Mirror Worlds, LLC v. Apple, Inc.

Filing 405

Emergency MOTION to Stay Entry of Jury Verdict and Judgment by Apple, Inc.. (Attachments: # 1 Affidavit of Jeffrey G. Randall, # 2 Exhibit 1, # 3 Text of Proposed Order)(Randall, Jeffrey)

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Mirror Worlds, LLC v. Apple, Inc. Doc. 405 Att. 2 Exhibit 1 Dockets.Justia.com Page 1 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 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS TYLER DIVISION MIRROR WORLDS, LLC VS. APPLE, INC., ET AL * * * * * * Civil Docket No. * 6:08-CV-88 Tyler, Texas October 1, 2010 9:00 A.M. TRANSCRIPT OF JURY TRIAL BEFORE THE HONORABLE LEONARD DAVIS UNITED STATES DISTRICT JUDGE APPEARANCES: FOR THE PLAINTIFF MR. JOSEPH DIAMANTE MR. KENNETH STEIN MR. IAN G. DIBERNARDO MR. ALEXANDER SOLO MR. CHARLES E. CANTINE STROOCK & STROOCK & LAVAN 180 Maiden Ln. New York, NY 10038 MR. OTIS CARROLL MR. PATRICK KELLEY IRELAND, CARROLL & KELLEY 6101 S. Broadway, Ste. 500 Tyler, TX 75703 COURT REPORTERS: MS. SHEA SLOAN, CSR MS. JUDY WERLINGER, CSR Official Court Reporters 211 West Ferguson, Third Floor Tyler, TX 75702 903/590-1171 (Proceedings recorded by mechanical stenography, transcript produced on CAT system.) Page 2 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 Page 3 FOR THE DEFENDANTS MR. JEFFREY G. RANDALL MR. RAYMOND YU MS. ERICKA J. SCHULZ PAUL HASTINGS 1117 S. California Ave. Palo Alto, CA 94304-1106 MR. ALLAN M. SOOBERT MR. BROCK WEBER MR. KIM MOORE PAUL HASTINGS 875 15th St. NW Washington, DC 20005 MR. S. CHRISTIAN PLATT MR. JEFFREY COMEAU PAUL HASTINGS 4747 Executive Dr. 12th Floor San Diego, CA 92121 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 Page 4 PROCEEDINGS (Jury out.) THE COURT: Please be seated. All right. The Court has reviewed the parties' briefing on this issue of Apple's objection to the claims of the -- let's see, what was it, the '313 and the -- what's the other one? '313 and the '227 -MR. RANDALL: That's correct, Your Honor. MR. DIBERNARDO: -- patents should not be included in the Charge. And I guess the question I have for Apple is, was this raised in JMOL when you raised the JMOL with regard to indirect infringement? Did you raise that that would knock this out -MR. RANDALL: Well, Your Honor -THE COURT: -- as well? MR. RANDALL: It -- we did raise it when we -- should I take the -THE COURT: Yes, please. Thank you. MR. RANDALL: Yes, Your Honor. When we raised JMOL, we identified the grounds. We identified the indirect infringement. I don't -- I don't think we specifically identified these claims in this patent, but, nonetheless, we -- it would cover it. I mean, we didn't identify these specific Page 5 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 claims. We did -THE COURT: Well, I understand you're arguing as a matter of law it now knocks them out if the Court has granted JMOL on indirect infringement, right? MR. RANDALL: I'm sorry. I didn't -THE COURT: You're arguing now that if -since the Court granted JMOL on the indirect infringement, that, as a matter of law, knocks out these -- these two patents? MR. RANDALL: That's correct, Your Honor. THE COURT: I'm not sure that's the case. I granted the JMOL with regard to the indirect infringement, because there was no expert testimony that I recall tying up or -- or expressing an opinion about that. Now, in their briefing, the Plaintiffs have raised the issue that there's certain -- that there is evidence of user use of these methods that would provide for direct infringement. That's a very close call, I think, as to whether -- and I'd be glad to hear argument as to whether there can be enough evidence to show that a user used these in order to constitute direct infringement but not enough to constitute indirect infringement. 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 MR. RANDALL: Yes, Your Honor. THE COURT: Do you care to respond to that? MR. RANDALL: I would, Your Honor. And here's what we brought up on JMOL, and it applies equally to this issue. And that is that they failed to completely, whether through expert testimony or factual testimony or documents, to provide evidence regarding indirect infringement, specifically as to inducement and contributory infringement. So, for instance, on the inducement charge, they have to show that the alleged infringer actively encouraged or instructed another person on how to -THE COURT: Well, I -- I understand that. But I guess my question is, is the standard -- I understand what the standard is for inducement, but can they -- do they have to prove inducement in order to get direct infringement under these two method claims -claim tests? MR. RANDALL: Yes, Your Honor. And there are two issues that we're dealing with. Number one is, did they fail to produce evidence of inducement and contributory such that they can get all of these sales of these products into 2 (Pages 2 to 5) Page 6 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 Page 7 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 evidence, et cetera, and prove infringement that way. And the answer is no. So they clearly didn't show any inducement or encouragement. So that's all out for sure. The second issue I think that you're dealing with is, do the claims really require some other party to participate? They're saying they proved direct infringement only on these very, very narrow circumstances, for instance, when someone was, you know, using the computer on a videotape or something like that. Let me address their evidence on that subject. First of all, they cite about 15 exhibits in this brief. Only one -- only one of those exhibits was PX1676 was a reviewer's guide that shows -- that they rely on. So they rely on that for direct infringement. That's insufficient. The issue that I think you're grappling with is, does it require another person, another entity? And, Your Honor, the claims clearly do. And if we look at the claims -THE COURT: Well, is Apple taking the position, though, that none of these that they sold, that no users turned them on? MR. RANDALL: We're taking the position twofold. One, the claims require another entity, a user to do something. And because they didn't provide sufficient evidence on that subject, specifically on inducement and contributory, their entire claims fall, period. If the Court disagrees with that for whatever reason, then the -- the -- the issue is whether or not the -- they have sufficient evidence of direct infringement. So if, for instance, the Court says, no, I don't think these claims require a user -- I think that would be wrong, if you said that -- then their direct infringement claim is limited to some -- you know, limited use of -- of those claims. THE COURT: Well, what if I say they -these direct infringement claims do claim a user; but there is sufficient circumstantial evidence of use, although not enough to rise to the level of inducement but enough to rise to the level of use by Apple? MR. RANDALL: All right. Let me address that specific issue. That's -- that's the one -- the one document that they submitted and only one exhibit out of Page 9 Page 8 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 15, which is 1676, a reviewer's guide. And so if you found that, Your Honor, we would ask for an instruction. Number one, we'd ask that the damages be taken away from the jury, because that -that particular act of infringement would not be sufficient to justify damages. But secondly, Your Honor, if you said, no, I think it is, we'd ask for an instruction that Mirror Worlds cannot obtain damages other than for the specific instances of direct infringement by an Apple employee that Mirror Worlds has identified in the record, if any. THE COURT: Okay. Thank you. Let me hear a response. MR. DIBERNARDO: Respectfully, Your Honor, I don't believe counsel addressed the threshold issue, and that is, do -- do we need to show direct infringement by a user for Apple to directly infringe these method claims? And the answer is no, we do not. That's the Elantech case cited in our brief. The capability of the software to perform that method has enough for a finding of direct infringement. It's that capability that's built into the software. With regards to contributory 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 infringement -THE COURT: Well, every other case I've ever had like this, they've always had their expert testify or their expert has testified as to inducement, which solved this. But your expert didn't express any opinions on that, did he? MR. DIBERNARDO: He didn't use those words, Your Honor. But as even cited in Apple's brief, he stepped through a user performing functions that did evidence the Apple computer, the Apple software performing the recited method. So with regard to the contributory inducement infringement, there is proof. In fact, Apple just said there is at least one evidence. There is one item, the reviewer's guide. And then to the Lucent standard, that one piece of evidence is enough. It can address it -directly addresses that point. One piece of -THE COURT: So -- and you're asking the Court to reconsider its JMOL on -- on inducement? MR. DIBERNARDO: We are, and contributory. Throughout the case, we've seen contributory -THE COURT: But your expert did not testify as to those, did he? 3 (Pages 6 to 9) Page 10 Page 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 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 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 MR. DIBERNARDO: The proof -- the factual issue as to whether or not a user uses these methods was presented. There are user surveys that go directly to the accused features. In fact, Mr. Bratic, for example, relied on the Spotlight survey out of the -- and this is not to -THE COURT: He may have testified to the facts; but just so I'm clear, did he express any opinions regarding inducement of contributory infringement? MR. DIBERNARDO: He did not use those words; but he did step through how a user, when the machine is turned on, performs this method. THE COURT: Okay. And I understand that, and I don't believe that it's necessary that you have an expert express an opinion, if you've otherwise got the facts and evidence to support a cause of action. But I guess my question is, if the Court were to grant that and reverse its ruling on the JMOL, where does that leave us? Because Defendants already put on its whole case and did not address any of those, because they were no longer in the case. Are we back to reopening evidence and Page 12 features; and that there is enough circumstantial evidence in the case to support the jury verdict on that. But I want to look at it closer post-verdict, when we're not -- you know, it's 9:00 o'clock. The jury's in there waiting. So what I'm going to do is I'm going to go ahead and submit it as to those, but I want to parse out the damage questions and will submit separate damage issues as to the '313 as -- the '313 and the '227, and a separate damage issue as to the -- what's the other one, the '427? MR. DIBERNARDO: The '313 and '227 are the method claims. THE COURT: Right. The separate one as to those and then a separate damage question as to the other one. Now, let me hear your arguments as to whether that's a good idea or a bad idea. MR. CARROLL: Your Honor, I'll be doing the argument, and I did the damage for our side. Of course, we based our damage model on the accused features. And I think both sides can argue to the jury what they -- how they suggest the jury apportion trying more infringement and damages and -MR. DIBERNARDO: These claims were still in the case with regard to Apple's direct infringement, so the proof was put on. In fact, that goes back to the threshold issue, to prove Apple's direct infringement under these method claims, is there even a need to get to this secondary -- the indirect liability question to prove the user's direct use. And the answer there is no. It's the capability that's in the software and that -THE COURT: Well, I'm not going to reverse my JMOL rulings on the contributory and inducement. I'm going to stand by those. But I am going to submit the -- the issue of direct infringement, based upon your arguments, as to the '313 and '227. But I think it's a tricky legal issue as to whether you're right that there's enough evidence there to support a direct infringement under those claims, or whether they're right that there has to be -- that there is not enough evidence regarding use of those products. I recall enough circumstantial evidence, I think, in the case, although not rising to the level of inducement or contributory, that it sort of defies logic to me that the users did not turn on these Page 13 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 whatever damages they choose to give, if they choose to give any. THE COURT: Let me ask this, Mr. Carroll: Do you believe that the damages can be apportioned between those two groups of patents? MR. CARROLL: I think -- and I don't want this to sound flip, but I think the jury can do whatever they want. THE COURT: I'm talking about as a matter of law. I know the jury can do whatever they -MR. CARROLL: I don't have a clue, Judge. I mean, all I know is -THE COURT: That's an honest answer. Response? MR. RANDALL: Yeah, Your Honor, two issues. One, on these claims, they simply didn't put in the evidence of direct infringement that each of these elements of these two claims require -- or two patents are part of the method claims, they didn't produce the evidence that suggested that any user on some video practiced each and every element. But in any event -THE COURT: Okay. You may be right. I'm going to go ahead and submit them, so I've got a finding 4 (Pages 10 to 13) Page 14 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 Page 15 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 on it, and I'll deal with it post-verdict. MR. RANDALL: With respect to the instruction, Your Honor, they are apparently relying on some unidentified instance of direct infringement, some, you know, user in a video or something. I don't even know what they're relying on, but it's a limited instance of direct infringement. And I said it doesn't show the elements. But in any event on that issue, Your Honor, Apple requests an instruction that Mirror Worlds cannot obtain damages on those two patents, other than for the specific instances of direct infringement by an Apple employee that Mirror Worlds has identified in the record, if any. Now, if want to argue, and they should, on that subject to the jury, that here's the Apple employee that we've identified and here's the things -THE COURT: Okay. Excuse me. I'm going to deny your request for that instruction. You can -you're a very capable lawyer. You can argue that to the jury, and the jury can sort that out. Now, my question is, though -- and I want to give both sides -- you know how I'm going to submit it. Now, I'm going to give both sides the opportunity for a very brief reopen, if you want to address the apportionment of damages, because we were originally Page 16 going to submit it just as one damage issue, but we're now breaking it out by apportionment. So does Defendant wish to offer any additional evidence with regard to that? MR. RANDALL: Well, I do object to reopening the record, if we had a chance to do that. But, Your Honor -- no, Your Honor. We don't -- we don't agree with reopening the record. THE COURT: The reason I'm doing this, though, is because, if I'm going to have two damage verdicts -- the reason I'm doing that is where if I throw out the '313 and the '227, I've got some damage number to throw out. Otherwise, the Court's just going to be guessing, if I throw it out, as to how much of the jury's verdict was attributable to the '313 and the '227 and how much to the '427. MR. RANDALL: All right. And so are you contemplating, Your Honor, just opening up briefly the record to allow them to show what damages they claim for those two method -THE COURT: Well, I will allow -- I'm contemplating opening it up for both of you for 10 or 15 minutes each. I was going to ask you how long you thought you would need to put on your respective damage people to address if -- since it's going to be submitted Page 17 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 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 as separate issues, to address how much should be assessed to each of those separate issues. So my question is, does Defendant wish to do that? Wish to offer any? Or you may want to think about it for a few seconds. MR. RANDALL: Your Honor -THE COURT: I'll allow up to 15 minutes per side for your expert to address this issue. Each side will have 15 minutes for direct and cross-examination to either put on your expert or cross-examine their expert. MR. RANDALL: Right. And part of that -part of my uncertainty there is, I don't know what evidence they're going to put on. I haven't seen an -you know, I have no idea what things they're going to claim. THE COURT: I don't -- let me ask you, do you want to put on any evidence as to that apportionment? MR. DIBERNARDO: Your Honor, I don't know -- I don't know that we've made a decision. THE COURT: All right. The Court is going to take a five-minute recess. MR. RANDALL: Can I raise one issue, Your Honor? And that is that I would like to read into the record the -- Apple's motion for JMOL regarding judgment as a matter of law. It is -THE COURT: Just a moment. Are you reading in what -- what the JMOL motion you made the other day? MR. RANDALL: Well, I'm certainly renewing it, and there's some additional information in here. And Rule 50(a)(2) says that a motion for JMOL may be made at any time before the case is submitted to the jury. And I would simply like to put it on the record, Your Honor. THE COURT: All right. MR. RANDALL: Thank you, Your Honor, very much. Your Honor, Apple hereby moves for judgment as a matter of law against all of Mirror Worlds' claims and counterclaims and for judgment as a matter of law in favor of Apple's declaratory judgment and counterclaims and defenses. First, Apple renews its former motions for judgment as a matter of law submitted to the Court on September 29 and 30 of 2010. Second, Apple moves for JMOL of 5 (Pages 14 to 17) Page 90 Page 91 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 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 we should be doing something different, right? That's what we all got taught. So we know that the level of importance that Apple has attached to this lawsuit. Because it's important to us, we're here; Mike Satow, our CEO, who used to be the CEO, he came down here. And we didn't even have to pay him. But Mr. Jobs isn't here. Mr. Serlet is not here; the other sub-boss is not here. And what we know, I think, is the reason that Steve Jobs is not here -- and hear me out on this and test it and see if this makes sense to you. You remember all of the videos you saw from Jobs was Jobs bragging about how new and revolutionary the products we have sued are. You remember that. And all the clapping and the cheering and the hoorah-ing and strutting around in his black sweater. Now, in Court, they're spinning a different tale. They brought all of these folks who are still out there -- or most of them are still out there. And none of them were on the e-mail string. Well, Mr. Tiene was. And they sat up here and said, no, none of this stuff is new; we've been doing it for years. Page 92 So ask yourself, if Jobs had shown up and sat on that witness stand and put his arm up like Dr. G. did and swore to tell the truth, he would have had to answer this one very simple question: Were you telling the truth then, when you spun a yarn that this is brand new so you could make $72 billion, or are you spinning the yarn now, when you tell this jury we can't infringe, because what we're doing is not new? I submit to you that's why it's more important that he not be in Tyler, Texas. And that's why he's not in Tyler, Texas. So let me go over the verdict form with you. The last thing I'm going to tell you, and I'll talk to you more about it when I have my second chance to talk, is why their invalidity defense is silly and starts with a very simple proposition, and it was confirmed over here by Dr. Tribble. And that is that they cannot lay hands on one piece of paper in their files of 30,000 employees to support the claim that they make in this courtroom before we sued them. That is, there's not one piece of paper anywhere in their files that contradict what their employees were saying about how important and new and innovative Dr. G.'s products were. It's not there. Page 93 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 It was created for the courtroom by folks who are out here still on the clock, who were paid to come and try to kill Dr. G.'s patents. You know, Dr. G.'s ideas attracted that guy who tried to kill him. Well, it attracted Jobs at Apple, and they are trying to kill his idea. So let me go through the verdict form with you real quick. Is the ELMO on? Okay. So this is the verdict form. This is what I think. What counts is what you think. The first question the Judge wants you to answer is, did they take our property? Did they infringe Dr. G.'s patent? I think the answers are plainly yes. Was it willful? You've seen the proof of them telling us one thing and doing another thing and telling you something today in this courtroom that plainly is not true. If that's not proof of willful infringement, then there's no willful infringement in the world. Now, this is really why we're here. They are terrified of Dr. G.'s patents. They want to kill 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 them. They want them dead. And they didn't bring the proof to you. The Patent Office said they're good. Two of the people who showed up to testify in this case about how old news Dr. G.'s patents were have patents that were on the face of his patents and considered by the Patent Office before they said this was new. Why did they do that? Why did they waste your time that way? Think about that. Now, these are the damage numbers, and I'll talk to you more about these, but you remember the Judge told you that the -- the iPods are out; that's all been resolved. So what that means is that the numbers that Mr. Bratic -- you remember I got him up at the very last and I said, if you take the i's out, what do you have, and he said about 50 percent. These are the allocations that I thought were appropriate based on what I heard Bratic say, but in each instance, it's about 50 percent of that 6-1/4 that Bratic told you about during his testimony, and that still means that they're making $25 million every day. MR. RANDALL: Your Honor, I'm going to 24 (Pages 90 to 93) Page 94 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 Page 95 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 object. He's inviting error with his comment here. He knows darn well that's not what his expert said. He's inviting error in this Court by doing that. THE COURT: Objection's overruled. The jury will disregard the objection. MR. CARROLL: So -- so you look at these. And, again, you heard the objection. That's what they're worried about. They're worried about their pocketbook. That's what they're squawking about. But this is what they make off these products, and this is less than 1 percent -- less than 1 percent. Any one of those numbers, there is a number 99 times higher that they get to keep. Now, I'm going to sit down now and let Mr. Randall talk to you. And then I'll have a few minutes left to talk to you afterwards. But think about those things that I suggested to you that you question in your own mind, when he's talking to you. Thank you, Your Honor. THE COURT: All right. Thank you, Mr. Carroll. The Court will now recognize Mr. Randall for purposes of closing argument. MR. RANDALL: Thank you, Your Honor. Page 96 Let me first thank you for your patience in this case, and I know you took time from your lives and your children. And Apple appreciates it, and I appreciate it. I was a former prosecutor for a long time. Like a criminal -- I sat at that table and watched criminal defense attorneys point fingers at you all day long. I have tried a lot of patent cases, but I've never sat through a case like this where there's two fundamentally different cases. There's Mirror Worlds' personal attacks, unnecessary, mean-spirited attacks, and then there's a patent case. Now, we're really here for this patent case. That's what this case is about. The case is about a patent case. Mirror Worlds has patents owned by some hedge funds. David accused Apple of infringement. And the evidence that's relevant to this case and relevant for your consideration is, how do the Apple products operate? Do they infringe? What does the prior art look like? Was he the first inventor? Does he deserve the patents? Does Mirror Worlds deserve these patents, Page 97 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 or are they invalid? Were they the first to invent this or not? That's the evidence. Mirror Worlds spent that entire time, 30 minutes, railing on Apple and me and others. But the point is, they never mentioned any evidence of infringement, right? They didn't do it. They didn't go through anything. And this case was the same way, right? It was their opportunity to lay out all their evidence about why -- how Apple's products operate specifically, whether they infringe, and whether the patents are valid. Now, we sat there and took it, okay? It wasn't easy. But what we did is we focused on the main issues in this case. And I'm not going to get into a mud-slinging game, and I'm not going to call names. I focused on the evidence, and I'd ask you guys to focus on the evidence. Focus on, how do Apple's products operate? Did they prove infringement? Did they prove every single element? Absolutely not. In fact, we don't have 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 to prove anything. But we proved, conclusively and without any possible doubt, that we don't infringe these patents for multiple reasons. And I'm going to get to that in a minute. I want to deal with a couple of these issues that were raised, and they spent so much time on, because I just can't sit there and let it go unanswered. They really focused on four events, and the four events really aren't in dispute, right? Except for the spin that they put on those four events is enormous, right? They say these four events mean some huge conspiracy, some huge plan to steal Mirror Worlds' technology. And it simply doesn't. Let's look at some of those issues. The first event is Steve Jobs saw a press clipping. He saw a press clipping regarding allegedly new software to organize documents, and he wanted someone to check out the software, okay? That's a fact. It's not in dispute. That's what happened. He saw it and he said, okay, go check it out. That's not surprising. All tech -high-tech companies do that. They keep track of technology. Everybody does. And if there's something 25 (Pages 94 to 97) Page 122 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 Page 123 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 single element of these claims. Workscape and MEMOIRS and Piles discloses these. And so any combination of these shows all of the components of the inventions, all of them. Let's go to the next slide. All right. So here is Workscape plus Piles, and you see that each of the components of the claims are shown in -- in the combination of the two references, and that is completely appropriate. That's what happens in the computer industry. You look at what's out there, and you say: Okay. I can put this system together. Let's go to the next one. Workscape plus SDMS. SDMS was the MIT work in '79, plus Dr. Lucas's work at Workscape, showing you the combination of the two. All right. Now, I just have a few minutes left. Let me -- let me talk about damages for a minute. They came in here, and they claimed that they're entitled to -- their expert first said they're entitled to $625 million, and then right before the close of the evidence, the expert said: Well, it's only half of that, okay? Remember? Because some of the other products are not at issue? So it's only half of that, all right. So roughly $300 million. And then Mr. Carroll gets up there and says: Well, no. Actually, for each one of those patents, it's 322, 336, 320. How did it go from half to nearly a billion dollars? Also -- let's show 40. Now, you heard from our expert -- and I asked their expert, I said: Remember the cards? They first looked like one side were down and one side was up, and I said: Isn't it true that they're -- both sides are up? And the answer is yes. So at the hypothetical negotiation, what would occur, both parties have to have their cards up, okay? And what Apple would learn is that they were running out of business. At the time of the hypothetical negotiation in 1990 -- in 2004 -- 2004, Mirror Worlds was running out of business, and they were going to sell their patents for $200,000, remember? They didn't commercially -- they weren't successful in commercializing. They didn't achieve any significant licensing partners. They sold their patents for $210,000. And they had attempted to contact these folks, Google, AOL, and Yahoo!, for some money or Page 124 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 Page 125 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 licensing deals and were unsuccessful. So they really didn't have much going on, and they ultimately sold their patents for $210,000. Let's go to 33. Now, here's Frank Weil. He made a sale for $210,000. And here's Plainfield. They purchased them for $5 million. And that is during the period of the hypothetical negotiation, right? Between this time or right before this time and this time (indicates), the hypothetical negotiation would have taken place, and what their expert says is it would have been a license. No. The patents were for sale, lock, stock, and barrel, and they were for sale for 210,000 here and 5 million here (indicates), and both experts say the hypothetical negotiation would have taken place. So if there was a hypothetical negotiation, and both sides had their cards up, what would have happened? And they wanted to strike a deal, which is part of the deal -- part of the rules. The entire patents would have been sold for somewhere between that range likely, okay? Somewhere between that range. If it was a license, it would be less, right? Because you're not buying everything. Those are the facts. We don't have to make this up. They say: Let's play pretend; let's make it up. We really don't have to make it up, because it happened. And it wasn't a license. It would be different -- if it was a license here and a license here (indicates), we'd have a little better facts. But this is a sale. So we know it's less than the cost of all the patents, lock, stock, and barrel. So the hypothetical negotiation, you look at this date; you look at that date; you say the hypothetical negotiation would take place in between there; and it would be less than the sale of the whole patents because they say they would have been a lump-sum license, so something less than that. Those are the facts. THE COURT: Mr. Randall, you have about five minutes left. MR. RANDALL: Thank you, Your Honor. Let's go to 41. You remember our expert? Common sense, right? He said: It's like you're buying a house, right? Let's figure this out. Let's figure out 32 (Pages 122 to 125) Page 130 Page 131 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 And he signs up. Does that make sense? What would be the first question that that guy would ask? What have you found? What's down there? I'll share with you. If it's a little, I get a little, and you get a little. If it's a lot, we both get a lot. That's the damage model we brought to you, 'cause it makes sense. What they're bringing to you makes no sense. Why would a patent owner ever do that? And the answer is, they wouldn't. They wouldn't. You know, their damage man, maybe in one of the best Perry Mason moments of the trial when my friend, Joe Diamante, over here was after him, he said: Under your analysis, it wouldn't matter whether Apple made a dollar or a billion dollars, you'd still give us that same number? And what was his answer? That's right. You know, we all remember that great scene in Wizard of Oz when the little dog pulls the curtain back, and there's the -- turns out the wizard is nobody other than some old guy pulling levers, and he makes the wizard voice say: Pay no attention to the man behind the curtain. That's what they want you to do. They want you to ignore this ton of money they have made selling the patents that we have the ideas behind. Page 132 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 Let me give you two more points about damages, and then I want to talk a little bit about what Mr. Randall said. And I guess I drew blood. He bowed up pretty good. But, you know, old Harry Truman says: If you can't stand the heat, don't go in the kitchen. And that means don't take other people's stuff and expect them to roll over just because you're who you say you are. Number one, remember the testimony that drew all the objections over here about this company called Intellectual Ventures? You remember that. Intellectual Ventures, it turns out, is a company owned by the big boys on the west coast, Intel, Microsoft, and Apple. And you remember the testimony is that not once, but twice, Intellectual Ventures tried to buy these patents; one time, before the suit, for 7 million bucks, plus 20 percent carried interest; and another time, after the suit, for 30 to $50 million, plus 10 percent. They don't want you to remember that. They don't want you to think about that. They want you to think about $200,000, which they spent more during this trial, during this trial than they would pay this Page 133 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 man for his life's work. That's not right. That's just not right. The second thing is, is that when Yale bought into the little company, Mirror Worlds, you heard Dr. G say, they evaluated the company way back then at 50 million bucks. Now, did it make it? No. It failed. But ask yourself this: If Apple hadn't been infringing and, in fact, had done what it should have done and played fair and taken a license, that little company wouldn't have failed. Those people wouldn't have lost their jobs. That's why we're here. Okay. So that's -- that's one thing to look at in that Court's Charge, and I think -- and by the way, this whole business about triple dipping, look at Judge Davis's questions that he asked you. These are his questions. You know, if Mr. Randall has a fuss, he ought to take it up with the Judge. These are the Judge's questions. He wants damage numbers for each separate patent. That doesn't mean we're going to get a billion dollars. That just means the Judge wants to know why you believe or if you believe what the value is of the reasonable royalty for each patent. The reason these numbers made sense to me 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 is, they were all infringed at the same time. They would have all been part of the same hypothetical negotiation. The numbers are a little different, based on the different products; but that's up to you. I think they're all around 300, 300-and-a-quarter apiece, if you believe that we were, in fact, the victim of patent infringement. So let me get to a couple of other points. Let's put up No. 1183. Now, one of the things that you know by now about this case is that there were a lot of hired people who testified. Now, blow that up. There are two pieces of evidence in this case that weren't paid for. This is one of them. This is that article that Mike Satow sent his old Chairman of the Board when he saw it in 2007, three years ago, from this Information Week, this business technical publication. Look what it says: It says: Back in 2001, noted computer scientist, David Gelernter, started a company called Scopeware that proposed a similar scheme to view files in a timeline. The market wasn't 34 (Pages 130 to 133)

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