Leader Technologies Inc. v. Facebook Inc.

Filing 567

Official Transcript of Pretrial Conference held on 07-01-10 before Judge Leonard P. Stark. Court Reporter/Transcriber Leonard A. Dibbs. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 7/26/2010. Redacted Transcript Deadline set for 8/3/2010. Release of Transcript Restriction set for 10/1/2010. (lad)

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1 1 UNITED STATES DISTRICT COURT 2 FOR THE DISTRICT OF DELAWARE 3 4 LEADER TECHNOLOGIES, INC., a : CA. NO. 08-862-LPS 5 Delaware corporation July 1, 2010 : 6 : 7 Plaintiff-Counter Defendant : 8 v. : 9 FACEBOOK, INC., a Delaware : corporation : 10 11 2:30 O'clock p.m. : 12 Defendant-Counterclaimant 13 ............................. : : 14 15 16 TRANSCRIPT OF PRETRIAL CONFERENCE 17 BEFORE THE HONORABLE LEONARD P. STARK 18 UNITED STATES MAGISTRATE JUDGE 19 20 21 APPEARANCES: 22 23 For the Plaintiff: POTTER, ANDERSON & CORROON. 24 BY: PHILIP A. ROVNER, ESQ. 25 JONATHAN CHOA, ESQ. 2 1 -and- 2 KING & SPALDING. 3 BY: PAUL J. ANDRE, ESQ. 4 BY: JAMES HANNAH, ESQ. 5 BY: LISA KOBIALKA, ESQ. 6 7 8 For the Defendant: 9 BLANK ROME STEVEN CAPONI, ESQ. 10 -and- 11 COOLEY LLP. 12 BY: HEIDI L. KEEFE, ESQ. 13 BY: MARK R. WEINSTEIN, ESQ. 14 BY: JEFFREY NORBERG, ESQ. 15 BY: ELIZABETH STAMESHKIN, ESQ 16 17 18 19 20 21 22 23 24 25 Court Reporter: LEONARD A. DIBBS Official Court Reporter 3 1 2 P R O C E E D I N G S 3 THE COURT: 4 ALL COUNSEL: 5 THE COURT: 6 Let's begin by noting your appearances for the record. 7 MR. ROVNER: 8 9 Good afternoon, everybody. Good afternoon. Welcome, or welcome back as the case maybe. Your Honor, Phil Rovner from Potter, Anderson & Corroon for the plaintiff, Leader. With me from King & Spalding is Paul Andre, Lisa 10 Kobialka, James Hannah and sitting in the back is John Choa from 11 my office. 12 MR. CAPONI: Steve Caponi from Blank Rome. With me 13 today is Heidi Keefe, Mark Weinstein, Jeffrey Norberg. I have 14 to look at the name to get it right, Elizabeth Stameshkin. 15 THE COURT: Welcome again. 16 Of course this is the time for our pretrial conference. 17 Let me tell you how we're going to proceed today. 18 First, I'm going to give you the court's ruling on the 19 Motions in Limine and the Daubert motion. 20 have a brief argument if either parties wishes to be heard on 21 Summary Judgement. 22 cover the remaining Summary Judgment motions, if you wish to 23 argue them. 24 25 Then we're going to I'll give you up to twenty minutes aside to Then we'll go through some of the matters that are addressed in your proposed pretrial order. And then after that, 4 1 we'll cover a few additional matters. 2 aware we have a second pretrial conference scheduled for July 3 16th, I think it is, the last business day before the trial 4 which begins on July 19th. 5 6 So, without any further adieu, let me give you the rulings on the Motions in Limine. 7 8 First, Facebook motion number one, all of the Facebook motions are at DI 412. 9 10 I think everybody is Facebook motion number one is to preclude any Doctrine of Equivalents argument. 11 This motion is denied having reviewed Dr. Vigna's 12 expert report. 13 standard, and in particular, Dr. Vigna gives approximately 25 14 pages of analysis, four paragraphs of analysis for each claim 15 element and, therefore, it is adequate. 16 17 The court finds that it satisfies the Aquatext Dr. Vigna will be permitted to give that Doctrine of Equivalents testimony. 18 Let me know that I will attempt to exercise it, but if 19 any expert, be it Dr. Vigna or any other expert testifies beyond 20 the scope of his expert report, you can make an objection to 21 that effect at trial, the objection will be noted. 22 trial you believe that you have a good faith basis to persist in 23 that objection then you can brief that objection following 24 trial. 25 court that the expert testified beyond the scope of his or her If following If you prevail on that objection and can prove to the 5 1 expert report. 2 proffered the inappropriate expert testimony will be paying the 3 costs for the new trial. 4 trial. 5 following the trial. 6 If a new trial is ordered, the party that has You can note the objection during the It won't be resolved during the trial. Brief it And as I have said, if you prevail on that motion, a 7 new trial will be necessary and the other side will pay the 8 costs for that. 9 Next, Facebook motion number two: 10 To preclude evidence or argument from Dr. Vigna and 11 argument beyond the three use cases disclosed in Dr. Vigna's 12 expert report. 13 examples as Dr. Vigna indicates in his report and in his 14 testimony. That motion is denied. The three use cases are 15 Also the fundamental architecture of Facebook is part 16 of what is accused here and that accusation is part of what is 17 being tried here and is part of Dr. Vigna's report. 18 Again, I'll emphasize if Dr. Vigna goes beyond the 19 scope of his expert report, you can object and the procedural 20 will be as I have outlined it. 21 Vigna will not be viewed as testifying beyond the scope of his 22 report simply by talking about something other than the three 23 use cases. However, my ruling is that Dr. 24 Next, is Facebook motion number three: 25 To preclude Leader from using the term platform to 6 1 refer to Facebook's product. This motion is denied. The risk 2 of confusion here from it's use of the word platform is minimal. 3 And in the court's view is no greater than the risk of confusion 4 from the multiple redactions that would be required if we were 5 not to permit the use of the word platform. 6 That redacting would be somewhat burdensome. 7 believes that the jury can understand the various ways that the 8 parties are using the word platform. 9 10 The Court Next is Facebook's motion number 5: To exclude the deposition errata sheet of Jeffrey Lamb. 11 That motion is denied. The Court has previously ruled, in the 12 court's view the changes in the errata sheet are not 13 substantive. 14 Next, is Facebook motion number 6: 15 To exclude Leaders late-produced non-disclosure 16 agreements. That motion is denied. As explained in the 17 telephone conference of last week, June 25th, I believe it was, 18 and in the court's view, Facebook has received sufficient 19 discovery into the NDAs and into the affirmative defenses of the 20 on-sale bar and public demonstration. 21 The court has attempted, I believe, that it has 22 carefully balanced the many factors at issue here throughout the 23 discovery process. 24 several discovery disputes. 25 has balanced all of the competing factors appropriately such This issue came up -- aspects came up during Again, the court believes that it 7 1 that Facebook has had sufficient opportunity to pursue that 2 defense and will be permitted to present that defense at trial. 3 The court sees, therefore, no basis to preclude Leader from 4 using the NDAs as evidence. 5 Next is Facebook motion number 7: 6 To exclude references to other litigation involving 7 Facebook or Mr. Zuckerberg. 8 This motion is granted in part and denied in part. 9 Leader can use prior deposition testimony from other 10 cases for proper impeachment, but when Leader, if they are to do 11 so, should just identify the prior testimony by date, not by 12 case name or number. 13 the substance or issues that may have been involved in any other 14 litigation. 15 there is no significant risk of unfair prejudice from the use of 16 the testimony. There will be no discussion by anyone of And with these conditions, the court believes that 17 Next, Facebook's motion number 10: 18 To preclude Leader testimony on topics which Mr. 19 McKibben claimed privilege at his deposition. 20 This one is also granted in part and denied in part. 21 Leader is precluded from using privilege as a sword when it's 22 already been used as a shield at his deposition. 23 Mr. McKibben will not be able to offer opinion 24 testimony as to novelty. However, he is permitted to testify to 25 the facts of his invention. 8 1 That takes us to Leader's Motion in Limine number 1, DI 2 417. Leader motion number 1, DI 417 is to exclude portions of 3 Mr. Greenberg's expert testimony. 4 part and denied in part. 5 This motion is granted in It appears to the court that there are three different 6 issues. 7 analysis on obviousness, including obviousness based on basic 8 internet functionality. 9 that. 10 Issue one has to do with the sufficiency of the The motion is denied with respect to So Mr. Greenberg is permitted to testify on those topics. The motion is also denied with respect to issue 2, 11 which had to do with the doctrine of incorporation by reference. 12 That is a legal issue for the court. 13 agree under the Advanced Display System of the Federal Circuit. 14 Here, the court finds that the requirements are met. 15 and Seliger references do identify the prior patents by number, 16 thereby, they sufficiently incorporate by reference the other 17 materials satisfactorily for purposes of anticipation and 18 obviousness. It appears the parties Lamping 19 On issue 3, the Motion in Limine is granted, meaning 20 that Mr. Greenberg may not offer testimony as to what the PTO 21 examiner would or would not do had certain materials been 22 disclosed. 23 facts that certain prior art is not cited on the face of the 24 '761 patent. 25 However, Mr. Greenberg may testify to the undisputed Next we have Leader's motion number 2, which is DI 418 9 1 to exclude portions of the testimony of Mr. Kearns. 2 granted in part and denied in part. 3 from any expert as to whether the Leader product is effective. 4 To the extent that Dr. Vigna was intending to testify to the 5 fact of the effectiveness of the Leader product. 6 extended to Dr. Vigna as well. 7 issue that remains in this trial. 8 testimony about the effectiveness of the Leader product would 9 risk jury confusion. 10 This is There will be no testimony This rule is It is simply not relevant to any It goes to damages and However, Mr. Kearns will be permitted to testify with 11 respect to the ensnarement issue as that relates to the Doctrine 12 of Equivalents, and, therefore, is permitted in the court's view 13 under the Dupuy case cited in the briefs. 14 If either party proposes, the court will give a 15 limiting instruction that Kearns' testimony regarding Yahoo and 16 e-Bay goes solely to rebut the Doctrine of Equivalents. 17 not evidence of invalidity. 18 what I have said is okay, is acceptable. 19 as it goes to, in the courts view, Doctrine of Equivalents, 20 which is an infringement issue and does not go to validity. 21 It's But Kearns' testimony other than It will be permitted Next is Leader's motion number 4, to exclude evidence 22 of reexamination, DI 420. That motion is granted. The 23 reexamination is not relevant to the issues in the case. 24 is a substantial risk of jury confusion given the different 25 standards applied by the PTO and here in court. There 10 1 If Leader does open the door by misrepresenting what 2 happened before the PTO, which is not relevant, then as with any 3 misrepresentation, the court will take appropriate corrective 4 action at the time. 5 Next is Leader's motion number 5, DI 421, to exclude 6 the on-sale and public disclosure defense. 7 denied. 8 9 This motion is As I have already indicated, the court attempted, I believe, did manage discovery appropriately, weighing all the 10 competing factors that go to the production of the NDAs and the 11 and these defenses. 12 timely manner under all the circumstances. 13 permitted the opportunity to prove these defenses to the jury. 14 And then Leader motion number 6, DI 422, to exclude a The defense was raised insufficiently in a 15 product to product comparison. 16 And Facebook will be no product to product comparison. 17 This is granted. There will be Facebook may introduce evidence of Leader to Leader as 18 part of its on-sale bar and public disclosure affirmative 19 defenses, but that's not a product to product comparison. 20 That takes care of the Motions in Limine. 21 There are two remaining Daubert motions. I'll give you 22 my rulings now. 23 to between the parties and it's pretty well settled. 24 25 The legal standard on these motions was agreed The motions to exclude evidence are committed to the court's discretion. Even though the expert testimony raises a 11 1 question of law governed by Rule 702, expert testimony under 2 that rule is admissible if it is based upon sufficient facts or 3 data, if it is a product reliable principles and methods, and if 4 the witness has applied the principles and methods reliably to 5 the facts of the case. 6 The Third Circuit has described these three distinct 7 restrictions as qualifications for reliability and fit. 8 Rule 702 does embody a liberal policy of admissibility. 9 10 And The Third Circuit has also ruled that it is an extreme sanction not normally to be imposed to exclude expert testimony. 11 Having reviewed the two remaining motions to exclude 12 testimony which are both Facebook motions and having applied 13 those standards to the arguments and the evidence there, I find 14 that Leader has met its burden to establish the qualifications 15 for reliability and fit of both Dr. Vigna and, I believe, they 16 are doctors. 17 Forgive me if I'm promoting them and Dr. Herbsleb. And I find no basis for imposing on Leader the extreme 18 sanction of precluding expert testimony or departing from the 19 liberal policy of admissibility. 20 Also, I note that I believe Facebook's concerns can be 21 addressed properly on cross examination. 22 exceptions to what I have just said and both relate to Dr. 23 Herbsleb. 24 25 There are only two With respect to Dr. Herbsleb, I'm granting the motion to exclude only in two limited respects. 12 1 First, Dr. Herbsleb cannot testify that certain prior 2 art is not incorporated by reference, given that the court has 3 found and ruled as a matter of law that it's sufficiently 4 incorporated by reference. 5 was number five in the motion, which has to do with the 6 materiality of certain prior art references. 7 solely to the inequitable conduct defense which is now part of 8 the forthcoming trial. 9 And, second, the issue that I think That issue goes Dr. Herbsleb will not be permitted to testify to 10 matters that go solely to inequitable conduct, but in all other 11 respects, the two Facebook motions to preclude evidence are 12 denied. 13 That takes us to the Motions for Summary Judgment. 14 MS. KEEFE: Regarding the limine's -- one of the 15 limine's that was denied as being deferred had to do with 16 copying, hacking, those types of things. 17 I understand that those issues were denied and, 18 therefore, deferred. 19 wanted to make 100 percent clear that though issues are not to 20 come up, right? 21 in this case about copying or hacking? 22 23 Those issues are not in this case. I There is no evidence that should be presented THE COURT: That was certainly my understanding from my review of the motions. 24 Mr. Andre, do I have that incorrect? 25 MR. ANDRE: Your Honor, it would depend on exactly what 13 1 Facebook brings up. 2 I think it was inducing infringement. 3 of copying which we don't believe is the law. 4 are arguing in the jury instructions. 5 They are bringing up issues right now for, There has to be showing That's what they There is also the issue of a possible secondary 6 consideration of non-obviousness which is copying as well. 7 At this point, we are not settled on it. I don't know 8 if it's relevant to bring those up at this time or not, but we 9 can talk to counsel about it. 10 THE COURT: 11 At this point, there's not to be any reference to hacking or copying. 12 You have my ruling from last week. It's the court's 13 view that there's no place in this trial that's forthcoming for 14 those types of allegations to be part of this case. 15 MS. KEEFE: Thank you, your Honor. 16 THE COURT: That take us to the Summary Judgment 17 motions. 18 remaining. 19 20 I believe there are -- there is either four or five I believe they are all Facebook motions. If you wish to be heard today on them, you can have up to twenty minutes as you wish with respect to those motions. 21 MS. KEEFE: 22 Could I have one second to give you the best order. 23 THE COURT: Absolutely, yes. 24 MS. KEEFE: Could we start with number three, which is 25 Absolutely, your Honor. our Motion for Summary Judgment of non-infringement? 14 1 THE COURT: 2 wish to go in. 3 Your time. Let's go in the order that you Whoever is doing the argument should come to the podium. 4 MS. KEEFE: Twenty minutes for the motions? 5 THE COURT: All of them, whatever you like. 6 MS. KEEFE: Perfect. 7 Would you like us to reserve a little bit of rebuttal 8 9 10 11 time? THE COURT: If you want to reserve some, just let us know so we can be sure to cut you off. MS. KEEFE: We would like ten minutes of rebuttal, ten 12 minutes on our argument themselves. 13 pretty well. 14 respond to something new that may come up. 15 I think our papers speak We want to answer your Honor's questions and MR. WEINSTEIN: Facebook Motion for Summary Judgment 16 number three granted would entirely dispose of this case. It's 17 a very narrowly focused motion that is directed at Leader's 18 failure to prove one essential claim element that is present in 19 every asserted claim. 20 that is associated with the users' data, be automatically 21 updated in a response to the users' movement to a separate 22 context work space or user environment. 23 claims -- different terminologies where they are describing the 24 context, user environment or user work space. 25 requirements in the claims is the same. That's the requirements that MetaData Different independent But the 15 1 2 MetaData must be automatically updated in response to the users' movement. 3 The only issue to be addressed for Summary Judgment 4 motion number three is the failure of proof on that essential 5 element. 6 language as well as Judge Farnan's claim construction of the 7 word dynamically. 8 9 That particular element is borne out by both the claim With respect to the evidence, your Honor, there are no genuine issues of material fact with respect to this motion. 10 The only evidence that has been put in by us is the expert 11 report of their expert, the screen shot that their expert 12 produced and the deposition testimony of their expert. 13 All those sources confirm that Dr. Vigna doesn't have 14 an opinion on whether or not the accused aspects of the Facebook 15 website perform this one missing element. 16 have it in his report. 17 He simply doesn't In his deposition he was asked whether or not he had an 18 answer to the question of whether Facebook performed it. 19 said I can't answer the question. 20 available to me. 21 22 He I don't have that information So, the only issue addressed by that motion is the missing element. 23 I'll briefly address the counter-statement that Leader 24 filed in connection with -- pursuant to Judge Farnan's standing 25 order. 16 1 The counter-statement has a lot of information whereby 2 other claim elements, other parts of the tracking component 3 limitation. 4 They are not at issue in this motion. If you look very carefully at their counter-statement, 5 you're not going to find any evidence that any MetaData is 6 automatically updated in response to the users' movement. 7 just not there. 8 9 10 11 12 It's And Dr. Vigna's admission on that with respect to all three of the use cases which are the only use cases for which he provides the required analysis is simply not there. THE COURT: It's not a factual dispute as to whether the MetaData has to be automatically updated? 13 MR. WEINSTEIN: Correct. 14 That's a pure question of claim construction for your 15 Honor to resolve. We think that issue has already been resolved 16 by Judge Farnan's claim construction of the word dynamically in 17 the claim construction that he put out. 18 MR. WEINSTEIN: 19 MS. KEEFE: Thank you. Your Honor, I'll take a couple of minutes 20 to talk very briefly about motions number one and two, that is 21 the IPXL motion and Muni Auction motion. 22 I think our briefing on the remaining two issues, prior 23 art, on-sale bar motion as well as the Shorts motion essentially 24 speak for themselves. 25 them, I'll let those papers speak for themselves. Unless your Honor has questions about 17 1 On IPXL. This is an issue that your Honor could 2 completely eliminate eight claims from this case, substantially 3 narrowing the case that has to go to the jury again on a pure 4 legal issue. 5 IPXL is a case which stands for the prospect -- very 6 well established prospect that hybrid claims, that is that 7 claims that claim both a system and a method within the same 8 claim are by definition indefinite. 9 In the case of the claims in this case, the problem is 10 that the alleged infringer cannot necessarily know whether their 11 actions simply infringe when they purchase the product or have 12 it sitting there, or if it's not until actually an action is 13 taken by a user. 14 the actual meets and bounds of the claim are. 15 So the public is not put on notice as to what In this case, the claims at issue all talk about a 16 apparatus that is then accessed by a user or employed by a user. 17 And those are the two active verbs that are utilized. 18 If Leader had actually wanted these claims to be purely 19 functional, they could have drafted them that way, in which case 20 she would have used language along the lines of can be accessed 21 or is accessible as opposed to the user, active verb accessing. 22 With respect to the word employee. In fact, if your 23 Honor turns to the claims at issue in this case, claim 21 in 24 particular, Leader actually demonstrates that it knows how to 25 use that active voice -- passive voice rather, and actually does 18 1 so. Part of the claim talks about the user employed the data so 2 that it requires the user to take a step. 3 phrase the patent talks about data that can be accessed in the 4 passive voice. 5 the active voice accesses which requires the user to perform an 6 activity, and other claims we have Leader claiming something 7 that can be accessed and thereby claiming functional language. 8 9 But in the very next So in separate claims we have Leader both using Here Leader used the active voice and must be stuck with it. The only thing that is not in our papers is that 10 there's actually two cases that I would pass on to your Honor to 11 the fact that you cannot simply rewrite claim language to change 12 the tense of a verb, change it to something else. 13 In the Rembrandt versus AOL case found at 673 F. Supp 14 2d 420 at 426. 15 with a desire to change what people in that case were arguing 16 was a simple word processing type error. 17 that the court cannot redraft the claims to make them operable 18 or sustain their validity, instead, quote, courts must construe 19 the claim as written, not as the patentees wish they had written 20 them. 21 The court was specifically dealing in that case And the court said That case cites to a Federal Circuit case called Chef 22 America vs. Lamb-Weston at 358 F 3rd 1371, a Federal Circuit 23 case of 2004. Another IPXL case. 24 In that case, -- I'm sorry that's not an IPXL case. 25 That's a case where they wanted to redraft the language 19 1 of the claim. 2 batter being raised to a temperature of 450 to 800 degrees. 3 Through the rest of the specification it seems as though really 4 the oven that should have been raised to that temperature 5 because if the cookie batter were in that temperature it would 6 be a cinder. 7 In that case, the claim talked about a cookie The court said despite the fact that it would 8 potentially render the claim meaningless, you simply cannot 9 rewrite the claim. 10 11 IPXL would take out eight of the claims and make this case narrower and much easier for the jury. 12 13 14 It's stuck with the language that it had. THE COURT: claim. You start with the premise of a hybrid Why is that not a factual issue? MS. KEEFE: Again, IPXL is a pure matter of law because 15 what the meaning of the term is and how they are applied is a 16 matter of claim construction for your Honor. 17 So the fact that the words says user accesses or user 18 employed, that's a claim construction issue for your Honor to 19 decide that requires the user to actually take an action where 20 the rest of claim actually calls out an actual apparatus. 21 Again, that's a claim construction issue. 22 issue of law. 23 So, a pure pure issue of law for the judge. 24 25 The IPXL case itself is very clear this was a The second case, your Honor, Muni Auction case deals with issues of divided infringement. 20 1 Now, in our case, very, very similar to the actual Muni 2 Auction case and the other cases that we cite, it doesn't appear 3 that the parties necessarily disagree that there are elements in 4 the claims that require Facebook to perform some action and 5 Facebook users to perform other actions. 6 The disagreement seems to be whether or not Facebook 7 actually controlled the action of those users. 8 extent, there's an argument made, we contend, of course, that 9 Facebook does not control any of our users. 10 And to that In fact, Facebook would perhaps argue that it may wish 11 to do so but it simply can't. 12 log on to. 13 once they arrive there. 14 It provides a service that people It's their choice to use it or not and how to use it The terms of service in Facebook's case do not dictate 15 as a contract would how the Facebook site is used. 16 simply give the ability for the Facebook website to be used. 17 Rather, In Muni Auction, the question becomes is there 18 direction or control over the end-users. 19 not. 20 to the level of direction or control regarding Facebook 21 employees when they are doing testing, not their personal use of 22 Facebook which is outside their employment. 23 that they may do while they are working at Facebook at the 24 direction of Facebook. 25 In this case, there is The only argument that Leader has advanced which may rise But the testing In this case there has been no allegation of damage 21 1 based on that internal use. 2 goes to the notion that where there is no allegation of damages 3 has been raised for that particular liability, there is no right 4 to a jury trial. 5 This is not a damages issue. It In fact, we actually have a case, your Honor, In Re 6 Technology Licensing Corporation at 423 F. 3rd at 1286, where 7 the Federal Circuit held that there is no right to a jury trial 8 where only equitable relief is sought for a given instance. 9 Since there is no allegation of a single direct 10 infringer which involves third party users of Facebook because 11 there is no control or direction over those third party users, 12 the only thing left would be internal use. 13 Internal use, under their own expert, there's no theory 14 of damages by the internal use. 15 injunction. 16 So, all that's left is the trial on this issue. All that would be left is a bench trial. 17 Thank you, your Honor. 18 MR. ANDRE: No jury 19 this. 20 are now. 21 judgments. 22 Your Honor, I know the court is aware of I do want to remind the court of how we got to where we We have not had a chance to fully brief these summary We wish to brief them. We dispute the facts. One of the things I note is both counsel talked about 23 this was a claim construction issue in both arguments. Claim 24 construction has come and gone in this case. 25 those issues were brought up in claim construction and they lost In many instances 22 1 on them. 2 necessarily, if it is though, we would like a chance to brief 3 that. 4 5 This is not the time to revisit those issues My colleague, Mr. Hannah, will be arguing all three motions. 6 THE COURT: 7 MR. HANNAH: 8 I will go in the same order that Facebook went. 9 Fine. Thank you, your Honor. I will start with Facebook's Motion for Summary Judgment motion number 10 three. 11 non-infringement argument that was raised in rebuttal to Dr. 12 Vigna. 13 This is clearly a factual issue here. This is a This was not raised by anybody else. Dr. Vigna provided an opinion that Facebook contains 14 components including a context component and a tracking 15 component that infringe on the '761 patent. 16 In that he applied the court's claim construction 17 dynamically which is automatically in response to the preceding 18 event. 19 Kearns said that there was no automatically and in response to a 20 proceeding event performed by the tracking component in the '761 21 patent. 22 In rebuttal to Dr. Vigna's non-infringement opinion, Dr. They are entitled to do that. This is a non-infringement factual issue for the jury 23 to decide whether or not that those actions are actually 24 performed and the components exist in the Facebook architecture 25 on the backend. 23 1 New, even though the claims don't require automatically 2 and in response to movement as counsel indicated, Dr. Vigna 3 actually did provide that opinion in his expert report. 4 look in his expert report, he talks about the tracking cookie as 5 located on the backend side. 6 does update MetaData in response to a user moving simply from 7 context to context. 8 9 If you That tracking cookie, actually, Now, that is part of the tracking component system. Part of the architecture that is used by Facebook. That is not 10 the sole basis. 11 modules that are in the backend system such as the new V system, 12 such as the mini-V system, such as all the modules that work 13 together from the front end that were displayed, which is called 14 the mini-feed. 15 They also have other components and other So all these issues are factual issues. We're saying 16 they infringe. Facebook is coming back and saying they don't. 17 This is simply a non-infringement argument that they have 18 raised. 19 issue that was raised by Facebook. 20 and now it is our position that they are estopped from arguing 21 this now in this case. 22 As Mr. Andre pointed out, this is a claim construction THE COURT: And they withdrew this issue When you say this, what particular claim 23 term did they propose initially and withdraw a request to 24 construe? 25 MR. HANNAH: They proposed a definition for based on 24 1 the change. 2 MetaData. 3 They also proposed a term -- a definition for MetaData was rejected from the get-go. MetaData from Facebook's -- Facebook argued that 4 MetaData required information regarding where the user resides. 5 It was rejected by the court. 6 ordinary meaning. 7 withdrew that definition before it actually got before the 8 court. 9 Facebook proposed in this case. 10 It was given just its plain and Based on the changes in their meaning, they The court wanted to narrowed down the 40 terms that If you look at the claim construction briefing, their 11 position now is completely contrary to what they did argue in 12 claim construction. 13 determine that there are no factual issues. 14 factual issue. 15 testify as to who they believe. 16 17 We will put this in our briefing if you This is clearly a It will be up to the jury when the experts That is Facebook's Motion for Summary Judgment number three. 18 For Facebook's Motion for Summary Judgment number one, 19 again, this turns out to be a non-infringement factual argument. 20 Facebook raised this for the first time with its 21 non-infringement expert Dr. Kearns in rebuttal to Leader's 22 expert, Dr. Vigna. 23 Dr. Vigna again stated that Facebook contains 24 components and performs methods that infringe on the '761 25 patent. In rebuttal to that, Dr. Kearns said that's not right. 25 1 G4. 2 3 Facebook actually doesn't access data from a second context. 4 So it's a factual issue that is going to be determined 5 by the jury whether or not Facebook has components that allows 6 access of data from a second context or whether they don't. 7 Again, this issue was raised in the claim construction 8 briefing. 9 term. 10 And they actually proposed a definition for this Again, this is accesses the data in their briefing. You'll see they proposed a term. 11 Even though this was never raised by their validity 12 expert, our validity expert never rebutted it. 13 first time in rebuttal on non-infringement. 14 This was the I would like to respond to counsel's argument about 15 IPXL. 16 believe that we need to get to the case law issues here. 17 Again, there are numerous factual issues. I don't In IPXL, it's all about indefiniteness and 18 understanding the scope of the claim. 19 understood the scope of the claim. 20 it, our validity expert knew it, our infringement expert knew 21 it, their non-infringement expert knew it. 22 understands the scope of the claim. 23 Nobody raised that. 24 25 Here, all the experts Their validity expert knew Everybody There's no confusion there. Now, IPXL actually states that you have to use the apparatus in combination. As your Honor knows it's about -- the 26 1 case is about having use of a apparatus within a method claim. 2 If you look at that there's actually a phrase in there. 3 talks about an input means, where the user uses the input means. 4 The '761 patent doesn't say that. 5 accessing the data from the second context. 6 accessing the context component or using the context component. 7 It's purely functional language. 8 9 The '761 patent says It doesn't say This is prevalent in many, many software patents where you have to have functional language to describe what the 10 components are going to do. 11 to a users' action. 12 It They are always based in response That's exactly the case here. There's a really good analogy that was raised in the 13 Yodlee case. 14 of California case. 15 The Westlaw cite is 3456610. 16 This is a quote from the court. 17 If I can find that. This was a Northern District Yodlee can be found at F. Supp 2d, 2006. And the analogy is as follows: A simple analogy would be a claim which physically 18 describes a pair of scissors designed to cut paper. It then 19 states, upon opening and closing the sharp edge of the scissors 20 on a piece of paper, the paper is cut. 21 the capability of the scissors. 22 Infringement occurs upon the manufacturing and selling of 23 scissors that are capable of cutting paper. The language describes It is functional language. 24 The IPXL rule would apply only if the patent claim 25 described a -- the physical description of the scissors and 27 1 stated within the same claim and the method of using said 2 scissors to cut a piece of paper. 3 analogous to the former example to describe what the apparatus 4 would do when used in a certain way. 5 the apparatus, thus, they do not recite both an apparatus and 6 method of using that apparatus. 7 The claims at issue here are They do not claim use of If you look at the '761 patent, if you look at claim 8 one, for instance, it states, context components, a tracking 9 component. And then it has certain actions that happen when the 10 user accesses data from the second context. It doesn't say then 11 a user using the context component and the tracking component. 12 In fact, that's impossible because the context 13 component and tracking component are kept on the backend servers 14 at Facebook. 15 user. 16 They are not going to be an accessible to the I would also like to note that analogy has been used in 17 several other cases including the Ricoh vs. Katun Corporation 18 case out of New Jersey at 486 F. Supp 2d 395. 19 And there's also be a recent case that came out from 20 the Federal Circuit in which they affirmed the use about 21 functional language in apparatus in technology cases, and that's 22 the Silicon Graphics vs ATI Technologies case. 23 2008-1334-1353. 24 25 That is It was decided on June 4, 2010. Again, it talks about functional language there and that having functional terms a product still infringes as long 28 1 as it contains the component. 2 occur. 3 That allows those functions to Now, the last motion is Facebook's Motion for Summary 4 Judgment number two. 5 It's a non-infringement argument they have raised. 6 Again, this is another factual issue. It is unclear from their motion what they are actually 7 arguing here. 8 evidence of direction and control. 9 Leader's infringement expert has opined in relation to claim 10 11 We assume that they are arguing that there is no This is what Dr. Vigna, nine, the method claim and dependent claims on that. In there, Dr. Vigna opines that Facebook has sufficient 12 direction and control over its user to perform these steps. 13 This is part of the direct and he also opines that there is 14 indirect infringement because the users perform these tests. 15 The fact that Dr. Vigna talks about this in his expert 16 report and actually talks about it during the deposition is 17 enough to show that there is sufficient evidence should Dr. 18 Vigna be allowed to testify regarding the direction and control 19 that Facebook has over its users. 20 Of course, terms in use and service contract that it 21 has with its users is going do govern what the user have to 22 perform that should be sufficient direction and control. 23 that is a factual issue for the jury to determine whether or not 24 that is sufficient or not. 25 Again, Facebook employees, of course, are under the direction 29 1 2 and control of Facebook. Facebook may contend it's not. Again, that's a factual 3 issue for the jury to decide whether or not being an employee of 4 Facebook and using the Facebook website is sufficient for there 5 to be direction and control. 6 Now, Dr. Vigna's report. He comes up with numerous 7 documents. 8 with other contracts that were and the actions and testing every 9 Facebook website by Facebook employees. 10 As I mentioned, the terms of use, he backs it up Again, in this case, the claims require the components, 11 and that's for the apparatus claims. There's a factual dispute 12 whether Facebook has those components. 13 Dr. Vigna has also provided sufficient disclosure in his expert 14 report to opine that there's indirect infringement and there's 15 indirect infringement by the direction and control of Facebook. For the method claims, 16 Thank you, your Honor. 17 THE COURT: 18 MR. WEINSTEIN: 19 I'm going to briefly address Mr. Hannah's comments with 20 21 22 23 24 25 Thank you. Thank you, your Honor. respect to Summary Judgment Motion three. First, very briefly. Mr. Hannah suggested something about the timing of the non-infringement argument. The arguments were presented in our interrogatory responses dated from last year. So there is no issue there. With respect to his reference to Dr. Kearns, we don't 30 1 have to rely on Dr. Kearns here to present our motion. 2 Yes, Dr. Kearns presented an opinion that Facebook did 3 not satisfy this element. 4 to satisfy this motion. 5 this element is not satisfied either. 6 We don't need to rely on his report Dr. Vigna's report establishes that Quoting from the transcript of his deposition at page 7 145. He was asked directly when the users navigates his own 8 profile page to a friend's profile page, do you have an opinion, 9 one way or another as to whether that active navigation will 10 cause MetaData to be dynamically updated in the second context? 11 His answer was I really need to see the source code to answer. 12 I really can't answer that. 13 knowledge you have, you cannot answer that question, correct? 14 15 16 Answer: So sitting here right now with the I don't have the data I would need to answer that question. The reason he couldn't answer the question, your Honor, 17 is because he did not analyze that issue. 18 analysis is based on the assumption that the MetaData update, 19 what he claims is a MetaData update, doesn't happen when the 20 user moves. 21 His infringement It's when the user takes other affirmative action. On paragraph 93 of his report, he says the MetaData of 22 the user is automatically updated in response to the user 23 posting the storage on the friend's wall. 24 claim language of dynamically but not in the context of user 25 moving, but in the context of the user taking affirmative steps So he's using the 31 1 on the second context to effectuate what he claims is the 2 MetaData change. 3 With respect to the claim construction issue, your 4 Honor. The way it came about was a lot of terms were proposed 5 for construction. 6 number of terms down to a select few. 7 asked to be construed was the word dynamically, precisely 8 because we didn't believe that they could show the Facebook 9 website dynamically updated the MetaData under the construction 10 we proposed. 11 Judge Farnan told the parties to limit the One of the terms that we adopted. 12 That was the construction that Judge Farnan After that construction of our non-infringement 13 argument, the position that we somehow withdrew our claim 14 construction position or that we're estopped from arguing it, I 15 don't think there's any basis for that. 16 Thank you, your Honor. 17 MS. KEEFE: 18 I have a few comments both on numbers one and two. 19 With respect to the IPXL motion, we're actually not Thank you, your Honor. 20 relying on Dr. Kearns at all. 21 issue of claim construction for your Honor. 22 Again, we think this is a pure And the argument here is not that there needs to be a 23 separated definition what it means to access. It is the fact 24 that accesses is a verb in an active sense that must be 25 performed by the user as opposed to the functional language, can 32 1 be accessed or accessible. 2 has to come up here. 3 That's the claim construction that If your Honor finds that the word accesses is in fact 4 an active verb requiring action by the user, then IPXL will 5 demonstrate that this is a hybrid claim. 6 There was no expertise needed. No experts needed. 7 It's a pure issue of claim construction law. 8 of the words used. 9 Based on the sense And if your Honor has any doubt as to how those words 10 should be construed, the remaining claims in the patent 11 demonstrate that they actually did know how to use functional 12 language. 13 opposed to the active sense of employed and access. 14 where IPXL problem comes in. 15 For example, can be accessed, can be employed as That's In terms of the Yodlee case, I do absolutely agree that 16 in Yodlee that was a functional language. 17 is that in Yodlee they talked about things happening upon 18 opening, not where the user opens the blade. 19 case they used a form which is functional, not the active form 20 of the verb. 21 they did in IPXL and in GPA Patent Holdings vs. Panther, there 22 would be a problem of indefiniteness. 23 The distinction there Again, the Yodlee Had they used the active form of the verb like With respect to the Muni Auction issue of direction or 24 control, the Muni Auction case, I think is perhaps the single 25 most informative thing I can point your Honor to. 33 1 In Muni Auction itself, the court found in a Motion for 2 Summary Judgment that control -- that by simply controlling 3 access to a system and instructing the bidders, in that case, 4 that was an online bidding site. 5 giving access to the system and telling people how to use it, 6 there was not sufficient direction or control to incur liability 7 for direct infringement. 8 court to decide up much in the same way the court looks to the 9 term of a contract and defines them as a matter of law. 10 Not unlike e-bay by simply In fact that was up to the to the You can find whether or not the terms of use, terms of 11 service here make sufficient direction or control. 12 We think they absolutely do not. 13 I think, your Honor, unless your Honor has any other 14 questions. 15 THE COURT: Okay. 16 Let me tell you where we are on Summary Judgment. I'm 17 not prepared to rule on the merits right now on the remaining 18 Summary Judgment Motions. 19 What I will do in time is either deny the motions. If 20 I'm not ready to deny the motion, I will be asking for the 21 completion of the full briefing on them. 22 we're going to have the trial on July 19th. 23 know yet what the timing will be on the further briefing and on 24 Summary Judgment if I do find I need it. 25 further on Summary Judgment. But in any event, And I just don't You'll hear from me 34 1 What I want to next do is turn to the proposed pretrial 2 order and talk about some of the issues there as we look forward 3 to trial. 4 As previously announced, there is going to be 5 separation of issues, and specifically, as you all know, I have 6 separated out from the trial that will is begin Leader's claim 7 of willful infringement, Leader's claim for damages and 8 injunctive relief and Facebook's counterclaim and defense of 9 inequitable conduct. 10 The first matter that I want to discuss with you is the 11 length of the trial. I'm going to give each side a certain 12 number of hours over a certain number of days. 13 the separation of issues and the other rulings that you've 14 gotten I'm definitely interested in the parties views at this 15 point as to how long they anticipate needing? 16 from Mr. Andre. And in light of We'll hear first 17 MR. ANDRE: Thank you, your Honor. 18 Ms. Keefe and I have actually been conferring on this. 19 We're pretty much in line. 20 were in the case that it would be a seven day trial, something 21 along that line. 22 about six days. 23 We were thinking when the damages We now both agree that we can both do it in If you look at the five hours average court day, maybe 24 15 hours each, something along those lines. 25 pretty close to agreement. I think we're I don't know what your Honor is 35 1 thinking. 2 THE COURT: That's pretty much what I was thinking. 3 Let me hear from Ms. Keefe. 4 MS. KEEFE: I don't think -- we are talking about. 5 Trying to come up with something both useful for your Honor and 6 for the jury. 7 8 THE COURT: All right. You can have a seat. You'll get a chance to talk and stand up again shortly. 9 In light of the separation of issues and the factual 10 legal disputes that will be tried, the claims at issue, the 11 accused product that's in dispute, having reviewed the witness 12 and exhibit lists and having heard from counsel as well having 13 some familiarity with the practice in this court with timed 14 trials and length of trials, I do find that it will be most 15 appropriate to have a times trial. 16 six days. 17 Probably all of you know the way we keep track of time. 18 Essentially, if you're on your feet, that time is being charged 19 to your side. 20 We're going to limit it to Each side will be given 15 hours to present its case. We'll begin on Monday July 19th at 9:30. We'll start 21 subsequent trial days at 9:00 o'clock. 22 from 9 a.m. to 1:00 p.m. on those subsequent days and break an 23 hour for lunch and then go from 2:00 to 4:30. 24 minute break in the morning and in the afternoon. 25 The plan will be to go A single 15 We will be meeting down here in court room 2A for the 36 1 trial. 2 Other issues on the pretrial order. 3 MS. KEEFE: With respect to time. Does your Honor have 4 a desire to separate out limits for opening statement and 5 closing arguments, or just leave it as a single bucket to be 6 used by the parties? 7 THE COURT: Single bucket of 15 hours. 8 the 15 hours, you'll be done. Okay. 9 All right. If you get to Looking at the pretrial order. 10 page three, Roman Numeral III topic. 11 First, at that are admitted which will require no proof. 12 13 There's a handful of facts What do the parties intend to do to make those facts known to the jury? 14 Mr. Andre? 15 MR. ANDRE: Your Honor, I believe we were intending on 16 having those in the jury instructions. 17 stipulate to these facts. 18 The parties will either party in the case. They don't have to be proved by 19 THE COURT: Ms. Keefe, is that correct? 20 MS. KEEFE: It is, your Honor. The only reason I'm 21 hesitating at all, I'm looking at them to see if they have these 22 facts that are no longer relevant. 23 THE COURT: As long as they are going to be in the jury 24 instructions, you'll all be resubmitting the jury instructions. 25 You can take care of that issue. 37 1 Number IV, issues of fact and law to be litigated. Of 2 course, I looked at your proposed outlines in light of 3 separation of issues. 4 had been initially set out. 5 revised pretrial order. 6 the issues of fact and law to be tried should be delineated as 7 follows. 8 9 10 Certainly it's much narrower than what And I will be having you submit a In that Pretrial Order -- excuse me, Number one as listed on exhibit A1 number one as given by Leader. And then numbers two and five A2, which is Facebook's statement. 11 The equitable defenses including laches are not going 12 to be tried in front of the jury as part of this trial. 13 are deferred to a later trial or trials if necessary. 14 15 Next matter Roman Numeral V, I believe, objections to trial exhibits. 16 17 They Let me first ask. Has there been any further meet and confer with respect to this issue? 18 MS. KEEFE: There has been, your Honor. Again, we've 19 actually been talking about the fact that we both understand the 20 need to reduce the list. 21 were on the telephone conference last week, we've been intending 22 to swap new lists and meet and confer about that, trying to get 23 it down to something that we can talk with your Honor about on 24 July 16. 25 THE COURT: Given what your Honor said while we Mr. Andre, that's correct? 38 1 MR. ANDRE: That's correct, your Honor. 2 THE COURT: That's fine. And I appreciate that. My 3 only hesitation is I'm going to need to see the fruits of your 4 meet and confer in advance of the 16th so I can know how much 5 time we have to put into those issues on the 16th. 6 7 Give me an indication as to how far in advance of the 16th you think you could give me something? 8 MR. ANDRE: 9 week from tomorrow. 10 A week in advance of the 16th. MS. KEEFE: That's a I was debating given how many other things 11 that we have to talk about with each other and continuing 12 depositions. 13 we have until Monday? 14 Could we have at least over that weekend? THE COURT: Could Monday of that week, I think it's the 12th. 15 Okay, that's fine. 16 to objections with respect to the trial exhibits on Monday, July 17 12th, I'm pretty sure is what it is. 18 19 20 We'll look for your submissions with respect A few things about exhibits just to understand how the trial will proceed. All exhibits must come in through a witness. At the 21 end of each trial day counsel will meet with the courtroom 22 deputy to make sure everybody is in agreement as to what 23 exhibits have been moved into evidence on that particular day. 24 We'll do that again at the end of trial. 25 there's an oversight, I will allow the court record to be If it turns out 39 1 reopened. 2 We're not trying to trick anybody into failing 3 inadvertently moving something into evidence. 4 Next demonstrative exhibits. 5 I don't as I indicated on the phone, I don't want to 6 leave those issues up in the air until the last minute. 7 sure whether there is going to be disagreement on that. 8 Where do we stand on that? 9 MR. ANDRE: I'm not We haven't talk about demonstratives yet, 10 just mostly because we haven't prepared them. 11 todays pretrial conference before preparing those. 12 We're waiting for I don't know when they would be ready for counsel to 13 exchange them and talk about objections. 14 could do on the 16th, or if we wait until the actual trial 15 begins? 16 17 18 THE COURT: If that's something we Let's see if you can address that in your submission on the 12th. At a minimum, indicate where you are with respect to 19 demonstratives on the 12th. My hope is you may have started 20 preparing some and anticipating those issues. 21 MS. KEEFE: We'll certainly work with each other. 22 THE COURT: On witnesses, there are some objections 23 that are noted on the witness list which I do want to discuss 24 with you all if they are still live issues. 25 Let me first ask, has there been a narrowing with 40 1 respect to those issues? 2 MS. KEEFE: Again, we've been meeting and conferring. 3 We were just talking this morning about the possibility of 4 narrowing those lists to each other by Wednesday of next week 5 which could help resolve some issues, I think. 6 the time that would help everybody take another look. I think given 7 THE COURT: Sure. 8 MR. ANDRE: This is a bigger issue for us, obviously, 9 because of the fact they have added so many witnesses on their 10 list that we have not deposed that were not listed in their 11 initial disclosures. 12 from some company. This is something because we have to do 13 trial preparation. We would like this issue resolved as soon as 14 possible. 15 THE COURT: Some of the witnesses are a representative Let me ask you, there is a reference to a 16 stipulation which seems to be the basis for a large number of 17 your objections, as I understand it. 18 doesn't exist. 19 It says that stipulation Help me understand where it exists. MR. ANDRE: Many of those individuals -- the fact 20 witnesses are listed there were subpoenaed by Facebook for 21 deposition and they withdrew those subpoenas. 22 When we talked to them we had an e-mail exchange. We 23 told them if you are going to take them off your deposition list 24 we don't want to see them at trial. 25 agreement on that issue. We thought we had an 41 1 2 3 Now, these people reappeared on the witness list even though they had withdrawn them from their deposition subpoenas. Part of a bigger issue, to be honest, your Honor, is 4 the fact without any warning the authors of the prior art showed 5 up on the witness list. 6 Now that's a nice way of trying to get an expert on 7 the stand. They were not disclosed to us as a witness at any 8 time prior to getting the witness list. 9 282, we were suppose to get a disclosure of their invalidity In fact, under 35 USC 10 contentions which we never got, a 282 disclosure. 11 clearly fall within those witnesses for sure. 12 That would I think they are trying to bring in expert witnesses 13 under the guise of fact witnesses. We think that would be -- 14 one of the biggest issues for the witnesses at this point. 15 THE COURT: Let's hear from Ms. Keefe on these issues. 16 You can come forward to the podium. 17 MS. KEEFE: 18 I think if we just wait and talk to each other, given Actually, I don't think it will. 19 the length of the trial this probably won't be an issue. 20 make all the arguments why everything we disclose was disclosed. 21 I'm not sure it's even going to be necessary. 22 I can If your Honor would allow us to do exactly what we 23 asked and what we talked about, I don't think this is going to 24 be an issue. 25 THE COURT: Okay. You reasonably believe you can 42 1 resolve this by July 12th? 2 MS. KEEFE: Absolutely. 3 THE COURT: Mr. Andre, I can give you all the chance to 5 MR. ANDRE: I hope that's the case, your Honor. 6 THE COURT: I hope so, too. 7 Okay. 4 8 do that. When we do get to trial, the examination of witnesses will be limited to direct, cross and redirect. 9 Where do the parties stand on how far in advance that 10 you are going as to disclose your order of witnesses to one 11 another? 12 Do you need more time to confer on that? 13 MS. KEEFE: I'm not sure that we actually talked about 14 order, instead we talked about the names of the witnesses 15 themselves. 16 no problem with that. 17 If you wish we can do it at the same time. I have And I also assume once a witness was put on you 18 would -- they would be up for all purposes? For example, if Mr. 19 McKibbin was put in direct in their case, I would just use him 20 right then and there and put on my defense right then and there 21 instead of calling him back again, back later. 22 THE COURT: Mr. Andre? 23 MR. ANDRE: I would object to that. 24 be here for the entire trial. 25 If they want to call him up in their case, they can certainly do Mr. McKibbin will He will be our representative. 43 1 that. 2 defense in the midst of it. 3 THE COURT: Ms. Keefe? 4 MS. KEEFE: I just think it is far more efficient and 5 6 I don't want to confuse the issue of our case with their That's prejudicial to our client. far more logical for all of the issues to come up at once. If the witness is on the stand especially vis-a-vis 7 some of my witnesses if they have to travel, the notion of 8 putting them up once and getting all the issues resolved and 9 having them sit down. 10 11 12 13 That works better for everybody since many of the issues very much overlap. THE COURT: Do you anticipate this to be an issue other than with Mr. McKibbin? MS. KEEFE: I don't know because I haven't seen their 14 list of our witnesses yet. 15 case, but I may want to bring them up in mine. 16 17 18 THE COURT: They may not bring them in their Mr. Andre, might this issue for someone other than Mr. McKibbin? MR. ANDRE: I can't imagine it would be. If they want 19 to bring Leader witnesses -- usually, you do this for the 20 convenience of witnesses who are out of town. 21 For our witnesses it's not an inconvenience if they 22 want their witnesses to be put up for all purposes, we'll 23 stipulate to that. 24 their case. 25 In our case, we don't want them putting on That would be prejudicial to us. THE COURT: I'm not going to require Mr. McKibbin or 44 1 the Leader witnesses to be put up only once for all purposes. 2 But if Facebook wishes to do that with their witnesses, then I 3 understand there's an agreement that you will be permitted to do 4 that. 5 MS. KEEFE: I do only have one scheduling issue with 6 respect to witnesses and we can definitely deal with this now. 7 I would raise it now anyway. 8 9 When the trial got moved, Dr. Kearns had a prior commitment on the evening of the 21st and 22nd where he has to 10 be in Washington, D.C. 11 before that and after that. 12 place. 13 He's not available. He is available I'm sure we can try to find him a It may be that it ends up being out of order. THE COURT: I'm going to leave the it to you all to 14 confer, to see if you can fit him in to an anticipated points 15 that makes sense. 16 issue with me. 17 18 19 If you can't, then you'll have to raise that The witnesses will be sequestered unless the parties otherwise agree. I've already told you with respect to the scope of 20 expert testimony, if you believe an expert is going beyond the 21 scope of what was in their expert reports, note your objection 22 and we'll deal with it post-trial with the appropriate sanctions 23 that I talked about previously. 24 25 Let's talk about deposition designations and the objections. I assume there's going to be a great deal of 45 1 narrowing there as well? 2 Mr. Andre? 3 MR. ANDRE: I believe that's correct, your Honor. 4 Based on the court's ruling on Friday, there will be a 5 considerable narrowing. 6 you at the same time that we have our exhibit list. We can work those out and have those to 7 THE COURT: Ms. Keefe? 8 MS. KEEFE: Agreed. 9 THE COURT: The process I want to follow with any 10 remaining objections to deposition designations is that -- what 11 you'll need to do is put together a package for us, all the 12 deposition testimony that either side is designating or 13 counter-designating. 14 Where there are objections, the proponent of the 15 testimony should just mark right on there with a highlighter say 16 yellow, exactly what the proffered testimony is. 17 objecting party can write up to one sentence in the margin what 18 the basis for the objection is and write a one sentence response 19 right there in the margin. 20 counter-designation and objections. 21 And the Use a different color where it is We'll take a full packet. If you can get it to us by 22 the 12th, great. As long as I have it by the start of the 23 second pretrial conference, that will be fine. 24 to tell me at least 48 hours in advance when you intend to use 25 that deposition testimony for that particular witness and we'll Then you'll need 46 1 get you our rulings on the objections 24 hours a head of time so 2 you'll know what deposition testimony you can use. 3 Mr. Andre? 4 MR. ANDRE: Your honor, with respect to the 5 sequestering of witnesses, are you going to permit the parties 6 to have one witness here throughout the trial? 7 THE COURT: At the table, you mean? 8 MR. ANDRE: At the table, usually one witness is 9 designated to see the trial. 10 THE COURT: 11 Any objection to that? 12 MS. KEEFE: 13 If Mr. McKibbin is going to be up and down and up down Obviously, Leader's witnesses. That was my intent. Absolutely. 14 and up and down again, then I think he would have to be 15 sequestered. 16 up and let us do everything then he can sit there the whole 17 time. 18 19 If, on the other hand, they are willing to put him We have no problem with that. MR. ANDRE: We're not willing to have him up once. We do intend to use him in our rebuttal case. 20 THE COURT: Do you have anybody else? 21 MR. ANDRE: He would be the only person that we would 22 have at the table. 23 and founder. 24 representing Leader. 25 He's the inventor and the CEO of the company He's the person that should be the person THE COURT: The objection to that is based? 47 1 MS. KEEFE: He's the main witness for their entire 2 case. If he's being put up for a very small purpose and listen 3 to everything everybody else says and then he's put again for 4 another small purpose and then listens to everything everybody 5 else says, it's unfair and prejudicial. 6 reasons why we asked that once a witness goes up, their 7 testimony goes through, then they can sit back in the courtroom 8 the rest of the time if they like. 9 That's one of the If they would like Mr. McKibbin to be able to sit 10 through the trial which I completely understand why they would 11 want to do that, then they simply need to put Mr. McKibbin up 12 once for all purposes and then he can sit in the courtroom the 13 rest of the time. 14 No problem. THE COURT: Mr. Andre, I agree. You're going to have 15 to make a choice either have him testify all at once or have him 16 sit there for the whole trial, otherwise that seat can be taken 17 from someone in the company or be empty. 18 MR. ANDRE: 19 I understand that is for the sequestration of fact 20 witnesses. 21 Thank you, your Honor. experts? 22 Are experts allowed to attend the testimony of other THE COURT: My ruling is that all witnesses are 23 sequestered unless the parties agree otherwise. If you can 24 agree if you want to limit it to experts or fact witnesses, you 25 can do that by agreement. 48 1 Let me move on to some other matters. 2 If it's necessary to state any objections during the 3 trial, I want you to keep -- I don't want speaking objections. 4 Just state the rule in a sentence or less for the basis of your 5 objection. 6 from you. 7 8 I'll call you to sidebar if I need to hear further Transition statements are fine and, in fact, encouraged to help the jury understand where we are in the case. 9 With respect to exhibits, I guess given the technology 10 at stake, we're not going to be using a lot of paper documents 11 and books. 12 13 What do you envision with respect to how you actually display exhibits? 14 MR. ANDRE: We would prefer to actually hand out jury 15 books for each juror of the paper exhibits that we intend to use 16 to the extent that we will project them up. 17 something electronic in nature and not paper, we'll do so like 18 that. 19 20 If they are They won't have every exhibit in their book, obviously, but a great many. That's what we would be intent on doing. 21 THE COURT: Ms. Keefe? 22 MS. KEEFE: That sounds reasonable to me. I know 23 absolutely there will be paper exhibits, more than you think in 24 a case like this. 25 They will be viewed on monitors as well as the larger screen. However, they will definitely be projected. I 49 1 agree that it would be nice to have them in a jury book. 2 work together on that. 3 4 5 6 THE COURT: I trust that you can work together. We can I didn't mean to be derogatory to the old fashioned paper world. MS. KEEFE: I think you would be surprised how many there still are. 7 THE COURT: 8 How are we going to deal with confidential information 9 10 11 I'm already surprised. including the source code and when the court is going to be open or closed? I have an obligation I think to keep the court open 12 absolutely as much possible. 13 exceptions. 14 MS. KEEFE: I know there maybe some We started discussing this among ourselves, 15 and at least when the source code itself is being displayed, 16 we're in agreement that the courtroom will be closed when the 17 source code is being displayed. 18 everything else. We can work out almost 19 THE COURT: Okay. 20 What would you envision to be a mechanism to let me and 21 those in the courtroom that need to know, okay, source code is 22 coming or that is the source code? 23 people who aren't permitted to be in the courtroom. 24 25 MS. KEEFE: We need to usher out certain My guess is that it will only come in through two witnesses. When those two witnesses are called, 50 1 we'll be able to tell your Honor far enough in advance, like 2 such today is Dr. Vigna. 3 code, displaying it. 4 Dr. Vigna will be using the source During his testimony we would like the courtroom to be 5 closed. We can get you a list of other people who can't stay in 6 the courtroom. We can work on that together. 7 THE COURT: Mr. Andre? 8 MR. ANDRE: We obviously agree. 9 We tried a case here last year and a half ago in front of Judge Sleet. That's how we 10 handled it when we got to the source code. 11 witness, I announced to Judge Sleet that we would be presenting 12 source code and we should clear the courtroom. 13 the presence of the jury. 14 courtroom. 15 record and unseal the courtroom at that time. No problem. I was presenting a We did that in They walked out of the When we finished it, we let Judge Sleet unseal the 16 THE COURT: Okay. 17 MR. ANDRE: It will be the attorneys responsibility to 18 19 20 21 let your Honor know that we are presenting source code. THE COURT: Fine. We'll make it the presenting parties, their responsibility. I do want to make sure that at least some portion of 22 every witness' testimony is open. 23 perhaps Dr. Vigna, for example. 24 least see who he is and answer some questions. 25 MS. KEEFE: It maybe very little for The public is entitled to at His background and things like that. Once 51 1 you start talking about the functionality of the code and the 2 code itself rather than trying to parse which one is functional 3 and which one is code. 4 THE COURT: Right. 5 You should be striving to segregate the public part 6 from the non-public part probably. 7 to do first. 8 9 10 I'll leave it to you which It seems to me obvious. MR. ANDRE: Your honor, we do have an issue with the source code that I would like to bring up today. I don't know if this is a good time. 11 THE COURT: Now is as good a time as any. 12 MR. ANDRE: We asked for the source code that Dr. Vigna 13 examined to be brought to court on the same computer that he 14 examined it on obviously in the same manner that it was kept in. 15 We spent hundreds of hours examining the code as it exists, that 16 is, that stand alone laptop computer. 17 Facebook's counsel is that they don't want to bring that code to 18 the courtroom. 19 with the code to some degree which would make Dr. Vigna -- all 20 of his previous work pretty much starting from square one again. 21 My understanding from They want to bring certain modules, monkeying We're going to bring this up maybe on 16th and earlier 22 that we would like to have the source code on the laptop 23 computer as Dr. Vigna examined it and about a based his report 24 on to be used at trial. 25 THE COURT: Let me hear from Ms. Keefe. 52 1 MS. KEEFE: Your Honor, the problem with that is we're 2 absolutely fine with having the code as it was displayed to them 3 brought to Delaware so it can be in the courtroom on the stand 4 stand alone computer. 5 However, what we've been asking is that they tell us 6 which portions of the code that they are actually going to put 7 in evidence and use. 8 9 There are numerous portions of the code that are completely irrelevant to this case. 10 What we're simply asking is that they like any other 11 swath of exhibits tell us which part. 12 parts. 13 There are many irrelevant We don't want them used in the case and put in evidence. THE COURT: They will be on a stand alone computer but 14 just won't be moved into evidence is what you're suggesting, I 15 feel? 16 MS. KEEFE: Correct. 17 THE COURT: Mr. Andre, does that address your concern? 18 MR. ANDRE: It does, your Honor. 19 THE COURT: Sorry to bring it up. 20 We could have resolved that easily. 21 As long as we have the code in the stand alone computer 22 Dr. Vigna can rely upon the code that he cited in his expert 23 report. 24 25 That's all we want. MS. KEEFE: As long as they don't start putting other pieces of the code that has never been in anybody's report 53 1 before, that's fine with us. 2 THE COURT: 3 If they do, we have a mechanism for dealing with that. 4 MS. KEEFE: Thank you, your Honor. 5 THE COURT: Let's talk a little bit about jury 6 selection. 7 For example, we're going to use what they call the 8 struck juror method which is how Judge Farnan has selected 9 jurors. Hopefully, Delaware counsel can explain it to you if 10 you are not already aware. 11 eight. 12 through the strikes for cause. 13 five preemptories. 14 I intend to end up with a jury of I plan to have 18 jurors potential jurors after we get That will leave each side with I reviewed the proposed voir dire. 15 are largely in agreement. 16 It seems to me you a result of what you've given me. 17 I'll be able to prepare voir dire as One issue I do need a little help on is whether or not 18 you envision that I instruct jurors not to use Facebook during 19 the course of the trial. 20 Mr. Andre, do you have a view on that? 21 MR. ANDRE: 22 The Facebook phenomenon is obviously taken over the I do, your Honor. 23 world to some degree. I know there are some individuals that 24 view their daily use of Facebook as essential as eating and 25 breathing. We obviously have an issue with those jurors on the 54 1 jury panel for cause when that comes. 2 doesn't think it's part of their daily life that they would 3 need, we would like an instruction that they not be on Facebook 4 and testing out the infringement or validity theories or 5 whatever it is. 6 To the casual user who That would preclude, I guess, some individuals who 7 don't think they can deal with Facebook for more three hours at 8 a time. 9 MS. KEEFE: For two weeks. 10 THE COURT: Certainly, we'll be exploring in the voir 11 dire and for the cause inquiries those -- what peoples' views 12 are of Facebook if it's as important as food. 13 I think we still are going to be left with an issue of 14 basically is part of the general instruction not to investigate 15 the case, you must refrain from using getting on Facebook for 16 the length of trial. 17 Ms. Keefe? 18 MS. KEEFE: Even though I haven't had a chance to 19 confer with my client about it, obviously he's never going to 20 want me to tell people not to use Facebook. 21 My personal impression is that the limiting instruction 22 typically not doing your own research, conducting your own 23 research would mandate that they not use Facebook because who 24 knows what they will think by virtue of testing it out and using 25 it. 55 1 I'm not sure I can give you a definitive answer right 2 now. 3 that it would be better for all of us if they did not use it 4 during trial. 5 I apologize for that. THE COURT: By the same token my inclination is That is my inclination as well. I'll leave 6 it to the parties to -- if it turns out that you have a 7 strenuous objection to that, you'll have to raise it. 8 intent to instruct the jurors just to refrain. 9 to be six days at this point. 10 It's my It's only going Hopefully, they can get by without Facebook for that long. 11 On the preliminary jury instructions. We'll play the 12 video. Both parties are requesting that we play the video on 13 the patent system. 14 to the burden of proof on invalidity. 15 whether it is clear and convincing or preponderance. It appeared there was a dispute with respect There was bracketing 16 Does Facebook have an argument on that point? 17 MS. KEEFE: This is an area of law that is currently I 18 think in a state of flux. This is actually an issue that has 19 risen all the way up to the Supreme Court then the case settled 20 before the Supreme Court actually decided the issue. 21 There have been a number of cases. And Mr. Weinstein 22 who is far smarter in case names -- I'm sure he can give them to 23 your Honor if your Honor is interested. 24 25 There are a number of cases where the burden regarding prior art that was never disclosed or never considered by the 56 1 patent office should actually be left. 2 The presumption of validity presumes you get a 3 presumption of validity based on the fact that the patent office 4 has done its job. 5 patent comes out and as a result you get a higher degree of yes, 6 this is a good patent. 7 validity over those references. It considered a number of references, the In other words, a presumption of 8 What we're saying is that burden, and that the 9 presumption should be lower viz-a-viz references that were never 10 placed in front of the Patent Office in the first instance. 11 That's really what the law change seems to be all 12 about. 13 in the Deepfor vs Microsoft case. 14 appeal as to whether or not there was a lower burden regarding 15 references that had never been disclosed to the Patent Office 16 and therefore had never been considered, specifically granted 17 cert on that issue. 18 have it resolved for us. 19 There was actually a jury instruction that was rejected That issue was certified for Unfortunately, the case settled. We don't We know this is an issue of first instance for your 20 Honor and perhaps for the Delaware Court. 21 important issue. We think it's an This is a great case to take it up in. 22 THE COURT: 23 Mr. Andre, do you think this is a great case to take it 24 25 Thank you. up in? MR. ANDRE: Your Honor, I'm going to let Ms. Kobialka 57 1 address it. 2 MS. KOBIALKA: Thank you, your Honor. 3 Aside from the hundreds of years of juris prudence, the 4 standard that is set forth is clear and convincing evidence. 5 The Federal Circuit just as recently in the I4I case said the 6 standard of proof here is clear and convincing evidence. 7 not to be a lower standard for references that may not have been 8 before the patent office. Its 9 That deals with some of the issues that we had raised. 10 They are attempting to make this argument that this information 11 wasn't before the Patent Office and our expert has said that the 12 Patent Office has looked at this type of information, 13 cumulative. 14 before. It is the type of things that they have seen 15 You can't have it both ways. The law is pretty clear. It's clear and convincing 16 evidence. It's something that you know we can try to suggest 17 change but you have the statute that says presumption of 18 validity which also appropriate for a patent issue. 19 THE COURT: Thank you. 20 I've heard enough, Ms. Keefe. I'm going to instruct 21 the jury that your burden on invalidity is clear and convincing. 22 I understand the argument the law maybe moving in that 23 direction. 24 25 I think your objection is now on the record to my instruction and we'll see what happens. 58 1 MS. KEEFE: Thank you. 2 THE COURT: You're welcome. 3 I do want to have revised preliminary jury instructions 4 in light of everything that I ruled on. 5 If you can get those to me on the 12th that will be 6 helpful. 7 they are any remaining issues on the 16th. 8 9 I will then have a chance to review them and see if In terms of the final jury instructions. At the close of the evidence I do want you to give me a revision on those as 10 well. I can take that. Have them into me by the 14th so I can 11 take a look at it. 12 you my rulings on whatever objections remain until we get into 13 the trial. 14 you are before we have the pretrial conference. I may not. I'm not promising that I'll give At least I would like to have a chance to see where 15 Do you have a question about that? 16 MS. KEEFE: Not about that. 17 THE COURT: Just so you know, it's up to you to decide 18 19 I have another question. how to perfect the record for appeal. In my view all proposed jury instructions that you put 20 in -- that you may put in as we go forth are part of the record. 21 I view them as exceptions to whatever my final instructions turn 22 out to be. 23 24 25 I believe the last thing that I had on my list is that I do need a revised Pretrial Order. I would like to have that by the 14th as well so I can 59 1 take a look at that before we meet on the 16th. 2 3 Ms. Keefe, is there anything else would you like now to raise now? 4 5 MS. KEEFE: When Ms. Kobialka made her argument, it's on a different point. 6 I understood your Honor's ruling regarding the expert 7 testimony on cumulativeness to go to the issue of materiality 8 and therefore was not in this case any further, and so there 9 would be no evidence regarding the cumulative nature of the 10 prior art before the Patent Office? 11 THE COURT: Mr. Andre, do you want to address that? 12 MR. ANDRE: That was a separate portion of their motion 13 regarding Dr. 14 Herbsleb. You've denied that aspect of it. With respect to materiality, that was with respect to 15 just the four references, whether material or not, an 16 inequitable conduct claim they were attempting to bring at the 17 time. 18 19 20 So you have two different things. Your Honor has based on your previous ruling denied that aspect. I have their Daubert motion, I believe it was. THE COURT: I'm going to have leave it to counsel to 21 confer on this. 22 still need to address with respect to it, put it in the 23 submission on the 12th that's coming. 24 an answer to that question right now. 25 If there remains a dispute that you think I MS. KEEFE: I appreciate it. I simply can't give you Thank you, your Honor. 60 1 THE COURT: Anything further Ms. Keefe? 2 MS. KEEFE: Not that I can think of right now. 3 THE COURT: Mr. Andre? 4 MR. ANDRE: Just a couple of housekeeping matters. 5 Last Friday you had ordered Leader to produce some privileged 6 logs of Mr. Zax (phonetic) documents. 7 closed. They were on vacation, small office. Mr. Zax's office was 8 Monday there was a death in the family. 9 We were able to -- he wouldn't ship the box to us that 10 though we thought he would. We gave him a shipping labels to 11 ship them to us, he didn't. We had a copy service pick them up 12 and scan them onto a disk and we got them today, this afternoon 13 by FedEx overnight delivery. 14 we could have until Wednesday of next week to get the privileged 15 logs done. 16 with electronic data. 17 did order us. 18 19 We talked to counsel. We hope to get it done by then. There's a problem Hopefully, it will be fine. Your Honor And I wanted to put that on the record. THE COURT: circumstances. They said I appreciate the update and the It sounds like you're doing the best you can. 20 MR. ANDRE: A couple of questions we had. 21 You had mentioned injunction would be out of the case. 22 We also obviously -- there should be no mention of a possibility 23 of an injunction through this case since injunction is not in 24 play, is that correct? 25 THE COURT: Correct. There should be no reference to 61 1 what might happen after this trial. 2 MR. ANDRE: This may not be decided ye, but is there 3 any indication as to -- and the reason we're doing this, we're 4 representing a small company that we have to plan for. 5 When the second phase of the trial goes forward, is 6 there a indication it's going to happen immediately or is there 7 going to be some time out from the first trial for planning 8 purposes? 9 THE COURT: Have you conferred with Ms. Keefe on it? 10 MR. ANDRE: We have not conferred yet. 11 THE COURT: I'm going to have you confer on that, if 12 you can, if not -- you can and will update me as to status and 13 your views on that on the 12th. 14 by the l5th, but I'm not promising you that you will have an 15 answer by the l5th. 16 THE COURT: Is there anything else, Ms. Keefe? 17 MS. KEEFE: I'm told one last thing. 18 Your honor, at the current stage there are eleven We'll try to have a draft on it 19 claims still at issue in this case, four independent with a 20 series of dependent claims. 21 Judgment Motions could limit the number of claims. 22 that is too many for a trial as short as we're proposing at this 23 point. 24 25 Obviously, some of the Summary We think The claims are very much overlapping and we would actually request that your Honor limit the scope of the trial to 62 1 one independent with the attendant and dependent claims perhaps 2 two, to workable for jury. 3 THE COURT: Mr. Andre? 4 MR. ANDRE: Your Honor, I think we have 15 hours. 5 We can get those 11 claims in very easily. 6 As I mentioned previously, a year and a half ago we 7 tried a case in front of Judge Sleet. 8 did it in 7 days. 9 There were 43 claims. We This is not burdensome. The fact that these claims are very different in 10 nature. 11 component on the back end on the servers, claims relate to 12 machinery medium. 13 sets of claims. 14 time. 15 Some are apparatus claims. Some are in regard to the There are method claims as well. Three large There's no reason to limit the numbers at this THE COURT: I'm going to deny the request. The time 16 limits will take care of hopefully anybody wasting any time. 17 the plaintiff wants to present its case with respect to the 18 If eleven claims, I'm going to leave that up to the plaintiff. 19 THE COURT: Anything else, Ms. Keefe? 20 MS. KEEFE: Not that I can think of. 21 THE COURT: Mr. Andre? 22 MR. ANDRE: Nothing. 23 THE COURT: We'll look for submissions that we talked 24 25 about. We'll see you on the 16th. Thank you all very much. 63 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 (At this time, court concluded.)

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