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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`BEFORE THE HONORABLE WILLIAM H. ALSUP, JUDGE
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`FINJAN, INC., )
` )
` Plaintiff, )
` )
` VS. ) NO. C 17-05659 WHA
` )
`JUNIPER NETWORKS, INC., )
` ) San Francisco, California
` Defendant. ) Thursday
` ) February 1, 2018
`___________________________________)
`
`TRANSCRIPT OF PROCEEDINGS
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`APPEARANCES:
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`For Plaintiff: KRAMER LEVIN NAFTALIS & FRANKEL LLP
` 990 Marsh Road
` Menlo Park, California 94025
` BY: LISA KOBIALKA, ESQ.
`
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`For Defendant: IRELL & MANELLA LLP
` 840 Newport Center Drive
` Suite 400
` Newport Beach, California 92660
` BY: REBECCA L. CARSON, ESQ.
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`Reported by: BELLE BALL, CSR 8785, RDR, CRR
` Official Reporter, U.S. District Court
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`
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`Case 3:17-cv-05659-WHA Document 28 Filed 02/02/18 Page 2 of 13
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`THURSDAY, FEBRUARY 1, 2018 8:06 A.M.
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`P R O C E E D I N G S
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`THE CLERK:THE CLERK: Calling Civil Action 17-5659, Finjan, Inc.
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`THE CLERK:THE CLERK:
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`versus Juniper Network, Inc.
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`Counsel, please approach the podium and state your
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`appearances for the record.
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`MS. KOBIALKA:MS. KOBIALKA: Good morning, Your Honor. Lisa Kobialka on
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`MS. KOBIALKA:MS. KOBIALKA:
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`behalf of the plaintiff, Finjan, Inc.
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`THE COURT:THE COURT: Welcome.
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`THE COURT:THE COURT:
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`MS. CARSON:MS. CARSON: Good morning, Your Honor. Rebecca Carson on
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`MS. CARSON:MS. CARSON:
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`behalf of Juniper Networks.
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`THE COURT:THE COURT: Welcome to you, too.
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`THE COURT:THE COURT:
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`Let's see, you're moving to dismiss.
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`MS. CARSON:MS. CARSON: That's correct, Your Honor.
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`MS. CARSON:MS. CARSON:
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`THE COURT:THE COURT: All right, let's hear a summary.
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`THE COURT:THE COURT:
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`Please don't go into everything, but make your most
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`important points.
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`MS. CARSON:MS. CARSON: Sure, Your Honor.
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`MS. CARSON:MS. CARSON:
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`The crux of the problem here is that Finjan is trying to
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`rely on its pre-suit communications regarding a non-asserted
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`patent to establish the knowledge elements of its willfulness
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`and inducement claims for the patents that it actually decided
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`to assert against Juniper.
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`According to the complaint, Finjan first reached out to
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`Juniper back in 2014. And it called out one specific patent,
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`Case 3:17-cv-05659-WHA Document 28 Filed 02/02/18 Page 3 of 13
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`and provided Juniper with a claim chart that it called exemplary
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`of its patent portfolio. That patent was the '968 patent. And
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`there is no dispute that Finjan has not asserted the '968 patent
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`in this case.
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`At that time, Juniper responded by providing Finjan with
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`some prior art. And shortly thereafter, the negotiations broke
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`down. And Finjan waited three years and then brought this
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`lawsuit.
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`There's no allegation that Juniper was wrong about the '968
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`patent. In fact, the opposite inference can be made by the fact
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`that Finjan has elected to assert eight patents against Juniper,
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`and not one of those patents is the '968 patent that it
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`specifically identified.
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`There's also no allegation in the complaint that Finjan ever
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`specifically identified any other patents from its portfolio
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`during the pre-suit negotiations. Instead, it chose to hide the
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`ball on those, and not raise them until filing this complaint.
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`Juniper shouldn't be charged with reading Finjan's minds
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`about these other patents, particularly in light of the fact
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`that the one patent that they chose to specifically discuss
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`didn't even have enough merit to make it into their complaint in
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`this case.
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`Finjan hasn't cited a single case where these sets of facts
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`were enough to establish the pre-suit knowledge elements for
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`willfulness and inducement.
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`Case 3:17-cv-05659-WHA Document 28 Filed 02/02/18 Page 4 of 13
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`And in fact, other courts in this district that have been
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`faced with similar situations where the patentee has identified
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`or put the defendant on notice of other patents or similar
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`patents in their portfolio have determined that that's not
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`sufficient to establish pre-suit knowledge.
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`THE COURT:THE COURT: All right. Stop.
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`THE COURT:THE COURT:
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`MS. CARSON:MS. CARSON: Sure.
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`MS. CARSON:MS. CARSON:
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`THE COURT:THE COURT: What do you say in response?
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`THE COURT:THE COURT:
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`MS. KOBIALKA:MS. KOBIALKA: Yes, Your Honor.
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`MS. KOBIALKA:MS. KOBIALKA:
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`The meetings that the parties had, it initially had started
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`with the '968, but we have a specific allegation in the
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`pleadings that we had meetings about the asserted patent.
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`And we can add very specific allegations regarding no later
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`than December of 2014, they, in fact, knew about some of the
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`patents that are asserted in this case because that was part of
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`the meetings that we were having with Finjan, and that was going
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`on between Finjan and Juniper.
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`And --
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`THE COURT:THE COURT: Then why didn't you send a -- you picked out a
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`THE COURT:THE COURT:
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`patent that you didn't even sue on, and sent that as an
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`exemplar. Right?
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`MS. KOBIALKA:MS. KOBIALKA: Yes. But in --
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`MS. KOBIALKA:MS. KOBIALKA:
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`THE COURT:THE COURT: And then, and now you are telling me that you
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`THE COURT:THE COURT:
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`did that, the same thing for the patents you are suing on? I
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`kind of doubt that's true.
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`MS. KOBIALKA:MS. KOBIALKA: No, we didn't send claim charts for the other
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`MS. KOBIALKA:MS. KOBIALKA:
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`patents that we sued on.
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`THE COURT:THE COURT: You mean it just kind of came up; those numbers
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`THE COURT:THE COURT:
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`were in the air in some conversation.
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`MS. KOBIALKA:MS. KOBIALKA: During the meetings that we had, absolutely.
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`MS. KOBIALKA:MS. KOBIALKA:
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`There were discussions regarding licensing, licensing of
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`Finjan's patents, and in particular --
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`THE COURT:THE COURT: But did you -- no. But did you say -- see,
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`THE COURT:THE COURT:
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`that's not going to be good enough, either. I'll just tell you
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`that wouldn't be good enough.
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`What you would have to do is say: Look, we brought the
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`patent, we showed them at the meeting -- I don't -- the ABC
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`patent, Claim 4, you infringed that, and here's why.
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`That would be pretty good. But just to say: Hey, here's a
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`list of the patents in our, quote, portfolio, and we will
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`license this to you and here's an exemplar, I'm going to throw
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`that out.
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`MS. KOBIALKA:MS. KOBIALKA: No. We --
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`MS. KOBIALKA:MS. KOBIALKA:
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`THE COURT:THE COURT: It's going to go so far away. Come on.
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`THE COURT:THE COURT:
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`MS. KOBIALKA:MS. KOBIALKA: We did not -- I will not represent to you or
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`MS. KOBIALKA:MS. KOBIALKA:
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`suggest that we sat down and gave them a claim chart on specific
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`claims of --
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`THE COURT:THE COURT: I know you didn't. I know you didn't.
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`THE COURT:THE COURT:
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`MS. KOBIALKA:MS. KOBIALKA: But we --
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`MS. KOBIALKA:MS. KOBIALKA:
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`THE COURT:THE COURT: I'm sorry. I apologize for -- but I -- these
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`THE COURT:THE COURT:
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`cases are getting out of hand here. To -- first of all, there's
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`no such thing as a portfolio. The statute doesn't give you a
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`right to a portfolio, to sue on a portfolio. You can sue on a
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`specific patent with a specific number. That's the statutory
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`creature.
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`This thing that -- this thing that you have come up with
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`called "portfolio" is just a gimmick. It's a gimmick. You
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`can't sue on a portfolio. You have got to sue on specific
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`patents.
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`Now, you didn't do that here, but you gave them the wrong
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`patent up front. You told them about a different patent. It
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`turns out it's totally invalid; you didn't sue on that. Then
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`you turned around and sue on things you didn't bring up in
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`writing.
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`MS. KOBIALKA:MS. KOBIALKA: During the licensing negotiations, specific
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`MS. KOBIALKA:MS. KOBIALKA:
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`patents that are asserted in this case were, in fact, discussed.
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`THE COURT:THE COURT: That's not enough. You know why? Because all
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`THE COURT:THE COURT:
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`you do is say: We'll give you a license to all these other
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`numbers.
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`What would be good would be is if you said: Here's how you
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`infringe Patent ABC.
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`Okay. I would go along with that. But I'm positive you
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`don't have that kind of proof.
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`Do you?
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`MS. KOBIALKA:MS. KOBIALKA: No. I'm not going -- I don't know that.
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`MS. KOBIALKA:MS. KOBIALKA:
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`THE COURT:THE COURT: I don't think you do. I know how these
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`THE COURT:THE COURT:
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`negotiations go.
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`And, get this. You tell them here's an exemplary thing, and
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`it turns out that's totally bogus. They would be within their
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`rights to say: Hey, the one they gave us that was represented
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`to be exemplary turns out to be completely off base, so we could
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`assume the rest of that portfolio was off base, because it was
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`exemplary.
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`MS. KOBIALKA:MS. KOBIALKA: Your Honor, I can talk to you about how the
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`MS. KOBIALKA:MS. KOBIALKA:
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`negotiations took place. But I don't think at this point --
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`THE COURT:THE COURT: I'm going to give you a chance to try to amend,
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`THE COURT:THE COURT:
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`and fix it up if you think you can. But before I allow it, I
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`may let -- what's your name?
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`MS. CARSON:MS. CARSON: Ms. Carson, Rebecca.
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`MS. CARSON:MS. CARSON:
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`THE COURT:THE COURT: -- take depositions in great detail before we
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`THE COURT:THE COURT:
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`even get to first base. Somewhere between home plate and first
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`base, there'll be about five depositions.
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`MS. KOBIALKA:MS. KOBIALKA: I understand, Your Honor.
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`MS. KOBIALKA:MS. KOBIALKA:
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`THE COURT:THE COURT: Anything more for today?
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`THE COURT:THE COURT:
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`Oh, you have another one about induced infringement. Let's
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`hear about your induced infringement.
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`MS. CARSON:MS. CARSON: So the induced infringement suffers from the
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`MS. CARSON:MS. CARSON:
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`same problem. One of the elements is knowledge of the patents.
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`And several of the patents expired prior to the lawsuit being
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`filed.
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`So for those patents, because there isn't an adequate
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`allegation of pre-suit knowledge, those -- Juniper requests that
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`those be dismissed, for the same reasons as the willfulness
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`claim.
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`THE COURT:THE COURT: I don't quite understand -- what is -- they --
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`THE COURT:THE COURT:
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`even if a patent has expired, you can still sue for -- within
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`the statute on it for the period that was under -- before the
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`expiration, right?
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`MS. CARSON:MS. CARSON: Well, so the requirements of inducement require
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`MS. CARSON:MS. CARSON:
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`that at the time of the alleged inducement, at the time of the
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`alleged action, the defendant knew about the patent, and
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`specifically intended to induce the infringement.
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`So if Juniper was not aware of the patents prior to the
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`filing --
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`THE COURT:THE COURT: Why isn't that the same point as the willfulness
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`THE COURT:THE COURT:
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`point?
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`MS. CARSON:MS. CARSON: It is, Your Honor.
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`MS. CARSON:MS. CARSON:
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`THE COURT:THE COURT: What does the statute of lim- -- what does the
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`THE COURT:THE COURT:
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`expiration got to do with that?
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`MS. CARSON:MS. CARSON: So because the patents have expired, now --
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`MS. CARSON:MS. CARSON:
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`upon receiving the complaint, Juniper is aware of the patents.
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`But those patents are expired, so it can't be held liable for
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`any actions that occur after the expiration of the patents.
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`THE COURT:THE COURT: Correct. But for the period -- but -- all
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`THE COURT:THE COURT:
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`right. Okay. That's confusing me. But all right, what do you
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`say to that point?
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`MS. KOBIALKA:MS. KOBIALKA: There is a difference between the standard
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`MS. KOBIALKA:MS. KOBIALKA:
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`that you were talking about for willfulness and for indirect
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`infringement.
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`We have alleged and we can allege with further detail that
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`they, in fact, knew because we had discussions about specific
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`patent numbers. It won't be all seven that are served, indirect
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`infringement. We had discussions about the '780, the '926,
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`'633, '844, '305, '408 and '494 patents, before the expiration
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`of the patents.
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`Their assertion is that because the complaint was filed
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`after the expiration, for some reason we can't go back in time,
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`because we didn't have knowledge. But we can actually
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`demonstrate that they did have knowledge.
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`THE COURT:THE COURT: Again, if it's just you were -- offered to
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`THE COURT:THE COURT:
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`license them a patent with a certain number as part of a larger
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`group, I'm not -- I'm going to say that's not good enough. It
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`has to be that you explained to them how they infringed that
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`patent. Then, that would be good enough.
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`But, but just to offer and say: By the way, you need a
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`patent -- you need a license, and we'll -- and this will cover
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`the '701 patent, no.
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`MS. KOBIALKA:MS. KOBIALKA: Your Honor, there was discussions about the
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`MS. KOBIALKA:MS. KOBIALKA:
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`merits of those specific patents. It wasn't: Hey, this is a
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`discussion where we're going to talk about our entire portfolio
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`for licensing.
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`That was, in part, the discussion. But we've specifically
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`talked about this subset of patents.
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`THE COURT:THE COURT: Okay. Well, sub- -- subset portfolios is not
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`THE COURT:THE COURT:
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`good enough. It's got to be this patent. Not some sub
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`portfolio.
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`MS. KOBIALKA:MS. KOBIALKA: I've given you the specific numbers that were
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`MS. KOBIALKA:MS. KOBIALKA:
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`part of the explicit discussions that occurred no later than
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`December of 20- -- 2014.
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`THE COURT:THE COURT: I'm going to tell you. When you get your chance
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`THE COURT:THE COURT:
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`to replead, don't gloss over these, and use conclusory language.
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`You need to plead it in great detail. Because I distrust what
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`you're telling me. I -- I want to see it in black and white.
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`And if you just say it was part of the -- that '701 was part
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`of the discussions, that's not -- that's too ambiguous. It's
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`got to be you explained -- somebody there at the meeting took
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`out the '701 and explained how their product violated that
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`patent. Okay. That would be good enough.
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`MS. KOBIALKA:MS. KOBIALKA: Your Honor, if I may, that's the standard for
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`MS. KOBIALKA:MS. KOBIALKA:
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`willfulness. The standard for indirect infringement, are you
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`saying that we have to plead --
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`THE COURT:THE COURT: Well, I don't -- if there's a difference in
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`THE COURT:THE COURT:
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`standard then -- I thought it was the same standard. That's
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`what you said.
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`MS. CARSON:MS. CARSON: It is, Your Honor.
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`MS. CARSON:MS. CARSON:
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`THE COURT:THE COURT: But you say -- okay, if it's a different
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`THE COURT:THE COURT:
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`standard, I'll take that into account. But why do you say it's
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`the same standard?
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`MS. CARSON:MS. CARSON: So I just wanted to clarify that -- so the
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`MS. CARSON:MS. CARSON:
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`elements of inducement are that the infringer knew or should
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`have known its actions would induce actual infringement, that
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`the infringer had specific intent to induce infringement by
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`another and direct infringement by another.
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`So those elements require knowledge of both the patent and
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`knowledge of the potential infringement. And that's why it
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`matters, because for the pre-suit period, Juniper did not have
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`knowledge of the patents and did not have knowledge of its
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`alleged infringement. And therefore, it can't be liable for
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`inducement for that period of time.
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`THE COURT:THE COURT: Well, but your opponent is saying that -- what
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`THE COURT:THE COURT:
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`you're telling me -- that may be true on the present pleading.
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`But she says she can fix that up in an amendment.
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`MS. CARSON:MS. CARSON: We're not aware of any discussions regarding
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`MS. CARSON:MS. CARSON:
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`the specific patents that occurred prior to the litigation.
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`THE COURT:THE COURT: Well, she says you're wrong. So we're going to
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`THE COURT:THE COURT:
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`find out.
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`All right, here's the deal. I'm going to grant this, give
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`you leave to amend. But if you do, you're going to have seek
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`leave to amend. And as part of that, if you want to take
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`depositions of those people, and put them under oath, and see
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`Case 3:17-cv-05659-WHA Document 28 Filed 02/02/18 Page 12 of 13
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`what they're willing to say under oath, I'll let you do that.
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`MS. CARSON:MS. CARSON: Thank you, Your Honor.
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`MS. CARSON:MS. CARSON:
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`THE COURT:THE COURT: All right, you all have a good day. Thank you.
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`THE COURT:THE COURT:
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`MS. KOBIALKA:MS. KOBIALKA: I'm sorry; may I just ask, is there a
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`MS. KOBIALKA:MS. KOBIALKA:
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`deadline for the --
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`THE COURT:THE COURT: Yeah, there will be. You tell me. What -- how
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`THE COURT:THE COURT:
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`much -- I was going to give you, like, two weeks.
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`MS. KOBIALKA:MS. KOBIALKA: Your Honor, I start trial February 9. Could
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`MS. KOBIALKA:MS. KOBIALKA:
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`I just have an extra week?
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`THE COURT:THE COURT: Yeah. I'll give you until -- I'll give you even
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`THE COURT:THE COURT:
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`more than that. I'll give you until February 22. How's that?
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`MS. KOBIALKA:MS. KOBIALKA: That's wonderful. Thank you very much.
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`MS. KOBIALKA:MS. KOBIALKA:
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`THE COURT:THE COURT: All right.
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`THE COURT:THE COURT:
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`MS. CARSON:MS. CARSON: Thank you, Your Honor.
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`MS. CARSON:MS. CARSON:
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`THE COURT:THE COURT: You are most welcome. See you later.
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`THE COURT:THE COURT:
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`(Proceedings concluded)
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`Case 3:17-cv-05659-WHA Document 28 Filed 02/02/18 Page 13 of 13
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`CERTIFICATE OF REPORTER
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` I, BELLE BALL, Official Reporter for the United States
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`Court, Northern District of California, hereby certify that the
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`foregoing is a correct transcript from the record of proceedings
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`in the above-entitled matter.
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` /s/ Belle Ball
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`Belle Ball, CSR 8785, CRR, RDR
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` Friday, February 2, 2018
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`