FreecycleSunnyvale v. The Freecycle Network

Filing 152

Transcript of Proceedings held on 09/27/07, before Judge Claudia Wilken. Court Reporter/Transcriber Lee-Anne Shortridge, Telephone number 408-287-4580. Per General Order No. 59 and Judicial Conference policy, this transcript may be viewed only at the Clerks Office public terminal or may be purchased through the Court Reporter/Transcriber until the deadline for the Release of Transcript Restriction.After that date it may be obtained through PACER. Any Notice of Intent to Request Redaction, if required, is due no later than 5 business days from date of this filing. Release of Transcript Restriction set for 11/10/2008. (las, ) (Filed on 8/13/2008)

F r e e c y c l e S u n n y v a l e v. The Freecycle Network

D o c . 15

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

FREECYCLESUNNYVALE , 6 PLAINTIFF, 7 V S. 8 FREECYCLE NETWORK, 9 DEFENDANT. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 FOR THE DEFENDANT : A P P E A R A N C E S: FOR THE PLAINTIFF :

) ) ) ) ) ) ) ) ) )

C- 06- 00324 CW SAN JOSE , CALIFORNIA SEPTEMBER 2 7, 2007 PAGES 1- 47

TRANSCRIPT OF PROCEEDINGS B E F O R E THE HONORABLE CLAUDIA W I L K E N UNITED STATES DISTRICT JUDGE

MAYER BROWN BY: I A N N. FEINBERG AND ERIC BUTLER EVANS TWO PALO ALTO S Q U A R E, SUITE 3 0 0 PALO ALTO , CALIFORNIA 94306 PERKINS, COIE BY: LISA KOBIALKA 101 JEFFERSON D R I V E MENLO PARK, CALIFORNIA

94025

GIGI C . HOANG 4 EMBARCADERO SQUARE, SUITE 2 4 00 SAN FRANCISCO, CALIFORNIA 94111 OFFICIAL COURT REPORTER : L E E- ANNE SHORTRIDGE , C S R, C R R CERTIFICATE NUMBER 9595

1

Dockets.Justia.co

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SAN JOSE , CALIFORNIA

SEPTEMBER 2 7, 2007

PROCEEDINGS ( WHEREUPON , C O U R T C O N V E N E D A N D THE FOLLOWING PROCEEDINGS WERE HELD: ) T H E CLERK: CALLING T H E M A T T E R OF

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FREECYCLESUNNYVALE VERSUS FREECYCLE NETWORK, CIVIL ACTION NUMBER C-0 6-0324 . COUNSEL , PLEASE COME FORWARD AND STATE YOUR APPEARANCES FOR T H E R E C O R D. M R. FEINBERG: I AN FEINBERG WITH M A Y E R

BROWN FOR PLAINTIFF, FREECYCLESUNNYVALE. M S. KOBIALKA: HONOR . GOOD AFTERNOON, YOUR

LISA K O B I A L K A O F PERKINS , COIE ON B E H A L F O F

FREECYCLE NETWORK . M S. HOANG: GIGI HOANG , PERKINS , COIE ON

BEHALF O F THE DEFENDANT , FREECYCLE NETWORK. M R. EVANS: FREECYCLESUNNYVALE. T H E COURT: A L L RIGHT. S O THIS IS ON F O R ERIC EVANS , MAYER BROWN FOR

PLAINTIFF'S MOTION F O R PARTIAL SUMMARY JUDGMENT A N D DEFENDANT'S MOTION T O STRIKE. I S SOMEONE ON T H E TELEPHONE? T H E CLERK: T H E COURT: T H E CLERK: N O. WHAT 'S THAT W E I R D N O I S E? I T'S COMING FROM T H E - - I 2

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D O N'T KNOW WHAT'S CAUSING IT. T H E COURT: T H E P H O N E. T H E CLERK: T H E COURT: I D O N'T KNOW. O H, WELL. I T SOUNDS LIKE SOMEBODY I S O N

S O JUST O U T O F CURIOSITY, MAYBE I' VE BEEN TOLD THIS B E F O R E, B U T WHAT EXACTLY IS IT THAT FREECYCLESUNNYVALE D I D TO OFFEND T H E FREECYCLE NETWORK AND G E T I T S E L F BOOTED O F F T H E YAHOO GROUPS ? JUST OUT OF CURIOSITY. DO WITH THE M O T I O N. M S. KOBIALKA: S O THE MEMBERS O F IT DOESN 'T HAVE A N Y T H I N G T O

FREECYCLESUNNYVALE DECIDED THAT THEY DIDN 'T WANT T O C O M P L Y WITH VARIOUS RULES AND REGULATIONS -T H E COURT: SUCH AS WHAT? - - THAT THE FREECYCLE

M S. KOBIALKA:

NETWORK HAD , W H I C H I N C L U D E D P R O P E R USAGE OF ITS TRADEMARKS. ALSO , T H E R E WERE A NUMBER OF VARIOUS G R O U P S THAT T H E MEMBERS WERE INVOLVED IN, A N D THEY BASICALLY JUST DECIDED THEY DIDN 'T LIKE T H E DIRECTION T H E FREECYCLE NETWORK WAS GOING , TOOK A NUMBER O F ACTIONS , INCLUDING OPPOSED - - I BELIEVE THEY OPPOSED A TRADEMARK A P P L I C A T I O N THAT WE H A D THAT WAS ABOUT TO BE PUBLISHED F O R REGISTRATION . 3

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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 HEARD T W O:

THEY MADE A N U M B E R OF STATEMENTS I N PUBLICATIONS STATING THAT YOU S H O U L D U S E FREECYCLE AS A GENERIC TERM . THERE WAS A NUMBER OF

ACTIVITIES THAT WENT ON . T H E COURT: OKAY . WELL, SO FAR I' VE

YOU THINK THEY OPPOSED YOUR TRADEMARK

APPLICATION ; A N D YOU THINK THEY SPOKE OUT ABOUT THEIR VIEW THAT FREECYCLE SHOULD BE GENERIC. M S. KOBIALKA: N O. ACTUALLY IT WASN' T

JUST THAT THEY SPOKE OUT ABOUT THEIR VIEW . THEY ACTUALLY WENT OUT A N D TOLD INDIVIDUALS THAT IT IS A GENERIC TERM, THIS IS HOW Y O U MAKE IT GENERIC, GO O U T A N D DO X, Y, AND Z TO E N S U R E THAT EVERYBODY C A N USE FREECYCLE A S A GENERIC TERM. ON IT . A N D THERE' S ALSO ANOTHER CASE THAT 'S PENDING IN ARIZONA A S I T RELATES TO A SPECIFIC INDIVIDUAL, T I M O E Y, W H O APPARENTLY IS ALSO A CO -OWNER OF FREECYCLESUNNYVALE. A N D IN THAT PARTICULAR INSTANCE , T H E R E W A S A C T U A L L Y A N INJUNCTION THAT WAS I S S U E D I N T H E ARIZONA COURT WHICH HAS SINCE BEEN REMANDED BY THE NINTH CIRCUIT. B U T THERE WAS QUITE A FEW T H I N G S THAT 4 THERE 'S QUITE A B I T OF DOCUMENTATION

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WENT ON, INCLUDING - T H E COURT: THEY WERE. WELL , I 'M INTERESTED I N WHAT ARE THERE A N Y MORE ?

I' VE HEARD TWO . M S. KOBIALKA:

S O, FOR EXAMPLE, MR . O E Y

ACTUALLY DRAFT ED OUR TRADEMARK P O L I C Y. H E THEN T U R N E D A R O U N D AND TOLD, IN VARIOUS E-MAIL POSTINGS A N D O N POSTER BOARDS , H O W TO U S E T H E MARK I M P R O P E RLY , KNOWING FULL WELL THAT WAS A COMPLETE VIOLATION - T H E COURT: YOU SAID THAT ALREADY.

THAT' S T H I N G N U M B E R TWO . T H I N G N U M B E R ONE W A S O P P O S I N G T H E TRADEMARK APPLICATION. T H I N G N U M B E R TWO W A S KEEPING O U T I N VARIOUS WAYS, OR ENCOURAGING OTHERS TO DO THIS OR THAT WITH RESPECT TO T H E G E N E R I C N E S S O F T H E TERM. I S THERE ANYTHING ELSE ? PETS? D I D THEY POST ILLEGAL DRUGS? DID THEY POST DID THEY FAIL

TO C O M P L Y WITH T H E PENGUIN P A T R O L'S DIRECTIVES? D I D THEY DO ANYTHING OTHER THAN THOSE TWO T H I N G S THAT YOU 'VE MENTIONED? M S. KOBIALKA: T H E R E - - I 'M GOING TO HAVE

TO GO BACK AND THINK ABOUT IT , B U T I BELIEVE THERE WERE ACTUALLY A N U M B E R OF DIFFERENT T H I N G S THAT THEY HAD DONE WHICH VIOLATED THE -5

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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 THEM?

T H E COURT:

B U T YOU C A N'T THINK OF A N Y O F

M S. KOBIALKA:

I 'D HAVE T O LOOK QUICKLY

BACK AT WHAT I HAVE, B U T I 'M RECALLING SPECIFICALLY IN CONNECTION WITH M R. OEY . I ALSO BELIEVE THAT THE MEMBERS DECIDED THEY DIDN'T WANT TO BE PART O F T H E FREECYCLE NETWORK ANY L O N G E R A S WELL , BECAUSE -T H E COURT: R I G H T. BUT YOU KICKED THEM

O F F Y A H O O G R O U P S, SO MY QUESTION IS , W H Y DID Y O U KICK THEM O F F OF YAHOO GROUPS ? M S. KOBIALKA: THE TRADEMARK. BECAUSE THEY WERE USING

THEY WERE USING FREECYCLE -- THEY

CONTINUED T O USE FREECYCLE EVEN THOUGH THEY WERE N O LONGER AFFILIATED WITH FREECYCLE NETWORK, WHICH WAS THE -T H E COURT: LONGER AFFILIATED ? M S. KOBIALKA: THEY DECIDED THAT THEY I N WHAT SENSE WERE THEY N O

WERE GOING TO BE THEIR OWN GROUP H A V I N G T H E I R O W N S E T O F R U L E S. THEY WERE GOING TO DO GIFTING A N D RECYCLING OVER THE INTERNET SEPARATE AND APART FROM THE FREECYCLE NETWORK. THEY WERE NO LONGER GOING TO BE AN 6

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AFFILIATED MEMBER OF T H E FREECYCLE NETWORK I T S E L F. T H E COURT: THAT? M S. KOBIALKA: I BELIEVE THERE' S A NUMBER H O W DID THEY COMMUNICATE

OF DIFFERENT MEMBERS OF T H E FREECYCLESUNNYVALE -- I THINK THERE WERE TWO INDIVIDUALS THAT INFORMED THE FREECYCLE NETWORK THEY NO LONGER W A N T E D T O B E AFFILIATED, A N D O N E INDIVIDUAL W A S ASKED TO NO LONGER - - T O STEP DOWN FROM THE VARIOUS POSITIONS. T H E COURT: S O, WHAT, THEY DIDN 'T WANT T O I S THAT WHAT

BE L I S T E D O N FREECYCLE. ORG A N YMORE? HAPPENED ? M S. KOBIALKA:

I THINK IN PART, Y E S. THEY DIDN 'T WANT T O

THEY DIDN'T WANT TO BE LISTED .

BE AFFILIATED IN ANY W A Y WITH T H E FREECYCLE NETWORK. THEY DIDN' T A G R E E WITH T H E FACT THAT THEY WERE RECEIVING FUNDING FROM WASTE MANAGEMENT . DIDN' T LIKE T H E DIRECTION THEY WERE GOING . IT

THEY

DIDN' T LIKE SOME OF THE RULES A N D R E G U L A T I O N S THAT WERE BEING PUT IN PLACE . TOO STALINISTIC. A N D THEY C A L L E D MR. BEAL, W H O W A S THE FOUNDER OF THE FREECYCLE NETWORK , I UNDERSTAND QUITE A FEW NAMES AS A RESULT , W H I C H W A S JUST 7 THEY THOUGHT THEY WERE

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BASICALLY ANTITHETICAL TO THE OVERALL IDEA A N D POINT B E H I N D T H E FREECYCLE NETWORK, WHICH IS TO HAVE PEOPLE WORK TOGETHER AS A COMMUNITY TO REDUCE WASTE . T H E COURT: OKAY . C A N I RESPOND QUICKLY TO

M R. FEINBERG: SOMETHING? T H E COURT: DISPUTED .

O H, NO.

I 'M SURE I T'S

I WAS JUST CURIOUS . M R. FEINBERG: I WAS ACTUALLY JUST GOING

TO HAND YOU UP T H E N I N T H CIRCUIT DECISION WHICH CAME DOWN YESTERDAY. T H E COURT: O H. YOU CAN GIVE I T T O THE

COURTROOM D E P U T Y AND -M R. FEINBERG: T H E COURT: S H E' S CLEARLY AWARE OF IT .

THE COURTROOM DEPUTY, I SAID . O H, I'M SORRY (HANDING ).

M R. FEINBERG: T H E COURT:

THAT 'S WHO HANDS IT UP TO ME .

S O THEY REVERSED THE INJUNCTION ? M R. FEINBERG: Y E S. A N D IT' S N O T ON

FIRST AMENDMENT GROUNDS WHICH , FRANKLY , YOUR HONOR , I NAIVEL Y E X P E C T E D I T T O B E. BASICALLY WHAT THEY SAID, A N D I 'M SURE THERE WILL BE A DISPUTE , B U T WHAT THEY SA I D IS ALL OF T H E T H I N G S THAT O P P O S I N G COUNSEL COMPLAINED OF 8

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AREN' T ACTIONABLE ; THEREFORE, Y O U C A N' T HAVE A PRELIMINARY INJUNCTION BASED ON IT, INCLUDING T H I N G S LIKE GENERICIDE ISN 'T A C L A I M, ENCOURAGING P E O P L E T O U S E A MARK OR PURPORTE D MARK GENERICALLY IS A RISK O F H A V I N G A MARK . THE REASON I BRING THIS U P I S W E WOULD LIKE TO REQUEST PERMISSION TO MOVE FOR SUMMARY JUDGMENT ON T H E COUNTERCLAIMS , BECAUSE WE BELIEVE THIS NINTH CIRCUIT D E C I S I O N, WHICH IS THE L A W O F THE CASE , EVISCERATE S THEIR COUNTERCLAIMS , WHICH ARE TORT AND ESSENTIALLY THE SAME THINGS THEY COMPLAINED OF. T H E COURT: YESTERDAY. I WISH YOU 'D TOLD M E THIS

I WOULD HAVE H A D TIME T O READ IT . M R. FEINBERG: W E'R E N O T GOING TO

ACTUALLY BRING T H E MOTION TODAY. T H E COURT: BEEN CURIOUS. S O, WELL, THAT W A S ONE OF MY QUESTIONS I S WHAT COUNTERCLAIMS A R E THERE THAT AREN 'T THE SUBJECT OF THIS M O T I O N? M R. FEINBERG: THERE ARE TORT CLAIMS WELL , N O, BUT I WOULD HAVE

AGAINST MR. O E Y, AND WE BELIEVE THAT THEY A R E GONE . I' M SURE OPPOSING COUNSEL DISAGREES , B U T WE THINK THAT THEY C A NN O T SURVIVE SUMMARY JUDGMENT . 9

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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 HERE.

T H E COURT:

R I G H T.

B U T, I MEAN , W H I C H

COUNTERC L A I M S ARE N O T T H E SUBJECT O F T H E MOTION Y O U'V E ALREADY MADE? M R. FEINBERG: NONE OF T H E COUNTERCLAIMS

ARE THE SUBJECT O F THIS MOTION. THIS IS STRICTLY ON O U R D E C L A R A T O R Y RELIEF AND THEIR COUNTERCLAIM FOR INFRINGEMENT. T H E ISSUE OF WHETHER O R N O T -T H E COURT: S O THAT 'S AT LEAST ONE OF T H E

COUNTERCLAIMS THAT I T ADDRESSES? M R. FEINBERG: WELL , T H E QUESTION IS

WHETHER THEY HAVE NAKEDLY LICENSED THE MARK AND , THEREFORE, HAVE N O MARK TO PROTECT AND NO MARK TO REGISTER . T H E COURT: I KNOW THAT'S T H E I S S U E.

B U T MY QUESTION IS, WHICH OF T H E COUNTERCLAIMS DOES THAT ISSUE A F F E C T A N D WHICH OF T H E COUNTER CLAIMS DOES IT NOT A F F E C T? M R. FEINBERG: BOTH OF T H E TRADEMARK

INFRINGEMENT COUNTERCLAIMS . T H E COURT: COUNTERCLAIMS? M R. FEINBERG: T H E COURT: N O. OKAY . NONE O F THE OTHER

YOU BETTER ASK YOUR FRIEND

10

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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 THAT.

( PAUSE IN PROCEEDINGS. ) M R. FEINBERG: M Y SENSE I S THAT THE NINTH

CIRCUIT HAS EVISCERATED -T H E COURT: YEAH , B U T I'M N O T A S K I N G YOU

M R. FEINBERG: T H E COURT:

I UNDERSTAND THAT.

I 'M ASKING Y O U, WHICH

MOTIONS -- WHICH COUNTERCLAIMS D I D YOU MOVE ON IN T H E M O T I O N THAT'S B E F O R E M E T O D A Y, AND WHICH ONES D I D Y O U NOT MOVE ON IN THE M O T I O N THAT 'S BEFORE ME TODAY ? M S. KOBIALKA: T H E COURT: WELL , T H E FIRST --

M A Y B E Y O U KNOW. THE FIRST CLAIM THAT - -

M S. KOBIALKA:

FREECYCLE NETWORK 'S COUNTERCLAIMS, ACCORDING T H E TITLE OF THEIR M O T I O N, WHICH I BELIEVE W A S A DECLARATORY JUDGMENT ON T H E I S S U E O F INFRINGEMENT - T H E COURT: THIS SAYS ALL OF THEM. W E M O V E D O N A L L OF THEM,

M R. FEINBERG:

BECAUSE IF THEY D O N' T HAVE A TRADEMARK TO SUPPORT THEIR COUNTERCLAIMS, THERE 'S NOTHING T H E R E. T H E COURT: WHAT ELSE IS IN THE CASE

BESIDES YOUR C L A I M AGAINST THEM AND A L L O F T H E I R COUNTERCLAIMS AGAINST Y O U? 11

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M R. FEINBERG:

T H E R E'S NOTHING ELSE.

W E, AT ONE POINT , H A D A T O R T I O U S INTERFERENCE C L A I M, AND WE DROPPED THE DAMAGES CLAIM A N D THAT CLAIM WILL DROP O U T, T O O. T H E COURT: S O YOU THINK THAT YOUR

TRADEMARK, YOUR NEGLIGENT LICENSING ISSUE AFFECTS ALL O F THEIR COUNTERCLAIMS ? M R. FEINBERG: T H E COURT: Y E S. WELL, I TEND TO THINK

OKAY .

THAT -- TO AGREE WITH Y O U THAT THIS NAKED LICENSING TERM -- I D O N' T R E A L L Y LIKE I T, IT REM I N D S M E O F - I GET THIS PICTURE O F P E O P L E AT THE D. M.V . B U T IT SEEMS TO ME THAT T H E NAKED LICENSING DOES MEAN THAT THEY C A N HAVE NO TRADEMARK CLAIM AGAINST YOU , BECAUSE Y O U G O T YOUR - - O R Y O U G O T YOUR PERMISSION TO USE T H E TRADEMARK BEFORE THEY EVEN A R G U A B L Y STARTED TO P U T I N C O N T R O L S A N D SO ON A N D S O F O R T H. I HAVE A Q U E S T I O N I N M Y MIND N O W, AT LEAST , A S T O WHETHER THEY PERHAPS RECAPTURED THEIR TRADEMARK SUBSEQUENTLY AND MIGHT HAVE SOME KIND OF TRADEMARK C L A I M AGAINST SOMEBODY OTHER THAN YOU , WHICH THEN MIGHT KEEP ALIVE SOME COUNTERCLAIMS H A V I N G T O D O WITH INDUCEMENT OR SOMETHING ELSE. S O I 'M CONCERNED ABOUT T H E RECAPTURE 12

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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

ISSUE A N D WHAT COUNTERCLAIMS MIGHT STILL BE ALIVE IF THERE W A S A DISPUTE OF FACT O R A N U N C E R T A I N T Y ABOUT T H E RECAPTURE ISSUE. M R. FEINBERG: WELL , F I R S T O F A L L, WHAT

T H E - - T H E TORT C L A I M S, I THINK -- I APOLOGIZE FOR N O T GETTING THIS ORDER OUT TO Y O U EARLIER FROM THE NINTH CIRCUIT, BUT W E JUST GOT I T YESTERDAY MORNING AND I T WAS JUST I N THE LEGAL PAPERS TODAY . T H E COURT: PAPER . M R. FEINBERG: I T I S - - THE PROBLEM WITH WELL , I HAVEN 'T READ T O D A Y'S

T H E RECAPTURE IS, A, IT DOESN 'T GO AGAINST, AGAINST MR . O E Y, A N D T H E TORT - T H E COURT: I AGREE . - - A N D THE TORT CLAIMS

M R. FEINBERG: WILL GO AWAY.

B U T MORE IMPORTANTL Y, THEY HAVE -- T H E ESSENCE OF THE TRADEMARK I S M A I N T A I N I N G QUALITY . THIS FREE AND LEGAL A N D A P P R O P R I A T E F O R A L L AGES I S N'T A MEASURE O F QUALITY . OF A LICENSE. T H E COURT: OKAY . BUT L E T'S A S S U M E F O R IT' S A SCOPE

T H E P U R P O S E S O F DISCUSSION JUST FOR A MOMENT THAT I THINK THERE MIGHT BE AN ISSUE ABOUT WHETHER THEY, IN FACT, INSTITUTED SUFFICIENT C O N T R O L S L A T E R, AND 13

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PERHAPS EVEN D I D SO SUFFICIENTLY TO RECAPTURE T H E I R TRADEMARK. WHICH O F YOUR COUNTERCLAIMS THEN MIGHT ARGUABLY , A T L E A S T, AND ASSUMING THOSE FACTS WHICH I KNOW Y O U DISAGREE WITH, WHICH OF YOUR COUNTERCLAIMS MIGHT THEN ARGUABLY SURVIVE ? M R. FEINBERG: T H E COURT: THEIR COUNTERCLAIMS ?

THEIR COUNTERCLAIMS . I D O N'T THINK A N Y O F THEM

M R. FEINBERG:

SURVIVE, BECAUSE IF MR. O E Y H A D THE RIGHT TO U S E FREECYCLE BECAUSE HE W A S NAKEDLY LICENSED , THEN THEIR COUNTERCLAIMS ARE GONE. T H E COURT: D I D HE HAVE T H E RIGHT TO

I N D U C E SOMEONE W H O WASN 'T NAKEDL Y L I C E N S E D A N D WHO W A S F U L L Y CLOTHED A N D I S SUBJECT TO CONTROLS A N D ENCOURAGE THEM TO M I S U S E T H E TRADEMARK EVEN THOUGH MR . O E Y HIMSELF C O U L D U S E THE TRADEMARK A S H E CHOSE ? M R. FEINBERG: A L L RIGHT. SO WE GET A

LITTLE B I T INTO T H E NINTH CIRCUIT HOLDING HERE, B U T T H E N I N T H CIRCUIT SAID THERE IS NO SUCH T H I N G A S GENERICIDE IF YOU U S E A TRADEMARK A S A VERB, OR Y O U T R Y T O DESTROY I T S V A L U E, WHICH IS REALLY WHAT THEIR COUNTERCLAIMS ARE ABOUT . ACTIO NABLE. 14 IT' S N O T

14:27:00 14:27:03 14:27:05 14:27:08 14:27:09 14:27:12 14:27:14 14:27:17 14:27:18 14:27:20 14:27:23 14:27:29 14:27:32 14:27:35 14:27:40 14:27:41 14:27:43 14:27:45 14:27:46 14:27:51 14:27:54 14:27:57 14:27:59 14:28:02 14:28:05

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

S O T H E PROBLEM I S W E'R E N O W IN AN AREA WHERE , WHEN WE MADE OUR M O T I O N, THERE WASN'T A N Y NINTH CIRCUIT LAW , O R PARTICULARLY GOOD L A W, A N D N O W T H E R E I S. A N D SO MY VIEW I S I F M R. -- IF -T H E COURT: DIFFERENT W A Y, THEN. CIRCUIT OPINION. L E T' S S A Y, JUST FOR PURPOSES OF DISCUSSION, THAT ALTHOUGH THEY N A K E DLY LICENSED Y O U, THEY F U L L Y CLOTHED LICENSED OTHER PEOPLE LATER ; A N D, FURTHERMORE , THEY INSTITUTED ADEQUATE CONTROLS ; A N D, FURTHERMORE , Y O U INDUCED T H O S E P E O P L E T O VIOLATE T H E TRADEMARK IN A REAL W A Y, AN ACTUAL VIOLATION. W H I C H COUNTERCLAIM WOULD SURVIVE, IF ANY ? M R. FEINBERG: I D O N'T THINK A N Y O F THEM . OKAY . WELL, LET ME A S K I T A

L E T' S S E T ASIDE THE NINTH

AND MORE IMPORTANT, THE PROBLEM WITH THAT IS IT 'S NOT JUST US. I T'S EVERYONE ELSE WHO W A S

NAKED LY LICENSED, WHICH MEANS THERE A R E 2 0 O R 3 0 O R 50 OR 2 0 0 F O L K S RUNNING A R O U N D W H O HAVE T H E RIGHT TO U S E THIS WITHOUT REGARD TO THEIR RULES , W H I C H I N MY VIEW, ALTHOUGH IT HASN' T BEEN BRIEFED BY EITHER SIDE BECAUSE W E REALLY HADN'T SEEN THIS RECAPTURE ARGUMENT UNTIL THEIR OPPOSITION, BUT THERE I S N O 15

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TRADEMARK RIGHT A T THAT POINT .

THERE ARE T O O MANY

P E O P L E W H O HAVE T H E RIGHT TO USE IT WITHOUT RESTRICTION . T H E COURT: LIKE TO SAY ? M S. KOBIALKA: T H E R E'S ABSOLUTELY NO OKAY . AND WHAT WOULD YOU

EVIDENCE OF THESE HUNDREDS OR 20 OR 30 OTHER INDIVIDUALS WHO WERE SUPPOSEDLY NAKEDLY LICENSED B Y THE FREECYCLE NETWORK. IT JUST DOESN' T E X I S T.

THEY 'VE SUBMITTED DECLARATIONS OF PRETTY SPECIFIC INDIVIDUALS . W E'V E BEEN ABLE TO REBUT EACH A N D EVERY O N E, DESCRIBING SPECIFICALLY THE RULES A N D T H E ETIQUETTE A N D THE GUIDELINES THAT WERE PROVIDED TO THEM IN CONNECTION WITH THESE MARKS . A N D WE NEED T O B E VERY CLEAR HERE. NOT TALKING ABOUT ONE TRADEMARK. W E'R E TALKING ABOUT THREE DIFFERENT TRADEMARKS. T H E PLAINTIFF IN THIS CASE D O E S N'T W E'R E

EVEN COME C L O S E T O ADDRESSING EACH AND EVERY O N E O F THOSE TRADEMARKS. O N E IS A LOGO ; O N E IS THE WORD,

T H E MARK FREECYCLE; AND T H E O T H E R O N E IS THE FREECYCLE NETWORK . Y E T THEY'R E ATTEMPTING TO B U N D L E A L L THREE AND SAY THAT SOMEHOW ALL THREE NOW HAVE BEEN 16

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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

NAKED LY LICENSED. B U T IF YOU LOOK CAREFULLY AT T H E R E C O R D A N D T H E EVIDENCE THAT W E'V E P R O V I D E D - - A N D IN THIS CASE, T H E EXHIBITS W E PROVIDED A R E REALLY REPRESENTATIVE EXAMPLES BECAUSE THERE ARE TENS OF THOUSANDS O F P A G E S THAT GO TO A L L O F T H E EFFORTS THAT THE FREECYCLE NETWORK H A D I N E N S U R I N G THAT I T S RULES A N D GUIDELINES A N D ETIQUETTES WERE PROPERLY ENFORCED , INCLUDING AS EARLY AS 2003, TOW A R D S T H E E N D O F 2003 , A S WELL AS IN 2004. B U T TURNING T O THIS ISSUE , Y O U' VE GOT TO ACTUALLY HAVE EVIDENCE. Y O U CAN 'T JUST MAKE T H E

STATEMENT THAT SUPPOSEDLY OTHER INDIVIDUALS HAVE BEEN NAKEDL Y LICENSE D. OF THAT. S O I F YOU LOOK A T THE INDIVIDUALS THAT - T H E COURT: WELL , F O R WHAT - - Y O U' RE FOR T H E THEY HAVEN' T PROVIDED A N Y

TALKING ABOUT FOR T H E COUNTERCLAIMS .

COUNTERCLAIMS, THOSE A R E YOUR C L A I M S, SO YOU HAVE T H E B U R D E N OF PROOF. A L L THEY HAVE TO DO IS POINT O U T THAT Y O U HAVE NOT PRESENTED A N Y EVIDENCE ON YOUR COUNTERCLAIMS AND T H E B U R D E N IS ON YOU TO PRESENT SOME. M S. KOBIALKA: THAT WE HAVEN 'T NAKEDL Y 17

14:30:02 14:30:04 14:30:04 14:30:06 14:30:08 14:30:10 14:30:11 14:30:12 14:30:15 14:30:19 14:30:22 14:30:23 14:30:25 14:30:28 14:30:31 14:30:33 14:30:35 14:30:35 14:30:37 14:30:40 14:30:43 14:30:46 14:30:49 14:30:52 14:30:55

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

LICENSED ? BURDEN - -

THAT'S THEIR CLAIM .

THEY HAVE THE

T H E COURT:

N O, ON YOUR COUNTERCLAIMS . R I G H T. OUR

M S. KOBIALKA:

COUNTERCLAIM - - A S I UNDERSTAND IT, WE DIDN' T MOVE F O R SUMMARY JUDGMENT ON T H E I S S U E O F TRADEMARK INFRINGEMENT. THAT IS WHAT -- AND A DETERMINATION THAT THE - - BECAUSE THEIR DECLARATORY JUDGMENT ACTION W A S F O R A DETERMINATION THAT THE MARK IS DEEMED GENERIC. THEY 'VE ADDITIONALLY I N C L U D E D T H E SUMMARY JUDGMENT ON T H E I S S U E O F N A K E D LICENSING. B U T IF YOU LOOK AT THEIR DECLARATORY JUDGMENT A C T I O N, IT WAS ACTUALLY ON T H E DETERMINATION THAT THE MARK WOULD B E DEEMED GENERIC. W E SUED FOR TRADEMARK INFRINGEMENT , BUT AS I UNDERSTOOD I T, THAT C L A I M I S N O T PUT AT ISSUE HERE IN THE SENSE THAT WE DIDN'T CROSS MOVE FOR A DETERMINATION OF TRADEMARK INFRINGEMENT. WHAT WE HAVE DEMONSTRATED IS THAT WE DO, IN FACT, HAVE A TRADEMARK THAT W E HAVE GONE OUT A N D AGGRESSIVELY PROTECTED. W E HAVE TAKEN GREAT PAINS

TO DESCRIBE A L L T H E DIFFERENT PROCEDURES, RULES , 18

14:30:59 14:31:01 14:31:03 14:31:05 14:31:08 14:31:11 14:31:15 14:31:18 14:31:21 14:31:24 14:31:26 14:31:29 14:31:32 14:31:34 14:31:35 14:31:39 14:31:42 14:31:45 14:31:50 14:31:52 14:31:53 14:31:56 14:31:58 14:32:01 14:32:03

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ETIQUETTE, ETHOS. I MEAN, I CAN GO ON A N D O N A B O U T T H E THING S THAT T H E FREECYCLE NETWORK H A S DONE T O, IN FACT, PROTECT INDIVIDUALS WHO DECIDED TO BECOME MEMBERS OF THE FREECYCLE N E TWORK A N D B E C O M E A PART OF THAT PARTICULAR G R O U P, AND A L L T H O S E R U L E S WERE ACTUALLY ENFORCED THROUGHOUT, AND CONTINUE T O B E ENFORCED THROUGH TODAY. S O W E HAVE DEMONSTRATED WITH EXTENSIVE EXHIBITS , A N D I C A N GO THROUGH A N D START TO DESCRIBE , A N D ONE OF T H E MOST IMPORTANT T H I N G S -T H E COURT: WELL , N O. I GUESS YOU C A N - -

I' M F A M I L I A R WITH T H E E X H I B I T S. M S. KOBIALKA: A L L RIGHT. A N D THE

EVIDENCE RIGHT N O W I S THAT MR . D E R O N BEAL HIMSELF MONITORED A L L OF THE VARIOUS NEW G R O U P S THAT STARTED TO JOIN S T A R T I N G I N T H E OCTOBER 2003 TIMEFRAME. HE S E T F O R T H THAT IN H I S D E C L A R A T I O N. THAT IS N O T D I S P U T E D B Y T H E PLAINTIFF IN THIS PARTICULAR CASE . A N D IN OCTOBER, HE STARTED H A V I N G THE MODERATORS DO A L O T OF THE WORK. H E REQUESTED THAT

THE MODERATORS ENSURE THAT THEY ADDRESS THE D A Y-T O-D A Y PROBLEMS AND I S S U E S THAT WOULD COME UP A N D E N S U R E THAT P E O P L E ARE COMPLYING. 19

14:32:06 14:32:08 14:32:13 14:32:15 14:32:17 14:32:20 14:32:23 14:32:23 14:32:24 14:32:29 14:32:30 14:32:31 14:32:33 14:32:34 14:32:36 14:32:38 14:32:41 14:32:43 14:32:45 14:32:47 14:32:48 14:32:50 14:32:50 14:32:51 14:32:53

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

A N D WHEN INDIVIDUALS W E R E N'T COMPLYING, AS EARLY AS EARLY 2004, THERE W A S A DETERMINATION OF A GROUP WHO DIDN' T A C T U A L L Y - T H E COURT: R I G H T. B U T T H E CAUSE OF ALL

OF THAT IS THAT NONE OF IT W A S DONE AT T H E TIME THAT FREECYCLESUNNYVALE GOT THEIR LICENSE . M S. KOBIALKA: T H E COURT: I T W A S. ALL THAT WAS

N O, IT WASN'T .

DONE TO THEM I S T H E OFT Q U O T E D E -MAIL, D O N'T U S E I T COMMERCIALL Y. S O I T S E E M S THAT -M S. KOBIALKA: RESPECT TO THE LOGO. B U T THERE WAS ACTUALLY OTHER DISCUSSIONS THAT HAD OCCURRED , A N D THAT'S ALSO IN THE EVIDENCE IN T H E R E C O R D WHERE MR. BEAL AND MR . KAUFMAN , W H O WAS A MEMBER O F THE FREECYCLE NETWORK, PROVIDED THE ETIQUETTE THAT HAD BEEN SET FORTH THAT THE FREECYCLE NETWORK -T H E COURT: B U T THAT W A S LATER. N O. IT W A S A C T U A L L Y A T Y O U' RE TALKING A B O U T WITH

M S. KOBIALKA: T H E TIME -T H E COURT:

N O, IT WASN'T . I T W A S IN OCTOBER O F 2003 . B U T T H E E-MAIL WENT 20

M S. KOBIALKA: T H E COURT:

R I G H T.

14:32:55 14:32:56 14:32:58 14:32:59 14:33:01 14:33:03 14:33:06 14:33:09 14:33:14 14:33:15 14:33:16 14:33:18 14:33:19 14:33:22 14:33:24 14:33:27 14:33:27 14:33:30 14:33:33 14:33:35 14:33:38 14:33:39 14:33:41 14:33:44 14:33:46

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O U T EARLIER THAN THAT. M S. KOBIALKA: REFERRING T O? T H E COURT: T H E E-MAIL THAT SAID, YEA H, W H I C H E -MAIL ARE Y O U

FREECYCLE - - I C A N PROBABLY Q U O T E T H E WHOLE THING, IT W A S MENTIONED SO FREQUENTLY - - Y E AH , FREECYCLE, GO AHEAD A N D U S E IT. COMMERCIALL Y. JUST D O N'T U S E I T

SO -A N D-S O C A N GET Y O U A FANCY

SCHMANCY LOGO, WHATEVER . M S. KOBIALKA: 9T H, 2003. P R I O R T O THAT , M R. BEAL H A D HAD DISCUSSIONS WITH MS. ABRAHAM, THAT' S I N H I S DECLARATION , A S WELL AS IN T H E DOCUMENTS, A N D MR . KAUFMAN AS WELL IN WHICH THE ETIQUETTE W A S PROVIDED . A N D THE ETIQUETTE L I S T S N O T FOR P R O F I T, NO POLITICS , N O S P A M M I N G, PROCEDURES F O R POSTING, WHAT WORDS TO USE A N D H O W TO POST. Y O U HAD TO AGREE TO T H E Y A H O O T E R M S A N D CONDITIONS. THIS IS N O T CHALLENGED . ALL OF THIS WAS YEAH , THAT 'S DATED OCTOBER

OCCURRING BACK IN SEPTEMBER O F 2003 A N D OCTOBER . T H E R E W A S A B A N ON THE CURBSIDE PICK UP. THERE W A S N O F I R S T COME , F I R S T S E R V E. THERE WAS N O 21

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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

BARTER OFFERS. AND THESE THINGS ARE IMPORTANT, BECAUSE T H E FACT THAT THE FREECYCLE NETWORK IS DOING THESE THING S F O R FREE I S WHAT DISTINGUISHES IT FROM O T H E R ENTITIES SUCH AS CRAIG' S LIST OR EB A Y OR SOME O F T H E O T H E R W E B SITES WHERE YOU 'RE ACTUALLY ALLOW ED TO B A R T E R T H I N G S OR TRADE THINGS , S O I T'S A O N E-F O R- ONE EXCHANGE , W H I C H W A S NOT T H E PRINCIPLE UNDER WHICH T H E FREECYCLE NETWORK I T S E L F WAS FOUNDED. S O W E'V E BEEN ABLE TO IDENTIFY QUITE A B I T, AND THAT IS NOT CHALLENGED AT ALL . I N FACT , SOME OF THAT CAME D I R E C T L Y O U T OF T H E D E C L A R A T I O N O F M R. KAUFMAN HIMSELF . AND THEN W E HAD ADDITIONALLY DOCUMENTS THAT WERE A T T A C HE D T O M Y D E C L A R A T I O N, AS WELL A S MR . BEAL 'S DECLARATION. S O A T THAT TIME, A L L O F THAT W A S I N P L A C E A N D A C T U A L L Y D I D EXIST AND W A S P R O V I D E D T O MS . ABRAHAM , W A S PROVIDED TO MR. KAUFMAN, A N D L A T E R TO MR . R O B E R TS O N AS WELL. M R. FEINBERG: COUPLE POINTS? T H E COURT: CAN RESPOND . 22 N O. WHEN SHE 'S FINISHED, Y O U C A N I RESPOND QUICKLY TO A

14:34:41 14:34:42 14:34:45 14:34:49 14:34:51 14:34:53 14:34:57 14:35:00 14:35:02 14:35:04 14:35:06 14:35:08 14:35:09 14:35:11 14:35:14 14:35:17 14:35:21 14:35:23 14:35:25 14:35:26 14:35:29 14:35:30 14:35:32 14:35:35 14:35:37

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M S. KOBIALKA:

OKAY .

AFTER THAT TIME ,

WHEN THERE STARTED T O BECOME MORE AND MORE GROUPS THAT WERE JOINING , M R. BEAL, HE' S P R O V I D E D A DECLARATION , H E MONITORED IT HIMSELF. BUT THEN H E CAME AND DECIDED IMMEDIATELY THEREAFTER, SO OCTOBER 9TH , 2003 , T O N O T ONLY HAVE MODERATORS, B U T T O HAVE A MOD SQUAD . A N D THE PURPOSE OF THE M O D S Q U A D W A S TO E N S U R E THAT P E O P L E C O M P L I E D WITH T H E RULE S, AND THEY HAD THIS RULE O F T W O STRIKES A N D YOU 'RE O U T, A N D THEY EVENTUAL LY DEVELOPED A MANUAL THAT WAS PROVIDED . BUT THIS POLICING WAS ONGOING. S O A S O F D E C E M B E R 9 TH, 2003, THERE 'S EXHIBIT 100 WHICH DEMONSTRATED H O W THE FREECYCLE NETWORK WAS ACTUALLY POLICING I T S TRADEMARKS . T H E R E W A S AN INSTANCE IN LINCOLN C O U N T Y WHERE SOMEONE WAS USING IT . S O THESE GUIDELINES AND RULES AND PROCEDURES HAD BEEN AROUND R E A L L Y A T THAT TIME, A N D THAT' S WHAT T H E RECORD SHOWS. W E HAVE NUMEROUS EXHIBITS THAT WE PROVIDED FROM THAT TIMEFRAME TO DEMONSTRATE THAT, AS WELL AS MR. BEAL' S D E C L A R A T I O N, WHICH IS NOT CHALLENGED. 23

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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

I THINK THAT, Y O U KNOW , T H E THINGS THAT T H E PLAINTIFF ARE ATTEMPTING TO POINT TO ARE THESE PERCEPTIONS THAT THESE INDIVIDUALS MAY OR M A Y N O T HAVE HAD AT T H E TIME , B U T THEY A L L CLEARLY KNEW THAT THEY WERE BECOMING MEMBERS OF THE FREECYCLE NETWORK. OTHERWISE WHY WOULD MR . BEAL BE CONTACTING THEM O R SUGGESTING THAT THEY WOULD HAVE THIS INFORMATION OR SUCH THAT THEY WOULD BE POSTED OR HAVE A LINK TO T H E FREECYCLE NETWORK'S W E B SITE ? S O T H E R E W A S ALL THESE DIFFERENT PROVISIONS THAT EXISTED BACK THEN THAT THEY CONTINUED T O AGGRESSIVELY PURSUE A N D MAKE SURE -AS T H E G R O U P G O T BIGGER , THEY H A D T O MAKE SURE THAT THEY WERE ADDRESSING T H E I S S U E S AND CONCERNS THAT WERE COMING UP , BECAUSE LIKE MANY S M A L L G R A S SROOTS MOVEMENTS THAT CATCH FIRE, Y O U'V E G O T TO ADDRESS T H I N G S A S THEY C H A N G E, AND PARTICULARLY A S T H E FREECYCLE NETWORK BEGAN TO HAVE INTERNATIONAL REPRESENTATION IN DIFFERENT COUNTRIES, IT W A S IMPORTANT FOR THEM T O ENSURE THAT THEIR RULES REFLECTED A N D WERE U S E F U L TO ALL OF THOSE VARIOUS GROUPS. A N D SO TO REFLECT T H E CHANGES THAT WERE HAPPENING W I T H I N THE FREECYCLE NETWORK IN JANUARY 24

14:36:41 14:36:46 14:36:49 14:36:51 14:36:55 14:36:57 14:37:00 14:37:03 14:37:06 14:37:08 14:37:11 14:37:14 14:37:16 14:37:19 14:37:22 14:37:25 14:37:27 14:37:30 14:37:34 14:37:34 14:37:38 14:37:41 14:37:44 14:37:47 14:37:49

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

OF 2004, THERE W A S A VOTE THAT W A S TAKEN WHETHER O R N O T W E S H O U L D EXPAND THIS PRINCIPLE OF JUST BEING FREE, WHICH H A D EXISTED FROM THE INCEPTION O F T H E FREECYCLE NETWORK . IT WAS , I N P O I N T O F FACT , T H E

POINT OF IT , T O B E FREE , L E G A L, AND APPROPRIATE F O R A L L AGES BECAUSE OF THE I S S U E S THAT WERE COMING UP A N D A S T H E GROUP WAS GROWING BIGGER . A N D THE M O D S Q U A D H A D SIGNIFICANT CORRESPONDENCE WITH MR. BEAL. H E DIDN 'T JUST WALK

AWAY AND S A Y, "OKAY, THIS IS NOW AN OPPORTUNITY F O R T H E MODERATORS OR T H E M O D SQUAD TO DEAL WITH ." H E CONTINUED TO HAVE CORRESPONDENCE WITH THEM THROUGHOUT T O ENSURE THAT THESE THINGS WERE COMPLIED WITH AND CONTINUED T O C R E A T E STRUCTURE A N D ADDITIONAL RULES AND HIERARCHY T O E N S U R E THAT PEOPLE WERE COMPLYING WITH THE RULES BECAUSE THIS W A S S T A R T I N G T O C A T C H, YOU KNOW, CATCH FIRE. IT

WAS EXPANDING PRETTY AGGRESSIVELY THROUGHOUT THE WORLD . A N D AS A REFLECTION OF THAT, THEY STARTED T H E PENGUIN P A T R O L, WHICH WAS SPECIFIC TO T H E TRADEMARKS, AND THAT WAS I N THE 2004 TIMEFRAME. THEN THEY HAD T H E N E W GROUP APPROVERS , WHICH D I D N O T, CONTRARY TO T H E D E C L A R A T I O N SUBMITTED B Y PLAINTIFF, JUST APPROVE GROUPS WILLY 25

14:37:52 14:37:54 14:37:56 14:37:58 14:38:01 14:38:05 14:38:06 14:38:08 14:38:11 14:38:14 14:38:17 14:38:19 14:38:22 14:38:24 14:38:27 14:38:28 14:38:31 14:38:35 14:38:38 14:38:42 14:38:42 14:38:45 14:38:46 14:38:48 14:38:51

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

N I LLY .

IN FACT, WE PROVIDED EVIDENCE WHERE GROUPS

HAD T O WAIT FOR APPROVAL. A N D THESE NEW GROUP APPROVERS W O U L D INSPECT THE SITE AND E N S U R E THAT THIS WOULD COMPLY WITH WHAT T H E FREECYCLE NETWORK' S PHILOSOPHY W A S, AS WELL AS ITS RULES A N D ETIQUETTE. I T CONTINUED ON WITH T H E GROUP OUT REACH ASSISTANCE AS WELL I N SEPTEMBER 2004. A N D AT ONE POINT , T H E PLAINTIFF I T S E L F, IN OCTOBER 2004, SAID, "Y O U KNOW WHAT? WANT A C L E A R TRADEMARK POLICY ." S O NOT ONLY DID THEY ACKNOWLEDGE THERE W A S A TRADEMARK P O L I C Y IN PLACE, B U T THEY W A N T E D T O CLARIFY IT AND MAKE IT SHARPER A N D CLEANER, AND THAT' S EXHIBIT 10 3. WHEN IT B E C A M E A P P A R E N T A T T H E TIME THAT SOME OF THESE OWNERS A N D MODERATORS WERE DISAPPEARING, THEY WERE M O V I N G A N D NOT MAINTAINING T H E W E B SITES, IT B E C A M E IMPORTANT TO TRY A N D HAVE INTERIM MODERATOR S THERE S O THAT YOU COULD CONTINUE THE QUALITY AND THE STANDARDS , WHICH I S THE REASON F O R H A V I N G THE I MODS. S O I T'S P R E T T Y EXTENSIVE THE A M O U N T O F WORK THAT T H E FREECYCLE NETWORK PUT IN WITH MR . BEAL AT T H E C E N T E R OF IT TO TRY A N D E N S U R E THAT 26 I REALLY

14:38:53 14:38:56 14:39:00 14:39:04 14:39:06 14:39:08 14:39:11 14:39:13 14:39:16 14:39:19 14:39:23 14:39:25 14:39:30 14:39:33 14:39:35 14:39:40 14:39:42 14:39:42 14:39:43 14:39:45 14:39:47 14:39:50 14:39:53 14:39:56 14:39:58

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

ITS QUALITY STANDARDS WERE BEING MAINTAINED THROUGHOUT. I WANTED T O MAKE SURE THAT THE ETIQUETTE I T S E L F W A S ACTUALLY CIRCULATED B Y T H E PLAINTIFF IN 2004. THAT 'S EXHIBIT 1 6. THE PLAINTIFF ALSO POLICED THE MARKS THEMSELVES. THAT 'S EXHIBIT 7 3.

S O T H E R E'S QUITE A BIT ON T H E PLAINTIFF' S SIDE WHERE THEY ACTUALLY WERE GOING OUT AND TRYING TO ENFORCE THESE RULES THEMSELVES. A N D EXAMPLES OF THE CONSTANT CORRESPONDENCE THAT MR. BEAL HAD EARLY IN 2004 IS EXHIBIT 36, A N D THAT IS WITH THE MODS TO ENSURE THAT THEY WERE R E A L L Y G O I N G O U T THERE AND FOLLOWING UP WITH THE VARIOUS MEMBER G R O U P S. T H E COURT: C O U L D Y O U FINISH UP -ABSOLUTELY .

M S. KOBIALKA: T H E COURT:

- - SHORTLY ? SURE . IN ADDITION TO THIS

M S. KOBIALKA:

ISSUE ABOUT THERE ARE THREE SEPARATE MARKS AND REALLY THESE MARKS HAVE NOT BEEN IDENTIFIED SEPARATELY, THEY' VE BEEN BUNDLED TOGETHER , T H E R E IS , Y O U KNOW, AN EXTRAORDINARY A M O U N T OF PROOF THAT I THINK NEEDS TO COME FORWARD BY A PLAINTIFF SEEKING TO STRIP A P A R T Y O F I T S TRADEMARK R I G H T S. 27

14:40:02 14:40:03 14:40:06 14:40:09 14:40:12 14:40:13 14:40:15 14:40:17 14:40:19 14:40:21 14:40:23 14:40:27 14:40:31 14:40:34 14:40:38 14:40:41 14:40:42 14:40:44 14:40:47 14:40:48 14:40:50 14:40:53 14:40:57 14:41:00 14:41:04

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

I T'S N O T SOMETHING WHERE YOU C A N JUST MAKE STATEMENTS THAT , " OH, THERE A R E O T H E R PARTIES O U T T H E R E" WITHOUT ACTUALLY PROVIDING PROOF THAT THEY WERE SUPPOSEDLY NAKED LICENSING, AND I REALLY THINK THAT THEY HAVE TO ADDRESS ALL OF T H E SUBSTANTIVE EVIDENCE THAT WE PROVIDED IN OUR OPPOSITION, WHICH THEY FRANKLY DIDN 'T DO. THE LAST POINT I HAD WAS THEY REALLY MISREPRESENTED THE DOCUMENT PRODUCTION . T H E R E'S A DISPUTE WITH RESPECT TO DOCUMENT REQUEST NUMBER 64 , A N D IF YOU LOOK VERY CAREFULLY A T T H E EXHIBIT 1 THAT WAS ATTACHED TO MR . CORGILL 'S DECLARATION, A N D THIS IS SUPPOSEDLY WHERE THE QUOTE THAT THEY USED FOR THEIR REPLY BRIEF CAME FROM, IT' S A C T U A L L Y A MISQUOTE . NOT ACCURATE. THEY F I L L E D I N W O R D S I M P R O P E RLY THERE A N D IT TAKES O U T O F CONTEXT ACTUALLY WHAT THE DISPUTE W A S. S O T H E REQUEST H A D TO DO WITH E V E R Y SINGLE DOCUMENT, INCLUDING ARCHIVED ELECTRONIC FILES , O F BASICALLY EVERY POSTING, WEB PAGE, ANYTHING THAT EXISTED O F E V E R Y M E M B E R GROUP OF THE E N T I R E FREECYCLE NETWORK, AND WE INFORMED T H E PLAINTIFF THAT THAT WAS U N D U L Y BURDENSOME A N D 28 IT' S

14:41:06 14:41:07 14:41:10 14:41:14 14:41:16 14:41:18 14:41:21 14:41:24 14:41:26 14:41:29 14:41:32 14:41:34 14:41:37 14:41:38 14:41:41 14:41:44 14:41:46 14:41:49 14:41:50 14:41:52 14:41:55 14:41:58 14:42:00 14:42:02 14:42:04

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

OVERL Y B R O A D. W E HAD DISCUSSIONS GOING BACK AND FORTH A S K I N G F O R THEM T O N A R R O W, MAYBE PICK AND S E L E C T A N U M B E R O F G R O U P S AND WE C A N PROVIDE THAT. MOST OF THAT INFORMATION ALSO W A S PUBLIC A N D W E H A D PROVIDED IT, IN FACT, WITH RESPECT T O QUITE A FEW OF THESE DIFFERENT E N T I T I E S. THE PLAINTIFF CAME BACK AND IDENTIFIED SOME, I THINK IT WAS 15 OR 20 , DIFFERENT SITES OR GROUPS THAT THEY WANTED T H E DOCUMENTATION FROM, B U T SAID THAT, "NO , W E S T I L L RESERVE T H E R I G H T T O COME BACK AND KEEP ASKING F O R MORE ," WHICH WE WERE JUST UNABLE T O R E A C H AGREEMENT UPON. HOWEVER , W E DID NOTIFY THEM SPECIFICALLY THAT QUITE A F E W OF THOSE ON THE LIST WERE P U B L I CL Y AVAILABLE A N D THEY C O U L D G E T IT THEMSELVES. Q U I T E A F E W O F THEM ON T H E LIST WE 'D ALREADY PROVIDED THOSE DOCUMENTS . A N D IT SAYS I N O U R LETTER , Q U O T E, "T H E FREECYCLE NETWORK HAS ALREADY PROVIDED THE VAST MAJORITY OF THESE DOCUMENTS I N EARLIER DOCUMENT PRODUCTIONS , INCLUDING FROM," A N D I T GOES ON TO IDENTIFY THE WEB SITE NAME . T H E ONLY STATEMENT THAT W E MADE W A S " THE FREECYCLE NETWORK M A Y N O T HAVE D I R E C T ACCESS TO T H E 29

14:42:08 14:42:12 14:42:16 14:42:19 14:42:23 14:42:25 14:42:27 14:42:30 14:42:32 14:42:33 14:42:36 14:42:39 14:42:42 14:42:44 14:42:46 14:42:50 14:42:51 14:42:54 14:42:56 14:42:59 14:43:02 14:43:04 14:43:07 14:43:11 14:43:13

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

ARCHIVES F O R T H E S E G R O U P S AND M A Y N O T BE ABLE T O" A C C E S S, "S E C U R E A C C E S S ON YOUR B E H A L F AS THESE G R O U P S WERE CREATED BY LOCAL MODERATORS W H O MAY RE TAIN SOLE CONTROL OVER A C C E S S TO THOSE GROUPS ." AND WHAT W E WERE REFERRING T O THERE ARE THOSE INDIVIDUALS W H O DECIDED THEY NO LONGER W A N T E D TO BE PART OF THE FREECYCLE NETWORK SUCH THAT W E D O N'T HAVE ANY KIND OF ACCESS TO THEIR O L D F I L E S THAT MAY HAVE EXISTED. A N D TO THE E X T E N T W E D I D, WE PRODUCED THEM, OR THERE W A S A F E W INSTANCES IN WHICH THE MODERATORS DID N O T PROVIDE T H E FREECYCLE NETWORK A C C E S S T O A L L OF THEIR FILES, B U T R E P R E S E N T E D THAT THEY WOULD DO THE POLICING A N D MONITORING MORE AGGRESSIVELY THAN SOME OF THE OTHER MODERATORS ON T H E O T H E R W E B SITES. S O I T'S A VERY S M A L L S U BSECTION THAT WAS BEING DISCUSSED I N CONNECTION WITH THAT PARTICULAR QUOTE , A N D THEY COMPLETELY MISREPRESENTED IT A N D SAID THAT W E BASICALLY STATED WE D O N'T HAVE POSSESSION, CUSTODY, OR CONTROL OF THESE DOCUMENTS , WHICH IS ABSOLUTELY UNTRUE , A N D IF YOU LOOK AT THE VERY SAME L E T T E R, WHICH IS A JUNE 7 TH, 2007 LETTER , IT SETS THAT F O R T H Q U I T E CLEARLY . T H E COURT: T H E DECLARATORY JUDGMENT, AS 30

14:43:18 14:43:22 14:43:24 14:43:26 14:43:27 14:43:29 14:43:31 14:43:33 14:43:36 14:43:41 14:43:43 14:43:43 14:43:45 14:43:46 14:43:48 14:43:51 14:43:51 14:43:52 14:43:52 14:43:53 14:43:55 14:44:00 14:44:02 14:44:06 14:44:09

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

I HAVE I T, SEEMS TO BE DECLARATORY JUDGMENT THAT THEY DID N O T I N F R I N G E YOUR TRADEMARK. A R E YOU S A Y I N G I T W A S A D E C L A R A T O R Y JUDGMENT THAT YOU D O N'T HAVE A TRADEMARK? M S. KOBIALKA: I N PART T W O, THAT W A S -- I

BELIEVE THE REQUEST FOR R E L I E F W A S THAT THEY D O N'T -- THAT THERE IS NO TRADEMARK . T H E COURT: OKAY . AND THEN YOU REFER TO ARE THOSE YOUR

CLAIMS Y O U HAVE AGAINST THEM. COUNTERCLAIMS? M S. KOBIALKA: T H E COURT:

THAT 'S CORRECT.

YOU HAVE SOME OTHER CLAIM

AGAINST THEM BESIDES YOUR COUNTERCLAIM S? M S. KOBIALKA: N O. WITH RESPECT T O

FREECYCLESUNNYVALE, WE ONLY HAVE T H E COUNTERCLAIMS THAT ARE IN THIS CASE. T H E COURT: OKAY . AND THAT HAVE BEEN

M S. KOBIALKA: ASSERTED . T H E COURT:

OKAY .

SO IF I WERE TO FIND

THAT YOU H A D N A K E DLY LICENSED FREECYCLESUNNYVALE I T S E L F A N D, THUS, THEY COULD NOT BE ACCUSED OF INFRINGING YOUR TRADEMARKS , BUT I SAID THAT THERE W A S A DISPUTE ABOUT WHETHER Y O U HAD RECAPTURED YOUR TRADEMARK A N D WHETHER Y O U DID HAVE A T R A D EMARK 31

14:44:14 14:44:17 14:44:20 14:44:21 14:44:25 14:44:26 14:44:27 14:44:29 14:44:33 14:44:36 14:44:39 14:44:40 14:44:46 14:44:49 14:44:50 14:44:52 14:44:55 14:44:58 14:45:02 14:45:03 14:45:04 14:45:08 14:45:11 14:45:14 14:45:16

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

V I S-A -V I S SOME OTHER P E O P L E, WHICH OF YOUR COUNTERCLAIMS IN YOUR VIEW WOULD SURVIVE? M S. KOBIALKA: WELL , W E STILL WOULD

PROBABLY HAVE OUR TRADEMARK INFRINGEMENT CLAIM. T H E COURT: AGAINST WHOM? AGAINST

M S. KOBIALKA:

FREECYCLESUNNYVALE, BECAUSE THE DETERMINATION I S GOING TO NEED TO BE MADE I N T E R M S O F A T WHAT POINT , TO T H E E X T E N T YOU DETERMINE T H E R E'S BEEN NAKED LICENSING, THE RECAPTURE A C T U A L L Y O C C U R R E D. T H E COURT: N O, THE RECAPTURE W O U L D N E V E R

OCCUR -- THERE WOULD NEVER BE A N Y RECAPTURE V I S-A -V I S THEM . RECAPTURE. S O I F I FELT THERE WAS SOME ISSUE ABOUT RECAPTURING V I S-A -V I S O T H E R P E O P L E WHO G O T T H E PERMISSION TO USE YOUR WORD A F T E R Y O U HAD BEGUN CLOTHED LICENSING , WHICH O F YOUR COUNTERCLAIMS WOULD SURVIVE? M S. KOBIALKA: I BELIEVE WE HAVE A IT WAS A L W A Y S S E N I O R TO YOUR

COUNTERCLAIM FOR UNFAIR COMPETITION AND - - T O B E FRANK , I C A N'T REMEMBER IT VERBATIM O F F T H E TOP OF MY HEAD AT THE M O M E N T, BUT I BELIEVE THAT WOULD SURVIVE BECAUSE I THINK THERE 'S ADDITIONAL CONDUCT OUTSIDE OF JUST TRADEMARK INFRINGEMENT THAT WAS T H E 32

14:45:18 14:45:20 14:45:22 14:45:23 14:45:26 14:45:26 14:45:28 14:45:29 14:45:31 14:45:31 14:45:35 14:45:36 14:45:37 14:45:38 14:45:42 14:45:43 14:45:45 14:45:46 14:45:48 14:45:53 14:45:56 14:45:58 14:46:05 14:46:06 14:46:09

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

BASIS FOR OUR COUNTERCLAIMS. T H E COURT: THAT 'S THE ONLY ONE , THEN ? THAT 'S THE ONLY ONE THAT' S

M S. KOBIALKA: COMING T O MIND . LOOK -T H E COURT:

I W O U L D LIKE TO BE ABLE TO TAKE A

I S THAT YOUR 172 0 0 CLAIM? I BELIEVE THAT'S CORRECT.

M S. KOBIALKA: LET ME --

( PAUSE IN PROCEEDINGS. ) M S. KOBIALKA: 17 500 CLAIM . T H E COURT: DOES THAT -A N D WE HAD A CLAIM UNDER S O A 43 (A) CLAIM . YEAH , W E H A D A 1 72 0 0,

M S. KOBIALKA: T H E L A N H A M ACT AS WELL. T H E COURT:

A N D THOSE ARE ADDRESSED T O

PEOPLE OTHER FREECYCLESUNNYVALE? M S. KOBIALKA: N O.

THIS PARTICULAR CLAIM, HOWEVER, H A D T O G O TO MISREPRESENTING T H E NATURE , T H E CHARACTERISTICS , A N D QUALITIES OF THE FREECYCLE NETWORK 'S SERVICES THEMSELVES, AND THAT THERE WAS A NUMBER O F STATEMENTS THAT THEY H A D MADE THAT HAD DAMAGED THE FREECYCLE NETWORK . S O W E HAD THAT ADDITIONAL CLAIM SEPARATE AND APART FROM OUR TRADEMARK INFRINGEMENT CLAIM . 33

14:46:12 14:46:13 14:46:14 14:46:16 14:46:19 14:46:22 14:46:23 14:46:25 14:46:30 14:46:35 14:46:36 14:46:40 14:46:41 14:46:43 14:46:49 14:46:51 14:46:53 14:46:55 14:46:56 14:46:57 14:46:58 14:47:00 14:47:02 14:47:03 14:47:07

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

T H E COURT: TRADE LIABLE C L A I M?

WHAT IS THAT, SOME KIND O F

M S. KOBIALKA:

YEAH .

I T H I N K I T'S A

FALSE ADVERTISING TYPE OF CLAIM WHERE THEY WERE M A K I N G STATEMENTS ABOUT US WHILE THEY HAD THEIR COMPETE AND SERVICE. T H E COURT: OKAY . SO YOU 'RE TALKING

ABOUT AN U N F A I R C O M P E T I T I O N C L A I M AGAINST FREECYCLESUNNYVALE F O R DOING WHAT? M S. KOBIALKA: S O W E HAVE INDUCING

INFRINGEMENT, THAT'S PARAGRAPH 7 5 - T H E COURT: INDUCING INFRINGEMENT. W E ALSO HAD ENCOURAGING

M S. KOBIALKA: T H E M I S U S E OF THE MARKS . T H E COURT:

AND WHAT ELSE ? THOSE WERE THE TWO PRIMARY

M S. KOBIALKA:

ALLEGATIONS THAT SUPPORTED THE - T H E COURT: A N D THEN THIS FALSE -- - T H E 43( A).

M S. KOBIALKA: T H E COURT:

- - ADVERTISING? Y E S, A N D T H E UNFAIR

M S. KOBIALKA: COMPETITION . T H E COURT:

I THOUGHT THE U N F A I R

COMPETITION W A S I N D U C I N G A N D ENCOURAGING OTHERS TO USE YOUR TRADEMARK. 34

14:47:08 14:47:09 14:47:12 14:47:21 14:47:22 14:47:24 14:47:25 14:47:26 14:47:26 14:47:28 14:47:30 14:47:33 14:47:34 14:47:35 14:47:36 14:47:38 14:47:42 14:47:45 14:47:47 14:47:50 14:47:52 14:47:56 14:47:59 14:48:03 14:48:06

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M S. KOBIALKA:

I T I S U N D E R 4 3(A ), AS WELL

AS 17 200 A N D 1 750 0 I S WHAT I MEANT. T H E COURT: OKAY . AND THEN FALSE ADVERTISING.

DID Y O U WANT TO -C A N I MAKE A FEW COMMENTS ,

M R. FEINBERG: YOUR HONOR? T H E COURT:

Y E S. O N E --

M R. FEINBERG: T H E COURT:

L E T ME ASK Y O U F I R S T, ARE Y O U

SUING THEM FOR SOME SORT O F D E C L A R A T I O N THAT THEY D O N'T HAVE A T R A D EMARK AT ALL , O R A R E YOU S I M P L Y SUING THEM FOR A DECLARATION THAT Y O U DON 'T INFRINGE IT ? M R. FEINBERG: BOTH . BUT I DON 'T KNOW

WHETHER -- I MEAN , T H E R E'S A STANDING QUESTION. I F W E A R E HELD T O B E N A K E DLY LICENSED , I' M G O I N G T O HAVE TO LOOK, A N D S O WILL OPPOSING COUNSEL, AT WHAT WE HAVE S T A N D I N G T O D O A T THIS POINT , BECAUSE IT I S N'T CLEAR TO ME THAT WE HAVE STANDING TO COMPLAIN ABOUT WHAT THEY'V E DONE TO OTHER P E O P L E O R WHAT THEY MIGHT DO TO OTHER PEOPLE . I REPRESENT FREECYCLESUNNYVALE. I HAVE,

FRANKLY, NO INTEREST IN REPRESENTING, ON A P R O BONO BASIS , A N D OPPOSING HER ON A PRO BONO BASIS, T H E REST OF THE UNIVERSE OF P E O P L E W H O MAY HAVE 35

14:48:09 14:48:11 14:48:13 14:48:16 14:48:18 14:48:20 14:48:23 14:48:24 14:48:26 14:48:28 14:48:32 14:48:35 14:48:38 14:48:40 14:48:43 14:48:46 14:48:49 14:48:52 14:48:52 14:48:54 14:48:57 14:48:59 14:49:01 14:49:02 14:49:03

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SOMETHING, SOME A X T O G R I N D WITH MR . BEAL , A N D I SUSPECT YOU WOULD JUST AS SOON N O T SEE US F O R T H E NEXT OF THE THREE YEARS ON A WEEKLY BASIS . T H E COURT: A N D THEN WHAT D I D Y O U SAY

ABOUT YOUR TORTIOUS INTERFERENCE CLAIM AGAINST THEM? THAT. Y O U WERE SORT OF W A V I N G YOUR HANDS ABOUT A R E YOU S A Y I N G Y O U' LL DISMISS THAT ? M R. FEINBERG: YEAH . WE ALREADY W A I V E D

T H E - - I T S E E M E D -- AND INTERESTINGLY, THEY DID N O T TAKE THIS P O S I T I O N, BUT IT S E E M E D U NSEEML Y F O R A NONPROFIT T O SEEK TORT DAMAGES AGAINST A NONPROFIT , B U T THEY 'VE OBVIOUSLY T A K E N A SOMEWHAT DIFFERENT TACT. I THINK O N E T H I N G THAT 'S WORTH BEARING I N MIND -- FIRST OF ALL , W E D I D MOVE O N T H E TRADEMARK COUNTERCLAIMS. I LOOKED WHILE W E WERE TALKING,

WHILE OPPOSING COUNSEL WAS TALKING, A N D W E CLEARLY MOVED . T H E COURT: YEAH . COULD YOU ADDRESS HER

THEORIES ABOUT WHICH OF THEM WOULD SURVIVE EVEN IF Y O U WERE NAKED LY LICENSED? M R. FEINBERG: D I D MOVE ON THEIR C L A I M S. T H E COURT: R I G H T. W E ALSO , T H E -- THE FACT 36 YEAH . AND THEN -- SO WE

M R. FEINBERG:

14:49:05 14:49:09 14:49:12 14:49:13 14:49:15 14:49:17 14:49:19 14:49:22 14:49:25 14:49:27 14:49:28 14:49:30 14:49:31 14:49:33 14:49:35 14:49:36 14:49:38 14:49:41 14:49:42 14:49:44 14:49:49 14:49:49 14:49:51 14:49:55 14:49:57

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

THAT WE DIDN'T CHALLENGE M R. BEAL A N D HIS DECLARATION IS BECAUSE I DIDN 'T COME DOWN WITH THE LAST SNOWFALL. I MEAN, NO COMPETENT L A W Y E R IS GOING TO G E T INTO A FACTUAL F I G H T OVER MR . BEAL . I THINK IT TURNS O U T THAT HE 'S COMPLETELY MISTAKEN A N D W E'L L P R O V E I T, BUT IT 'S IRRELEVANT T O THIS MOTION , S O W E JUST DIDN' T TAKE H I M O N. O N E OF THE T H I N G S THAT 'S INTERESTING -T H E COURT: FIRST SNOWFALL ? M R. FEINBERG: T H E COURT: T H E LAST SNOW FALL. IS THAT Y O U DIDN'T COME DOWN WITH T H E

THAT 'S A N E W ONE .

KIND OF LIKE N O T HAVING A DOG IN T H E F I G H T, OR WHAT? M R. FEINBERG: N O. IT 'S JUST THAT I' M

N O T S O N A I V E THAT I' M G O I N G T O TAKE ON EVERY ISSUE . T H E COURT: I S E E. I CHASE ENOUGH WILD

M R. FEINBERG: RABBITS.

I D O N'T NEED TO CHASE THEIRS , T O O. O N E OF THE THING S THAT IS INTERESTING

ABOUT THIS, T H O U G H, IS WHAT EXACTLY IS T H E QUALITY CONTROL THAT THEY 'RE EXERCISING? EVEN TODAY IT 'S

FREE, IT 'S LEGAL, A N D I T'S APPROPRIATE F O R A L L AGES. 37

14:49:58 14:50:00 14:50:01 14:50:03 14:50:05 14:50:08 14:50:11 14:50:12 14:50:15 14:50:18 14:50:21 14:50:25 14:50:27 14:50:28 14:50:30 14:50:34 14:50:36 14:50:38 14:50:41 14:50:43 14:50:45 14:50:47 14:50:48 14:50:50 14:50:53

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

THAT I S N'T A QUALITY S T A N D A R D. SCOPE OF U S E O F T H E TRADEMARK .

THAT' S A

THEY HAVE BEEN POUNDING PEOPLE OVER THE HEAD ON WHETHER THEY 'RE W I T H I N T H E SCOPE OF WHAT Y O U'R E ALLOWED TO U S E F R E E C Y C L I N G F O R, BECAUSE OF C O U R S E T H E MARK FREECYCLE DOES, IN FACT, HAVE T H E WORD "FREE" IN IT . B U T THIS W O U L D B E LIKE MCDONALD 'S SUING P E O P L E BECAUSE THEY LICENS ED THE MARK FOR HAMBURGERS, F R E N C H F R I E S A N D MILK S H A K E S AND THEY WERE USING IT FOR H E A L T H FOOD A N D THEY SAID YOU 'RE OUTSIDE THE SCOPE OF T H E LICENSE . THAT 'S NOT QUALITY CONTROL. QUALITY CONTROL WOULD BE IF THEY WERE SELLING LOUSY HAMBURGERS I N A DIRTY RESTAURANT. S O A C T U A L L Y, I T H I N K T H E PROBLEM THEY 'VE GOT HERE , AND ULTIMATELY I F W E D O G O T O TRIAL O N BEHALF O F A L L THESE PEOPLE I HOPE I D O N'T REPRESENT, I T H I N K THEY 'VE G O T A PROBLEM BECAUSE I D O N'T THINK THEY DO QUALITY CONTROL AT A L L. B U T THAT'S -- WE D O N'T NEED TO GET THERE FOR THIS MOTION. THIS ONE WAS A VERY LIMITED MOTION . WE

WOULD LIKE PERMISSION T O G E T RID OF A L L T H E S E O T H E R COUNTERCLAIMS TO THE E X T E N T THEY 'RE N O T D I S P O S E D O F 38

14:50:55 14:50:58 14:51:01 14:51:02 14:51:07 14:51:10 14:51:13 14:51:15 14:51:18 14:51:22 14:51:25 14:51:30 14:51:33 14:51:36 14:51:37 14:51:39 14:51:41 14:51:44 14:51:46 14:51:47 14:51:50 14:51:54 14:51:55 14:51:58 14:52:02

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

BY THIS MOTION , BECAUSE I DO THINK THAT T H E NINTH CIRCUIT' S D E C I S I O N YESTERDAY REALLY DOES GUT T H E COUNTERCLAIMS. B Y T H E WAY , Y O U HAVE T O READ D E N N I S CORGILL' S DECLARATION. SOME OF WHAT S H E SAYS I S N' T

IN T H E L E T T E R ISN 'T IN THE L E T T E R BECAUSE T H E DECLARATION SAYS HE WAS TOLD THAT I N A TELEPHONE CALL. S O I T'S N O T EXACTLY A CONTRADICTION. T H E COURT: WELL , S O, AGAIN I A S K YOU ,

WHICH OF -- WHAT DO YOU S A Y T O H E R ARGUMENT AS TO WHICH OF H E R COUNTERCLAIMS SURVIVE IF I FIND NO -IF I FIND THAT Y O U WERE NAKED LY LICENSED, B U T THAT THERE 'S A DISPUTE ABOUT T H E RECAPTURE? M R. FEINBERG: YOUR HONOR. I THINK NOTHING SURVIVES,

I THINK NOTHING SURVIVES. RESPOND TO H E R A R G U M E N T THAT

T H E COURT:

THE INDUCEMENT AND THE ENCOURAGEMENT SURVIVE S AND THAT THE FALSE ADVERTISING SURVIVES . M R. FEINBERG: THE PROBLEM I S THAT WHAT

WE A R E ALLEGED TO DO IS N O T T O S A Y -- NOT TO U S E FREECYCLE T O - - I N A CONFUSINGLY SIMILAR WAY . WHAT THEY' RE ACTUALLY SAYING , I F Y O U READ IT , I S THAT WE WERE ENCOURAGING PEOPLE TO U S E I T I N A NON -TRADEMARK W A Y FOR T H E PURPOSE OF DESTROYING A TRADEMARK. 39

14:52:04 14:52:06 14:52:07 14:52:11 14:52:14 14:52:15 14:52:18 14:52:20 14:52:22 14:52:25 14:52:26 14:52:29 14:52:30 14:52:31 14:52:33 14:52:35 14:52:37 14:52:39 14:52:41 14:52:43 14:52:45 14:52:48 14:52:51 14:52:54 14:52:54

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 MARK.

THAT 'S TRADEMARK INFRINGEMENT, AND THAT' S NOT ACTIONABLE . A N D IF WE HAD A LICENSE T O U S E IT AND WE ENCOURAGE O T H E R P E O P L E TO USE IT , I T'S N O T ACTIONABLE. A N D SOME O F T H O S E F O L K S WILL TURN OUT TO HAVE BEEN N A K E DLY LICENSED AT WELL. A T THIS POINT THEY HAVEN' T ESTABLISHED - NOTWITHSTANDING WHAT OPPOSING COUNSEL SAYS, THEY HAVEN 'T ESTABLISHED A R I G H T T O A N Y T H I N G. THEY MADE A R E G I S T E R, OR AN APPLICATION TO REGISTER T H E MARK . W E OPPOSED . I T W A S STAYED AT THEIR REQUEST, AS P E O P L E TEND TO DO WHEN T H E R E'S A DISTRICT COURT ACTION , A N D THEY 'RE ENTITLED TO STAY IT. B U T THEY D O N' T - - THEY HAVE A PURPORTED THEY D O N'T HAVE ANY MARK AT THIS P O I N T. T H E COURT: OKAY . AND WHAT ABOUT THE

FALSE ADVERTISING CLAIM AGAINST YOU ? M R. FEINBERG: I F W E H A D A LICENSE TO U S E

T H E WORD "FREECYCLE" A N D W E USED IT , W E WERE NAKED LY LICENSED AND WE C A N'T BE G U I L T Y O F F A L S E ADVERTISING . T H E COURT: S H E' S S A Y I N G YOU SAID BAD 40

14:52:55 14:52:59 14:53:02 14:53:04 14:53:06 14:53:07 14:53:09 14:53:12 14:53:14 14:53:14 14:53:16 14:53:18 14:53:21 14:53:23 14:53:24 14:53:27 14:53:28 14:53:30 14:53:33 14:53:34 14:53:35 14:53:37 14:53:37 14:53:39 14:53:42

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THINGS A B O U T THEM , M A Y B E THAT THEY WEREN' T WARM A N D FUZZY , O R THAT THEY WERE S T A L I N I S T I C, OR WHO KNOWS WHAT. I 'M NOT SURE EXACTLY WHAT IT IS . M R. FEINBERG: FALSE ADVERTISING . A N D, UNFORTUNATELY, WE 'RE GETTING A L I T T L E B I T IN BETWEEN - - T H E NINTH CIRCUIT H A S GONE HEAD- ON ON A L O T OF THE I S S U E S THAT Y O U'R E A S K I N G ABOUT . T H E COURT: OKAY . I'L L HAVE TO READ IT. B U T THAT'S N O T A CLAIM F O R

S O M A Y B E WHAT WE S H O U L D D O I S HAVE SOME POST- HEARING BRIEFS THAT W O U L D ADDRESS H O W T H E NINTH CIRCUIT' S OPINION WOULD AFFECT THE ISSUES . M R. FEINBERG: OKAY . SO IT DOESN' T

A F F E C T N A K E D LICENSING AT ALL . I T D O E S N'T AFFECT T H E COUNTERCLAIMS, WHICH IS W H Y I ASKED F O R PERMISSION TO FILE A MOTION FOR SUMMARY JUDGMENT O N THE COUNTERCLAIMS. T H E COURT: O N E? M R. FEINBERG: CIRCUIT CASE. T H E COURT: OKAY . WELL, I G U E S S W E C O U L D YEAH , BASED O N THE NINTH Y O U ALREADY D I D. BUT ANOTHER

P U T I T THAT W A Y, OR WE COULD SAY THAT IT WAS IN FURTHER SUPPORT O F YOUR M O T I O N Y O U' VE ALREADY MADE 41

14:53:44 14:53:45 14:53:46 14:53:48 14:53:50 14:53:53 14:53:56 14:53:58 14:53:59 14:54:04 14:54:06 14:54:10 14:54:13 14:54:16 14:54:18 14:54:19 14:54:22 14:54:22 14:54:24 14:54:27 14:54:28 14:54:31 14:54:32 14:54:35 14:54:38

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F O R SUMMARY JUDGMENT ON T H E COUNTERCLAIMS . M R. FEINBERG: I THINK THEY' RE ACTUALLY

DIFFERENT I S S U E S, SO I WOULD PREFER IT AS A SEPARATE M O T I O N, AND IT 'LL BE SHORT BECAUSE BASICALLY I 'M GOING TO CITE T H E ONE CASE. T H E COURT: OKAY . ALL RIGHT . WELL, WHEN

DO Y O U WANT TO FILE IT? M R. FEINBERG: T H E COURT: I N THE NEXT FOUR WEEKS .

HOW ABOUT SOONER ? C A N WE HAVE T H R E E W E E K S?

M R. FEINBERG:

WE 'RE GOING TO HAVE -- DENNIS , W H O' S M Y LEAD G U Y, H A S LEFT T H E FIRM , S O I 'M A L I T T L E BIT SCRAMBLED. T H E COURT: IT FOUR. M S. KOBIALKA: WILL WE HAVE AN WE 'RE GOING TO DO OKAY . ALL RIGHT . WE' LL MAKE

OPPORTUNITY TO RESPOND TO THIS? A FULL BRIEFING? T H E COURT: YEAH .

YOU C A N FILE YOURS T W O

WEEKS LATER , A N D YOU FILE YOURS A WEEK AFTER THAT. I D O N'T THINK I' LL NEED T O HAVE A HEARING ON IT . I'L L JUST DECIDE I T O N T H E PAPERS . A N D I W O N' T RULE ON THIS UNTIL I G E T THAT, BECAUSE SOME O F THAT MIGHT AFFECT THIS . Y O U CAN ADDRESS IN THAT H O W THE NINTH CIRCUIT' S OPINION MAY INFLUENCE WHAT W E ALREADY 42

14:54:42 14:54:43 14:54:43 14:54:45 14:54:47 14:54:49 14:54:51 14:54:54 14:54:55 14:54:58 14:55:00 14:55:06 14:55:09 14:55:12 14:55:14 14:55:16 14:55:17 14:55:18 14:55:19 14:55:20 14:55:21 14:55:23 14:55:26 14:55:27 14:55:28

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HAVE BEFORE US . M R. FEINBERG: T H E COURT: DATES FOR ANYTHING? O H, YOU H A D A DISPOSITIVE M O T I O N C U T OFF . Y O U D O N' T - - Y O U' RE NOT HOLDING BACK A N Y T H I N G T O MAKE A D I S P O S I T I O N M O T I O N CUT O F F? M R. FEINBERG: WELL , A T SOME POINT , I F OKAY .

N O W, DO Y O U HAVE A N Y O T H E R

T H E T H I N G I S N' T OTHERWISE RESOLVED -- AND I INTEND TO HAVE A HALLWAY CONVERSATION WITH OPPOSING COUNSEL AS TO WHY THEY WANT U S O U T OF HERE, BUT T H E - - A T SOME POINT THERE 'S GOING TO BE CROSS -MOTIONS ON WHETHER THIS THING IS A MARK, IF WE STILL HAVE STANDING AT THAT P O I N T. T H E COURT: YOUR NEW M O T I O N? M R. FEINBERG: OKAY . BECAUSE I F I T'S W H Y DON 'T YOU ADDRESS THAT I N

GRANTED, I DON 'T KNOW I F W E HAVE STANDING . T H E COURT: THAT? M R. FEINBERG: Y E S. T H E R E'S N O T A L O T O F WELL , WOULD YOU LOOK INTO

NAKED LICENSE CASES ANYWAY , S O I HAVE MY DOUBTS OF H O W C L O S E I 'LL G E T. T H E COURT: YEAH , BECAUSE I WANT T O B E

ABLE TO KNOW B Y T H E END OF T H E NEXT ROUND OF 43

14:55:30 14:55:33 14:55:34 14:55:35 14:55:38 14:55:41 14:55:43 14:55:46 14:55:48 14:55:50 14:55:52 14:55:54 14:55:55 14:55:55 14:55:57 14:56:01 14:56:01 14:56:03 14:56:07 14:56:09 14:56:10 14:56:12 14:56:13 14:56:13 14:56:16

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BRIEFING WHAT, IF ANYTHING , T H E R E I S LEFT . M R. FEINBERG: M S. KOBIALKA: M E, TOO . A N D IN LIGHT OF DOING ALL

THIS BRIEFING THIS E A R L Y, WE DON 'T WANT A N Y COMPLAINTS ON THEIR SIDE T O T H E EXTENT THAT WE GET EXPERTS TO PROVIDE DECLARATIONS IN THIS M A T T E R, PARTICULARLY A S I T RELATES TO T H E N I N T H CIRCUIT OPINION, THAT THEY H A V E N'T H A D T H E OPPORTUNITY TO G E T DISCOVERY BECAUSE THEY 'RE DOING THIS WELL B E F O R E A N Y OF THE E X P E R T D I S C L O S U R E S THAT WE H A D AGREED T O I N THIS CASE. T H E COURT: F O R? WELL , L E T' S P U T IT THIS W A Y: SOME EXPERTS Y O U WANT T O RELY ON IN YOUR OPPOSITION, Y O U C A N DO THAT. A N D YOU C A N - - I F Y O U NEED T O D E P O S E THEM BEFORE YOU FILE YOUR REPLY , I GUESS YOU CAN EITHER STIPULATE O R MOVE F O R A N EXTENSION OF TIME T O FILE YOUR REPLY. B U T I D O N' T S E E ANY NEED FOR EXPERTS IN THIS CASE. M S. KOBIALKA: I THINK THERE 'S A NUMBER I F YOU HAVE WHAT WOULD YOU NEED EXPERTS

OF I S S U E S THAT M A Y COME UP , A N D IT' S G O I N G T O D E P E N D O N WHAT T H E B R I E F I N G SAYS AS WELL, THAT MAY 44

14:56:18 14:56:21 14:56:23 14:56:26 14:56:29 14:56:32 14:56:36 14:56:39 14:56:41 14:56:43 14:56:45 14:56:45 14:56:47 14:56:49 14:56:52 14:56:54 14:56:56 14:56:56 14:56:58 14:56:59 14:57:00 14:57:02 14:57:03 14:57:06 14:57:07

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ACTUALLY MAKE EXPERT TESTIMONY APPROPRIATE. T H E COURT: I D O N'T TAKE EXPERTS O N T H E

L A W, SO DON 'T GET A N Y EXPERTS ON TRADEMARK L A W. M S. KOBIALKA: T H E COURT: I T'S N O T. AND THEN -- SO WE' VE

OKAY .

G O T A FURTHER CASE MANAGEMENT CONFERENCE ON THE 20 TH OF FEBRUARY. W E'L L W O R R Y A B O U T THAT LATER . YOU

A N D YOU 'VE ALREADY TRIED TO SETTLE . WEREN 'T ABLE T O SETTLE, I GUESS. THAT W A S A WHILE A G O. SETTLE A G A I N. M R. FEINBERG: WE SPENT WEEKS IN

Y O U WANT TO T R Y T O

MEDIATION B E F O R E AN OUTSTANDING NINTH CIRCUIT MEDIATOR AND W E WENT AROUND AND AROUND AND AROUND. T H E COURT: BACK IN JUNE OF '06 . N O.

M R. FEINBERG: T H E COURT:

WHEN WAS THIS ? W E WENT A L L T H E WAY

M S. KOBIALKA: THROUGH -T H E COURT:

O H, BECAUSE Y O U HAD T H E N I N T H

CIRCUIT THING IN CONNECTION WITH T H E O T H E R CASE . THAT 'S ANOTHER Q U E S T I O N I HAVE. WHAT 'S

T H E S T A T U S OF THAT O T H E R CASE , A N D DOES I T MAKE SENSE F O R U S T O HAVE T W O C A S E S? M R. FEINBERG: I T D O E S N'T , B U T YOU 'VE G O T 45

14:57:10 14:57:13 14:57:14 14:57:16 14:57:16 14:57:16 14:57:18 14:57:18 14:57:21 14:57:23 14:57:23 14:57:25 14:57:26 14:57:28 14:57:29 14:57:31 14:57:33 14:57:35 14:57:37 14:57:39 14:57:39 14:57:40 14:57:41 14:57:41 14:57:41

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T H E N I N T H CIRCUIT DECISION THAT STAYED IT . M S. KOBIALKA: CIRCUIT -T H E COURT: THEY REMANDED . THEY REMANDED , EXACTLY . A C T U A L L Y, NO. THE NINTH

M S. KOBIALKA:

A N D THAT CASE IS S T A Y E D, AND IN T H E OPINION, THEY ACTUALLY HAD A FOOTNOTE THAT - - THEY ACTUALLY HAVE AN OPINION S A Y I N G THAT T H E R E A R E OTHER CAUSES O F ACTION THAT THE FREECYCLE NETWORK H A S. S O I 'M NOT SURE WHETHER THAT -T H E COURT: CASE STAYED HIS CASE ? M R. FEINBERG: AFTER H E ISSUED A S O T H E JUDGE IN THE OTHER

PRELIMINARY INJUNCTION, HE S T A Y E D I T. THE NINTH CIRCUIT THEN STAYED THE PRELIMINARY INJUNCTION AND REVERSED IT , B U T THAT DOESN 'T UNSTAY T H E CASE . T H E COURT: CASE? M R. FEINBERG: T H E COURT: Y E S. SO IT' S S T I L L S T A Y E D.

A N D HE STAYED IT PENDING THIS

PENDING THIS CASE? Y E S.

M R. FEINBERG: T H E COURT:

A N D DID WE TALK ABOUT WHETHER

H I S CASE COULD BE TRANSFERRED HERE OR MY CASE C O U L D 46

14:57:44 14:57:44 14:57:46 14:57:48 14:57:50 14:57:51 14:57:53 14:57:56 14:57:57 14:57:58 14:58:00 14:58:02 14:58:04 14:58:06 14:58:09 14:58:11 14:58:14 14:58:15 14:58:16 14:58:18 14:58:18 14:58:20 14:58:21 14:58:22 14:58:22

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BE TRANSFERRED THERE ? M S. KOBIALKA: ARIZONA CASE HERE . DENIED. THEY TRIED TO TRANSFER T H E IT WAS

IT WAS REJECTED .

THE REQUEST WAS DENIED. M R. FEINBERG: THIS W A S N O T ME. WE

H A D - - M R. OEY , W H O' S T H E ONLY INDIVIDUAL , H I S INSURANCE DEFENSE COUNSEL DID IT A N D I T W A S NOT TRANSFERRED . W E WERE NOT O F RECORD. T H E COURT: OKAY . WELL, IF THERE' S N E W

A N D DIFFERENT GROUNDS B A S E D O N T H E OPINION, YOU C A N CERTAINLY T R Y AGAIN. I MEAN, IT WOULD BE GOOD TO GET THESE THINGS RESOLVED. O R Y O U CAN MOVE TO TRANSFER MY CASE T O ARIZONA. I 'D LIKE THAT . M R. FEINBERG: YOUR HONOR. M S. KOBIALKA: IF Y O U WANT . T H E COURT: OKAY . THANK YOU . W E'D BE HAPPY TO DO THAT W E WILL NOT B E DOING THAT ,

M S. KOBIALKA: M R. FEINBERG:

T H A N K Y O U, YOUR HONOR. T H A N K Y O U.

( WHEREUPON , T H E PROCEEDINGS IN THIS MATTER WERE CONCLUDED.) 47