1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 --oOo-- 4 5 RELIGIOUS TECHNOLOGY CENTER, ) a California non-profit ) 6 corporation, et al., ) ) 7 Plaintiffs, ) ) 8 vs. ) No. C-95-20091 RMW ) 9 NETCOM ON-LINE COMMUNICATION ) SERVICES, INC., a Delaware ) 10 corporation, et al., ) ) 11 ) Defendants. ) 12 ______________________________) ) 13 AND RELATED CROSS-ACTION______) 14 15 16 DEPOSITION OF: 17 WARREN McSHANE 18 May 9, 1995 19 20 21 22 Reported by: 23 JAN ELVEE, CSR 24 (CSR No. 4800) 25 1 1 I N D E X 2 Deposition of Warren McShane Page 3 Examination by Ms. Oakley 5 4 Examination by Mr. Leipold 212 5 6 EXHIBITS MARKED FOR IDENTIFICATION 7 8 1. 33-page document; Exhibit E 9 to Declaration of Warren L. McShane 125 10 2. 12-page document; KSW News 176 11 3. 2-page document; Notice of Deposition 230 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2 1 BE IT REMEMBERED that, pursuant to Notice 2 of Taking Deposition, and on Tuesday, May 9, 1995, 3 commencing at the hour of 9:38 a.m. thereof, at the 4 Offices of Morrison & Foerster, 345 California Street, 5 San Francisco, California, before me, JAN ELVEE, a 6 Certified Shorthand Reporter, there personally appeared 7 WARREN McSHANE, 8 called as a witness by the Defendants, who having been 9 by me first duly sworn, was examined and testified as 10 is hereinafter set forth: 11 ---oOo--- 12 ELLIOT J. ABELSON, Attorney at Law, Fox 13 Plaza, 2121 Avenue of the Stars, Twenty-Second Floor, 14 Los Angeles, California 90067-5010, appeared as counsel 15 on behalf of the Plaintiffs. 16 SMALL, LARKIN & KIDDE, 10940 Wilshire 17 Boulevard, Los Angeles, California 90024-3945, 18 represented by JANET A. KOBRIN, Attorney at Law, 19 appeared as counsel on behalf of the Plaintiffs. 20 MORRISON & FOERSTER, 345 California 21 Street, San Francisco, California 94014-2675, 22 represented by CARLA B. OAKLEY, Attorney at Law, 23 appeared as counsel on behalf of the Defendant Dennis 24 Erlich. 25 LAW OFFICES OF HAGENBAUGH & MURPHY, 701 3 1 South Parker Street, Suite 8200, Orange, California 2 92668, represented by DANIEL A. LEIPOLD, Attorney at 3 Law, appeared as counsel on behalf of the Defendant 4 Thomas Klemesrud. 5 ---oOo--- 6 P R O C E E D I N G S 7 THE VIDEO OPERATOR: Good morning. This 8 is the beginning of videotape number one in the 9 deposition of Warren L. McShane in the matter of 10 Religious Technology Center, et al, versus Netcom 11 On-Line Communication, et al, and related actions. 12 That is filed in the United States District Court for 13 the Northern District of California and it is case 14 number C-9520091 RMW. 15 Today's date is May 9, 1995 and the time 16 is approximately 9:38. The location of this deposition 17 is the Law Offices of Morrison & Foerster, and they are 18 located at 345 California Street in San Francisco. 19 This deposition is being taken pursuant to 20 notice, and the videotape is being produced on behalf 21 of Ms. Oakley of Morrison & Foerster who represents 22 defendant and counterclaimant, Mr. Erlich. 23 My name is Kevin Foor. I'm a notary 24 public for the State of California, County of Marin. 25 And I work for Dan Mottaz Video Productions located at 4 1 One Lansdale Avenue, San Francisco, California. Our 2 court reporter is Jan Elvee of Smythe and Wilson. 3 If the attorneys present would identify 4 themselves and who they represent for the record, 5 beginning on my right, please. 6 MS. OAKLEY: Carla Oakley of Morrison & 7 Foerster, representing Mr. Dennis Erlich. 8 MR. ABELSON: Elliot Abelson, representing 9 RTC and Bridge. 10 MS. KOBRIN: Janet Kobrin, Small, Larkin 11 and Kidde, representing RTC and Bridge. 12 VIDEO OPERATOR: If the reporter will 13 administer the oath, we can begin. 14 ---oOo--- 15 WARREN McSHANE, 16 having been first duly sworn, testified as follows: 17 EXAMINATION BY MS. OAKLEY 18 MS. OAKLEY: Q. Mr. McShane, will you 19 please state your full name for the record? 20 A. Warren McShane. 21 Q. Do you have a middle name? 22 A. Lee. I don't use it, but I have it. 23 Q. Will you agree, please, to tell me if you 24 don't understand any question I ask you of today. 25 A. Certainly. 5 1 Q. I would like to remind you to answer 2 questions verbally, not with yea or yeah. Clearly 3 state yes or no. And also, I'd like to remind you to 4 only testify as to what you know and not to speculate 5 today. Will you agree to do that? 6 A. Yes. 7 Q. Do you feel well today? 8 A. Yes. 9 Q. Is there any medical reason we should not 10 go forward today? 11 A. No. 12 Q. Are you represented by counsel here today? 13 A. Yes. 14 Q. Who is that? 15 A. Mr. Abelson and Ms. Kobrin. 16 Q. Have you had your deposition taken before 17 in any case involving Scientology or L. Ron Hubbard 18 documents? 19 A. Yes. 20 Q. When was that? 21 A. I have no idea. Sometime in 1990, I 22 think, or '91. 23 Q. In connection with how many different 24 cases? 25 A. I think two different cases. 6 1 Q. Do you recall the name of the first case? 2 A. I don't remember. 3 Q. Do you recall the name of the second case? 4 A. It was in State court. I don't remember 5 the name of the case. 6 Q. In what year, if you can recall, was your 7 deposition taken in the first case? 8 A. I think it was '89. 9 Q. Was it in State or federal court? 10 A. I might confuse the two. I'm not sure. 11 One was State. One was federal. 12 Q. I take it the second deposition was in '90 13 or '91? 14 A. I think so. 15 Q. Do you still have the transcript for 16 either of those two depositions? 17 A. I'm sure I do somewhere. 18 Q. Do you recall the nature of the issues in 19 the first case in which you were deposed? 20 A. I don't remember. I mean it was -- one 21 case had to do with litigation against a former 22 attorney who worked for us. And the second case had to 23 do with upper level materials. 24 Q. Were there claims of copyright 25 infringement or trade secret misappropriation in either 7 1 of the two cases? 2 A. In the latter, yes. 3 Q. Do you recall specifically the upper level 4 materials at issue in the second case? 5 A. Primarily the NOTS materials. New Era 6 Dynamics for OTs. 7 Q. Do you know how the second litigation 8 resolved? 9 A. It is not resolved. It is up on appeal. 10 Q. I'd like to remind you that you'll have an 11 opportunity to review the transcript of today's 12 deposition and to make any corrections, but of course, 13 if any corrections are made, I'll have an opportunity 14 to comment on the nature of those corrections. Do you 15 understand that? 16 A. Understood. 17 Q. You are currently the president of RTC; is 18 that correct? 19 A. That's correct. 20 Q. When did you first become employed by RTC? 21 A. I believe it was in August 1983. 22 Q. What was your first position with RTC? 23 A. I was the director of investigations, I 24 believe. 25 Q. Generally, what did your responsibilities 8 1 involve as director of investigations? 2 A. I investigated and enforced the trademarks 3 owned by RTC. 4 Q. Did you also have any responsibility for 5 copyrights or trade secrets? 6 A. Yes. 7 Q. For what period of time were you the 8 director of investigations? 9 A. I've been on and off in that position ever 10 since. The name has changed over the period of years. 11 But my primary responsibilities have always been to 12 register or maintain and enforce the trademarks. 13 Q. Has your responsibility also included 14 registration and maintenance and enforcement of 15 copyright? 16 A. In the upper level materials, yes. 17 Q. And trade secrets? 18 A. Yes. 19 Q. When you use the phrase "upper level 20 materials," what are you referring to? 21 A. The trade secrets. 22 Q. Do the trade secrets have a particular 23 name or title? 24 A. There's various titles to the various 25 levels. 9 1 Q. And what are the titles? 2 A. Well, it starts with a level called Power, 3 which is I believe -- there's Power and Power Plus. 4 Two different levels. Then it goes to the Solo course 5 which is -- Solo Part B actually is the confidential 6 part. Then we have a level that's called R6EW. Then 7 the clearing course, OT-I all the way through to 8 OT-VIII. 9 Q. Are there any other levels of the upper 10 level materials? 11 A. Well, there's other confidential levels. 12 For instance, the Class VIII course itself is a 13 confidential level. There are levels called the Ls, 14 LX, XI and XII, which are confidential. The Sunshine 15 Rundown is a level that's confidential. I believe 16 that's it. 17 Q. Of all of the levels that you have just 18 identified, are those all considered to be trade 19 secrets? 20 A. Yes. 21 Q. Are the NOTS levels also considered trade 22 secrets? 23 A. Yes. It is also called OT-V. 24 Q. So OT-V is the same as NOTS? 25 A. Yes. 10 1 Q. What other positions have you held at RTC 2 other than director of investigations and president? 3 A. Well, like I said, the position has been 4 pretty much the same. The titles have changed from 5 time to time. 6 Q. What other titles have you had? 7 A. I can remember director of trademark 8 policing, director of the registration, maintenance and 9 enforcement. That's all I can remember. 10 Q. When did you become president of RTC? 11 A. In January 1994. 12 Q. When you became president, did your 13 responsibilities change in any way for the 14 organization? 15 A. No. 16 Q. What precipitated the new title of 17 president? 18 A. We needed a president. Due to my 19 longevity and the area that I work in. 20 Q. Whom did you succeed in 1994? 21 A. A gentleman by the name of Mark Rathbun. 22 Q. Could you spell the last name? 23 A. R A T H B U N. 24 Q. What are your current responsibilities as 25 the president of RTC? 11 1 A. Well, I'm primarily responsible for 2 ensuring that the marks and trade secrets that we own 3 are properly registered and maintained and any 4 violations thereof are handled. I'm responsible for 5 the corporation itself, to maintain the corporate 6 status of RTC, its tax exemption, its registration with 7 the State, et cetera. 8 Q. Do you know when RTC was first formed as a 9 corporation? 10 A. January 1982. 11 Q. Is RTC currently a nonprofit California 12 corporation? 13 A. Yes. 14 Q. Has it been a nonprofit California 15 corporation since its inception? 16 A. Yes. 17 Q. Is it currently a 501C3 corporation? 18 A. Yes. 19 Q. Has it had the 501C3 status since its 20 incorporation in '82? 21 A. We got our status in October of 1993 which 22 was retroactive. 23 Q. Has the 501C3 status been in place since 24 October of 1993? 25 A. Uh-huh. 12 1 Q. Answer yes or no, please. 2 A. Yes. 3 (Mr. Leipold enters the deposition room.) 4 MS. OAKLEY: We'll note for the record 5 that Mr. Dan Leipold of Hagenbaugh & Murphy has just 6 joined us. It is now about eight minutes to ten. 7 Q. Is your position at RTC a full-time 8 position? 9 A. Yes. 10 Q. Has it always been a full-time position? 11 A. Yes. 12 Q. To whom do you currently report at RTC, if 13 anyone? 14 A. Do I report? 15 Q. Yes. 16 A. I don't understand what type of reports. 17 Q. In other words, do you have a boss or 18 someone who oversees your work? 19 A. No. I mean, there is the chairman of the 20 board. He doesn't oversee my work. 21 Q. Who is the chairman of the board? 22 A. David Miscavige, M I S C A V I G E. 23 Q. Does Mr. Miscavige have any responsibility 24 for protection or enforcement of RTC's marks, 25 copyrights or trade secrets? 13 1 A. No. That's my job. 2 Q. Where were you employed before joining RTC 3 in 1983? 4 A. Before that, it was an organization called 5 the special unit. 6 Q. Was that a company or what kind of an 7 entity was the special unit? 8 A. It was part of the Church of Scientology 9 International. 10 Q. In what position were you employed by 11 Church of Scientology International? 12 A. In investigations. 13 Q. Investigations of what sort? 14 A. Trademark, trade secrets, copyright 15 violations. 16 Q. Is there a relationship between RTC and 17 Church of Scientology International? 18 A. A relationship? 19 Q. Yes. 20 A. Yes. 21 Q. What is that relationship? 22 A. RTC licenses CSI to use the marks. 23 Q. Does RTC license to CSI use of any 24 copyrights? 25 A. No. 14 1 Q. Does RTC license to CSI use of any trade 2 secret materials? 3 A. Yes. 4 Q. And what trade secret materials does RTC 5 license to CSI? 6 A. The ones that we've named. 7 Q. All the ones that were previously 8 identified? 9 A. Yes. 10 Q. Does RTC license to CSI any copyright 11 rights in the trade secret documents? 12 A. No. 13 Q. What does the license between RTC and CSI 14 provide that CSI can do with the trade secret 15 materials? 16 A. It can use them internally among their 17 staff only. 18 Q. For what type of use? 19 A. For servicing their staff. 20 Q. Can you describe that any more thoroughly? 21 A. Well, in Scientology, there's what's 22 called auditing. That's the service that's delivered 23 to the individual. And CSI services its own staff as 24 all Scientology organizations do. 25 Q. Do you know the size of the staff at CSI? 15 1 A. I don't know. 2 Q. Do you know how many copies of the trade 3 secret materials CSI has possession of? 4 A. Maybe three or four. 5 MR. LEIPOLD: I'm sorry. What was the 6 answer? 7 THE WITNESS: Three or four. 8 MS. OAKLEY: Q. Did RTC provide the three 9 or four copies to CSI? 10 A. Yes. 11 Q. Is CSI permitted to use the materials, the 12 trade secret materials, with any individuals other than 13 staff of CSI? 14 A. Yes. 15 Q. What other individuals? 16 A. Other staff members of certain 17 organizations, Scientology organizations. 18 Q. Can you identify those organizations, 19 please? 20 A. The only one I can think of off the top of 21 my head is the Hamburg org located in Hamburg, Germany. 22 Also, I believe Orange County org, the church in Orange 23 County. 24 Q. Is there any other relationship between 25 RTC and CSI other than the license agreement you've 16 1 discussed? 2 MR. ABELSON: Do you understand the 3 question? 4 THE WITNESS: No. I don't. 5 MS. OAKLEY: Q. Is there any corporate 6 relationship between RTC and CSI? 7 A. No. 8 Q. Does CSI make any payments to RTC for the 9 license of the trade secret materials? 10 A. No. 11 Q. Are you familiar with the entity called 12 Church of Spiritual Technology? 13 A. Yes, I am. 14 Q. Do you know if that's a company or 15 corporation? 16 A. It is a corporation. 17 Q. Is that located in California? 18 A. Yes. 19 Q. Do you know where the company is located, 20 the corporation? 21 A. Main office is in Los Angeles. 22 Q. Is there any corporate relationship 23 between Church of Spiritual Technology and RTC? 24 A. No. 25 Q. Is there any contractual relationship 17 1 between Church of Spiritual Technology and RTC? 2 A. Contractual, no. 3 Q. Does RTC license any works to the Church 4 of Spiritual Technology? 5 A. There is a letter agreement between us so 6 that they are allowed to use the trade secrets for 7 their staff only. 8 Q. Do you know the date of the letter 9 agreement? 10 A. I don't remember. 11 Q. Do you know approximately the year of the 12 letter agreement between Church of Spiritual Technology 13 and RTC? 14 A. I don't know. It is quite a few years 15 ago. 16 Q. Do you have a copy of that letter 17 agreement? 18 A. I'm sure I do. 19 Q. Do you know how many copies of the trade 20 secret materials the Church of Spiritual Technology 21 has? 22 A. Yes. 23 Q. How many copies? 24 A. One. 25 Q. Is Church of Spiritual Technology 18 1 permitted to use the materials with anyone other than 2 its staff? 3 A. No. 4 Q. Do you know the number of people on staff 5 for Church of Spiritual Technology? 6 A. I have no idea. 7 Q. Can you estimate? 8 A. I really don't. 9 Q. Are there any agreements licensing or 10 transferring interests from Church of Spiritual 11 Technology to RTC? 12 A. I don't understand the question. 13 Q. Has Church of Spiritual Technology 14 licensed or assigned to RTC any documents? 15 A. Documents. 16 Q. Or rights in any materials. 17 MR. ABELSON: Do you understand the 18 question so you can answer it? 19 THE WITNESS: I think so. 20 There is a license agreement that they 21 have affirmed between the estate or between the trustee 22 of the estate of L. Ron Hubbard and RTC which is a 23 copyright license. And they have affirmed that 24 license. 25 MR. ABELSON: I'll object and move to 19 1 strike as nonresponsive. 2 MS. OAKLEY: Q. You said that the Church 3 of Spiritual Technology has affirmed an existing 4 copyright license; is that accurate? 5 A. Yes. I think so. 6 Q. Is that a written affirmation that you're 7 referring to? 8 A. I believe it is. 9 Q. Do you know the date of that document? 10 A. I don't. 11 Q. Are you aware of any other or any license 12 or other agreement not previously identified between 13 Church of Spiritual Technology and RTC? 14 A. As I sit here right now, no. 15 Q. Do you know of an entity called New Era 16 Publications? 17 A. Sure. 18 Q. What do you know about that entity? 19 A. I know a lot about it. 20 Q. Does New Era Publications have anything to 21 do with Scientology? 22 A. Yes. 23 Q. What does it have to do with Scientology? 24 A. It publishes books. 25 Q. Does New Era Publications have any rights 20 1 to works that RTC also has rights in? 2 MR. ABELSON: Do you understand the 3 question? 4 THE WITNESS: No, I don't. 5 MS. OAKLEY: Q. Does New Era Publications 6 publish any works in which RTC has rights? 7 MR. ABELSON: Object. Calls for a legal 8 conclusion. Vague and ambiguous. But if you can 9 answer the question, you can. 10 THE WITNESS: Not that I know of. 11 MS. OAKLEY: Q. Does RTC publish any of 12 the documents you identified earlier as upper level 13 materials? 14 A. No. 15 Q. Have you read all of the various documents 16 that you have identified as upper level materials? 17 A. I believe I have. 18 Q. You're familiar with the content of those 19 documents? 20 A. I believe so. 21 Q. You identified the upper level materials 22 in a series of -- I think we called them levels. Can 23 you describe what you mean by levels? 24 A. They're levels. They're done in a 25 gradient manner, as you do one after another. You 21 1 don't go out of sequence. 2 Q. Is it a requirement that the documents are 3 used in the order provided in the sequence? 4 A. Yes. 5 Q. What is the purpose for these upper level 6 materials? 7 MR. ABELSON: Objection. Vague and 8 ambiguous. 9 THE WITNESS: I don't understand the 10 question. 11 MS. OAKLEY: Q. Let me first back up and 12 be sure that I'm using the proper terminology to 13 describe the materials. You've used in various 14 declarations the term "advanced technology." 15 A. Yes. 16 Q. What do you include in the term advanced 17 technology? 18 A. Those levels we've identified. 19 Q. And those levels are Power, Power Plus, 20 Part B of the Solo course, R6EW, clearing course, OT-I 21 through VIII, of which the OT-V is the NOTS series, the 22 Class VIII course, LX, XI, XII and the Sunshine 23 Rundown; correct? 24 A. From what I remember at this point, yes. 25 Q. And you consider all of those documents to 22 1 be part of the advanced technology; correct? 2 A. Yes. 3 Q. And does RTC consider all of those 4 documents to constitute trade secrets? 5 A. Yes. 6 Q. Are there any other documents which RTC 7 considers trade secrets that are authored by Mr. 8 Hubbard? 9 A. I'd have to look at the list to be totally 10 sure. 11 Q. How does a person know that these 12 documents that you've identified are advanced 13 technology documents? In other words, is there any 14 title on all of them that says advanced technology? 15 MR. ABELSON: Do you understand the 16 question? 17 THE WITNESS: Not really. 18 MS. OAKLEY: Q. How can a person identify 19 that the documents you identified are part of the 20 advanced technology? 21 MR. ABELSON: I'm sorry. What person are 22 you talking about? Just any person? 23 MS. OAKLEY: Q. When anyone sees these 24 documents, how would you know they're part of the 25 advanced technology? 23 1 MR. ABELSON: Object. That assumes a fact 2 not in evidence, that anyone does see these documents. 3 You can answer the question if you can. 4 THE WITNESS: Unless you identify which 5 person you're talking about, I really can't answer it. 6 MS. OAKLEY: Fair enough. We'll start 7 again. 8 Q. Let me ask this question: What is the 9 purpose of the advanced technology documents? 10 A. The purpose is to increase a person's 11 spiritual awareness of himself, others, things around 12 him. 13 Q. Are all of the documents identified on 14 Exhibit B to the complaint considered to be trade 15 secret materials? 16 MR. ABELSON: Do you need to refresh your 17 memory? 18 THE WITNESS: I'd have to see the list. 19 MS. OAKLEY: Q. Does RTC have rights to 20 any of the advanced technology documents outside of the 21 United States? 22 A. Sure. 23 Q. Are RTC's rights worldwide? 24 A. Yes. 25 Q. So does RTC have obligations to enforce 24 1 rights in the advanced technology around the world? 2 A. Correct. 3 MR. ABELSON: I'm going to object. Let it 4 go. Mr. McShane, please wait for me to object. 5 MS. OAKLEY: Q. When did RTC obtain any 6 rights in the advanced technology documents? 7 A. Well, the assignment from L. Ron Hubbard 8 was in 1982. 9 Q. To your knowledge, did L. Ron Hubbard 10 assign rights in the advanced technology to any person 11 or entity other than RTC? 12 MR. ABELSON: In 1982 are we talking about 13 or ever? 14 MS. OAKLEY: Ever. 15 THE WITNESS: Not that I know of. 16 Q. Does RTC license the advanced technology 17 documents to entities other than CSI and Church of 18 Spiritual Technology? 19 A. Yes. 20 Q. To whom? 21 A. To the Flag Service Organization located 22 in Clearwater, Florida. To the Church of Scientology, 23 Western United States. To the Church of Scientology, 24 United Kingdom. And to the Church of Scientology in 25 Denmark, Copenhagen, Denmark. And the Church of 25 1 Scientology Australia. And one other. Church of 2 Scientology of the Flag Service Organization. Flagship 3 Service Organization. I'm sorry. 4 Q. Is the Church of Scientology, a Flagship 5 Organization, separate from the Flag Service 6 Organization? 7 A. Yes. 8 Q. So there are six licensees? 9 A. Not including CSI, yes. 10 Q. And Church of Spiritual Technology; 11 correct? 12 A. I don't consider them a licensee. 13 Q. Does Flag Service Organization in 14 Clearwater, Florida have any copies of the advanced 15 technology? 16 A. Yes. 17 Q. Do you know how many copies that 18 organization has? 19 A. I have no idea. 20 Q. Did the Flag Service Organization get its 21 copies from RTC, as far as you know? 22 A. Yes. 23 Q. Do you know when the Flag Service 24 Organization first obtained its copies of the advanced 25 technology documents? 26 1 A. When they first obtained them. 2 Q. Yes. 3 A. Well, it would vary from level to level. 4 Q. In what respect? 5 A. Well, OT-III came out before OT-V, so they 6 would have OT-III first. 7 Q. I'd like to go through each of the levels 8 and find out when each one of them did come out so I 9 can put this in perspective. 10 The Power level: when was that issued or 11 authored if you know? 12 A. When it first -- 13 MR. ABELSON: Which one? Issued or 14 authored? 15 MS. OAKLEY: Q. Do you know when Power 16 was authored? 17 A. It was sometime in the sixties. I'm not 18 sure of the exact date. 19 Q. Do you know when Power was issued? 20 A. During the same time period. 21 Q. Do you know when Power Plus was authored? 22 A. Same time. 23 Q. Do you know when Power Plus was issued? 24 A. Same answer. 25 Q. In the sixties? 27 1 A. I believe so. 2 Q. Do you know when Solo course, Part B, was 3 authored? 4 A. I'd have to look at documents. I'd be 5 guessing. 6 Q. Can you estimate even the decade? 7 A. It would be in the sixties. 8 Q. Do you know when Solo course, Part B, was 9 issued? 10 A. Originally, during that same time period. 11 Q. Do you know when R6EW was authored? 12 A. Without looking at the documents, I don't 13 know. 14 Q. Do you know the decade? 15 A. I'd really be guessing. 16 MR. ABELSON: Don't guess. 17 THE WITNESS: I won't. 18 MS. OAKLEY: Q. Do you know if it was 19 before 1970 or after? 20 A. I'd say it was right around in that time 21 period. I really don't know. 22 MR. ABELSON: Mr. McShane, if you don't 23 know, then don't answer. 24 THE WITNESS: Okay. 25 MS. OAKLEY: Q. Do you know when the 28 1 clearing course was authored? 2 A. It was in the early seventies. 3 Q. Do you know when the clearing course was 4 issued? 5 A. Probably around the same time period. I'm 6 basing that on the fact of not seeing the document but 7 on my personal knowledge of when I did those levels. 8 Q. Do you know when OT-I was first authored? 9 A. Around the same time period. 10 Q. Early seventies? 11 A. Yes. 12 Q. Do you know when OT-I was issued? 13 A. Approximately the same time period. 14 Q. How about OT-II? 15 A. Same. 16 Q. 1970s? 17 A. Early seventies. 18 Q. OT-III? 19 A. Three was first authored in '67. 20 Q. When was OT-III first issued? 21 A. Probably right around the same time. 22 Shortly thereafter. 23 Q. Do you know when OT-IV was first authored? 24 A. Well, the original OT-IV was right around 25 the same time period. Early seventies. 29 1 Q. Was there a subsequent version of OT-IV? 2 A. Yes. 3 Q. When was that authored? 4 A. Mid-eighties. 5 Q. When was the first original version of 6 OT-IV issued? 7 A. Early seventies. 8 Q. When was the revised version of OT-IV 9 issued? 10 A. I would say mid-eighties. 11 Q. Do you know when OT-V was first authored? 12 A. Same answer. Early seventies. 13 Q. And was it issued shortly thereafter? 14 A. Yes. 15 Q. Any revisions to OT-V? 16 A. Yes. 17 Q. And what years? 18 A. The same. Mid-eighties. 19 Q. Was the revised version issued shortly 20 thereafter? 21 A. I believe so. 22 Q. When was OT-VI first authored? 23 A. I think the original version was early 24 seventies. 25 Q. Was that revised in the mid-eighties as 30 1 well? 2 A. Yes. 3 Q. As best as you know, was the issuance of 4 the original and the revised versions of OT-VI shortly 5 after their authoring? 6 A. I believe so. 7 Q. What about OT-VII? When was it authored? 8 A. The original version, early seventies. 9 Same on the issuance. 10 Q. Was there a revision to OT-VII? 11 A. I'm not sure. I don't think there was. 12 Q. When was OT-VIII authored? 13 A. I'm not sure when Hubbard authored it. 14 Q. Do you know whether it was in the 15 seventies or the eighties? 16 A. I really don't know. 17 Q. Do you know when it was issued? 18 A. Well, we first started delivering it in 19 '86, I believe. 20 (Discussion off written record.) 21 Q. So RTC first made its deliveries of the 22 OT-VIII materials in '86? 23 A. No. 24 Q. When did RTC first make deliveries of the 25 OT-VIII materials? 31 1 A. Never. 2 Q. Let me understand what was happening here. 3 When were the OT-VIII materials issued, first issued? 4 A. I believe it was '86. Either '86 or '88. 5 I'm not sure as I sit here right now without looking at 6 the dates. 7 Q. Were there any revisions to any of the 8 advanced technology documents that you didn't identify 9 in our run-through just now of when they were authored 10 and issued? 11 A. I'm sorry. What was the question again? 12 Q. As we went through, you identified 13 revisions to a handful of the various levels. 14 A. Right. 15 Q. Were there any revisions to levels that 16 you did not identify? 17 A. I don't believe so. I want to correct one 18 thing. On OT-VI and VII, that was authored I believe 19 in the late seventies, and issued shortly thereafter. 20 That was not revised. 21 Q. When you say issued, what do you mean by 22 issued? 23 A. Well, made available to the organizations 24 to deliver those levels. 25 THE VIDEO OPERATOR: I believe your 32 1 microphone just fell off. I heard what you said 2 though. 3 MS. OAKLEY: Thank you. 4 Q. We were talking earlier about the Flag 5 Service Organization in Clearwater, Florida. Did the 6 Flag Service Organization receive copies of advanced 7 technology documents before RTC obtained rights to 8 those documents? 9 A. Yes. 10 Q. To your knowledge, did the Flag Service 11 Organization receive advanced technology documents as 12 those documents were issued? 13 A. No. Because some of those documents were 14 issued before the Flag Service Organization existed. 15 Q. When did the Flag Service Organization -- 16 when did it first exist or when was it created? 17 A. First went to Clearwater, Florida, I 18 believe in '74 or '75. 19 Q. To your knowledge, at that time did the 20 Flag Service Organization obtain the then existing 21 advanced technology? 22 A. I'm sure they would have. 23 Q. Do you have any information on the number 24 of copies that the Flag Service Organization obtained 25 of the advanced technology documents in '74, '75? 33 1 A. I don't know. They'd be all in the 2 inventory, I'm sure. 3 Q. And what inventory is that that you're 4 referring to? 5 A. There's an inventory of all the OT 6 materials. 7 Q. Where is that inventory kept? 8 A. We have a copy of it. We being RTC. And 9 each organization who has the materials has a copy of 10 that inventory. 11 Q. Is there also an inventory of materials 12 that are not OT materials but fall within the category 13 of advanced technology? 14 A. Yes. Inventory of all advanced 15 technology. 16 MR. ABELSON: Could you keep your voice up 17 a little bit? 18 THE WITNESS: Yes. 19 MS. OAKLEY: Q. When was the Church of 20 Scientology for the Western U.S. first established? 21 A. Boy ... mid-seventies, I believe. I take 22 that back. Mid-eighties. 23 Q. Does the Church of Scientology for the 24 Western U.S. have copies of the advanced technology? 25 A. Yes. 34 1 Q. Do you know how many copies it has? 2 A. Not without looking at the inventory. 3 Q. Can you estimate the number of copies? 4 MR. ABELSON: Without guessing. 5 THE WITNESS: I can't. 6 MS. OAKLEY: Q. Can you estimate whether 7 it is fewer than ten or more than a hundred copies? 8 A. Well, definitely not more than a hundred. 9 It varies from level to level. 10 Q. Why is that? 11 A. Because they need extra copies of certain 12 levels. 13 Q. Can you estimate the number of copies of 14 the OT-I documents that the Church of Scientology for 15 the Western U.S. has? 16 A. No. I'd just be guessing. 17 Q. Do you have any idea whether it is more or 18 less than 50? 19 A. Probably less than ten. 20 Q. Can you estimate the number of copies of 21 the OT-II documents held by the Church of Scientology 22 Western U.S? 23 A. Same answer. I don't know. 24 Q. How about as to the OT-III documents? 25 A. Same. 35 1 Q. When was the Church of Scientology United 2 Kingdom formed? 3 MR. ABELSON: If you know. 4 THE WITNESS: I don't know. 5 MS. OAKLEY: Q. Do you know how many 6 copies of any of the advanced technology documents that 7 organization has? 8 A. I don't know. 9 Q. Can you estimate in any way? 10 A. I'd say less than ten. 11 Q. Do you know when the Church of Scientology 12 of Denmark, Copenhagen, was formed? 13 A. I don't. 14 Q. Do you know how many copies that 15 organization has of any of the advanced technology 16 documents? 17 A. Same answer. Probably less than ten. 18 Q. Do you know when the Church of Scientology 19 of Australia was formed? 20 A. I don't know. 21 Q. Do you know how many copies of the 22 advanced technology documents that organization has? 23 A. Same answer. Probably less than ten. 24 Q. Do you know when the Church of Scientology 25 of the Flagship Organization was formed? 36 1 A. The Ship Organization? Probably '86 or 2 '88. 3 Q. Do you know how many copies of any of the 4 advanced technology documents that organization has? 5 A. Less than ten. Probably more like five. 6 Q. Now, who is entitled to see the contents 7 of any of these advanced technology documents? 8 A. You'd have to give me a little more narrow 9 parameter than that. 10 Q. How do you define who can have access to 11 the advanced technology documents? 12 A. How do I define it? 13 Q. How does RTC define who can have access to 14 the advanced technology documents? 15 A. We don't define it. 16 Q. Does RTC restrict in any way who can have 17 access to the advanced technology documents? 18 A. Yes. 19 Q. What is the restriction? 20 A. The person has to be -- if it is a public 21 person, it has to be at that correct level to be able 22 to receive the documents or view the documents. 23 (Discussion off the record between the 24 witness and his attorney.) 25 If it is a staff member, then he'd have to 37 1 be trained technically at that level to be able to view 2 them. 3 Also there are other restrictions. Has to 4 sign a bond, security bond, confidentiality bond. Be 5 of the right ethical level. In other words, he has to 6 be eligible, which is laid out in policy. That's why I 7 say we don't define it. Policy defines it. 8 Q. And who authored the policy? 9 A. L. Ron Hubbard. 10 Q. That's a policy that RTC enforces? 11 A. Yes. 12 Q. Do you have a copy of that policy? 13 A. I'm sure we do. 14 Q. It is a written policy, I take it? 15 A. Yes. 16 Q. Are members of the public who otherwise 17 qualify to see the advanced technology materials 18 required to pay for their access to those materials? 19 A. Well, it depends on what your definition 20 of "pay" is. 21 Q. Are they required to turn over any money 22 or any currency in order to have access? 23 A. They're required to make a donation, yes. 24 Q. What is the amount of the donation? Let 25 me ask this question: Is a separate donation required 38 1 for each different level of the advanced technology? 2 A. Yes. 3 Q. What is the level of the donation required 4 for access to OT-I documents? 5 MR. ABELSON: I'm going to object to that 6 question. We do not have a protective order signed. 7 And I will not allow him to answer any questions with 8 respect to what the donations are until we get a 9 protective order. And I'm instructing him not to 10 answer. 11 MR. LEIPOLD: Why is that? 12 MR. ABELSON: I just stated why. 13 MR. LEIPOLD: Is this confidential? 14 Because I've seen a list published. 15 MR. ABELSON: It is confidential. 16 MS. OAKLEY: I realize you're not going to 17 allow the witness to answer the question but I will 18 state for the record, clearly, you're making claims 19 here of economic value of these materials. And you've 20 stated that great revenues are obtained from these 21 materials. And certainly we're permitted to delve into 22 what exactly constitutes great revenue. 23 MR. ABELSON: I totally agree with you. 24 And if we had a protective order, I would allow it but 25 we don't. 39 1 (Discussion off the record between the 2 witness and his attorney.) 3 MR. ABELSON: Can we take a short break? 4 MS. OAKLEY: I'd just like to finish a 5 line I'm on and then we can take a break. 6 MR. ABELSON: I'd like to take a break now 7 so I can get this sorted out. 8 THE VIDEO OPERATOR: It is 10:31. 9 (Short break in proceedings.) 10 THE VIDEO OPERATOR: We are back on the 11 record. It is 10:38. 12 MR. ABELSON: I would like to withdraw my 13 objection to your question concerning whether there are 14 certain amounts that are charged for the courses. 15 I believe it is accurate, Mr. Leipold is 16 accurate with respect to saying there are published 17 lists. So having found that out, I withdraw the 18 objection. He is allowed to answer that question if it 19 is stated again. 20 MS. OAKLEY: I'll repeat the question. 21 Q. What is the donation for OT-I level of 22 materials? 23 A. I have no idea. I've not seen the list. 24 I don't know. 25 Q. Can you estimate? 40 1 A. I don't know. 2 Q. Do you know whether it is above or below 3 $1000? 4 A. I'd be guessing. 5 Q. Do you know whether the donation amount 6 for OT-I level documents is the same for each one of 7 the organizations that has the advanced technology 8 materials? 9 A. I don't know if they're exactly the same. 10 Q. Is the required donation for access to 11 advanced technology materials dictated by RTC? 12 A. No. 13 Q. Who dictates that amount? 14 A. I think the mother church does. 15 MR. ABELSON: What do you mean by the 16 mother church? 17 THE WITNESS: I'm sorry. Church of 18 Scientology International. 19 MS. OAKLEY: Q. In what way does Church 20 of Scientology International dictate the donation? In 21 other words, do you get a written policy or how is it 22 dictated? 23 A. I'm not sure. 24 Q. Are the donations required for access to 25 the advanced technology materials paid to RTC? 41 1 A. No. 2 Q. To whom or to what organization are the 3 donations paid? 4 A. To the organization that's delivering that 5 particular service to the person. 6 Q. Do you know the level of donation required 7 for OT-II materials? 8 A. I don't know any of the donation levels. 9 Q. Can you estimate any of the donation 10 levels? 11 A. No. 12 Q. Do you know whether access to advanced 13 technology materials is denied if an individual is not 14 able to pay the donation amount? 15 A. Well, it is a requirement to make the 16 donation. So if the person doesn't make the donation, 17 they will not get the service. 18 Q. Do the individual organizations pay any 19 amounts to RTC for the licenses of the advanced 20 technology materials? 21 A. Yes, they do. 22 Q. Is that payment determined per level or 23 per copy? 24 A. Determined per the service that's 25 delivered. 42 1 Q. Can you describe that more thoroughly? 2 A. They pay a percentage of what is called 3 their value of services delivered. 4 Q. What is the value of services delivered? 5 A. When they have delivered a particular 6 level and they have completed that level with the 7 parishoner, that is then counted as value of services 8 delivered. Or we call it VSD. And then it would be a 9 percentage of that. 10 Q. Is there a set VSD for each level? 11 A. Well, the VSD is what the service cost. 12 Donation rate. They can't count it until they actually 13 complete the service. 14 Q. I take it since you don't know the 15 donations, you also don't know the VSD for the various 16 levels; is that correct? 17 A. I have no idea. It varies from week to 18 week. 19 Q. Why does it vary from week to week? 20 A. Because it is dependent on the service 21 being completed. So services are completed at various, 22 different rates. 23 Q. What percentage do the organizations pay 24 to RTC of the value of services delivered? 25 A. Six percent. 43 1 Q. Is that pursuant to a written agreement? 2 A. Yes. 3 Q. Does RTC have a written license agreement 4 with each of the seven organizations identified? 5 A. Yes. 6 Q. Does RTC track the revenue earned from 7 these licenses to the seven organizations on a monthly 8 basis? 9 A. I don't understand what you mean by track. 10 Q. Do you keep track of the revenues earned 11 from the seven organizations on licenses? 12 A. They report it to us, yes. 13 Q. How frequently is the revenue reported? 14 A. Weekly. 15 Q. Do you review those reports? 16 A. Do I personally review them. 17 Q. Yes. 18 A. Occasionally. 19 Q. Are there also monthly or quarterly 20 reports of revenue from the seven licensees? 21 A. I think there might be quarterly. I've 22 seen some quarterly reports. 23 Q. Do you know the amount of revenue earned 24 by RTC for the advanced technology materials as a whole 25 for any given year? 44 1 MR. ABELSON: You can answer that yes or 2 no. 3 THE WITNESS: Yes. 4 MS. OAKLEY: Q. Do you know the amount of 5 revenue earned by RTC for any particular level within 6 the advanced technology for a given year? 7 A. Particular level itself? 8 Q. Correct. 9 A. No. 10 Q. What is the amount of revenue RTC has 11 received from licensing of the advanced technology in 12 1994? 13 MR. ABELSON: I'm going to object on the 14 basis of privacy and instruct my client not to answer. 15 I do think it is relevant, and if we had a protective 16 order, I would certainly allow him to answer. 17 MS. OAKLEY: I think we could reach some 18 agreement with respect to confidentiality right here 19 that could take care of that issue. 20 We could agree to limit access to the 21 testimony on the revenue figures to the lawyers and the 22 parties in this case. And we can also agree that the 23 information if provided to the court would be provided 24 under seal. I think we can take care of issue and get 25 the information here rather than having to reconvene 45 1 another deposition to get the information. 2 MR. ABELSON: Ms. Oakley, we've been 3 trying to get you to agree to a protective order for 4 weeks. I know you have made some efforts but it hasn't 5 been done. I'm sorry it wasn't done before this 6 deposition. But we are not going to do it orally and 7 not without the Court okaying it. So we can't -- 8 unfortunately, we may have to have another deposition. 9 MS. OAKLEY: We would certainly reserve 10 the right to recover costs for having to reconvene 11 another deposition for these figures. 12 I think we can reach a reasonable 13 agreement sitting here to protect the information 14 sufficiently. And certainly when a final protective 15 order is entered by the Court, this information can be 16 swept within that protective order. I don't see the 17 need to withhold it at this time. 18 MR. ABELSON: I do. 19 MS. OAKLEY: Q. Has the revenue for the 20 advanced technology documents received by RTC in 21 1994 -- does it exceed $50,000? 22 MR. ABELSON: Objection. Same objection. 23 Instruct him not to answer. 24 MS. OAKLEY: Q. Does the revenue exceed 25 $100,000? 46 1 MR. ABELSON: Same objection and 2 instruction. Do not answer the question. 3 MS. OAKLEY: Q. Are you willing to give a 4 range at all of the revenue received by RTC for 5 licensing of the advanced technology documents? 6 MR. ABELSON: You can answer that yes or 7 no, bearing in mind I'm going to instruct you not to 8 answer it when it comes to the time to answer the 9 question. 10 THE WITNESS: You have to repeat the 11 question. 12 MS. OAKLEY: Q. Will you answer the 13 question: Will you provide a range of revenue received 14 by RTC for the licensing of the advanced technology 15 documents. 16 A. Will I provide a range. 17 Q. Yes. 18 A. I could provide a range, yes. 19 Q. Will you provide a range? 20 A. No. 21 Q. On the grounds of concerns of 22 confidentiality? 23 A. Yes. 24 Q. Do you know the revenue received by RTC 25 for the licensing of the OT-I materials? 47 1 MR. ABELSON: You can answer yes or no. 2 THE WITNESS: No. 3 MS. OAKLEY: Q. Do you know the revenue 4 received by RTC for the licensing of OT-II materials? 5 A. No. 6 Q. Do you know the revenue received by RTC 7 for any of the NOTS materials? 8 A. No. 9 Q. Do you know the licensing received by RTC 10 for the Class VIII Assist Tape? 11 A. No. The reason I'm saying no, Ms. Oakley, 12 is because it is not broken down on each level. 13 (Discussion off the record between the 14 witness and his attorney.) 15 Q. Do the licensees of the advanced 16 technology materials provide reports to RTC of the 17 services delivered? 18 A. Yes. 19 Q. Do the reports break down by level of the 20 advanced technology? 21 A. I don't believe so. 22 Q. What is the nature of the information 23 provided in the reports? 24 A. The amount of the VSD. 25 Q. Are you provided simply with a summary 48 1 total of VSD? 2 A. Yes. 3 Q. Does RTC audit in any way the 4 determination of the value of services delivered? 5 A. We have the ability to do the audit 6 pursuant to the license. I don't recall whenever we 7 have done it. I'm not saying that we haven't. I just 8 don't recall where we have. 9 Q. Who determines whether a person, either 10 the public or the staff member, has reached the proper 11 training level in order to have access to the advanced 12 technology materials? 13 A. I don't understand your question. 14 Q. I believe you said earlier that for a 15 person to have access to the advanced technology 16 materials, they must have attained a certain level of 17 training; is that accurate? 18 A. No. Staff members, yes. Not parishoners. 19 Q. Do parishoners have to be at a certain 20 level of training in order to have access to the 21 advanced technology? 22 A. No. 23 Q. What requirements must a parishoner 24 satisfy in order to have access to the advanced 25 technology? 49 1 A. He has to have the right spiritual 2 awareness level. And ethical level. 3 Q. And who determines whether a parishoner 4 has the correct spiritual awareness level or ethical 5 level? 6 A. Well, usually the technical person within 7 the organization themselves, what is called a case 8 supervisor, would determine whether the person has 9 reached that correct degree of spiritual awareness. 10 And we determine -- RTC determines whether he is 11 ethically okay to go on that level. 12 Q. Is any record currently kept of the 13 parishoners or staff members who are able to obtain 14 access to the advanced technology? 15 A. What do you mean by record? 16 Q. Do you have any evidence of the identity 17 of the individuals currently able to have access to the 18 advanced technology materials? 19 MR. ABELSON: I think the question is 20 vague and ambiguous. I don't know what the word 21 "evidence" means in this context. And certainly the 22 witness may not know. But if he knows, he can answer. 23 MS. OAKLEY: I'm happy to state the 24 question again. 25 Q. Do you keep any log or listing of 50 1 individuals who are currently allowed to have access to 2 the advanced technology materials? 3 A. Yes. 4 Q. What kind of log is kept or record? 5 A. Just a log. 6 Q. Where is the log kept? 7 A. My office. 8 Q. Your personal office? 9 A. Well, in my area. Not my personal office. 10 Q. Do you know the number of people currently 11 identified on the log? 12 A. No, I don't. 13 Q. Can you estimate? 14 A. It would be thousands. 15 Q. Thousands of people? 16 A. Uh-huh. 17 Q. Would it be accurate to say more than 18 10,000 people? 19 A. I have no idea. 20 Q. For how long has such a log been kept of 21 the people with access to the advanced technology 22 materials? 23 A. Boy ... I think the present log that we 24 have, for the last couple of years. Before that, I'm 25 not sure to what degree the log was kept then. 51 1 Q. Can you be any more precise than the last 2 couple of years? 3 A. I'm sorry I can't. Not looking at it, I 4 don't know when it started. 5 Q. Do you know when the current log was first 6 initiated? 7 A. The last couple of years. 8 Q. Prior to the initiation of the current 9 log, was a log kept of individuals with access to the 10 advanced technology? 11 A. Well, there's a log kept in the 12 organizations themselves. Whether RTC has kept a log 13 of each individual, I'm not really sure. 14 Q. So you don't know whether RTC had a log of 15 individuals with access prior to your current log; 16 correct? 17 MR. ABELSON: I'd like to interject just 18 as a point of making sure that you're getting the right 19 information, or I'm understanding what's going on, are 20 we talking about current access or all time, long time 21 access? I don't think that's been gone into. And 22 maybe we ought to. 23 MS. OAKLEY: I think in each of my 24 questions, I have talked about currently, a log of 25 people who have current access. 52 1 THE WITNESS: Right. 2 MR. ABELSON: Is that how you understood 3 it? 4 THE WITNESS: That's how I understood it. 5 MR. ABELSON: Then we're clear. 6 MS. OAKLEY: I think we have a question 7 pending before the interruption. 8 (The record was read back as follows: 9 "Question: So you don't know whether 10 RTC had a log of individuals with access prior 11 to your current log; correct?") 12 THE WITNESS: That's correct. 13 MS. OAKLEY: Q. The log of access that 14 you currently have of people with current access, does 15 that include individuals from all of the various 16 organizations? 17 A. Yes. 18 Q. Is it your understanding that the seven 19 licensees also keep a log of the people who have access 20 to the advanced technology? 21 A. I don't know if they keep a log per se the 22 same as I do. They definitely have a record of some 23 form or another. 24 Q. Have you seen the record kept by the 25 licensees? 53 1 A. I've seen some of them, yes. 2 Q. Do you know for what period of time the 3 licensees have kept a record of which individuals had 4 access to the advanced technology? 5 A. It would go back to the very beginning, 6 whenever the person first got on the level. 7 Q. Is it your understanding that each of the 8 licensees has always kept a log of people with access 9 to the advance technology? 10 A. No. I didn't say log. 11 Q. Or a record? 12 A. Some form of record, yes. 13 Q. Have you seen those records? 14 A. Some. 15 Q. For how many of the seven licensees have 16 you seen records of access to the advanced technology? 17 A. All of them. 18 Q. Why is access to the advanced technology 19 limited to people who have reached the proper level of 20 spiritual enlightenment? 21 A. Why is it limited? 22 Q. Yes. 23 A. Because if a person does it out of 24 sequence, it could be spiritually harmful to him. 25 Q. Any other reason? 54 1 A. Well, the person obviously makes a 2 donation to the level and he would not gain access if 3 he didn't make the donation to the level. As far as 4 why it is done in the sequence that it is done, that's 5 laid out in policy by Mr. Hubbard for his spiritual 6 betterment. 7 Q. I'm sorry? 8 A. His spiritual betterment. In other words, 9 we don't go out of sequence. 10 Q. Does RTC have authority to make copies of 11 the advanced technology documents? 12 A. Sure. 13 Q. Has RTC in fact made copies since you've 14 been with the organization? 15 A. Sure we have. 16 Q. Does RTC make copies each year? Let me 17 ask a different question. Has RTC made any copies this 18 year of the advanced technology materials? 19 MR. ABELSON: 1995. 20 MS. OAKLEY: Correct. 21 THE WITNESS: Yes. 22 Q. How many copies of the -- let me ask the 23 first question. Does RTC make copies of the advanced 24 technology materials as an entire set or by levels? 25 MR. ABELSON: Or both. 55 1 MS. OAKLEY: Or both. 2 THE WITNESS: Both. 3 Q. What number of copies of the entire set of 4 the advanced technology materials has RTC made in 1995? 5 A. How many sets is the question. 6 Q. Yes. 7 A. I can give you an estimate. I can't give 8 you an exact figure. 9 Q. What's your best estimate? 10 A. Maybe 400. 11 Q. In addition to the 400 sets of advanced 12 technology copied in 1995, has RTC made or had made 13 copies of the individual levels? 14 A. That's what I mean. The individual 15 levels. We have not made 400 sets of the entire work. 16 Q. Okay. When you say 400 copies, what are 17 you referring to there because I think now I'm unclear. 18 A. The different levels. 19 Q. Do you know how many copies have been made 20 of OT-I documents? 21 A. I'd say, an estimate, probably 16. 22 Q. Do you know how many copies have been made 23 of OT-II documents? 24 A. About 40. 25 Q. Do you know how many copies have been made 56 1 of the NOTS documents? 2 A. None. 3 Q. Do you know whether copies have been made 4 of the Class VIII Assist transcript? 5 A. Class VIII? None. 6 Q. Do you know whether any copies have been 7 made of the OT-III materials? 8 A. Yes. 9 Q. How many? 10 A. Probably 40. 11 Q. Have copies been made of the Sunshine 12 Rundown document? 13 A. I don't believe so. 14 Q. And what is the purpose for making the 15 additional copies of these various advanced technology 16 materials? 17 A. Because when a person, say, is on OT-II, 18 he's on that level for a longer period of time. So the 19 organization will need more copies of that level to be 20 able to service their parishoners, whereas OT-I takes a 21 shorter period of time so they need less copies. 22 They're only given the copies that they actually need 23 to have. 24 Q. Do you know the number of copies of the 25 OT-I materials that currently exist today? 57 1 A. Not without looking at the inventory. I 2 have no idea. 3 Q. Do you know the number of copies that 4 exist today of any of the levels of the advanced 5 technology? 6 A. Not without looking at the inventory. 7 Q. Do you know whether any records were kept 8 of the number of copies made of the advanced technology 9 materials prior to 1983? 10 A. Do I know that there were records kept. 11 Q. Yes. 12 A. Yes, there were. 13 Q. Do you know when there was the record 14 keeping started for the advanced technology documents 15 and how many copies were made? 16 A. It started from the very beginning when 17 the issues are first put out and given to the orgs. 18 Q. Mr. McShane, I just want to show to you 19 and not disclose otherwise at the table some of the 20 original documents provided. These were pursuant to 21 the protective order. I merely want to ask you about a 22 notation on these documents. These were the originals 23 of OT-II documents. 24 A. Uh-huh. 25 Q. And the cover says: "Confidential OT 58 1 Materials. OT-II." Turning to Bates number 615, there 2 is a box at the bottom of that page that says Set, and 3 then MBR. Then there's a number in the box. 006002. 4 Do you know what that refers to? 5 A. Yes. 6 Q. What is that? 7 A. It is a code number for the organization 8 and the number for this set that was given to them. 9 Q. And what is the code number for the 10 organization? 11 A. 006 would be the code number for that 12 particular organization. I'm not sure which one. That 13 would be one of the advanced organizations. And then 14 002 would be the pack, meaning pack number two. 15 Q. One of the items you mentioned as part of 16 the advanced technology was the Class VIII Assist tape. 17 I take it this is a transcript of a lecture given by 18 Mr. Hubbard; is that correct? 19 A. Yes. 20 Q. When was the lecture first given? 21 A. I'd have to look at the transcript. 22 Q. Do you know the circumstances of the 23 lecture being given? 24 A. I don't understand the question. 25 Q. Was the lecture given to the public, to 59 1 students? What were the circumstances of the lecture, 2 if you know? 3 A. Lecture was given to the Class VIII 4 students. 5 Q. I believe the Class VIII materials were in 6 the package that I just showed to you. So I'll show 7 you this again. If you can look through there and be 8 refreshed as to -- 9 A. You're saying that they're in here. 10 Q. Yes. 11 A. There's a transcript in here of it, yes. 12 Q. From that transcript, can you determine 13 that the Class VIII Assist lecture was first given to 14 students in October of 1968? 15 A. That's when it says. 16 Q. Did you attend that lecture? 17 A. No, I did not. 18 Q. Do you know whether the lecture was given 19 more than one time? 20 A. No. Just once. 21 Q. Do you know the number of attendees at the 22 lecture? 23 A. I have no idea. 24 Q. Do you know whether the lecture was given 25 in a locked room? 60 1 A. I don't know. 2 Q. Do you know anything about the setting, 3 the location where the lecture was given? 4 A. Well, it was given on the ship, and the 5 Class VIII course was confidential. So I'm sure the 6 necessary confidential procedures were followed. 7 Q. When you say the lecture was given on the 8 ship, what are you referring to? 9 A. On the ship APOLLO, a ship that we used to 10 own during the late sixties. 11 Q. Do you know how or whether the lecture was 12 recorded in any way? 13 A. It was recorded. 14 Q. Audio or video? 15 A. Audio. 16 Q. Do you know if there was any video? 17 A. There was no video. 18 Q. No video. Do you know whether there was 19 any film taken of the lecture? 20 A. Not that I know of. 21 Q. Do you know whether the audience was 22 permitted to tape the lecture? 23 A. Absolutely not. 24 Q. How do you know that? 25 A. Because it is a confidential level. 61 1 Q. Is there any other reason why you know 2 that the audience was not permitted to tape the 3 lecture? 4 A. I know from standard procedures that 5 audiences are not to allowed to tape any of Mr. 6 Hubbard's lectures. They were always recorded by the 7 church itself. 8 MR. LEIPOLD: Could you repeat the answer 9 to me? 10 (The record was read back as follows: 11 "Answer: I know from standard 12 procedures that audiences are not to allowed to 13 tape any of Mr. Hubbard's lectures. They were 14 always recorded by the church itself.") 15 MS. OAKLEY: Q. The standard procedures to 16 which you just referred, are those written procedures? 17 A. No. Just my knowledge. 18 Q. Were you a member of the Church of 19 Scientology in 1968? 20 A. No. 21 Q. Are you currently a member? 22 A. Yes. 23 Q. Do you know whether the standard 24 procedures to which you've just referred were in place 25 in October of 1968? 62 1 A. I have no firsthand knowledge of that. 2 Q. Do you know what confidentiality 3 procedures were in place with respect to lectures in 4 October of 1968? 5 A. Any lectures. 6 Q. Yes. Any lectures. 7 A. No. Unless it was a confidential lecture, 8 there would be no confidential procedures. 9 Q. Do you know what confidential procedures 10 were in place for any confidential lectures given in 11 1968? 12 A. It was limited to people who were allowed 13 on that level. 14 Q. How is it that you know that limitation 15 was in place in 1968? 16 A. Just from my experience over the years. 17 Q. When did you first become a member of the 18 Church of Scientology? 19 A. 1973. 20 Q. So you don't have any personal experience 21 of Scientology efforts to maintain materials as 22 confidential prior to 1973; correct? 23 A. Experience, no. 24 Q. Do you know whether there was any express 25 prohibition on tape recording of the Class VIII Assist 63 1 lecture? 2 A. Expressed by whom? 3 Q. Any express prohibition given to the 4 audience of the Class VIII Assist lecture. 5 MR. ABELSON: I'm going to object on the 6 grounds that it is vague and ambiguous and 7 unintelligible. You can answer it if you understand 8 it. If you don't, please don't. 9 THE WITNESS: I don't know. 10 MS. OAKLEY: Q. Do you know when the 11 Class VIII Assist lecture was transcribed? 12 A. First transcribed. 13 Q. Yes. 14 A. I don't know. 15 Q. Do you know who did the first 16 transcription of the Class VIII Assist Tape? 17 A. I don't know. 18 Q. Do you know whether there have been 19 subsequent transcripts of the Class VIII Assist Tape? 20 A. Yes, there have. 21 Q. Do you know how many times the Class VIII 22 Assist Tape has been transcribed? 23 A. I'm not sure. 24 Q. Do you know how many copies currently 25 exist of the Class VIII Assist lecture tape, audio 64 1 tape? 2 A. I'd have to look at the inventory. 3 Q. Can you estimate it in any way? 4 A. I really don't know. 5 Q. Pardon me? 6 A. I don't know. 7 Q. Have you attended any of the confidential 8 Hubbard lectures? 9 A. I don't understand "attended." 10 Q. Did you personally attend any confidential 11 lectures by Mr. Hubbard as they were being given live 12 as opposed to taped or reading a transcript? 13 A. No. 14 Q. Do you know how many confidential lectures 15 are part of the advanced technology that were given by 16 Mr. Hubbard? 17 A. Yes, I think so. 18 Q. How many? 19 A. On the advanced levels themselves, there 20 are ten. Qualify that. Ten films which are what I 21 call ten lectures. 22 Q. I take it for each of these ten, you did 23 not see the live performance of the lecture; correct? 24 A. No. 25 Q. Is the Class VIII Assist lecture part of 65 1 one of the course levels of the advanced technology? 2 A. It is part of the Class VIII course, yes. 3 Q. Is the Class VIII course part of the 4 OT-VIII course? 5 A. No. 6 Q. Are there other components to the Class 7 VIII course other than the Assist tape? 8 A. Yes. There are many tapes. 9 Q. Does the Class VIII course consist 10 entirely of tapes? 11 A. No. Materials. 12 Q. The registration, copyright registration 13 for the Class VIII Assist Tape was filed in September 14 1994; correct? 15 A. I'd have to look at the registration. 16 Q. Does that sound approximately right to 17 you? 18 A. I really don't know. 19 Q. Are you responsible for seeing to it that 20 advanced technology works are registered with the 21 copyright office? 22 A. Yes. 23 Q. I'm handing to you a copy of the first 24 amended complaint which has various registration 25 certificates attached so you can refresh your memory 66 1 with respect to the registration of the Class VIII 2 Assist. Trying to locate it here to make it a little 3 bit easier. 4 MR. LEIPOLD: I think it is the page 5 marked 136. 6 MS. OAKLEY: Thank you. If you'll turn to 7 Bates numbering 136. 8 THE WITNESS: Yes. 9 Q. Can you identify what is in front of you, 10 part of Exhibit H to the first amended complaint. We 11 are looking at Bates number 136 and 137. What is that 12 document, please? 13 A. Registration certificate for the Class 14 VIII, lecture number ten. 15 Q. And does this document refresh your memory 16 as to when the registration for that work was sought? 17 A. Yes, it does. 18 Q. When was that? 19 A. In the September 7, 1994. 20 Q. Do you know whether there was any earlier 21 registration of the Class VIII Assist lecture? 22 A. No, there was not. Not to my knowledge. 23 Q. Do you know why registration was not filed 24 earlier than September of '94? 25 MR. ABELSON: Objection. Calls for a 67 1 legal conclusion. 2 MS. OAKLEY: Q. I'm only asking for your 3 opinion as the person with responsibilities for 4 obtaining the registrations for advanced technology 5 works. I'm not asking for any legal conclusion. 6 Do you know why the registration -- what 7 is your understanding as to why the registration for 8 the Class VIII Assist lecture was not filed earlier 9 than September of 1994? 10 MS. KOBRIN: Counsel, I'm going to object. 11 Mr. McShane and RTC registered these works on the 12 advice of counsel. Now, if he has any understanding as 13 to -- if his answer calls for any of the advice that 14 was given by counsel during that period of time, I'm 15 going to object and instruct him not to answer on the 16 grounds that it is attorney/client privilege. 17 I will state for the record that the way 18 in which these registrations were handled depended upon 19 the state of the law at the time with respect to the 20 ability to register taped recordings. 21 Now, if Mr. McShane has any knowledge as 22 he sits here today as to what the reasons were at the 23 points in time in which protection was sought for those 24 tape recorded lectures, then he may answer the 25 question. If it involves again the disclosure of any 68 1 attorney advice, I'm going to instruct him not to 2 answer. That document speaks for itself. 3 MR. LEIPOLD: I'm going to object that 4 that was a speaking objection. 5 MS. KOBRIN: Fine. 6 MS. OAKLEY: I concur with Mr. Leipold's 7 objection. And perhaps we can go back to the question 8 again. 9 I'm not looking for any legal conclusion 10 as to the right or wrong of filing for registration. I 11 am merely asking why is it that a registration was not 12 earlier filed for the Class VIII lecture tape, if you 13 know. 14 THE WITNESS: I need a break here. 15 THE VIDEO OPERATOR: It is 11:24. We are 16 going off the record. 17 MS. OAKLEY: I would like to put on the 18 record before we break just an objection for breaking 19 here for advice of counsel and perhaps further 20 instruction by counsel pending a question on the 21 record. I think the question can be answered before. 22 THE WITNESS: The reason I'm questioning 23 it is because I don't want to divulge attorney client 24 privileged information and I'm asking her if I would or 25 not. 69 1 MS. KOBRIN: Counsel, when would a witness 2 want to consult counsel other than when he has a 3 question about his answer to a question? 4 MR. LEIPOLD: I concur that it is 5 inappropriate to seek advice of counsel with a question 6 pending. 7 MR. ABELSON: We're very happy to hear 8 that. 9 THE VIDEO OPERATOR: It is 11:25 and we're 10 going off the record. 11 (Short break in proceedings.) 12 THE VIDEO OPERATOR: It is 11:27. We're 13 back on the record. 14 MS. OAKLEY: If we could have the question 15 reread that was pending before the break. 16 (The record was read back as follows: 17 "Question: Do you know why the 18 registration -- what is your understanding as 19 to why the registration for the Class VIII 20 Assist lecture was not filed earlier than 21 September of 1994?") 22 THE WITNESS: My understanding is that 23 none of the advanced technology materials were 24 registered because they are unpublished works. And 25 they were registered at the time when litigation was 70 1 either planned or was going to be brought, as a 2 requirement in the United States. 3 Q. Are there registrations for other advanced 4 technology unpublished works, other than the Class VIII 5 Assist lecture? 6 A. Yes. 7 Q. And those registrations were obtained 8 before September of 1984; correct? 9 A. September of '84? 10 Q. Excuse me. '94. 11 MS. KOBRIN: Objection. Vague and 12 ambiguous. If you can answer the question, go ahead. 13 THE WITNESS: I believe they were. 14 MS. OAKLEY: Q. Is it accurate to say 15 that the registration of the Class VIII Assist Tape was 16 made in September of 1994 in anticipation of the 17 existing litigation, the current litigation? 18 A. I believe so. 19 MR. LEIPOLD: Just for clarification, by 20 current litigation, you mean this litigation; is that 21 correct. 22 MS. OAKLEY: Yes. The litigation 23 involving Netcom, Tom Klemesrud and Dennis Erlich. 24 THE WITNESS: Right. 25 Q. With respect to a motion for contempt 71 1 filed by the plaintiffs in this action, you submitted a 2 declaration attaching the transcript of the Class VIII 3 Assist lecture and portions of that transcript were 4 redacted. Do you recall that? 5 A. Yes. 6 Q. How did you decide what information to 7 redact? 8 MS. KOBRIN: Objection to the extent it 9 calls for disclosure of attorney-client privileged 10 information. You may go ahead and answer the question. 11 THE WITNESS: I redacted any of the 12 confidential materials that were in it. 13 MS. OAKLEY: Q. How did you distinguish 14 what was confidential from what was not confidential in 15 the lecture? 16 A. Based on my knowledge of confidential 17 materials. 18 Q. Can you be any more specific as to what 19 distinguishes the confidential from the not 20 confidential information in the lecture transcript? 21 A. The words. 22 Q. Can you be any more specific that? 23 A. Not without discussing the confidential 24 materials. 25 Q. What is the nature of the redacted 72 1 information? 2 MS. KOBRIN: Objection. Vague and 3 ambiguous. 4 THE WITNESS: I don't understand. 5 MS. OAKLEY: Q. How is it that you can 6 determine what of the information in the lecture 7 transcript is confidential and what is not 8 confidential? 9 A. Because I know the words. 10 Q. What is there about the substance of the 11 information claimed to be confidential that makes it 12 confidential? 13 A. I don't understand your question. 14 Q. Does RTC have written policies regarding 15 the security measures to protect the confidentiality of 16 the advanced technology materials? 17 A. Written policies. 18 Q. Yes. 19 A. There are issues, yes. 20 Q. What do you mean by issues? 21 A. The actual security systems themselves are 22 written down, what they consist of, what are the 23 requirements. 24 Q. Are those documents maintained at RTC? 25 A. Yes. 73 1 Q. Are there any other written guidelines 2 with respect to maintaining the confidentiality of the 3 advanced technology materials? 4 A. There's an LRH policy. 5 Q. Where can that be found? 6 A. I believe we supplied it to you. 7 Q. What are the titles of the documents in 8 which that can be found? 9 A. I'd have to look at them and see. 10 Security of the OT materials. Things like that. 11 Q. Do you consider yourself to have the 12 primary responsibility for protection and enforcement 13 of the confidentiality of the advanced technology 14 materials? 15 A. Yes. 16 Q. Who had that primary responsibility before 17 you? 18 A. I'm not really sure. It's a long time 19 ago. 20 Q. When would that be? 21 A. Prior to 1983. 22 Q. So you don't know who before 1983 had 23 responsibility for protecting the confidentiality of 24 advanced technology materials; correct? 25 A. Generally in the organizations themselves, 74 1 it would be the security force. It would be also the 2 Hubbard communications office, also responsible for 3 security, as well as the technical staff themselves. 4 Q. And what do you mean by the technical 5 staff? 6 A. The staff who are actually dealing with 7 the materials, who are training other staff members to 8 deliver it, or who are actually delivering the service 9 to the parishoners. 10 Q. Have you made any improvements to the 11 security for the advanced technology documents since 12 you took on the responsibility in 1983? 13 A. Yes. 14 Q. What improvements? 15 A. It has varied over the years. As the 16 technology has improved, we've improved the security. 17 Q. Can you be specific? What particular 18 improvements have you put in place since 1983? 19 A. Boy ... okay. We've made improvements 20 electronically. The individual packs themselves are 21 electronically wired into an alarm system. Rooms are 22 monitored by video cameras. Improved door locks. 23 Improved filing cabinets. More secure. Fireproof. 24 Things like that. 25 Q. Any other improvements that you can 75 1 identify in the security since you came on board in 2 1983? 3 MS. KOBRIN: Counsel, are you asking him 4 to detail every single improvement from the time he 5 took over those responsibilities? 6 MS. OAKLEY: Yes. 7 MS. KOBRIN: I am going to object that 8 that is overly broad and beyond the scope of the 9 examination. Unless you've got documents, I don't know 10 how you can expect him to recall everything. 11 MS. OAKLEY: Q. Can you identify any 12 other types of improvements made in the security since 13 you came on board in 1983? 14 A. Yes. I mean, there's been several 15 improvements. Improvements to the rooms themselves 16 where the materials are delivered. There's 17 improvements to the buildings. 18 Q. Do you agree with your counsel that the 19 nature and scope of the improvements since 1983 have 20 been so vast that you would not be able to answer such 21 a question? 22 MS. KOBRIN: Objection. That misstates 23 what I had said, Counsel. 24 THE WITNESS: I don't agree with your 25 statement. 76 1 MS. OAKLEY: Q. Do you think that you 2 could sitting here today identify the improvements made 3 in the security since 1983 to protect the advanced 4 technology documents? 5 A. I can give you generally what the 6 improvements are. 7 Q. Have you now identified for me what the 8 improvements have been? Or are there additional 9 improvements to the security? 10 A. Generally what I've given you are the 11 improvements. I'm not saying that I've given you 12 everything. 13 MS. OAKLEY: I believe we're at the end of 14 this first tape. So we'll take a break at this moment. 15 THE VIDEO OPERATOR: This is the end of 16 tape one of Warren McShane. It is 11:37. 17 (Short break in proceedings.) 18 THE VIDEO OPERATOR: This is the beginning 19 of videotape two in the deposition of Warren McShane. 20 It is 11:38. 21 MS. OAKLEY: Q. In your one of the 22 declarations that you submitted in this matter, you 23 identified a list of security devices to protect the 24 advanced technology documents. One of those was the 25 use of photo identity cards with magnetic codes; is 77 1 that correct? 2 A. That's true. 3 Q. For how long has there been the use of 4 photo identity cards with magnetic codes? 5 A. Probably last couple of years. 6 Q. Can you be any more specific? 7 A. I don't remember exactly when it went in, 8 no. 9 Q. Since 1990? 10 A. Yes. 11 Q. I take it you do not have a photo 12 identity, I.D. card, with a magnetic code for Mr. 13 Dennis Erlich; is that correct? 14 A. Not that I'm aware of. 15 Q. As far as you know, did Mr. Erlich ever 16 have a photo identity card? 17 A. I don't know. 18 Q. Do you know if there is any requirement 19 for photo identity cards prior to 1982 in order to 20 obtain access to advanced technology materials? 21 A. Not that I'm aware of. 22 Q. Are photo identity cards currently 23 required for access to advanced technology documents at 24 all locations where those documents are found? 25 A. I'm not sure if they all have it. If they 78 1 don't have it, they will have it. 2 Q. Which locations may not yet have the photo 3 I.D. requirement at this time? 4 A. I don't know if the U.K. uses it yet. And 5 the advanced Los Angeles organization, I don't know if 6 they require it. 7 Q. Which organization is the advanced L.A. 8 organization? 9 A. It is called the Advanced Organization of 10 Los Angeles. Part of the Church of Scientology of 11 Western United States Corporation. 12 Q. Do you know the number of different 13 locations where the advanced technology documents are 14 held? 15 MS. KOBRIN: Asked and answered, counsel. 16 MS. OAKLEY: We know the number of 17 different licensees. I'm asking the different 18 locations where advanced technology documents are held. 19 THE WITNESS: I could work it out, yes. 20 Q. Is it more than the seven locations? 21 A. Yes. 22 Q. How many more than seven if you could work 23 that out? 24 A. As I sit here right now, I'd say probably 25 ten. 79 1 Q. Can you estimate out of the ten locations 2 in how many of those locations it is required to use a 3 photo I.D. for access? 4 A. I believe three. 5 Q. Which three require the photo I.D. access? 6 A. I believe it is the FSO, Flag Service 7 Organization, Clearwater, Flagship Service Organization 8 and the advanced organization in Copenhagen. 9 Q. And why is the photo I.D. card requirement 10 not in place in the other seven locations? 11 A. Because it is just an improvement that we 12 are doing. 13 Q. You also identified the requirement of 14 personal identification numbers to get access to 15 advanced technologies in your declaration; is that 16 correct? 17 A. Identification numbers. 18 Q. Correct. 19 A. I don't recall that. If it goes with the 20 card, I think is what you mean, then that's true. 21 Q. Let me ask the question in a different 22 way. Other than having a photo I.D. card, is there a 23 requirement for a personal identification number held 24 by the member in order to get access to the advanced 25 technology? 80 1 A. No. 2 Q. You identified that the advanced 3 technology related services are only provided behind 4 doors locked with a card reader; is that correct? 5 A. Yes. 6 Q. In how many of the ten locations is there 7 a card reader door lock? 8 A. It's the same. They go with the photo 9 I.D. cards. 10 Q. So only three of the ten locations have 11 the card reader door locks; correct? 12 A. Yes. 13 Q. You also identified as a security measure 14 the inability to go into the service area until the 15 door behind the parishoner has been closed and locked 16 as a security device. 17 A. Uh-huh. 18 Q. Do you recall that? 19 A. Yes. 20 Q. Out of the ten locations where the 21 advanced technology documents are found, which of those 22 have this security device? 23 A. I think, six. I think six of them. 24 Q. Which six? 25 A. The Ship organization. Flag Service 81 1 Organization, Clearwater. The U.K. church. 2 Copenhagen. Australia. CSI, of course. Two locations 3 in CSI. That's it. That's six. I'm sorry. Celebrity 4 Center, too. 5 Q. What is the Celebrity Center? 6 A. Celebrity Center International in Los 7 Angeles. That's a part of the servicing, the service 8 location at Celebrity Center is part of CSI. It is a 9 group that's called the Universe Core. A branch of CSI 10 that delivers the OT materials to the staff. 11 Q. So how many locations within CSI have this 12 security device? 13 A. I think three. 14 Q. You also identified as a security device a 15 second locked door with a card reader requiring an I.D. 16 number. I take it that security device is only 17 available at the three locations that use the photo 18 I.D; correct? 19 A. Yes. 20 Q. You also identified the need to present a 21 photo I.D. to the course administrator to obtain access 22 to the advanced technology. Is that security device 23 limited to the three locations where photo I.D.s are 24 used? 25 A. Yes. The actual I.D. card, yes. 82 1 Q. Do you have a replacement type of security 2 device at the other seven locations? 3 A. Sure. 4 Q. What is that? 5 A. Well, all the rooms are locked. Access to 6 the rooms are only permitted by invitation only to the 7 parishoner. He has to have a certificate that shows 8 that he's eligible to have access to the room. That's 9 presented to the administrator. Packs are logged in 10 and out. There are various alarms in each of the 11 rooms. 12 Q. You identified as a security device having 13 the materials in locked cabinets. At which of the ten 14 locations is this device in place? 15 A. All ten. Always has been. 16 Q. Since when have the materials been 17 maintained in locked cabinets? 18 A. Since the very beginning. 19 Q. When do you mean by the very beginning? 20 A. Whenever the first advanced level came 21 out, in '67. 22 Q. How do you know that? You weren't at the 23 organization in '67; correct? 24 A. No. 25 Q. In fact, you didn't become a member until 83 1 some years later? 2 A. Right. 3 Q. So what is your basis for saying that the 4 materials have always been maintained in locked 5 cabinets? 6 A. Talking to the people who were there at 7 that time, security people, technical staff. My own 8 observation when I was in, when I did the levels 9 myself. 10 Q. When did you yourself do the advanced 11 technology levels? 12 A. First one I did was in '75. 13 Q. You identified as a security device a lock 14 on the materials that then causes the door to the 15 course room to be locked. Do you recall that security 16 device? 17 A. No. It's not a lock. 18 Q. What do you call it? 19 A. I think you're referring to the cables 20 that plug in, actually plug in. And when they are 21 unplugged, the doors unlock. 22 Q. In how many of the ten locations is that 23 device found? 24 A. All of them. 25 Q. And when was that installed at the various 84 1 locations? 2 A. I believe since -- I think we started that 3 back in '86. Probably all completed by '88. 4 Q. You also described in your declaration a 5 means for having locking cables connecting to the seat 6 where the parishoner studies. Do you recall that? 7 A. Yes. 8 Q. Was that security device put in place at 9 the same time? 10 A. Yes, it is all part of the cable security 11 system. 12 Q. You identified security alarms in your 13 declaration. 14 A. Uh-huh. 15 Q. Which of the ten locations have a security 16 alarm system to protect the advanced technology 17 documents? 18 A. They all have alarms. 19 Q. When were the alarms installed to protect 20 the advanced technology documents, if you know? 21 A. They were all in at that time period, like 22 '88. I'm just thinking if they were in before that. 23 There were varying, different types of alarms that were 24 used prior to that time period. Like the windows would 25 be alarmed. If somebody broke a window, the alarms 85 1 would go off. If somebody entered the room when they 2 weren't supposed to, alarms would go off. 3 Q. Do you know when the first security alarms 4 were installed to protect the advanced technology at 5 the Flag Service Organization? 6 A. Probably in the early eighties. An 7 estimate. 8 Q. Do you know when the first security alarm 9 system was put in to protect advanced technologies at 10 the Western U.S. organization? 11 A. Probably a little after that. 12 Q. Late eighties? 13 A. Mid-eighties. 14 Q. Do you know when the first security alarm 15 system was put in for the U.K. organization? 16 A. I think they were all done around the same 17 time period, mid-eighties. 18 Q. So there was -- if I'm understanding 19 correctly - a security alarm system put in around the 20 mid-eighties and then upgraded in '88? 21 A. You said alarms. 22 Q. Security alarm system. 23 A. Yes. 24 Q. Is that accurate, the chronology? 25 A. Yes. There's always been security 86 1 systems. They just have changed over the years. 2 Q. I understand. You described in your 3 declaration that tapes were not given to or touched by 4 parishoners as a security device. Do you recall that? 5 A. Yes. 6 Q. When was that practice put into place? 7 A. Sometime after 1990. 8 Q. Is that practice in place at all ten 9 locations? 10 A. No. I don't believe so. 11 Q. Which locations have the practice where 12 the tapes cannot be touched by the parishoner? 13 A. I know it is at the Flagship organization. 14 I'm sorry. Flag Service Organization. At the advanced 15 organization in Los Angeles, Australia, Copenhagen. 16 I'm just not totally positive if U.K. has it. Not all 17 those ten locations actually have the Class VIII tapes. 18 Q. Which of the organizations does not have 19 the Class VIII tapes? 20 A. Like, for instance, I gave you Hamburg and 21 Orange County don't have it. Celebrity Center does not 22 have it. Two of the three locations I gave you for CSI 23 don't have it. 24 Q. You identified a system of cabling between 25 the tapes and a door lock as another security device; 87 1 is that correct? 2 A. For the transcripts, yes. 3 Q. Is that cabling system in place only at 4 the locations that have a similar cabling system for 5 the rooms and the seats for the parishoners? 6 A. Yes. 7 Q. You identified videos of the course areas 8 being monitored, or excuse me, security cameras 9 monitoring the course areas. Do you have security 10 cameras at each of the ten locations? 11 A. Yes. 12 Q. Since when? 13 A. Since the mid-eighties, I believe. 14 Q. I take it you personally have access to 15 the advanced technology materials; correct? 16 A. Yes. 17 Q. Do you need to go through the procedures 18 described in your declaration in order to obtain access 19 to the advanced technology materials? 20 A. If I went to those service organizations, 21 yes, I would. 22 Q. Can you get access to the advanced 23 technology materials by some means other than going to 24 one of the service organizations? 25 A. Yes. 88 1 Q. How? 2 A. Well, where they're printed. 3 Q. Where are the advanced technology 4 documents printed? 5 A. Within the Church of Scientology 6 International. 7 Q. And I take it at the Church of Scientology 8 International, you don't need to have a photo I.D. card 9 and I.D. number and so forth to get access to the 10 advanced technology documents; correct? 11 MS. KOBRIN: Objection. Vague and 12 ambiguous, Counsel. Not clear whether you're still 13 asking about him personally or anyone else. 14 MS. OAKLEY: Q. I'm asking about you 15 personally, to get access to the advanced technology 16 documents. Do you need to have a photo I.D. to get 17 access to the documents at the Church of Scientology 18 International? 19 A. I have an I.D. card. Not a photo I.D. 20 card. 21 Q. You mentioned the requirement of 22 confidentiality agreements in order to obtain access to 23 advanced technology documents; correct? 24 A. Yes. 25 Q. Since when has it been required that 89 1 someone sign a confidentiality agreement? 2 A. I believe since the sixties. 3 Q. And you don't have personal knowledge of 4 that though; correct? 5 A. Yes, I do. 6 Q. What is your personal knowledge of the 7 requirement of confidentiality agreements in the 8 sixties? 9 A. I've seen the agreements. 10 Q. Does RTC maintain confidentiality 11 agreements signed by individuals given access to 12 advanced technology documents? 13 A. No. 14 Q. Where are those agreements kept? 15 A. In the service organizations. 16 Q. Do you know whether all confidentiality 17 agreements are maintained by the various service 18 organizations? 19 A. Yes, they are. 20 Q. You mentioned the requirement of a bond. 21 Why is a bond required in order to obtain access to the 22 advanced technology materials? 23 A. Well, they're called different things over 24 the years, but it is a security bond. Person would 25 pledge to not disclose the materials once they have 90 1 gained access to them. 2 Q. Do you know whether any bond has been 3 enforced for someone violating the pledge? 4 A. Yes. 5 Q. How many instances? 6 A. I don't know. 7 MS. KOBRIN: That he knows of personally. 8 MS. OAKLEY: Yes. 9 THE WITNESS: I don't know what you mean 10 by enforce. 11 Q. Do you know whether there's ever been a 12 recovery on a bond? 13 A. I don't understand. 14 Q. Has someone been required -- I'm assuming 15 the bond is a pledge of money; correct? 16 A. Not necessarily. 17 Q. What do you mean when you say a bond? 18 A. Confidentiality bond. The person agrees 19 to maintain the confidentiality of the materials and 20 not to disclose them to anyone. 21 Q. Is there any penalty if the materials are 22 disclosed in the bond? 23 A. Well, the bond varied over the years. 24 Some of the bonds carried a liquidated damages clause. 25 Some didn't. 91 1 Q. Do you know whether there was ever a 2 recovery of the liquidated damages amount? 3 A. Not that I know of. 4 Q. Do you know whether the bonds are required 5 to be signed by the individual seeking access to the 6 advanced technology materials? 7 A. Yes, they are. 8 Q. Are those signed bonds kept somewhere? 9 A. Yes. 10 Q. Where are they kept? 11 A. I explained to you. In the organizations. 12 Q. Is the bond part of the confidentiality 13 agreement, is it a separate agreement or all within one 14 agreement? 15 A. I think now they're together as one 16 agreement. I think it is called a confidentiality 17 agreement or waiver agreement. I think over the years, 18 they may have been separate. They may have been 19 together. Depends on the local laws in the various 20 countries. 21 Q. Does RTC have any competitors? 22 MS. KOBRIN: Objection. Vague and 23 ambiguous. 24 THE WITNESS: I don't understand what you 25 mean by competitors. 92 1 MS. OAKLEY: Q. To give you an example of 2 competitors, for example, you could go to one store to 3 buy some merchandise or you could go to another store 4 perhaps to buy the same merchandise. Those two stores 5 may be competitors of one another. And do you ever use 6 the word "competitors"? 7 MS. KOBRIN: Objection. Vague and 8 ambiguous. 9 MS. OAKLEY: Q. I take it you don't have 10 an understanding of the word competitor yourself. You 11 don't use that? 12 A. In a normal sense, outside of religion? 13 Yes, of course I do. Within a church, within our 14 church setting, I'm not totally sure what you're 15 referring to. 16 Q. Is it your view that RTC does not have 17 competitors? 18 A. I can't answer it until I understand how 19 you're defining the word competitor within a religious 20 sense. 21 Q. Do you think it is possible to have 22 competitors within a religious sense? 23 A. From my understanding, yes, I do. 24 Q. In what way? 25 A. If somebody had stolen the materials, 93 1 and -- our materials, and were using them in any way to 2 the detriment of the church or its parishoners, I'd say 3 it would be a competitor. 4 Q. Can you identify any competitors at this 5 time? Current competitors of RTC. 6 A. I mean, they've come and they've gone. 7 Enid Vien for instance was a competitor in San Diego. 8 V I E N. E N I D. 9 Q. Can you identify any other competitors of 10 RTC? 11 MS. KOBRIN: Currently? 12 MS. OAKLEY: In the past. 13 THE WITNESS: A fellow by the name of 14 Larry West who is also located in San Diego or was. He 15 got sued for trademark infringement. 16 There was a fellow -- skips my mind now -- 17 in Oklahoma who splintered off his mission. There was 18 a gentleman -- I believe his name was Harry Palmer in 19 Elmira, New York, who split off his mission. There was 20 a lady in Brazil, name of Lordez. Don't ask me to 21 spell it. 22 David Mayo, at one time. Located in Santa 23 Barbara. John Zeigel, located in Los Angeles. Ben 24 Corridon was located in Riverside. There was Ron Lolly 25 in the United Kingdom. Robin Scott in Scotland. A 94 1 gentleman in Italy. I don't remember his name. It was 2 one of those long Italian names. That's all I can 3 recall right now. 4 Q. Are any of the individuals you've just 5 identified currently competitors of RTC? 6 A. I don't believe so. 7 Q. Do you consider any organization to be a 8 competing organization that promotes or teaches a 9 philosophy or religion that is different than the 10 Church of Scientology? 11 MS. KOBRIN: Objection. Vague and 12 ambiguous. Do you understand the question, Mr. 13 McShane? 14 THE WITNESS: Not fully. 15 MS. OAKLEY: Q. Would it help to have the 16 question repeated? 17 A. Please. 18 (The record was read back as follows: 19 "Question: Do you consider any 20 organization to be a competing organization 21 that promotes or teaches a philosophy or 22 religion that is different than the Church 23 of Scientology?") 24 THE WITNESS: Do I consider them 25 competing? No. 95 1 Q. Do you consider Catholicism to be a 2 competitor of RTC? 3 A. No. 4 Q. Or Judaism? 5 A. No. 6 Q. Do you consider Mr. Dennis Erlich to a 7 competitor of RTC? 8 A. To the degree that he's violating our 9 copyrights and trade secrets, yes. 10 Q. Can you describe the market for the 11 advanced technology materials? 12 A. Market. You'll have to define that for 13 me. 14 Q. Who are the consumers of advanced 15 technology materials? 16 A. Well, if you mean consumers -- who receive 17 the advanced technology? It would be our parishoners. 18 Q. Would your parishoners be able to obtain 19 from Mr. Erlich the same advanced technology materials 20 as they can obtain from one of the Church of 21 Scientology organizations? 22 A. Well, the ones that he has in possession. 23 Q. Do you believe that your parishoners could 24 receive from Mr. Erlich the same teaching to go along 25 with the advanced technology materials from Mr. Erlich 96 1 as they can receive from one of the Church of 2 Scientology organizations? 3 A. No. 4 MR. ABELSON: I think this would be a good 5 time for us to take a break since my stomach is going 6 blup, blup, blup. 7 MS. OAKLEY: Fine. 8 VIDEO OPERATOR: It is 12:11. We're going 9 off the record. 10 (Luncheon Recess) 11 THE VIDEO OPERATOR: We are back on the 12 record. It is 1:20. 13 Q. Mr. McShane, as far as you know, has 14 Church of Scientology lost any parishoners to Mr. 15 Dennis Erlich as a result of his use of any Scientology 16 materials? 17 A. Not that I know of. It's possible but I 18 don't have any knowledge of that. 19 Q. Are you aware of whether Scientology lost 20 any parishoners as a result of any of the dozen or so 21 individuals you identified as competitors before our 22 lunch break? 23 A. Lost parishoners to them? 24 Q. As a result of them. Yes. To them. 25 A. I don't know. 97 1 Q. You don't know? 2 A. I don't know. 3 Q. Of these dozen or so individuals you 4 identified as past competitors of RTC, do you know 5 essentially during the time period that they were 6 competitors? In other words, if we go through them, do 7 you know the time period that they were competitors of 8 RTC? 9 A. I could probably estimate when it was. 10 Q. For Enid Vien, what was the time period 11 you considered that individual to be a competitor? 12 A. Well, it was up until 1993. 13 Q. And beginning when? 14 A. I'm not really sure when she began her 15 group. 16 Q. Can you estimate? 17 A. Well, I could tell you when we became 18 aware of her, which is the only knowledge I have, which 19 is about a year and a half before that. 20 Q. Larry West. For what period of time did 21 you consider him to be a competitor of RTC? 22 A. Well, it was early eighties. I think it 23 was up until 1984, I believe. 24 Q. For what period of time? 25 A. Probably a couple of years before then. 98 1 Q. The individual in Oklahoma, how long was 2 that individual a competitor? 3 A. Probably the same time period. 4 Q. For the same length of time? 5 A. I believe so. 6 Q. Harry Palmer. For how long was he a 7 competitor of RTC? 8 A. I believe like from 19 -- probably 1984 to 9 1985. 10 Q. The individual named Lordez in Brazil: 11 For what period of time was that person a competitor? 12 A. Probably 1987, '88. 13 Q. David Mayo: When was he a competitor? 14 A. I'd say from late '82 to '86. 15 Q. When was John Zeigel a competitor? 16 A. I don't know. Mid-eighties. 17 Q. For what period of time? 18 A. Probably a year. 19 Q. Ben Corridon: For what period of time was 20 he a competitor? 21 A. Probably same answer. Mid-eighties for 22 about a year or so. 23 Q. Ron Lolly in the U.K. 24 A. Lolly was late '83 to probably '86. 25 Q. And Robin Scott? 99 1 A. Same. 2 Q. Finally the individual in Italy with a 3 long name. How long was that person a competitor? 4 A. I think it's Fuchinetti. I think it 5 was -- he probably lasted about a year. About '86. 6 Q. Is it accurate to say that in each 7 instance you considered these individuals to be 8 competitors because they were utilizing Scientology 9 documents, but not with permission of any of the 10 Scientology organizations; is that correct? 11 A. Correct. 12 Q. Do you think it is accurate to describe 13 the market for the advanced technology documents as 14 those individuals who meet Scientology's requirements 15 for access and also who want to further their 16 Scientology training? Would that be an accurate 17 description? 18 (The record was read back as follows: 19 "Question: Do you think it is accurate 20 to describe the market for the advanced 21 technology documents as those individuals who 22 meet Scientology's requirements for access and 23 also who want to further their Scientology 24 training? Would that be an accurate 25 description?") 100 1 MR. ABELSON: Object that it is vague and 2 ambiguous and unintelligible, but if you understand it, 3 you certainly can answer. 4 THE WITNESS: I'm still not totally clear 5 by what you mean by market. 6 MS. OAKLEY: Q. Who are the customers? 7 Who does RTC consider to be the customers for advanced 8 technology documents? 9 A. I don't consider that we have customers. 10 Q. To whom does RTC promote the advanced 11 technology documents? 12 A. The people who receive the advanced 13 technology are parishoners of the church. 14 Q. Is it accurate to say that Scientology 15 training requires the following of a specified method 16 for the learning of the various courses? 17 A. The courses have materials that the 18 individual studies. 19 Q. Are there requirements to take the courses 20 in a certain order? 21 A. Yes. 22 Q. And within each course are there other 23 methods or procedures that must be followed in order to 24 complete the course? 25 A. Yes. 101 1 Q. And in your view, can a person derive 2 benefit from any single one aspect of a course without 3 having the entire course? 4 A. Certainly. 5 Q. In what respect? 6 A. A person can derive benefit by reading any 7 of Mr. Hubbard's works. 8 Q. Can a person derive the full benefit by 9 reading merely an aspect of one of the courses and not 10 the entire course? 11 A. Benefit of what? 12 Q. Full benefit intended for the course. 13 A. No. He would receive the full benefit of 14 the course when he completed the course. There would 15 be many benefits in-between. 16 Q. I understand from your earlier testimony 17 that parishoners are required to pay a donation in 18 order to have access to the various levels of the 19 advanced technology documents; correct? 20 A. Yes. 21 Q. Since the payment is a required payment, 22 why is it called a donation? 23 A. It is a fixed donation. 24 Q. Why do you call it a donation and not 25 merely the price? 102 1 A. Because the parishoners are donating funds 2 to their church. It is voluntary. They don't have to 3 do it if they don't want to. 4 Q. But they have to pay the donation in order 5 to obtain access to the advanced technology documents; 6 correct? 7 A. Not any different than any religion. 8 Q. Just answer the question yes or no. 9 A. Repeat the question. 10 Q. But they have to pay the donation in order 11 to obtain access to the advanced technology documents; 12 correct? 13 A. Yes. 14 Q. During what time period did you personally 15 go through the advanced technology training? 16 A. From 19 -- I started in 1975. 17 Q. Through until when? 18 A. Present time. 19 Q. When you started your learning in 1975, at 20 what organization did you receive your learning? 21 A. Very first organization was the American 22 Saint Hill Organization in Los Angeles. 23 Q. Were you permitted at anytime to remove 24 any advanced technology documents from the premises 25 during the course of your learning? 103 1 A. Absolutely not. 2 Q. Earlier today, we talked about the number 3 of copies of the various advanced technology documents 4 that have been made thus far in 1995. Do you know the 5 number of copies of advanced technology documents made 6 during your tenure at RTC? 7 A. Not without looking at the inventory. 8 Q. Can you estimate, say in the last ten 9 years, '85 to '95, how many copies have been made of 10 the OT-I documents? 11 A. Of the original or the later revision? 12 Q. Of the original. 13 A. I don't know the exact number. It would 14 be very small. 15 Q. Can you give me an estimate? 16 MR. ABELSON: Maybe give a range, if you 17 can without guessing. 18 THE WITNESS: It would be a guess. 19 Without looking at the inventory, I couldn't tell you. 20 MS. OAKLEY: Q. Can you give me a range 21 of copies made of the revised version of OT-I? 22 A. Probably three or four copies per advanced 23 org. 24 Q. How many advanced orgs are there? 25 A. Six. 104 1 Q. In the last ten years, how many copies 2 have been made approximately of the OT-II documents? 3 A. My estimate would probably be ten per org, 4 but again, I'd have to look at the inventory to be 5 accurate. 6 Q. Over the last ten years, how many copies 7 have been made of the NOTS documents? 8 MR. ABELSON: Per org again? 9 MS. OAKLEY: My question is in total. 10 THE WITNESS: I'd estimate again maybe 11 between 20 to 30. 12 MR. ABELSON: Total or per org? 13 THE WITNESS: Total. 14 MS. OAKLEY: Q. Do you know approximately 15 the number of copies that have been made of the Class 16 VIII Assist tape transcript in the last ten years? 17 A. Estimate, again, would be probably -- 18 maybe a dozen total. 19 Q. Do you know the number of copies over the 20 last ten years of the Sunshine Rundown document? 21 A. Estimate, again, would probably be three 22 or four per org. 23 Q. Lastly, do you know the number of copies 24 that have been made over the last ten years of the 25 OT-III materials? 105 1 A. Probably ten per org. 2 Q. Does anyone other than RTC have the 3 authority to make copies of any of the advanced 4 technology documents? 5 A. No. 6 Q. To your knowledge, have any of Mr. 7 Erlich's postings of Scientology documents had an 8 impact on the market for advanced technology documents? 9 A. Yes. 10 Q. In what way? 11 A. Well, by putting the materials out on the 12 Internet, without authority, it is accessible 13 potentially to millions of people that would not 14 normally have access to those materials. 15 Q. Other than these particular materials 16 being accessible, in what way have his postings 17 impacted the market for advanced technology? 18 A. Well, if the person has access to those 19 materials or views those materials ahead of time, when 20 he's not ready for them, then it may deter him from 21 ever doing the levels. 22 Q. Anything else? 23 A. Not as far as I know at this point in 24 time. 25 Q. Do you know of anyone who has ever been 106 1 deterred from participating in any of the advanced 2 technology levels because they've seen postings by Mr. 3 Erlich? 4 A. I've read some people's postings on the 5 Internet criticizing the materials or thinking that it 6 is foolish or whatever because they don't know. 7 MR. ABELSON: Is the answer to that yes? 8 THE WITNESS: Yes. 9 MS. OAKLEY: Q. Do you know of any 10 individuals who have declined to participate in the 11 advanced technology documents or to study them because 12 of Mr. Erlich's postings? 13 A. Yes. 14 MR. ABELSON: I believe it is asked and 15 answered. Withdraw the objection. 16 MS. OAKLEY: Q. Can you identify any of 17 those individuals? 18 A. As I sit here right now, no. I'd have to 19 look at the postings. 20 Q. And what number of individuals are you 21 aware of? 22 A. That I'm personally aware of? A range I'd 23 say of probably five to ten, that I'm personally aware 24 of. 25 Q. Of any of these five to ten individuals, 107 1 to your knowledge, are any of the individuals Church of 2 Scientology members? 3 A. I don't know that. 4 Q. Do you know whether any of the five to ten 5 individuals even meet the qualifications or the 6 requirements that RTC has for access to advanced 7 technology documents? 8 A. Well, if they're not Scientologists, they 9 wouldn't meet the requirements. Potentially they would 10 in the future but if they wouldn't if they weren't in 11 the church already. 12 Q. So your answer is no; is that correct? 13 A. The way I've explained it is my answer. 14 Q. To your knowledge, there is no one who's 15 been deterred from obtaining the advanced technology 16 documents from RTC because of Mr. Erlich's postings who 17 is currently qualified to receive those advanced 18 technology documents; correct? 19 A. I don't know. 20 Q. Other than individuals being deterred from 21 the advanced technology documents because they may be 22 critical of them, do you know of any other impact on 23 the market for advanced technology documents because of 24 Mr. Erlich's postings? 25 A. Well, I'd answer that to the degree that I 108 1 have seen his postings and read people's responses to 2 his postings, that potentially could occur when people 3 read the advanced materials out of sequence. So 4 there's the potential I would say -- potentially 5 there's a lot of people that would be deterred. 6 Q. Is it your view that posting the materials 7 out of sequence makes the Scientology documents subject 8 to ridicule in a manner they wouldn't otherwise be 9 subject to? 10 A. It is more than just out of sequence. It 11 is posting any of them in any sequence. 12 Q. Are you aware of postings on the Internet 13 of Scientology materials by individuals other than Mr. 14 Erlich? 15 A. Yes. 16 Q. Do you have any information that those 17 postings are having any effect on the market for 18 advanced technology materials? 19 A. My answer would be yes. Less than Mr. 20 Erlich's because they were removed. 21 Q. What do you mean because they were 22 removed? 23 A. These people were notified that they 24 either remove them from the system or they'd be sued. 25 And they removed them. 109 1 Q. To your knowledge, have there in the last 2 month been any postings of advanced technology 3 documents on the Internet? 4 A. The last month? I really don't know. 5 Q. Does RTC obtain revenue from the advanced 6 technology documents in any form other than the 7 licensing fees paid by the seven licensees? 8 A. No. 9 (The record was read back as follows: 10 "Question: Does RTC obtain revenue from 11 the advanced technology documents in any form 12 other than the licensing fees paid by the seven 13 licensees?") 14 MS. OAKLEY: Q. Is it RTC's view that the 15 advanced technology documents at all levels have 16 independent economic value? 17 A. Of course. 18 Q. What documents does RTC have that 19 establish the economic value of the eight advanced 20 technology documents? 21 A. The documents we produced to you. 22 Licensing agreements. 23 Q. So the licensing agreements. Anything 24 else? 25 A. The records of the VSD that we've talked 110 1 about earlier today. 2 Q. Anything else? 3 A. That's all I can think of right now. 4 Q. And the records of the VSD, are those 5 retained in RTC's offices? 6 A. Yes. 7 Q. Is it RTC's view that it will be 8 irreparably harmed if Mr. Erlich is not enjoined 9 immediately from use of any documents in any way listed 10 on Exhibit B to the complaint? 11 MR. ABELSON: Object and instruct him not 12 to answer on the basis it calls for a legal conclusion 13 he's not qualified to give. 14 MS. OAKLEY: Q. I'm only asking for your 15 view as president of RTC, whether your company will be 16 irreparably harmed if Mr. Erlich is allowed to use in 17 any way the documents identified on Exhibit B. 18 MR. ABELSON: You can answer. 19 THE WITNESS: Yes. 20 MS. OAKLEY: Q. In what way? 21 A. Well, I think as we've discussed 22 throughout the day, if those materials are used and put 23 on the Internet without authorization, that we will be 24 harmed. They are not supposed to be published. They 25 are not published. They never have been published. 111 1 Q. In what way will RTC be harmed? 2 A. Well, economically, we're harmed. And 3 parishoners would be harmed. Potential parishoners 4 would be harmed. 5 Q. In what way will RTC be economically 6 harmed if Mr. Erlich uses in any way the documents on 7 Exhibit B? If you need to see Exhibit B to the 8 complaint, I'm happy to show it to you. 9 A. I think I know what it is. As I said, if 10 people read those documents they're not supposed to, 11 and if that affects them from ever doing the service, 12 stops them from doing the service, obviously they won't 13 make donations to the church which will directly affect 14 RTC economically. 15 Q. Is there any other way that RTC will be 16 economically harmed if Mr. Erlich is permitted to use 17 any of the documents on Exhibit B? 18 A. That's all I can think of now. 19 Q. I believe you said that potential 20 parishoners would also be irreparably harmed if Mr. 21 Erlich is not prevented from any use of the documents 22 on Exhibit B. In what way? 23 A. That they will be prohibited or in some 24 way stopped from doing services of the church. 25 Q. Any other way that potential parishoners 112 1 may be harmed? 2 A. Spiritually they could be harmed if 3 they're exposed to this material when they're not 4 supposed to be. 5 Q. How so? 6 MR. ABELSON: Without going into detail 7 about the material. 8 THE WITNESS: I can't answer that. 9 MS. OAKLEY: Q. Is it that you can't 10 answer it because of the -- why is it that you can't 11 answer? 12 A. One, you wouldn't understand my answer in 13 the first place because we'd be talking about the 14 phenomenon that occurs when you people see those 15 materials. 16 MR. LEIPOLD: Sorry. What do you mean by 17 you people? 18 THE WITNESS: I'm talking to her. 19 MS. OAKLEY: Q. We can just assume that 20 it really doesn't matter whether I currently now 21 understand it or not. I'd still like you to explain 22 what the spiritual harm would be to someone, a 23 potential parishoner, to be exposed to the materials. 24 MR. ABELSON: Without -- again, I'm going 25 to instruct you not to go into specifics of what the 113 1 material says. But if you can answer the question 2 without doing that, go ahead. 3 THE WITNESS: Well, I can't -- I can't 4 answer it. It would vary from person to person, what 5 manifestation, what spiritual harm, what discomfort, 6 whatever a person would be subject to is unlimited. 7 MS. OAKLEY: Q. But not everyone would 8 necessarily be spiritual harmed; correct? 9 A. I don't know that. 10 Q. Have you seen instances where a individual 11 was spiritually harmed from exposure to the advanced 12 technology documents from the Internet? 13 A. From the Internet? 14 Q. Correct. 15 A. No. 16 Q. Are you familiar with any instance where a 17 person has been spiritually harmed from exposure to 18 advanced technology documents out of sequence in any 19 other way other than the Internet? 20 A. Yes. 21 Q. Can you describe that, what you're 22 familiar with, what your experience is in that regard? 23 A. I've seen several people experience 24 discomfort, other physical manifestations. I don't 25 know how else to describe it. 114 1 Q. You also indicated that parishoners may be 2 irreparably harmed if Mr. Erlich is not prohibited from 3 using in any way the documents in Exhibit B. In what 4 way would parishoners be harmed? 5 A. In the same way. 6 Q. As what? 7 A. The non-parishoners. 8 Q. In other words, the potential for 9 spiritual harm? 10 A. Yes. 11 Q. Anything else? 12 A. Could be physical harm. 13 Q. What type of physical harm? 14 A. Well, again, it is difficult to answer 15 without going into the philosophy of Scientology. If a 16 person is spiritually harmed, it could manifest itself 17 in the physical universe. 18 Q. Do you have any documents that support the 19 concern that RTC may be irreparably harmed if Mr. 20 Erlich is not prohibited from using any of the Exhibit 21 B documents? 22 A. I don't understand the question. 23 Q. You have stated that you believe RTC will 24 be irreparably harmed if Mr. Erlich isn't prohibited 25 from using these documents; correct? 115 1 A. Right. 2 Q. Do you have any documents that support 3 your view about irreparable harm? 4 A. Well, the documents would be the documents 5 we discussed: Licensing agreements, VSD documentation. 6 Q. Anything else that you can think of? 7 A. Not at this time. 8 Q. Is it RTC's view that it will be 9 irreparably harmed if Mr. Erlich is not prohibited from 10 use of any of the documents identified on Exhibit A to 11 the complaint? 12 MR. ABELSON: Objection. He can't speak 13 for RTC other than as its president. And it calls for 14 a legal conclusion. He can speak personally and has 15 answered that question. 16 MS. OAKLEY: We've been talking about 17 Exhibit B up until now. So that question has not been 18 asked nor answered yet. 19 (The record was read back as follows: 20 "Question: Is it RTC's view that it 21 will be irreparably harmed if Mr. Erlich is not 22 prohibited from use of any of the documents 23 identified on Exhibit A to the complaint?") 24 MR. ABELSON: I'm not sure I understand 25 the question. I thought there was a double negative in 116 1 it. Can you repeat the question? 2 MS. OAKLEY: Certainly. 3 Q. Will RTC be irreparably harmed if Mr. 4 Erlich is not prohibited from use of documents on 5 Exhibit A? In other words, will RTC be irreparably 6 harmed if Mr. Erlich is permitted to continue use of 7 documents on Exhibit A? 8 A. Yes. 9 Q. In what way? 10 A. Well, if my recollection is correct, as 11 far as what's on A -- maybe you can show me the 12 complaint. Let's do that first. 13 Q. Sure. A is the first one, I believe. 14 (Discussion off the written record.) 15 MS. OAKLEY: Q. Do you have Exhibit A in 16 front of you? 17 A. Yes. 18 Q. Now, looking at Exhibit A, will RTC be 19 harmed, irreparably harmed, if Mr. Erlich is permitted 20 to use these documents in any way? 21 MR. ABELSON: Object on the basis of 22 relevancy. But he can answer the question. 23 THE WITNESS: Well, I change my answer to 24 no because RTC is not suing Mr. Erlich on these 25 documents. Bridge Publications is. 117 1 MS. OAKLEY: Q. So RTC has no rights in 2 the documents identified on Exhibit A; correct? 3 A. Correct. 4 Q. How did you come to discover the alleged 5 postings by Mr. Erlich in August of '94 of the Class 6 VIII Assist transcript? 7 A. I believe one of our parishoners reported 8 it to RTC. 9 Q. Was that a report in writing? 10 A. I don't remember, actually. 11 Q. Did the report come directly to your 12 attention? 13 A. I don't think directly to my attention. 14 Probably, eventually got to me. 15 Q. Does someone within RTC have the 16 responsibility for monitoring postings on the Internet? 17 A. No. 18 Q. Does RTC monitor postings on the Internet 19 group, Alt Religion Scientology? 20 A. Yes. 21 Q. Who does that monitoring? 22 A. I do. 23 Q. Do you monitor Alt Religion Scientology on 24 a daily basis? 25 A. Generally, yes. 118 1 Q. Do you monitor any other news groups or 2 areas on the Internet? 3 A. Yes. 4 Q. What other areas do you monitor? 5 A. I don't recall the names of them. Various 6 different news groups that would have anything to do 7 with Scientology or religion. 8 Q. Does RTC maintain any archive of Alt 9 Religion Scientology postings? 10 A. Archive? No. 11 Q. Does RTC ever download segments of 12 postings from ARS, Alt Religion Scientology? 13 A. Download in what way? 14 Q. Are you familiar with the term 15 downloading? 16 A. Yes. 17 Q. Does RTC download information from Alt 18 Religion Scientology or do you? 19 MR. ABELSON: I don't know what you mean 20 by download. 21 THE WITNESS: Download to what? 22 MS. OAKLEY: Q. Download to a computer. 23 A. No. 24 Q. I'm showing you the documents which were 25 produced, I believe, just last Friday. They came with 119 1 an index calling them the Index of Erlich's Postings of 2 Nonconfidential Documents. And they appear to have 3 Bates numbers 196 through 262. Are you familiar with 4 these documents generally? 5 A. Yes. 6 MR. LEIPOLD: Bates numbers? 7 MS. OAKLEY: 196 through 262. 8 Q. Now do you know how these copies of Mr. 9 Erlich's alleged postings were obtained? 10 A. They were obviously printed off from a 11 computer. 12 Q. Did you print them off? 13 A. No. 14 Q. Do you know who did print them off? 15 A. No. Other than -- I think Helena did. 16 Helena Kobrin. Or she had them done. 17 Q. Are you familiar with these documents 18 enough to know what the various dates and line entries 19 mean on the tops of the postings? 20 A. Yes. 21 Q. Of the documents? 22 A. Yes. 23 Q. At the very top of the first document 196, 24 it says "From Dennis, Date Sun 28 August 1994." Is it 25 your understanding that that's the date of the posting? 120 1 A. Yes. 2 Q. Turning over three documents to the one 3 with Bates number 135, that document doesn't have the 4 same kind of "from" notation at the top. Do you know 5 why that is? 6 A. No, I don't. 7 Q. And about one-third of the way down in the 8 document it says 8/31/94. Do you know what that date 9 refers to? 10 A. It looks like it is just the date of the 11 posting. 12 Q. Do you know why the date of the posting 13 appears any different on that document than on the 14 first document? 15 A. No, I don't. 16 Q. As far as you know, could that date 17 8/31/94 mean anything other than the date of posting? 18 A. It's possible. 19 Q. I'm going to show you again the documents 20 provided to us in a confidential -- or an envelope and 21 marked confidential, and to be treated as B1 documents. 22 So I'm not going to describe the contents of those 23 documents for the record at this time. 24 But I'd like you to look through these 25 materials and if you can tell me whether these are the 121 1 complete works as registered for the documents listed 2 on Exhibit B to the complaint. 3 A. I'd have to have the registration 4 certificate to go with it to determine. But if we 5 produced it that way, I'm sure it is. 6 MR. ABELSON: What do you mean by as 7 registered? 8 MS. OAKLEY: I can certainly be more clear 9 about that. 10 MR. ABELSON: Okay. 11 MS. OAKLEY: I'll ask the question in a 12 slightly different way. 13 Q. In front of you, there's a stack of 14 several loose papers. 15 A. Right. 16 Q. Are these loose papers -- and we'll look 17 now at the OT-II papers -- are these pages excerpted 18 from a larger bound volume of a book or do they 19 constitute an entire bound volume? 20 A. Well, OT materials are not in a book. 21 Q. Okay. 22 A. So when I register the materials, they 23 were registered, all the materials that were in the 24 pack. 25 Q. What do you mean by a pack? 122 1 A. Well, the OT materials are put in a 2 notebook form. They're not bound in a book because 3 they're not published. 4 Q. Are they in like a three-ring binder? 5 A. Like a three-ring binder. 6 Q. So with respect to these OT-II documents, 7 is what is here in front of you in this stack, is that 8 the entire notebook for the OT-II? 9 A. I don't know if this is all of it. I'd 10 have to look at and compare it to the original to see 11 if it is all of it. The OT-II materials consist of 12 various levels within them, and this has several of 13 them here. 14 These particular ones also are bound in a 15 different type of notebook. These particular ones are 16 bound in what we call a portfolio, which the individual 17 page is put into a plastic sleeve which is sealed. 18 Q. Are you familiar with the way in which the 19 OT-II materials were deposited with the copyright 20 office, if at all, in the course of registering those 21 works? 22 A. Yes, I am. 23 Q. And was one of the portfolios provided to 24 the copyright office? 25 A. Well, the pages were taken out of them. 123 1 The portfolio itself was not. 2 Q. Do you know if there was any redacting 3 done to any of the pages before they were submitted to 4 the copyright office? 5 A. They were masked. They weren't redacted. 6 Q. They were what? 7 A. Masked. 8 Q. Now, a number of those pages you've been 9 looking through of the OT documents appear to be 10 handwriting rather than typewritten or other mechanical 11 written. Whose handwriting is that? 12 A. Mr. Hubbard's. 13 Q. Likewise here, OT, Section III, is that an 14 OT-III document or is it a section of the II documents? 15 A. It's an OT-III document. 16 Q. Is that also Mr. Hubbard's handwriting? 17 A. Yes, it is. 18 Q. Have these handwritten OT-II and OT-III 19 documents ever been transcribed or typed out? 20 A. No, not by the church. 21 Q. By anyone else, as far as you know? 22 A. By people who stole it. 23 Q. By anyone else? 24 A. Well, they were on Internet by Mr. Erlich. 25 He would have done it. 124 1 (Whereupon, Defendant's 2 Exhibit 1 was marked 3 for identification.) 4 MS. OAKLEY: I have marked as Defendant's 5 Exhibit 1 to the deposition a document titled Exhibit E 6 to Declaration of Warren L. McShane in Support of 7 Verified Complaint for Injunctive Relief and Ex Parte 8 Applications for Temporary Restraining Order re: 9 Preliminary Injunction, Writ of Seizure, Sealing Order 10 and Protective Order. 11 Q. Mr. McShane, have you seen this document 12 before? 13 A. Yes, I have. 14 Q. Are you familiar with the contents of 15 Exhibit 1? 16 A. Yes. 17 Q. And does Exhibit 1 describe some of the 18 security procedures we talked about earlier today? 19 A. Yes, it does. 20 Q. Now, looking through the security 21 procedures that are identified in this Exhibit 1, how 22 many of the ten locations which have the advanced 23 technology materials available in fact employ all of 24 the security devices described in this Exhibit 1? 25 A. All of them? I think as I told you three 125 1 of them. 2 Q. Perhaps we need to be clear. How many of 3 the ten locations that have the advanced technology 4 documents in fact employ all of the security devices 5 described in Exhibit 1? 6 A. Well, there's three that have similar 7 security devices. This picture is from the FSO, Flag 8 Service Organization. So none of the orgs, the other 9 AOs, are identical because obviously the buildings are 10 different. There are two others that have similar 11 security systems. And all of the rest of them have 12 various forms of them. 13 Q. Now, we've had some documents at issue so 14 far in the case or at least that there have been some 15 discussion among counsel that have been identified as 16 being, I believe, confidential, but not necessarily 17 trade secret documents. Does that sound accurate to 18 you. Are there documents that are confidential 19 documents of RTC but not trade secret documents? 20 MS. KOBRIN: Do you understand what she's 21 referring to? 22 THE WITNESS: Yes. Yes, there were. 23 MS. OAKLEY: Q. For your ease of 24 reference, this is your declaration of February 24. 25 And it was my understanding that there was a claim that 126 1 the documents identified in Exhibit B in that 2 declaration were confidential but not trade secret 3 documents. This is A in front of you. 4 A. We're at B? 5 Q. Correct. 6 A. B. 7 Q. Is it your understanding that these are 8 confidential documents to RTC but not advanced 9 technology documents, but not trade secret documents? 10 A. That's correct. 11 Q. And these are the documents listed in 12 Exhibit B. And why don't you look through the whole 13 exhibit so we're not missing any of the things -- 14 A. (Witness complies.) Yes. 15 Q. So RTC in your view owns rights to the 16 documents identified on Exhibit B to your declaration 17 of February 24; correct? 18 A. No. 19 Q. Does RTC not have rights in the documents 20 identified in Exhibit B? 21 A. Bridge Publications does. 22 Q. I see. Is it your understanding that the 23 documents identified in Exhibit B are confidential 24 documents? 25 A. Yes. 127 1 Q. But RTC has no rights to those documents? 2 A. Right. 3 Q. Is there any relationship between -- any 4 corporate relationship between Bridge Publications and 5 RTC? 6 A. Again, I'm not sure I understand what 7 corporate relationship means. 8 Q. Are they related companies in any way? 9 A. I still don't understand what you mean by 10 related. 11 Q. Are the companies corporate affiliates of 12 one another? 13 A. No. 14 Q. Do the companies share a board of 15 directors? 16 A. No. 17 Q. Do the companies share any officers? 18 A. No. 19 Q. Are there any contractual relationships 20 between Bridge Publications and RTC? 21 A. RTC is party to a contractual 22 relationship. 23 Q. Can you describe what you mean? 24 A. Bridge Publications has an exclusive 25 license for the copyrights. And I haven't seen that 128 1 license for a long time. I'm not sure exactly what it 2 all entails. But we are -- there's also a license for 3 Bridge to use the trademarks and we are party to that 4 agreement. In other words, they can't use the marks 5 without our permission or our guidance. 6 Q. Is it accurate to say that Bridge 7 Publications has a license from RTC to use certain 8 trademarks? 9 A. No. 10 Q. Can you describe a little bit more what 11 the agreement is? 12 A. Mr. Hubbard had retained some rights to 13 the trademarks. And those rights were regarding 14 publications of books and so forth. And those were 15 licensed to Bridge by his estate. And we are party to 16 that agreement since we are the owners of the marks. 17 They are permitted to use the marks but under our 18 guidance and under our requirements. 19 Q. Is this just for trademarks or does this 20 also include any copyright registration? 21 A. Just trademarks. 22 Q. Mr. Hubbard died in 1986; correct? 23 A. Correct. 24 Q. Was he survived by a wife and children? 25 A. Yes. 129 1 Q. Is his wife still living or his widow? 2 A. I believe so. 3 Q. Does he have children that are still 4 living? 5 A. Yes. 6 Q. How many? 7 A. Three, I believe. 8 Q. Are there any agreements transferring the 9 rights from either Mr. Hubbard's widow or children to 10 RTC? 11 A. No. 12 Q. Who was the executor of Mr. Hubbard's 13 estate? 14 A. Norman Starkey. 15 Q. Was there more than one executor? 16 A. No. 17 Q. To your knowledge, does the Author Family 18 Trust B still exist? 19 A. I don't believe it does. 20 Q. Do you know when it dissolved? 21 MS. KOBRIN: If you know. 22 THE WITNESS: I believe it was 1993. 23 MS. OAKLEY: Q. Do you know who was the 24 trustee or trustees of that trust? 25 A. I believe it was Mr. Starkey. 130 1 Q. Do you know if there were any other 2 trustees of the Author Family Trust B? 3 A. I don't know. 4 Q. Is it your understanding that assets from 5 the Author Family Trust B were transferred to the 6 Church of Spiritual Technology? 7 A. Yes. 8 Q. Was that transfer by written agreement? 9 A. I believe so. 10 Q. Does RTC have possession of that written 11 agreement? 12 A. Not that I'm aware of. 13 Q. Do you know whether the agreement is 14 retained by anyone at this time? 15 A. I don't know. 16 Q. Have you ever seen the agreement? 17 A. No. 18 Q. To your knowledge, have any of the 19 assignments of the copyright interests from Mr. Hubbard 20 through to RTC been filed with the copyright office? 21 A. The agreements? 22 Q. Correct. Any of the assignments or any of 23 the agreements. 24 A. I believe there was. 25 Q. Do you know which ones were filed with the 131 1 copyright office? 2 A. I thought the original license in 1987 3 was. I could be mistaken but I thought it was. 4 Q. I'll have you put the complaint back in 5 front of you and ask you a couple of questions about 6 the agreements attached to the complaint. 7 A. Okay. 8 Q. I believe the first agreement that RTC 9 relies upon for ownership is at Exhibit C; is that 10 correct? I believe that's Bates number 24. 11 A. Yes. 12 Q. You see at the top of that document 13 there's a date, 16th day of May 198 blank. Do you know 14 what the date of that agreement is supposed to be? 15 A. 16 May 1982. 16 Q. Do you know why there is blank there after 17 the eight? 18 A. No. Obviously, somebody forgot to put it 19 in. 20 Q. And turning to page two, in Paragraph C, 21 it talks about giving RTC control in the United States 22 of America and its territories and possessions. Do you 23 see that? 24 A. Yes. 25 Q. Does RTC have a separate agreement with 132 1 respect to rights outside of the United States? 2 A. Yes. 3 Q. Turning to page six of that document, 4 Bates number 29, in the middle of the page, there 5 appears to be -- there's a line for Lafayette Ronald 6 Hubbard and a signature above that. Have you ever seen 7 Mr. Hubbard's signature before? 8 A. Many times. 9 Q. Does this look similar to his signature? 10 A. Yes, it does. 11 Q. Were you present at his signing of this 12 document? 13 A. No, I was not. 14 Q. Looking down below the line for his 15 signature, in the notary block there, it says on the 16 10th day of May 1980 I guess two, so on and so forth. 17 Do you have any information as to why the notary block 18 says May 10th and the date at the top of the document 19 is May 16? 20 A. Well, the 10th of May is obviously the day 21 Mr. Hubbard signed the document. And when the document 22 was signed by the other parties, RTC, which was done on 23 the 16th, they filled in the top of the documents. 24 Q. But you don't have personal knowledge of 25 when Mr. Hubbard signed this agreement; is that 133 1 correct? 2 MS. KOBRIN: Object. Document speaks for 3 itself. 4 MS. OAKLEY: Q. I'm asking whether you 5 have any personal knowledge of when Mr. Hubbard in fact 6 signed the document. 7 MS. KOBRIN: Same objection, Counsel. Go 8 ahead, Mr. McShane. 9 THE WITNESS: Personal knowledge is from 10 reading this document. 11 MS. OAKLEY: Q. Were you present -- did 12 you observe Mr. Hubbard signing this agreement? 13 MS. KOBRIN: Asked and answered, Counsel. 14 MS. OAKLEY: You can respond. 15 THE WITNESS: No, I was not. 16 Q. Now, anywhere on the exhibits to this 17 agreement in Exhibit C to your complaint, does the 18 Class VIII Assist lecture tape show up in any of these 19 lists? 20 A. In any of the exhibits? 21 Q. Within Exhibit C. 22 A. Yes. 23 Q. Where is that? 24 A. Exhibit 2, I believe, on Bates stamp 25 number 32 under Auditor Training. 134 1 Q. And which item specifically refers to 2 Class VIII Assist? 3 A. Third line down is Class VIII auditor 4 confidential section. The tape is within that. 5 Q. Okay. Then there's a document beginning 6 on Bates page 33. And what is this document? 7 A. It says it's an addendum. 8 Q. What is it an addendum to? What's your 9 understanding of what it is an addendum to? 10 A. Addendum to the original assignment. 11 Q. Which original assignment? 12 A. The one that's right before that which is 13 I believe dated May 16, 1982. 14 Q. How is it that you understand this 15 addendum to be an addendum to the May 16, 1982 16 agreement? 17 A. Because it says it modifies the assignment 18 agreement of the advanced technology U.S. 19 Q. Dated reference January 1, 1982; correct? 20 A. Right. 21 Q. Do you have any assignment agreement 22 advanced technology U.S. dated for reference January 1, 23 1982? 24 A. That is the May agreement. 25 Q. And how do you know that the May agreement 135 1 is the same as the January agreement? 2 A. Because that's the only agreement there 3 is. 4 Q. Do you have any information as to why the 5 addendum refers to an agreement dated January 1, 1982? 6 A. That's the date that RTC was incorporated. 7 Q. Do you have any other information as to 8 why this addendum refers to an agreement U.S. dated for 9 reference January 1, 1982? 10 A. No. It's the effective date of RTC's 11 corporation and we started with the materials. 12 Q. Do you have any information as to why the 13 Exhibit 1 in this addendum is replacing the Exhibit 1 14 in the prior agreement? 15 MS. KOBRIN: I'm sorry. Why they created vv 16 the addendum to begin with? 17 MS. OAKLEY: Yes. 18 MS. KOBRIN: If you know, you can answer. 19 THE WITNESS: If you notice a difference, 20 it says new OT-IV, new OT-V, VI, VII, VIII, et cetera. 21 And the prior attachment did not identify those new 22 levels. 23 MS. OAKLEY: Q. Does new OT-IV, V, VI and 24 VII, is that the same thing as NOTS? 25 A. New OT-V is, yes. 136 1 Q. Are the other new OTs not part of NOTS? 2 A. That's right. 3 Q. Do you ever refer to these other 4 documents, new OT-IV, as NOTS? 5 A. Not OT-IV, no. 6 Q. In the list there of LX, LXI, LXII, what 7 does the L stand for? 8 A. It says right next to it what LX is. 9 Q. I see. Does the column on the right, is 10 that the long name of the item listed in the column on 11 the left? 12 A. Yes. 13 Q. Turn then, please, to the agreement which 14 is just behind Tab D of the complaint. Our Bates 15 numbers 35 through 48. Can you identify what this 16 document is? 17 A. License agreement. 18 Q. Who are the parties? 19 A. Document says it is Norman Starkey, 20 Executor of the Will of L. Ron Hubbard and Religious 21 Technology Center. 22 Q. In the first page of the document it has 23 the date September 17, 1987. Do you see that? 24 A. Yes. 25 Q. And on the first signature page which is 137 1 Bates number 39, there's a notary segment there. And 2 it says the date is September 20, 1987. Do you see 3 that? 4 A. I'm sorry. Which page? 5 Q. Bates page 39. 6 A. Yes. I see it. 7 Q. Do you have any information to explain why 8 the date on the notary is September 20 and the date on 9 the top of the agreement is September 17? 10 A. That's when Norman Starkey signed it. 11 Q. Were you present when Norman Starkey 12 signed this agreement? 13 A. No. I was not. 14 Q. How is it that you know Norman Starkey 15 signed the agreement on the 20th? 16 A. Because I signed it on the 17th and I sent 17 it to him. 18 Q. Is there any other way that you personally 19 know that Mr. Starkey signed on the 20th? 20 A. I believe I received it a day or two after 21 that time when he signed it and sent it back to me. 22 Q. So you're assuming that he signed on the 23 20th? 24 A. That's when it was notarized. 25 MS. KOBRIN: Document speaks for itself. 138 1 That's what the notary block says. 2 MS. OAKLEY: We have testimony making 3 assumptions about when things occurred. I'm just 4 trying to make a clear record about what he personally 5 knows happened. 6 MS. KOBRIN: Either the document speaks 7 for itself or he's giving you his personal 8 recollection. Now if you want to say that's 9 contradictory, that's your problem. You created the 10 contradiction. 11 MS. OAKLEY: Merely trying to be clear 12 between what is being assumed and what he has personal 13 knowledge about. 14 MS. KOBRIN: Document speaks for itself. 15 You've got signature blanks and notary blocks and Mr. 16 McShane's recollection. 17 MS. OAKLEY: Q. In the body of this 18 license agreement, it refers to RTC, an exclusive 19 license for use of the properties in the USA? Does RTC 20 have a separate license for use of the properties 21 outside of the USA? I happen to be looking at Bates 22 page 37. Paragraph 1A. 23 A. Yes. 24 Q. There is a separate document? 25 A. Uh-huh. 139 1 Q. That's in RTC's possession? 2 A. Yes. I believe it was produced to you. 3 Q. Turning to Bates page 42, within that 4 exhibit, what is this document? 5 A. Page 42 you say? 6 Q. Correct. Titled First Addendum to License 7 Agreement. What was the purpose of this document as 8 far as you know? 9 A. Well, paragraph three explains what it is. 10 The intention of it is that they intended that RTC's 11 exclusive license under the agreement should extend 12 over all of the advanced technology. I guess there was 13 an error in the original schedule. 14 Q. And Exhibit A is intended to be a complete 15 list as far as you understand it of all advanced 16 technology works over which RTC has rights, for which 17 RTC has rights? 18 A. Yes. 19 Q. Is there any reason why in this Exhibit A 20 which starts on Bates page 44 you have listed out Class 21 VIII Auditor Course on the top of page two, and then 22 separately listed on page three the Class VIII tape, 23 the various tapes with various titles? 24 A. Because each individual tape is separately 25 registered. So we listed them out, which ones they 140 1 were. 2 Q. Is it your understanding that the Class 3 VIII Auditor Course in fact includes all of the tapes 4 listed on page three? 5 A. When you do the course, you also do, you 6 listen to all the tapes. 7 Q. Have the registration numbers and 8 registration dates as yet been inserted into Exhibit A 9 of the first addendum to the license agreement? 10 A. I don't know that they have. 11 Q. Is it your understanding that all of these 12 works have in fact been registered? 13 A. I believe so. I could be wrong. As far 14 as I know they are. I take that back. Some of them 15 aren't. Because some of them haven't been released 16 yet. 17 Q. How did it come to your attention that all 18 of the works were not listed in the September 1987 19 agreement? 20 A. I don't quite remember. I remember 21 looking at the agreement -- someone in my office 22 actually pointed it out to me at one point. And I 23 asked counsel about it, to fix it. 24 Q. Do you know which items were not included 25 in the 1987 agreement but have been added in by way of 141 1 the addendum? 2 MS. KOBRIN: Vague and ambiguous. 3 Unclear, Counsel, whether you're asking him for a 4 comparison between the two lists or whether there were 5 things created in between that went into the list that 6 were not contemplated as part of the original 7 agreement. 8 MR. LEIPOLD: Could I have that back? Can 9 I have the request for clarification back, please? 10 (The record was read back as follows: 11 "Vague and ambiguous. Unclear, Counsel, 12 whether you're asking him for a comparison 13 between the two lists or whether there were 14 things created in between that went into the 15 list that were not contemplated as part of the 16 original agreement.") 17 MS. OAKLEY: Q. Let me ask this question: 18 Paragraph three says there were items from Exhibit A in 19 the original agreement that were inadvertently omitted 20 from the schedule of advanced technology. What items 21 were inadvertently omitted from the original Exhibit A 22 that are now included on the Exhibit A by way of the 23 addendum? 24 MS. KOBRIN: You're asking for a 25 comparison. 142 1 MS. OAKLEY: I'm asking which items were 2 inadvertently omitted and now appear on Exhibit A. 3 THE WITNESS: All of them were. Because 4 the schedule says this is a schedule of additional 5 works. So these are in addition to what was on Exhibit 6 A of the original agreement. 7 MS. OAKLEY: Q. Is it your understanding 8 of these agreements that both the Exhibit A to the 9 original document and Exhibit A to the addendum are in 10 effect? 11 A. Yes. 12 Q. In other words, the second Exhibit A did 13 not replace the first Exhibit A; is that correct? 14 A. That's correct. 15 Q. Were there any documents included on the 16 Exhibit A to the addendum that were, to use your 17 counsel's words, not contemplated in the original 18 agreement? 19 A. Well, I don't know if it was not 20 contemplated. They were obviously not included. And 21 I'm not sure why they weren't included at the time. It 22 was just inadvertently left off. 23 Q. Are any of the documents included in 24 Exhibit C and D filed with the copyright office as far 25 as you know? 143 1 A. I really don't know. I'd have to check 2 the records. 3 Q. Is RTC relying on any other agreements 4 than these agreements we've just talked about in 5 Exhibit C and D to the complaint for its rights to sue 6 for the copyright and trade secrets asserted in this 7 case? 8 A. Well, I'd have to look at everything that 9 we've supplied to you. Everything I believe we put, 10 attached to the complaint, is what we were relying on. 11 MS. KOBRIN: I believe some additional 12 agreements were produced as well when you asked for 13 everything that we were relying on. 14 MS. OAKLEY: I think they were duplicates 15 of what we had. But I'll doublecheck. 16 Q. Is it your understanding that the Church 17 of Spiritual Technology remains the actual owner of the 18 copyrights at issue here? 19 A. They are the owner, yes. 20 Q. Does RTC pay anything to Church of 21 Spiritual Technology for its use of the advanced 22 technology documents? 23 A. We make a donation to CST, yes. 24 Q. How is that donation calculated? 25 A. It's 90 percent of the six percent that we 144 1 collect from the advanced orgs. 2 Q. To your knowledge, does the Church of 3 Spiritual Technology retain any ownership in the trade 4 secrets contained in the advanced technology documents? 5 A. No, they do not. 6 MS. OAKLEY: Since we have only five 7 minutes left on the tape, I'm going to break right now. 8 VIDEO OPERATOR: This is the end of 9 videotape two in the deposition of Warren McShane. It 10 is 2:41. 11 (Short break in proceedings.)* 12 THE VIDEO OPERATOR: This is the beginning 13 of tape three in the deposition of Warren McShane. It 14 is 2:57. 15 MS. OAKLEY: Q. Mr. McShane, I believe 16 you said earlier you have some responsibility for the 17 registration of the advanced technology documents; 18 correct? 19 A. That's correct. 20 Q. Do you know whether steps have been taken 21 to protect the confidentiality of all the advanced 22 technology documents in the course of their being 23 registered? 24 A. Yes. 25 Q. What has been done to protect their 145 1 confidentiality in the course of registration? 2 A. Each sheet, each page is copied with a 3 mask over it which hides the actual, the majority of 4 the print, the typed words so that a reader cannot read 5 what it is underneath. 6 Q. How did you select what would be masked 7 out from the copy? 8 A. I didn't select it. I just made a mask 9 and put it over the materials and copied it. 10 Q. Did you leave any portion of the text 11 visible in the copy? 12 A. The titles maybe were left. 13 Q. One of the registrations provided to us 14 was signed by Andy Zulieve. Z U L I E V E. Who is Mr. 15 Zulieve if you know? 16 A. I'd have to see the document to see -- 17 Q. Do you recognize the name? 18 A. -- what he signed. No. 19 Q. Do you know him to be an agent of the Ron 20 Hubbard Estate? 21 A. It's very possible. 22 Q. But you don't know one way or the other? 23 A. I don't know. 24 Q. As far as you know, have any 25 registrations, any renewal registrations been filed for 146 1 any of the advanced technology works? 2 A. I don't believe so. I don't think the 3 time is right for that. 4 Q. You indicated in one of your declarations, 5 I think from February 7, that with respect to certain 6 works, the grade five, five A, OT-IV and NOTS, these 7 are delivered by a minister and a parishoner never sees 8 the documents; is that correct? 9 A. Yes. 10 Q. First of all, grade five and grade five A 11 were not mentioned earlier by you in your list of 12 advanced technology works. What do those refer to? 13 A. Power and Power Plus. 14 Q. And why is it that a parishoner never in 15 fact sees these particular documents? 16 A. Because he doesn't need to. They are 17 auditing actions not a solo action. So he doesn't need 18 to see the materials. 19 Q. Is the substance of the materials 20 disclosed to the parishoner? 21 A. Somewhat, yes. 22 Q. In what way? 23 A. Enough to orient him so he understands the 24 questions that will be asked of him by the minister. 25 Q. Do these documents include questions that 147 1 are asked by the minister? 2 A. Yes. 3 Q. And does the minister then read through 4 the list of questions on the document? 5 A. Well, I mean, I wouldn't say it's exactly 6 a list of questions. They are questions that are asked 7 at specific time periods, depending on what the 8 parishoner, how he responds. 9 Q. Has it always -- let me ask the question 10 this way: Is the delivery of these courses by the 11 minister with the parishoner not seeing the documents, 12 is it done in that fashion pursuant to a policy? 13 A. Well, yes. I mean, it is done pursuant to 14 instructions from Mr. Hubbard on how that service is 15 delivered. 16 Q. Are those instructions written? 17 A. Yes. 18 Q. Do you know when those instructions were 19 written? 20 A. I don't -- they were written at the time 21 the materials were written. 22 Q. Do you know whether the instructions 23 prohibit the minister from showing the documents to the 24 parishoner? 25 A. Well, the documents give the minister the 148 1 instructions on how to deliver the service, and he 2 would not alter that delivery. 3 Q. Does the delivery instruction prohibit the 4 minister from showing the documents to the parishoner? 5 MS. KOBRIN: Do you understand the 6 question? 7 THE WITNESS: I understand what you're 8 trying to ask. All I was telling you is that the 9 minister will deliver the service as he's been trained 10 to do. And if the policy says you do it this way, he 11 does it that way. He's not going to alter that. 12 MS. OAKLEY: Q. Does the policy say: Do 13 not show these documents to the parishoner? 14 A. They might. 15 Q. You don't know for sure? 16 A. I don't know for sure. 17 Q. How many ministers are there currently 18 that can deliver the courses grade five, five A, OT-IV 19 and NOTS? 20 A. I have no idea. 21 Q. Can you estimate? 22 A. It would be a guess. 23 Q. Do you know whether it's more than a 24 hundred, fewer than a hundred? 25 A. I really don't know. 149 1 Q. Do you have any idea of the number of 2 ministers who have had access to the NOTS documents? 3 A. I have no way of knowing. 4 Q. I'm going to show you one of the various 5 volumes that was produced to us. It has a Bates 6 number -- I can't quite read that. 7 A. Looks like 194. 8 Q. It is called the Organization Executive 9 Course, Basic Staff, Volume Zero. Can you just look 10 through that. And what I'm curious about is the 11 organization of this volume generally speaking. Can 12 you describe what is in here? 13 A. Generally speaking, Volume Zero is a basic 14 heading reference for staff members. And it lays out 15 generally how an organization is organized. It orients 16 the staff to various policies on how to operate as a 17 staff member. Gives them basic references on 18 communications and ethics. How to basically operate as 19 a general staff member. 20 Q. And who was it that authored the various 21 separate items identified in this table of contents? 22 A. Mr. Hubbard. 23 Q. And did Mr. Hubbard also collect them into 24 the various groupings identified throughout the table 25 of contents? 150 1 MS. KOBRIN: If you know. 2 THE WITNESS: Did he personally group 3 them? 4 MS. OAKLEY: Yes. 5 Q. Did he personally first do the grouping 6 into the subject areas? 7 A. He didn't personally do that, no. 8 Q. Was that done at his direction as far as 9 you know? 10 A. As far as I know, yes. 11 Q. Do you know whether -- is it your 12 understanding that this book in its entirety has been 13 registered? 14 A. That's my understanding, yes. 15 Q. Looking inside the book on the title page 16 there's a copyright notice with a number of years 17 listed. What is your understanding as the person 18 responsible for the registration of -- 19 MS. KOBRIN: Objection. I think he 20 testified that he is not the person responsible for the 21 registration of the nonconfidential materials. 22 MS. OAKLEY: Okay. I stand corrected. 23 Q. Do you have any understanding of what the 24 dates are there within the book, to what they refer? 25 A. I don't. Copyright dates. That's all I 151 1 know. 2 Q. Do you happen to know whether any of the 3 works listed in this table of contents were separately 4 registered? 5 A. My understanding is they were. Some were. 6 I believe some weren't. 7 Q. Some were and some were not: That's your 8 understanding? 9 A. Uh-huh. 10 Q. The Class VIII Assist lecture, I believe 11 you said that was part of an overall course; correct? 12 A. Correct. 13 Q. How many other works are included in the 14 Class VIII course? 15 A. I'd have to look at the course. There are 16 many tapes that are on the course and there's various 17 issues that are on the course. It is a quite extensive 18 course. 19 Q. What do you mean by issues? 20 A. Individual policy letters. 21 Q. Do you know whether the works that 22 comprise the Class VIII course were written all at the 23 same time? 24 A. I don't know without looking at the 25 individual issues. 152 1 Q. Do you know if the Class VIII course was 2 augmented over time with additional issues? 3 A. Again, I don't know without looking at the 4 issues themselves the actual course packets. 5 Q. Now, is it intended that a parishoner 6 study the Class VIII course over a certain period of 7 time? 8 A. Yes. 9 Q. Over what period of time? 10 A. I'm not sure of the length of the course 11 itself. That course is pretty hefty so it probably 12 would take months. 13 Q. Is a parishoner advised to start at the 14 beginning of the course and work their way through 15 through all of the items that are part of the course? 16 A. Yes. 17 Q. And is there a set order through the 18 course that the parishoner is supposed to go? 19 A. Yes. 20 Q. The second item listed on the Exhibit B to 21 the complaint is identified as NOTS, issue 24 "NOTS 22 correction list." First of all, what does issue 24 23 mean or refer to? 24 A. NOTS issues are written in sequence. I 25 believe there's 53 or 55 of them. 153 1 Q. Is each issue a policy letter? 2 A. Well, it's actually called a bulletin. 3 Q. Do you know if each of the bulletins 4 within the NOTS course is separately registered? 5 A. Yes, they are. 6 Q. In other words, is there a separate 7 registration for 24, separate registration for 25, 8 separate registration for 26: That's the question I'm 9 asking. 10 A. Okay. The series was registered as one 11 registration as an unpublished work. 12 Q. And is a parishoner supposed to to take 13 the course, go through each of the issues one through 14 55 or 53, seriatum, in that order? 15 A. No. 16 Q. How does a parishoner use the NOTS course? 17 A. He doesn't. 18 Q. What is the NOTS -- what are the NOTS 19 materials for? 20 A. Training of an auditor. 21 Q. What is an auditor? 22 A. An auditor is a trained minister of the 23 church who is trained to listen and apply the various 24 procedures as developed by Mr. Hubbard. 25 Q. Is an auditor required to go through the 154 1 NOTS series in the order policy one through 55 or 53? 2 A. Yes. 3 Q. Are there any other advanced technology 4 works that are included within the NOTS course? 5 A. Yes. 6 Q. What are those? 7 A. I believe that there are some OT-III 8 materials also part of the NOTS course. 9 Q. What makes something part of the NOTS 10 course? I'm getting a little confused since we've got 11 OT-V being the NOTS course and NOTS having parts of 12 OT-III. Can you describe a little more what is 13 included in NOTS? 14 A. NOTS is a specific auditing procedure that 15 was developed by Mr. Hubbard that handles specific 16 phenomena in the spiritual realm. And there's some 17 background material that's needed to train the auditor 18 to be able to deliver NOTS. So whatever materials 19 would be needed for that would be included in the 20 course. 21 Q. And one of those background materials is 22 OT-III? 23 A. That's right. 24 Q. Any other materials included within NOTS? 25 A. Not that I can recall right now. 155 1 Q. Are all of the NOTS issues bound or kept 2 in any one place? 3 A. They're in a notebook. 4 Q. Is that like a three-ring notebook? 5 A. Yes. 6 Q. With the plastic sealed pages as you 7 described earlier? 8 A. No. 9 Q. What's the means for maintaining the NOTS 10 materials? 11 A. They're just in a notebook. Notebook that 12 cannot be opened. 13 Q. You mean the rings can't be opened? 14 A. That's right. 15 Q. And is NOTS correction list, is that the 16 title of issue 24? 17 A. Yes, I believe so. 18 Q. On Exhibit B there are other NOTS issues 19 listed. 34, 35, 36, one and 42. Are those all 20 included in the same notebook as the NOTS 24? 21 A. I didn't get that question. 22 Q. Are all of the NOTS issues included in one 23 notebook? 24 A. Yes. 25 Q. And are the other course materials for 156 1 NOTS included in that same notebook? 2 A. There might be two -- I'm not quite sure 3 as I sit here right now. I'd have to look at the 4 actual packs. There might be two notebooks that 5 consist of the actual course itself. 6 Q. I see. Do NOTS issues 34, 35, 36, one and 7 42 also have separate titles, as far as you know? 8 A. Yes. 9 Q. Any reason those titles weren't included 10 on the list? 11 A. No particular reason. 12 Q. Are the titles considered trade secret 13 titles? 14 A. Some of them are, yes. 15 Q. The titles themselves? 16 A. Yes. 17 Q. With respect to OT-I, what all is included 18 in OT-I? 19 A. There are individual bulletins that are 20 included in it. 21 Q. Are there any tapes included in OT-I? 22 A. I'd have to look at the check sheet to 23 see. I don't recall any but there might be. 24 Q. Do you know how many items are included in 25 OT-I? 157 1 A. I don't know. I'd have to look at the 2 course. There's two packs. Part A and Part B. 3 Q. Are both Part A and Part B considered 4 advanced technology? 5 A. I believe Part B is. 6 Q. Are both Part A and Part B considered to 7 be trade secrets? 8 A. Again, I think Part B is. 9 Q. What is there that distinguishes -- 10 Does RTC have rights to Part A of OT-I? 11 A. If it is not part of the advanced 12 technology, we wouldn't. 13 Q. So is the answer no? 14 A. I'm not sure. I'd have to look at what's 15 in the pack to determine that. 16 Q. Who made the determination of what 17 constitutes advanced technology or not? 18 A. Mr. Hubbard. 19 Q. So is it Mr. Hubbard who made the 20 determination of whether Part A is part of the advanced 21 technology or not? 22 A. No. I mean, Part A, if Part A doesn't 23 contain any confidential materials, then it wouldn't be 24 part of the advanced technology. 25 Q. And who is it that would determine whether 158 1 Part A includes confidential material? 2 A. I'm not sure exactly who designed the 3 course that particular way. It might have been one of 4 our senior staff, technical staff. 5 Q. Do you know when the determination was 6 made between whether Part A was confidential or not? 7 A. It's when the new -- we're talking about 8 the new OT-I when we're talking about Part A and Part 9 B. I believe that came out in '86 or '88. 10 Q. Is there a similar Part A, Part B split in 11 the original OT-I? 12 A. No. 13 Q. It is alleged that Mr. Erlich posted some 14 documents or some materials from OT-I. Do you know 15 whether these were from the original version of OT-I or 16 the revised version? 17 A. I'd have to actually see the document. I 18 don't remember right offhand. 19 Q. Again, to protect confidentiality, I am 20 going to just pass to you documents provided to us in 21 an envelope. B1 documents subject to protective 22 order. Confidential copies of Erlich's postings. 23 Can you look through those documents and 24 does that refresh your memory as to whether the alleged 25 postings by Mr. Erlich were from the original or 159 1 revised OT-I? I believe there's an index on the top 2 which may be of some assistance in finding the proper 3 documents. 4 A. It obviously was from the original. I'm 5 not totally sure without looking at the new pack if it 6 is also included in that one too. It might be. 7 Q. Is the original of OT-I still being 8 utilized in any way by RTC? 9 A. Well, there may be issues in the old OT-I 10 that's still used in the new one. The actual course as 11 it was delivered before the new one is not delivered 12 any more. 13 Q. So sitting here today and looking at what 14 is alleged to be Mr. Erlich's postings of OT-I, you 15 can't identify whether that information is in the 16 current revised version of OT-I; correct? 17 A. No. I'd have to see the pack. 18 Q. Can you estimate the number of bulletins 19 that make up all of OT-I? 20 A. I have no idea. I'd have to look at the 21 pack and count them. 22 Q. Would you say it's more than 50? Fewer 23 than 50? 24 A. I'd say it is fewer than 50. 25 Q. Aside from bulletins, are there any other 160 1 items included in OT-I? 2 A. There might be. Might be some actual 3 policy letters in there. 4 Q. With respect to OT-II, what kinds of 5 documents compose the OT-II course? 6 A. Quite a lot. There's policy letters and 7 there's bulletins and there's also handwritten 8 material. 9 Q. Before I continue with OT-II, I want to go 10 back to OT-I. In the packs for OT-I, Part A and Part 11 B, are those in three-ring binders? 12 A. Yes. 13 Q. That can't be opened up? 14 A. Correct. There are also some platens in 15 it. 16 Q. What do you mean by platens? 17 A. The portfolios. 18 Q. That's a plastic seal over the page? 19 A. Yes. 20 Q. The original of OT-I, in what manner was 21 that stored? 22 A. In a notebook. 23 Q. OT-II. So you're saying that policy 24 letters, bulletins, handwritten notes. Anything else 25 included in OT-II? 161 1 A. These portfolios, like I said. Platens. 2 Q. Do you know approximately the number of 3 policy letters included within OT-II? 4 A. I'd have to look at the packs and count 5 them. 6 Q. Do you know the number of bulletins? 7 A. No, not without looking at the pack. 8 Q. Considering the policy letters and 9 bulletins together, would you estimate more than 50 10 within OT-II? 11 A. I think so. 12 Q. More than a hundred? 13 A. Are you talking individual issues or 14 pages? 15 Q. Individual letters and bulletins together. 16 A. I don't know. I'd be guessing. 17 Q. About what size of a notebook or a stack 18 of paper would all the policy letters and bulletins 19 make up? 20 A. If you include everything that's in there, 21 including the portfolios, it would be quite high. I 22 mean, I'm just visualizing if I stacked them altogether 23 what would it look like. I'd say probably, you know, 24 including the thickness of the binders and stuff, 25 probably three feet. 162 1 Q. When you say the portfolios, I'm not sure 2 I'm understanding what you mean by that. 3 A. The OT-II materials are, some of the 4 materials are in a notebook, three-ring binders, and 5 some of them are in portfolios. They're not binders. 6 They're not three-ring binders. They are like a folder 7 that's opened up with plastic sleeves inside which are 8 sealed. 9 Q. I see. Thank you. I take it when someone 10 studies the OT-II course -- let me ask the first 11 question. Is the OT-II course something to be studied 12 by parishoners? 13 A. Yes. 14 Q. When a parishoner is studying that course, 15 is he or she advised to start at one place and work 16 their way through the course in a required order? 17 A. Yes. 18 Q. About how long does it take a person to 19 get through the entire course? 20 A. It varies with the person. 21 Q. Is there a range of time? 22 A. I really couldn't say. 23 Q. With respect to the Sunshine Rundown, this 24 has been identified as HCOB 16 November 1981. First 25 off, what does HCOB stand for? 163 1 A. Hubbard Communication Office Bulletin. 2 Q. 16 November '81, is that the author date, 3 the date that it was written? 4 A. Yes, I believe so. 5 Q. Is HCOB 16 November 1981 Sunshine Rundown 6 part of an overall course? 7 A. No. 8 Q. It is a single document? 9 A. I believe it is. 10 Q. Do you know how big the document is? 11 A. I'd have to look at it. 12 Q. You attended the seizure at Mr. Erlich's 13 home on February 13; correct? 14 A. Yes. 15 Q. Had you ever participated in a seizure of 16 documents before? 17 A. No. 18 Q. You were accompanied by someone named Paul 19 Wilmhurst? 20 A. Correct. 21 Q. He was identified as a computer expert? 22 A. Yes. 23 Q. Is he an RTC employee? 24 A. No. 25 Q. Do you know with whom Mr. Wilmhurst is 164 1 employed? 2 A. Church of Scientology International. 3 Q. Do you know if he was paid for his time 4 during the search? 5 A. He's a staff member. 6 Q. There was no U.S. marshal present during 7 the seizure; correct? 8 A. Correct. 9 Q. Did RTC hire a private investigator to 10 execute the seizure? 11 A. No. 12 Q. Who went along on the seizure? 13 A. Mr. Small was there. Myself. Paul. 14 There were three off-duty policemen. And in the 15 beginning, one Glendale police officer, and at the end, 16 another Glendale police officer. 17 Q. Who made the arrangements for the three 18 off-duty police officers to attend the seizure? 19 A. Mr. Small. 20 Q. Do you know if the three off-duty police 21 officers were paid for their time in attending the 22 seizure? 23 A. I'm sure they were. 24 Q. Do you know who paid them? 25 A. Counsel. 165 1 Q. Mr. Small? 2 A. Either Small or Helena Kobrin. 3 Q. Do you know whether your counsel had ever 4 hired these off-duty officers in the past? 5 MS. KOBRIN: Question is do you know. 6 THE WITNESS: I don't know. 7 MS. OAKLEY: Q. Do you know how much the 8 three off-duty officers were paid? 9 A. I have no idea. 10 Q. Did the three off-duty police officers 11 themselves search through Mr. Erlich's possessions? 12 A. Yes, they did. 13 Q. Did you also participate in searching 14 through Mr. Erlich's house? 15 A. Yes. Under their direction. 16 Q. In what fashion did the officers direct 17 you? 18 A. When it came to viewing the computer 19 itself, because they did not recognize the documents. 20 They wanted me to do that. 21 Q. Did you look through any of Mr. Erlich's 22 closets? 23 A. Yes. 24 Q. Did you do that at the direction of any of 25 the police officers or the off-duty officers? 166 1 A. Yes. 2 Q. Were the officers present while you were 3 looking in the closets? 4 A. Yes. 5 Q. Did you look through any drawers of any 6 desks or dressers of Mr. Erlich's? 7 A. Yes. 8 Q. Did you do that at the direction of the 9 police officers? 10 A. Absolutely. 11 Q. Were they observing your actions at this 12 time? 13 A. Yes. 14 Q. Did you look through any drawers in Mr. 15 Erlich's kitchen? 16 A. Yes, I believe I did. 17 Q. Did you do this at the direction of the 18 police officers? 19 A. Yes. 20 Q. Were they observing your actions at this 21 time? 22 A. Kitchen. I don't remember if they were in 23 the kitchen with me or not. 24 Q. Did you look at any of Mr. Erlich's bank 25 statements? 167 1 A. Bank statements? Not that I recall. 2 Q. How long did the first Glendale police 3 officer remain at Mr. Erlich's home? 4 A. Couple of hours, I guess. 5 Q. And who caused the Glendale police officer 6 to be at Mr. Erlich's home at the outset, if you know? 7 A. One of the off-duty police officers called 8 him. 9 Q. Do you know the name of the Glendale 10 police officer? 11 A. I don't know. 12 Q. You said a different Glendale police 13 officer came later on in the day. Do you know why he 14 arrived? 15 A. Because Mr. Erlich became very 16 belligerent. 17 Q. Do you know who called the second officer 18 to the home? 19 A. I believe one of the off-duty officers 20 did. 21 Q. Do you know that for a fact? 22 A. I don't know. 23 Q. Do you know the name of the second 24 Glendale police officer who came? 25 A. I don't. 168 1 Q. Do you know for how long he was at Mr. 2 Erlich's home? 3 A. Maybe half hour. He was there until we 4 left. 5 Q. Did Mr. Erlich request an opportunity to 6 make an inventory of the items before they were taken 7 from his home? 8 A. Not that I know of. 9 Q. Can you describe -- let me first ask you 10 to please identify the names of the three off-duty 11 police officers who were there. 12 MS. KOBRIN: Do you know? 13 THE WITNESS: I don't know. 14 MS. OAKLEY: Q. Was one of the officers 15 Edward Eckles? 16 A. Yes. 17 Q. The other Steven Bevan? Was that another 18 one of the officers? 19 A. The last name doesn't sound familiar. 20 Steven does sound familiar. Steve. 21 Q. Can you describe Mr. Eckles' actions in 22 the course of the search? What was he doing? 23 A. I'm not sure which one he was. 24 Q. Do you know which one Steven was? 25 A. I don't. 169 1 Q. Can you describe the actions of any one 2 officer in particular during the course of the search? 3 A. Yes. 4 Q. Let's call them Officer A, B and C since 5 we can't identify the proper name with the person. How 6 about Officer A? 7 A. I think that was Ed. He was the one that 8 was kind of in charge. He knocked on the door when we 9 arrived. He had the writ with him to serve on Mr. 10 Erlich. He knocked on the door. No answer for quite a 11 long time. One of the other officers went around back 12 and knocked on the back door, I believe. The third 13 officer was on the porch with me along with the 14 Glendale police officer. 15 Q. During the course of the search, did this 16 first officer, Officer A, actually look through any of 17 Mr. Erlich's closets? 18 A. He did a whole search of the house, yes. 19 Q. And did you go with him on his search of 20 the house? 21 A. Some of the rooms. Not all the rooms. 22 Q. And did Officer A stay at the house during 23 the entire search? 24 A. No. I believe he left after a few hours. 25 Q. Did officer -- 170 1 MS. KOBRIN: I'm sorry, Counsel. Can we 2 clarify for the record, Mr. McShane, when you're 3 talking about Officer A, was Officer A on duty or off 4 duty? 5 THE WITNESS: A, B and C were off-duty. 6 MS. KOBRIN: Also, for the record, we're 7 talking about a search that went on for how many hours? 8 THE WITNESS: About six hours. Something 9 like that. 10 MS. OAKLEY: Q. So Officer A, when you 11 said he did a complete search of the house, did he in 12 fact remove any items? Did you see him remove any 13 items from a closet, a drawer, a bookcase, anything of 14 that nature? 15 A. No. 16 Q. Officer B, did he, as far as you saw, did 17 he do a search of the house? 18 A. Not that I saw. 19 Q. Did he supervise any of your searching 20 within the house? 21 A. I think he -- if that's Steve, the younger 22 guy, I believe he was in what I call the computer room 23 the majority of the time I was there. 24 Q. Was he watching over your shoulder as you 25 were working at the computer? 171 1 A. Off and on. 2 Q. Did he supervise you in any other manner 3 other than in the computer room? 4 A. No. Majority of the time I was in the 5 computer room. 6 Q. How long did this second officer stay at 7 the house? 8 A. He left sometime after the first officer 9 did. Maybe an hour afterwards. Two hours afterwards. 10 I'm not totally sure. 11 Q. Do you know if he left before noon? 12 A. I don't know. 13 Q. And then the last officer, do you know 14 whether he was an off-duty officer or retired officer? 15 A. I don't know. He was an older gentleman. 16 So I'm not sure. 17 Q. Can you describe the nature of his 18 activities during the search? 19 A. He was mainly overseeing the search 20 itself. 21 Q. Did he physically look through any closets 22 or drawers or bookshelves that you saw? 23 A. Not that I saw, no. 24 Q. Did he oversee your searching for any 25 items? 172 1 A. After the other two officers left, yes. 2 Q. Did this third officer stay for the entire 3 time? 4 A. Yes. 5 Q. I believe you stated in your declaration 6 regarding the seizure that you had located a number of 7 floppy disks at Mr. Erlich's home; correct? 8 A. Yes. 9 Q. Did you check the content of any of those 10 floppy disks? 11 A. Several. 12 Q. How was that done? 13 A. Use of the computer. 14 Q. You loaded it onto Mr. Erlich's computer? 15 A. No. We had a laptop that we brought. I 16 think it was one of the officer's computers actually, 17 that he brought. It was both actually. Now that I 18 think of it, to speed it up, we were using both 19 computer. 20 Q. Both Mr. Erlich's and the officer's? 21 A. Yes. 22 Q. And I take it you also downloaded some 23 information off of Mr. Erlich's computer? 24 A. Once we found the right computer, yes. 25 Q. Did you download that onto a computer tape 173 1 or onto separate floppy disks? 2 A. On a tape. 3 Q. Then was there an effort made to erase 4 what was on the hard drive? 5 A. Only what was downloaded. 6 Q. Who did the downloading? 7 A. Paul did. 8 Q. Did he also do the erasing? 9 A. Yes. 10 Q. Did you or anyone in the group take any 11 pictures inside Mr. Erlich's house during the course of 12 the seizure? 13 A. Yes. We had a photographer there. 14 Q. Who was the photographer? 15 A. I have no idea. 16 Q. Who arranged for the photographer? 17 A. I believe one of the officers. 18 Q. Do you know why a photographer was brought 19 along? 20 A. Yes. He explained to me that it was a 21 procedure that he always followed when he did seisures 22 because people like Mr. Erlich would claim afterwards 23 that things were stolen or things were destroyed. So 24 we took photos of everything to show it wasn't done 25 that way. 174 1 Q. Do you have the film of those photos? 2 A. I'm sure counsel does. 3 Q. Have you used the film from those photos 4 for any purpose or has RTC? 5 A. We've used several of them. 6 Q. For what purpose? 7 A. To identify what was going down as far as 8 the seizure itself. To show that each room was 9 photographed and nothing was destroyed. And I believe 10 we used two or three of them I believe in one of our 11 publications. 12 Q. Now, when you said that you used them to 13 identify what was going on, what was that for? 14 A. Well, I believe Mr. Erlich was making 15 allegations that things were destroyed, that things 16 were taken from his home on the seizure. 17 Q. You're talking about internal use of the 18 pictures to identify what was going on? 19 A. Yes. 20 Q. Have you had all of the film developed 21 into pictures? 22 A. I'm not sure. I think so. 23 Q. Then you said you've used some of the 24 photographs in one of your publications. Which 25 publication is that? 175 1 A. Called KSW News. 2 Q. What was the purpose of using the pictures 3 in KSW News? 4 A. The purpose was to show parishoners what 5 was done. 6 (Whereupon, Defendant's 7 Exhibit 2 was marked 8 for identification.) 9 MS. OAKLEY: I have marked as Exhibit 2 a 10 document called KSW News. I must say I don't see a 11 date on the document. 12 Q. Would you look through here and let me 13 know if this is the KSW News document to which you were 14 just referring? 15 A. Yes. It appears so. 16 Q. Is there an article in here regarding the 17 search at Mr. Erlich's home? 18 A. Yes, I believe so. 19 Q. Where is that? 20 A. I'm not sure -- this is a photocopy so I'm 21 not sure what page this is. It is on the same page as 22 the three photographs. 23 Q. Is it under the title "RTC Sues Copyright 24 Infringer and Seizes Illegally Used Materials." Is 25 that story referring to the seizure at Mr. Erlich's 176 1 home? 2 A. Yes. 3 Q. Are the three photographs on this page 4 photographs obtained during the course of that seizure? 5 A. Appears so. 6 Q. When was this KSW newsletter disseminated, 7 if you know? 8 A. I think this came out on New Year's, I 9 believe. 10 Q. If the seizure took place February 13 -- 11 A. I'm wrong. 12 Q. It probably wasn't New Year's. 13 A. Then it came out in March. 14 Q. How frequently is the KSW News published? 15 A. Four or five times a year. 16 Q. And to whom is the KSW News distributed or 17 available? 18 A. To our parishoners. 19 Q. Do parishoners have subscriptions to this 20 document? 21 A. No. It is mailed to them. 22 Q. Is it mailed to all members? 23 A. All members of a certain class, yes. 24 Q. And approximately what is the circulation 25 of the KSW News currently? 177 1 A. I have no idea. 2 Q. More than 10,000? 3 A. I'm sure it is. 4 Q. More than 50,000? 5 A. I really don't know. I don't handle that 6 aspect of it. 7 Q. Is it distributed worldwide? 8 A. Yes. 9 Q. Do you have anything to do with putting 10 together the KSW News? 11 A. Yes. 12 Q. Did you review this article before it was 13 published? 14 A. Yeah, I'm sure I did. 15 Q. Did you review -- at the top of the second 16 column it says that there was a court order finding 17 copyright infringement. Did you review that statement? 18 A. Yes. 19 Q. Did you understand that to be a true 20 statement? 21 A. Yes. 22 Q. Are you aware of any order in this case in 23 which the court has determined in fact on the merits 24 that there has been any copyright infringement? 25 MR. ABELSON: I'm going to object. It 178 1 doesn't say anything about on the merits in that 2 article. Irrelevant. 3 MS. OAKLEY: Q. Are you aware of any 4 order in this case where there's been a determination 5 of actual copyright infringement? 6 A. There was an order that refers to 7 copyright infringement, yes. 8 Q. Are you aware of any order making a 9 finding of copyright infringement? 10 A. I'm not sure what you mean by a finding. 11 Q. Throughout the article, there are the 12 initials used SP. What do those initials stand for? 13 A. Where is that at? 14 Q. Throughout the article there are the 15 initials used, SP. 16 A. Suppressive person. 17 Q. Is that a reference to Mr. Erlich? 18 A. Yes, it is in this article, it would be. 19 Q. What does it mean to be a suppressive 20 person? 21 A. Suppressive person is a person who has 22 antisocial personality traits, meaning he is 23 destructive or dangerous to society. 24 Q. Is that a definition or term that is known 25 within the Church of Scientology? 179 1 A. Yes. 2 Q. Is that a term that you would understand 3 parishoners -- excuse me. Is that a term that 4 parishoners would understand to have the definition you 5 just described? 6 A. Yes. 7 Q. Has RTC published any additional pictures 8 obtained in the search of Mr. Erlich's home? 9 A. Not that I'm aware of. 10 Q. Did you obtain Mr. Erlich's permission 11 before publishing these pictures from his home? 12 A. No. 13 Q. Have you utilized any information obtained 14 in the seizure for any purpose other than this 15 litigation? 16 A. No. 17 MS. OAKLEY: In the event there's been any 18 change of position over the lunch hour, I wanted to 19 pose the question again from this morning that we had 20 some controversy over, which is the revenue received by 21 RTC for the licensing of the advanced technology 22 documents. And I would put again on the record our 23 offer to maintain this information as confidential. 24 You've seen throughout this deposition we have handled 25 the B1 documents per the agreement. I don't think I've 180 1 made any violations of what I have offered to do thus 2 far to protect the information. I think it would be 3 abundantly more efficient and economical to just get 4 the information out on the table today. 5 MR. ABELSON: I certainly appreciate your 6 efforts, and I assure you that we gave it deep thought 7 over the lunch hour and discussed it. And 8 unfortunately, we've come to the same conclusion: That 9 for over a month we've tried to get a protective order. 10 You have resisted and I think put up every barrier 11 possible to getting that accomplished. And because of 12 that and our insistence on having a court approve it, 13 we cannot agree to that now. But we will make 14 ourselves available if another deposition session is 15 necessary. 16 MS. OAKLEY: You have been willing to 17 provide through the course of document productions 18 various materials not strictly within the category of 19 Exhibit B1 and just have those documents protected as 20 though they are Exhibit B1 documents pursuant to the 21 order regarding the seized documents. I would suggest 22 that we identify this aspect of the transcript and 23 protect it in the very same way. 24 MR. ABELSON: I would really like to, but 25 I can't. 181 1 MS. OAKLEY: We will reserve the right to 2 strike from the declarations any of the testimony which 3 so far is not supported with any specific basis of 4 claimed economic value of these materials, and just be 5 in that position. 6 MR. ABELSON: Okay. 7 MS. OAKLEY: Q. We went through at length 8 earlier this morning about the security procedures 9 currently in place to protect the advanced technology 10 documents. I want to go back in time to 1975 when you 11 first were introduced to these materials. Where again 12 did you say you studied the advanced technology at the 13 outset? 14 A. In the beginning at the American Saint 15 Hill Organization in Los Angeles. 16 Q. And what were the security procedures in 17 place in 1975 with respect to -- let me ask first what 18 OT levels did you study at American Saint Hill? 19 A. Grade five and five A, Power and Power 20 Plus. 21 Q. And what security procedures were in place 22 for your access as a student at that time or parishoner 23 to those advanced technology documents? 24 A. I had no access at all. 25 Q. How did you study grade five and five A? 182 1 A. I didn't. It was an auditing action. I 2 received the auditing. 3 Q. Did you observe the grade five or grade 4 five A documents being used by your auditor? 5 A. She used some materials. I can't say it 6 was all the materials. Some. 7 Q. Did you observe any security procedures to 8 keep those materials confidential? 9 A. Yes. They were in a locked cabinet. 10 Q. Anything else? 11 A. The space, the office, room where we 12 audited was locked. And she had to unlock the filing 13 cabinet when we started the session. And she took the 14 materials out. She put them back and locked it up and 15 locked the room when we left. 16 Q. Did you have to log into the room in order 17 for your session to begin? 18 A. No. 19 Q. Did your auditor log in in any way that 20 you saw? 21 A. No. 22 Q. Did you observe any other security efforts 23 in 1975 to protect the advanced technology documents? 24 A. Yes. 25 Q. What else did you observe? 183 1 A. Well, in the advanced org itself, access 2 to the rooms were restricted to parishoners and staff 3 who were at that level. Had to have an invitation to 4 get in. All materials were in locked briefcases in 5 locked cabinets. They were all numbered. They were 6 logged in and out. Bars on the windows. 7 Q. When you say advanced org, what are you 8 referring to? 9 A. Advanced Organization of Los Angeles. 10 Q. Is that part of the Church of Scientology 11 of the Western U.S.? 12 A. Yes. 13 Q. And when were you at the advanced, when 14 were you first at the advanced organization in L.A. 15 A. 1975. 16 Q. And what documents did you know were 17 protected by the security devices that you just listed? 18 A. At that time I did from the Solo course 19 all the way through to OT-VII. 20 (The record was read back as follows: 21 "Answer: At that time I did from the Solo 22 course all the way through to OT-VII.") 23 MS. OAKLEY: Q. That was all in 1975? 24 A. Yes. 25 Q. At that time, was OT-V already considered 184 1 NOTS? 2 A. No. 3 Q. When did NOTS -- when was that first 4 authored or issued? 5 A. I believe I said that already. 1978. 6 Q. You said that some of the materials were 7 in locked briefcases. What materials were in locked 8 briefcases? 9 A. They were some materials that the 10 parishoner would need to take with him into the 11 auditing session. And those materials would be given 12 to him in a locked briefcase. Instructional materials. 13 Q. And what distance would these materials 14 have to be moved from where they were received to the 15 auditing session? 16 A. It would depend on where the person was 17 doing his auditing. 18 Q. Was it in the same building? 19 A. Majority of the time, yes. 20 Q. Sometimes in a separate building? 21 A. Yes. 22 Q. So on occasion, the documents in the 23 briefcase could be taken out of the building? 24 A. Yes. But they were never the actual 25 course materials themselves. 185 1 Q. They were instructions to the course 2 materials? 3 A. That's right. 4 Q. Do you know instructions to what levels? 5 A. Well, for instance, OT-I had instructions. 6 OT-II had the platens. These materials that were in 7 the portfolios. Those would be given to you. There 8 was different levels of that, 27 different steps. And 9 you would be given one step to take with you. When you 10 completed that, you would come back and get step two. 11 Q. Are these instruction that are in the 12 briefcase, are those not trade secret materials? 13 A. They are. 14 Q. They are trade secret materials? 15 A. Yes. 16 Q. Each time that you had access to any of 17 the levels of the advanced technology you studied in 18 1975 at the advanced org, did you have to sign in to 19 obtain the materials and then sign back out when the 20 materials were returned? 21 A. Yes. 22 Q. Were you aware at that time whether all of 23 the advanced technology copies were maintained in such 24 a fashion? Do you have any information of how all the 25 advanced technology copies were maintained? 186 1 A. Subsequent information, yes. 2 Q. What did that subsequent information tell 3 you? 4 A. They were all maintained in a similar 5 manner. 6 Q. Have you ever heard of auditors 7 maintaining their own sets of any advanced technology 8 materials? 9 A. Auditors, yes. 10 Q. Is it currently permissible for an auditor 11 to maintain his or her own set of advanced technology 12 materials? 13 A. Depends on the level. 14 Q. Level of the auditor or level of the 15 documents? 16 A. Level of the documents. 17 Q. At what level documents are auditors 18 permitted to maintain their own sets? 19 A. When for instance an auditor is trained on 20 the NOTS materials, he is assigned a pack of materials 21 which are numbered and logged out to him. That 22 material is taken with him to the organization that 23 he's delivering the services in. He maintains that 24 pack. 25 Q. So the packs, the NOTS packs, can be taken 187 1 off-site with the auditor to wherever he or she is 2 going to deliver the services; correct? 3 A. Yes. Under secure circumstances, yes. 4 Q. And what are those secure circumstances? 5 A. The materials are usually secured, like I 6 say, in a locked briefcase or courriered to the 7 organization where they are put into his, usually into 8 his auditing room, which is a secure cabinet. And 9 again, with our advances in security now, they're all 10 wired into the alarm systems. 11 Q. What differentiates when the materials can 12 be carried in a locked briefcase versus courriered and 13 placed into a locked room for the person's use upon 14 arrival? 15 A. It really depends on the circumstances. 16 Q. Are there circumstances today where an 17 auditor is permitted to take the materials in a locked 18 briefcase? 19 A. Not that I'm aware of. 20 Q. Are there any other -- are auditors as far 21 as you know, have they ever been permitted to have 22 their own working set of OT-I documents? 23 A. I can't think of circumstances where they 24 would need to because it is not an audited service. 25 It's a Solo level. 188 1 Q. How about OT-II? 2 A. Same. 3 Q. How about Class VIII? 4 A. An auditor would not have his own Class 5 VIII materials. A cramming officer may have a copy of 6 the Class VIII materials in his cramming space to 7 correct auditors. 8 Q. How many cramming officers are there 9 currently? 10 A. I have no idea. 11 Q. Is that handled at the organization level? 12 A. Yes. 13 Q. Can you even estimate whether there are 14 more than a hundred cramming officers? 15 A. A lot less than that. 16 Q. Fewer than ten? 17 A. All together, worldwide? 18 Q. Correct. 19 A. More. 20 Q. Are there any other -- are cramming 21 officers allowed to have their own copies of any other 22 advanced technology materials other than Class VIII? 23 A. They would probably have a copy of the 24 NOTS materials. 25 Q. They also have copies of OT-I or II 189 1 A. I don't believe so. They might have -- if 2 they are public cramming officers they might have. 3 Because if a public parishoner had confusions or 4 questions on the materials, he may go to the cramming 5 officer for correction. So he may have. 6 Q. What is a cramming officer? 7 A. Cramming officer is a minister in the 8 church that takes an auditor who has erred in some way 9 on the delivery of a particular level and has corrected 10 them on that error so he becomes familiar with how to 11 do it correctly. 12 Q. Are there any other officers or persons 13 who have reached a necessary level within Scientology 14 so that they can have access to advanced technology 15 materials outside of the restricted environment of the 16 orgs? 17 A. No. 18 Q. For example, are you entitled to access to 19 any of the advanced technology documents outside of 20 RTC's offices? 21 A. Well, I can go into any space that they're 22 kept in. 23 Q. In any of the ten locations; correct? 24 A. Yes. 25 Q. Does RTC maintain a library or records of 190 1 other Internet postings by individuals other than Mr. 2 Erlich, of Scientology materials? 3 A. Archive? No. I wouldn't use that word. 4 Q. Have you retained copies of postings of 5 Scientology materials other than postings by Mr. 6 Erlich? 7 A. I have some, yes. 8 Q. Have you ever seen any postings of OT-II 9 documents that were not postings identified as by Mr. 10 Erlich? 11 A. I'd have to look and see. Not as I sit 12 here now. 13 Q. Do you recall seeing any postings of NOTS 14 documents on the Internet other than as postings by Mr. 15 Erlich? 16 A. Yes. 17 Q. And do you recall which issues of NOTS 18 you've seen posted other than by Mr. Erlich? 19 A. I believe they were the same issues as Mr. 20 Erlich posted. Maybe not all of them, but some of 21 them. 22 Q. Do you know when these were posted? 23 A. I don't. Around the same time period. 24 Q. Subsequent to Mr. Erlich's postings? 25 A. I believe so. 191 1 Q. Have you seen any OT-III materials posted 2 on the Internet, not by Mr. Erlich? 3 A. I don't know. I'd have to look at the 4 file. 5 Q. Have you seen dissemination in any news 6 articles of any sections, portions of the OT-I 7 documents? 8 A. Can you repeat that question? 9 Q. Have you seen published in any news 10 articles any portions of OT-I documents? 11 A. Not that I can recall. 12 Q. Have you seen published in any news 13 articles portions of any OT-II documents? 14 A. Not that I can recall, no. 15 Q. Have you seen publication in any news 16 articles of any OT-III documents? 17 A. Yes. 18 Q. In what news articles? 19 A. I've seen snippets of it in the Times 20 article, Time Magazine article, L.A. Times. That's all 21 I can recall. 22 Q. When was the Time Magazine article that 23 you're referring to? 24 A. I don't remember. 25 Q. Do you recall when the L.A. Times article 192 1 was published that you're referring to? 2 A. Several years ago. 3 Q. Do you recall if there's any duplication 4 between the OT-III documents published in either the 5 Time Magazine or L.A. Times as compared to OT-III 6 documents allegedly published by Mr. Erlich? 7 A. Well, there were some similarities. The 8 articles were very small snippets of it whereas Mr. 9 Erlich posted a substantial amount of them. 10 Q. Do you recall seeing any published news 11 articles including any of the NOTS documents? 12 A. No. 13 Q. Any including any of the Class VIII course 14 lecture? 15 A. Never. 16 Q. Any including the 1981 Sunshine Rundown 17 bulletin? 18 A. No. 19 Q. Are you aware of any public books that 20 include portions of any of the OT-I, II or III 21 documents? 22 A. I've seen some publications that have some 23 snippets of it, yes. 24 Q. What books are those? 25 A. Boy ... I get some of these mixed up. 193 1 There's a book called Madman and Messiah. Religion, 2 Inc. Barefaced Messiah. Those are the ones I recall 3 right now. 4 MR. ABELSON: How about if we take four or 5 five minutes? 6 THE VIDEO OPERATOR: It is 4:13 and we're 7 going off the record. 8 (Short break in proceedings.) 9 THE VIDEO OPERATOR: It is 4:27. We are 10 back on the record. 11 MS. OAKLEY: Q. Mr. McShane, I'm handing 12 to you the documents that were produced to me in a 13 folder labeled Confidentiality Policies. The index is 14 titled Confidential Policies. Bates numbers one 15 through 15. Various documents with a title HCOPL and 16 then a date following. Could you look through these 17 and tell me first please what is HCOPL? 18 A. Hubbard Communication Office Policy 19 Letter. 20 Q. And what are these various letters? 21 (Discussion off the written record.) 22 A. These are various policy letters regarding 23 security of the OT levels or eligibility to get on the 24 OT levels. 25 Q. And let's start with the first one. HCOPL 194 1 16 December 1968, issue two. To what documents does 2 that relate? 3 A. Relates to all advanced levels. 4 Q. Some of the advanced levels had not yet 5 been written by 1968? 6 A. For sure. 7 Q. So the ones that had been written by that 8 time? 9 A. Still applicable today. 10 Q. And is every member of Scientology obliged 11 to comply with HCOPL 16 December 1968? 12 A. Yes. 13 Q. Is there anything that a member needs to 14 sign to show their compliance with that policy letter? 15 A. Well, unless -- it might be on a specific 16 check sheet for a particular course, and then he would 17 read it and sign it off. 18 Q. How are these policy letters made 19 available to the parishoner or how does a parishoner 20 get access to these policy letters? 21 A. Well, most of these I'm sure are contained 22 in the volumes themselves, the green volumes. And some 23 of them also would be included in the individual 24 courses that a person would take. And he would read 25 that as part of the course. 195 1 Q. Do you know to which course this HCOPL 16 2 December 1968 pertains? 3 A. I don't know. I'd have to look at the 4 courses. 5 Q. So as you're sitting here today, you can't 6 identify for which of the items on Exhibit B to the 7 complaint this policy letter pertains; correct? 8 A. No. Your statement is not correct. It 9 would refer to any documents in Exhibit B. It refers 10 to all the advanced levels. 11 Q. Is this policy letter provided with all of 12 the items on Exhibit B? 13 A. I don't understand your question. 14 Q. Is this policy letter included in the NOTS 15 course materials? 16 A. I'd have to look at the course materials. 17 I'm not sure. 18 Q. Is the policy included in the OT-I course 19 materials? 20 A. Same answer. 21 Q. How about the OT-II course materials? 22 A. Same. I should look at the course. 23 Q. Looking at the next document, HCOPL 12 24 August 1971, to which documents does this pertain? 25 A. It pertains to all the advanced courses. 196 1 Q. It says in the title OT Courses. Does 2 that mean it pertains only to the OT courses? 3 A. It would be all advanced courses. 4 Q. Do you know how this HCO policy letter 12 5 August was distributed to members? 6 A. Well, again, it would probably be 7 contained in the green volumes, OEC volumes, executive 8 course volumes. And it would probably be included, 9 although I can't say without looking at the packs, it 10 would probably be included in one or more of the OT 11 courses. 12 Q. The executive course, the green volumes, 13 are those volumes that parishoners are required to go 14 through? 15 A. Not required, no. They could. 16 Q. Is it part of the standard training for 17 parishoners? 18 A. There's a course they can take. 19 Q. Would every parishoner necessarily be 20 exposed to HCO policy letter 12 August 1971? 21 A. If they did the OT levels, yes. 22 Q. Looking at the third document, what is 23 that, please? 24 A. HCO policy letter 15 September 1978. 25 Entitled Confidentiality of Upper Level Rundowns. 197 1 Q. To what documents does this pertain? 2 A. It would pertain to all the confidential 3 rundowns of all the OT levels. 4 Q. Now what are the confidential -- or the 5 rundowns? 6 A. All the auditing processes on the OT 7 levels are called rundowns. 8 Q. Are all of the categories we discussed 9 called auditing processes? 10 A. There are auditing processes within them. 11 Some have many more than just one. 12 Q. And the rundowns are the auditing 13 processes? 14 A. Yes. 15 Q. And how would a parishoner necessarily be 16 exposed to this third confidentiality policy you have 17 in your hand? 18 A. Again, it could be, although I'm not sure, 19 contained in the OEC volumes. And it could be in the 20 actual OT levels courses themselves. 21 Q. Looking at the next document in front of 22 you which is HCOPL 8 January '81, what's this document? 23 A. This is entitled The Advanced Course 24 Regulations and Security. Document that describes the 25 various security requirements and regulations. 198 1 Q. And to what materials does it pertain? 2 A. All the materials. 3 Q. All the advanced -- 4 A. Advanced tech materials, yes. 5 Q. How is this distributed to the membership 6 or parishoners? 7 A. I believe every parishoner who goes on to 8 the OT levels has to read this issue. 9 Q. How is it made sure that all the OT 10 parishoners read this? 11 A. It is part of one of the beginning courses 12 they would take. 13 Q. And the next document in front of you is 14 HCOPL 8 January 1981 R, I think. 15 A. Yes. 16 Q. Bates numbers seven to nine? 17 A. Yes. 18 Q. And what is this document? 19 A. It is just a revision of the previous one 20 we discussed. 21 Q. Do you know the nature of the revisions? 22 A. I'd have to look. 23 Q. That's all right. And to what documents 24 does this policy pertain? 25 A. All the advanced tech materials. 199 1 Q. How would a person get access to this 2 policy or be required to read this policy? 3 A. Again, it would be on the advanced 4 courses. 5 Q. I'm sorry. On the advanced courses? 6 A. Probably be part of the course themselves. 7 Q. When you say it would be part of the 8 course themselves, you've described the courses as 9 being within three-ring binders or portfolios. Would 10 this confidentiality policy be bound within those 11 materials? 12 A. Yes. It would be -- usually, like I said, 13 sometimes there's Part A and Part B, where Part A would 14 be the nonconfidential issues. This would be like one 15 of those would be in there. 16 Q. I see. Looking to the sixth item, HCOPL 9 17 March 1982, what is this document? 18 A. This is a document called Eligibility for 19 OT Levels. 20 Q. And does that pertain to all the OT 21 levels? 22 A. Yes, it does. 23 Q. Do you know if this policy letter was 24 issued while Mr. Erlich was still a member of 25 Scientology? 200 1 A. I'm not sure. I mean, he left sometime in 2 '82. So I'm not sure if this was issued before he 3 left. 4 Q. And what is the last document there in 5 front of you, the HCOPL 9 March 1982R? 6 A. This is a revised version of that previous 7 document. 8 Q. That was issued 6 January 1985? 9 A. It was revised then, yes. 10 Q. So it was revised after Mr. Erlich was no 11 longer a member of Scientology; correct? 12 A. The reason why I hesitate is that it was 13 revised, it might have been revised before then also. 14 Then revised again in January 6, 1985, which would have 15 been after Mr. Erlich left. 16 Q. What tells you it may have been revised 17 multiple times? 18 A. When you see RB after the number, after 19 the date, that reads 1982 Revision B. This one only 20 has 1982. So there might have been Revision A or 21 Revision B. A lot of times you revise just to handle 22 typos and things like that. 23 Q. Now, handing to you the documents provided 24 to me in a folder labeled Confidentiality Agreements, 25 the index title is Confidentiality Agreements Signed by 201 1 Mr. Erlich. Bates numbers are 16 through 25. The 2 first item there, if you can tell me what that is, 3 Bates number 16? 4 A. It's a confidentiality bond that Dennis 5 Erlich signed in December 1978. 6 Q. Does that pertain to any particular level 7 of materials? 8 A. This one pertains to NED for OTs. 9 Q. That's the same as NOTS that we've been 10 discussing? 11 A. Yes. 12 Q. Do you have a similar bond for any other 13 advanced technology materials signed by Mr. Erlich? 14 A. Yes. 15 Q. And what are you looking at there? 16 A. The third document in the series, which 17 was signed by Mr. Erlich in November 1975. 18 Q. To what documents does that agreement 19 pertain? 20 A. All secret and confidential material. 21 Q. And what is the final document you have 22 there in the confidentiality agreement? 23 A. This other one looks like a -- 24 Q. Bates numbers 17 through 23. 25 A. Looks like a staff covenant. 202 1 Q. Does that include within it 2 confidentiality requirements? 3 A. Yes. 4 Q. From where were these three documents 5 obtained? 6 A. From where? 7 Q. Yes. 8 A. Probably the Flag Service Organization in 9 Clearwater. 10 Q. Do you know that for certain or you're 11 just making an assumption? 12 A. Well, I had a search done there for all 13 documents related to Mr. Erlich, and these were found. 14 Q. I take it there were no other documents 15 regarding confidentiality found signed by Mr. Erlich? 16 A. Not that I'm aware of. 17 Q. Earlier today, we were talking about the 18 harm that you said RTC may encounter or may face if Mr. 19 Erlich is not prohibited from utilizing the Exhibit B 20 documents. You indicated that there may be harm from 21 parishoners or potential parishoners declining to 22 participate in the advanced technology courses. Do you 23 recall that testimony? 24 A. Yes. 25 Q. Is the harm RTC would face because of that 203 1 loss of revenues and loss of donations? 2 A. That's part of it, yes. 3 Q. And that's a monetary harm; correct? 4 A. Well, the monetary part is part of it, 5 yes. 6 Q. What other aspect of harm is there other 7 than a monetary harm? 8 A. Harm on the materials themselves. If he 9 exposes the materials, they will lose their 10 confidentiality or potentially could lose it. 11 Q. Anything else? 12 A. That's all I can recall right now. 13 Q. Do you have any knowledge as to how long 14 postings remain on the Internet, on the Alt Religion 15 Scientology bulletin board service? 16 A. Yes. 17 Q. How long? 18 A. It varies from service provider to service 19 provider from my understanding. 20 Q. Do you have any understanding of how long 21 Mr. Erlich's postings remained on the net, the 22 postings, alleged postings of items from Exhibit B? 23 A. I think it varied between three days to 12 24 days, something like that. 25 Q. Do you know of any alleged postings by Mr. 204 1 Erlich that was on Alt Religion Scientology for longer 2 than 12 days? 3 A. Not as I sit here right now, no. 4 Q. In one of your declarations, the 5 declaration of February 24, you indicate that Mr. 6 Erlich has made postings to the public news group with 7 little or no commentary. Do you recall that substance 8 in your declaration? 9 A. Yes. 10 Q. And how is it that you identified the 11 commentary by Mr. Erlich on these various postings? 12 A. I read them. 13 Q. Did you make any efforts to observe 14 postings either prior to or subsequent to Mr. Erlich's 15 posting to ascertain the nature of the -- let me start 16 again. 17 Have you made any effort to investigate 18 the postings that preceded or postdated Mr. Erlich's 19 alleged postings of the Exhibit B documents? 20 A. Yes. 21 Q. Do you know whether Mr. Erlich's postings 22 of, any alleged postings of the Exhibit B documents in 23 fact caused some additional comments to be posted about 24 those materials? 25 MR. ABELSON: I'm going to object. By him 205 1 or by others? 2 MS. OAKLEY: By others. Let me ask a more 3 direct question. 4 Q. Did you see any comments posted on the 5 Internet that were in response to postings by Mr. 6 Erlich of the Exhibit B documents? 7 MR. ABELSON: Objection. Irrelevant. 8 THE WITNESS: I believe there were some, 9 yes. I can't recall offhand, but I think I remember 10 some. 11 MS. OAKLEY: Q. Did you see some comments 12 that were critical of the advanced technology materials 13 that were allegedly posted by Mr. Erlich? 14 MR. ABELSON: Objection. Irrelevant. 15 THE WITNESS: They might have been. 16 MR. OAKLEY: Q. You don't recall one way 17 or the other? 18 A. As I sit here now, no. Not without 19 looking at the documents. 20 Q. You also state in your declaration of 21 February 24, and I'll be happy to make it available to 22 you if you need to refer to the space, in paragraph 23 seven, that RTC derives important economic value from 24 its trade secrets. To what were you referring there? 25 A. Well, the economic value is the income we 206 1 make from the various service organizations that 2 deliver to the advanced organization, which is very 3 important to us. 4 Q. Anything else that you're referring to 5 there? 6 A. That is the economic value. 7 Q. The ability to earn revenues off of the 8 VSD; correct? 9 A. Yes. 10 Q. Are the advanced technology documents or 11 their substance being used at this time to create 12 additional new works? 13 A. I'm sorry. Repeat that again. 14 Q. Is RTC creating any derivatives of the 15 advanced technology works at this time? 16 MR. ABELSON: The word derivative I think 17 is a legal or has legal meaning here. Maybe we can 18 make it simpler. 19 MS. OAKLEY: Q. I don't mean to use the 20 word in the copyright sense. Is RTC using the advanced 21 technology documents to create any new works? Again, 22 I'm not wanting to put any copyright legalese on this, 23 and I don't mean to be getting a copyright opinion from 24 you here. 25 MR. ABELSON: Is your question are they 207 1 creating any new works. 2 MR. OAKLEY: Using the substance of the 3 advanced technology materials. 4 THE WITNESS: Using the substance -- I 5 really can't answer that. Your question is vague in 6 the sense that there are other OT levels that have not 7 been released. 8 Q. Have they already been written? 9 A. Yes. 10 Q. Were they written by Mr. Hubbard? 11 A. Of course. 12 Q. The existing -- the OT levels that have 13 not yet been released, does RTC have rights to those 14 materials? 15 A. Yes. 16 Q. Is RTC using any of the currently existing 17 advanced technology documents, released or not 18 released, to create new works? 19 A. I don't know the answer to that. 20 Q. Who would know? 21 MR. ABELSON: Do you mean create new upper 22 level works? Is that what we're talking about? 23 MS. OAKLEY: New works of any kind. 24 THE WITNESS: The reason why I hesitate is 25 I haven't seen those upper levels. They have not been 208 1 released yet. I can't answer the question and I'm not 2 sure who could. 3 Q. With respect to the advanced technology 4 documents that you know about, the ones that have been 5 released, do you know if those documents or the 6 substance of those documents are being used to create 7 new works? 8 A. No. 9 Q. Is there a plan to release the levels that 10 have not yet been released? 11 A. Yes. 12 Q. Do you know when that should take place? 13 MR. ABELSON: How is that relevant to this 14 case? It's interesting. 15 MS. OAKLEY: I'll withdraw the question. 16 MR. ABELSON: Thank you. 17 MS. OAKLEY: Q. If you look on the same 18 page three of your declaration, up at the top, line 19 two, there's a reference there. Downloading from Mr. 20 Erlich's computer onto floppy disks. And earlier you 21 said there was downloading to a computer tape. Was 22 there actually both downloading to tape and to floppy 23 disks? 24 A. We might have done both actually. 25 Because -- I think we did because we were concerned if 209 1 something would happen to the tape, we'd have a backup. 2 Q. Did you download the same volume of 3 information onto the tape as you downloaded onto 4 floppies? 5 A. I believe so. 6 Q. Then the information downloaded was erased 7 from the hard drive; correct? 8 A. Yes, it was. 9 Q. Are you familiar with the case Religious 10 Technology Center versus Fishman? 11 A. Yes, I am. 12 Q. Were there various OT levels -- 13 A. I'm sorry. Religious Technology Center 14 versus Fishman? 15 Q. Yes. 16 A. There is no such case. 17 Q. Are you aware of a case involving Fishman 18 as one of the defendants? 19 A. Yes. 20 Q. Do you know who the plaintiff is? 21 A. I believe it is CSI. 22 Q. Does that case involve OT level documents? 23 A. Does the case involve it? 24 Q. Yes. 25 A. No. 210 1 Q. Does it have to do at all with the 2 confidentiality of OT documents? 3 A. No. A libel case. 4 Q. Were there issues in that case regarding 5 maintaining under seal some OT documents? 6 A. Yes. 7 Q. Do you know why that case was brought by 8 CSI and not RTC? 9 A. CSI was libeled. Not RTC. 10 Q. Are you aware of any decisions in the 11 Fishman case regarding the confidentiality or the 12 public dissemination of any OT documents? 13 A. No. There are motions that are pending. 14 I don't know of any decisions. 15 Q. Do you know what OT levels of documents 16 the motions pertain to? 17 A. I think primarily OT-II and III. 18 Q. Were there OT-I documents and their 19 confidentiality at issue in that case as far as you 20 know? 21 A. I'd have to look at the pleadings. I'm 22 not sure as I sit here right now. 23 MS. OAKLEY: I have no further questions. 24 MR. ABELSON: I really appreciate your 25 stopping before 5:00. 211 1 MR. LEIPOLD: I have a few, but I won't 2 take long. 3 EXAMINATION BY MR. LEIPOLD 4 MR. LEIPOLD: My name is Daniel Leipold 5 and I represent Thomas Klemesrud, one of the defendants 6 in this matter. 7 Q. You said with reference to CSI versus 8 Fishman there were motions pending. What did you mean 9 by motions pending with reference to the OT materials? 10 A. There are motions, RTC motion to intervene 11 pending in that case. 12 Q. Is that in the Ninth Circuit Court of 13 Appeal? 14 A. No. It is pending with Judge Hupp. 15 Q. Has the case gone up before the Ninth 16 Circuit Court of Appeal? 17 A. It went up and came back down. 18 Q. Do you know what the ruling of the Ninth 19 Circuit Court of Appeal was? 20 A. Yes. 21 Q. Was that to have another hearing on the 22 confidentiality orders? 23 A. I believe the instructions of the Ninth 24 Circuit to Hupp was to either seal them or give them 25 back. 212 1 Q. When did that happen? 2 A. I don't know the date. 3 Q. Was that within the last two weeks? 4 A. No. 5 Q. Where did you get your understanding of 6 what the order from the Ninth Circuit was? 7 A. I read it. 8 Q. When was that? 9 A. Whenever it came down. I'm not sure when 10 that was. 11 Q. Now, are you familiar with the case called 12 RTC versus Mayo? 13 A. Yes. 14 Q. In the RTC versus Mayo case, was there 15 ever an order issued with reference to RTC precluding 16 RTC from putting on any evidence that David Mayo had 17 not participated in the writing of the NOTS material? 18 MS. KOBRIN: What? 19 MR. ABELSON: I don't understand the 20 question at all. Maybe you could rephrase it. 21 MR. LEIPOLD: Q. Did the court ever issue 22 in the Mayo case an order precluding RTC from putting 23 on any evidence that David Mayo did not write portions 24 of the NOTS material? 25 MR. ABELSON: Objection. Irrelevant. 213 1 I'll instruct my client not to answer. 2 MR. LEIPOLD: Why is it irrelevant? 3 MR. ABELSON: Nothing to do with the 4 issues before the court on the 23rd. 5 MR. LEIPOLD: Isn't the NOTS material part 6 of this? 7 MR. ABELSON: It's irrelevant what a judge 8 ruled in an individual case that we have nothing to do 9 with. 10 MS. OAKLEY: I would disagree with that 11 because obviously, if the NOTS materials are at issue 12 here, one of the issues may be authorship. If there 13 are claims of another person being an author, if 14 there's a court ruling that may address that question, 15 it's relevant. 16 MR. ABELSON: I don't believe there is a 17 court ruling. 18 MR. LEIPOLD: I'm asking him the question. 19 Why don't you let him answer. 20 THE WITNESS: You have to repeat it again. 21 MR. LEIPOLD: Q. Do you know if in the 22 Mayo case, RTC versus Mayo, there was a court order 23 issued at anytime precluding RTC from putting on 24 evidence that David Mayo was not an author of some 25 portion of NOTS material? 214 1 MR. ABELSON: Objection. Irrelevant on 2 the basis that a court order is not a court finding. 3 The fact that it was issued at some time doesn't mean 4 it wasn't changed. Not a final determination on the 5 merits and therefore I think it is irrelevant and I'm 6 going to instruct him not to answer. 7 MR. LEIPOLD: Counsel, I used the word 8 court order because he seemed to have a difficulty with 9 the word finding when that was used by Ms. Oakley. 10 You're going to instruct him not to answer on what 11 basis? What privilege is this you're asserting? 12 MR. ABELSON: Relevance. 13 MR. LEIPOLD: You don't believe that the 14 authorship of the materials that you're seeking an 15 injunction on is relevant to the motions on the 23rd: 16 Is that your basis? 17 MR. ABELSON: Right now, I'm objecting on 18 the basis that a court order in some other case is 19 irrelevant. A court finding might be res judicata or 20 collateral estoppel if that was an issue in the case. 21 But you haven't asked that. 22 MR. LEIPOLD: Q. Do you know if there's 23 any court finding precluding RTC from putting on 24 evidence that David Mayo wrote some portion of the NOTS 25 material in the Mayo case? 215 1 A. I don't know of any such finding. 2 Q. Were you familiar with the Mayo case? 3 A. Very familiar with it. 4 Q. Did you go to London in 1994 for any 5 copyright cases or to sit in on any copyright cases 6 with reference to any of the advanced tech materials? 7 A. Yes, I believe I did. 8 Q. And do you know who Ron Lolly is? 9 A. Yes. 10 Q. Was there a court order in that case by 11 the judge that Mr. Lolly was to be given possession of 12 any of the advanced materials? 13 A. There was an order that's on appeal. 14 Q. It is on appeal, but a judge did order 15 that; correct? 16 A. He was ordered to give -- Lolly was given 17 back a copy of the materials that he stole. 18 Q. And he was allowed to keep copies of the 19 material; correct? 20 A. Allowed to keep copies. 21 Q. The judge specifically allowed him to keep 22 copies of the material? 23 A I don't think that's in the order. 24 Q. And did you seek to speak in court at the 25 time of that hearing? 216 1 A. Did I? 2 MR. ABELSON: Objection. Irrelevant. 3 MR. LEIPOLD: Q. You can respond. 4 A. Did I seek to speak? 5 Q. Yes. 6 A. I did not seek to speak. 7 Q. You talked about in the complaint -- 8 excuse me. I'll ask another question. With reference 9 to the advanced materials, has there ever been a time 10 when parishoners were able to take the advanced 11 materials and keep them in their own possession? 12 A. You have to break that down. Which 13 advanced materials are you talking about? 14 Q. Any of the advanced materials that are at 15 issue in this case. 16 A. There were times when parishoners were 17 allowed to have certain issues in the advanced 18 technology material. 19 Q. What issues were those? 20 A. I'd have to look at the course check sheet 21 to see which ones. 22 Q. And were they allowed to ever take these 23 off the premises? 24 A. Some documents they were allowed to take 25 under lock and key, yes. 217 1 Q. When you say under lock and key, were they 2 ever allowed to take them anyplace other than other 3 Scientology premises? 4 A. Yes. If a person was auditing at home, he 5 was allowed to them home. 6 Q. When you say under lock and key, would the 7 parishoner be given the key to audit at home? 8 A. Yes. Of course he'd have the lock to the 9 briefcase. 10 Q. I notice at Bates mark 63 to your 11 declaration of February 7, 1995, this is a Church of 12 Scientology Flag Service Organization confidentiality 13 agreement, it states at the conclusion of the delivery 14 of the particular service for which advanced technology 15 was entrusted to him or on the oral or written demand 16 of FSO or its licensor at anytime parishoner shall 17 immediately return to FSO all books, documents and all 18 other materials in any medium which contained the 19 advanced technology. 20 Now, with reference to that statement, 21 could you explain to me with reference to the materials 22 in Exhibit E, which are the materials to your 23 declaration that explain how these things are kept 24 under lock and key and locked up by electronic means, 25 why such clause would be included if all these 218 1 materials were kept in a room under lock and key and 2 electrically monitored? 3 MR. ABELSON: Objection. Argumentative. 4 MR. LEIPOLD: You can respond, sir. 5 MR. ABELSON: If you understand the 6 question. 7 THE WITNESS: I understand the question. 8 Obviously, you weren't listening when I was explaining 9 it to Ms. Oakley. There are some of the platens which 10 are part of the advanced technology which are permitted 11 to the person to be taken and use them in session. 12 MR. LEIPOLD: Q. With reference to the 13 advanced materials, advanced technology, prior to 1982, 14 what orgs or Church of Scientology organizations were 15 allowed to deliver that advanced material? 16 A. Prior to '82? 17 Q. Yes. 18 A. Okay. The Flag Service Organization. 19 Advanced organization in the U.K. Advanced 20 organization in Copenhagen. The advanced organization 21 in Los Angeles. 22 Q. Any others? 23 A. I don't think that Anzo was formed at that 24 time. Advanced organization of Australia. 25 Q. Do you have any knowledge of anyone 219 1 claiming that they wrote any of the advanced materials 2 other than L. Ron Hubbard? 3 A. Claim that they wrote it? 4 Q. Yes. 5 A. Yes. 6 Q. And who do you know has made that 7 particular allegation? 8 A. David Mayo made that allegation. 9 Q. Anyone else? 10 A. Not that I know of. 11 Q. With reference to the agreement that is 12 marked as Exhibit A to your declaration of February 7, 13 the notary public seal is issued to David Miscavige. 14 Is he currently an officer or director of the Religious 15 Technology Corporation? 16 A. Yes, he is. 17 Q. And back when this agreement was 18 purportedly signed by L. Ron Hubbard in May of 1982, 19 was he an officer or director of RTC? 20 A. No. 21 Q. Did he have a position with the Church of 22 Scientology back in 1982, any Church of Scientology? 23 A. '82. I don't believe so. 24 Q. Do you know when he got voted onto the 25 board of directors of RTC? 220 1 A. When? 2 Q. Yes. 3 A. In 1987. 4 Q. Do you know what position he held prior to 5 1987, if any, with any Church of Scientology 6 organization? 7 A. I don't believe he had. 8 Q. He had no position whatsoever to your 9 knowledge? 10 A. Not to my knowledge. 11 Q. I believe you testified that RTC -- and 12 I'll paraphrase this, I may be wrong about this, is a 13 sea org organization? 14 A. Yes, it is. 15 Q. So the people in RTC would be sea org 16 members; is that correct? 17 A. Yes. 18 Q. There are other sea org organizations 19 within the Church of Scientology; correct? 20 A. There are other sea organizations, yes. 21 Q. There are sea org members throughout the 22 Church of Scientology; correct? 23 A. I have difficulty when you say Church of 24 Scientology. There is no entity called the Church of 25 Scientology. 221 1 Q. There are various entities called Church 2 of Scientology but they have other -- 3 A. There are corporations, yes. 4 Q. Within the -- 5 THE VIDEO OPERATOR: I have to change 6 tapes. This is the end of videotape three in the 7 deposition of Warren McShane. It is 5:10. 8 (Short break in proceedings.) 9 THE VIDEO OPERATOR: This is the beginning 10 of videotape four in the deposition of Warren McShane. 11 It is 5:11. 12 MR. ABELSON: I would like to inquire of 13 Kevin, our videotape producer here, how much time is 14 left on the three tapes that you have registered now. 15 THE VIDEO OPERATOR: Well, this is 16 ballpark, mind you. So I would say these tapes are 17 probably a little bit longer than 120 minutes, being 18 two hours, but it looks like there's about three 19 minutes on this one and maybe two there, and maybe 20 another two there. That's what? Ten minutes? 21 MR. ABELSON: You said you could probably 22 finish up in five minutes? 23 MR. LEIPOLD: I said I could finish up in 24 ten minutes. 25 (Discussion off the written record.) 222 1 MR. ABELSON: Go ahead. 2 MR. LEIPOLD: Q. There are sea org 3 members throughout the various Church of Scientology 4 organizations; correct? 5 A. If they're sea org organizations, there 6 are sea org members, yes. 7 Q. There are also sea org members in other 8 Churches of Scientology that aren't sea org 9 organizations? 10 A. Yes. 11 Q. My question is: Have you ever heard of 12 any instances in which the security that you provided 13 for the advanced technology has been breached by 14 somebody simply walking in and saying: I'm a sea org 15 member, and demanding to be given copies of the 16 advanced material? 17 A. No. 18 Q. You've never heard of that? 19 A. Not the way you describe it. 20 Q. Have you ever heard of anybody pretending 21 to be a sea org member and walking into the advanced 22 organization in Denmark and obtaining copies of the 23 advanced material? 24 A. Yes. 25 Q. And do you know if they did anything else 223 1 to get the advanced material other than demanding, 2 saying that they were sea org members and were entitled 3 to it? 4 A. They said they were representative of RTC. 5 Q. Do you know if they showed any 6 identification? 7 A. Not that I know of. 8 Q. So by the simple ploy of saying that they 9 were from RTC and not showing any identification, all 10 these various security devices you talked about were 11 foiled? 12 MR. ABELSON: Objection as argumentative. 13 But you may answer. 14 THE WITNESS: I believe I put in my 15 declaration that it was after that theft and the 16 imprisonment of Robert Scott that other security 17 devices were created. They walked into the sea org in 18 Copenhagen, misrepresented themselves as representative 19 of RTC, asked for a secure room and were brought the 20 materials in locked briefcases and stole them. 21 MR. LEIPOLD: Q. And when was that? 22 What year? 23 A. 1983. 24 Q. And was that the year you started working 25 as a secretary of RTC? 224 1 A. Yes. 2 Q. And was that the year you gained 3 responsibilities for watching over the materials, 4 the advanced materials? 5 A. I don't understand your question. 6 Q. Advanced technology? 7 A. What do you mean watching over? 8 Q. Was that the year you gained the 9 responsibility for protecting the advanced technology? 10 A. Yes. 11 Q. Did you find when you gained that 12 responsibility that there were serious problems with 13 the security for the advanced materials? 14 A. No. 15 Q. Then why did you undergo this series of 16 changes to the security for the advanced materials 17 since 1983? 18 A. Well, obviously, the security that existed 19 at that time wasn't sufficient to protect it against 20 theives the likes of Mr. Lolly and Mr. Scott. 21 Q. But you didn't consider that a serious 22 problem? 23 A. No. 24 Q. You stated that there's an inventory for 25 all OT materials. When was this inventory first 225 1 created? 2 A. There's been an inventory ever since I can 3 remember. 4 Q. And have you viewed any copies of the 5 inventories going back to the date that each of these 6 materials were created? 7 A. I've seen various types of inventories 8 over the years. 9 Q. My question is: Have you seen any 10 inventories going back to the dates each of these 11 materials were created, advanced tech materials? 12 A. As I sit here now, I can't remember how 13 far back they went. 14 Q. Is there a person or a department within 15 RTC to which a parishoner can write telling them about 16 misuses of the advanced material? 17 A. Yes. 18 Q. And does RTC keep copies of all these 19 various writings to that department? 20 A. I believe so. 21 Q. And do they keep copies of all their 22 investigations with reference to any complaints that 23 come into them with reference to the misuse of the 24 advanced material? 25 A. Does who keep copies? 226 1 Q. RTC. 2 A. You're referring to the department that 3 received the reports? 4 Q. I'm referring to that department or RTC as 5 a whole. Doesn't matter to me. 6 A. There are some reports obviously of 7 investigations, yes. 8 Q. Prior to transferring the rights to the 9 copyrights on the material -- strike that. Prior to 10 RTC obtaining the rights to the copyrights on the 11 material as you allege in the verified complaint, do 12 you know if Mr. Hubbard ever acted to give the rights 13 to the copyrights to any of the advanced materials to 14 anyone else? 15 A. Not that I know of. 16 Q. Have you ever investigated to find out if 17 Mr. Hubbard did? 18 MR. ABELSON: Did what? 19 MR. LEIPOLD: Gave the rights to any of 20 the copyrighted materials to anyone else. 21 THE WITNESS: Which copyrighted material? 22 Q. Any of the copyrighted materials that are 23 listed in Exhibit B. 24 A. Not that I'm aware of. 25 Q. Are the seven organizations you referred 227 1 to called class five organizations? 2 A. No. 3 Q. What are they? 4 A. Advanced organizations. 5 Q. Were there always identification numbers 6 placed on the advanced technology materials? 7 A. The packs that I've seen, yes. 8 Q. Have you ever seen the originals of the 9 advanced materials? In other words, the ones written 10 in Mr. Hubbard's hand or dictated by Mr. Hubbard? 11 A. The actual originals, yes, I have. 12 Q. Do those have identification numbers on 13 them? 14 A. Each individual page? 15 Q. Yes. 16 A. Pages do not, no. 17 Q. Do they have any other type of identifiers 18 on them identical to the copies that you send out to 19 the advanced orgs? 20 A. I don't understand the question. 21 Q. I'll withdraw it. 22 Have you ever heard of any Church of 23 Scientology organizations requesting that parishoners 24 provide them with copies of the tapes of the lectures 25 of Mr. Hubbard? 228 1 A. Provide them with tapes. Yes. 2 Q. Do you know if any of the original 3 lectures in which the advanced technology was presented 4 by Mr. Hubbard were allowed to be taped by the people 5 attending? 6 A. Not that I'm aware of. 7 Q. Have you ever checked to find out about 8 that? 9 A. No. I don't believe so. 10 Q. Have you ever heard any information that 11 in fact some of the original lectures pertaining to the 12 advanced materials were taped by people attending the 13 lectures? 14 A. No. 15 Q. With reference to Mr. Klemesrud, did you 16 or anybody from RTC other than your counsel write to 17 Mr. Klemesrud prior to initiating the lawsuit against 18 him? 19 A. Not that I'm aware of. 20 Q. Did anybody ever e-mail him with reference 21 to copyright violations or potential violations prior 22 to the lawsuit being initiated? 23 A. Not that I'm aware of. 24 Q. Did RTC ever have anyone go over to Mr. 25 Klemesrud's house and contact him demanding that he 229 1 take Mr. Erlich off his bulletin board service? 2 A. Not that I'm aware of. 3 Q. Do you know a Linda Willard? 4 A. No, I don't. 5 Q. Do you know if she works for RTC? 6 A. If she worked for RTC, I would know her. 7 Q. You don't recognize the name at all? 8 A. No. 9 Q. How many people work for RTC 10 approximately? 11 A. Sixty. 12 MR. ABELSON: Any other questions? 13 MR. LEIPOLD: Just calm down for a second. 14 Hear me out. Okay. You want to offer a stipulation? 15 MR. ABELSON: You kept your word. Ten 16 minutes. 17 MS. OAKLEY: I would like before we close 18 here to make the deposition notice an exhibit to the 19 deposition. I neglected to do that. Exhibit 3. 20 (Whereupon, Defendant's 21 Exhibit 3 was marked 22 for identification.) 23 THE VIDEO OPERATOR: This will be the 24 conclusion of the deposition of Warren L. McShane 25 consisting of four videotapes. 230 1 The original will be retained by Dan 2 Mottaz Video Productions at One Lansdale Avenue in San 3 Francisco. It is 5:23, and we are going off the 4 record. 5 (5:23 p.m.) 6 7 8 9 ____________________ 10 WARREN McSHANE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 231 1 STATE OF CALIFORNIA ) 2 o County of ______________) 3 4 5 On ____________________, 19____, 6 the foregoing deposition was submitted to 7 WARREN McSHANE, 8 the witness in the aforesaid deposition, 9 for his/her examination; 10 At which time the deposition was 11 read by him/her, and any changes he/she 12 desired to make were subsequently entered 13 upon the deposition; and 14 Thereafter, the deposition was 15 signed by WARREN McSHANE, 16 before me. 17 18 ____________________________________________ 19 NOTARY PUBLIC in and for the 20 County of __________________________________, 21 State of ____________________________________ 22 23 24 25 232 1 STATE OF CALIFORNIA ) o ss. 2 CITY AND COUNTY OF SAN FRANCISCO) 3 I, JAN ELVEE, hereby certify that the 4 witness in the foregoing deposition, 5 WARREN McSHANE, 6 was duly sworn to tell the truth, the whole truth, and 7 nothing but the truth in the within-entitled cause. 8 That said deposition was taken down in 9 shorthand by me, a Certified Shorthand Reporter and a 10 disinterested person, at the time and place therein 11 stated, and that the testimony of the said witness was 12 thereafter reduced to typewriting under my supervision 13 and direction. 14 I further certify that I am not of counsel 15 or attorney for either or any of the parties to the 16 said deposition, nor in any way interested in the event 17 of this cause, and that I am not related to any of the 18 parties thereto. 19 IN WITNESS WHEREOF, I have hereunto set my 20 hand this 10th day of May, 1995. 21 22 _________________________ 23 Certified Shorthand Reporter 24 25 233 ------- End of Forwarded Message