Motorola Mobility, Inc. v. Apple, Inc.

Filing 323

MOTION to Amend/Correct the Procedural Schedule by Apple, Inc.. Responses due by 5/4/2012 (Attachments: # 1 Affidavit Declaration of Mark G. Davis, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G, # 9 Supplement Notice of Filing Under Seal, # 10 Text of Proposed Order Proposed Order Granting Motion to Amend Procedural Schedule)(Pace, Christopher)

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EXHIBIT A 1 1 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA CASE NO. 10-23580-CV-SCOLA 2 3 MOTOROLA MOBILITY, INC., 4 5 Plaintiff, vs. Friday, March 9th, 2012 9:47 a.m. Miami, Florida 6 APPLE INC., 7 Defendant. -----------------------------APPLE INC., 8 9 Pages 1 - 41 Counterclaim Plaintiff, vs. 10 MOTOROLA MOBILITY, INC., 11 Counterclaim Defendant. 12 13 14 15 TRANSCRIPT OF TECHNOLOGY/LEGAL TUTORIALS BEFORE THE HONORABLE ROBERT N. SCOLA, JR. UNITED STATES DISTRICT JUDGE 16 17 18 19 APPEARANCES: For the Plaintiff: Charles K. Verhoeven, Esq. David A. Perlson, Esq. QUINN EMANUEL URQUHART & SULLIVAN, LLP 50 California Street, 22nd Floor San Francisco, CA 94111 20 21 22 23 24 Marshall M. Searcy, III, Esq. QUINN EMANUEL URQUHART & SULLIVAN, LLP 865 South Figueroa Street, 10th Floor Los Angeles, CA 90017 Edward M. Mullins, Esq. ASTIGARRAGE DAVIS MULLINS & GROSSMAN, P.A. 701 Brickell Avenue, 16th Floor Miami, FL 33131 25 STENOGRAPHICALLY REPORTED, COMPUTER-AIDED TRANSCRIPT 2 1 For the Defendant: 2 Matthew D. Powers, Esq. TENSEGRITY LAW GROUP LLP 201 Redwood Shores Parkway Redwood Shores, CA 94065 3 Robert T. Haslam, Esq. COVINGTON & BURLING LLP 333 Twin Dolphin Drive, Suite 700 Redwood Shores, CA 94065 4 5 6 Christine S. Haskett, Esq. COVINGTON & BURLING LLP One Front Street San Francisco, CA 94111 7 8 Jill J. Ho, Esq. WEIL, GOTSHAL & MANGES LLP 201 Redwood Shores Parkway Redwood Shores, CA 94065 9 10 11 Christopher R.J. Pace, Esq. WEIL, GOTSHAL & MANGES LLP 1395 Brickell Avenue, Suite 1200 Miami, FL 33131 12 13 Wendy Anna Herby, Esq. APPLE, INC. 1 Infinite Loop #36-3NYJ Cupertino, CA 95014 14 15 16 17 18 19 20 21 22 23 24 25 Reported By: Judith M. Wolff, CRR Official United States Court Reporter 400 N. Miami Avenue, Room 8N09 Miami, FL 33128 (305)523-5294 judy_wolff@flsd.uscourts.gov 3 1 (Court was called to order.) 2 3 THE COURT: seated. Good morning, everybody. I know we're early, but is everybody here? 4 MR. POWERS: 5 THE COURT: 6 Welcome, be We are, Your Honor. All right, so this is Motorola versus Apple. 7 Do you need their appearances, again, Judy? 8 MR. MULLINS: 9 THE COURT: 10 11 12 13 Edward Mullins of Astigarrage Davis -- No, we don't need them. That will save us 15 minutes right there. Okay. So we're -- well, first of all, have you resolved the issue relating to the emergency motion to compel? MR. POWERS: Not fully, Your Honor, the parties have 14 met and conferred. Our suggestion to the Court is that we 15 allow that process to continue over the next few days. 16 expect it to be productive. 17 will be able to withdraw the motion if the witnesses are made 18 available and that process is continuing, we think in a 19 productive way. 20 THE COURT: 21 MR. POWERS: 22 THE COURT: Okay. We Our hope, obviously, is that we So just hold off on that for now? Correct. Okay. All right. So the next one is 23 Motorola's motion to amend the procedural schedule to serve 24 supplemental invalidity contentions. 25 MR. POWERS: Before we begin that, Your Honor, one 4 1 quick housekeeping matter related to yesterday, if we could. 2 THE COURT: 3 MR. POWERS: Yes. We have a flash drive that has -- there 4 was numerous binders that were given to you yesterday that are 5 bulky, but useful obviously, in hard copy. 6 were presented were videos or animations. 7 drive that has all of the information presented to you 8 yesterday, including the animation and videos that don't 9 appear obviously, in the hard copy. Some of those that We have a flash Could we hand that up? 10 THE COURT: 11 Do you want the opportunity to do the same thing, 12 13 Sure. Mr. Verhoeven? MR. VERHOEVEN: We could do that as well, Your Honor, 14 I don't have it right here but we could deliver that to the 15 court, we'd also request a copy of whatever it is that 16 Mr. Powers has on that flash drive for our records as well. 17 MR. POWERS: 18 THE COURT: 19 MR. POWERS: 20 THE COURT: Of course. Okay. All right. So let me hear -- yes? Who do you wish to go first, Your Honor? Well, it's their motion so I assume 21 they're going to go first. 22 that I agree and don't need to say anything. 23 MR. POWERS: 24 THE COURT: 25 MR. SEARCY: Unless you're going to tell me In that case, they should go first. Okay. Good morning, Your Honor. Marshall 5 1 Searcy for Motorola, let me give you a roadmap of what I'll be 2 covering during my oral argument today. 3 First, I'll begin with the issue of prejudice. 4 Namely, the fact that there is a lack of prejudice. 5 prejudice to Apple if our motion is granted. 6 be extreme prejudice to Motorola and the process, the Court 7 and the jury, if Motorola isn't allowed to supplement its 8 references in this case, the prior art invalidity contention. 9 Next, I'll discuss efficiency. No And there will Amending the 10 procedural schedule is the most efficient way to deal with the 11 issues that are raised by these new prior art references. 12 Third, I'll get into Motorola's diligence. 13 Specifically I'll contrast Motorola's diligence in trying to 14 supplement its invalidity contentions with Apple's own claim, 15 carefully-worded statement about its lack of knowledge that it 16 didn't know anything about the references involved here. 17 18 19 And before I begin with that, though, there is a housekeeping issue that relates directly to this motion. Apple has dropped its '646 and '116 patents. Those 20 are the display space patents so we didn't hear a tutorial 21 about them yesterday and the issues that are raised in the 22 motion to amend the procedural schedule are now mooted about 23 that, those are the issues that related to plug and play and 24 the representations made at the prior tutorial. 25 moot in light of them dropping the patents. Those are now 6 1 So what we're down to now, Your Honor, are two sets 2 of references. One is the Neonode reference, the publication, 3 and the phone. And those are items that Mr. Verhoeven showed 4 you yesterday during the tutorial. 5 patent, that goes to set-top box issues. 6 owned by a company called Rovi. 7 And the other is the '185 And that's a patent So Your Honor, now turning to the issue of prejudice, 8 and we are talking about these two sets of references, Apple 9 isn't prejudiced by us supplementing our invalidity 10 contentions to include those two references. 11 A deposition of Neonode is currently, tentatively 12 scheduled for March 19. 13 ask questions about that reference. 14 seek the information that they claim to be looking for. 15 So Apple will have the opportunity to To get discovery. And to Apple subpoenaed the company Rovi on January 23, 16 2012. That was attached as Exhibit R to the reply in this 17 case. And in that subpoena, Apple specifically asks Rovi 18 about the '185 patent that we're seeking to supplement our 19 invalidity contentions with. 20 So they've had the opportunity and will have -- 21 THE COURT: 22 23 24 25 The subpoena or they actually spoke to them? MR. SEARCY: They've subpoenaed them. It's my understanding -THE COURT: They took a deposition or they -- I mean, 7 1 2 -MR. SEARCY: That they are currently in negotiations 3 for a deposition with Rovi. 4 THE COURT: 5 MR. SEARCY: 6 THE COURT: 8 MR. SEARCY: 10 That they have been meeting and conferring with counsel for Rovi on that. 7 9 Okay. Okay. And I believe that they are currently seeking to take a deposition of Rovi pursuant to that subpoena. 11 THE COURT: 12 MR. SEARCY: Okay. Okay. So Apple has had and will have 13 the opportunity to take discovery with regard to these 14 supplemental references. 15 discovery will be even more present now that the Court has 16 agreed to extend the discovery schedule and the parties have 17 agreed to that. 18 19 And that opportunity to take So they'll have the opportunity to get the discovery that they say they couldn't otherwise get on these references. 20 So they can't show prejudice. 21 On the other hand, as we saw yesterday during the 22 tutorial, these are very important references, very important 23 pieces of prior art that go to the validity of the patents 24 that Apple has raised here. 25 And certainly the video, the Neonode phone that we 8 1 showed you yesterday, that's something that a jury should be 2 allowed to see. 3 allowed to consider in determining the issues in this case. 4 So there will be a prejudice to Motorola, prejudice to the 5 jury and even to the Court in not being able to consider all 6 of the prior art that is critical to the patents that are 7 being considered in this case. 8 9 10 That's something that the Court should be On balance, the prejudice falls far in favor of Motorola. Motorola would be extremely prejudiced if the schedule is not amended. 11 Now I want to talk to you about efficiency, because 12 that's another reason why these references, the Neonode and 13 the '185 patent references that I've been describing, 14 shouldn't be excluded. 15 These references raises issues -- they raise issues 16 that will have to be tried. That will have to be considered 17 by a court. 18 litigation, should Apple decide to raise these same patents in 19 the second litigation that's currently before the Court. 20 It might be considered in a separate action for They might be considered in the second 21 declaratory relief that might be necessary if these references 22 are excluded. 23 important issues that relate to these patents have to be 24 decided. 25 But somehow, these prior art issues, these The most efficient place to decide that, Your Honor, 9 1 is here, in front of this Court, where these issues will be 2 tried to a jury, and where they can all be considered and 3 where they'll, as we've discussed, will have been complete 4 discovery on that. 5 6 7 So it makes sense to get rid of these issues, to resolve these issues now. Now turning to the issue of diligence. In their 8 opposition, Apple says two things. First they say that we 9 should have known about these Neonode references. Yet at the 10 same time they say, in very carefully worded statements, turn 11 to page 3, turn to page 4 of their opposition, they make 12 statements like, there was no evidence that Apple had been in 13 possession of Juels or Neonode prior to the June 20, 2011 14 deadline for invalidity contentions. 15 They say on page 4, Motorola points to no evidence 16 that anyone at Apple was aware of those references during the 17 relevant time frame. 18 THE COURT: What does that mean? They're not saying 19 nobody at Apple knew about it, they're saying you haven't 20 produced any evidence yet that anybody at Apple knew about it. 21 MR. SEARCY: It's very carefully worded, Your Honor. 22 And the reason why it's carefully worded is because it flies 23 in the face of a lot of things we know. 24 were in litigation with Samsung in the Dutch Court and that's 25 where the Neonode reference appeared and that's where the We know that they 10 1 Dutch court held that this Neonode reference may invalidate 2 the slide-to-unlock patent. 3 We know from discovery that was taken recently that 4 Apple submitted what's called an "information disclosure 5 statement." 6 slide-to-unlock patent application. 7 who is an attorney for Apple, included a reference to a 8 Neonode manual and included that, with that a citation to a 9 website, ebookspdf.com, gadget/2818/neonode N1m manual. 10 That was submitted in connection with the '849 And in it, Robert Beyer, So all of this is to show that if there's a -- sort 11 of harkening back to the point of prejudice, if there's 12 prejudice here, it's because Apple didn't produce something 13 that they knew or should have known about and that was, in 14 fact, requested for production. 15 But it also goes, Your Honor, to the issue of 16 Motorola's own prejudice. 17 taking Apple's statements in their brief at face value, that 18 there's no evidence that they knew about it. 19 indicate to the Court that they didn't know about it, it 20 certainly wouldn't be fair to expect that Motorola would 21 somehow know about it. 22 You know, even assuming, even Trying to And that goes to one of the issues, one of the points 23 that's raised in the Amerson case. When you're talking about 24 a search for prior art, Your Honor, you're talking about a 25 worldwide search, looking for prior art, the references to 11 1 patents that are brought up in patent litigation. 2 And certainly if you look to the disclosures that 3 were provided in this case, Your Honor, they're diligently 4 provided. 5 they're extensive, and in light of that with Apple saying they 6 don't know about this Neonode reference, they certainly can't 7 claim that we weren't diligent, considering our position, in 8 us not knowing about it. 9 They contain analysis, they contain claim charts, As to the issue of the '185 patent, that's the Rovi 10 patent that goes to set-top box issues, if you look to the 11 face of the Rovi patent, that patent actually was filed after 12 the three Apple interactive programming guide patents that are 13 at issue in this case. 14 patent, it's the set-top box that's actually an interactive 15 programming like that. And part, earlier I described the '185 16 So someone looking at that information, the face of 17 the patent, and we saw the -- how the face of patents looked 18 yesterday at the tutorial, with the filing date on it. 19 wouldn't know from the face of it that that was prior art. 20 You It's only afterwards when we actually dug into the 21 file history, that's all the documents that went back and 22 forth between the PTO, you know, a file about that thick, that 23 we found this declaration from the inventors claiming that 24 they had invented the inventions in the Rovi patent first. 25 And thus should have priority over these Apple patents. 12 1 So we were diligent in locating it. Diligent in 2 finding it and now we've brought it to the Court's attention 3 so that it can be tried in this case. 4 issues can be decided, as they should be on these patents. 5 So that all of the So in sum, Your Honor, there's no prejudice to Apple. 6 We've acted diligently. The most efficient way to deal with 7 this prior art, to deal with these issues is to deal with them 8 before this Court and have a full and fair hearing on these 9 issues in front of the jury. 10 THE COURT: And the only disruption, if any, would be 11 that one deposition is already scheduled for the 19th and the 12 other one is in the works and there's no other delays that 13 this would cause. 14 MR. SEARCY: That's correct, Your Honor, because the 15 subpoena, the other one that I referenced, that subpoena was 16 issued back in January. 17 THE COURT: 18 MR. SEARCY: 19 THE COURT: 20 So that is in the works. Okay. Thank you, Your Honor. All right. Who's going to make the preparation on behalf of Apple? 21 MR. POWERS: 22 THE COURT: 23 MR. POWERS: I will, Your Honor. All right. Mr. Powers. The starting place obviously, in any 24 motion, is to consider who has the burden of proof and what it 25 is. The burden of proof in this case, under all the case law 13 1 is clear. It is on Motorola. 2 establish diligence -- not generally, but specifically with 3 respect to the items that Motorola seeks to add. 4 So let's -- 5 THE COURT: And the initial burden is to Let me go back to the beginning, because 6 in their first motion in front of Judge Ungaro, they suggest 7 that when the validity contentions were first scheduled, that 8 there was an understanding that those were preliminary. 9 it seems -- they seem to, in the motion, that all the parties And 10 had kind of moved forward with that assumption until Judge 11 Ungaro said no, I didn't say that they were preliminary and 12 I'm not extending my deadline. 13 So were there any discussions between or among the 14 lawyers concerning whether these were preliminary or final 15 invalidity contentions? 16 MR. POWERS: I don't believe so, Your Honor. And I 17 think what Motorola said was a slightly different version of 18 what you said. 19 THE COURT: 20 MR. POWERS: Okay. I think what Motorola said was not that 21 the parties had an explicit understanding which they shared 22 with each other that they were preliminary, but that both 23 sides put caveats into their contentions saying the word 24 "preliminary" and saying we hope to have the right to amend 25 them. 14 1 THE COURT: 2 Okay. MR. POWERS: So, and that difference, I think is an 3 important difference. 4 operating under that assumption. 5 communications of the sort that you described. 6 THE COURT: 7 MR. POWERS: It's not as if both of us were I'm not aware of any Okay. And the fact, the mere fact that a 8 lawyer puts into, whether it's us or them, a statement that 9 it's preliminary, we have the right to add, doesn't change the 10 fact that it is or is not preliminary based on the Court's 11 rules. 12 And in this case, Judge Ungaro's rule, I think in 13 fairness, was fairly clear it was not preliminary and Judge 14 Ungaro thought there was no ambiguity about that question. 15 To the extent that there's an argument that the 16 parties had explicitly or sub silentio interpreted that order 17 in a way and operated under that understanding, I don't think 18 that's fair. 19 Back to the burden of proof, the Southern Grout case 20 in the Eleventh Circuit and all the other cases in other 21 courts that have similar rules and similar processes make 22 quite clear it is Motorola that bears the burden of proof on 23 this issue. 24 25 That's not an accidental thing. The reason for this sequence of events that is laid out in patent cases is that 15 1 every statement -- and I was one of the people who wrote the 2 local rules for the Northern District of California. 3 a very conscious sequence of events that take place because 4 subsequent events use prior events. 5 parties make decisions based on what happens previously. 6 There's And everything -- and the And that sequence, if upset, goes directly to the 7 prejudice question. There is, in fact -- I don't want to jump 8 to the prejudice issue yet because that's a separate question 9 of burden of proof -- but the prejudice is inherent in the 10 sequence. 11 place in terms of contentions and then Markman hearings and 12 expert reports and all of that is because people rely on 13 what's said in those positions in making decisions for 14 subsequent actions. 15 The logic of the sequence of the events that take So the prejudice isn't just that we have to go take 16 another deposition. We're all big boys and girls, we can go 17 take another deposition. 18 prejudice is the logic inherent in the way the system is set 19 up by which everyone does rely on what's said before. 20 really the prejudice issue. That's not the prejudice. The That's 21 But let's move back to the burden of proof. 22 burden of proof under all the case law is that Motorola has to 23 show it was diligent. 24 the prime reference that they wanted to show you and it's one 25 they showed you yesterday. Let's start with Neonode. The Neonode is 16 1 Let's talk a little bit about what Neonode is first 2 so we know what we're talking about, and then I want to talk 3 about the lack of diligence. 4 They showed you a video. What they didn't show you 5 is that video was dated 2007. 6 application. 7 What they showed you was a 2007 video. 8 9 10 The video's irrelevant. Meaningless. evidence is a device, a physical Neonode device. If that device was not sold in the United States prior to -THE COURT: 12 MR. POWERS: 13 THE COURT: 14 MR. POWERS: 15 THE COURT: 16 MR. POWERS: 17 THE COURT: 19 It's not prior art. Now, what they also say they want to get into 11 18 Two years after the What is the date of -December 2005 is the prior date -Is the Apple -Is the Apple date. 12/05. The filing date of the '849 patent. When did Neonode get their patent? Wasn't it like in 2002? MR. POWERS: Well, no, no, no. We don't know the 20 answer to that question but there is -- what we know is the 21 video that they showed you, is 2007, two years later. 22 know is that the -- 23 MS. HO: Isn't Neonode suing Apple now? 24 MR. POWERS: No. 25 THE COURT: Okay. Not that I'm aware of. What we 17 1 MR. POWERS: There's three things they're trying to 2 get into evidence. Let's talk about this specifically because 3 Neonode isn't just a thing in the air. 4 things. 5 doesn't matter. One's the video. 6 There's three specific That's 2007, two years late, Second is a physical device, a physical Neonode 7 phone. Now, a physical Neonode phone under the rules is prior 8 art only if it was sold in the United States more than a year 9 before 2005. 10 Well, there's zero evidence of that and I, based on 11 what I've seen, I don't think it was. 12 evidence of that. 13 the physical device is not prior art either. 14 undated. 15 there are very specific rules under Section 102 about what 16 constitutes prior art. 17 Now, maybe they have If so, they haven't showed it to us. But Obviously, it's We don't know what the date of that device is. But If you sell something in Finland, that may very well 18 not be prior art in the United States. 19 specific rules that they have not even attempted to satisfy as 20 to whether any of this is prior art. 21 And there's highly The third reference, the third piece of Neonode is a 22 user's guide. 23 request is completely undated. 24 that's prior art. 25 The user's guide that they submitted with their So we have no idea whether So at the moment they've submitted to you three 18 1 things which they seek to add as prior art, as to which there 2 is zero foundation that any of it is prior art at all. 3 sort of sends the prejudice argument out the window until they 4 can actually prove its prior art. 5 video doesn't even come close. 6 Which And showing you a 2007 But the diligence argument is worse than that. The 7 diligence argument in this case is -- is amazing. The first 8 thing you do, when you're a defendant on a patent, and a 9 patent is asserted against you, the very first thing you do 10 after reading the patent, is you read its file history. 11 patent litigator knows that. 12 Any You read the file history and you read the file 13 history for a variety of reasons. 14 prior art. 15 One of which is to look for In the file history of the '849 patent in suit in 16 this case, our patent lawyer disclosed a Neonode user guide. 17 So their idea or their argument that they couldn't have found 18 it assumes they didn't do the first thing that any competent 19 patent litigator does, which is read the file history of the 20 very patent that's asserted against you. 21 Had they read that, they would have said, oh, 22 Neonode, all right, let's go find out what we know about 23 Neonode. 24 25 That's what diligent patent litigators do. If you see something cited as prior art or potential prior art, you go find out more about it. 19 1 They obviously didn't do that. So whatever else they 2 did in ginning up these thousands of pages of things that they 3 gave to the Court, that's not diligence as to Neonode. 4 Neonode, all they had to do was read the very file history of 5 the patent that was asserted against them. 6 that satisfies a diligence requirement means there is no 7 diligence requirement. 8 jurisdictionally on this motion. 9 10 As to Now, to say that Yet that is the requirement And I completely understand the pragmatism that underlies the Court's comments yesterday and today. 11 But at some point, at some point a line has to be 12 drawn. 13 at the very end of the case after all sorts of decisions have 14 been made, after all sorts of processes occurred on something 15 so basic. 16 an obscure database that wasn't available until recently. 17 they had to do was do the first thing that any competent 18 patent litigator does. 19 We can't just keep throwing things in over the transom This isn't something where they had to go search in And they didn't. And that isn't diligence. All That 20 doesn't justify upsetting a carefully crafted schedule that 21 would prejudice Apple because of the carefully crafted 22 schedule. 23 THE COURT: So I'm going to grant or deny their 24 motion, and in the United States or at least in the Southern 25 District of Florida, you're going to, let's say, go for it, 20 1 you're going to win, okay. 2 other countries, okay. 3 they're going to show that Neonode had its patent in 19 -- 4 2002 and it's prior art and the lawyers raise it in that case, 5 so now you're going to have inconsistent verdicts in different 6 countries. MR. POWERS: 8 THE COURT: I understand Your Honor's point. I mean a trial, like the -- ultimately a search for the truth about what really happened here? 10 11 And they're going to win because You know, I mean, isn't -- 7 9 And there's this litigation in MR. POWERS: Why -- A trial is certainly a search for the truth. 12 There's two strands to the point Your Honor's asking. 13 One strand is that the rules are different in different 14 countries. 15 not prior art in the United States, the rules are different in 16 other jurisdictions. 17 What is prior art in the United States and what is So you heard yesterday a reference to Neonode being 18 the basis for a preliminary possible recommendation in 19 validity, Neonode is a European company. 20 So perhaps things that aren't prior art in the United 21 States which has territorial limits on certain aspects of 22 prior art don't apply in a European court based on a European 23 product. 24 jurisdiction on that particular issue. 25 inconsistent results, was resulting from inconsistent or I don't know the rules there for that particular But the fact of 21 1 different rules -- 2 THE COURT: Yeah, but I don't have any control to 3 change the rules of Sweden or Germany or the Netherlands, 4 okay. 5 MR. POWERS: 6 THE COURT: Understood. I do have control to make sure that 7 whatever decision is made in our courts is based upon all the 8 facts that are available within reason, so that we don't have 9 inconsistent -- I mean, our world is getting smaller and I 10 can't imagine Apple wants to, you know, win in one country and 11 lose in another -- I don't know why they want to be going 12 around the world -- I don't know, maybe the lawyers do, but I 13 can't imagine Apple and Motorola want to have a hundred 14 litigations. 15 I'm sure at some point they want to know who's right 16 about this and who's wrong and let's move on. 17 you know, some procedural issue that doesn't really resolve 18 who's right and wrong, okay, I just don't know that that 19 serves anybody's interest. 20 MR. POWERS: And to have, I hear your point, Your Honor, and that 21 is the pragmatism I was referring to earlier. 22 there is a lot of common sense appeal to a pragmatic approach. 23 And certainly My point was that as -- as you noted in your last 24 comment, within reason. 25 has to bend to process. There is a point at which pragmatism 22 1 THE COURT: 2 MR. POWERS: 3 THE COURT: Right. Process does matter. So what are you going to have to do if I 4 grant their motion, that you wouldn't have had to do if I deny 5 it? 6 MR. POWERS: If you grant their motion, the discovery 7 is going to be far beyond what was just discussed in terms of 8 a deposition or two. 9 THE COURT: 10 Okay. MR. POWERS: So for example, if the '185 patent comes 11 in, we'll have to go depose those inventors. 12 amount of discovery required -- let's be clear what the issue 13 was that they're now going to claim. 14 There's a -- the On the '185 patent as he admitted, the '185 patent on 15 its face isn't prior art. 16 prove based on what those inventors actually did. 17 fact, the '185 invention was made sufficiently earlier, and 18 there's a whole body of law about burdens of proof and 19 corroboration, that type of analysis is an incredibly 20 fact-intensive analysis. 21 They're going to have to try to That, in We're talking many depositions, we're talking many -- 22 extensive document reviews. 23 with that issue because it's a separate question. 24 25 Probably another expert to deal So all of that hasn't been done because no one knew it needed to be done. 23 1 And that's not just a single deposition of somebody, 2 to ask them what they did. 3 When you're swearing behind a date, the procedural rules on 4 corroborating an attempt to get behind your effective filing 5 date require a very exacting analysis of the evidence and a 6 very exacting analysis -- not just depositions of the 7 inventors because the inventors can't corroborate the earlier 8 invention. 9 That's a very intensive analysis. The rule is, and it makes sense, the rule is that if 10 an inventor is trying to say I actually get an earlier date 11 than that effective date that's shown on the patent, that 12 requires corroboration by someone other than an inventor. 13 Because otherwise the inventor could just say it. 14 -- 15 16 THE COURT: And there's Is that when the inventor is one of the parties, though? 17 MR. POWERS: 18 THE COURT: 19 MR. POWERS: No, no -Even when he's not the party. On '185, all inventors are going to be 20 third parties. So we're talking about depositions of all the 21 inventors and anybody that gets put up as a third party 22 corroborator and anybody that even -- that isn't put up as a 23 third party corroborator because they may put up person one 24 who will attempt to corroborate but persons two, three and 25 four were also working with that team and their testimony may 24 1 be quite different. 2 3 So that is just a mare's nest of stuff. deposition. Not even -- 4 THE COURT: 5 MR. POWERS: 6 THE COURT: 7 What's a "mare's nest"? It's a mess. I looked up genericize. So you're one for one. 8 MR. POWERS: 9 THE COURT: 10 MR. POWERS: 11 THE COURT: 12 MR. POWERS: That is a word. So what is that, M-A-R-E? M-A-R-E. Like a horse's nest. Exactly. It's a mess. A mare's nest. going to look that up. 13 Not a single Never heard of that. I'm Go ahead. So the amount of discovery and -- it's 14 not just one round of discovery. 15 question. 16 person. 17 That is a big complicated That is not resolvable by going to talk to one Now, Neonode, all sorts of discovery has to happen 18 about whether something was sold or not sold. 19 can't just walk into a court with a physical device and say 20 here it is. 21 about whether that thing is prior art or not. 22 prior art only under very specific conditions so we have to go 23 establish that. 24 25 I mean, you Section 102 says there's elaborate specific rules THE COURT: That thing is Tell me what -- wasn't the Neonode brought up in some other litigation involving Apple? 25 1 2 MR. POWERS: reference -- 3 THE COURT: 4 MR. POWERS: 5 THE COURT: 6 MR. POWERS: 7 THE COURT: 8 My understanding is that the Neonode Right. Was raised in a European litigation. Involving Apple. Involving Apple. Okay. I know you're not there, but Apple was there. 9 MR. POWERS: 10 THE COURT: Apple was there. So wouldn't they be doing, the same 11 things you say have to be done, wouldn't that have been done 12 in that case? 13 MR. POWERS: Well, I don't know but probably not 14 because that's in Europe. And the rules are different. You 15 don't have to show sales in the United States in Europe to 16 make it prior art. I'm fairly confident of that. 17 THE COURT: Do they have depositions in Europe? 18 MR. POWERS: I don't know -- I believe that 19 litigation was in the Hague, and the Hague, there typically 20 are no depositions. 21 don't really get discovery. 22 record, typically. 23 had no discovery at all. 24 25 So the rules are quite different. You That -- it's based on a paper I've done two trials in the Hague and we And so the idea that this has all been done and we can wrap it up in a bow and move it over here, that is not 26 1 true. 2 THE COURT: 3 MR. POWERS: Okay. Not only because they don't really have 4 discovery there, but also because the issues are different. 5 What's prior art there isn't prior art here. 6 things have to be proved. 7 And so different And so all of that becomes a substantial -- and we're 8 talking about -- we have a summary judgment date in this case 9 of May 18 and an October trial date and we're talking about 10 opening up two large, new questions that aren't going to get 11 resolved with a single deposition sometime in the next -- 12 13 THE COURT: How long do you think that's going to take? 14 MR. POWERS: I don't know. The short answer is, I 15 don't know, because you have to do the first wave of discovery 16 and see what that produces. 17 alone, even if it's third parties and third parties scattered 18 all over who knows where, that's at least a month just to go 19 find them and do it. 20 to arrange in a very prompt time. 21 22 I do know that the '185 discovery And third parties are obviously harder And sometimes they're hard to find. idea. 23 So we have no That process has just started. There's initial discussions about the Rovi 24 deposition, that's true. 25 case. That's not in connection with this That was in connection with case number two, as I 27 1 understand it. 2 But, that's just the first step. 3 And then the question is all of that -- and I do 4 appreciate Your Honor's point that there's a tension between 5 process and substance and merit. 6 completely. 7 I appreciate that I get that. We're up against the very end of a schedule. 8 literally, summary judgment's in May. 9 created as we speak. Expert reports being All of that would be thrown out if we go 10 down this path. 11 complete this process under that schedule. 12 I mean, All of it, because there's no way we can Zero chance. And then the question is, why would we turn that 13 completely upside down when the requester was so obviously not 14 satisfying the diligence requirement the cases impose? 15 they had to do was read the file history. 16 All That's it. And so obviously it's Your Honor's decision, but if 17 we were six months from trial, I would see the point. 18 months from summary judgment, rather. 19 Six there was -- Or something where 20 THE COURT: I think we are six months from trial. 21 MR. POWERS: Yes, we are six months from trial. 22 THE COURT: 23 24 25 Seven months from trial. Your vocabulary is better than your math. MR. POWERS: Okay. Okay. But we are in the midst of right now doing all the expert reports, having the SJ process. 28 1 None of that would then be able to go forward. 2 THE COURT: 3 MR. POWERS: Okay. And it just -- it doesn't make sense to 4 me, obviously it's your decision, it doesn't make sense to me 5 to break all of that in a situation where the diligence 6 requirement that is required is so obviously blatantly not 7 met. 8 THE COURT: Okay. All right. Thank you. 9 I'll give you a chance for a brief response. 10 MR. SEARCY: Thank you, Your Honor. 11 So, Your Honor, first of all we heard a discussion 12 from Mr. Powers about how you have to rely on what's been said 13 before. 14 discovery on things that they knew about. 15 what they said to us and they didn't provide us with the 16 discovery that they were supposed to provide. 17 And here, we're relying on Apple to provide us with We're relying on So when you talk about the burden of proof and you 18 talk about diligence, that's where you start. 19 about reliance on what's been said before, Apple didn't 20 provide what they were supposed to provide. 21 When you talk In discussing the Neonode reference, his second 22 point, what Mr. Powers did is he actually attacked the merits 23 of the reference. 24 the U.S. 25 itself is a prior publication, which is prior art. He claimed that the phone wasn't sold in He ignored the fact that the Neonode reference And then 29 1 he said well, there's no evidence that the phone is sold in 2 the U.S. 3 Well, these are infringement -- or these are 4 invalidity contentions, Your Honor. That's why you have 5 discovery. 6 Neonode and you find out what attempts they made to sell that 7 phone in the U.S. 8 reference. 9 have the contentions, to get these things out there so that You go, you ask the questions of the folks at You find out what happened with the That's why you have the discovery, that's why you 10 everybody can do it. 11 right now. 12 That's the process that's taking place As to his third point, and this one was maybe the 13 most interesting, he admitted to you that Apple knew about a 14 Neonode reference and submitted it in its file history on the 15 application for the slide-to-unlock patent. 16 Apple's attorney knew about this, and knew about -- in the 17 file history and Apple knew about it, then they should have 18 submitted this reference to us in discovery, they didn't do 19 that until we asked for it once we found out about the Dutch 20 litigation. 21 And obviously if And obviously, if Apple knew about this Neonode 22 reference, Your Honor, they can't really be prejudiced now by 23 having to litigate it. 24 basically takes away any of their arguments of prejudice. 25 he raised some other issues and we'll get to that in a second. So what he's admitted to you, it But 30 1 Your Honor, you raised the issue of inconsistent 2 judgments and Apple doesn't have an answer for that. 3 we know that Apple is seeking right now a preliminary 4 injunction on this slide-to-unlock patent against another 5 party, Samsung, in the Northern District of California. 6 So these issues are going to be out there. In fact, And there 7 needs to be a chance for consistent judgments and for the 8 opportunity for the Court in this case, for the jury in this 9 case to hear all the facts. 10 issues. 11 To get to the bottom of the And that's what we're seeking to do here. With the issue of discovery, Your Honor, first of 12 all, Mr. Powers told you something that was incorrect. 13 think it was a mistake on his part. He told you that Rovi had 14 been subpoenaed in a different case. Again, Exhibit R to our 15 reply brief is a subpoena that was issued by Apple on January 16 23, by Weil Gotshal, the Weil Gotshal firm, and included on 17 the service list is Mr. Powers, that's on page 2 of Exhibit R, 18 if the Court wishes to look at that. 19 I THE COURT: And that was in a 2010 case, not the 2012 21 MR. SEARCY: No, Your Honor, that was in this case. 22 THE COURT: The 2010 case. 23 MR. SEARCY: That's right. 24 THE COURT: 25 MR. SEARCY: 20 case. Okay. And Your Honor, with regard to the 31 1 discovery that Apple claims that they need, we didn't hear any 2 specifics. 3 other things that might potential -- that the expert schedule 4 will have to change. 5 But we didn't hear any specifics because what we're talking 6 about here are two depositions that are scheduled to take 7 place and where they'll have the opportunity ask these 8 questions concerning the prior art. 9 We heard a lot of -- of a parade of horribles and There might have to be a new expert. And if from that Apple decides that they need to take 10 additional depositions, they'll have the opportunity to do 11 that. 12 schedule. 13 That certainly doesn't require changing the expert's But in addition to that, maybe even more importantly, 14 Mr. Powers was talking about the '185 patent, and with that 15 patent, that's the patent to Rovi, he said that they'd have to 16 show that the inventors came up with the idea first, that 17 there would be intensive documents that would have to be 18 reviewed for that. 19 Well, Your Honor, that's all our problem. 20 ones, as Motorola, who have to show that this is prior art. 21 Who would have to show that this '185 patent which has a 22 filing date after these three Apple patents, should actually 23 be considered to be prior art. 24 25 So we'd have to make that showing. us. Not on Apple. We're the The burden is on That's a burden that, if we choose to, we 32 1 can take on and we'll get it done within the discovery period. 2 So the burden again, is on us. 3 here. 4 all the facts of the case decided. 5 There's no prejudice to Apple There's extreme prejudice to Motorola and to getting Your Honor, in the end, the procedural schedule 6 should be amended and these few references should be allowed 7 to be supplemented in Motorola's invalidity contentions. 8 Thank you. 9 THE COURT: All right. Thank you. All right, I'll 10 take this matter under advisement, I'll get the order out in 11 the next couple of days. 12 Yes? 13 MR. POWERS: 14 Your Honor, may I have just 30 seconds to respond to one new point that he had made? 15 THE COURT: 16 MR. POWERS: Okay. Just 30 seconds. First, counsel is 17 right that Rovi was served in this case, I was wrong about 18 that. 19 THE COURT: 20 MR. POWERS: Okay. But counsel said twice that we didn't 21 give them the discovery on these references. And that's just 22 not true. 23 argument about we had carefully worded declarations, et 24 cetera, they put in two declarations which could have 25 satisfied their diligence requirement. Because he's insinuating and this is part of his They spoke to none of 33 1 it. They had two. An original and a reply. 2 Our point in our declaration was the prior art in the 3 Netherlands, the Hague case, which is now what they're seeking 4 to add, was not cited, as we understand it, until an August 3 5 prior art filing. 6 So their argument was, we should have produced it to 7 them before June 20 which is the deadline for the prior art 8 contentions. 9 because it wasn't cited in the Netherlands until August 3. 10 Our point is, we didn't have it before June 20 The one thing we did have which was what we submitted 11 in the patent office, we did produce to them. So they could 12 have either read that as part of reading the file history 13 which every patent litigator does, or reading what we produced 14 to them. Apparently they did neither. 15 Thank you. 16 THE COURT: 17 So I'm going to take this matter under advisement, All right. Thank you. 18 I'll get the order out in the next couple days. 19 going to let me know in the next couple of days if the other 20 emergency motion to compel needs my attention. 21 22 You all are Are there any other matters we can take up this morning? 23 MR. POWERS: Not from us, Your Honor. 24 MR. VERHOEVEN: 25 THE COURT: No, Your Honor. Okay. Thank you. We'll be in recess on 34 1 2 this case, then. All right. (Court recessed at 10:29 a.m.) 3 4 * * * 5 6 I certify that the foregoing is a correct transcript from the record of proceedings in the above matter. 7 8 Date: Thursday, March 15th, 2012 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 s/ JUDITH M. 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[1] 20/10 Searcy [2] 1/20 5/1 seated [1] 3/3 second [5] 8/17 8/19 17/6 28/21 29/25 seconds [2] 32/13 32/16 Section [2] 17/15 24/20 see [4] 8/2 18/24 26/16 27/17 seek [2] 6/14 18/1 seeking [5] 6/18 7/9 30/3 30/10 33/3 seeks [1] 13/3 seem [1] 13/9 seems [1] 13/9 seen [1] 17/11 sell [2] 17/17 29/6 sends [1] 18/3 sense [5] 9/5 21/22 23/9 28/3 28/4 separate [3] 8/20 15/8 22/23 sequence [5] 14/25 15/3 15/6 15/10 15/10 serve [1] 3/23 served [1] 32/17 serves [1] 21/19 service [1] 30/17 set [4] 6/5 11/10 11/14 15/18 set-top [3] 6/5 11/10 11/14 sets [2] 6/1 6/8 Seven [1] 27/22 shared [1] 13/21 Shores [5] 2/2 2/2 2/5 2/9 2/10 short [1] 26/14 should [13] 4/23 8/1 8/2 8/18 9/9 10/13 11/25 12/4 29/17 31/22 32/6 32/6 33/6 shouldn't [1] 8/14 show [10] 7/20 10/10 15/23 15/24 16/4 20/3 25/15 31/16 31/20 31/21 showed [7] 6/3 8/1 15/25 16/4 16/7 16/21 17/12 showing [2] 18/4 31/24 shown [1] 23/11 sides [1] 13/23 Signature [1] 34/10 silentio [1] 14/16 similar [2] 14/21 14/21 single [3] 23/1 24/2 26/11 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6/8 7/13 7/19 7/22 8/12 8/15 8/18 8/21 8/22 8/22 8/23 9/1 9/5 9/6 9/9 11/25 12/4 12/7 12/8 13/14 19/2 29/3 29/3 29/9 30/6 31/7 31/22 32/6 32/21 they [82] they'd [1] 31/15 they'll [4] 7/18 9/3 31/7 31/10 they're [12] 4/21 9/18 9/19 11/3 11/5 17/1 20/2 20/3 22/13 22/15 26/21 33/3 they've [3] 6/20 6/23 17/25 thick [1] 11/22 thing [10] 4/11 14/24 17/3 18/8 18/9 18/18 19/17 24/21 24/21 33/10 things [13] 9/8 9/23 17/1 17/4 18/1 19/2 19/12 20/20 25/11 26/6 28/14 29/9 31/3 think [10] 3/18 13/17 13/20 14/2 14/12 14/17 17/11 26/12 27/20 30/13 third [10] 5/12 17/21 17/21 23/20 23/21 23/23 26/17 26/17 26/19 29/12 this [50] those [11] 4/5 5/19 5/23 5/24 6/3 6/10 9/16 13/8 15/13 22/11 22/16 though [2] 5/17 23/16 thought [1] 14/14 thousands [1] 19/2 three [6] 11/12 17/1 17/3 17/25 23/24 31/22 throwing [1] 19/12 thrown [1] 27/9 Thursday [1] 34/8 T thus [1] 11/25 take [14] 7/9 7/13 7/14 15/3 15/10 time [3] 9/10 9/17 26/20 today [2] 5/2 19/10 15/15 15/17 26/13 31/6 31/9 32/1 told [2] 30/12 30/13 32/10 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