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` UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
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`THE HONORABLE CATHY ANN BENCIVENGO
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`FINJAN, INC., )
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` Plaintiff, ) CASE NO. 17CV183-CAB-BGS
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` vs. ) SAN DIEGO, CALIFORNIA
` )
`ESET, LLC and ESET SPOL, S.R.O.,) TUESDAY, MARCH 10, 2020
` )
` Defendants. )
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`Reporter's Transcript of Jury Trial, Day 1, Volume 1
`Pages 1-219
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`Proceedings reported by stenography, transcript produced by
`computer assisted software ___
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`Mauralee Ramirez, RPR, CSR No. 11674
` Federal Official Court Reporter
`ordertranscript@gmail.com
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`APPEARANCES:
`For The Plaintiff: Kramer Levin Naftalis & Frankel, LLP
` Paul Andre
` James Hannah
` Lisa Kobialka
` Kristopher Kaskins
` 990 Marsh Road
` Menlo Park, California 94025
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` Cristina Lynn Martinez
` 1177 Avenue of the Americas
` New York, New York 10036
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`For the Defendants: Eversheds Sutherland (US) LLP
` Justin E. Gray
` Nicola A. Pisano
` Scott A. Penner
` Jose Patino
` Regis Worley
` 12255 El Camino Real, Suite 100
` San Diego, California 92130
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`San Diego, California; Tuesday, March 10, 2020; 8:45 a.m.
`(Case called)
`(Appearances stated)
`THE COURT: All right. I've received your briefs
`about the opening statement demonstratives and exhibits that
`Mr. Hartstein is going to use. I'm going to wait on the depo
`designations. I have to look at them in context, and I don't
`think I need to do that before we start this morning.
`MR. ANDRE: It's probably unlikely we get to those
`today, but we can get to it in the afternoon to see how things
`progress.
`THE COURT: Regarding Finjan's PowerPoint, first of
`all, I expect all of these are demonstrative, correct? None of
`these are going to be admitted?
`MR. ANDRE: That's correct.
`THE COURT: I don't have any issue really with the
`timeline and the explanation. I understand that Finjan has
`some concerns that it shows a company that -- and we've had
`this conversation before -- that evolved over time, and so
`we're going back to when it was something else and then
`ultimately became Finjan, Inc. But it's a timeline that shows
`when the patents issued. I'm okay with that.
`I'm a little more concerned about the product and the
`awards because I'm not quite sure in terms of relevance in the
`case, which is what ESET raised is this -- I mean, when was
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`this product sold? Does it actually practice the patents?
`What is its relevance? Why pick that one out of however many?
`Do the awards have anything to do with these patents?
`MR. ANDRE: Your Honor, I'd like to have Ms. Cristina
`Martinez argue this, if you don't mind.
`THE COURT: That's fine.
`Good morning.
`MS. MARTINEZ: Good morning, your Honor. So these
`slides are really just a demonstrative of what the product
`looked like at the time. We're not planning on introducing any
`evidence attempting to map the product to any of the patents in
`this case. It's really to provide a background about the
`company and say Finjan did, in fact, have products as of a
`certain time frame.
`And then with respect to the awards, just to say that
`Finjan was recognized in the industry and did receive awards as
`a company. We attached some of ESET's opening slides to show
`that they are really planning on attacking Finjan as not a real
`company, not a successful company, and so this is really
`important for us to be able to say yes, we did, in fact, have a
`product, and to kind of rebut those attacks on Finjan as an
`operating entity.
`So just demonstrating -- this really is a
`demonstrative to just show what the product looked like and,
`again, to just mention some industry recognition. It will not
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`be going into detail in terms of either the exhibits or the
`demonstrative. It's really to just sort of say what the
`industry was saying about Finjan at the time.
`THE COURT: Thank you.
`MR. PENNER: Good morning. As we discussed earlier in
`the motions in limine conference, the use of the -- the use of
`the appliances or Finjan's products are basically to provide
`the jury with an understanding that they practice these patents
`as well as won awards for them. And, as Your Honor noted,
`during that time, there is simply no evidence in the record, or
`witnesses, that can tie any of the products or the awards to
`any of the patents at issue. And so, it's going to be leaving
`the jury with the impression that these products practiced the
`five patents that they're going to wind up discussing this
`entire time. Otherwise, there's really no reason to introduce
`them at this point.
`Also, Your Honor, this image of the actual appliance,
`they have used this image in other slides as well. And so, for
`example, there's a slide deck that we'll probably be discussing
`this tomorrow that uses the same image, and they actually put
`it on a slide that shows the patent numbers. And so, they're
`trying to create the impression by showing this to the jury
`today, and then later on, showing the same images with the
`patent numbers that these products are practicing those
`patents. And that's the impression that we discussed at the
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`motion in limine.
`THE COURT: All right. I'm not going to strike the
`slides for opening or Mr. Hartstein's testimony. With the
`understanding, as counsel has just represented, that there
`isn't going to be an inference made that these awards somehow
`were made for these particular patents or what they claim, and
`the testimony will be subject to a motion to strike and an
`instruction to the jury to disregard any testimony in that
`regard because I don't believe there has been -- if you lay
`foundation for it during his testimony, but they've said that
`no one has ever testified to that. And certainly,
`Mr. Hartstein has never testified to the fact that he believes
`this particular product, which -- the vital security product,
`is a commercial embodiment of the patents at issue in the case.
`So, again, in the context of explaining the nature of
`the company, where it came from, how it evolved, it's fine,
`that the company has been recognized and received industry
`awards generally is fine, but be careful on the line, that we
`don't cross it to leave an inference with the jury that these
`awards are specific to the patents at issue in the case.
`You'll have lots of opportunity to cross-examine Mr. Hartstein.
`All right. I think that was the bulk of the arguments
`for your opening slides.
`MR. ANDRE: As for Mr. Hartstein, yeah, that was, Your
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`Honor.
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`THE COURT: Okay. And then?
`MR. ANDRE: Our objections to their opening slides,
`Your Honor, is legal in nature regarding claim instruction, and
`I don't think you have a copy of their opening slides. I can
`hand it up if you like. Can I hand this up, Your Honor?
`THE COURT: Sure.
`MR. ANDRE: This was not part of the letter briefing,
`Your Honor. The opening slides give a different timeline for
`disclosures. The purple flags are the ones we have the primary
`problem with slides. And it's slides 13, 14, 16 -- 12, 13, 14,
`and 16. The problem I have with the slides is they take Your
`Honor's claim construction and put emphasis on certain words.
`Your Honor, when you gave a claim construction, you
`didn't emphasize those aspects of your claim instruction, so I
`asked my colleague to take this -- play it straight and just
`put it in text. We don't have a problem with the claim
`instruction, but emphasizing certain aspects of the
`construction is not appropriate. That's not the law of the
`case. They put an asterisk on there and put emphasis added,
`but I don't think that solves the problem. That's the issue
`with slide 12 and 14.
`Slide 13 is a little more problematic. They put the
`word "fetched" in there and gave definition to the word
`"fetched," which Your Honor did not construe. That's on slide
`13. They never asked to have the word "fetch" construed by
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`this Court.
`THE COURT: Yes.
`MR. ANDRE: They put their own construction on it
`saying that's required. We don't think that's appropriate.
`THE COURT: In the context, the way it is presented, I
`am a little concerned it's not a construction the Court gave.
`MR. PISANO: Your Honor, let me first deal with the
`"emphasis added." This was simply so we could save time in
`having the Trial Director guy outcize (sic) the words.
`Clearly, we've added "emphasis added" on pages 12 and 14 so
`that -- to focus the jury's attention on those words. I can
`state to the jury that those were not emphasized in the Court's
`constructions. But they are, in fact, italicized because those
`are things that we're going to be bringing to their attention.
`Now with respect to the "fetched" on slide 13, for
`example, we don't say that's the Court's construction. In that
`middle box, we say what the claims require. Now, for the first
`element, "Performing hashing function of the Downloadable
`together with express software components," that's Your Honor's
`construction.
`There was no construction for the word "fetch," but
`this is what we believe the evidence will show, and we believe
`this is what our experts will testify that the evidence
`requires. So, you know, we're not saying that it doesn't say
`that's your construction. That's the way we're interpreting
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`it. That's the way we believe the jury should interpret it for
`the purposes of this trial. And, obviously, Finjan has a
`different view, and their interpretation of fetched is in the
`next column. So we're not at all saying that's what you said.
`THE COURT: Okay.
`MR. ANDRE: Your Honor.
`MR. PISANO: We're making that distinction. We think
`the jury will be able to understand that distinction.
`MR. ANDRE: But it's put with your construction, Your
`Honor. It says what the claims require and with your
`construction right above it. And that is what the claims
`require, your construction. Then they put "fetch" right below
`it so that gives the impression that that is required. And we
`would just disagree, that is not what the claims require. What
`is required is what Your Honor construed.
`THE COURT: Well, it may end up that we're ultimately
`going to have to construe what that term means during the
`course of the trial since there seems to be no clear and plain
`and ordinary meaning since the experts have different points of
`view. But we'll have to wait to see how their testimony comes
`in.
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`With the understanding that you're going to make this
`clear and that this is opening statement, it's not evidence,
`it's sort of argument, and you make it clear when you turn to
`this slide that you're talking about your party's position as
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`to how the patent should be applied, I don't have a problem
`with either of the slides or with the emphasis you've added,
`again, because this is argument -- well, opening.
`MR. ANDRE: On the last one, slide 16, Your Honor, and
`there's an issue there about the changing claim construction.
`Our experts are applying the Court's claim construction and
`they put in there "the construction may change over time,"
`which is not our understanding.
`THE COURT: I'm sorry. On 16?
`MR. PISANO: On 16, Your Honor.
`MR. ANDRE: Slide 16. You'll see they have the "small
`executable."
`THE COURT: Yes.
`MR. ANDRE: And on the right, they put in the -- some
`megabit size, et cetera, and at the bottom, they say "they
`change over time."
`MR. PISANO: Well, Your Honor --
`MR. ANDRE: And it's something, that, once again,
`depending on how they argue it, it's a -- claim construction
`doesn't change over time.
`THE COURT: My recollection of this when I did the
`claim construction and put in "small" and raised the issue at
`the time that I might be creating a problem by using the word
`"small," that that was the definition that was used in the
`patents and the family tree. And then I looked at the
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`testimony and did not give them summary judgment on this
`because there was an argument that the meaning of "small" would
`evolve over time depending on the size of files that a computer
`could handle. And I think that's what you're reflecting.
`MR. PISANO: That's right, Your Honor.
`THE COURT: So it really isn't that they're saying
`that claim construction works. It's what the plain and
`ordinary meaning of what "small" would be as these patents roll
`out. So that's fine. You can keep that.
`All right. This blue tab in the front here?
`MR. ANDRE: Your Honor, that's a trivial argument.
`The law changed. They're going to try to argue that we have
`submarine patents. I don't know if Your Honor was -- and back
`in the day, this was over 20 years ago, there is such things
`as-- I think Mr. Lemelson --
`THE COURT: Yes.
`MR. ANDRE: -- created submarine patents. And they're
`going to bring up this issue of submarine patents. And, you
`know, the law changed back then. I think it was '94, 95 that
`submarine patents were done. They got rid of those and they,
`you know --
`THE COURT: Pull this slide out. I don't want this
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`slide.
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`MR. PISANO: Your Honor.
`THE COURT: I'm not going to define submarine patents
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`to the jury. You can talk about this being continuations, but
`that whole --
`MR. PISANO: I understand, Your Honor. That's fine.
`I'll pull it, but just if I might, you can still have a
`submarine patent. If you look it up on Wikipedia, the
`definition --
`THE COURT: Oh, yes, there's a good source.
`MR. PISANO: Okay. But the definition of a submarine
`patent, Your Honor, is something in which the prosecution has
`been delayed a very long time. As to two of the patents in the
`case, that seemed to be inappropriate. I'm not aware of any
`case law --
`THE COURT: I understand you have an equitable defense
`of prosecution laches. That's for the Court.
`MR. PISANO: Thank you for mentioning that, Your
`Honor, because that is actually an issue. So on prosecution
`laches, we agree that is an issue for your determination, but
`whether there is prejudice or not due to the delay, we believe
`that is it something that the jury gets to decide. That is
`something I do plan to talk about in the opening, the amount of
`time it took them to prosecute the patents.
`THE COURT: That's fine. I looked at the verdict
`form, and I think for that purpose, we might have to get an
`advisory opinion on the ultimate issue but allow the jury to
`make a factual finding on whether or not there's been
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`prejudice.
`MR. PISANO: Thank you, Your Honor.
`THE COURT: Okay. Anything else?
`MR. PISANO: Your Honor, there was one more issue on
`Mr. Hartstein's exhibits. One of those things, in the chart
`that deals with Finjan negotiating with ESET, it's our
`understanding that plaintiff intends to introduce
`communications between Finjan and ESET and Finjan and ESET's
`counsel, which is me. So they're going to be -- they want to
`put in letters that went back and forth between me and
`Mr. Chaperon, who is no longer with Finjan, about what we were
`doing. I think that is totally inappropriate because your
`Honor has already set the start date from infringements.
`And all of the discussions under NDA -- or all the
`negotiations were under NDA. So I think for them to bring in
`any of those letters talking about what the parties' positions
`were or what we were saying back and forth to one another under
`the NDA, totally inappropriate.
`MS. MARTINEZ: So, first of all, the communications
`that we were seeking to mark with Mr. Hartstein were not under
`the NDA. They all predated the NDA.
`And, second, just again, this is really just going to
`the context of setting up how we got here, what the
`communications had been between ESET and Finjan that predated
`this lawsuit. Again, there's going to be arguments -- it
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`appears anyway, that there's going to be arguments sort of
`saying Finjan is an entity that just wants to litigate. Again,
`in their opening slide, you can see that they were trying to
`identify how many licenses arose out of the litigation. So
`this is kind of giving the history to say this is when the
`parties were in communication with each other prior to any
`litigation.
`And with regard to notice, yes, there is. Your Honor
`did issue a summary judgment issue regarding the notice date,
`but it's not a stipulated fact, so it's important that Finjan,
`who bears the burden of proof, has the foundation that its
`damages expert can then say, you know, this was the date that
`Finjan first provided notice to ESET and kind of discuss that
`set of communications. So we're not seeking to introduce any
`of the letters that were post NDA or really to go into detail
`about the letters themselves, but it's really, you know, the
`date that Finjan first sent that letter out, to lay the
`foundation and also to establish sort of the course of the
`communication between the parties.
`THE COURT: I don't know how you're going to establish
`the course of communications without getting into the NDA,
`because my recollection was that almost immediately following
`the initial notification on the -- the first patent, they
`launched into the NDA and the negotiation, none of which is
`admissible.
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`So the fact that a letter was sent in January to ESET
`is fine, that you can use that to mark the date of the first
`notification to them, actual notice to them regarding that
`patent. And there were two I think that were covered in that
`patent. But I don't want to see any communications from
`counsel because I don't want it to make it look like counsel is
`a witness and he's not going to be able to take the stand to
`talk about it and have people interpreting what he wrote or
`what he said. So the timeline that just shows you sent them a
`letter for opening is fine, but communication back and forth is
`not acceptable.
`MS. MARTINEZ: Your Honor, just to ask a question, so
`that January 22nd, 2015 letter which was from Finjan to ESET
`and not to counsel, is that okay to use and mark with
`Mr. Hartstein?
`THE COURT: That's fine, yes.
`MR. PISANO: Your Honor, in their slide, they have a
`period that says -- after that letter, they say Finjan
`negotiates with ESET. And during that period --
`THE COURT: Well, that's a fact, Counsel. They sent
`you a letter, they were having communications with you. If
`you're going to argue some sort of laches, it needs to be fair
`that they didn't send you a letter and then never talked to you
`for four years.
`MR. PISANO: Your Honor, we're not going to argue that
`
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`for the period after the letter. But during that NDA period,
`they tried out a lot of patents before we ended up with the
`patents here. So the problem is that, negotiations, there is a
`lot of back and forth. There were things that came in, there
`were things that went out. We went back and forth. And,
`again, if they want to put the first letter in, 2015, Your
`Honor, I have no objection to that. We're not going to object
`to 2015 and filing the suit. But a year later there was
`laches. Besides, laches went away anyway, so, you know, we're
`just concerned, as you say, that they're going to open the
`door.
`
`THE COURT: All right. Again, understanding the
`initial letter that kicked off your notification to them so
`that you have a start point for your experts to talk about when
`they were on notice is fine and when the suit was filed,
`obviously, is a matter of public record. The negotiations that
`went on in between, we're not going to discuss with the jury,
`and if anybody starts to go down that road, I'll cut it off and
`tell them they're not to be concerned about prior to the suit
`being filed, other than the letter was sent. All right?
`MR. PISANO: Thank you, Your Honor.
`THE COURT: Is that it now?
`MR. PISANO: Your Honor, I have a couple housekeeping
`issues. We're just going to deal with them very quickly.
`MR. PENNER: One issue, Your Honor, is at the motion
`
`
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`in limine conference, the pretrial conference, the parties had
`discussed about adding the Court's claim constructions to the
`jury binder. The parties could not agree on what the claim
`constructions should look like. We believe that the claim
`construction should include all of the terms that Your Honor
`construed that are relevant to the patents-in-suit, and Finjan
`argued that we should not include the term "appended
`Downloadable" because they have dropped that from their
`infringement contentions. But, of course, we still have it as
`our invalidity contentions, and we still plan to invalidate
`that claim. And, therefore, it seems appropriate art. We
`believe it's appropriate for the jury to have that in their
`binder. If it never comes up, it doesn't matter if the jury
`saw it or not. So we do have two sets of instructions, one
`with the word "appended," which we believe should be there, and
`one without, but right now, the jury binder does not have any
`of the claim constructions.
`THE COURT: All right.
`MR. HANNAH: Your Honor, as counsel said, we've
`narrowed the case based on the number of hours that you've
`allowed us. We have dropped a number of claims. They've
`indicated that they want to keep in some -- to challenge some
`of the claims that we're not asserting for infringement, which
`is, I think, another issue for this Court.
`But one issue that we have is, is we have dropped
`
`
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`claims from the '086 patent. And in your claim construction
`order, there's a definition of the word "Destination Computer."
`And I have a copy of your order if you would like me to hand it
`up to you.
`THE COURT: Sure.
`MR. HANNAH: May I approach, Your Honor?
`THE COURT: Yes.
`MR. HANNAH: I'm also handing you ESET's claim
`construction brief. The issue that we have here is that in
`your order for "Destination Computer," it's "a separate
`computer receiving the appended Downloadable." And the parties
`agreed that that construction only applies to claim 1, the
`earlier claims, and not claim 24, which does not require the
`appended Downloadable.
`It's actually not in the claim at all. It's evident
`from the fact that Your Honor put in "a separate computer
`receiving the appended Downloadable," which is antecedent
`basis. And if you look at ESET's opening claim construction
`brief on page 7 at line 11, ESET flatly admitted -- said:
`Claim 24 further confirms this construction, because
`it recites transmission of a Downloadable and a representation
`of the Downloadable Security Profile data as multiple pieces of
`informations, while claims 1 and 9 each teach transmitting a
`singular appended Downloadable.
`So I think what they're trying to do is import this
`
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`definition of "a destination computer requiring an appended
`Downloadable" into claim 24. So if they want to keep in claim
`1 from the '086 and challenge it, even though it's not being
`asserted for infringement, we think there should be some type
`of notation that this claim construction only applies to claim
`1.
`
`MR. PENNER: First of all, we are not arguing that the
`appended Downloadable is required for claims 24 or 42, and it
`would apply to both claim 1 and claim 9 since both claims 1 and
`9 use the "appended Downloadable" term. We simply copied
`directly out of Your Honor's claim construction order the sets
`of claim constructions for the jury binder.
`THE COURT: All right. I'm going to leave it in the
`jury binder. I think that at the end of the day if it's in
`there and it never gets discussed, it's not going to be
`prejudicial. No one is going look at it and say oh, wait, we
`didn't talk about this. I can guarantee you.
`But if you're still planning on pursuing an invalidity
`challenge to a claim they're no longer asserting for
`infringement and they're not willing to dismiss it with
`prejudice, the claim, then I will allow you to continue to
`assert your dec relief claim for validity on that claim.
`MR. HANNAH: Your Honor, we are willing to dismiss
`with prejudice, by the way.
`THE COURT: All right. Let's talk about that in
`
`
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`the -- at another time. Okay.
`MR. PENNER: Thank you, Your Honor.
`THE COURT: That would help, I think. Then they don't
`have to go there.
`MR. ANDRE: The last thing, Your Honor, just for
`opening statements, are we anchored to the podium there?
`THE COURT: No. We have a lapel mic, so you can move
`around. And during jury, you can step into... obviously,
`because you're going to need to -- oh, my God, where are we
`going to put everybody? How many do we have coming?
`THE CLERK: Thirty.
`THE COURT: I'm going to need -- everybody on that
`side is going to need to move to that side of the courtroom so
`that when the jury pool comes in.
`(Discussion between Court and courtroom deputy off the
`record)
`
`THE COURT: Never mind.
`MR. PENNER: Your Honor, there's one more thing that
`has come up for tomorrow. One of the witnesses, Mr. Kroll, you
`had mentioned in the pretrial conferences that witnesses could
`be taken out of order. Mr. Kroll is going to be here live for
`Finjan, and we intend to call Mr. Kroll in our case as well.
`They've indicated he will not be available when we want to call
`him and so that so we can simply play his deposition
`transcripts. Given that he is here, we would like the
`
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`opportunity to question him live. It seems strange for the
`jury to see him once live and then we're relegated to
`videotape. So we would like to call him out of order and take
`him at the same time we do our cross-examination.
`THE COURT: Do you really have an objection to that?
`MR. ANDRE: Well, only to the extent that they
`designated the deposition. They said they were going to play
`the deposition. Now they want to take him out of order. The
`only objection I have with it, Your Honor, to be honest with
`you, is it blows the flow of our case.
`THE COURT: I'm sorry. It does what?
`MR. ANDRE: It blows the flow of our case.
`THE COURT: Well, that's not a reason. Okay. You may
`take him tomorrow to facilitate for the witness and not have to
`bring him back. All right. I think we'll get the jury in
`then.
`
`By the way, so normally, I read the list of all the
`witnesses, but you might notice because there are so many and
`they have some complicated names, I have provided the
`prospective jurors each with a copy of the prospective witness
`list, so I'll just have them look through. All right. Bring
`them on in.
`(Pause in the proceedings)
`(Prospective jurors entering at 9:35 a.m.)
`(Prospective jurors given an oath)
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`(Case recalled)
`(Appearances restated)
`THE COURT: Good morning, ladies and gentlemen.
`Welcome to courtroom 4C of the United States District Court,
`Southern District of California. I'm District Judge Cathy Ann
`Bencivengo. We'll be together until we take a break as a group
`so if you have not already made sure your cellphone is
`silenced, please do so at this time.
`If anyone needs any hearing assistance, don't hesitate
`to let us know. We can give you a headset.
`The Court and the parties appreciate the effort you
`have all made to be here this morning. Our system of justice
`would not work without the willing and dedicated participation
`of citizens like yourselves giving up your personal time to
`come to court and assist in the resolution of disputes, so
`thank you for your time and effort.
`We are about to begin a civil trial between plaintiff,
`Finjan, Inc. and defendant, ESET, LLC, a California corporation
`and ESET S.R.O., a Slovakian corporation, jointly referred to
`as ESET.
`
`The first step in our trial process this morning will
`be to select nine jurors to hear this case. Each side in this
`case is entitled to have a neutral and impartial jury to hear
`and decide the case based solely on the evidence presented in
`court and the law as you will be instructed. The purpose of
`
`
`
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`jury selection is to allow the Court and the parties to inquire
`as to whether a prospective juror can fulfill that role. Your
`participation in this step is very important. You'll each have
`an opportunity to tell us about yourself, so please give this
`process your full attention.
`If you are selected, you will be expected to be here
`each trial morning by 8:30, and we will adjourn each day at
`approximately 2:30 with two 20-to-30-minute breaks during the
`day. Given the length of the trial, it's my hope that the
`schedule will provide some time during the trial days for
`jurors to handle work and other family matters.
`The presentations of evidence is expected to conclude
`on or before Thursday, March 26th. We will be in