Here's the first part (of 2 or 3 total, I'm predicting) of my account of Alexander Katalov's testimony.

Alexander explained how the Night Administrator for his company had called him on the telephone and woken him up about "a strange email from Adobe." Alexander went on to explain how his Night Administrator told him that the email sent to them from Adobe said that ElcomSoft had copyrighted material on its site.

Alexander told the Night Administrator that he thought it was stupid to call him up in the middle of the night over it, and that they would work it out in the morning. The Night Administrator called him back again that night, this time at 3am. This time, it was Verio, ElcomSoft's ISP that was contacting the ElcomSoft, because they too had received a shutdown notice from Adobe over the same AEBPR product, except that the notice they sent to Verio says "within 24 hours".

Verio is telling ElcomSoft at this point that they are about to shut their entire website down.

Alexander tells his Night Administrator that it's 3:00 AM and he's really going to get it in the morning. That it's absolutely ridiculous that they are selling copyrighted Adobe software on their website, and that all of the confusion can be cleared up in the morning.

12/10/02 - Alexander Katalov, President, ElcomSoft (Part 1)

Immediately after Vladimir Katalov testified, Alexander Katalov was called up to testify.

Alexander is the older of the two brothers, at 39. He has short black hair, thinning on the top and he was wearing a black suit.

Defense Attorney Joseph Burton asked Alexander his name and age, and about his position at ElcomSoft.

"I am the President of Elcomsoft." Alexander said.

"What is your role there?" Burton asked.

"Marketing, tech support, hiring new employees..." Alexander named. "Sometimes I even work as a driver when I need to get things from one store to another." Alexander started to hold up his hands to drive an invisible steering wheel for a instant, before thinking better of the gesture and putting his hands back down.

Alexander explained how ElcomSoft started in 1989-1990 when his country was still the Soviet Union.
ElcomSoft formed with two partners (Alexander and Vladimir, his brother) at a time when citizens were just being allowed by the government to have private companies of their own.

Alexander went on to explain more about ElcomSoft's early history, and how the company started in the supercomputer and payroll computers business, providing both hardware and software for their clients.

Although many of these old products aren't sold anymore by the company, ElcomSoft continues to support these older systems for those clients still using them.

"We closed that line in 1995-1996," Alexander explained. "But we continue to support our old customers."

From 1995-1997, ElcomSoft focused on its software outsourcing business. Clients during this time period included VISA. In 1996, ElcomSoft starting selling shareware on the Internet.

"How many employees were at your company at this time?" Burton asked.

"Five to Seven." Alexander said.

"What was your first product you sold on the Internet?" Burton asked.

"Advanced Disk Catalog." Alexander said.

Burton asked Alexander to explain how the creation of the Advanced Disk Catalog came about.

"I asked Vladimir to write a program for my own needs, and we put it on the Internet for free and got feedback." Alexander said. "People wanted to give back. (There are more comments in here about how online users of the program contributed bugfixes to it, etc.)

Next, Burton asked Alexander when they started selling "password recovery" software.

"1997." Alexander said. He went on to explain how one of their business partners sent them some financial information in an ecrypted format with a password that was supposed to be the partner's phone number. When Alexander received the file, the phone number wouldn't work. He tried the partner's business number, home number, and cell phone number, but nothing worked.

Alexander had someone in the company write up a program to come up with all of the available passwords. (This took two weeks.) The program didn't work, however, and they still couldn't access the data until they finally heard back from the business partner. (Turns out, the business partner had included dashes in-between the digits of his business phone number.)

Burton continued to ask Alexander about the company's history and more recent activities. Alexander explained that in 1997, ElcomSoft decided to start "downsizing its outsourcing business and concentrate on shareware and focus on password recovery software."

"In 2000, what were the total sales of the company?" Burton asked.

"$200,000 to $300,000." Alexander said.

"And how many employees?" Burton asked.

"Ten to twelve." Alexander said.

"What were the total sales in 2001?" Burton asked.

"One million." Alexander said.

"In 2002? I know the year's not over yet, but..." Burton said.

"Probably about the same: one million." Alexander said.

Alexander said something about how the bad publicity had hurt their business this year and so they hadn't increased their business sales between 2001 and 2002.

"How many employees do you currently have?" Burton asked.

"Fifteen." Alexander replied. "And some part time employees that telecommute."

Burton said that he wanted to talk about the AEBPR program now.

"When did you first learn that there was a problem (with the AEBPR)?

"Around midnight on June 25-26th." Alexander said.

"Describe how you first learned about the problem." Burton said.

Alexander explained how the Night Administrator for his company had called him on the telephone and woken him up about "a strange email from Adobe." Alexander went on to explain how his Night Administrator told him that the email sent to them from Adobe said that ElcomSoft had copyrighted material on its site.

Alexander told the Night Administrator that he thought it was stupid to call him up in the middle of the night over it, and that they would work it out in the morning. The Night Administrator called him back again that night, this time at 3am. This time, it was Verio, ElcomSoft's ISP that was contacting the ElcomSoft, because they too had received a shutdown notice from Adobe over the same AEBPR product, except that the notice they sent to Verio says "within 24 hours".

Verio is telling ElcomSoft at this point that they are about to shut their entire website down.

Alexander tells his Night Administrator that it's 3:00 AM and he's really going to get it in the morning. That it's absolutely ridiculous that they are selling copyrighted Adobe software on their website, and that all of the confusion can be cleared up in the morning.

"Where were you when this happened?" Burton asked.

"In Russia. Moscow." Alexander said.

Burton asked the Jury to please keep in mind that, in Moscow, where ElcomSoft has just received the letter for the first time, it was already midnight. This is significant because in Adobe's June 25, 2001 letter, it gives ElcomSoft five working days to respond. Since the letter was not received until midnight at the end of the first of day, to ElcomSoft, one of those five days had already passed before they even received the letter.

At this point evidence was submitted and projected on the screen for the jurors...

Stay tuned!