For the reasons set forth below, the court tentatively denies Sun's Motion for Summary Judgment re: Interpretation of Section 2.7(a) of the TLDA.

Sun moves for summary judgment as to the interpretation of section 2.7(a) of the TLDA. Sun asserts that "the most current Java Reference Implementation" appearing in section 2.7(a) refers to "Microsoft's Compatible Implementation of the Significant Upgrade in which the Supplemental Classes were delivered." Motion at 1. Microsoft, on the other hand, argues that section 2.7(a) requires that any Supplemental Java Classes, which Sun may develop and deliver as part of a Significant Upgrade, must run on the current commercially distributed version of Microsoft's reference implementation.¹

Section 2.7(a) of the TLDA provides:

Licensee may determine, in its sole discretion, to include one or more Supplemental Java Classes in its Products; however, Licensee shall not be obligated to distribute any Supplemental Java Classes with its Products. Licensee shall use reasonable efforts to promptly inform SUN of its decision to exclude any such Supplemental Java Classes from Products. Licensee also shall use reasonable efforts to promptly make available to developers and customers free of charge any Supplemental Java Classes that Licensee decides, in its sole discretion, to exclude from Products. For purposes of this Section 2.7, Licensee shall be deemed to have made such "reasonable efforts" if it (i) issues a press release and posts a message on its Worldwide Web site on such pages as Licensee's support for Java is described, stating the place where any excluded Supplemental Java Classes are available, and (ii) publishes any excluded Supplemental Java Classes on CD-ROMs that are distributed through Licensee's Microsoft Developer Network within 90 days after the date that SUN delivers such Supplemental Java Classes to Licensee and makes such Supplemental Java Classes available on its worldwide web site within 30 days after the date that SUN delivers such Supplemental Java Classes to Licensee. The Supplemental Java Classes delivered by SUN to Licensee shall run on the most current Java Reference Implementation. (Emphasis added).

In support of its interpretation, Sun offers certain extrinsic evidence relating to the negotiations resulting in the TLDA. According to Sun, it would be "nonsensical" to interpret section 2.7 as a warranty by Sun that its most current Supplemental Java Classes would execute on a prior reference implementation that lacked the required functionality to run them. Sun's Motion at 1; Baratz 2/12/99 Decl. ¶ 13.

The negotiation history, says Sun, is consistent with Sun's interpretation and the notion that Supplemental Java Classes would require changes to the virtual machine. Microsoft proposed that it have the right to exclude Supplemental Java Classes from its reference implementations, but nevertheless would be obligated to distribute them to developers through alternative channels. Baratz 1/22/99 Decl. ¶ 12; see also 3/5/96 Draft TLDA § 2.7. Microsoft's proposed March 5, 1996 draft stated that its Products would not be required to pass those portions of Sun's test suites directed to Supplemental Java Classes. See 3/5/96 Draft TLDA § 2.6(a)(iii). Sun was apparently satisfied with Microsoft's obligation to distribute such Supplemental Java Classes to developers through alternative channels. Yet, according to Sun, it insisted that Microsoft's products include the necessary functionality in order to support Sun's Supplemental Java Classes. Baratz 1/22/99 Decl. ¶ 13. Sun contends that a subsequent draft prepared by Microsoft reflects Sun's demand and Microsoft's apparent acceptance. See 3/10/96 Draft TLDA § 2.6(vi) ("the Compatible Implementation and all Products shall be deemed to pass the Relevant Test Suites if they pass the Relevant Test Suites when combined with any Supplemental Java Classes that are not included in Products . . ."); see also TLDA § 2.6(a)(vii). Against this backdrop, says Sun, "most current Java Reference Implementation" in section 2.7(a) is reasonably interpreted to mean the Reference Implementation which Microsoft would develop to implement the enhancements embodied in a Significant Upgrade of the Java Technology. See also Baratz 1/22/99 Decl. ¶ 15; Baratz 2/26/99 Reply Decl. ¶ 6-9.

Sun presents other extrinsic evidence which, according to it, shows that Microsoft's asserted interpretation is inconsistent with its lead-negotiator's demonstrated understanding of the meaning of section2.7(a). In response to an inquiry about supporting Sun's JavaBeans^TM,which included Supplemental Java Classes released with Java Development Kit (JDK^{see also Kannegaard 2/26/99 Reply Decl. ¶ 6 (JavaBeans comprise Supplemental Java Classes whose execution requiredchanges to the Java virtual machine*); see also Day 2/26/99 Decl. Ex. 2 (Muglia 1/27/99 Depo. at 338:14-22); but see Muglia 1/27/99 Depo. at 334:7-337:21.}

Microsoft, on the other hand, presents its own version of the negotiation history. Microsoft contends that it agreed to allow Sun to test for compliance with Supplemental Java Classes in exchange for Sun's promise that these classes would run on Microsoft's then existing virtual machine such that Microsoft would have no work to do in order to post them on its web site. Giannini Decl. Ex. A (Muglia 1/26-27/99 Depo. at 335:11-336:1). This obligation did not concern Sun, says Microsoft, since it was contemplated by Sun that its Supplemental Java Classes would be written in Java and, therefore, run on any virtual machine without modification. Muglia 1/26-27/99 Depo. at 341:2-342:3; see also Day 2/26/99 Reply Decl. Ex. 2 (Muglia 2/12/99 Depo. at 179:3-25).

2. LEGAL STANDARD ON SUMMARY JUDGMENT

Summary judgment may be granted when the moving party demonstrates that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.Proc. 56(c).

Interpretation of a contract, including a determination of whether any of its provisions are ambiguous, is a matter of law for the court. United States v. King Features Entertainment, Inc., 843 F.2d 394, 298(9th Cir. 1988) (citing Beck Park Apts v. United States Dept. of Housing, 695 F.2d 366, 369 (9th Cir. 1982)). Under California law, even if the written agreement is clear and unambiguous on its face, the district court "must receive relevant extrinsic evidence that can prove a meaning to which the language of a contract is 'reasonably susceptible.'" Brobeck, Phleger & Harrison v. Telex Corp., 602 F.2d866, 871 (9th Cir.1979), cert. denied, 444 U.S. 981, 100 S.Ct. 483, 62L.Ed.2d 407 (1979) (citing Pacific Gas Electric Co. v. G.W. Thomas Drayage Co., 69 Cal.2d 33, 37 (1968)). If, after consideration of such extrinsic evidence, the court finds that the agreement is not reasonably susceptible to an asserted interpretation and is unambiguous, extrinsic evidence may not be used to alter the terms of the contract. Id. In this instance, summary judgment is appropriate, since interpretation of an unambiguous contract is a question of law for the court. Id.; see also Brinderson-Newberg Joint Venture v. Pacific Erectors Inc., 971 F.2d 272, 276-77 (9th Cir. 1992) ("whether the written contract is reasonably susceptible of a proffered meaning is a matter of law").

3. ANALYSIS

Sun contends that "the most current Java Reference Implementation" in section 2.7(a) refers to "Microsoft's Compatible Implementation of the Significant Upgrade in which the Supplemental Classes were delivered." Microsoft, on the other hand, asserts that section 2.7(a) of the TLDA obligates Sun to deliver Supplemental Java Classes which run on Microsoft's then-commercially distributed Reference Implementation. Microsoft reasons that, in exchange for its prompt distribution of Sun's Supplemental Java Classes on its web site, Sun agreed that they would run on Microsoft's existing virtual machine. Microsoft contends that this is the only reasonable interpretation since this is the only way that Microsoft could ensure that Supplemental Java Classes would be posted on its web site in working order within thirty days of Sun's delivery. Opposition at 2.

The parol evidence rule involves two initial inquires: (1) whether the written instrument at issue was intended to be an integration, and (2) whether the language of the instrument is reasonably susceptible to the interpretation of the party offering extrinsic evidence.² Brinderson-Newberg Joint Venture v. Pacific Erectors, Inc., 971 F.2d 272, 276-77 (9thCir. 1992).

California law requires a preliminary consideration of "all credible evidence offered to prove the intention of the parties." , 69 Cal.2d at 39-40. If, after such consideration, thec ourt determines that the contract is reasonably susceptible to either of the two interpretations asserted by the parties, extrinsic evidence relevant to prove either meaning is admissible. Id. at 40. However, extrinsic evidence may not be offered to add to, detract from or vary the terms of a written contract. Id. at 39. The court is also guided by the principle that the meaning of a particular provision in a contract is determined not only from the words in that provision, "but from reading of the entire contract." Sunset Securities Co. v. Coward McCann Inc., 47 Cal.2d 907, 911 (1957).

The language of section 2.7(a) is unambiguous and consistent with Microsoft's asserted interpretation. Section 2.7(a) states that the Supplemental Java Classes delivered by Sun shall run on "the most current Java Reference Implementation." Webster's defines "current" as "occurring in or existing at the present time" and "most recent. "Webster's Ninth New Collegiate Dictionary 316 (1990). Microsoft's reference implementation which responds to a Significant Upgrade would not meet these definitions, since it would not exist at the time of the Significant Upgrade or delivery of Supplemental Java Classes. Accordingly, the literal language of section 2.7(a) supports Microsoft's interpretation and is reasonably interpreted to require Sun to deliver Supplemental Java Classes that run properly on Microsoft's then-existing and commercially distributed virtual machine.

Moreover, Microsoft's interpretation makes sense with the remainder of section 2.7(a). Under the TLDA, Microsoft must within thirty days of receipt of Sun's Supplemental Java Classes post them on its web site. If Microsoft wished to have these Supplemental Java Classes in working order when it posted them, then thirty days appears to be insufficient to allow Microsoft to implement the changes to its virtual machine required by Supplemental Java Classes.

Sun, on the other hand, submits that in the context of the TLDA as a whole, the term "most current Java Reference Implementation" in section 2.7(a) refers to Microsoft's Compatible Implementation of the Significant Upgrade in which the Supplemental Classes were delivered. As discussed above, however, Sun's asserted interpretation contravenes the literal language of section 2.7(a). Moreover, Sun's extrinsic evidence is insufficient to render section 2.7(a) reasonably susceptible to its asserted interpretation.

4. ORDER

In light of the foregoing, the court tentatively denies Sun's Motion for Summary Adjudication Re Interpretation of Section 2.7(a) of theTLDA.

Oral argument is set for June 24, 1999 at 2:00 p.m. The court emphasizes that the foregoing ruling and supporting reasoning is only tentative. The court expects each party to identify the problems it perceives in the reasoning set forth in the present order. In addition, the parties shall address the following questions at oral argument:

1. Did the original supplemental classes delivered by Sun require Microsoft's virtual machine to support JNI?
2. Does the court's tentative interpretation of section 2.7(a) conflict with the remainder of the TLDA and, if so, how?
3. Both parties appear to agree that Sun could force changes to Microsoft's virtual machine necessary to support Supplemental JavaC lasses in a "two-step" process. Was this two-step process expressly discussed by the parties or is this process merely a by-product of theTLDA?
4. In light of this two-step process and that Microsoft has as long as six months to implement a Significant Upgrade, does the court's tentative interpretation of section 2.7(a) significantly impede the distribution of Upgraded Java Technology?
5. Is their any evidence of record to dispute Microsoft's factual contention that Sun's negotiator's stated that Supplemental Java Classes would be written entirely in Java?
6. If a Supplemental Java Class were written entirely in Java, would it require changes to a virtual machine?
7. Is there a difference between the term "then-current" used in section 1.13 and "most current" used in section 2.7(a)?

FOOTNOTES

¹ Microsoft, in its Motion for Partial Summary Judgment Re: Sun Microsystems' Refusal to Deliver Technology Upgrades and Meet Other Requirements of the TLDA, also moves for summary judgment as to the interpretation of section2.7(a).  back to text

² Neither party disputes that section 12.3 of the TLDA resolves the"integration"-prong of the inquiry under the parole evidence rule as it states that the TLDA constitutes "the final, complete and exclusive agreement and understanding between the parties with respect to its subject matter."  back to text

*As used on this web site, the terms "Java virtual machine" or "JVM" mean a virtual machine for the Java platform.