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 1

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

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BEDROCK COMPUTER
TECHNOLOGIES LLC

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DOCKET NO. 6:09cv269

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-vs-

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YAHOO!, INC.
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Tyler, Texas
9:00 a.m.
April 27, 2011

TRANSCRIPT OF TRIAL
MORNING SESSION
BEFORE THE HONORABLE LEONARD DAVIS,
UNITED STATES DISTRICT JUDGE

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A P P E A R A N C E S
FOR THE PLAINTIFF:

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MR. DOUGLAS A. CAWLEY
MR. THEODORE STEVENSON, III
MR. SCOTT W. HEJNY
MR. JASON D. CASSADY
McKOOL SMITH
300 Crescent Court, Ste. 500
Dallas, TX 75201
MR. ROBERT M. PARKER
MR. ROBERT CHRISTOPHER BUNT
PARKER, BUNT & AINSWORTH
100 E. Ferguson, Ste. 1114
Tyler, TX 75702
COURT REPORTERS:

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MS. JUDY WERLINGER
MS. SHEA SLOAN
Proceedings taken by Machine Stenotype; transcript was
produced by a Computer.

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We think the second reexam should come

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in.

Our client, objectively and subjectively, would

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look at the entire record in front of the Patent Office,

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not only the first reexam that's been issued, but the

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second reexam, which is pending.

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some of the same art which was the subject of the first

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reexam.

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And it's pending on

We think that the declaration by
Mr. Koomey should come in.

That declaration was

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excluded in the Google trial.

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Mr. Weinstein, relies upon an article by Mr. Koomey.

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Mr. Koomey has a declaration which he says that reliance

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on the article is not proper.

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Their damage expert,

Again, that would go both to the

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objective and subjective issues raised by Seagate.

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think that the settlement agreements ought to come in,

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including the most recent settlement agreements, which

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would show what others in this -- that have been sued on

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this patent are settling for.

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Google verdict and the request for damages to Google

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should come in.

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We

And we think that the

Bedrock asked, as you know, Your Honor,

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for $180 million.

The jury came back at 5 million.

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We think all these things go to the issue of

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willfulness, both on the objective as well as the

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about Google, which is suggested by Bedrock's counsel as

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to the issues of validity and I think infringement, put

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in the entire verdict; put in the verdict which shows

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that the jury came back with an award of $5 million, and

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couple that with a request that their damage case is

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$183 million, and the jury only saw fit to award 3 cents

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per dollar.

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THE COURT:

Okay.

That's denied.

And

your request for infringement is denied as well.

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MR. CAWLEY:

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THE COURT:

All right.

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MS. DOAN:

Your Honor --

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MR. MORISSEAU:

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What else?

One other point, Your

Honor.

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Okay, Your Honor.

MS. DOAN:

Your Honor, with respect to

the issue of reexam, I know that you've just --

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THE COURT:

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MS. DOAN:

With respect to what?
The issue of reexam, and I

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know -- the second pending reexam, I know that you've

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just denied it with respect to the willfulness issue.

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Just for the record, I wanted to make

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sure the Court was aware of Judge Ward's opinion in the

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Tyco versus E-Z-EM case where he specifically allowed

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the pending reexam to come in to rebut the evidence of

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willfulness.

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I understand the Court's already ruled on

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this, but we wanted to make sure and bring that case to

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the Court as well as the Tesco versus Weatherford case

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where in the Southern District in Houston, the same

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issue -- the pending reexam was allowed to rebut the

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evidence of willfulness.

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THE COURT:

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and argued several times.

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I think this has been briefed

additional thoughts.

So thank you for your

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MS. DOAN:

Yes, Your Honor.

And just --

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THE COURT:

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MS. DOAN:

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And just one more point for the record.

But it's not necessary.
Thank you, Your Honor.

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And I know that Mr. Cawley said that in i4i and in this

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other case -- I'm sorry; I can't remember the name of

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it -- that those issues of reexam -- this is a different

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issue here, Your Honor.

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The pending -- the second reexam is based
on the same prior art as the first reexam.
THE COURT:

MS. DOAN:

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THE COURT:

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Counsel, you're rearguing a

position I've already ruled on.

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It is --

Thank you.

Thank you, Your Honor.
All right.

Anything further

before we bring the jury in?
MR. STEVENSON:

Your Honor, two things

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walk through the normal operation, we can choose a

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candidate entry or piece of data for free.

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Compare that description of his idea to

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Dr. Nemes's summary of his patent, a patent that he had

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gotten back in 1999.

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Remember, Dr. Nemes says:

During the

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normal data insertion or retrieval -- that's the same

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thing as Mr. Miller's walk through the destination of

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the hash chain.

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And Dr. Nemes says in his invention that

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the expired obsolete records are identified and removed.

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That's exactly the same thing as Mr. Miller is saying.

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During the walk, we can choose a candidate entry for

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free.

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David Miller and Alexey Kuznetsov put Dr.

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Nemes's invention into Linux; and you'll learn, Ladies

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and Gentlemen, that in 2004, Yahoo! adopted that version

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of Linux and put Dr. Nemes's invention into their own

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computers.

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And furthermore, you will hear that when

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they decided to do it, they took no steps to ensure that

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they would not be infringing the patent.

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Throughout the early 2000s, Dr. Nemes

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began to wonder, as the internet grew, if people might

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be using his invention.

He knew what it was good for.

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knowing about this lawsuit, their new code still

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infringes the patent.

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In short, you're going to hear, Ladies

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and Gentlemen, that Yahoo! needs this patent, and they

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haven't been able to stop infringing and do without it.

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Well, if you don't believe Yahoo!'s

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lawyers when they tell you that we don't infringe, then

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I suspect they'll tell you:

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patent is invalid.

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Well, how about this?

The

Now, yes, it's true that the Patent

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Office studied this for two years back in the late '90s,

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but we still hope that you'll find that it's invalid.

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First of all, Judge Davis has already

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given you some valuable guidance about how you should

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approach this issue of validity of the patent in this

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case, and here is what he read to you just a few moments

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ago.

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He told you that the granting of a patent

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by the United States Patent & Trademark Office carries

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with it the presumption that the patent is valid.

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But, you know, an extraordinary thing

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happened in this case.

It doesn't happen very often,

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but it did in this case.

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anyone who wants to, can ask the Patent Office to

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reconsider whether or not a patent is valid.

You'll learn in this case that

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About a year ago, someone -- we don't

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know who.

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mystery person or company, asked the Patent Office to

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reconsider the validity of Dr. Nemes's '120 patent, and

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the Patent Office agreed to do that.

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We know some lawyers in Houston paid by a

Well, Dr. Nemes and Bedrock in response

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said:

You know what?

If the Patent Office is going to

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look at this thing again and reconsider the validity,

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let's give them everything.

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Let's take all of the prior art patents

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and articles and references that Yahoo! talks about in

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this case, and let's send it all to the Patent Office so

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they can have the whole story.

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Every bit of the prior art that Yahoo!

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will ask you to consider in hoping that you will find

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the patent invalid was before the Patent Office in that

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second re-examination.

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THE COURT:

Mr. Cawley, you have about

two minutes left.

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MR. CAWLEY:

Thank you, Your Honor.

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And, Ladies and Gentlemen, with all of

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that information before it, two weeks ago, two weeks

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ago, the Patent Office said Claims 1 and 2 of

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Dr. Nemes's patent are valid.

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Finally, if you don't buy Yahoo!'s

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