STC.UNM v. Intel Corporation

Filing 95

MOTION for Leave to File To File A Supplemental Submission In Support of Motion to Compel by STC. UNM. (Attachments: # 1 STC's Supplemental Submission In Support of Motion to Compel, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C)(Pedersen, Steven)

Exhibit A
Hearing Transcript: May 18, 2011

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF NEW MEXICO

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STC.UNM,
Plaintiff,

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vs.

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CV-10-01077-RB-WDS

INTEL CORPORATION,
Defendant.

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Transcript of Motion Hearing before THE

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HONORABLE W. DANIEL SCHNEIDER, United States Magistrate

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Judge, held in Albuquerque, Bernalillo County, New Mexico,

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commencing on Wednesday, May 18, 2011, at 9:00 a.m.
A P P E A R A N C E S

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For the Plaintiff STC.UNM:
STADHEIM & GREAR, Ltd.
Attorneys at Law
Wrigley Building Tower
400 North Michigan Avenue
Suite 2200
Chicago, Illinois

BY:

60611-4102

MR. GEORGE C. SUMMERFIELD

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MR. ROLF O. STADHEIM

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--AND--

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KELEHER & McLEOD, P.A.
Attorneys at Law
201 Third Street, Northwest
Twelfth Floor
Albuquerque, New Mexico 87102

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BY:

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MR. DERON B. KNONER

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JULIE GOEHL, RDR, CRR, RPR, RMR, NM CCR #95
333 Lomas Boulevard, Northwest
Albuquerque, New Mexico 87102

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A P P E A R A N C E S (Continued)
For the Defendant Intel Corporation:

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PERKINS COIE, L.L.P.

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Attorneys at Law
2901 North Central Avenue
Phoenix, Arizona 85012-2788

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BY:

MR. CHAD S. CAMPBELL

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--AND-7
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ATKINSON, THAL & BAKER, P.C.
Attorneys at Law

201 Third Street, Northwest
Suite 1850

Albuquerque, New Mexico
BY:

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87102

MR. CLIFFORD K. ATKINSON
MR. JUSTIN D. RODRIGUEZ

--AND--

INTEL CORPORATION

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Litigation Division
2200 Mission College Boulevard
RNB-4-150
Santa Clara, California 95054

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BY:

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MR. BENJAMIN R. OSTAPUK

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Reported by:

JULIE GOEHL, RDR, CRR, RPR, RMR, NM CCR #95
United States Court Reporter
333 Lomas Boulevard, Northwest
Albuquerque, New Mexico 87102
[phone]

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JULIE GOEHL, RDR, CRR, RPR, RMR, NM CCR #95
333 Lomas Boulevard, Northwest
Albuquerque, New Mexico 87102

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You can't -- it's not proper under the statute or

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the policy that the courts have recognized that is inherent

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in the statute to apply that concept to the sales that

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happened after the patent has expired, because under the

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statute and under the policies of the Patent Act, we

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encourage people to use technology that's disclosed in

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patents after the patent has expired.

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So there is no case.

We could look all day

long -- and we have looked hard, and the plaintiffs have

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looked too.

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going to allow you to pay or to tax, in a reasonable

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royalty context, sales that are going to happen after the

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patent expires.

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There is no case that sort of says:

Okay, I'm

The accelerated market entry cases are addressing

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actual harm that might come to the patentee's business

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after the patent has expired because of an infringement

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that took place before it expired.

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So, for example, could you imagine two

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competitors who have a long lead time to kind of get their

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business ramped up before they start selling something.

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And if infringement in the context of research and

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development happens with the infringer before the patent

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expires, that could allow them to get in a position to

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actually compete with the patentee and cost them sales

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after the patent has expired.

JULIE GOEHL, RDR, CRR, RPR, RMR, NM CCR #95
333 Lomas Boulevard, Northwest
Albuquerque, New Mexico 87102

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1

So it's a causal tie between the one and the

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other, and all you're doing is trying to find out when the

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lost sales took place.

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than the reasonable royalty calculation and doesn't have

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any bearing.

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It's a completely different concept

There would be cases if it did.

There are a couple of cases that the defendant --

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or the plaintiffs, rather -- have cited, that I think are

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helpful in underscoring this distinction.

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case, which was the first case that they cited for their

In the Merck

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argument that:

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reasonable royalty, you know, that's going to be applied to

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sales and the sales that you are going to make in the

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future because of this research on 10 and 14 nanometers

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that happened before the patent expires.

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Hey, we ought to be able to have a

So the Merck case, 434 F. Supp. 2d at 257, a 2006

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case, had a number of different theories in the case, and

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one of the theories was:

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reasonable royalty for your stuff that's going to happen

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after the patent expires.

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Hey, we're entitled to a

The Court actually granted summary judgment on

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that and said:

No.

But with respect to the lost profits

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component of your model, stuff where you can actually

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prove that you're losing sales, the case law does say

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accelerated market entry is a viable theory.

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went forward.

And so that

JULIE GOEHL, RDR, CRR, RPR, RMR, NM CCR #95
333 Lomas Boulevard, Northwest
Albuquerque, New Mexico 87102

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So there's a case where we had both of these

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things in play, and you don't tax post-expiration sales

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under a reasonable royalty theory.

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case stands for.

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That's what the Merck

The BIC Leisure products case is another case

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that they cited in their papers, which actually if you go

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through the opinion, distinguishes a line of Supreme Court

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cases that caution courts against allowing remedies or

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effects or license agreements to apply after a patent has

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expired, where you're trying to cause people to continue to

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pay royalties on sales for things that happened after the

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patent expired.

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The Supreme Court said:

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The BIC Court said:

That's wrong.

Well, we recognize that rule

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that the Supreme Court has.

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accelerated market entry lost products context, however,

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because what we're doing there is simply trying to figure

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out what the pre-expiration infringement did in the way of

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damage to the patentee's business.

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It doesn't apply in the

So, again, they are different concepts, and

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that's the reason why, when we looked at this, we couldn't

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figure out really fundamentally a legitimate reason why

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they would need the research information at the nodes 10

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and 14, because it doesn't factor into anything that's

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going to make a practical difference in the case.

JULIE GOEHL, RDR, CRR, RPR, RMR, NM CCR #95
333 Lomas Boulevard, Northwest
Albuquerque, New Mexico 87102