American Airlines, Inc. v. Yahoo! Inc. et al

Filing 78

NOTICE OF FILING OF OFFICIAL ELECTRONIC TRANSCRIPT of Telephone Conference held on August 11, 2009, before Judge McBryde. Court Reporter/Transcriber Eileen Brewer, Telephone number 817-850-6661. Parties are notified of their duty to review the transcript. A copy may be purchased from the court reporter or viewed at the clerk's office public terminal. If redaction is necessary, a Redaction Request - Transcript must be filed within 21 days. If no such Request is filed, the transcript will be made available via PACER without redaction after 90 calendar days. If redaction request filed, this transcript will not be accessible via PACER; see redacted transcript. The clerk will mail a copy of this notice to parties not electronically noticed. Redaction Request due 9/11/2009. Redacted Transcript Deadline set for 9/21/2009. Release of Transcript Restriction set for 11/19/2009. (emb)

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American Airlines, Inc. v. Yahoo! Inc. et al Doc. 78 1 1 2 3 4 VS. 5 6 7 8 9 10 11 APPEARANCES: 12 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FORT WORTH DIVISION AMERICAN AIRLINES, INC., Plaintiff, . . . . . . . . . . CIVIL ACTION NO. 4:08-CV-626-A YAHOO! INC. and OVERTURE SERVICES, INC. d/b/a YAHOO! SEARCH MARKETING, Defendants, ......... August 11, 2009 10:38 a.m. . TRANSCRIPT OF PROCEEDINGS (Telephone Conference) BEFORE THE HONORABLE JOHN H. McBRYDE UNITED STATES DISTRICT JUDGE For the Plaintiff: 13 14 15 16 17 18 For the Defendants: 19 20 21 22 23 24 25 Mr. Frederick Brown Gibson Dunn & Crutcher LLP 555 Mission Street, Suite 3000 San Francisco, California 94105 (415) 393-8204 Mr. Lars L. Berg Kelly Hart & Hallman 201 Main Street, Suite 2500 Fort Worth, Texas 76102 (817) 878-3524 Mr. David F. Chappell Mr. Scott A. Fredricks Cantey Hanger LLP 600 West Sixth Street, Suite 300 Fort Worth, Texas 76102 (817) 332-1800 Mr. Michael A. Jacobs Mr. D. Anthony Rodriguez Mr. Daniel P. Muino Morrison & Foerster, LLP 425 Market Street San Francisco, California (415) 268-7455 94105 U.S. DISTRICT COURT Dockets.Justia.com 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 APPEARANCES CONTINUED: Official Court Reporter: Eileen M. Brewer 424 United States Courthouse 501 West Tenth Street Fort Worth, Texas 76102-3637 (817) 850-6661 Proceedings recorded by mechanical stenography, transcript produced by computer-aided transcription. U.S. DISTRICT COURT 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Honor. THE COURT: defendants? THE COURT: P R O C E E D I N G S, We're on the line. This is a conference call between the Court and the attorneys in No. 4:08-CV-626-A, American Airlines Inc., versus Yahoo! Inc., and Overture Services, Inc., d/b/a Yahoo! Search Marketing. Let's see, who's on the line for the plaintiff? MR. BROWN: Thank you, Your Honor. There are two of us, Fred Brown and Lars Berg. THE COURT: attorney, Mr. Brown? MR. BROWN: THE COURT: I will be, Your Honor. Okay. And who's on the line for -- are Yahoo! Okay. Are you going to be the lead the defendants all represented by the same attorneys? and Overture? MR. CHAPPELL: THE COURT: Yes, sir. And who was that speaking? That was David Chappell speaking, Your MR. CHAPPELL: And who else is on the line for those MR. CHAPPELL: We have Scott Fredricks here at Cantey Hanger with me, and then Michael Jacobs with Morrison & Foerster will introduce his people, Your Honor. MR. JACOBS: Good morning, Your Honor. This is Michael Jacobs and with me is Tony Rodriguez and Dan Muino. U.S. DISTRICT COURT 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: defendants? MR. JACOBS: And who will be the spokesman for the I think I will probably do much of the speaking Your Honor, Michael Jacobs. THE COURT: I have with me the court reporter, who is taking this down, and Jamie Hoxie, the law clerk working with me on the case. Unless you're responding to a question where I've identified you, identify yourself when you speak so the court reporter will know who is talking. I arranged for this because of the deadline we had for Yahoo! to respond to one of the requirements of an order I signed on the 4th, I believe, August the 4th. And I realize I didn't give the defendants an opportunity to make a formal response to that. I was prompted to move, when I did, because I saw the problem developing with the expert designations and reports. And I felt that the issue that the August 4 order dealt with might have some interrelationship with that. I now have seen the defendant's response and I'm a little concerned with the fact that it simply can't do what I've ordered it to do. Obviously, we don't accomplish much by ordering somebody to do something they can't do. So let me ask Mr. -- Let's see, who do I want to direct this question to. Mr. Brown? Yes, sir. How can the Court require Yahoo! and U.S. DISTRICT COURT Is it Brown, yes. MR. BROWN: THE COURT: 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Overture to do something they can't do? MR. BROWN: THE COURT: I don't think that is possible. Okay. Well, what do you want? Do you want to extend the trial date until -- They say they can do it sometime in the year 2010. MR. BROWN: that long. I doubt, Your Honor, that it would take My answer was in respect to the deadline that was When we met with Mr. Jacobs and his client imposed yesterday. some weeks ago, our proposal to their telling us it would take seven months was that we thought they could do it in one month and there the negotiations stopped. 3500 manhours of time, if they hired 35 people or used their people to do it, and they work from, let's say 50 hours a week to do it, they could do it in two weeks. We thought the offer of a month was generous. The support that they have provided to date is conclusory. It doesn't give us any of the details about how many people they have on this project, doesn't give us the details of the equipment, and it doesn't describe in any detail from any knowledgeable person precisely why they think it would take longer than 30 days. fashion. We also believe that they are the cause of their own problem because of their failure to issue an appropriate hold notice and their failure to begin -THE COURT: Well, I think that's a different issue. U.S. DISTRICT COURT We think they could do it on an expedited 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 If you think they've done something wrong that they should be sanctioned for, that will be dealt with separately. MR. BROWN: We have not asked for any sanction when we asked that the documents and information be produced. THE COURT: Okay. So what he's saying, Mr. Jacobs, is What's your response to that y'all just need to try harder. that? MR. JACOBS: This is Michael Jacobs. We have pressed that question with the Yahoo! folks, and because we recognize that really this is a technical question, we proposed to American that they designate somebody on their side who was really a technical mavin in this field of databases to talk directly with our database folks so at least the technical people can reach a shared understanding. I still think that's actually the most practical thing to do at this stage so at least we're not trying to argue to you, lawyers who aren't deeply technically knowledgeable, trying to argue to you about what can and can't be done. What I will represent to the Court is that we have pressed the question can it be done faster. people. It is not a matter of It's not even a matter of just adding hardware, because the database needs to be rebuilt sequentially day by day with each backup added in and added in properly on the system that is this huge, you know, just unbelievably gargantuan database. that's what we understand to be the reason that it will take U.S. DISTRICT COURT And 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 even much of August to rebuild January 2007, and then progressively weeks and weeks and weeks for each remaining month. THE COURT: Mr. Brown, I don't have anywhere near the technical knowledge that the lawyers do in this case, so I'm going to have to rely on the lawyers to help me along. your response to what you just heard? MR. BROWN: tried harder. We think they could do it faster if they What's We're also -Is that because of your expertise on the THE COURT: subject? MR. BROWN: I don't have the technical expertise to speak to the particular problems that Yahoo! is experiencing, but I don't think any of us on this phone call do. THE COURT: Well, maybe he's got the right idea. Does American have someone available to it who can get with the technical people with Yahoo! and at least have an understanding as to what the real problems are? MR. BROWN: Either through a -- someone that we would engage to do that or internally, we could certainly accomplish that. What we would have expected to see is some technical declaration at this point in time to describe to us in detail, under oath, what the problems are. we don't have those. THE COURT: Well, Mr. Jacobs, that seems to be a U.S. DISTRICT COURT And even at this late date, 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 reasonable request. MR. JACOBS: Why don't they have that? I think they do, Your Honor. Number one, they took the deposition of Catherine Cameron, who is the declarant in our -- I guess our motion for reconsideration. And then in the Cameron declaration she describes in paragraph nine the steps that are being taken, and she describes the scale of the database. So what I would expect -- If we're going to send the ball back over the net, what I would expect American to have done is given that declaration to a technical person and said, "We have some more questions about this. What is this reference in paragraph 9(a) to restoring billions of lines of data from tape," or something of that nature. That could have been done over the past weeks, because we have offered that technical interchange. Moreover, they took her deposition four months ago, I think, right? THE COURT: Is she the person who would be the person with the technical knowledge to confer with the American Airlines counterpart? MR. JACOBS: Yes. I think she might bring one of the She line engineers, if you will, into the discussion as well. is the responsible manager of this effort and of this project. I think -- What I've come to know after working on these cases, that you can go down several levels of detail into the technical details in a project like this. help in that dialogue. U.S. DISTRICT COURT So she would probably have some 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Okay. I would prefer not to delay the pretrial or the trial in the case, if there's a way to avoid it, which means that I would like to expedite providing the information. But if it can't be done, it can't be. Is American And let me go back to you, Mr. Brown. satisfied that it does not want to pursue either of the alternatives that Yahoo! suggests? MR. BROWN: The stipulations, Your Honor, were This also is a very critical entirely one-sided from our view. period of time in which there was a very significant technology change called "Panama" that was introduced by Yahoo! in February of 2007. That technology platform introduced a new way for Yahoo! to do paid search advertising and change the dynamics of its relationship with its advertising customers. There was also a second change, and that was a change in the contract between American and travel agents that Yahoo! believes provides it a defense to any liability and any damages, and that change occurred in December of 2006. time is critical. So this period of We are not sure if we could do an accurate extrapolation on damages, and then we also have the issue of what particular ads were displayed. Yahoo! is contending that we need to show that each and every one of the million ads it displayed was itself an infringing ad. We don't agree with that position, but that So we need to see certainly is something we need to deal with. U.S. DISTRICT COURT 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 what ads, in fact, were displayed during that period of time to adequately represent American Airlines. THE COURT: Okay. How long would it take American to identify an expert with the knowledge needed to confer with the Yahoo! expert? MR. BROWN: Your Honor, I think we can probably do that within a week, Your Honor. THE COURT: Okay. I think I'll withdraw the August 4 I'll establish a order as to the subject we're now discussing. week to identify the expert, and I assume that expert will then need some time to understand the problem. I'll direct this to you, Mr. Brown. When do you anticipate you would have an expert ready to confer with the Yahoo! expert? MR. BROWN: I think we can do it within two weeks. It would greatly help us if we had a declaration from Yahoo! describing the problem that it believes it will be dealing with so that our expert can see that and come prepared to discuss that declaration with Yahoo! and to test what they say, whether it's correct or incorrect or whether there could be a different point of view. THE COURT: Okay. Mr. Jacobs, do you understand the type of detail he's looking for? MR. JACOBS: I think so, Your Honor. I think what we'll do is we will go back to our technical folks and say can you elaborate on the paragraph. And I will talk to Mr. Brown U.S. DISTRICT COURT 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and say is this the kind of information that would be helpful to you. And we will try and work it out among the two of us. THE COURT: Okay. I'm going to fix a deadline of ten days, and I'll have an exact date, for the defendants to provide a new declaration or declarations defining exactly what problems are being encountered or will be encountered in restoring the information. And I expect there to be a communication between the responsible attorneys as to what Yahoo! plans to provide and whether that's what American Airlines thinks should be required. So, in other words, I expect there to be a cooperative effort in defining what should be in the declaration. MR. JACOBS: MR. BROWN: Brown. THE COURT: And then I'm going to set a deadline of We'll do that, Your Honor. We'll do that, Your Honor. This is Fred two weeks for there to be a meeting between the experts for American Airlines and the defendants. MR. BROWN: THE COURT: MR. BROWN: MR. JACOBS: May we do that in Fort Worth, Your Honor? Who was that? That was Fred Brown, I'm sorry. Your Honor, if we could do it by video conference, at least, I think it would go a lot faster than if we have to fly people around at the height of the travel season. THE COURT: MR. JACOBS: Well, American likes that. This is Michael Jacobs. U.S. DISTRICT COURT We've come to 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 know that, Your Honor. THE COURT: Mr. Brown? MR. BROWN: Nothing is wrong with it, Your Honor. What's wrong with a video conference, I was just assuming that we could get more done on a more personal basis if we were sitting in the same conference room. THE COURT: think that is true. MR. JACOBS: Your Honor, why don't we leave the -- I Well, I think that's probably true. I think we can work out the location based on the availability of folks. It may be, for example, that American's expert happens There are a lot of database folks here. I think we'll probably have someone -- to be out here. MR. BROWN: Your Honor, this is Fred Brown -- here in Texas. THE COURT: Well, Fort Worth will be the default location, but I expect you to have whatever discussions are appropriate about an alternative if that actually turns out to be more desirable. MR. JACOBS: THE COURT: deal with? MR. BROWN: Brown. MR. JACOBS: THE COURT: Thank you, very much, Your Honor. Okay. Thank you. No, Your Honor. Thank you. It's Fred Michael Jacobs. Okay. Understood, Your Honor. Is there anything else we need to U.S. DISTRICT COURT 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Proceedings concluded, 11:55 a.m. -o0oCERTIFICATE I certify that the foregoing is a correct transcript from the record of proceedings in the above-entitled matter. I further certify that the transcript fees format comply with those prescribed by the Court and the Judicial Conference of the United States. s/Eileen M. Brewer Eileen M. Brewer Official Court Reporter Texas CSR No. 3016 August 21, 2009 Date U.S. DISTRICT COURT