Bedrock Computer Technologies, LLC v. Softlayer Technologies, Inc. et al

Filing 842

Opposed MOTION for Attorney Fees Yahoo!'s Motion to Declare this an Exceptional Case and for Attorneys' Fees and Costs Pursuant to 35 USC Sec. 285 by Yahoo! Inc.. (Attachments: #1 Affidavit B. James Decl., #2 Exhibit 1, #3 Exhibit 2, #4 Exhibit 3, #5 Exhibit 4, #6 Exhibit 5, #7 Exhibit 6, #8 Exhibit 7, #9 Exhibit 8, #10 Exhibit 9, #11 Exhibit 10, #12 Exhibit 11, #13 Exhibit 12, #14 Exhibit 13, #15 Exhibit 14, #16 Exhibit 15, #17 Exhibit 16, #18 Exhibit 17, #19 Exhibit 18, #20 Exhibit 19, #21 Exhibit 20, #22 Exhibit 21, #23 Exhibit 22, #24 Exhibit 23, #25 Exhibit 24, #26 Exhibit 25)(Chaikovsky, Yar) (Additional attachment(s) added on 6/7/2011: #27 Text of Proposed Order) (mll, ).

EXHIBIT 10

Bedrock Computer vs. Softlayer Technologies

1

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TEXAS
TYLER DIVISION

2
3

1

BEDROCK COMPUTER
TECHNOLOGIES, LLC

4

) DOCKET NO. 6:09-cv-269
)
)
) TYLER, TEXAS
) FEBRUARY 16, 2011
)
) 9:30 A.M.

VS.
5
6

SOFTLAYER TECHNOLOGIES,
INC., ET AL

7
8

MOTION HEARING
BEFORE THE HONORABLE JOHN D. LOVE
UNITED STATES MAGISTRATE JUDGE

9
10

APPEARANCES:

11

FOR THE PLAINTIFF:

12

MR. DOUGLAS A. CAWLEY
MR. JASON D. CASSADY
MR. J. AUSTIN CURRY
MR. SCOTT W. HEJNY
MR. PHILLIP M. AURENTZ
MCKOOL SMITH
300 Crescent Court
Suite 1500
Dallas, TX 75201
dcawley@mckool smith.com
[e-mail]
[e-mail]
[e-mail]
[e-mail]
214-978-4000

13
14
15
16
17
18
19
20
21

COURT REPORTER:
22
23

MS. CHRISTY HUMPHRIES
ARK-LA-TEX REPORTING & VIDEO
108 S. BROADWAY AVENUE
TYLER, TEXAS 75702

24
25

(PROCEEDINGS RECORDED BY MECHANICAL STENOGRAPHY,
TRANSCRIPT PRODUCED ON CAT SYSTEM.)
Ark-La-Tex Reporting & Video

Bedrock Computer vs. Softlayer Technologies

13

1

that the basis, either solely or I guess primarily, for

2

a willfulness allegation here?

3

MR. HEJNY:

That's correct, Your Honor.

4

That's one of the bases for our willfulness

5

allegations.

6

The first objective basis would be the

7

fact that Bedrock prevailed on almost every claim

8

construction position in the provisional order that you

9

issued on October 29th, and in the final memorandum and

10

opinion that came out on January 11th.

11

discussed before, on January 14th Bedrock received a

12

notice of intent to issue the reexamination certificate

13

in the case, and those two factors, Your Honor, Bedrock

14

believes establish a likelihood that there is no reason

15

why Defendants are acting without objective

16

recklessness.

17

THE COURT:

As has been

So your willfulness case runs

18

from -- whatever it is -- November of 2010 to January

19

2011.

20

here of willful infringement?

21

here?

So you've got about a four-, five-month window
Is that what's going on

22

MR. HEJNY:

That's correct Your Honor.

23

THE COURT:

Well, I guess; one, I wonder

24

in such a situation as you've presented, what issue is

25

there for the jury to decide?

It's almost as if there

Ark-La-Tex Reporting & Video

Bedrock Computer vs. Softlayer Technologies

14

1

could be stipulations as to, yeah, this reexam

2

happened, yeah, the Court ruled, yeah, we continued to

3

do the same thing, I guess.

4

figure out what fact issues -- what would the jury need

5

to hear about these circumstances as you've put forward

6

as the basis for a willfulness case?

7

MR. HEJNY:

I guess I'm trying to

Your Honor, Bedrock's

8

position is the fact that Defendants have continued to

9

use the accused code, even though they have no basis

10

for -- any objective basis for believing that the

11

claims were not valid and not infringed.

12

stated, there are a couple of bases for that, Your

13

Honor.

14

THE COURT:

And as we

One thing I wonder about,

15

too -- let me throw this out there, too -- would be are

16

we talking about willful infringement or are we talking

17

about their conduct during this litigation as being

18

improper, as putting forward -- you almost seem to be

19

saying they're putting forward frivolous claim

20

construction positions and frivolous defenses.

21

if that's the case, we talking willfulness, willful

22

infringement or we talking something else?

23

MR. HEJNY:

I mean,

Well, with respect to this

24

motion, Your Honor, it would deal strictly with

25

willfulness.

Obviously there'll probably be some
Ark-La-Tex Reporting & Video

Bedrock Computer vs. Softlayer Technologies

15

1

discussions later regarding litigation misconduct.

2

what we're talking about today is just strictly

3

willfulness.

4

THE COURT:

Okay.

But

You get up in front of

5

a jury, you're talking willfulness, and you're going to

6

say what to the jury about how these Defendants

7

willfully infringed this patent?

8

issued a claim construction that was unfavorable to

9

them and the fact that a reexam happened and it was

10

The fact the Court

favorable, according to Bedrock?

11

MR. HEJNY:

That's correct, Your Honor.

12

Essentially the claims were in reexam; Claims 1, 2, 5

13

and 6 are going to come out of the reexamination

14

proceeding without amendment.

15

invalidity contentions in this case, all the prior art,

16

all their invalidity charts have been before the

17

examiner during the reexamination process.

18

examiners have nevertheless determined that these

19

claims should be reissued without amendment and

20

Defendants' activities going forward is objectively

21

reckless.

22

All of the Defendants'

The

And, Your Honor, there's one other issue

23

that we haven't discussed today, and that's actually

24

not in the briefing that I'd like to call to the

25

Court's attention.
Ark-La-Tex Reporting & Video

Bedrock Computer vs. Softlayer Technologies

1

16

At some point in the past, Defendants

2

were in communication with the actual author of the

3

code, Alexey Kuznetsov, and the Defendants took their

4

first depositions of third-party prior art witnesses on

5

January 4th, 2011, about five days before the close of

6

fact discovery.

7

that the Defendants produce any communications they had

8

with third parties.

9

the Defendants produced an email from Mr. Kuznetsov,

In advance of that, Bedrock requested

During the last week of December,

10

the author of the accused code, to counsel for

11

Defendants in which Mr. Kuznetsov stated unequivocally

12

that the current Linux kernel actually contains logic

13

that could be considered as infringing the patent.

14

also stated his belief that he felt that the prior art,

15

of which he was aware, did not collide with the claims

16

of the patent, and that the best the Defendants could

17

do would to seek an expert who could help them find a

18

loophole in the patent rules.

19
20

He

THE COURT:

This is an email that he sent

MR. HEJNY:

To counsel for Defendants,

to who?

21
22

Your Honor.

23

like to see it.

24
25

And I've got a copy if the Court would

THE COURT:

Okay.

So that would be --

you're saying you want to introduce that as evidence of
Ark-La-Tex Reporting & Video