Arista Records LLC et al v. Lime Wire LLC et al

Filing 378

DECLARATION of Melinda E. LeMoine in Support re: 234 MOTION for Permanent Injunction.. Document filed by Arista Records LLC, Atlantic Recording Corporation, BMG Music, Capitol Records, Inc., Elektra Entertainment Group, Inc., Interscope Records, Laface Records LLC, Motown Record Company, L.P., Priority Records LLC, Sony BMG Music Entertainment, UMG Recordings, Inc., Virgin Records America, Inc., Warner Bros. Records Inc.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4 (Under Seal), # 5 Exhibit 5 (Under Seal), # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8)(Lemoine, Melinda)

Arista Records LLC et al v. Lime Wire LLC et al

Doc. 378 Att. 2

EXHIBIT 2

Dockets.Justia.com

12-7-07 Court Transcript.txt 1 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 18 18 19 19 20 20 21 22 23 24 25 7C7ARIC Conference UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------x ARISTA RECORDS, et al., Plaintiffs, v. LIME WIRE LLC, et al., Defendants. ------------------------------x New York, N.Y. December 7, 2007 5:00 p.m. Before: HON. GERARD E. LYNCH, District Judge APPEARANCES CRAVATH, SWAINE & MOORE Attorneys for Plaintiffs BY: KATHERINE B. FORREST TEENA-ANN V. SANKOORIKAL JOANNE M. GENTILE PORTER & HEDGES Attorneys for Defendants BY: CHARLES S. BAKER JOSEPH D. COHEN 06 CV 5936 (GEL)

2 7C7ARIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Conference (In open court) THE DEPUTY CLERK: Arista Records v. LimeWire LLC. MS. FORREST: Katherine Forrest with Cravath, Swaine & Moore for plaintiffs. MS. SANKOORIKAL: Teena-Ann Sankoorikal from Cravath for plaintiffs. MS. GENTILE: Joanne Gentile for plaintiffs. MR. BAKER: Your Honor, Charles Baker on behalf of the defendants. THE COURT: Good afternoon, Mr. Baker. MR. COHEN: Joe Cohen from Porter & Hedges in Houston, also for the defendants. THE COURT: Mr. Cohen, good afternoon. It probably wasn't the wisest thing to schedule this so late in the day Page 1

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12-7-07 Court Transcript.txt that had four sentencings in the afternoon. But that's where we are. Fortunately, the parties have submitted a very thorough joint letter that set forth the various issues that divide them on discovery, and I've carefully reviewed that and so I'm able to rule on most of these issues. Now, since that letter was written, the circumstances have changed in that I've dismissed the antitrust counterclaims that underlay some of these discovery issues. Though as I trace through it, that may make less difference than I might have thought. Partly because the defendants have other 3 7C7ARIC Conference arguments as to why they need the discovery that they seek, and partly because some of what they seek I wouldn't have granted even if the antitrust counterclaims were there. So I am going to try and just go through these and make rulings, and I've asked the court reporter to stay around so that everyone wouldn't have to be quite so frantically taking notes, and we'll have a record of what I actually ordered. First, there is an issue with respect to the proof of copyright ownership and what discovery needs to be provided on that front. It seems to me that the sensible resolution here is the plaintiffs' alternative suggestion, that we simply take some subset of copyrighted works and sever the claims as to those for the initial purpose of deciding whether there is liability or not. There is not likely to be a serious dispute about whether the plaintiffs own the copyrights to at least some of the material that is at issue here. That's not what this case is about. But of course, if we ever get there and there is a damages assessment, the extent of whatever the alleged infringement might be, might be relevant to that, and it might be necessary to figure out what of the material here really is copyrighted. But, it's not necessary to have more than a single item, as far as I'm concerned, in order to address the basic 4 7C7ARIC Conference liability issues that are what the case is about. And since you never do anything with a single item because you need at least a belt and suspenders and probably a rope and a couple of other things to avoid errors and things becoming moot and unforeseen events, a relatively small subset of copyrighted items will suffice. And if the plaintiffs provide the discovery as to those, we can worry about the others if, as and when we get to damages phase, or if, as and when it becomes necessary or appropriate to address the rest of the copyrighted materials. Second, there is an issue as to whether EMI and UMG, two of the plaintiffs, are required to search for documents prior to February 2006. Notwithstanding that they take the position that all documents relevant to the case that existed prior to February 2006 were produced in prior antitrust government investigations and lawsuits, and therefore, have been produced to the defendants in this case. Now, I note two things about this. Number one, the antitrust claims have been dismissed. And while it is true that the plaintiffs maintain that the antitrust counterclaims are simply some species of copyright abuse and therefore Page 2

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12-7-07 Court Transcript.txt necessary for the defense of the plaintiffs' claims, the contingency of whether there really is an abusive copyright defense in this circuit and what exactly it would consist of and the fact that at any rate it is not congruent completely 5 7C7ARIC Conference with the alleged antitrust violations, and the fact that the principal antitrust violation that can be at issue here has to do with the refusal to provide hashes, which seems to have occurred in 2006 and not before it, suggests that so long as the parties are looking for documents post-February 2006, and given that they've produced, as I understand it, the materials that had been produced in prior antitrust matters, the only thing that I will order here is that the plaintiffs provide the defendants with information regarding what the specific document requests were that led to these productions in the prior matters which may enable the defendants to focus on what, if anything, they specifically need for the defenses that are still in the case that might not be covered by the prior productions. And if there is such a thing, then they can seek it. And if there is still an issue, that can come before the Court at some future point. Given the status of the case, it is hard for me to believe that greater discovery on that front will be ordered. Next there is a question of whether the record labels themselves, the so-called subsidiaries, shall be required to produce responsive documents for certain requests with respect to communications about LimeWire. And it seems to me that since those are the actual defendants, and they may have material that is relevant to the copyright misuse defense, that they should have to produce, and not simply inherent companies. 6 7C7ARIC Conference Next there is a issue with respect to custodial lists, organizational charts. I think the only issue here as far as I can figure out that is of any interest is whether the custodial lists are sufficient. It seem to me the plaintiffs are correct that those lists include the persons most likely to possess documents related to the claims or defenses of the parties. And I am not going to direct that any further discovery be provided as to the process by which the plaintiffs selected these custodians. In the joint letter I couldn't find anything that gave me any reason to think that the plaintiffs had not identified the right people, and as those people are -- any of those people are deposed or as further discovery proceeds, if the defendants have some actual reason to think there is some deficiency, maybe that could be raised at some future point. But I don't think there is a need, given the volume of discovery that has been made and its limited relevance to the core issues in the case, that we need to have some further inquiry into the process by which the discovery was made. Next, there is an issue of communications related to digital distribution licensing agreements. And it seems to me that the plaintiffs' representation that they've agreed to provide the licensing agreements related to digital downloading and the negotiation files associated with those agreements is adequate to deal with that issue. 7 7C7ARIC Conference Page 3

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12-7-07 Court Transcript.txt Next, there is a question of communications with respect to peer-to-peer companies. Here again it seems to me that the plaintiffs are responsible for producing materials that are called for by the document request. But there needs to be some reasonable balancing, again taking into account the absence at the moment of the antitrust counterclaims, and taking into account what is a reasonable burden on the plaintiffs to make an appropriate search. And it seems to me that the methodology used by the plaintiffs to identify the potential entities that are involved here, and then produce what records exist in their files that are turned up by such a search, seems to me to be adequate. Next, the defendants' request for settlement agreements and correspondences related to the settlement of previous litigation is just denied. And nice try, but no. Next comes the issue of the plaintiffs disclosing ownership interests in unaffiliated companies involved in online distribution. Defendants have requested communications related to the plaintiffs' actual or contemplated investments in such companies. It seems to me, the actual and the contemplated are two different things. With respect to actual investments, these may be far-flung empires, but it is hard to believe they don't know what they've invested in. So, with respect to actual investments, it seems to me 8 7C7ARIC Conference the plaintiffs are responsible at whatever peril exists in the discovery process to make a genuine accounting of what they have actually invested in. With respect to contemplated investments, on the other hand, it seems to me that some process of search is the right way to go here. The search terms that have been utilized in attempting to find documents related to the far-flung problems of what they may have contemplated at some time are sufficient. And so, I think it would be highly burdensome to require the plaintiffs to go interviewing anybody and everybody who might have some knowledge of something that they ever thought of once. And the search is sufficient as to that. But, I can't believe that a sort of computerized search for documents is the most sensible way to find out what the plaintiffs actually own. And they should do whatever is necessary to find out whatever investments they currently have in these online distribution entities. The question of documents related to Internet business models, that seems to me to be the thing that is closest to just an antitrust matter that is no longer in the case, so it's moot. And I probably would've said no anyway, even with the antitrust claims in the case. Because this seems to be both a very vague one and one that also probes to the heart of what might be highly confidential material. One way or the other, that's denied. 9 7C7ARIC Conference Next is an issue about agreements and plans relating to providing music over the Internet. Once again, I'm satisfied with the plaintiffs' representation that they've agreed to provide the licensing agreements and negotiation files that are relevant to that subject. With respect to documents relating to communications, meetings and agreements among the plaintiffs regarding prices Page 4

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12-7-07 Court Transcript.txt and terms of service, the plaintiffs say they have provided the relevant custodians and supplied the relevant search terms. I am satisfied with that, except the custodian list does not, as far as I can see, include anybody from RIAA. And that seems to me to be an organization that in principle could have very significant information to impart. And it seems to me someone should identify some possible custodian who is the right person whose files should be searched on that issue. Last, on the defendants' list, there is a question relating to the plaintiffs' restriction of answers in interrogatories to the current employees who have the most knowledge. I'm satisfied with the most knowledge part. I think it would be burdensome and would yield little benefit to expand the category to anybody who has any knowledge or something like that, or try to figure out who out of all these employees may have been involved in something relevant. But, I do think that given that the allegations in this copyright misuse claim go back as far as 2000, the 10 7C7ARIC Conference plaintiffs should also identify the most relevant former employees who might be served with interrogatories for third-party discovery, and that restricting the answers to interrogatories to current employees is not likely adequate. All right. Now turning to the plaintiffs' laundry list. The request for protective order I think is denied, except to the extent that I have made these various rulings and that seems to deal with the problem and be the way of dealing with these issues. The plaintiffs move to compel production of documents from David Ruth and Amy Gordon who are close relatives, indeed nuclear family members, of Mr. Mark Gordon, who is the CEO of LimeWire. The fact that they're family members doesn't seem to me to make them different from shareholders to the extent of the likelihood of producing any -- of having any relevant information. And the fact that they're family members tends to increase the risk that serving them with discovery documents is just harassment, so that will be denied. Next there is a question of bifurcation. I think I've essentially dealt with that by separating out the test case copyrights. I think that's a more sensible way to do it than simply bifurcating damages issues, or at least maybe that means I am bifurcating at least damages issues to the extent they go to how many copyrights or something like that. But I'm not -- I think I'd rather not phrase it as no 11 7C7ARIC Conference discovery with respect to damages issues. Because that's the kind of order that tends to produce more trouble than it's worth, as the parties then fight over whether a given demand is or isn't in which half of the bifurcation. I think I've made clear the way to proceed here with respect to what I think is the principal issue or problem, which is the disclosure of copyright ownership issues, is just to proceed with a small subset of those in the first instance. Finally, I think it's finally, the plaintiff seeks some additional deadlines and the defendants seek various extensions. Now, some of this has been mooted or changed or affected just by the process of events. I'm sorry that it took so long to deal with the motion, but that's life in the big city. There are a lot of other motions on the list. This was Page 5

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12-7-07 Court Transcript.txt a somewhat demanding one, it resulted in a lengthy opinion, it took me a while to get to it. But having taken that time, the plaintiffs' proposed discovery deadline is now past. And it seems to me that based on all of the things that I've covered today from the parties' joint request, it is just not realistic to think that this work is not going to get done -- I'm sorry -- is going to get done in a very short period of time, particularly with the holidays intervening. It does seem to me, on the other hand, appropriate to require that document discovery be substantially complete by 12 7C7ARIC Conference January 31; that fact depositions be done in February and March and be completed by March 31; that expert reports be provided by I guess basically the same time, the end of March; rebuttal reports by the end of April; expert depositions then to be conducted in May and be finished by May 31. And I think that's enough deadlines to keep everybody occupied, and we can think about summary judgment motions at a conference to be held after that process is done. It seems to me, though, it would be productive to schedule a conference for the very beginning of April. Just to find out, get some progress report on the completion of fact discovery, and see whether progress is sufficiently being made and give the parties a deadline that is a real hearing in court deadline to concentrate the mind on what needs to be done in the interim. So that is what I thought after reading the joint letter. Is there anything really huge that I've missed, any major topic heading that I haven't addressed that the parties need guidance on? Or anything that you think from the point of view of your client I've gotten grotesquely wrong in these rulings? And basically, you've each got about one, and if it's not terribly wrong, if you can't persuade me on one, then your second best is not going to be heard. Do you have one or are people content to live with this for now? 13 7C7ARIC Conference MS. FORREST: Your Honor, I just have a couple of very brief points. One is on a couple of the rulings that your Honor has stated today, they do rely upon the copyright misuse affirmative defense still being in the case. If we could, your Honor, let me just ask if LimeWire could define for us what the parameters of that copyright misuse defense are, because we have seen it both in its letter briefs and in its filings before the Court in various places change. It's gone from both being overlapping with the antitrust case, to now in the most recent November 16 letter brief, having some bearing on ownership issues. Your Honor, I would also suggest that if copyright misuse is only in the case or was only in the case for antitrust, if the counterclaims are truly gone, your Honor, then I would ask how is it that that discovery is still relevant here. If the rulings, your Honor, relating to misuse are for some other purpose, we'd like to have the parameters of that spelled out. That relates to the couple of the rulings, the label level searching, the actual investments, the prices in terms of service. Page 6

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12-7-07 Court Transcript.txt I have a couple of other questions of clarification, but perhaps it's best to stop there and let LimeWire address that or your Honor. THE COURT: You want to address that? 14 7C7ARIC Conference MR. BAKER: Yes, your Honor. We're happy to provide the Court with a statement or a position on the copyright misuse as well as the unclean hands, that for some reason has been not mentioned today by plaintiffs' counsel, but we have -those are our two main defenses we have in the case. The point I would like to make is to the extent, and this could be shown in our briefing that the courts, the circuits that have dealt with this issue do not limit it to you have to prove an antitrust violation. You don't have to meet all the standards under the antitrust laws. You just have to show anticompetitive conduct that affects the public interest. They are extending their monopolies beyond what the law allows them to do. Their position, because you've dismissed our antitrust claims, which I would like to say also that you still gave us that opening that if we found facts that we could come back to the Court and ask to replead them. That by no means does it mean our copyright misuse case is over with. That's what they want to tell third parties who we've subpoenaed who are now calling and saying you guys just got your antitrust claim dismissed, we are not going to produce any documents to you, go pound sand. So, that's the problem we are facing right now. THE COURT: They can come and litigate these things. Let me say where I think we're going here. It has been my reading of this joint letter that this discovery process is 15 7C7ARIC Conference well underway. And that what we are dealing with here is clean up. That it is not that the plaintiffs have refused to provide anything pending the ruling, but that they've provided a lot of stuff. Now to the extent that I gave the defendants the opportunity to replead, that was based not on the prospect that they would engage in indefinite fishing expeditions and maybe turn up something someday in the future. That was based on the assumption they had already seen a lot of documents, and if they had something, they would be able to tell us what they had. So, that is my reaction to the repleading issue. With respect to the scope of the defense, I frankly have very little idea what the scope of the defense is going to be, if any, in this circuit. But it has been my view that it would be appropriate for the defendants to have the opportunity to do discovery with respect to alleged anticompetitive activity. And that would put us in a position to decide whether there is any issue in the case. Once the defendants can say this is what we think they did and this is why we think it constitutes a valid defense, it seems to me better to address that in a concrete context rather than an abstract context. While I realize there is an expense and a burden here on the plaintiffs, after all, the plaintiffs are trying to put the defendant out of business. The plaintiffs are just going 16 7C7ARIC Conference Page 7

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12-7-07 Court Transcript.txt out of business because they are a dead industry and not because of anything the defendants are doing to them. And they still have a lot of money and a lot of power. And I don't think that the burden is so extreme that, as limited by these rulings, they shouldn't have to provide what I've said they have to provide. Now, I also recognize that having dismissed the antitrust claims, it does put things in a slightly different posture. And if the plaintiffs want to take another shot at some of these things in writing, have another letter that identifies exactly why there is no possible way this stuff could be relevant, or put some real cost figures and try to identify why there is some extraordinary burden to doing these things, I'm prepared to hear it. Now, I guess the other thing is, Mr. Baker, I can see how a copyright misuse defense would be different. Less technical. Maybe even broader than a simple antitrust violation. But as you've just described it, it sounds like it could be anything that you don't like. Anything anybody doesn't like. Anything that a Court thinks maybe isn't a very good idea. I don't know what anticompetitive behavior is. And it is certainly my expectation that if this defense is going to survive into a trial phase of the case, it is going to survive summary judgment, there is going to have to be a very specific 17 7C7ARIC Conference delineation, both what we think the legal test is, and here is why we think we can meet it. Finally, one other thing. You guys are either Napster or you're not, it seems to me. And I would've thought that there are at least colorable and quite interesting arguments as to why the kind of thing that your clients are doing is not the same sort of thing that has been condemned previously. Now, those are interesting issues. And the more that the defendants appear to be distracting attention from those issues, the more I begin to wonder why the defendants have any real confidence in that position. And, you know, I am just an amateur in antitrust law, and I am an amateur in technology. And judges have to be guided sometimes by their instincts. And you're channeling my instincts in the wrong direction, it seems to me, by making it look like the plaintiffs are right, that this is all a distraction and a way of bogging down this litigation. Now, it is my view that the discovery process should continue, and I've tried to give you some leeway here. I think I'm still doing that, and the plaintiffs are probably not thrilled with it. But the time is going to have to come when this gets laid out in black and white as this is what we think they're doing, and this is why we think this deprives them of their ability to protect their copyrights. But it still seems to me that the real story here is 18 7C7ARIC Conference are you doing something that infringes? And if you are, well, it is going to have to be something pretty dramatic to say in effect that in effect invalidate copyrights. If you're not, then you win, and we don't have to go through all of this. MS. FORREST: Your Honor, three very quick points on this topic. One is we would be happy to write, to put forward with the Court something -Page 8

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12-7-07 Court Transcript.txt THE COURT: I'm sure you would. MS. FORREST: -- something that would spell out the burden on this. We would ask, as Mr. Baker suggested he would be willing to do, that defendants lay out the parameters of the misuse defense so we know what the target is we are shooting at. On that point, your Honor, as your Honor acknowledged in your opinion of last week, there is no evidence that LimeWire ever sought to license the copyrights from the record companies. As a result, your Honor, it would be unlike any other copyright misuse claim ever known in any court across this land where there is no copyright which was even being sought, number one. Number two, it would be quite unusual, your Honor, and how this plays out if a copyright misuse defense with no factual allegations really around it with counterclaims dismissed could do what Twombly had said was not supposed to be done, which is to have burdensome antitrust discovery proceed. 19 7C7ARIC Conference THE COURT: But the difference in Twombly is those folks were going about their business and somebody came and attacked them in court and said we've got claims here. And even though he can't tell you anything about the claims, we are going to go and inflict a lot of financial damage on you. You are going after them, and they've said we have certain defenses here. That is separate from the counterclaim issue. I think they are entitled to defend themselves. And that is a different matter than if they had just walked in the door and said we want damages from you. You are trying to shut down their entire business. And maybe you are entitled to do that. But, it seems me that puts the shoe on a very different foot in terms of their ability to flesh out this defense. I hear what you are saying. The thing that is difficult from my standpoint in terms what is sensible judicial administration is what you're trying to back me into is a situation which I have to rule in the guise of a discovery ruling on some proposition of law. Some articulation of, in the abstract, what are these copyright misuse claims going to be and which of them are valid and which of them aren't. In a way, that I think is fairly difficult. Now, again, where I'm coming from here, is I had thought that the plaintiffs, while the counterclaims were pending, were in good faith providing discovery since I had not 20 7C7ARIC Conference stayed discovery. And therefore, that what remains here is not the same thing as the plaintiffs suddenly having to confront these massive claims, but is a relatively limited -- further limited by the rulings that I've made today -- clean up of the fringes of discovery that rightly or wrongly has already happened. That's why I say I'm interested a little bit in the burden story. To the extent that a showing can be made that in light of what the defendants are claiming, these burdens are excessive. Last thing. We want to get to the end of this process someday. You want to get to the end of the process someday because you've got the claims that they're doing something that's a threat to your business that warrants shooting them Page 9

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12-7-07 Court Transcript.txt down. And it seems to me that you are abetting any strategy, if there is one, to bog this thing down, to the extent that you involve me in having to do elaborate research and elaborate thinking about this or the other thing, and spend a lot of time resolving something, and first spend a lot of time with you briefing it, and then spending a lot of time with me deciding it. And at the end of a period of what is it going to be, right, it's Christmas, you are not going to get me another big joint letter until sometime in January. What if I rule against you and then we're not going to get the document discovery by the end of January. Then we are going to be put back another 21 7C7ARIC Conference couple of months by the same process that has delayed us here. It's your ballgame. That's your choice to make. MS. FORREST: Your Honor, let me just address that. When I talk about what is the place of the discovery for copyright misuse, I am not really talking, frankly -- except for label level searching, which I want some clarification on -- I am not talking about the documents. Your Honor is correct. We have produced the documents, but for some clean up items here. That, however, does not address entirely the burden. What will happen, your Honor, is we will have a deposition program here, and we will have expert discovery that will occur that will be enormously expensive and burdensome. Based upon a case that will look somewhat like the counterclaims might be sort of in the case if we proceed. So it's not just about the documents, your Honor. It is about the deposition program here being actually not just twice the size as it would otherwise be, but three or four times the size. Going into the issues about digital licensing, going into all of the arrangements that the record companies might have had, and the hashes and everything else. That is going to take lots more depositions than a copyright case. THE COURT: That is a good point. That also tells me how to resolve it, doesn't it. First, it takes the time pressure off, to a limited degree. We are not talking about 22 7C7ARIC Conference what is going to happen with the documents. And second, it means that we can talk about a concrete deposition program based on some concrete allegations from the defense. Because if they have the documents, they can describe exactly what it is they want to explore based on exactly what they have found. And then we're in a position where any limitation on what is going to happen will be based on the defendants having had a fair chance to review these documents and tell me whether they've got something, and what it is they think they've got, and what it is that has to be explored with individuals based on what has been found in the documents. Now, again, that said, I am not suggesting that we don't have any depositions until there has been some elaborate process of the depositions and what the deposed people are going to talk about. It seems to me there are clearly lots of depositions and lots of witnesses who can be started on while we go down this road. But it seems to me that if the document discovery is well on the road to being completed, it is not unrealistic to think that by the end of January there could be some submissions to the Court that explains what the defendants Page 10

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12-7-07 Court Transcript.txt propose to explore in depositions related to the copyright misuse defense, and what basis in the documentary record there is for formulating some concrete, this is what we think the plaintiffs did, this is what evidence we've already got that 23 7C7ARIC Conference suggests they did it, here is why as a matter of law that is a defense, and here is who we're going to have to talk to, to develop this further. MR. BAKER: If I may speak to that point. You may have wondered why I have this stack of documents here. This is the privilege logs that they have produced. They produced to us a month -- about six weeks ago. Just on the prior antitrust productions. I've got another box over here of a privilege log from the RIAA. They haven't given us the most recent production on the privilege log. This is going to take a long, long time to go through. They have claimed a lot of material as privileged. THE COURT: That's because a lot of material is probably privileged. You can make -- you know, take your shot. Do what you need to do. But we are not going to be doing this forever. If there is some plausible objection you have to these assertions of privilege, we'll deal with that. But we're moving forward. I told you what I think this case is about. I've given you a lot of leeway. Don't push it. The leeway is you're getting these documents on claims that have been dismissed as counterclaims based on a pretty amorphous defense that may not even exist in this circuit. The idea is you are getting a lot of material. It may not be everything you want. If there is something they're withholding that they're improperly withholding, we can litigate that. But you've had 24 7C7ARIC Conference your fun. You've had months of pursuing this stuff. By the end of January, if there is something that you've got, I expect to know what it is. That's all I am saying. We are going to be moving forward into that process. We are going to be doing depositions. We are going to get to the end of this someday. And the heart of this story still is whether there is something about this peer-to-peer system that escapes from the plaintiffs' contention that it is a violation of copyright. I don't know much, so I don't have any real opinion about that at this point. But it certainly doesn't seem to me to be a foregone conclusion that the way to defend this case has to be to somehow avoid a straightforward adjudication that you are doing something wrong. It seems to me there is -- my mind is completely open to the possibility you haven't done anything wrong at all. That is one piece of this. That's the big piece of this, in my view. Because I am not that sympathetic, frankly, to the idea that -- if you were just stealing their intellectual property, I don't know what this copyright misuse thing is all about. It wouldn't have a lot of traction. Anyway, enough said. I think I've ruled on the things I ruled on. If we are going to have something more, bring it on. Don't expect it is going to lead to a lot of delay, and don't expect we are going to be getting special masters, and 25 7C7ARIC Conference Page 11

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12-7-07 Court Transcript.txt don't expect we are going to just consume our lives with this. I am going to shoot from the hip. Do it from horseback. Try to get this case to someplace where it gets litigated. And that's what we are doing here. I don't feel obliged to review every document in these files and decide whether it's privileged. That's not a good use of my time. Given the nature of the case, I don't think it is a good use of any judicial officer's time. And I am going to take responsibility. I am going to do it at the level I think I can devote to it that's going to get the case moving. Anything else? Or can we all go home, especially the court reporter. MS. FORREST: I have one final issue, if I might, your Honor, to raise. Which is we had previewed in our letter brief, the joint letter brief of November 16, that we would be adding some additional tracks into our schedule A, which is at the back of the complaint. This does not change a single word of any substantive allegation in the complaint. As we said in paragraph 74 of our complaint originally, we would be spending some time during the discovery period trying to solidify what the list of tracks were that we were going to be suing upon. We have that ready. We understand from LimeWire that they object to our putting that forward, so we raise it with the Court, though we didn't actually think this was something that needed to be raised to the level of any kind of judicial 26 7C7ARIC Conference intervention. THE COURT: I wouldn't have thought so. Maybe I'm just not getting it, but isn't this related to this bifurcation or carving up business? MS. FORREST: It is, your Honor. It is going to add some sound recording registrations to the schedule at the back of complaint. So that now is going to be bifurcated, we'll give that list to LimeWire now, but the issue should be sort of off the table, if you will. THE COURT: I would think so. I don't see any reason, particularly given that discovery hasn't progressed on this front and now isn't going to progress on this front, why there is any prejudice to amending the complaint to in effect add more allegedly copyrighted materials. That is because we have plenty of time if, as and when we get there to do that discovery and go through it all. But we are not going to add that at this point. MR. BAKER: After today's ruling, your Honor, that's fine with us. If they would just supply -- one of the reasons I've tried to ask why are you doing this, so we would have some justification to our client to allow this to happen. THE COURT: Okay. I think we're done for today. Thank you very much. Again, I'm sorry not to have had more time to discuss this with you all. But other people have other business, some of which involves their liberty. See you next 27 7C7ARIC Conference time I see you. Tom will work out with you a date for some next conference just to be on the calendar in early April, but it may be that we'll be seeing more of each other between now and then anyway. Thank you. Happy holidays to everybody. o0o Page 12

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age 13