Software Rights Archive, LLC v. Google Inc. et al

Filing 118

SUR-REPLY to Reply to Response to Motion re 66 MOTION to Dismiss for Lack of Standing filed by Software Rights Archive, LLC. (Attachments: # 1 Exhibit Table of Exhibits, # 2 Exhibit Exhibit 1, # 3 Exhibit Exhibit 2, # 4 Exhibit Exhibit 3, # 5 Exhibit Exhibit 4, # 6 Exhibit Exhibit 5, # 7 Exhibit Exhibit 6, # 8 Exhibit Exhibit 7, # 9 Exhibit Exhibit 8, # 10 Exhibit Exhibit 8, # 11 Exhibit Exhibit 10, # 12 Exhibit Exhibit 11, # 13 Exhibit Exhibit 12, # 14 Errata Exhibit 13, # 15 Exhibit Exhibit 14, # 16 Exhibit Exhibit 15, # 17 Exhibit Exhibit 16, # 18 Exhibit Exhibit 17, # 19 Exhibit Exhibit 18, # 20 Exhibit Exhibit 19, # 21 Exhibit Exhibit 20, # 22 Exhibit Exhibit 21, # 23 Exhibit Exhibit 22, # 24 Exhibit Exhibit 23, # 25 Exhibit Exhibit 24, # 26 Exhibit Exhibit 25, # 27 Exhibit Exhibit 26, # 28 Errata Exhibit 27)(Duvvuri, Narasa)

1
..?'

1

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS

2 3
4

MARSHALL DIVISION

CE RTI r:r ~:::".,~ ".,# g ~ 1'""1

TRANSCRip~r
-- - -- -- - -- -- - - - - - --- --- - - -- -- - - - - - -- - x

5 6 7
8

SOFTWARE RIGHTS ARCHIVE, LLC.,

Plaintiff,
-vsINC. ,
Civil Action No.
2: 07-cv-511 (CE)

GOOGLE INC., YAHOO! INC., lAC SEARCH 9 & MEDIA, INC., AOL, LLC., and LYCOS,

10
11 12 13
14

- - - - - -- - - -- -- - - --- - - --- - - -- - - - - - - - - --x

Defendants.

Videotaped deposition of JEFFREY FRANKLIN AIT, the
wi tness herein, called for the purpose of Discovery

15

16
17 18

Examination by the Defendants, pursuant to Federal
Rules of Civil Procedure, taken before Rita Rodriguez,

a Notary Public for South Carolina, ~t the Hilton Myrtle Beach Resort, 10000 Beach Club Drive, Myrtle
Beach, South Carolina, on Tuesday, September 30, 2008,

19

20
21
22

commencing at 9: 45 a.m.

23
"." "

24

\

Vi

25

EXHIBIT 3
Doerner & Goldberg New York * A Veritext Company 1350 Broadway * New York, NY 10018 * 212-564-8808

104

1 A.

Yes.
The next paragraph she says, "In 2000 while
finalizing the 2000 tax returns it appears we

2 Q.
3
4

became aware that Slash still existed on paper
and had not been liquidated." And then she says, "I have an e-mail
string from Wilson, Sonsini relating to the bill

5 6

7
8

from the franchise tax board asking us to prepare

9

a letter saying that Slash had no assets and a
response back saying we were not comfortable stating that since we had just determined the
entity still existed."
Do you see that?

10
11 12

13

14 A.

Okay.
Do you recall any of that that she just describes there that Wilson, Sonsini had e-mailed -- that

15 Q.
16
17
18

the franchise tax board, somebody had wanted them
to prepare a letter saying that Slash had no
assets and in 2000 y' all were not comfortable

19

20
21
22

stating that since you hadn't determined if Slash
still existed?

Do you recall that?

23 A.
24

I mean, I did not recall that until she sent me
this e-mail.

25 Q.

But you have no reason to dispute the accuracy of
Doerner & Goldberg New York * A Veritext Company 1350 Broadway * New York, NY 10018 * 212-564-8808

105
1

her e-mail; do you?

2 3
4

A.
Q.

No.
In fact, we have seen tax returns from 1998 and
1999 for Slash showing that they still had some
ongoing business acti vi ties; correct?

5
6 7
8

A.

They were filed in 2001 as a result of this
determination that we needed to do that.

Q.

Right. Which confirmed that slash still had some
ongoing business activities in 1998 and 1999;
correct, Mr. Ait?

9

10 11
12

A.
Q.

Yes.
And she says, "I don't have any records but we must have done some work in 2000 to allocate
something to the entity as the final tax returns
have filings for the entity each year until 2000.

13
14

15

16
17 18

We recognize royalty income and showed some fixed

assets. "

Do you see that?
A.
Right, but we did not allocate any gain on sale
of software.

19

20 21
22
Q.

You don't have any reason to dispute the accuracy
of that statement by Miss Fugitt; right?

23
24

A.
Q.

I don't.

It's a direct interpretation.

You would agree, wouldn't you, Mr. Ait, that in
1998 and 1999, based on the documents we have
Doerner & Goldberg New York * A Veritext Company 1350 Broadway * New York, NY 10018 * 212-564-8808

25

107
1

misremembered it or misheard it?
A.

2

No, I said those employees I agreed to keep
employed for one year in North Carolina but as
employees of Site not as employees of Slash.

3
4

5
6

Q.

Well, if we look at the federal income tax return
for 1998, we show Slash paying salaries of

7
8

$88,000?
A.
But I don't know what that's for. Their salaries

9

would have been much greater than that. That
actually can be a portion of my salary as the CEO
that they decided to apply to this.

10
11

Again,

12 13
14

wi thout asking the accountants the way that they
distributed these assets across that for whatever
purposes, I can't tell you.
I can't remembe r .

15

But I could tell you that Ron Sauer's

16
17 18
Q.

salary, Neal's salary and Sean's salary far

exceeded $88,000.
But that $88,000 could be a portion of their

19

salaries too; couldn't it?
A.
Q.

20 21
22

It could be but I don't believe that it is.

But we have here $88,000, compensation of

officers. That's what was written, compensation
of officers, on a federal income tax return that

23
24

you signed in 2001 on behalf of Slash?

25

A.

But it would not have been their salary. This
Doerner & Goldberg New York * A Veritext Company 1350 Broadway * New York, NY 10018 * 212-564-8808

108
1

would have been mine because it says officers.
They were not officers.
Q.

2 3
4

But you would agree that Slash was paying at

least $88,000 because that was what was reported to the federal government for an officer in the
1998 tax year; correct?

,5
6 7
8

A.

Yes.
MR. KAPLAN: Objection. Asked and

9

answered.
Q.

10
11 12 13
14

Wouldn't you agree, based on what we have seen
here today, Mr. Ai t, that Slash was not a shell

entity in 1998 or 1999?

A.

No, I don't agree with that. There was no
business carried out by Slash.

15

Q.

Even though Slash is taking these losses and
other amortizations and depreciations and has
capi tal paid in as we have seen on these income

16
17
18

tax returns in 1998, your opinion and belief, as
you sit here today under oath, was that Slash was

19

20 21
22

a shell entity in 1998?

A.

Yes, it was a wholly-owned subsidiary that did no

business.

I don't know what you classify as a

23
24

shell but that's what I would classify as a

shell.
Q.

25

Let me ask you, what is your definition of a
Doerner & Goldberg New York * A Veritext Company 1350 Broadway * New York, NY 10018 * 212-564-8808

110
"

1

shell entity? If you told me I didn't get it.
A shell entity basically is a corporation that

2 A.
3

has no assets.
But we know from looking at the 1998 tax return
that in fact Slash had assets in 1998, don't we,

4 Q.
5

6

sir?
Desks, chairs and computers, yes.

7 A.
8 Q.
9

So you would agree under your own definition of

shell entity, under the definition that you j list
told me, and I mean this respectfully, Slash was

10
11 12

not a shell entity at least in 1998, you would
agree with that; right, and the same in 1999;

13

correct?
Okay.
I'm going to get through some stuff here that I

14 A.
15 Q.
16
17

don't want to ask you. Give me a second here.
I'm going to cut some stuff here.

18

V-Search technology, Mr. Ai t, you have
talked about that being the technology that you
intended

19

20

to sell to Mr. Egger; correct?

21 A.

Yes.
Did you ever try to sell the V-Search technology
to anyone other than Mr. Egger?

22 Q.
23

24 A. 25 Q.

No.
When we say the V-Search technology, do you know
Doerner & Goldberg New York * A Veritext Company 1350 Broadway * New York, NY 10018 * 212-564-8808

~)
. ... ......

1

STATE OF SOUTH CAROLINA

2
3
4

SS : CERTI FICATE
COUNTY OF HORRY I, Rita Rodriguez, a Notary Public for South Carolina, do hereby certify that the wi thin named

5
6

wi tness, , was by me first duly sworn to
testify the truth, the whole truth and nothi.ng but the

7
8

truth in the cause aforesaid:
That

9

the testimony then given was reduced by me

10 11
12 13
14

the presence of said witness, subsequently transcribed onto a computer under my
to stenotype in

direction, and that the foregoing is a true and correct
transcript of the testimony so given as aforesaid.
f

~")

15

I do further certify that this deposition was taken at the time and place as specified in the
foregoing caption, and that I am not a relative,

l
!

l

16
17 18

,
I

counselor attorney of either party, or otherwise
interested in the outcome of this action.

19 20 21

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal of office at Myrtle Beach, South

Carolina this day of . ,
'l ii-Gl ~aoLMOtlÅJ g

22

23
24

RITA RODRIGUEZ, Not~r¥ Public
for South Carolina.

My Commission expires October 4, 2010.

.~i
(

25
::. : 'f ~ '. 10 ,..__,...V.i_,I¡..~~ ~""-~_IIL""_"_"'90.''''';,U_"",,,,,~,,,,,. ..~_.~....":...." ..._.....'...'""~~ ..._""

~-...... ..~~ ,