PA Advisors, LLC v. Google Inc. et al

Filing 216

TRANSCRIPT of Proceedings held on 10-6-08, Motion Hearing, 11 pages before Judge David Folsom. Court Reporter/Transcriber: Libby Crawford,Telephone number: 903.794.4067 Ext. 237. NOTICE RE REDACTION OF TRANSCRIPTS: The parties have seven (7) business days to file with the Court a Notice of Intent to Request Redaction of this transcript. If no such Notice is filed, the transcript will be made remotely electronically available to the public without redaction after 90 calendar days. The policy is located on our website at www.txed.uscourts.gov Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.. Redaction Request due 11/6/2008. Redacted Transcript Deadline set for 11/17/2008. Release of Transcript Restriction set for 1/14/2009. (aec, )

PA Advisors, LLC v. Google Inc. et al

Doc. 216

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COURT REPORTER: APPEARANCES: FOR PLAINTIFF: PA ADVISORS, LLC VS. GOOGLE, INC.

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS MARSHALL DIVISION . . . DOCKET NO. 2:07CV480 MARSHALL, TEXAS OCTOBER 6, 2008, 10:36 A.M.

MOTION FOR PROTECTIVE ORDER BEFORE THE HONORABLE DAVID FOLSOM, UNITED STATES DISTRICT JUDGE.

MR. ANDREW W. SPANGLER SPANGLER LAW PC 208 N. GREEN ST. SUITE 300 LONGVIEW, TX. 75601 MR. BRIAN C. CANNON QUINN EMANUEL URQUHART OLIVER & HEDGES 555 TWIN DOLPHIN DRIVE SUITE 560 REDWOOD SHORES, CA. 94065 MR. JEFF BENTCH BECK, REDDEN & SECREST ONE HOUSTON CENTER 1221 MCKINNEY STREET SUITE 4500 HOUSTON, TX. 77010

FOR DEFENDANT GOOGLE INC.:

FOR DEFENDANT YAHOO!, INC.:

MR. JASON C. WHITE HOWREY LLP 321 NORTH CLARK STREET SUITE 3400 CHICAGO, IL. 60610 MS. LIBBY CRAWFORD, CSR OFFICIAL COURT REPORTER 500 STATE LINE AVENUE

Dockets.Justia.com

-21 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PROCEEDINGS RECORDED BY STENOMASK VERBATIM REPORTING, TRANSCRIPT PRODUCED BY CAT SYSTEM. TEXARKANA, TX. 75501 903.794.4067 EXT. 237

-31 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (OPEN COURT) THE COURT: GOOD MORNING, GENTLEMEN. PROTECTIVE ORDER ISSUE. THIS IS THE PROCEEDINGS MARSHALL, TEXAS OCTOBER 6, 2008

I SORT OF FOUND MYSELF, AS I READ

THROUGH THIS YESTERDAY, ASKING MYSELF WHY I SET THIS BUT, NEVERTHELESS, WE ARE HERE. ­- EVERYONE MAY HAVE A SEAT. SO, MY UNDERSTANDING, YOUR PRIMARY WHY DON'T WE MAKE ANNOUNCEMENTS

FOR MRS. CRAWFORD'S BENEFIT AS FAR AS THE ATTORNEYS PRESENT AND WHO YOU REPRESENT. MR. SPANGLER: YOUR HONOR, ANDREW SPANGLER ON BEHALF OF PA ADVISORS, READY TO PROCEED. MR. CANNON: GOOD MORNING, YOUR HONOR. CANNON ON BEHALF OF GOOGLE. THIS IS BRIAN

WITH ME IS JEFF BENTCH.

MR. WHITE: GOOD MORNING, YOUR HONOR, JASON WHITE ON BEHALF OF YAHOO!. THE COURT: VERY WELL. AND WE HAVE AN ISSUE OF

SOURCE CODE, WHERE IT'S TO BE MADE AVAILABLE FOR INSPECTION. MY UNDERSTANDING, ESSENTIALLY WE HAVE AN ISSUE OF PLAINTIFFS SUGGESTING DALLAS, DEFENDANTS SUGGESTING CALIFORNIA, AND PERHAPS WE HAVE A DISAGREEMENT AS TO THE AMOUNT OF NOTICE. MAYBE THE PLAINTIFFS ARE SAYING TWENTY-FOUR HOURS AND THE DEFENDANTS WANTING MORE TIME. IS THAT CORRECT?

MR. CANNON: THAT'S ESSENTIALLY CORRECT, YOUR HONOR.

-41 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I THINK THAT THE NOTICE PERIOD IS SECONDARY TO THE LOCATION. THE DEFENDANTS WOULD LIKE THE SOURCE CODE INSPECTED WHERE IT IS PHYSICALLY LOCATED, WHICH IS NORTHERN CALIFORNIA. THE COURT: RIGHT. SO THOSE ARE ESSENTIALLY THE SO WHAT DO YOU SAY ON BEHALF

ISSUES WE NEED TO WORK THROUGH. OF THE PLAINTIFF?

MR. SPANGLER: YOUR HONOR, BASICALLY, AND I AM GOING TO GO THROUGH THE ARGUMENT THAT THE DEFENDANTS HAVE MADE BOTH IN THE PROTECTIVE ORDER AND THEIR SUPPLEMENTAL BRIEF. WE

BELIEVE THAT THIS CASE SHOULD BE TREATED THE SAME AS THE POLARIS CASE, THE BRIGHT RESPONSE CASE. REASONS. FIRST, THE DEFENDANTS SAY THAT THIS -THE COURT: IS THAT, I AM TRYING TO REMEMBER, IS THAT ONE OF MY CASES OR IS THIS -MR. SPANGLER: THAT CASE IS IN FRONT OF JUDGE EVERINGHAM RIGHT NOW. THE COURT: IS THAT A RELATED CASE IN ANY FASHION? MR. SPANGLER: NOT RELATED IN TERMS OF PARTIES BUT IN TERMS OF CORE TECHNOLOGY. ABOUT THE SAME TIME. YOU HAVE BOTH CASES ARE GOING ON THERE ARE A NUMBER OF

YOU HAVE BOTH GOOGLE AND YAHOO! IN THE

CASES; YOU HAVE SOME OF THE SAME PLAINTIFF LAWYERS; YOU HAVE THE SAME LOCAL COUNSEL FOR GOOGLE; YOU HAVE THE SAME NATIONAL AND LOCAL COUNSEL FOR YAHOO! SAME IN BOTH CASES. THE SOURCE CODE EXPERT IS THE

-51 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: WHERE DOES THE PLAINTIFF'S EXPERT RESIDE? MR. SPANGLER: AUSTIN. THE COURT: AUSTIN. MR. SPANGLER: YES, YOUR HONOR. ONE THING I WANTED

TO POINT OUT IS IN THE SUPPLEMENTAL BRIEF THE DEFENDANTS ALLEGE THAT THEY SHOULDN'T HAVE TO PRODUCE IT IN DALLAS BECAUSE WE HAVE ACCUSED A WIDER RANGE OF PRODUCTS IN THIS CASE VERSUS IN THE BRIGHT RESPONSE CASE. IN FACT, IF YOU LOOK AT

THE INFRINGEMENT CONTENTIONS, THEY ARE EXACTLY THE SAME ACCUSED PRODUCTS, EXACTLY THE SAME. SO YOU HAVE THE SOURCE

CODE EXPERT THAT TRAVELS TO DALLAS TO LOOK AT THE CODE, THE GOOGLE CODE AND THE YAHOO! CODE, WHO THEN HAS TO TRAVEL TO NORTHERN CALIFORNIA TO ESSENTIALLY DO SIMILAR -THE COURT: WAS THAT PROTECTIVE ORDER AGREED UPON OR IS THAT JUDGE EVERINGHAM'S RULING? MR. SPANGLER: IT WAS AGREED UPON. IT WAS AGREED THE

UPON BY YAHOO!'S COUNSEL THAT IS SITTING HERE TODAY.

OTHER THING IS THEY SAY THEY CAN'T GIVE UP PHYSICAL CONTROL, THAT THEY NEED TO HOLD ONTO IT BECAUSE THEY ARE SCARED ABOUT TRANSPORTING IT. WELL, WE WILL AGREE TO FLY SOMEONE TO DALLAS THAT'S NOT A PROBLEM. SO THEY

WITH THE SOURCE CODE IN HAND. NEVER GIVE UP PHYSICAL CONTROL.

AND THE ARGUMENT THAT THEY --

THE COURT: WHAT ABOUT THE NOTICE ISSUE, WHY DO YOU FEEL TWENTY-FOUR HOURS IS SUFFICIENT? MR. SPANGLER: WHATEVER IS IN THE BRIGHT RESPONSE

-61 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CASE, THE POLARIS CASE, WE WILL AGREE TO THAT IN THIS CASE. DON'T KNOW WHAT THE ­- I DON'T REMEMBER WHAT IT IS, BUT IF IT'S FORTY-EIGHT HOURS, THAT'S FINE. IF IT'S TWENTY-FOUR, WE I

DON'T UNDERSTAND WHY IN ONE CASE WITH THE SAME ACCUSED PRODUCTS, THE SAME LAWYERS THAT AGREED TO IT, WHY WE CAN'T HAVE THAT NOW. THE COURT: VERY WELL. COMMENTS ON BEHALF OF GOOGLE. I AM NOT A LAWYER IN

MR. CANNON: YES, YOUR HONOR. THE POLARIS CASE. CASE.

I DID NOT REPRESENT GOOGLE IN THE POLARIS IT'S A DIFFERENT PATENT, A

IT IS NOT A RELATED CASE.

DIFFERENT INVENTOR.

PLAINTIFF'S COUNSEL MAY BE THE SAME, BUT SO THE AND

DEFENDANT'S COUNSEL IS TO SOME DEGREE DIFFERENT.

TECHNOLOGY IS DIFFERENT BECAUSE IT'S A DIFFERENT PATENT. IN THAT CASE THE PROTECTIVE ORDER WAS AGREED UPON.

IT AROSE

OUT OF A SERIES OF NEGOTIATIONS AND COMPROMISES, YOUR HONOR, AND IT SHOULD NOT SERVE AS THE DEFAULT RULE FOR ALL CASES MOVING FORWARD. WE SUBMITTED A SUPPLEMENTAL BRIEF WHERE ONE OF THE ARGUMENTS WE MADE IS THE RISK IS CUMULATIVE. WHAT THAT MEANS

IS IF GOOGLE AND YAHOO! HAVE TO REPEATEDLY SEND ITS SOURCE CODE OUT OF ITS PHYSICAL LOCATION, THE RISK FOR SOMETHING HAPPENING TO THAT SOURCE CODE INCREASES. SO A RULE THAT'S

AGREED TO IN ONE CASE SHOULD NOT SERVE FOREVER MORE AS THE RULE THAT GOOGLE AND YAHOO! SHOULD TRANSPORT THEIR SOURCE CODE OUT OF WHERE IT IS PHYSICALLY LOCATED.

-71 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 AND ONE THING I REALLY WANT TO EMPHASIZE THIS MORNING IS JUST HOW VALUABLE THIS SOURCE CODE IS. THE REMAINDER OF THE

DOCUMENTS WE HAVE AGREED TO PRODUCE ON CDS IN SEARCHABLE FORMAT. WE CAN SEND THEM TO PLAINTIFFS, TO PLAINTIFF'S

OFFICES IN TEXAS SO THEY CAN INSPECT THEM AND SEARCH THEM AND BUILD THEIR CASE AS THEY SEE FIT. THE SOURCE CODE IS DIFFERENT, YOUR HONOR. THE SOURCE

CODE REPRESENTS THE ACTUAL SOFTWARE THAT GOOGLE AND YAHOO! HAVE BUILT THEIR BUSINESSES ON. THE COMPUTERS WHAT TO DO. IT'S THE SOFTWARE THAT TELLS

AND THE PROBLEM IS ONCE, IF THAT IS

COMPROMISED IN ANY WAY, THE INVESTMENT THAT GOOGLE AND YAHOO! MADE IN THAT SOFTWARE IS, I MEAN, THE DOWNSIDE IS CATASTROPHIC COMPARED TO THE, I WOULD SAY, RELATIVELY MINOR INCONVENIENCE OF HAVING AN EXPERT IN A HIGH PROFILE KIND OF CASE HAVE TO FLY TO WHERE THE SOURCE CODE IS LOCATED. AND PLAINTIFF HAS TOLD US THAT IT HAS AN EXPERT IN AUSTIN. WE HAD NOT HEARD THAT BEFORE. UNDER THE PROTECTIVE SO THAT

ORDER, THERE HAS BEEN NO DISCLOSURE OF AN EXPERT YET. WAS NEWS TO US THIS MORNING.

I AM NOT SAYING IT'S NOT TRUE,

WE JUST DID NOT KNOW THAT THERE WAS AN EXPERT IN THE PA ADVISOR'S CASE. AND I GUESS MY BOTTOM LINE IS, IF YOU COMPARE THE POTENTIAL PREJUDICE TO DEFENDANTS TO HAVING A RULE GOING FORWARD THAT ITS SOURCE CODE HAS TO BE TRANSPORTED FROM WHERE IT IS PHYSICALLY LOCATED, COMPARED TO THE INCONVENIENCE IN

-81 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NOTICE. THIS CASE OF HAVING A PLAINTIFF GO TO WHERE THE COMPANIES ARE LOCATED, I WOULD SUBMIT, YOUR HONOR, THAT THE PREJUDICE TO DEFENDANTS FAR OUTWEIGHS THE -THE COURT: AND HOW MUCH NOTICE ARE YOU REQUESTING? MR. CANNON: WELL, WE PROPOSE SEVENTY-TWO HOURS IF THE INSPECTION IS IN NORTHERN CALIFORNIA, WE CAN IF THE ISSUE IS GETTING THE SOURCE

GET A LOT LESS NOTICE.

CODE, PUTTING IT ON A DISK AND TRANSPORTING IT SOMEWHERE, THAT TAKES TIME. IF WE DO IT IN NORTHERN CALIFORNIA, WE CAN HAVE

IT PRELOADED ON A COMPUTER AND PHYSICALLY TAKE IT FROM GOOGLE OR YAHOO! UP TO COUNSEL'S OFFICES WHICH IS WITHIN THE DISTRICT. PERIOD. THE COURT: VERY WELL. ANY ADDITIONAL COMMENTS? WE CAN ACCOMMODATE THEM ON A MUCH SHORTER NOTICE

MR. WHITE: ON BEHALF OF YAHOO! I WAS A PART OF THE NEGOTIATION IN THE POLARIS CASE, YOUR HONOR, AND AS MY COCOUNSEL MENTIONED, THAT WAS A RESULT OF A SERIES OF COMPLEX NEGOTIATIONS THAT WERE GIVE AND TAKE HERE AND THERE. IF

YAHOO! WOULD HAVE UNDERSTOOD THAT IT WAS FOREVER AGREEING TO PRODUCE ITS SOURCE CODE IN ALL INSTANCES IN TEXAS BY AGREEING TO THAT PROTECTIVE ORDER, OBVIOUSLY THE NEGOTIATIONS MAY HAVE GONE DIFFERENTLY AND WE MAY NOT HAVE AGREED TO THAT. THE COURT: WHY DO YOU THINK THERE IS MORE POTENTIAL FOR HARM IN THIS CASE VERSUS THE POLARIS CASE, WHICH I DON'T KNOW ANYTHING ABOUT THE SUBJECT MATTER, BUT --

-91 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 REPLY. MR. WHITE: I WAS SURPRISED TO HEAR THAT THE ACCUSED TECHNOLOGIES ARE EXACTLY THE SAME BECAUSE I DON'T BELIEVE THAT'S EXACTLY THE CASE. I THINK THAT HERE THERE IS A WIDER

RANGE OF THESE APPLICATIONS IN TERMS OF THE LISTINGS OF PRODUCTS. SO IT DOES AT LEAST APPEAR TO US ON ITS FACE THAT

IT IS A BROADER ACCUSATION OF INFRINGEMENT. THE COURT: WELL, I MEAN DO YOU THINK THAT INCREASES THE POTENTIAL FOR HARM? MR. WHITE: ABSOLUTELY. TO THE EXTENT IT SWEEPS IN MORE CODE, OR MORE PRODUCTS, OR MORE TECHNOLOGY, THE RISK IS JUST HEIGHTENED. THE COURT: AND THEN WE WILL GIVE YOU A CHANCE TO ADDITIONAL COMMENTS? MR. CANNON: I JUST WANT TO ADD, YOUR HONOR, THE MORE TIMES ONE PUTS A CD IN THE FED EX AND SENDS IT OUT OF STATE, THE RISK SIMPLY INCREASES. SO WHATEVER THE RISK THAT WAS, YOU

KNOW, EVALUATED BASED ON THE ACCUSED PRODUCTS IN THE POLARIS CASE, A NEW CASE WITH MORE, YOU KNOW, THE MORE TIMES ONE PHYSICALLY LETS GO OF THE SOURCE CODE, JUST SIMPLY THE GREATER THE RISK THAT INCREASES. THE COURT: NOW, REPLY COMMENTS. MR. SPANGLER: THANK YOU, YOUR HONOR. FIRST OF ALL,

THE LIST OF ACCUSED PRODUCTS, AND I HAVE THEM BOTH RIGHT HERE, ARE EXACTLY THE SAME. THERE IS NO DEFAULT RULE. IN FACT, WE

WOULD ENCOURAGE THE COURT TO PUT A FOOTNOTE IN THE ORDER THAT

- 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SAYS THIS IS NOT A DEFAULT RULE. CIRCUMSTANCES. THE COURT: OH, I LOOK AT EVERY ONE OF THESE INDIVIDUALLY. MAYBE SOME GUIDANCE FROM PAST ORDERS, BUT I THIS IS A UNIQUE SET OF

DON'T HAVE ANY TYPE OF DEFAULT RULE. MR. SPANGLER: THE OTHER THING IS THEY SAY THEY HAVE TO TAKE IT ON A DISK, LOAD IT ON A SECURE LAPTOP; IT HAS TO LEAVE GOOGLE'S PREMISES AND YAHOO!'S PREMISES AND TRAVEL TO THAT LAW FIRM. IT IS LEAVING THE PREMISES. SO WHAT WE SAY

IS, THEY DON'T WANT TO SEND IT FED EX.

YOU LOAD IT ON THE

SAME LAPTOP, WE WILL PAY FOR THE SAME PERSON THAT WAS GOING TO GO, WE WILL PAY FOR THEM TO TRAVEL ON A PLANE. GIVE UP PHYSICAL CONTROL. THEY NEVER

THEY ARE ALREADY PRODUCING THAT, A THE

LOT OF THAT SAME SOURCE CODE IN THE POLARIS CASE. EFFICIENCIES ACTUALLY FAVOR US IN EVERY WAY. SET OF CIRCUMSTANCES.

THIS IS A UNIQUE

WHEREAS THE DEFAULT RULE THAT CUTS

AGAINST THE PLAINTIFF IS YOU CAN HAVE IT IN ONE CASE, YOU CAN HAVE ALL THIS OVERLAP, AND THEN BECAUSE THERE IS SUPPOSEDLY MORE CODE OR IF THAT'S SENSITIVE, WHICH EVERY DEFENDANT ALLEGES, YOU THEN ­- THEY NEVER HAVE TO LEAVE THOSE PREMISES. AND SO NOW IN EVERY CASE WE WOULD HAVE TO TRAVEL ALL OVER. THERE ARE ARGUMENTS BOTH WAYS. WE THINK WITH THIS MUCH OVERLAP, SOME OF THE SAME LAWYERS, THE EXACT SAME LAWYERS FOR YAHOO!, THE SAME ACCUSED PRODUCTS, THE SAME TIME, IT JUST MAKES SENSE. SO

- 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 REPORTER'S CERTIFICATION I CERTIFY THAT THE FOREGOING IS A CORRECT TRANSCRIPT FROM THE RECORD OF PROCEEDINGS IN THE ABOVE-ENTITLED MATTER. DATE: OCTOBER 15, 2008 /S/LIBBY CRAWFORD LIBBY CRAWFORD, CSR OFFICIAL COURT REPORTER THE COURT: WHY DALLAS VERSUS MAYBE HOUSTON WHERE MR. BECK'S OFFICE AND MR. WILLIAMS' OFFICE IS LOCATED? MR. SPANGLER: THE PROBLEM WITH THAT IS WE HAVE ALREADY NEGOTIATED ALL THAT WITH THE POLARIS CASE. AND WE DID

SAY IN THAT CASE WE DON'T CARE WHAT CITY IN TEXAS AS LONG AS IT'S IN THE SAME STATE. SO SINCE WE HAVE ALREADY NEGOTIATED,

AND THIS WAS JUST A FEW WEEKS AGO IN DALLAS, WE WOULD LIKE TO KEEP IT IN DALLAS. THE COURT: VERY WELL. THEN I WILL TAKE THIS UNDER

ADVISEMENT, AND I WANT TO LOOK AT THE POLARIS ORDER AND SEE IF I RECEIVE ANY GUIDANCE FROM THAT. AND I WILL HAVE SOMETHING

OUT BEFORE THIS WEEK IS OVER SO THIS CASE IS NOT DELAYED ADDITIONALLY. ANYTHING ELSE? I APPRECIATE YOUR COMMENTS, AND IF THERE

IS NOTHING MORE, WE WILL BE IN RECESS. (ADJOURNED AT 10:46 A.M.)