I/P Engine, Inc. v. AOL, Inc. et al

Filing 837

Memorandum in Support re 835 MOTION for Judgment under Rule 52(B) and a New Trial under Rule 59 filed by I/P Engine, Inc.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7)(Sherwood, Jeffrey)

Exhibit 1

From:

Sent:
To:
Cc:

Subje ct:
Attachments:

Emily O'Brien <[e-mail]>
Monday, October 22, 2012 7:56 PM
zz-IPEng ine; W. Ryan Snow (wrsnow@cwm- law.com); Donald C. Schultz
([e-mail])
QE-IP Engine; Stephen E. Noona ([e-mail])
VP Enqine
Blais Part 2.pdf; Blais Part l.pdf

Defendant s intend t o call the following wit nesses by live testimony on Wednesday:
Gary Culliss
Ruben Ortega
Dr. Ungar
Defendant s intend t o call Mark Blais by deposit ion testimony on Thursday.
Thank you,
Emily
Emily O'Brien
Quinn Emanuel Urquhart Oliver & Hedges, LLP
50 California Street, 22nd Floor
San Francisco, CA 94111
Direct: [phone]
Main Phone: [phone]
Main Fax: [phone]
E-mail: [e-mail]
Web: www.guinnemanuel.com
The information contained in this e-mail message is intended only for the personal and confidential use of the recipient(s)
named above. This message may be an attorney-client communication and/or work product and as such is privileged and
confidential. If the reader of this message is not the intended recipient or agent responsible for delivering it to the
intended recipient, you are hereby notified that you have received this document in error and that any review,
dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in
error, please notify us immediately by e-mail, and delete the original message.

1

Case Clip(s) Detailed Report
Monday, October 22, 2012, 7:24:43 PM

IP Engine vs Google

Blas, Mark (Vol. 01) - 07/31/2012

1 CLIP (RUNNING 00:18:28.000)

Good morning. Could you please state your ...
MB-0731-00603

52 SEGMENTS (RUNNING 00:18:28.000)

1. PAGE 6:03 TO 6:06 (RUNNING 00:00:10.000)

03
04
05
06

Q. Good morning. Could you please state your
name and address for the record?
A. Mark Blais. My address is 1241 Adams
Street, Dorchester, Mass. 02124.

2. PAGE 8:11 TO 8:13 (RUNNING 00:00:05.000)

11
12
13

Q. What was your next position after leaving
Goodwin Procter?
A. Associate general counsel at Lycos.

3. PAGE 8:21 TO 9:01 (RUNNING 00:00:11.000)

21
22
23
24
00009:01

Q. How long were you associate general counsel
at Lycos?
A. Through sometime in 2006.
Q. What was your next position at Lycos?
A. Deputy general counsel.

4. PAGE 9:12 TO 9:19 (RUNNING 00:00:23.000)

12
13
14
15
16
17
18
19

Q. How long were you deputy general counsel
for Lycos?
A. Through December of 2008.
Q. What was your next role at Lycos?
A. General counsel.
Q. Is that your current role?
A. Yes. I'm also general counsel of our
parent company as well now.

5. PAGE 9:23 TO 10:11 (RUNNING 00:01:03.000)

23
24
00010:01
02
03
04
05
06
07
08
09
10
11

Q. What are your roles as general counsel?
What are your responsibilities as general counsel of
Lycos?
A. Everything I've mentioned so far, except
that really any legal matter affecting the company
comes through me. So I now handle employmentrelated issues as well as the entire intellectual
property portfolio, including trademarks.
In the past I was responsible for patents
but not trademarks. Now I handle trademarks and
domains, all disputes affecting the company, all
transactions related to the company, anything legal
related.

6. PAGE 27:09 TO 27:21 (RUNNING 00:00:45.000)

09
10
11
12
13
14
15
16
17

CONFIDENTIAL

Q. Does Lycos currently use the Google AdSense
product?
A. Yes.
Q. Do you know when Lycos first began using
the Google AdSense product?
A. I don't know when we began to use that
product at first. I know we've used it for many,
many years, and that we've had many, many contracts
with Google over the last ten years, which has

page 1

Case Clip(s) Detailed Report
Monday, October 22, 2012, 7:24:43 PM

IP Engine vs Google
18
19
20
21

included both AdWords and AdSense at various times.
I believe AdSense has been constant for many years,
however. As long as I've been at the company we've
used AdSense.

7. PAGE 28:21 TO 29:07 (RUNNING 00:00:43.000)

21
22
23
24
00029:01
02
03
04
05
06
07

Q. Do you know when Lycos first began using
AdSense for search?
A. I think, I don't know specifically when it
began, but as I said, we've gone back and forth
between providers many times over the years. I know
back in, for instance, in 2002, I believe, we
switched from Overture at the time to Google, and
used Google for a number of years, and then we used
Ask Jeeves, and we went back to Google, and went
back to Ask, and went back to Yahoo!, and we're
currently with Yahoo!. I might have missed

8. PAGE 30:19 TO 30:21 (RUNNING 00:00:07.000)

19
20
21

Q. And you said in October of 2004 Terra sold
Lycos to Daum; is that right?
A. Yes.

9. PAGE 31:09 TO 31:10 (RUNNING 00:00:05.000)

09
10

Q.
A.

Do you know what the purchase price was?
95 million.

10. PAGE 32:15 TO 32:18 (RUNNING 00:00:11.000)

15
16
17
18

Q. How about AdSense, do you know if Lycos was
using AdSense in 2004?
A. I believe we were, based on the fact that
I've seen contracts.

11. PAGE 57:17 TO 57:19 (RUNNING 00:00:08.000)

17
18
19

Q. How about in 2006, do you know if Lycos had
any preferences in licensing out its patents for a
lump sum versus a running royalty?

12. PAGE 57:21 TO 58:01 (RUNNING 00:00:21.000)

21
22
23
24
00058:01

A. I wouldn't say there was really any
preferences.
Q. And similarly, do you know if Lycos had any
preference in licensing out its patents in 2005 as
to a lump sum versus a running royalty?

13. PAGE 58:03 TO 58:04 (RUNNING 00:00:26.000)

03
04

A. No. We didn't attempt to license any
patents then.

14. PAGE 90:05 TO 90:19 (RUNNING 00:00:24.000)

05
06
07
08
09
10
11
12
13
14
15
16
17
CONFIDENTIAL

Q. You said Lycos needed to become profitable
in this time frame. Was Lycos able to become
profitable in 2010?
A. 2009, we were, yes.
Q. How about 2008, was Lycos profitable in
2008?
A. No.
Q. How about 2007, was Lycos profitable?
A. No.
Q. 2006?
A. No.
Q. 2005?
A. No.
page 2

Case Clip(s) Detailed Report
Monday, October 22, 2012, 7:24:43 PM

IP Engine vs Google
18
19

Q.
A.

2004?
No.

15. PAGE 96:12 TO 96:23 (RUNNING 00:00:30.000)

12
13
14
15
16
17
18
19
20
21
22
23

Q. Has anyone ever contacted Lycos to request
the license to the '420 patent?
A. No.
Q. Similarly, has anyone ever contacted Lycos
to request the license to the '664 patent?
A. No.
Q. Has Lycos ever contacted Google regarding
licensing the '420 patent?
A. Not that I'm aware of.
Q. Similarly, has Lycos ever contacted Google
regarding licensing of the '664 patent?
A. Not that I'm aware of.

16. PAGE 108:04 TO 108:06 (RUNNING 00:00:09.000)

04
05
06

Q. Has Lycos ever based any of its patent
licensing decisions on agreements between Overture
and third parties related to the '361 patent?

17. PAGE 108:08 TO 108:08 (RUNNING 00:00:02.000)

08

A.

I don't believe so, no.

18. PAGE 110:05 TO 110:06 (RUNNING 00:00:07.000)

05
06

Q. Now as of 2004 was Lycos using Googlesponsored listings?

19. PAGE 110:08 TO 110:10 (RUNNING 00:00:06.000)

08
09
10

A. I believe so.
Q. And as of 2004 was Google using -- was
Lycos using Google's AdSense for content product?

20. PAGE 110:12 TO 110:12 (RUNNING 00:00:02.000)

12

A.

I believe so, yes.

21. PAGE 111:24 TO 112:01 (RUNNING 00:00:13.000)

24
00112:01

Q. Similarly in 2005, was Lycos using Google's
sponsored listings product?

22. PAGE 112:03 TO 112:10 (RUNNING 00:00:42.000)

03
04
05
06
07
08
09
10

A. In 2005?
Q. Uh-huh.
A. I believe so, yes.
Q. And was Lycos using the Google AdSense for
content product in 2005?
A. Yes.
Q. Do you have any reason that Lycos would not
have licensed the '420 patent to Google in 2004?

23. PAGE 112:13 TO 112:16 (RUNNING 00:00:10.000)

13
14
15
16

A. I have no idea.
Q. Do you know if there was any reason that
Lycos wouldn't have licensed the '664 patent to
Google in 2004?

24. PAGE 112:18 TO 112:21 (RUNNING 00:00:08.000)

18
19
20
21
CONFIDENTIAL

A. Again, I have no knowledge.
Q. Same question with regards to 2005, is
there any reason that Lycos would not have licensed
the '420 patent to Google in 2005?
page 3

Case Clip(s) Detailed Report
Monday, October 22, 2012, 7:24:43 PM

IP Engine vs Google
25. PAGE 112:23 TO 113:01 (RUNNING 00:00:11.000)

23
24
00113:01

A. I don't know.
Q. Is there any reason why Lycos would not
have licensed the '664 patent to Google in 2005?

26. PAGE 113:03 TO 113:07 (RUNNING 00:00:14.000)

03
04
05
06
07

A. You mean if Google had approached Lycos for
a license?
Q. Right.
A. Obviously would depend on the financial
terms of -- other than that, no.

27. PAGE 114:17 TO 114:19 (RUNNING 00:00:10.000)

17
18
19

Q. Would Lycos be more willing to enter into a
patent license with a business partner if the
business were larger?

28. PAGE 114:21 TO 114:23 (RUNNING 00:00:06.000)

21
22
23

A. Again, we're talking about if the partner
approached us?
Q. Right.

29. PAGE 115:01 TO 115:03 (RUNNING 00:00:14.000)

00115:01
02
03

A.
Q.
frame?

Probably.
Would that have been true in the 2005 time

30. PAGE 115:05 TO 115:10 (RUNNING 00:00:53.000)

05
06
07
08
09
10

A. Yeah. It would depend on how big the
partner was, how close our relationship was, the
financial terms that were involved. It depends on a
lot of things. Certainly our relationship with the
partner and the size of that partner would be
relevant.

31. PAGE 116:08 TO 116:10 (RUNNING 00:00:10.000)

08
09
10

Q. Is there any reason why Lycos wouldn't have
licensed the '420 patent to Google for use with its
sponsored listing products in 2005?

32. PAGE 116:12 TO 116:13 (RUNNING 00:00:03.000)

12
13

A. Again, probably would depend on the
financial terms, but otherwise, no.

33. PAGE 118:22 TO 119:01 (RUNNING 00:00:16.000)

22
23
24
00119:01

Q.
A.
Q.
A.

Who currently owns Lycos?
Ybrant Digital Limited. Y-B-R-A-N-T.
When did Ybrant acquire Lycos?
October of 2010.

34. PAGE 122:24 TO 123:02 (RUNNING 00:00:08.000)

24
00123:01
02

Was Lycos ever contacted about selling the
'420 and '664 patents?
A. Not specifically.

35. PAGE 131:23 TO 132:14 (RUNNING 00:01:04.000)

23
24
00132:01
02
03

CONFIDENTIAL

Q. What patents were involved in that
negotiation?
A. Well, I was contacted by another -- at that
time we were not, we did not -- let me step back.
We had received an offer from a third party, another

page 4

Case Clip(s) Detailed Report
Monday, October 22, 2012, 7:24:43 PM

IP Engine vs Google
04
05
06
07
08
09
10
11
12
13
14

party related to the patents in suit here.
Q. And who is that third party?
A. Stayko Staykov. And that is S-T-A-Y-K-O
S-T-A-Y-K-O-V.
Q. Who is Stayko Staykov?
A. He's from that Borat movie, I think. No,
he owns an intellectual property investment type of
company. I believe it was called Eidos, E-I-D-O-S,
if I remember correctly. And a smaller company.
And he's invested in intellectual portfolio s
before, and he contacted me.

36. PAGE 133:06 TO 133:11 (RUNNING 00:00:16.000)

06
07
08
09
10
11

Q. Did he make an offer to purchase the patent
of families at the time? The family of patents at
that time?
A. After our meeting he did some brief due
diligence and sent me some information about
himself, and then made an offer.

37. PAGE 135:04 TO 135:17 (RUNNING 00:00:56.000)

04
05
06
07
08
09
10
11
12
13
14
15
16
17

Q. After you reached out to Altitude Capital
did they respond?
A. In the meantime I met with Alex Burger's
company, then was Hudson Bay Capital, he came up and
met with me with one of his colleagues to discuss
this family of patents. He then went back and did
some very quick due diligence over a span of days,
and then made an offer, and I had not heard back
from Altitude yet, I conveyed the highest offer we
had to Altitude, and eventually Altitude came back
and made an offer. I conveyed all this to Staykov.
Staykov made more of an offer, and the three parties
basically negotiated off themselves until we finally
agreed at 3.2 million with Hudson Bay.

38. PAGE 136:02 TO 136:04 (RUNNING 00:00:15.000)

02
03
04

Q. So then the 3.2 is, the 3.2 million was the
highest offer that you received?
A. Yes, to date. Yeah, and Altitude basically

39. PAGE 137:14 TO 137:17 (RUNNING 00:00:10.000)

14
15
16
17

Q. Were there any factors that influenced
Lycos's decision to sell the '799 patent family to
Hudson Bay other than the 3.2 million purchase
price?

40. PAGE 137:19 TO 137:21 (RUNNING 00:00:10.000)

19
20
21

A. No. It was just all based on the highest
price we could get. And the size of Lycos, it was a
good amount of cash.

41. PAGE 138:11 TO 139:17 (RUNNING 00:02:05.000)

11
12
13
14
15
16
17
18
19
20
21
CONFIDENTIAL

(Exhibit No. 17, marked; Letter dated May
16, 2011.)
Q. And obviously take your time to look at the
document, I will just first ask if you recognize the
document.
A. Yes, I recognize it.
Q. What is it?
A. This would be the letter of intent that
Lycos entered with Hudson Bay. It's a little
earlier in 2011 than I had remembered. I thought it
was June or July, but that's close enough.
page 5

Case Clip(s) Detailed Report
Monday, October 22, 2012, 7:24:43 PM

IP Engine vs Google
22
23
24
00139:01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17

Q. I want to just look at the first page, the
section "form of acquisition."
A. Yes.
Q. About maybe a third of the way down the
sentence that begins "The purchase agreement."
A. Yes.
Q. It refers to a royalty-free, worldwide
license back to the patents. Do you see that?
A. Yes.
Q. Do you know if Lycos placed any value on
the license back of the patents in this agreement?
A. Monetary value?
Q. Right.
A. No. It was more just cross our T's, dot
our I's and be protected going forward so nobody
could sue us on patents we sold, or I'd look like an
idiot.
Q. Do you know if at the time Lycos was
practicing any of the patents in Schedule A of this
agreement?

42. PAGE 139:19 TO 140:20 (RUNNING 00:01:31.000)

19
20
21
22
23
24
00140:01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20

A. I really don't know.
Q. And just looking at the section No. 2,
purchase price, do you see that on the bottom of the
first page?
A. Yes.
Q. It refers to "Purchasers shall pay to the
seller $3,100,000 in exchange for the patent"; do
you see that?
A. Yes.
Q. Was that $3.1 million an amount that was
proposed by Hudson Bay or by Lycos?
A. Hudson Bay, because at that point Lycos
wasn't throwing any numbers out there. To be honest
with you, I was being honest with all parties saying
I have a third-party offer, I can't tell you who it
is, but this is the offer. If you want to beat it,
beat it. And they kept on increasing the amount,
and until we get to the 3 million, and that's when
Altitude said this is our final offer. I don't
think Altitude didn't believe me that we had all
these other offers. And so I took them at their
word and Hudson Bay offered 3.1, that was the
highest, Eidos dropped out, I had heard final offer
from Altitude, accepted this offer and didn't go
back to Altitude, and Altitude was mad at that. And
I said don't say final offer if you don't mean it.

43. PAGE 145:18 TO 145:19 (RUNNING 00:00:04.000)

18
19

Q. During the negotiations did Lycos assume
that the patents it was selling were valid?

44. PAGE 145:22 TO 145:24 (RUNNING 00:00:06.000)

22
23
24

A. Yes, we assumed they were valid.
Q. Do you know if Smart Search and Hudson Bay
assumed that the patents were valid?

45. PAGE 146:02 TO 146:08 (RUNNING 00:00:20.000)

02
03
04
05
06
07
CONFIDENTIAL

A.
Q.
validity
A.
Q.
concerns

I hope so.
Did anyone raise any concerns about the
of the patents during the negotiations?
No.
And similarly, did anybody raise any
about the enforceability of the patent
page 6

Case Clip(s) Detailed Report
Monday, October 22, 2012, 7:24:43 PM

IP Engine vs Google
08

during negotiations?

46. PAGE 146:10 TO 146:16 (RUNNING 00:00:17.000)

10
11
12
13
14
15
16

A. No.
Q. We were discussing that the final amount of
the sale of the patents was 3.2 million.
A. Yes.
Q. Is there any reason that Lycos wouldn't
have agreed to sell the patents in this agreement to
Google for $3.2 million?

47. PAGE 146:18 TO 146:19 (RUNNING 00:00:04.000)

18
19

A. No reason we wouldn't have sold to whoever
would have given us the most.

48. PAGE 150:01 TO 150:03 (RUNNING 00:00:12.000)

00150:01
02
03

In 2004 would Lycos have known what other
contributions would be necessary to commercialize
the inventions claimed in the '420 patent?

49. PAGE 150:06 TO 150:13 (RUNNING 00:00:21.000)

06
07
08
09
10
11
12
13

A. I don't know what Lycos would have known
about that in 2004, nor do I know if it even
considered it.
Since I've been in the company, there's
never been a discussion about that patent.
Q. Similarly, was there ever any discussion
about commercializing the '664 patent since you were
at Lycos?

50. PAGE 150:15 TO 150:17 (RUNNING 00:00:07.000)

15
16
17

A. No.
Q. Did Lycos at any time believe that Google
had successfully commercialized the '420 patent?

51. PAGE 150:19 TO 150:21 (RUNNING 00:00:11.000)

19
20
21

A. We never did any analysis of anything
Google was doing in relation to these patents in
suit or that family.

52. PAGE 153:22 TO 154:08 (RUNNING 00:00:43.000)

22
23
24
00154:01
02
03
04
05
06
07
08

You had testified earlier, and I'm
paraphrasing, I'm not trying to put words in your
mouth, so if I'm, you know, if I flub it up, let me
know, that you weren't sure whether the Overture/
Lycos settlement agreement covered the patents in
suit in this case, the '420 and '664; do you recall
that? We can take a look at it, it's Exhibit 15, I
think the question is from.
A. I don't believe that the Overture licensure
agreement had anything to do with these patents. I
don't think it's in this agreement.

TOTAL: 1 CLIP FROM 1 DEPOSITION (RUNNING 00:18:28.000)

CONFIDENTIAL

page 7

IP Engine vs Google

Blas, Mark (Vol. 01) - 07/31/2012

1 CLIP (RUNNING 00:13:52.871)

Did you have any involvement in the merger ...
MB-0731-01313

28 SEGMENTS (RUNNING 00:13:52.871)

1. PAGE 13:13 TO 13:14 (RUNNING 00:00:04.100)

13
14

Q. Did you have any involvement in the merger
between Lycos and WiseWire?

2. PAGE 13:16 TO 13:16 (RUNNING 00:00:01.000)

16

A.

No.

3. PAGE 13:17 TO 14:03 (RUNNING 00:00:27.676)

17
18
19
20
21
22
23
24
00014:01
02
03

Q. Do you know who negotiated on behalf of
Lycos with regards to the agreement with WiseWire?
A. I do not.
Q. Do you know anything about the negotiations
between WiseWire and Lycos related to that
agreement?
A. No.
Q. Do you know if any evaluations were
conducted of WiseWire's intellectual property in
connection with that agreement?
A. I do not.

4. PAGE 30:10 TO 31:10 (RUNNING 00:01:06.000)

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
00031:01
02
03
04
05
06
07
08
09
10

Q. Do you know anything at all about the
negotiations related to Terra's purchase of Lycos?
A. No.
Q. Is it relatedly -- do you have any
knowledge as to whether the parties discussed the
'420 patent in connection with that purchase?
A. No.
Q. Or the '664 patent?
A. No.
Q. And you said in October of 2004 Terra sold
Lycos to Daum; is that right?
A. Yes.
Q. Do you know anything about those
negotiations between Daum and Terra related to
Lycos?
A. No.
Q. Do you know if the parties discussed the
'420 patent in those negotiations?
A. No.
Q. Similarly, do you know if the parties
discussed the '664 patent in connection with those
negotiations?
A. No.
Q. Do you know what the purchase price was?
A. 95 million.

5. PAGE 31:12 TO 31:14 (RUNNING 00:00:08.898)

12
13
14

CONFIDENTIAL

Q. Do you know if there was any valuation of
Lycos's intellectual property in connection with the
purchase by Daum in 2004?

page 1

IP Engine vs Google
6. PAGE 31:16 TO 31:19 (RUNNING 00:00:25.738)

16
17
18
19

A. No, I do not.
Q. Similarly, do you know if there was any
valuation of Lycos's intellectual property in early
2000 when Terra purchased Lycos?

7. PAGE 31:21 TO 31:21 (RUNNING 00:00:01.158)

21

A.

No.

8. PAGE 32:06 TO 32:07 (RUNNING 00:00:08.300)

06
07

Q. Do you know anything about Lycos's revenues
related to AdSense in 2003?

9. PAGE 32:09 TO 32:20 (RUNNING 00:00:37.618)

09
10
11
12
13
14
15
16
17
18
19
20

A. No.
Q. How about in 2004, do you know if Lycos was
using AdWords in 2004?
A. AdWords or AdSense?
Q. I'm sorry, AdWords.
A. I don't know.
Q. How about AdSense, do you know if Lycos was
using AdSense in 2004?
A. I believe we were, based on the fact that
I've seen contracts.
Q. Do you know what Lycos's revenues were
related to AdSense in 2004?

10. PAGE 32:23 TO 32:23 (RUNNING 00:00:01.600)

23

A.

No.

11. PAGE 50:13 TO 50:15 (RUNNING 00:00:04.362)

13
14
15

Q.

Put that one aside.
Did Lycos have any policies regarding
patent enforcement in 2004?

12. PAGE 50:17 TO 50:17 (RUNNING 00:00:01.605)

17

A.

I don't know.

13. PAGE 50:21 TO 50:22 (RUNNING 00:00:07.432)

21
22

Q. Did Lycos investigate in 2004 whether
Google infringed any of its patents?

14. PAGE 50:24 TO 50:24 (RUNNING 00:00:01.230)

24

A.

I don't know.

15. PAGE 51:09 TO 51:13 (RUNNING 00:00:12.061)

09
10
11
12
13

Q. Did Lycos have in 2004 any policies
regarding patent licensing?
A. What time period?
Q. 2004.
A. I don't know.

16. PAGE 52:03 TO 52:04 (RUNNING 00:00:07.400)

03
04

Q. Did Lycos have any negotiations regarding
licensing out of any of its patents in 2004?

17. PAGE 52:06 TO 52:06 (RUNNING 00:00:01.041)

06

CONFIDENTIAL

A.

I don't know.

page 2

IP Engine vs Google
18. PAGE 52:16 TO 52:18 (RUNNING 00:00:06.562)

16
17
18

Q. Were there any factors that Lycos would
typically consider in licensing out its patents in
2004?

19. PAGE 52:20 TO 52:20 (RUNNING 00:00:01.053)

20

A.

I don't know.

20. PAGE 101:10 TO 102:09 (RUNNING 00:02:05.789)

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
00102:01
02
03
04
05
06
07
08
09

Q. If you turn to page 3 of this agreement,
which is Bates-numbered Lycos 0000914.
A. Yes.
Q. And in particular section 3.1 of the grant
of license.
A. Okay.
Q. The first sentence refers to a grant to
Lycos of a "nonexclusive, nontransferable,
nonassignable limited license under the license
patents," do you see that?
A. Yes.
Q. And it refers to, first to the license
patents, do you know what patents it's referring to?
A. Referring to patent number 6269361.
Q. Have you ever read the U.S. Patent 6269361?
A. No, I don't believe so.
Q. Do you have any understanding of what the
'361 patent covers?
A. I just have a general understanding it
covers their keyword auction-based advertising
system. At least that's their opinion.
Q. Did Lycos have any opinions as to the value
of the '361 patent at the time that they entered
into this agreement?

21. PAGE 102:11 TO 105:06 (RUNNING 00:04:46.785)

11
12
13
14
15
16
17
18
19
20
21
22
23
24
00103:01
02
03
04
05
06
07
08
09
10
11
12
13
14
15

CONFIDENTIAL

A. I don't believe so.
Q. Was Lycos aware of any agreements between
Overture and any third parties related to the '361
patent?
A. If I recall correctly, Overture received
stock in Google to settle claims based on these
patents at a certain point. That's just my
recollection. And they had pending litigation at
the time against FindWhat, one word, capital F,
capital W. Internet names in the past.
Q. Was Lycos in 2005 aware of any licenses
between Overture and any third parties related to
the '361 patent?
A. Other than what I recall, between Overture
and Google, no.
Q. And was Lycos aware of any of the specific
terms?
A. Only what was recorded publically.
Q. Did the agreement between Overture and
Google have any impact on the terms that Lycos
agreed to to license the '361 patent?
A. I don't know.
Q. Do you know what factors, if any, were
considered by Lycos in agreeing to enter into this
licensure agreement for the '361 patent?
A. It was partly because we wanted to continue
our AdBuyer business, get rid of cost in litigation,
and we were at the same time settling all types of
matters with our previous parent company under the

page 3

IP Engine vs Google
16
17
18
19
20
21
22
23
24
00104:01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
00105:01
02
03
04
05
06

acquisition agreement with our then present parent
company. There were all types of disputes and
matters and we were trying to reach a global
settlement to settle everything. And this was part
of it because we had an indemnification, so we were
trying to settle this up as quickly as possible to
clean up the rest of the matters.
Q. Were there any other factors that Lycos
considered in entering into this agreement with
Overture for the '361 patent?
A. I honestly don't know. I didn't negotiate
the financial terms of this.
Q. Do you recall who did on behalf of Lycos?
A. I believe that would have been Peter Karol.
That's K-A-R-O-L. He was our general counsel at the
time, and he was the one that participated in faceto-face meetings, I believe, that ultimately led to
an agreement, I believe. And I believe our outside
patent counsel at the time may have been Ropes &
Gray. I don't remember.
Q. Turn to page 4 of the agreement which is
Bates-numbered Lycos 000915, and in particular
section 4.1 under the term of license. Do you see
that?
A. Yes.
Q. The term of license states that "The
license granted under the license patents by this
license agreement shall terminate six years from the
active date of this license agreement." Do you know
why the term of license was six years from the
effective date?
A. No, I do not.
Q. Do you know if that term had any impact on
the amount of royalties that Lycos was willing to
agree to in order to license the '361 patent?
A. I don't know.
Q. Do you know if that term had any impact on
the type of royalty that Lycos was willing to enter
into with Overture?

22. PAGE 105:08 TO 106:01 (RUNNING 00:01:00.156)

08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
00106:01

A. I don't know.
Q. And then going to the next section, 5.1 on
royalties, do you see that section?
A. Yes.
Q. Second paragraph, the one that begins "for
AdBuyer product," do you see that?
A. Yes.
Q. I'm paraphrasing, but it says that the
licensee shall pay Overture royalties in the amount
of ten percent of gross revenue. Do you see that?
A. Yes.
Q. Do you have any understanding of how the
parties reached the agreement that the, that the
amount paid would be ten percent of gross revenue?
A. No.
Q. Did Lycos have any knowledge of royalty
rates that, of customer royalty rates in the
industry?

23. PAGE 106:03 TO 107:02 (RUNNING 00:01:20.985)

03
04
05
06
07
CONFIDENTIAL

A. I don't know.
Q. And similarly, the second sentence refers
to Websites owned by syndicatees or subsyndicatees;
do you see that?
A. Yes.
page 4

IP Engine vs Google
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
00107:01
02

Q. And it refers to earned royalties in the
amount of eight percent in the gross revenue
attributable to such links; do you see that?
A. Yes.
Q. And do you have an understanding how the
parties reached an agreement of eight percent of
gross revenues for syndicatees or subsyndicatees?
A. No.
Q. Do you know if those terms were negotiated
by the parties?
A. Yes.
Q. Do you have any knowledge of specific
offers made by Lycos to license the '361 patent?
A. No.
Q. Do you recall when Lycos stopped using the
AdBuyer product?
A. Sometime in 2006.
Q. Do you know the amount of royalties paid by
Lycos to Overture under this agreement?

24. PAGE 107:04 TO 107:04 (RUNNING 00:00:01.527)

04

A.

I don't know.

25. PAGE 109:10 TO 110:02 (RUNNING 00:00:39.217)

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
00110:01
02

Q. Do you recognize this document?
A. No.
Q. Okay. If you look about the paragraph that
begins "Lycos advertising base," do you see that?
A. Yes.
Q. And that's the paragraph I'm going to ask
about. Take as much time as you want to look at the
document.
First sentence says, "Lycos advertising
base revenue structure was largely dependent on
Google AdWords, which are distributed on U.S.
properties," and then it has a list of U.S.
properties, do you see that?
A. Yes.
Q. Do you know if Lycos's advertising base
revenue was largely dependent on Google AdWords in
2004?

26. PAGE 110:04 TO 110:04 (RUNNING 00:00:01.364)

04

A.

I don't know.

27. PAGE 111:13 TO 111:15 (RUNNING 00:00:11.147)

13
14
15

Q. Do you know the amount of Lycos's
advertising-based revenue that was derived from its
use of Google products in 2004?

28. PAGE 111:18 TO 111:18 (RUNNING 00:00:01.067)

18

A.

No, I don't.

TOTAL: 1 CLIP FROM 1 DEPOSITION (RUNNING 00:13:52.871)

CONFIDENTIAL

page 5