EMG Technology, LLC v. Apple, Inc.

Filing 226

NOTICE OF FILING OF OFFICIAL TRANSCRIPT of Joint Status Conference Proceedings held on 2/1/10 before Judge Leonard Davis. Court Reporter: Shea Sloan, [e-mail]. 20 pages. 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 before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.. Redaction Request due 3/11/2010. Redacted Transcript Deadline set for 3/22/2010. Release of Transcript Restriction set for 5/19/2010. (sms, )

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS TYLER DIVISION EMG TECHNOLOGY, LLC ) ) ) ) )

4 -vs5 APPLE INC., ET AL 6 7 EMG TECHNOLOGY, LLC 8 9 10 11 12 13 14

DOCKET NO. 6:08cv447

******** ) ) -vs) ) ) MICROSOFT CORPORATION, ET AL ) DOCKET NO. 6:09cv367 Tyler, Texas 1:30 p.m. February 1, 2010

TRANSCRIPT OF JOINT STATUS CONFERENCE BEFORE THE HONORABLE LEONARD DAVIS, UNITED STATES DISTRICT JUDGE APPEARANCES

15 FOR THE PLAINTIFF: 16 17 18 19 20 21 22 23 24 25 Proceedings taken by Machine Stenotype; transcript was produced by a Computer. COURT REPORTER: MS. SHEA SLOAN 211 West Ferguson Tyler, Texas 75702 [e-mail] MR. ROBERT D. BECKER MANATT, PHELPS & PHILLIPS 1001 Page Mill Rd, Bldg 2 Palo Alto, CA 94304 MR. CHARLES AINSWORTH PARKER BUNT & AINSWORTH 100 E. Ferguson, Ste. 1114 Tyler, Texas 75702

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 MS. JESSICA HANNAH CAPSHAW DeRIEUX 1127 Judson Rd., Ste. 220 Longview, Texas 75606 MR. JOHN M. GUARAGNA DLA PIPER USA LLP 401 Congress Ave., Ste. 2500 Austin, Texas 78701-3799 MR. PATRICK CLUTTER POTTER MINTON P.O. Box 359 Tyler, Texas 75710 MR. HERBERT A. "TREY" YARBROUGH YARBROUGH WILCOX LAW FIRM 100 E. Ferguson, Ste. 1015 Tyler, Texas 75702 MR. J. CHRISTOPHER CARRAWAY KLARQUIST SPARKMAN 121 SW Salmon St., Ste. 1600 Portland, OR 97204 MR. ERIC FINDLAY FINDLAY CRAFT 6760 Old Jacksonville Hwy, Ste. 101 Tyler, Texas 75703 MR. RUSSELL J. GENET NIXON PEABODY 300 S. Riverside Plaza, 16th Floor Chicago, IL 60606 FOR THE DEFENDANTS: MR. DAVID J. HEALEY MR. GARLAND T. STEPHENS MR. JOHN R. LANE FISH & RICHARDSON 1221 McKinney St., Ste. 2800 Houston, Texas 77010

3 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. CHAD WALKER FISH & RICHARDSON 1717 Main St., Ste. 5000 Dallas, Texas 75201 MR. ANTHONY I FENWICK DAVIS POLK & WARDWELL 1600 El Camino Real Menlo Park, CA 94025 FOR THE DEFENDANTS: MR. DERON DACUS RAMEY & FLOCK 100 E. Ferguson, Ste. 500 Tyler, Texas 75702

4 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 please. THE CLERK: Court calls Cases No. 6:08cv447, EMG v. THE COURT: All right. PROCEEDINGS Please be seated. Ms. Ferguson, if you will call the case,

Apple, et al; and Case No. 6:09cv367, EMG v. Microsoft, et al. THE COURT: Announcements? Charles Ainsworth for the

MR. AINSWORTH: plaintiffs.

I'm here with Robert Becker, who will be the

speaker today. MR. BECKER: MR. FINDLAY: Good afternoon, Your Honor. Good afternoon, Your Honor, Eric

Findlay and Chris Carraway on behalf of Microsoft. MR. GENET: Good afternoon, Your Honor, Russ Genet

from Nixon Peabody representing American Airlines, Dell, and Hyatt. And with me is my Local Counsel Dru Montgomery and

Jessica Hannah. MR. STEPHENS: Good afternoon, Your Honor. Garland

Stephens with Fish & Richardson representing Apple and Southwest Airlines. Healy and John Lane. MR. YARBROUGH: Scottrade, Your Honor. THE COURT: MR. CLUTTER: Okay. Patrick Clutter for Zagat Survey, Trey Yarbrough on behalf of With me today are my colleagues David

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 Potter Minton. THE COURT: Okay. John Guaragna for Marriott, Your

MR. GUARAGNA: Honor, ready. MR. DACUS: on behalf of Comcast. THE COURT: MR. WALKER:

Your Honor, Deron Dacus and Tony Fenwick We are ready. Okay. Good afternoon, Your Honor. Chad

Walker from Fish & Richardson for Priceline and Barnes & Noble, Your Honor. THE COURT: All right. We are ready. Thank you. We are here to try to get this sorted As I understand it --

out on the Joint Status Conference.

well, who would like to take the lead to explain to me what y'all would like to do, what are any disputes? MR. STEPHENS: crack at that. THE COURT: Okay. I am Garland Stephens. Your Honor, I am happy to take a

MR. STEPHENS: THE COURT:

Okay. I represent Southwest Airlines.

MR. STEPHENS: THE COURT:

Okay. I guess about 14 months ago in It It

MR. STEPHENS:

November of 2008, the plaintiff EMG sued my client Apple. was one defendant, Apple. It was one product, the iPhone.

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 was one patent. In between that time and today, the case has

expanded into two very closely related litigations with, I think, a total of 12 defendants now. There have been three

others somewhere along the line in there and -THE COURT: Are you talking about in the first case? Well, when I was speaking there about I

MR. STEPHENS:

12 defendants, that is both cases together, Your Honor. forget the exact number in each case. THE COURT: Has the first case expanded?

MR. STEPHENS: THE COURT:

The first case has also expanded --

Patent-wise or party-wise or both? Both, Your Honor; additional The most

MR. STEPHENS:

products, additional patent, additional parties.

recent parties were added to the Apple case -- I will refer to the first case as the Apple case and the later case as the Microsoft case, if that is all right? THE COURT: All right. Uh-huh.

MR. STEPHENS:

The most recent parties were added to I think pleadings

the Apple case just a few months ago.

didn't close until sometime in January, Your Honor. Sometime back in September or October and after the Microsoft case had been filed, plaintiff EMG represented to the Court and to us that it was going to move to have the cases consolidated. That hadn't happened. Our anticipation

was that somehow the two cases would be coordinated and

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 eventually put on a common schedule. We got to a point where the existing schedule in the Apple case was no longer workable, and that's when Apple, Your Honor, filed the motion to vacate the deadlines in that case, the Apple case, and for a joint case management conference in the two cases. Now, since that time the parties have discussed that motion, and I think by and large there is not much left in dispute. THE COURT: Okay. Everybody agrees that the cases

MR. STEPHENS:

should be consolidated for everything up to and perhaps including pretrial activities but not for trial, on the defendants' side. I think the plaintiffs -- I will let them

speak for themselves, but they think there should be a single trial as well. THE COURT: All right. That is pretty much where we stand,

MR. STEPHENS: Your Honor. THE COURT: multiple patents? MR. STEPHENS: THE COURT:

Both cases involve one patent or

Two patents.

Two patents, okay. The same patents in both cases. And is the technology the same in

MR. STEPHENS: THE COURT:

Okay.

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 both cases, the accused products? MR. STEPHENS: the accused products. Well, there is a wide variation in Even just for Apple there is a wide But I

range of different kinds of products that are accused. think you could fairly divide up -THE COURT: Is the iPad accused?

MR. STEPHENS:

That's a good question, Your Honor.

I have a feeling that they will probably tell you they intend to add it to the case. THE COURT: exemplar copies. Well, good because we need about six

No, I am just kidding. Well, Your Honor, I have been asking

MR. STEPHENS:

for one myself and they keep telling me that I have got to wait. THE COURT: They are hard to come by. They are indeed. That is pretty much

MR. STEPHENS:

how we got where we are, Your Honor. THE COURT: MR. BECKER: THE COURT: MR. BECKER: Plaintiff? Can I speak to that, Your Honor? Sure. The distinction that I would like to

make is that the Apple case has been on file for over a year. Last summer the Court set discovery orders, and the plaintiff produced its infringement charts. There was an order in place

that required the defendants to start to produce documents.

9 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 that? MR. BECKER: I would like to move forward. It is The defendants -- and I mean primarily here Apple and American -- to produce documents and to also start to search their emails so that we could get the case moving. deadlines passed in October and in December. had the discovery. And there was no motion made for a protective order. So we have been waiting since October for a very large production of documents, and we have been waiting since December for productions of emails. Now, it is true there are Those

And we haven't

a lot of defendants in the case and that the pleadings have changed somewhat. But Apple has been in there from day one.

Apple is by far, at least in the Apple case, the most important defendant in that case in terms of discovery burdens, trial prep -THE COURT: And you would like to move forward with

true that we could do the case on a shortened schedule with some of the other defendants but not with Apple. our infringement contentions long ago. produce documents in October. We gave them

They were ordered to

They were ordered to do email

searches in December and we don't have any of that. MR. STEPHENS: Your Honor, if I may, that is a I don't

pretty major mischaracterization of what happened.

think there was anything that we were obligated to produce

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 that we did not produce up until we filed the current motion to vacate. I think the record will show that most of the

changes in the schedule for the deadlines came after requests from the plaintiffs. We mediated with the plaintiffs -- that is, Apple mediated with the plaintiffs in December. We specifically

waited to depose the inventors in that case at their request until after that mediation. disclosures. We put off deadlines for initial

So I don't think there was anything that was due

to the plaintiffs from Apple until December sometime. MR. LANE: Right. That is right at the time we moved to And what we think should happen now is We are not opposed The case has

MR. STEPHENS: vacate the deadlines.

everybody should be on a common schedule.

to having Apple on a somewhat earlier schedule. been pending for a while.

We have attempted to reach out to

them to settle this dispute so we didn't have to bring it in front of Your Honor, this minor difference about whether Apple is going to produce documents before the other defendants, and they refused even to negotiate on that. So what I suggest, Your Honor, is that you put in place a single schedule which has been proposed in the joint report the parties have put before you. If you want to shave

a little time off of Apple at the end of that for the close of discovery, we are fine with that; take off a month, 45 days,

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 something like that, that is not a problem. MR. BECKER: One more thing, Your Honor. We are not

arguing about the extensions. the agreed extension dates.

The dates I am referring to are The reason that Apple gave for

noncompliance with the orders is that there was no protective order in place. yet. They haven't moved for a protective order

So I don't know what it is that is holding them back If a protective order needs to be

from making a production.

entered, I think it should be entered; but there is no reason that they need additional time. The reason has been to date So as soon

that there just was no protective order in place.

as that goes in place, I don't think there is any reason why Apple and American couldn't begin production right away. MR. STEPHENS: Your Honor, if I may, the problem

with the protective order, of course, was this revolving door with defendants. And we have had multiple meet-and-confers We have worked actually quite hard

just in the last week.

right until this weekend to try and have the motion in front of Your Honor before the hearing today. I don't think there

will be any problem to have the motion on behalf of all of the defendants for a protective order later this week. that order is entered, Apple is prepared to make the production of several hundred thousand confidential documents to the plaintiff. THE COURT: So you are prepared to do that within a As soon as

12 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 matter of, what, a week or ten days, you say? MR. STEPHENS: THE COURT: Yes, Your Honor.

Would that satisfy plaintiff if they

comply -- get those to you where you can go on and get started on their documents? MR. BECKER: THE COURT: Yes, Your Honor. Well then, I don't think we have really You just need to get a protective

got a dispute then, do we?

order entered, you make production, give us a date that you can do that by -- February 15th? MR. STEPHENS: Your Honor, I would say one week from That really has been the

the entry of the protective order.

hold-up with the production of the confidential documents. THE COURT: MR. BECKER: THE COURT: Is that good with you? That's fine. Thank you.

What about the protective order,

anything I need to resolve for y'all on that? MR. BECKER: There are a few issues. One has to do

with the subject of reexamination.

The defendants have

proposed a prosecution bar that also extends to reexamination. I think there has been a number of cases

recently from this Court that holds that those orders shouldn't be extended that far, and that is the primary dispute we have with respect to the protective order. THE COURT: I'm sorry, say that again. What is your

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 primary dispute? MR. BECKER: The primary dispute is whether

confidential information can be shared with anyone who participates in a reexamination proceeding. Apple has filed So

requests for reexamination for the patents-in-suit.

effectively they are trying to have the plaintiff hire two sets of counsel and have the two sets of counsel prosecute these very related proceedings without being able to talk with each other. So that is a primary issue.

Another issue is they don't want any confidential information to be shown to the client. There is one main

person at the client, and they don't want him to see any confidential information. And then we also have a few issues about how we handle the source code. THE COURT: MR. BECKER: MR. STEPHENS: How you handle what? The source code. Your Honor, I think in the course of

the meet-and-confers we had just this last week, the second issue that Mr. Becker raised has been resolved, and they agreed not to show confidential information to their client. That is my understanding. THE COURT: MR. BECKER: MR. STEPHENS: Is that correct? Okay. The issue on reexamination, Your

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 Honor, we would like to brief. I think it is somewhat subtle,

but it is certainly because the plaintiff has a number of continuation applications based on the patents-in-suit currently pending. We think it would be very inappropriate

for them to look at Apple or other defendants' -- the other defendants are on-board with this as well, Your Honor -- their confidential information and then use information about how the products in suit work to tailor their claims in reexamination so that they cover the accused products but distinguish the prior art. That is the fundamental issue.

There is also an ethical issue with the Patent Office there is a duty to disclose information material to patentability in the course of reexamination, and we have had the experience in the past where patent owners have said they need to disclose confidential information of our clients to the Patent Office because of that duty. So it puts the

counsel who is both trial counsel with access to confidential information and at the same time has this duty to disclose to the Patent Office in an irreconcilable conflict where they are obligated to disclose information that is protected under the protective order to the PTO where it would become public. would like to brief that for Your Honor, and I think we can have that motion and brief on file in the next few days. THE COURT: Well, what can we do -- I mean, that is I would be glad to We

an issue I have confronted before.

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 consider it on briefing, but I don't want to hold up everything, the production and the beginning of the case on that. Is there some way -- I don't know where you are right

now; but is there some way you can move forward with it? MR. BECKER: Sure, if I can address that. Trial

Counsel is not with the counsel that is prosecuting the application. The client has retained different counsel.

There really is no issue about continuation applications, and I don't know if that was a misstatement. reexaminations. The real issue is

There has been a reexamination request filed,

but it hasn't even been granted, and it is not likely to be granted, if at all, for the next two months. So there is no issue right now. No one needs to

share confidential information with anybody prosecuting any patent applications right now. THE COURT: Okay. Well, I think the simplest thing

would be to go ahead and in your protective order preclude your firm from participation in any reexam, but with the express understanding that on motion for good cause shown I will revisit that issue; and if you can make out a case and we can get thorough briefing on it -- because it doesn't sound like you have even really got an issue of needing to participate at this point in the reexam; is that correct? MR. BECKER: THE COURT: That's correct. But I want to make it clear to

16 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 defendants and to plaintiff, go ahead and tailor it that way, but it is not going to be without prejudice -- and you can read some of my other decisions -- I will look at it on a case-by-case basis as to whether you have made a strong enough case to allow you to participate in the reexam. MR. BECKER: THE COURT: Thank you. Okay. And you have resolved the part

about Mr. Gottfurcht; is that correct? MR. BECKER: THE COURT: Yes. All right. Well, I will consolidate it,

I will consolidate it into the newer case with the understanding, and you can write it in as a footnote to your Docket Control Order, that the defendants in the Apple case 447 will go ahead and begin discovery within ten days as -mean, the production within ten days as indicated. As far as your trial date, I think the plaintiff had suggested July, defendants had suggested August. August available. I don't have I

I have already got six patent cases on my

July 2011 trial docket, which is pretty heavy, so I am going to put it as the first case on my September docket. Let's see, as far as the length of trial at this point for sake of -- let me just say, it will be consolidated through pretrial, and then I will decide on -- based on who is left, the best way to try the case, whether separate trials or consolidating trial or whatever, for the purposes of the

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 with? addressed. THE COURT: Well, I have got here that plaintiff Do I Docket Control Order put the trial time down at five days and we will revisit that as we get closer to it as well. Now, are there some discovery disputes as well? MR. BECKER: They were the ones that we already

wants 15 requests for admission, and defendants want 25. need to rule on those, or can y'all figure those out? MR. AINSWORTH:

Your Honor, we filed these late in

the evening; but if you want to just rule on them, we don't really need argument. one of those deals -THE COURT: I think y'all are grown adults, and you We are not that far apart. It is just

can pretty well figure out how I'm going to rule on them. MR. AINSWORTH: THE COURT: That's fine, Your Honor. I

But if you need me to, I will.

usually don't get into this level of the case. usually work that out.

Good lawyers

I know you are all good lawyers, so If you can't work it out,

why don't y'all work that out.

bring it back to me, and I will decide it. Is there any particular one you are hung up on -MR. STEPHENS: can work them out. THE COURT: Anything further the Court can help you No, Your Honor. I think we probably

18 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. BECKER: THE COURT: MR. BECKER: Thank you. Y'all have a mediator? No. Markman date, Your Honor, do we keep

MR. AINSWORTH: the same Markman date? THE COURT:

Oh, yes.

All right.

Markman date will

be January 27th, 2011; pretrial conference, August 25, 2011; jury selection on September 6th; trial on September 12. MR. STEPHENS: Your Honor, if I may, I think there Some of the

may be one other issue that I neglected.

defendants in the Apple case were added much more recently than Apple, so while it is not a problem for Apple to start producing a week after the protective order is done, I'm not sure that the more recently added defendants feel the same way. Maybe we should let them address that. THE COURT: Well, this footnote will apply to Apple.

Who else does the plaintiff want it to apply to? MR. BECKER: THE COURT: American. Apple and American. The others will Okay?

fall on the other schedule with the newer case. Okay. Anything further? Okay.

Now, we were

talking about mediator, do you have a mediator? MR. BECKER: Actually, I think we do not. Just for

the Court's information, Apple and the plaintiff already had a mediation outside of the --

19 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 THE COURT: MR. BECKER: THE COURT: Court, please. Okay. -- the Court's schedule -If you would stand when you address the

Tell your co-Counsel to stand when he We are in Texas. I don't know that you have actually We ad hoc have

addresses the Court.

MR. AINSWORTH:

appointed anybody as mediator in this case. gotten mediators along the way -THE COURT:

Any objection to Judge Faulkner? No, Your Honor. This sounds

MR. AINSWORTH: THE COURT: like a complex case. you. Okay.

He does wonderful work.

I think he would be a good mediator for

He will be appointed. Thank you. Anything further? All right. Y'all

MR. BECKER: THE COURT: have a good week.

(End of proceedings.)

20 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 /s/ Shea Sloan SHEA SLOAN, CSR, RPR OFFICIAL COURT REPORTER STATE OF TEXAS NO. 3081 February 5, 2010 I certify that the foregoing is a correct transcript from the record of proceedings in the above-entitled matter. CERTIFICATION