WI-LAN Inc. v. Alcatel-Lucent USA Inc. et al

Filing 481

MOTION for New Trial CONCERNING THE NON-INFRINGEMENT OF CERTAIN CLAIMS OF U.S. PATENT NOS. 6,088,326; 6,222,819; 6,195,327 AND 6,381,211 by WI-LAN Inc.. (Attachments: # 1 Exhibit A - Trial Transcript (July 9, 2013 Morning Session), # 2 Exhibit B - Trial Transcript (July 11, 2013 Morning Session), # 3 Exhibit C - Trial Transcript (July 11, 2013 Afternoon Session), # 4 Exhibit D - Trial Transcript (July 10, 2013 Afternoon Session), # 5 Exhibit E - PX-1 - U.S. Patent No. 6,088,326, # 6 Exhibit F - PX-2 - U.S. Patent No. 6,195,327, # 7 Text of Proposed Order)(Weaver, David)

WI-LAN Inc. v. Alcatel-Lucent USA Inc. et al

Doc. 481 Att. 3

Exhibit C

Dockets.Justia.com

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

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WI-LAN, INC.

)

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DOCKET NO. 6:10cv521
-vs-

)

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Tyler, Texas
1:06 p.m.
July 11, 2013

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ALCATEL-LUCENT USA, INC.,
ET AL

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******************************************************

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WI-LAN, INC.

)

)
DOCKET NO. 6:13cv252

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-vsHTC CORPORATION,
ET AL

)
)

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TRANSCRIPT OF TRIAL
AFTERNOON SESSION
BEFORE THE HONORABLE LEONARD DAVIS,
UNITED STATES CHIEF DISTRICT JUDGE, AND A JURY

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COURT REPORTERS:

MS. SHEA SLOAN
MS. JUDY WERLINGER
211 W. Ferguson
Tyler, Texas 75702
[e-mail]

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Proceedings taken by Machine Stenotype; transcript was
produced by a Computer.

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HSDPA functionality is a small part of that, but it is

2

in the Qualcomm chipset.

3
4

Q.

And there's no dispute between the parties

about that, is there?

5

A.

No.

6

Q.

Okay.

7
8
9
10
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Does -- does HTC modify the Qualcomm

chipset that goes into its phones?
A.

No.

It is my understanding that they buy the

chipset from Qualcomm and they put them in their phone
and that's the process.
Q.

Okay.

If the accused functionality is in the

12

Qualcomm chipset, what did you do to figure out how the

13

chipset works?

14

A.

So we have to go to what happens in the

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Qualcomm chipsets.

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that I looked at, including -- and we have a slide on

17

that.

18

And so there's a lot of documents

So what I looked at is the source code.

We

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looked at the Qualcomm engineers' depositions.

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at the Qualcomm spec sheets.

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information, most of it is confidential, that's provided

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by Qualcomm that I was allowed to go through.

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I looked

There was a lot of

You signed the protective order, and then you

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can read all that.

So it's kind of exciting, because

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normally most people don't get to see this.

20
1

Q.

Maybe for you.

2

[Laughter]

3

A.

Sorry.

It was for me.

4

Q.

(By Mr. Bader) After examining the claims of

5

the '211 patent and comparing them to the Qualcomm

6

chipsets, did you come to any conclusions on whether

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HTC's phones infringe the '211 patent?

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9

A.
evidence.

Yes.

I did my analysis.

I looked at the

And the conclusion that I write to is the HTC

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phones that include the Qualcomm chipset do not infringe

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for two reasons:

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overlay code generator.

13
14

Q.

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There is no

And there is no second decoder.

So let's step through these one at a

time as quickly as we can, hopefully.

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16

Okay.

There is no overlay code.

First, what are the two independent codes that
are claimed in the '211 patent?
A.

So the '211 patent, again, has the orthogonal

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code, and it has the overlay code.

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is additional code that subdivides an orthogonal

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channel.

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22
23

Q.

And the overlay code

Now, you reviewed all these documents that

describe the HSP -- HSDPA standard?
A.

Correct.

So I went through the HSDPA standard

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document-by-document, and there is no mention of an

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overlay code.

There is no second code in the HSDPA

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2

standard.
Q.

And in the system described in the '2 -- I'm

3

sorry -- is the system described in the '211 patent,

4

compliant with the HSDPA standard?

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6
7
8
9

A.

No.

The system described in the '211 patent

is -- is not related to the HSDPA standard.
Q.

Okay.

So how many codes does the HSDPA

standard require for a single channel?
A.

There is a single code.

There is the OVSF

10

code.

And the standard is very clear.

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different sections in the standard, and here's an

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example.

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We look at

This is Section 5.2, talking about

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channelization codes, and it says the channelization

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code for the primary CPICH -- that was the example that

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I showed animated at the beginning -- has a fixed 256 --

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and there's other examples of other codes -- for

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different channels.

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So on a single channel, there is one code.
Q.

And how many codes does the '211 patent

require per channel?

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A.

Two.

23

Q.

Is there anything in the claims or the

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specification or the Court's claim construction that

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describes using a single code or describes a single code

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from originally?

2

A.

Oh, in -- '93, actually was the priority date,

3

and '94 is when it was filed.

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patent application that was filed by Klein Gilhousen.

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There is an international

He's one of the founders of Qualcomm, that

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actually describes the variable length of the orthogonal

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code, and it's those codes that were adopted by the

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HSDPA standard and used in the Qualcomm chip.

9

Q.

Have you ever met Klein Gilhousen?

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A.

Yes.

Actually, I feel very honored.

I met

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him in the late '90s, and it was a huge honor to meet

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him.

13

Q.

Okay.

So what exactly does the

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Qualcomm/Gilhousen reference describe?

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color-matching that you've done here.

16

A.

Okay.

And explain the

So this is Figure 2 out of the

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international patent application, and I believe the jury

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has seen this before.

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generates this variable length orthogonal code.

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It is -- it is this tree that

And on the right, I am showing a figure that's

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taken right out of the standard.

The only thing I've

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done is I've rotated the figure so that they're both

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kind of pointing down.

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tree and the way the codes are generated at the first

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level, the second level, the third level is the same,

So you can see that the code

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whether it's in Dr. Gilhousen's international patent

2

application or in the standard.

3

Q.

So with respect to when the '211 patent was

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filed, when did Qualcomm file its international patent

5

application on this concept?

6

A.

This was two-and-a-half years before.

7

Q.

Okay.

Now, let's go to the -- I'm sorry.

So

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what's your ultimate conclusion with respect to whether

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the HTC's phones include an overlay code and an overlay

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code generator?
A.

There is no overlay code, and there is no

overlay code generator.
Q.

Okay.

Now, with respect to the second reason

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you mentioned here, what is your conclusion with respect

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to whether there's a second decoder in HTC's phones?

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A.

So it makes sense, if there is no overlay code

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and no overlay code generator, there would be no second

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decoder.

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So I'm looking for something that's not there.
So let's see what is there and why this is not

there.
Q.

Okay.

So what does the Qualcomm specification

actually show about how the chips operate?
A.

So, again, this is a diagram out of the

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Qualcomm specs, and I don't think the jury has seen this

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before.

This is an actual block diagram of what is

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happening in the Qualcomm chip in the HTC phone.

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And it's a little bit hard to see, but what I

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highlighted here in yellow is a single code generator

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that generates the OVSF code.

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fed to here.

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it's a single decoder that applies the OVSF code.

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And you see that being

And this is a de-spreader; it's a decoder;

And then the other blocks are -- do something

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different.

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there's a lot of different blocks in the receiver.

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Kind of like when we saw in the patent,

But this is the key thing.

There is a single

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code generator; there is a single code; there is a

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single decoder?

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14
15

Q.

So, in summary, what are the main reasons why

HTC's phones do not infringe the '211 patent?
A.

So, again, we have no single -- no second

16

decoder, and there is no overlay code and no overlay

17

code generator.

18

Q.

HTC was also accused of infringing Claim 2; is

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that correct?

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A.

That is correct.

21

Q.

How does Claim 2 compare to Claim 5 in the

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'211 patent?

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A.

The language is very similar, so my analysis

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for Claim 5 carries over for Claim 2, and for the same

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reasons.

There is no overlay code generator, no overlay

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time you left Wi-LAN, in which the Airspan

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patents-in-suit here were the drivers of the deal?

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4

ANSWER:
like that.

I don't remember any agreements

No.

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(End of video clip.)

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MS. HEFFERNAN:

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Your Honor, Defendants

call their next witness, Christopher Bakewell.

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THE COURT:

He has been sworn, hasn't he?

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MS. HEFFERNAN:

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THE WITNESS:

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Yes, he has, Your Honor.

Yes, sir.

Thank you.

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W. CHRISTOPHER BAKEWELL, DEFENDANTS' WITNESS,

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PREVIOUSLY SWORN

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DIRECT EXAMINATION

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BY MS. HEFFERNAN:

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Q.

Good afternoon, Mr. Bakewell.

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A.

Good afternoon.

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Q.

Would you please introduce yourself to the

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jury?

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A.

Sure.

My name is Chris Bakewell.

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Q.

Where do you live?

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A.

I live in Sugar Land, Texas.

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Q.

Now, every other witness has described their

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family life.

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A.

Do you want to share any secrets?

No secrets, not in open court.

But I will

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tell a little bit about my family.

2

Q.

Great.

3

A.

I'm married.

I've been married for 23 years.

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I have 3 children.

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man, I guess, who just started driving, which is quite

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an experience.

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have an 11-year-old son.

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9

Q.

I have a 16-year-old boy, a young

I have a 13-year-old daughter, and I

Have you been retained as a damages expert for

Alcatel-Lucent and HTC in this case?

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A.

I have.

My firm has.

11

Q.

So let's cut right to the chase.

What are

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your opinions regarding a reasonable royalty in this

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case for Alcatel-Lucent and HTC?

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MS. HEFFERNAN:

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if you would.

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A.

And let's go to Slide 2,

Sure.

As we have here on this slide, it's my

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opinion that a reasonable royalty applicable to

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Alcatel-Lucent, assuming that there is infringement and

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validity found for the three patents asserted against

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Alcatel-Lucent, would be $500,000 over the applicable

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damages period, which would start at the date of

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trial -- or the date the lawsuit was filed through the

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day of trial.

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And for HTC, regarding the '211 patent, the
applicable figure is $100,000.

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1

Q.

(By Ms. Heffernan) Now, before we get to how

2

you arrived at your opinions in this case -- and we'll

3

spend a fair amount of time talking about that -- I'd

4

like you to tell the jury a little bit about your

5

background.

6

A.

Sure.

7

Q.

What do you do for a living?

8

A.

Well, at the core of what I do, I'm a

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management consultant, and I focus on the valuation of

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up intellectual property rights.

I will advise

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companies and inventors on how to maximize the value of

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their intellectual property rights, help them determine

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what the value of their IP rights is.

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asked from time to time to testify regarding damages in

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cases like this.

And I also get

16

Q.

Where do you work?

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A.

I work in Houston, Texas, for a firm called

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Duff & Phelps.

19

Q.

And what do you do at Duff & Phelps?

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A.

I am a managing director in the Houston

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office.

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intellectual property practice nationwide.

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the vision and strategy committee of the dispute

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practice.

25

Q.

I am the head -- the co-head of our
I'm also on

What's the vision and strategy committee?

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did not know how to do that adjustment --

2

A.

I did.

3

Q.

-- in this case?

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5
6
7
8
9

And as a result, Mr. Jarosz didn't identify
any damages numbers for this jury in this case, did he?
A.

Yes.

I understand that's why he did not

present any numbers that he would represent as damages.
Q.

Dr. Becker, were you able to do a geographic

apportionment in this case?

10

A.

I was.

11

Q.

And as a result, are you able to provide this

12

jury with damages analysis for both Ericsson and Sony

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Mobile in this case?

14

A.

I am.

15

Q.

Before we go into your analysis, should the

16

fact that you're offering opinions on damages now

17

suggest in any way that you think there is any

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infringement here by either Sony Mobile or Ericsson?

19

A.

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conclusion.

21

said this, that as damages experts, for our work to be

22

relevant, we have to make an assumption that there might

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possibly be a finding of validity and infringement.

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25

No.

It wouldn't be fair to draw that

I think Mr. Bakewell and even Mr. Jarosz

And thus, we work from that as our assumption.
But it shouldn't be taken in any way as an indication

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1

that I have an opinion that the patents are valid or

2

infringed.

3

Q.

That's not my area.

Okay.

And if the jury finds that there is no

4

infringement or that the patents are invalid, would

5

there be any damages awarded in this case?

6

A.

No.

7

Q.

With that preface and moving to Slide DX 7,

8

can you give the jury a preface, a little preview of

9

your damages analysis in this case with respect to

10
11

Ericsson?
A.

12

Sure.
My opinion is that when we look at the very

13

specific period of time that's the damages window in

14

this case, namely, from October of 2010 until trial, the

15

reasonable royalty for Ericsson, if there's a finding of

16

validity and infringement, would be $737,000.

17
18

Q.

And did you prepare a similar analysis with

respect to Sony Mobile?

19

A.

Yes.

20

Q.

Okay.

21
22
23

And as we move to DX 8, can you tell

the jury about that?
A.

Yes.
For Sony Mobile, with the same preface, that

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if there's a finding of validity and infringement, it's

25

my opinion that for the one patent, the '211, for that

154
1

period of time that's in the damage window, it would be

2

$45,600.

3

Q.

And before you go into more detail, I want to

4

ask you, you heard Mr. Jarosz and also Mr. Bakewell talk

5

about Georgia-Pacific Factors and a hypothetical

6

negotiation.

7

A.

Yes.

8

Q.

And instead of going back through all of that,

9
10
11

because it's been explained to the jury, let me just ask
you, did you consider these as well?
A.

Yes, I did.

I oftentimes have lots of slides

12

to explain that; but there have been two experts that

13

have gone before me that have explained it, so I'll just

14

tell you that, yes, I did consider that framework and

15

the hypothetical negotiation.

16

have are the result of my consideration of that.

17

Q.

Okay.

And the opinions that I

And rather than going through lots of

18

slides, let me just point you to one slide, which is

19

DX 15-10 and ask you how this hypothetical negotiation

20

and the Georgia-Pacific Factors informed your analysis.

21

A.

Sure.

We see on the upper left there that

22

first assumption that we all have to make in the patent

23

damages world, that the patents are valid and infringed.

24
25

I then conduct a hypothetical negotiation for
the license.

I sort of mix the consideration of

155
1

evidence and a consideration of the Georgia-Pacific

2

Factors.

3

conclusion about the reasonable royalty.

4

Q.

Those things all work together to lead me to a

And with respect to the hypothetical

5

negotiation, Dr. Becker, what year was the hypothetical

6

negotiation for Ericsson?

7

A.

That's in 2005.

8

Q.

And with whom would Ericsson have negotiated

9

in this hypothetical negotiation?

10

A.

With Airspan.

11

Q.

And with respect to Sony Mobile, what year was

12

Sony Mobile's hypothetical negotiation?

13

A.

It's 2009, and that would --

14

Q.

And --

15

A.

-- that would be with Wi-LAN.

16

Q.

Okay.

Again, without asking you to go through

17

all of the evidence you reviewed, did you review a lot

18

of the same evidence that we've heard from the other

19

experts, such as license agreements?

20

A.

Yes.

Yes.

There were -- among the many, many

21

sort of electronic boxes of information that I got were

22

a large number of licenses from Ericsson, from Wi-LAN,

23

and that was, you know, a pretty significant amount of

24

paper or at least electronic paper.

25

Q.

And for many of these licenses, you looked at