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

Filing 484

RESPONSE in Opposition re 475 MOTION for Attorney Fees filed by WI-LAN Inc.. (Attachments: # 1 Exhibit A - July 9 PM Tr, # 2 Exhibit B - 2013-03-21 Pre-Trial Hearing Transcript, # 3 Exhibit C - July 10 AM Tr, # 4 Exhibit D - Lanning report excerpt, # 5 Exhibit E - Email from Justin Cohen to Ajeet Pai (June 23, 2013), # 6 Exhibit F - July 12 AM Tr, # 7 Text of Proposed Order)(Weaver, David)

Exhibit A

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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
12:45 p.m.
July 9, 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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2

Q.

Okay.

How many -- is Wi-LAN a publicly traded

company?

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A.

It is.

4

Q.

So nothing secret about your business or what

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you do?

6

A.

No.

We're on the NASDAQ Stock Exchange.

We're an open book.

You know, we have to

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file reports and give analysts calls and give

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shareholder calls, so...

9

Q.

How many employees do you have at Wi-LAN?

10

A.

We have a little over 50 employees.

11

Q.

And what do your employees do?

12

A.

They do a lot of things.

People have an

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opinion that we're a lot of lawyers.

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more engineers than lawyers.

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lawyers, engineers, master's, Ph.D.s, and then people

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like myself that have both a, you know, finance and

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engineering degree.

18

Q.

We're actually

So we have a lot of

So we know from this lawsuit that the

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discussions in opening statements and things, that

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Wi-LAN is in the business of licensing technology.

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Can you tell the jury generally what it means

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to be in the technology licensing business and what that

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means your business does day-to-day?

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A.

Sure.

We -- so maybe I'll step back a bit.

We -- we started with our own patents.

We are

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a product company, and those initial products we had

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developed patents on.

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were infringing those patents.

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And what we found were companies

In 2006, we changed from a product company.

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We sold -- there were companies that wanted to buy our

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product lines, and we sold our product lines.

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we went forward licensing those patents that we owned.

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9

And then

We also knew that -- you know, we wanted to
continue with that business, so what we do is we -- we

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do due diligence on companies, and people bring us

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patents and technology, and we buy -- buy those patents

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and technology from those companies.

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We also have an R&D program within the company

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so we develop our own -- we continue to develop our own

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technology on a small scale, and develop -- you know,

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try to sell the algorithms and software and also develop

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patents.

18

Q.

So would it be fair to say that the customers

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for your business are the people that take licenses to

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the technology that you have so that they can then use

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and implement that technology?

22

A.

Yes, it is.

I would consider all our

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customers to be like -- you know, we would call them

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customers or licensees, so...

25

Q.

Now, how many licensees would you say you

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have?
A.

We have close to 280 license -- companies that

are licensed to our technology.
Q.

Is it all your technology, or do some

companies license different parts?
A.

Yeah, we're quite flexible.

So if a company

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comes in and wants a license to our wireless portfolio

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only, we'll do that.

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more.

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11

You know, sometimes they want

We also have a television DSL, and that's

basically the main product lines.
Q.

How does Wi-LAN rank in terms of companies

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that are in the patent licensing business?

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big player, top 10?

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A.

Are you a

Are you a small fry?

I would -- we're definitely not the biggest.

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I think we're higher than -- I think we're definitely in

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the top 10 of companies.

17

Q.

Okay.

And let's talk a little bit about --

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well, let me -- I want to show you something before

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we -- before we move on and talk about some of these

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other things to do with these licenses.

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A.

Sure.

22

Q.

I want to show you a slide that was used in

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opening statements, one of the Defendants' slides.

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think it was No. 13.

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Now, take a look at that slide.

Do you

I

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remember this from the opening statements?

2

A.

Yes, I do.

Yeah, I was here.

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Q.

All right.

This was put up in front of the

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jury during opening to show the members of the 3GPP

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standards-setting body.

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Do you recall that?

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A.

I do.

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Q.

Now, I don't know if you ever played this game

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when you were a kid, but I want to -- I want to play it
now, if we can, if you're familiar with it.

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12

There are some of these names that have
something in common.

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A.

Okay.

14

Q.

You agree with that?

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A.

Yeah.

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list, yeah.

17

Q.

Okay.

There's some familiar names on the

I want you to do me a favor.

Now, you

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can give it a practice run, if you need to; but if you

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would take your finger and you can draw on that screen,

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and I want you to circle for me the companies that you

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think, with regard to Wi-LAN, have something in common?

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A.

With Wi-LAN?

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Q.

Yes.

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A.

Nokia -- this isn't working very well for me

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here.

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Q.

All right.

2

A.

Let me try to underline.

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Q.

Okay.

4

A.

Samsung.

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Q.

You think that's all you see there?

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A.

Yeah.

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There are some other companies where we

have -- you know, these are all --

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9

I think -- I think that's --

Q.

Hold on a second.

We don't want to spoil the

mystery.

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Tell us, what do these companies have in

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common?

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A.

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They are all companies that would -- that have

taken licenses from Wi-LAN for various technologies.

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Q.

Okay.

Are there any of the companies that are

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listed on this slide that were members of the 3GPP

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standard-setting process that have taken license to the

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patents-in-suit in this case?

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A.

Yes, there are.

19

Q.

All right.

20

A.

We have Motorola, Samsung, Panasonic was --

Which ones?

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and we're negotiating with them again -- Fujitsu, and

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LG.

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Q.

Okay.

So despite having participated in the

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3GPP standard-setting process, these companies came to

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Wi-LAN and took a patent -- took a license to the

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patents that are involved in this lawsuit?

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A.

They did.

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Q.

In fact, more than that.

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Yes.
They took a license

to your wireless portfolio, in fact?

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A.

Yes, they did.

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Q.

Let's talk a little bit more about that.

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How many licensees do you think Wi-LAN has had
to the patents in this case?
A.

I would put the number at about 70 companies

have taken licenses that included the patents-in-suit.
Q.

Okay.

And you mention here on this slide

Samsung, LG, Motorola.
A.

Yes, they have a license.

Did I miss their

They're not on the slide.

I'm asking you

name?
Q.

about some others.

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A.

Sure.

18

Q.

RIM has.

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What about RIM?

product.

No problem.
What does RIM make?

They make a

Most people know it by a different name.

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A.

Yeah, they make the BlackBerry smartphone.

21

Q.

How about Sharp?

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A.

Yes.

23

Q.

Okay.

And so all total, you think it's close

Yeah.

Roughly, yes.

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Sharp took a license as well.

to 70?
A.

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Q.

All right.

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MR. HILL:
Q.

We can take that slide down.

(By Mr. Hill) Now, I want to talk to you about

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one other thing we heard in opening statement,

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Mr. Parolin, as we get started here.

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7

We heard about lawsuits.

Do you remember

that?

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A.

Yes.

9

Q.

Pertinent subject.

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I mean, that's what we're

here to do, isn't it?

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A.

Yeah.

That's why we're here today.

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Q.

Okay.

Does Wi-LAN file a lot of lawsuits?

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A.

I wouldn't say we file a lot of lawsuits.

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We

file lawsuits when we have to.
Q.

Do you file lawsuits because you're seeking to

abuse the system in some way?
A.

No, not at all.

Not at all.

I mean, the

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problem we have is there's -- you know, there's no

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patent police out there; and so, you know, the only way,

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once -- after licensing discussions, if we can't come to

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an agreement with a company, you know, they have their

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opinion, we have our opinion, and really the only

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circumstance is to, you know, get to the bottom of it is

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to do it in court.

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Q.

Now, you may have heard the implication in

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opening that Wi-LAN uses litigation as a cost driver to

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leverage costs against parties, litigation costs, to

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force them to take a license.

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Remember that?

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A.

I do remember that statement.

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Q.

Would you like to respond to that allegation?

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A.

Yeah.

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expensive for us, too.

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Cost is one factor.

Yes.

I mean, it's

So it goes for both parties.

That's going to cost them a lot of money; it's
going to cost us a lot of money, too.

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But I thought the statements actually

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ignored -- when we make those presentations and we have

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these discussions, we talk about a lot of things.

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is cost of litigation.

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themselves.

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they are, you know, the validity.

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One

The other is the patents

So we talk about the patents, how strong

We talk about who's taken licenses, you know,

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have their competitors taken a license.

You know,

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that's quite often an important thing.

There's, you

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know, five to ten factors that we talk about.

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22

Q.

Now, if a party refuses to respect property

rights that Wi-LAN owns --

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A.

Sure.

24

Q.

-- is there a way that you can enforce those

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property rights other than filing a lawsuit against

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them?
A.

No, there's really no other way.

I mean, if

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we -- if we truly believe that someone's infringing our

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property rights, then really the only way to have them

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pay is to litigate.

6

Q.

So there's no patent enforcement police out

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there you can go to that can help you with somebody

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who's just going to disregard your property rights and

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trespass on you?

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13

A.

No.

As I mentioned before, there's --

there's -- there's no system set up like that here.
Q.

And, you know, you didn't design the patent

system, did you?

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A.

No.

No, I did not.

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Q.

You didn't set up the U.S. patent laws such

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that the only way to stop a trespass is to file a

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lawsuit, did you?

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A.

No, I did not.

19

Q.

So does Wi-LAN simply play by those rules?

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A.

Yeah.

That's -- that's the way the system is

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set up is -- you know, the USPTO does their due

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diligence.

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They grant the patent.

We have the patent.

It's up to us to enforce the patent ourselves.
So it's up to us to enforce our own patent rights.
There's no -- there's no Bureau -- FBI or

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police out there that's going to do it for us.
Q.

What if the person you believe is infringing

your patent is bigger and has more money?

4

A.

I'm sorry.

I didn't understand the question.

5

Q.

What if the person against whom you're

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enforcing your patent is bigger than you and has more

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money, does it deter you?

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A.

Does it what?

9

Q.

Does it deter you?

10

A.

No, it can't.

I mean -- and that's why

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licensing is very difficult.

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Mr. Brant there from Airspan talk about -- you know,

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they had these patents, and they weren't licensing them

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or doing anything with them and licensing is very tough.

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And you saw, you know,

You know, you need the right skill set.

You

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need to have the right financial setup.

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because a company is big, you know, they should still

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respect property rights.

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you're big; you're bigger than us; oh, we're going to

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ignore you.

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Q.

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But just

And we can't just say, oh,

That's not the case and you cannot do that.

So if you believe in what you own, is it fair

to say you have to stand up for it?
A.

Absolutely.

We're the only ones that are

going to stand up for ourselves here.
Q.

Now, let's talk about the way some people

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respond to Wi-LAN as a company.

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4

What percentage of your licensees would you
say are the result of litigation?
A.

So as I mentioned before, we have about 270

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licensees, and 90 percent of those were done without

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litigation.

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notice.

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discussions with them, and they took licenses without

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litigation.

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So just through -- you know, we put them on

We told them about our patents.

We would have

So 90 percent of those companies were without

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litigation.

12

Q.

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So less than 10 percent require you to file a

lawsuit; is that right?

14

A.

Approximately, yes.

15

Q.

Okay.

So by and large, most companies who are

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respectful of property rights will sit down and

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negotiate a business resolution with you?

18

A.

Yeah.

We pride ourselves on being flexible.

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And that's why, you know, all our licenses are

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different, because the company on the other side is

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different and they want different things; and we're

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willing to work with them.

23

Q.

How would your licensees that have come to you

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voluntarily and taken a license to your patents, because

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they chose to respect your property rights, respond to

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you if you let other companies walk all over you?

2

A.

We hear that a lot.

You know, typically,

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we'll get phone calls or even during the negotiations,

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why isn't our competitor, you know, Company X not taken

5

a license?

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we're going to be doing this; we're going to be doing

7

the right thing; and this company is -- is getting off.

8

They will use the word Scott free.

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And, you know, it's not fair that, you know,

And, you know, so it would -- if we don't

10

enforce our patent rights against everybody, then, you

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know, when it comes time to renew a license, the company

12

won't renew with us.

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to enforce our rights.

14

Q.

Why would they if we're not going

Does the patent give you a right to do

15

anything other than exclude someone else from doing what

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you have a patent on?

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18
19

A.

I'm not a lawyer, but that's the meaning to

Q.

All right.

me.
Let's talk about licensing

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practices a little bit, since that's what you handle at

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Wi-LAN; is that right?

22

A.

Absolutely.

23

Q.

You're the man in charge of licensing there,

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Yes.

correct?
A.

Correct.

I run the licensing program.

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A.

LG paid $29 million.

2

Q.

All right.

3

And let's look at our chart.

MR. HILL:

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midway down?

5

Q.

Can we see LG's line about

6

(By Mr. Hill) Did you do better or worse than

Mr. Houston projected?

7

A.

By my calculations, we did much better.

8

Q.

All right.

9
10

We've got two more to go.

Plaintiff's Exhibit 169, which this is
Motorola Solutions; is that correct?

11

A.

That's correct, yes.

12

Q.

All right.

13

A.

That was a lump sum.

14

Q.

And how much did they pay?

15

A.

I think they paid around $6 million.

16

Q.

I'll let you look at the license agreement.

17

A.

$5.949,900 million (sic), so it's close to 6.

18

Q.

Okay.

19

Lump sum or running royalty?

Now, let's look at the last one,

Plaintiff's Exhibit 170.

That's Motorola Mobility?

20

A.

That's correct.

21

Q.

And how much did Motorola Mobility pay?

22

A.

They paid $24.5 million.

23

Q.

Mr. Parolin, are you the person that

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Yes, it's Motorola Mobility.

personally negotiated a large number of these licenses?
A.

A large number.

I was either the prime

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1

negotiator or I was, you know, second -- second or third

2

person.

3

Q.

4

Did each of these licenses allow rights to the

patents-in-suit?

5

A.

I believe so, yes.

6

Q.

And I know the jury is going to hear about a

7

hypothetical negotiation.

8

negotiations, and you were the negotiator?

9

A.

Absolutely.

These are examples of actual

These were -- these are real

10

licenses, and they're paying us or have paid us.

11

you know, hard-fought negotiations for sure.

12

Q.

And,

And engaging in these negotiations, did you

13

follow the licensing practices that you described for me

14

earlier?

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16
17

A.

We did.

We always follow our licensing

practices.
Q.

Mr. Parolin, is Wi-LAN bringing this lawsuit

18

because it wants to exert pain on people, or because it

19

is concerned about legitimate violations of its legal

20

rights?

21

A.

It's definitely not to exert pain, and it's

22

really -- you know, we have a lot of companies that have

23

taken licenses to these patents, and we feel these

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companies should as well.

25

Q.

90 percent of your licensees are voluntary?

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2

A.

Yes.

As I said before, 90 percent are

voluntary.

3

MR. HILL:

4

THE COURT:

5

All right.

Cross-examination.

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7

Pass the witness, Your Honor.

MR. JONES:

Thank you, Your Honor.

May I

approach the witness, Your Honor?

8

THE COURT:

Yes.

9

MR. JONES:

More papers.

10

THE WITNESS:

11

Yes.

Thanks.

CROSS-EXAMINATION

12

BY MR. JONES:

13

Q.

Mr. Parolin, I will try to get your name

14

right.

My name is Mike Jones.

15

Welcome to Tyler.

hope you enjoy your visit.

16

A.

Thank you very much, sir.

17

Q.

Let me dive right in.

I

We went through a bunch

18

of licenses, and let me dive in first by talking about

19

these licenses.

20

Have you ever heard the term comparing apples

21

to oranges?

22

A.

Oh, yes, most definitely.

23

Q.

In order to make sure we know that something

24

is comparable that we need to rely upon it, we need --

25

if we're going to rely upon the comparison -- to make

129
1

sure we're comparing the same things.

2

A.

Yeah, I think so.

3

Q.

Okay.

Okay.

Right?

Yes.

And what we also need to

4

remember about these particular licenses is that in this

5

case, for example, my client, Alcatel, has been sued on

6

three patents, right?

7

A.

In this case, yes, they have.

8

Q.

Okay.

9

And, for example, another Defendant,

HTC, has been sued on one patent, right?

10

A.

In this case, yes.

11

Q.

And none of these licenses, not one of these

12

licenses apply only to the four patents we're talking

13

about in this suit, right?

14
15
16

A.

Yeah.

Very few companies want to take

licenses just to a few patents.
Q.

Right.

That's correct, yes.

But these -- these licenses here

17

concern a whole lot of patents in addition to the four

18

we're talking about in this suit, right, sir?

19

A.

I wouldn't quite place it that way.

But,

20

yeah, the rights given are more than the patents in this

21

suit.

22
23

Q.

Okay.

I don't want to quibble with you.

Let's go through them one at a time.

24

A.

Sure.

25

Q.

But let me just say this:

As you told me at

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1
2

MR. JONES:
Q.

Should we go to Slide 13?

(By Mr. Jones) And this letter, again, talks

3

about more patents.

4

'834 patent, and it says that more products of -- of

5

Airspan infringe your patents, right, sir?

6
7
8
9
10

A.

Yes.

It adds the '530 patent and the

For those additional patents, we thought

their WiMAX products infringed.
Q.

It specifically talks about MicroMAX base

stations, base stations, WiMAX products, and things like
that, right, sir?

11

A.

I'm assuming this is the letter.

12

Q.

Right.

13

A.

So if this letter, it's -- yeah, those are the

14
15

products.
Q.

Now, let's then move on, because even after

16

those letters, a deal is not done, right?

They don't

17

take a license from you.

18

you've told Airspan, we think you infringe our patents;

19

we want to you take a license.

You've approached them and

20

A.

Right.

21

Q.

They don't take a license, right, sir?

22

A.

What timeframe are you talking about?

23

Q.

Let's say by May of 2008, they haven't taken a

24
25

license.
A.

2008, Airspan had not taken a license.

No.

140
1

Q.

And at that point in time, you prepared what

2

is DX 56 before you, an Airspan license review, right,

3

sir?

You see it there?

4

A.

You saying me personally or --

5

Q.

No.

6

A.

Yes.

7

Q.

Okay.

8
9

Wi-LAN.
It looks like a license review.
Thank you.

Now, Mr. -- Mr. Hill brought this up, and I
want to dive into it further.

He said that sometimes

10

litigation costs or costs of defense, the cost that

11

other parties like Airspan are going to expend in

12

defending a lawsuit, come up in negotiations.

13

Didn't he say that?

14

A.

Absolutely, yes.

15

Q.

And, in fact, they did come up in this

16

negotiation.

17

MR. JONES:

18

Q.

Let's go to Slide 15.

(By Mr. Jones) And is this what you told them

19

there -- and, again, this is estimated costs to defend,

20

right?

21

their costs, right?

22
23
24
25

These are not your costs.

We're talking about

A.

Absolutely.

We're familiar with our costs,

Q.

So you're telling them that their costs, if

yes.

they defend the lawsuit, will be -- number one, they

141
1

will need to get a legal opinion, and that would cost

2

them 60,000 to a hundred thousand, right?

3

A.

That's what the chart says.

4

Q.

Okay.

5

Yes.

And then you tell them that it will

cost them 5 to $8 million to defend it, right, sir?

6

A.

That's what it says.

Yes.

7

Q.

And then you tell them that they are going to

8

lose opportunities, because all their employees and

9

their executives will be distracted, and that will cost

10

them another $1 million, right?

11

A.

That's what that says.

12

Q.

Okay.

13

Yes.

And this is -- this is a presentation.

Again, it's prepared by Wi-LAN to talk about

14

the costs of Airspan, if they had to defend the lawsuit,

15

right?

16

A.

I disagree with that comment.

17

Q.

Okay.

18

A.

This is a presentation that talks about the

19

value of the license.

20

cost of litigation is certainly one aspect of it.

21

And as I mentioned before, the

But if you look, it also talks about where the

22

patents came from, the history, you know, what other

23

companies have said.

24

my previous testimony, you know, if you look at Slide --

25

third or fourth slide in there, you have a company like

Like, for instance, as I said in

142
1

Dell saying Wi-LAN invented 802.11A.

2

So as I mentioned before in my previous

3

testimony, cost of litigation is certainly a factor.

4

It's not the only one.

5

up so that they show the complete picture.

6
7

Q.

Well, let's look at this presentation further.

Let's drill down on another slide, Slide 16.

8
9

And these presentations are set

Now, in this particular slide, you give
Airspan three scenarios, right?

10

A.

Yeah.

11

Q.

You tell them that they can accept your offer,

12

Sure.

and they can pay $3 million, right?

13

A.

Yes.

14

Q.

You tell them they can fight; they can defend

15

the lawsuit; and you say that if they win and a jury

16

just like this finds that they do not infringe, then

17

they will expend $4.1 million, right, sir?

18

A.

Yeah, that's our estimate.

19

Q.

And you tell them that if they lose, it will

20
21

Yes.

cost them $14.8 million, right?
A.

Yeah.

I think we calculated out what -- you

22

know, a long license and a 2-percent royalty.

23

what it would cost.

24
25

Q.

That's

So what you're saying here is even if they're

right and it's true they don't infringe, it's going to

143
1

cost them $4.1 million when they could have settled for

2

3, right, sir?

3

A.

Yeah.

That's what that says.

If we were

4

wrong, Wi-LAN was wrong and we sued them on those

5

patents, all those eight to ten patents, and we were

6

wrong, yeah, Airspan would end up paying $4.1 million.

7

Q.

So even if they win, they lose under this

8

scenario, right, sir?

9

having not taken your settlement agreement, right, sir?

10

A.

Yeah.

Because they're losing money by

If we had sued Airspan on those eight

11

to ten patents and we thought they infringed, like

12

everybody if -- yeah, they would be out $4.1 million.

13

Q.

Well, now, you know, it's not unusual for

14

Wi-LAN to send out presentations like this, right, sir?

15

Nothing unusual about it at all, right?

16

A.

I disagree with that.

17

Q.

Okay.

18

Let's go -- one of the license

agreements you have in front of you --

19

A.

Sir, can I explain my answer or not?

20

Q.

Sure.

21

A.

There was -- there was a time -- there was

22

about a year where we actually sent out and included

23

this information.

24

while, because we knew people already understood that.

25

So I wouldn't say we used it all the time in

You know, we stopped doing it after a

144
1

this particular presentation format.

2

for a little bit, but -- so I just wanted to clarify.

3

Q.

We only used it

One of the agreements that you and Mr. Hill

4

pointed out to us that deals with all of Wi-LAN's

5

patents that relate to certain standards, not just the

6

patents in this suit, one of those is the Casio deal,

7

which is PX 159.

Right?

8

A.

That is the Casio deal.

9

Q.

Yeah.

10
11
12
13

MR. JONES:

Yes.

Let's go -- can we go to

Slide 17?
Q.

(By Mr. Jones) And here we see that you did a

Wi-LAN/Casio license review in that case, right?

14

A.

Yes.

15

Q.

Okay.

16
17

MR. JONES:

And if we could go to

Slide 18.

18

Q.

(By Mr. Jones) You used the same figures with

19

them, right?

20

A.

Yeah.

That was around the same timeframe.

21

Q.

Okay.

In fact, you told us before your

22

deposition that you yourself personally have told people

23

that it costs 5 million to $8 million to defend a single

24

patent suit, right, sir?

25

A.

Yes, for sure.

152
1

A.

Right.

But he's not an employee of -- this is

2

where it gets a little -- you know, Mr. Struhsaker is

3

not an employee of Airspan, so he really -- I'm not sure

4

what his obligations are to Airspan.

5

But, basically, you know, the intent of that

6

paragraph is to say, if Airspan can help us, they will;

7

if they can't, they can't.

8
9
10
11

Q.

Mr. Lysejko is also an inventor.

Has he

provided technical assistance in connection with the
commercialization of these patents?
A.

So if you let me finish my answer, the -- for

12

Wi-LAN directly, I don't think he has; but I think he --

13

you know, as part of this litigation, he has.

14

Q.

Thank you, sir.

15

A.

Sure.

16

Q.

Now, is -- has he been in Tyler?

17

Has he

helped in Tyler?

18

A.

I'm not aware of that, but --

19

Q.

Okay.

20

A.

I don't think so.

21

Q.

Okay.

22
23

Is he planning to testify?
I'm not quite sure.

Thank you, sir.

Now, in 2010, one of your personal goals was
to launch the Airspan litigation; is that right, sir?

24

A.

One of my personal goals?

25

Q.

Yes.

153
1
2

A.

I'd have to look back.

I have a lot of

objectives in my -- my job.

3

Q.

Does Wi-LAN's policies with regard to

4

launching litigation like this, does it include suing

5

the same company repeatedly?

6

A.

It really depends.

You know, as we mentioned

7

before, we don't like to sue; and 90 percent are without

8

litigation.

9

company is not respecting our rights, we'll sue once and

10

So typically what will happen is, if a

see if that helps them a bit.

11

And then, you know, what happens is, we have

12

patents on different technologies.

13

maybe a year, a year-and-a-half later if we feel that,

14

you know, they're still at loggerheads, and we'll sue

15

again typically on another technology.

16

MR. JONES:

17
18

Q.

So we'll sue again

Could we go to Slide 28?

(By Mr. Jones) This is Wi-LAN's corporate

overview dated April the 2nd, 2013, right, sir?

19

A.

Yes.

20

Q.

And it's Defendants' Exhibit 434.

21
22

If we could go to the next slide, it gives a
timeline, and it says:

23
24
25

It's labeled that, yes.

Core Licensing Methodology.

And, again, this is a Wi-LAN document, right,
sir?
A.

Yeah, exactly.

154
1

Q.

And it says:

2

A.

Ill -- yeah, illustrative (pronouncing).

3

Q.

Illustrative?

4
5

An illustrative example, right?

I'll go with that one.

Now, if you look at this, what it shows us on
this timeline is that you initiate contact, right?

6

A.

Right.

7

Q.

Then it says, 12 months after you contact

8

them, you sue them with the first litigation on two

9

patents, right, sir?

10

A.

That's what it says, yes.

11

Q.

And then it says, 24 months later, you

12

initiate the second litigation; and you sue them on

13

three patents, right?

14

A.

Yeah, that's correct.

15

Q.

Okay.

And then it says, 18 months later, you

16

initiate the third litigation; and you sue them on two

17

more patents, right, sir?

18

A.

That's what this slide says, yes.

19

Q.

Okay.

Okay.

And, again, this is Wi-LAN's

20

core licensing methodology, right, sir, that we see from

21

your Wi-LAN corporate overview, right, sir?

22

A.

I think this is a framework that -- that's

23

done.

24

been different.

25

I think the timeframes are -- historically have

Typically -- although it says, you know, one

155
1

year, it typically runs two, three, or four years.

I

2

mean, you know, although our CEO likes one year; in

3

practice, we do -- typically, it's two or three or four

4

years.

5

Q.

And you told --

6

A.

Uh --

7

Q.

-- you told -- excuse me.

8

A.

And I was saying, you know, it's a framework,

9
10

so the number of patents -- you know, sometimes it's
one; sometimes it's two; sometimes it's three.

11

So this is kind of a -- you know, a -- one

12

slide that we show -- that our CEO shows people as --

13

you know, tries to catch it all, but the reality is the

14

program is a little different than this.

15

Q.

And -- and you've told people that to defend

16

even one lawsuit can cost you 5 to $8 million, right,

17

sir?

18

A.

In 2008, we said that, yeah.

19

Q.

Okay.

20

A.

Although companies tend to tell us it was a

21

lot less than that.

22

Q.

Okay.

Now, in fact, Wi-LAN believes that

23

additional litigation brings additional pressure on the

24

people you're trying to get to take a license, right,

25

sir?

156
1

A.

Yeah.

We think if a company is infringing our

2

property rights and it's been, you know, years when they

3

haven't really engaged with us and we feel strongly

4

about it, as I mentioned before, that's -- that's our

5

only recourse is to, you know, put our money where our

6

mouth is and litigate on those patents.

7

Q.

Well, let's see how this has worked in this

8

case with regard to one of the Defendants, HTC.

9

just see how it plays out.

10

A.

Sure.

11
12
13

Let's

MR. JONES:

If we could, let's go to

Slide 33.
Q.

(By Mr. Jones) Here we see you first filed

14

with them in this suit on the '211 patent on October the

15

5th, right, sir?

16

A.

Yes.

Yes.

17

Q.

Then you sued them in Marshall, Texas, on

18

February the 2nd on the '802 and '222 patents of Wi-LAN,

19

right, sir?

20

A.

That's correct, yes.

21

Q.

And then you sued them again on the '802 and

22

'222 patents on September the 1st in 2011; is that

23

right, sir?

24

A.

Yeah.

25

Q.

And then you sued them again in Miami,

The same two patents, yes.

157
1

Florida, on the '640 and the '040 patent on December the

2

6th, 2012, right, sir?

3

A.

Yes.

4

Q.

And then you sued them again on June the

5

28th -- not too long ago -- June the 28th, 2013, again,

6

in Tyler on the '688 patent, right, sir?

7

A.

Yeah, I agree.

That's our litigation.

8

think the slide is missing a lot of things, but

9

that's -- that's pure litigation.

10

I

start that slide much earlier --

I would actually

11

Q.

Okay.

12

A.

-- 2007 when we first put them on notice.

13

Q.

Well, let me ask you this:

With regard to my

14

other client, Alcatel, isn't it true that with regard to

15

these four patents, you never went to them and you've

16

never alleged to them that they infringed those four

17

patents prior to filing suit?

18
19
20

That's true, isn't it?
A.

It's -- it's true, but we had been in

discussions since 2006 with Alcatel-Lucent.

21

Q.

No.

22

A.

These four patents --

23

Q.

I know you want -- I know you want to answer

24
25

I'm talking about these four patents.

another question, but please answer my question.
A.

I don't want to answer another question.

178
1
2

Q.

But it's still in the millions of

dollars; is that --

3
4

Okay.

A.

Yes.

Most of the time they would say, it was,

you know, 1-1/2 to 2 million.

5

Q.

6

statements?

7

A.

I was, yes.

8

Q.

And you understand that during Mr. Weaver's

9

Were you present in the courtroom for opening

presentation, he told the jury that he was going to ask

10

the jury to award $500,000 for Sony Mobile's

11

infringement of the patent?

12

A.

I believe I remember that one, yes.

13

Q.

Okay.

14

MR. WYNNE:

Pass the witness, Your Honor.

15

THE COURT:

All right.

16

MR. HILL:

17

Redirect?

Thank up, Your Honor.

REDIRECT EXAMINATION

18

BY MR. HILL:

19

Q.

20
21

Mr. Parolin, let's start with that last point.
What would happen if you send some

companies --

22

(REPORTER'S NOTE:

23

mic is off.)

24

THE COURT:

25

mic.

Mr. Hill informed his

I think you turned off your

179
1

MR. HILL:

Oh.

Is it working now?

2

THE COURT:

Yes.

3

MR. HILL:

Okay.

Sorry about that.

4

A.

No problem.

5

Q.

(By Mr. Hill) What can happen if you send some

6

companies a notice letter before you file a lawsuit

7

against them for patent infringement?

8

A.

Yeah.

Typically, what happens is -- and we

9

actually have companies threaten us all the time -- is,

10

if I send a notice letter to a particular company, they

11

can actually sue me right away.

12

companies, we feel there's a very high threat of people

13

suing us right away.

14

So it's this catch-22.

And with some

You want to let the

15

people know; but at the same time, you know, just by

16

sending a letter, they can sue me.

17

Q.

So there are some people in this world who, if

18

you approach them about your patent rights, they will

19

sue you first; and they know that's a deterrent to keep

20

people from approaching them about their rights.

21

A.

Absolutely.

We hear that all the time, and

22

we're threatened by that all the time.

And it's

23

happened to -- and it's not only a threat.

24

companies do this to us, where we went.

25

right thing.

We've had

We've done the

I've sent them a letter and said, I think

180
1

you're infringing our patents, and we'd like to discuss

2

it with you; and then we get back a lawsuit.

3

So for some companies and in some

4

circumstances, you know, we're left with very little

5

choice.

6

Q.

7
8
9

So is it a bully tactic that some companies,

who have the resources to do that, pursue?
A.

Yes.

It tends to be the larger companies

that, you know, they've got lots of money.

I mean,

10

you've got to understand, we're -- you know, we do about

11

$80 million a year, which is -- which is good, but many

12

of the companies we're trying to license do tens of

13

billions of dollars a year, and we're quite a bit

14

smaller.

15

So, you know, if we're worried about being

16

sued by that company, we will definitely -- you know, in

17

some cases, we will sue first, yeah.

18

Q.

Are there contractual arrangements that you

19

may have had in the past with some companies that

20

require you to actually file suit to initiate a case

21

against them rather than some informal process?

22
23
24
25

A.

There is.

And that's why some of the

questions were a little uncomfortable for me.
We've got some -- some companies, you know,
we'll do an agreement on a specific technology, and then

181
1

they'll -- they've actually put in the agreement,

2

because they think it's a deterrent for little ol'

3

Wi-LAN, you know, that they don't want to sue, they'll

4

actually say, you know, damages can't accrue or, you

5

know, we won't even consider paying you until you sue

6

us.

7
8
9

So these are the type of things that go on in
the licensing business all the time.
Q.

Tell me, Mr. Parolin, what's the number of

10

potential licensees that you've had to sue more than

11

once?

12

A.

It's a very small number.

I can think off the

13

top of my head it's maybe four or five companies where

14

we've had to sue multiple times.

15

Typically, what will happen, is -- as I said,

16

90 percent is done without litigation, and then there is

17

a set of companies that, you know, maybe the numbers are

18

very high, and they want to fight, or maybe they have a

19

strong opinion, and we litigate.

20
21
22

But usually what happens is, you resolve a lot
of issues in one litigation.
Q.

What's the number of companies that you've had

23

to sue more than once that are sitting at this table in

24

this courtroom today?

25

A.

It's three of these companies we've had to sue

182
1
2
3
4
5
6

more than once.
Q.

So you said you could think of maybe four or

five, and three of them are sitting here?
A.

Yeah.

Today I can think of four or five,

yeah, and three of them are sitting here today.
Q.

Well, let's talk about that.

When we're

7

talking about lawsuits and Wi-LAN's business model and

8

the business of patents, frankly, patent ownership, are

9

you -- let me ask you, have you ever heard the saying

10

people in glass houses shouldn't throw rocks?

11

A.

I've definitely heard that saying, yes.

12

Q.

Are you aware of Alcatel-Lucent and Ericsson's

13

participation in patent licensing business just like

14

Wi-LAN is engaged in?

15

A.

Absolutely, yeah.

You know, it's -- it's

16

funny.

A lot of these companies that throw rocks at us

17

actually do the same thing as us.

18

Q.

Do they do it in their own name?

19

A.

Not all the time.

They -- you know, to --

20

sort of shelter themselves.

We see this with a lot of

21

companies; but specifically, the companies you mentioned

22

as well, is that they'll actually put patents in a trust

23

or they'll sell them to a company like Wi-LAN or

24

somebody else that licenses.

25

subsidiary called, you know, some name that's -- that's,

Or they'll put them in a

183
1

you know, not with those companies, and then they'll go

2

assert those patents against companies like -- usually,

3

they're not in their product field.

4
5

Q.

Let me give you a name.

Unwired Planet, have

you ever heard of them?

6

A.

I have, yes.

7

Q.

Tell us about Unwired Planet.

8

A.

They're a -- they're a licensing company that

9

They're a licensing company.

had some patents, and I believe they're public.

You

10

know, they took -- they were given 2,000 patents from

11

Ericsson to go off and try to -- in the wireless space

12

to go off and try to license Ericsson's competitors.

13

And what it allows is, it allows companies to

14

license their own portfolio and also have this other

15

portfolio there to be licensed, not under their own

16

name.

17

Q.

Did Ericsson have a back-end interest in that?

18

A.

Yeah.

It's public knowledge; and you can, you

19

know, go to the Unwired Planet site and see what the

20

back-end is.

21

hefty percentage, you know, up to 20, 50, 70 percent of

22

the -- the royalties from that licensing program.

23

Q.

There's -- you know, they get a pretty

And let's talk about -- with regard to

24

Alcatel-Lucent, have you ever heard of the Multimedia

25

Patent Trust?

184
1

A.

Yes, I have, yes.

2

Q.

What do you know about the Multimedia Patent

3
4

Trust?
A.

It's a -- it's a -- it's a set of patents set

5

up by Lucent mostly in the multimedia space, video

6

space; and they go off and they license -- they litigate

7

a lot, and they license companies that, you know, aren't

8

competitors of theirs.

9

So they have some video patents, so they'll go

10

off and sue, you know, Canon and Nikon and, you know,

11

companies that, you know, aren't really competitors, so

12

they can't really fight back against Alcatel directly.

13

Q.

Would it surprise you to learn that the

14

Multimedia Patent Trust has filed over 30 lawsuits in

15

the last five years?

16
17
18

A.

It would not surprise me at all.

And that

number, I think, is actually higher than ours, so...
Q.

Are you familiar with the fact that the

19

Multimedia Patent Trust was actually sued by a

20

standard-setting organization that Alcatel-Lucent was a

21

part of because they saw it as just a mask for

22

Alcatel-Lucent to violate its standards obligation?

23

A.

Yeah.

My understanding is, you know, before

24

the -- just before the acquisition by Alcatel of

25

Lucent -- and Alcatel had a -- so what happens is,

185
1

when you -- when you join a licensing pool or -- you'll

2

say:

3

licensing pool is going to go out and license on your

4

behalf.

I'm going to donate all my patents, and this

5

And what they try to do in the pool is, they

6

try to get all the companies in that market involved.

7

But what some companies do is they say -- just before

8

they join, they -- you know, they shelve off a few

9

patents, and they keep it out.

10

So it allows them to go

license in particular.

11

I'm not sure what happened from the lawsuit,

12

but the lawsuit -- that type of thing was insinuated by

13

the filing of the lawsuit.

14

Q.

Are you aware of the fact that Ericsson was a

15

plaintiff in this courtroom and got a judgment less than

16

three weeks ago?

17

MR. JONES:

Your Honor, can we approach

19

THE COURT:

Yes, you may.

20

(Bench conference.)

21

MR. JONES:

18

the bench?

My objection is, none of this

22

is none of this -- my objection is none of this is

23

relevant.

24

patents, number one.

25

Nobody has said they can't license their

Number two, we're getting off into every

186
1

lawsuit in the world, which if we want to try, we can.

2

This is -- this is not relevant, and I object for that

3

reason, and also --

4

MR. HILL:

Your Honor, they have, as a

5

theme in their trial, indicted our business model; and

6

in doing so, they make relevant their own business

7

practices.

8

THE COURT:

9

(Bench conference.)

10
11

Q.

Overruled.

(By Mr. Hill) So three weeks ago, Ericsson, in

this courtroom, Plaintiff, right?

12

A.

That's what I understand, yes.

13

Q.

Do you know who any of the Defendants were in

14
15

that case?
A.

I think they were smaller companies, like

16

D-Link and that type of -- size company, little

17

companies.

18

Q.

Smaller than Ericsson?

19

A.

Oh, yes, much smaller.

20

Q.

You were asked earlier some questions about

21

HTC, about whether you had discussions with HTC about

22

these patents before you sued them.

23
24
25

Has HTC ever expressed to Wi-LAN a resistance
to taking a license to anything?
A.

Absolutely.

As I mentioned before, you know,