Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 1 of 23
`Case 5:l5—cv—O2008—EJD Document 91-2 Filed 04/27/16 Page 1 of 23
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`EXHIBIT 1
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`EXHIBIT 1
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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 2 of 23
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` Pages 1 - 146
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`BEFORE THE HONORABLE HAYWARD S. GILLIAM
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`OPENTV, INC., and NAGRAVISION,
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`SA,
` )
` Plaintiffs, )
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` VS. ) NO. C 14-1622 HSG
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`APPLE, INC.,
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` ) San Francisco, California
` Defendant. ) Wednesday
` ) April 22, 2015
`___________________________________) 12:30 p.m.
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`TRANSCRIPT OF PROCEEDINGS
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`APPEARANCES:
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`For Plaintiffs: FINNEGAN, HENDERSON, FARABOW
` Garrett & Dunner LLP
` 901 New York Avenue, NW
` Washington, DC 20001
` BY: SMITH R. BRITTINGHAM, ESQ.
` GERALD IVEY, ESQ.
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` FINNEGAN, HENDERSON, FARABOW
` Garrett & Dunner LLP
` Stanford Research Park
` 3300 Hillview Avenue
` Palo Alto, California 94304
` BY: ROBERT MCCAULEY, ESQ.
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` FINNEGAN, HENDERSON, FARABOW
` Garrett & Dunner LLP
` 3500 SunTrust Plaza
` 303 Peachtree Street, N.E.
` Atlanta, Georgia 30308
` BY: STEPHEN KABAKOFF, ESQ.
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`CRR, RMR, RPR
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`Reported By: Debra L. Pas, CSRReported By: Debra L. Pas, CSRReported By: Debra L. Pas, CSR 11916 11916 11916 11916, , , , CRR, RMR, RPRReported By: Debra L. Pas, CSR CRR, RMR, RPRCRR, RMR, RPR
` Official Reporter - US District Court
` Computerized Transcription By Eclipse
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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` (415) 431-1477 (415) 431-1477
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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 3 of 23
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`APPEARANCES CONTINUED:
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`For Defendant: O'MELVENY & MYERS LLP
` Two Embarcadero Center
` 28th Floor
` San Francisco, California 94111
` BY: GEORGE RILEY, ESQ.
` LUANN SIMMONS, ESQ.
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` O'MELVENY & MYERS
` 400 South Hope Street
` Los Angeles, California 90071
` BY: RYAN YAGURA, ESQ.
` BRIAN COOK, ESQ.
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`Also Present: Brian Platt, Esq.
` Chuck Fish, Esq.
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 4 of 23
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` P R O C E E D I N G S
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`April 22, 2015
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`12:33 p.m.
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`THE CLERK: We're calling C14-1622 OpenTV, Inc., et
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`al versus Apple, Inc.
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`Please step forward and state your appearances for the
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`record, please.
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`MR. BRITTINGHAM: Good afternoon, your Honor. Smith
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`Brittingham with Finnegan Henderson on behalf of OpenTV.
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`With me here at counsel table is Gerry Ivey, Steve
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`Kabakoff, Rob McCauley.
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`And, also, two in-house counsel with, Brian Platt and
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`Chuck Fish.
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`THE COURT: All right. Good afternoon
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`Mr. Brittingham.
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`MR. BRITTINGHAM: Thank you.
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`MR. RILEY: Good afternoon, your Honor. George Riley
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`of O'Melveny and Myers for Apple.
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`I'm joined by my colleagues from O'Melveny and Myers,
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`Luann Simmons, Ryan Yagura and Brian Cook.
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`THE COURT: Good afternoon, Mr. Riley.
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`MR. RILEY: Thank you.
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`THE COURT: Okay. So we're here for two purposes.
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`One is the hearing on the motion to supplement the Local
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`Rule 3-2(b) production, and then from there we'll segue into
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`the claim construction hearing.
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 5 of 23
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`I've read the papers on the motion for leave to
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`supplement, have a few questions. I don't know how the parties
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`propose to proceed on that.
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`But I suppose since it's OpenTV's motion, Mr. Brittingham,
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`you can start.
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`MR. BRITTINGHAM: Your Honor, I'm happy to present
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`argument, which would probably duplicate much of what you
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`already read in the motion papers.
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`We do believe the motion should be granted. I'm happy to
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`answer your questions, but if you would like me to go forward
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`with argument until you feel the need to interrupt me, I would
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`be happy to do so.
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`THE COURT: Let me ask, it seems to me there are a
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`couple questions. One is, obviously, without going into
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`attorney-client privileged material, generally what was it that
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`took three months to make the waiver decision?
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`MR. BRITTINGHAM: So the decision came after,
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`essentially, the disclosures in Apple's invalidity contentions.
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`So those, as you know, were in October and the documents were
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`produced in January.
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`During that time, first we had to evaluate the prior art
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`itself and determine the nature of it and what the dates were,
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`whether there were prior art reference that's could be sworn
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`behind, as we sometimes say, or we could pre-date what the
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`earlier conception date or whether the art was the type of art
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 6 of 23
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`that you can do that. Because it comes at a particular time, a
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`year before the application and can't be avoided.
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`Secondly, then we had to review the records. We were
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`trying to find non-privileged documents that would support
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`conception in the earlier time. We hadn't found them leading
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`up to our initial disclosures, but we went back and looked
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`again to make sure. When we concluded at that time we only had
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`privileged documents, then we needed to go look and look at all
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`the privileged documents from that era because once you produce
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`something that's privileged, you're going to have to waive
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`certain scope of subject matter that would have previously been
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`protected by the privilege.
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`So we really did have to review everything that was out
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`there to get a sense of, well, what was -- what was going to
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`come out, and what would be the scope, and what would be the
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`subject matter that might be subject to disclosure because of
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`this waiver. And that included documents that were in our
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`possession, but, also, documents that we had to get from
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`third-party prosecution counsel.
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`And so then once we looked at all those, made the
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`decision, have to talk to the client. Client has to consider
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`the issues as well. So it was not an insignificant analysis to
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`determine whether to waive. I mean, the number of documents
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`that were ultimately produced were not significant, 15 or 16
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`pages, but the job of figuring out whether you're going to do
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 7 of 23
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`that is actually more complex.
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`THE COURT: And could any of that work have been
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`front loaded? In other words, could you have reasonably
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`anticipated that the issue that ultimately arose, might arise
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`so you could have done this work in advance and been in a
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`position to produce more quickly after Apple's invalidity
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`contentions were served?
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`MR. BRITTINGHAM: I suppose in a perfect world there
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`could have been some pre-game analysis that might have sped the
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`process up. But we had been searching through, you know,
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`somewhat old records. These are 2000 to 2002 era records. So
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`we -- we had done a fair amount of looking. I'm not sure there
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`was any expectation that we would have to continue looking or
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`then consider privilege waiver.
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`So I can't say that somebody thinking presciently might
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`have actually done some of that work ahead of time, but to the
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`best of my knowledge, we felt we had done what was required
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`under the rules and then reacted accordingly when we received
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`the invalidity contentions.
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`THE COURT: I assume there was no privilege log here.
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`I don't see any privilege log requirement in the rule, but was
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`there one?
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`MR. BRITTINGHAM: There was not one. One of the
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`reasons it's so complicated or unusual, I suppose is another
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`way to put it, is at the time this all happened we had not
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 8 of 23
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`received any discovery requests from Apple.
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`So as you correctly note, the rule itself doesn't really
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`say one way or another whether some there should be a privilege
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`log. But that kind of gets obviated sometimes because you get
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`a set of discovery requests from the other side. So they are
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`asking you to do a privilege log anyway. So it kind of falls
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`out in the wash.
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`But here, because there were no efforts to produce a
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`privilege log in response to a more all-encompassing set of
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`discovery requests, no, we didn't have a log at the time. It's
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`not -- I note that we've now received just on April 6th Apple's
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`infringement contentions with respect to their 10 patents and
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`the counterclaims. They did the same thing we did. No
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`privilege log. They did identify priority dates of
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`applications, indicated there might be some documents relevant
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`to conception, reduction to practice. But we don't have any
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`privileged documents. Can't imagine there aren't some, but we
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`don't have them.
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`So I think the parties are proceeding both evenly with an
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`understanding of what the rules require. And so the fact that
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`we're arguing about this is in some respects somewhat not --
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`not quite sure why we're arguing as much as we are arguing
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`about it.
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`THE COURT: Okay. So Ms. Simmons, initial question:
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`There is no dispute, is there, that the documents were
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 9 of 23
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`permissibly held -- withheld initially? That they are
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`privileged? There is no dispute that they are privileged, am I
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`right?
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`MS. SIMMONS: We are not disputing the claim of
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`privilege itself. We are disputing that they were properly
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`withheld. It is our position that the analysis that
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`co-counsel -- that my opposing counsel has described regarding
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`whether there are -- you know, searching for and determining
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`whether there are non-privileged materials that might support
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`an earlier date for purposes of the invalidity analysis and
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`then the balancing of that against whether a party wants to
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`waive privilege with respect to things like invention
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`disclosure forms, that all has to happen -- as your Honor asked
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`in your question, that all has to happen before the
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`infringement contentions are served.
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`And, in fact, counsel mentioned that Apple recently served
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`its infringement contentions on its patents and we conducted
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`that analysis. So we are not operating, I don't believe, in
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`the same way. We went through the analysis and determined
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`whether or not we wanted to waive privilege.
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`THE COURT: To be informed by this dispute I'm sure,
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`right?
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`MS. SIMMONS: True, but patentees have to do that all
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`the time. I mean, the rules clearly specify that all documents
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`that a party intends to rely on for purposes of establishing
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 10 of 23
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`what date is going to be relevant for the invalidity analysis,
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`all of those have to be produced on the date specified by the
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`Court's scheduling order.
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`THE COURT: And I don't know if you can read that
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`much into the local rule. It does say produce the documents,
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`but I can't see how that could be read to say: You're required
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`to produce privileged documents.
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`So essentially you're arguing for a rule that says the
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`waiver decision has to be made at the time that the disclosure
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`is made. And we could argue about whether that might be a
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`better rule. We could argue about whether the patent local
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`rule committee ought to take that up. But I just don't see
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`that on the face of the rule.
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`So starting from there, the argument that you're making is
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`that there is a -- there is prejudice that would redound to
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`Apple having to redo prior art searches.
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`I guess the question is: How do you quantify that?
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`What's the actual expense that would be entailed by doing
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`whatever you would have to do if you receive these documents?
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`Understanding that, I thought plaintiff's point was well
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`taken; that it seems that this could come up anyway in
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`connection with documents that the inventor might have and it
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`could have -- you know, that could come up two months from now
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`or whenever you all get around to discovery.
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`So what's the tangible harm that you're alleging this
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 11 of 23
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`situation imposes on you?
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`MS. SIMMONS: There are two -- two categories, I
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`would say, of prejudice to Apple based on this. And then I'd
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`like to also address the point about whether materials could be
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`obtained elsewhere, such as through the inventor.
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`As to the prejudice issue, there is the prejudice that we,
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`I think, all recognize that Apple will have to go back and
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`perform additional searching and additional work to prepare new
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`invalidity contentions.
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`THE COURT: My point is, what does that cost?
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`MS. SIMMONS: We can submit the details on how much
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`that would cost. It not an insignificant amount of time and
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`effort and cost to Apple.
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`There is another prejudice, though, that in addition to
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`the invalidity contentions, which is the claim construction
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`process required the parties to identify -- to essentially rank
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`the importance of terms that we wanted to have construed based
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`on issues of which terms are going to be more dispositive or
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`less dispositive to issues like invalidity and
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`non-infringement. And had Apple known that the landscape was
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`different with respect to the prior art universe, then Apple
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`might have ranked the terms from this -- the '229 patent, which
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`is the patent at issue, differently than, say, the terms from
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`the '799 patent, where we believed we had a good 101 defense.
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`And that harm is now almost impossible, frankly, to cure
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 12 of 23
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`because we're, in 15 or 20 minutes, going to have our claim
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`construction hearing, and so we would have to essentially start
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`that process over.
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`THE COURT: Sure. With the understanding, though,
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`that if there are additional claims beyond the 10 that have to
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`be construed before we get to trial, under any circumstances I
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`have to do that.
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`MS. SIMMONS: Agreed. Agreed. But I think stepping
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`back a moment from the idea of whether or not the prejudice can
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`be cured, I think the more fundamental point is that the entire
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`reason behind these patent local rules was to avoid this kind
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`of back-and-forth and rebuttal and changing of positions as the
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`litigation progresses.
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`And the case law seems clear that it does apply both to
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`the 3-1 disclosures and the 3-2 production, because of those
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`requirements combined provide the defendant of notice of what
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`the plaintiff's case is with respect to the date that is going
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`to be the critical date for purposes of analyzing and
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`collecting prior art and determining the invalidity defenses.
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`And the -- the case law regarding the rules make it clear
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`that the point was, behind these rules, that the parties have
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`to state their positions early on in the litigation and they
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`have to stick to those positions. "Adhere to," I believe,
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`several of the cases say.
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`THE COURT: Right. But none of the cases that you
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
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` (415) 431-1477 (415) 431-1477
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` (415) 431-1477 (415) 431-1477
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`

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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 13 of 23
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`had cited deal with 3-2 disclosures, correct? I mean, they are
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`3-1 cases.
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`I think we all agree this is an oddball circumstance that
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`we're in, but I didn't see any cases that dealt with this
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`circumstance.
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`MS. SIMMONS: That's correct, your Honor. There was
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`a case that was close. It was sort of the flip side.
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`Judge Patel in the IXYS Corp. case dealt with the issue of
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`whether a defendant could be permitted to rely on materials
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`produced under the analogous document production requirement
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`for invalidity contentions. That defendant had not produced
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`these materials, produced them late, and then wanted to rely on
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`them. And Judge Patel said that that party could not rely on
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`those materials because they were not produced timely.
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`So it's the analogous -- the sister rule for document
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`productions for -- that correspond to invalidity contentions
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`and we're dealing here with the production for infringement
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`contentions.
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`And Judge Patel talked about it as, again, the local rules
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`are there so that the parties will disclose their positions and
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`stick to them, not so that they can read into the rule some
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`loophole that will allow them to "practice litigation by
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`ambush," is the way Judge Patel referred to it.
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`And, your Honor, mentioned, I wanted to respond, I believe
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`you asked also about documents that could be obtained from the
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
`
` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
`
` (415) 431-1477 (415) 431-1477
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` (415) 431-1477 (415) 431-1477
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`

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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 14 of 23
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`inventor and elsewhere. To me, that's an entirely different
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`category. So if the plaintiff did not have access to that
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`information and could only obtain it later through discovery,
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`that then might be able to meet the good cause standard and
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`permit supplementation.
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`We would have to, obviously, look at the specific
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`circumstances to see if they could show diligence, but in this
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`case, there is really no dispute that there is no diligence;
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`that they cannot show diligence. They made a strategic
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`decision to withhold these documents.
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`THE COURT: Well, they made a decision to, at the
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`time, stand by what seems to me to be an indisputably proper
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`assertion. In other words, I don't think anyone is arguing
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`that they did anything wrong by asserting privilege over the
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`documents initially. Your argument is that they have to make a
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`once-and-for-all decision about waiver early on.
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`I suppose that's what the motion comes down to, but it
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`just -- it strikes me as a little unusual to ascribe bad faith
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`to the assertion of a privilege that everyone acknowledges
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`applied and say that it's -- you know, somehow you've got to
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`make the decision at a certain point or forever waive your
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`ability to waive.
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`MS. SIMMONS: And I don't know that we would -- we
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`would -- it is not our position that there was bad faith. It's
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`our position that the patentee in this case -- we're the
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
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` Debra L. Pas, CSR, CRR, RMR, RPR Debra L. Pas, CSR, CRR, RMR, RPR
`
` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
`
` Official Reporter - U.S. District Court - San Francisco, California Official Reporter - U.S. District Court - San Francisco, California
`
` (415) 431-1477 (415) 431-1477
`
` (415) 431-1477 (415) 431-1477
`
`

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`Case 5:15-cv-02008-EJD Document 91-2 Filed 04/27/16 Page 15 of 23
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`patentee on our patents -- has to make a decision upfront
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`whether a -- a strategic decision, whether or not they are
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`comfortable with the dates that they are asserting based on the
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`face of the patent or if they want to try to shoot for an
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`earlier date.
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`THE COURT: But this is the other thing, too.
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`Wouldn't you agree that the rule speaks specifically of
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`priority date? There is no obligation to disclose a conception
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`date. There's an obligation to produce documents reflecting a
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`conception date, but -- and, again, this might be an argument
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`for the patent rule drafters for revisions in the future, b