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`
` IN THE UNITED STATES DISTRICT COURT
` FOR THE EASTERN DISTRICT OF TEXAS
` MARSHALL DIVISION
`VERSATA SOFTWARE, INC., )(
`ET AL. )( CIVIL DOCKET NO.
` )( 2:07-CV-153-CE
`VS. )( MARSHALL, TEXAS
` )(
` )( MAY 14, 2009
`SAP AMERICA INC., ET AL. )( 1:30 P.M.
` MOTIONS HEARING
` BEFORE THE HONORABLE JUDGE CHAD EVERINGHAM
` UNITED STATES MAGISTRATE JUDGE
`
`APPEARANCES:
`
`FOR THE PLAINTIFFS: (See Attorney Sign-In Sheet)
`
`FOR THE DEFENDANTS: (See Attorney Sign-In Sheet)
`
`COURT REPORTER: MS. SHELLY HOLMES, CSR
` Deputy Official Court Reporter
` 2593 Myrtle Road
` Diana, Texas 75640
` (903) 663-5082
`
`(Proceedings recorded by mechanical stenography,
`transcript produced on a CAT system.)
`
`SAP EXHIBIT 1025
`
`5b01eb6f-ad48-4aeb-9c4d-b070f04c6e85
`
`
`
` IN THE UNITED STATES DISTRICT COURT
` FOR THE EASTERN DISTRICT OF TEXAS
` MARSHALL DIVISION
`VERSATA SOFTWARE, INC., )(
`ET AL. )( CIVIL DOCKET NO.
` )( 2:07-CV-153-CE
`VS. )( MARSHALL, TEXAS
` )(
` )( MAY 14, 2009
`SAP AMERICA INC., ET AL. )( 1:30 P.M.
` MOTIONS HEARING
` BEFORE THE HONORABLE JUDGE CHAD EVERINGHAM
` UNITED STATES MAGISTRATE JUDGE
`
`APPEARANCES:
`
`FOR THE PLAINTIFFS: (See Attorney Sign-In Sheet)
`
`FOR THE DEFENDANTS: (See Attorney Sign-In Sheet)
`
`COURT REPORTER: MS. SHELLY HOLMES, CSR
` Deputy Official Court Reporter
` 2593 Myrtle Road
` Diana, Texas 75640
` (903) 663-5082
`
`(Proceedings recorded by mechanical stenography,
`transcript produced on a CAT system.)
`
`SAP EXHIBIT 1025
`
`5b01eb6f-ad48-4aeb-9c4d-b070f04c6e85
`
`
`
` I N D E X
`
`Page 2
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`May 14, 2009
` Page
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` Hearing 3
` Court Reporter's Certificate 105
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` COURT SECURITY OFFICER: All rise.
` THE COURT: Please be seated.
` We've got a motions hearing set today in
`2:07-CV-153, Versata against SAP and others.
` What says the plaintiff?
` MR. COLE: Your Honor, Scott Cole, Laurie
`Gallun, and Kevin Knuepper for the plaintiff. We're
`ready to proceed.
` THE COURT: Okay. The defendant?
` MR. BATCHELDER: Good afternoon, Your Honor,
`James Batchelder from Day, Casebeer, Madrid &
`Batchelder. With me is my partner, Will Nelson. Also
`I've got Kurt Truelove from the Patton, Tidwell &
`Schroeder firm, and in-house counsel, Kevin Hamel.
` THE COURT: All right.
` MR. BATCHELDER: Defendant is ready.
` THE COURT: And Mr. Kitchen?
` MR. COLE: Oh, sorry.
` THE COURT: Are you looking for work, or you
`just --
` MR. KITCHEN: I was wondering if there was
`anything available. And I did want to send Mr. Baxter's
`regards to the Court.
` THE COURT: Well, we've got a list of things
`here to do today. I will advise you, and maybe this
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`Page 4
`will help, maybe it won't help. Your Markman ruling is
`imminent, and by imminent, I mean, Monday or Tuesdayish
`of next week. I would be very confident with Monday,
`but for the fact that Judge Amos Mazzant is being sworn
`in tomorrow as the newest magistrate judge in this
`district, and I will be there instead of here finishing
`your Markman opinion.
` But I can -- if I were you-all, I would look
`for it sometime before close of business Tuesday, but
`that's not a warranty, but I know that there's a motion
`to limit your claims, and so I don't know if that helps
`you resolve that or not, but my thought was in view of
`that, to give you-all some period of time from Tuesday
`of next week for you to consider the Markman rulings on
`both sides and to let me know within 7 to 10 calendar
`days thereafter what are we going forward with. So does
`that work for the plaintiff?
` MR. COLE: Yes, Your Honor. I think the
`only remaining dispute really is whether the reduction
`of claims would also entail a reduction of prior art
`references concomitant with that.
` As far as reducing claims, we -- we agreed
`to reduce it to five claims per patent. I can't
`remember the exact number of days after the Markman
`ruling. So that -- that part of it is easy. It's just
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`we don't want to do that if they're going to go with 102
`prior art references and refuse to reduce those. So
`that's, I think, the only remaining dispute on that
`front.
` THE COURT: Okay. Well, what's -- what's
`the answer to that? You need all 102 or will 90 do or
`what's the --
` MR. BATCHELDER: Well, our only problem is
`for 103, we do feel like our experts need to be able to
`tell the story about how these patents arose in a
`crowded field.
` I haven't ever seen a case where defendants
`were required to diminish the number of asserted prior
`art references in that context, and I haven't seen that
`cause any problems at trial. So we do think a
`limitation of the number of asserted claims is
`appropriate, but if Your Honor feels strongly about
`reducing the number of asserted prior art references, we
`would consider it for 102, but we think it would be
`problematic for 103.
` THE COURT: Well, what my problem is more
`than anything is that you've got 103 references or 102,
`however many it's going to be, at this time, and then
`the expert gets up there to discuss the -- the crowded
`state of the art, talks about four of them, and then the
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`other side doesn't really know what your expert -- I
`mean, what the -- what's key and what isn't. That's --
`I mean, that's -- that's my concern, and that's a -- I
`think that's a fair concern.
` So if -- I mean, I'm -- I agree with you
`that -- that you ought to be -- and, in fact, have to
`under 103 point to what the state of the art is and all
`that, but what I'm hearing over here is that they don't
`want to be having to guess which ones you-all think are
`really important.
` MR. BATCHELDER: I understand the concern.
`I think the ones that are going to be emphasized as most
`important will be the anticipatory references under 102,
`and what would be assembled around those for the 103
`story is -- are the references that set the context or
`set the stage for when the alleged invention came to be.
` But, again, Your Honor, they're committing,
`I think, to limit this to five patents -- or, excuse me,
`five asserted claims per patent, and I think we could
`agree to limit it to five 102 references per asserted
`patent. I don't see a need for a limit to 103
`reference, but if Your Honor wants some, it would have
`to be significant -- higher number than that, but if
`Your Honor wants to limit it, we can limit it.
` THE COURT: Well, I think what I'm -- what
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`I'm more inclined to do is as opposed to a limitation on
`103 references is to tell you to disclose to them by the
`same, you know, within a few days after they disclose
`their -- the claims they're going to assert, you tell
`them which -- which of those that you've identified as
`103 references you intend to rely on at trial, and that,
`I think, will -- and if you -- and if you tell them that
`it's all of them, then I'll expect to hear about all of
`them at trial.
` MR. BATCHELDER: That we can do.
` THE COURT: Okay.
` MR. BATCHELDER: Happily. Thank you.
` THE COURT: All right. Let's hear
`argument -- then I'll -- I'll do a short order on that
`contemporaneous with the Markman opinion, then. And
`answer this me on your side, Mr. Cole, how many patents
`are you -- you said five per patent?
` MR. COLE: There are three patents
`remaining.
` THE COURT: Okay. Did y'all work out the
`'854?
` MR. COLE: We -- we've agreed to dismiss it
`with prejudice. The only -- I think there's a minor
`dispute, I don't know if it's still live, about whether
`we need to Super Sack them. If you want to take -- if
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`Your Honor wants to take that up now, we can do that, or
`deal with it at the end.
` THE COURT: I'll deal with that at the end.
` MR. COLE: Okay.
` THE COURT: But is that -- that's not in the
`three, though? That's --
` MR. COLE: That's correct, Your Honor.
` THE COURT: Okay. All right. Okay. Well,
`let's hear argument, then, first on the second one
`listed in the May 7th letter signed by Mr. Cole and
`Mr. Batch --
` I don't want to mispronounce your name.
`Tell me how -- is it --
` MR. BATCHELDER: It's Batchelder.
` THE COURT: Batchelder.
` MR. BATCHELDER: Thank you, Your Honor.
` THE COURT: Okay. Okay. That's -- it's
`Docket No. 141. It's the motion to compel production of
`documents regarding inequitable conduct.
` I'll tell y'all, I have a 3:00 o'clock
`competency hearing with a criminal defendant that y'all
`want to be through with this hearing by then, okay?
` MR. BATCHELDER: Thank you.
` MR. NELSON: Thank you, Your Honor.
` So, Your Honor, my name is Will Nelson. I'm
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`here on behalf --
` THE COURT: Yes.
` MR. NELSON: -- of defendants, SAP America.
` THE COURT: Mr. Nelson.
` MR. NELSON: We prepared a set of slides in
`regards to the pending motions today. I -- given the
`time constraints on the Court, I will foreshorten the
`presentation that's -- that's here and try to hit upon
`what we regard as -- as the most important aspects of --
`of SAP's motion here.
` Your Honor, although there's a lot of
`evidence surrounding SAP's motion to compel the
`production of documents surrounding the invention record
`for the plaintiff's '235 patent, the order management
`patent, there's really a simple question that the motion
`presents, and that question is this, when it comes time
`for you to make a determin -- determination regarding
`whether or not the inventors and their patent counsel
`committed inequitable conduct before the patent office,
`is the Court going to be deprived of the documents that
`are most central to that question including critical
`evidence found in two documents that Versata produced to
`SAP, left in its hands for more than seven months, and
`then clawed back as privileged, as well as the other
`documents currently withheld as privileged by Versata
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`Page 10
`concerning the preparation and prosecution of this
`patent application.
` Now, we've asserted two bases for our motion
`that say, yes, you should have this information before
`you when you make that determination. The first is
`that -- that SAP has shown through its motion and
`supporting papers that the crime-fraud exception should
`be found -- to the attorney-client privilege should be
`found to apply to the invention record of '235 patent,
`and I will address that -- that issue first in my
`presentation.
` The second is that -- a completely separate
`and independent basis for this motion. Versata waived
`any privilege attached to the invention record of the
`'235 patent through a series of reckless actions in its
`discovery conduct that give rise to the waiver of the
`privilege.
` And under either of these two bases for
`compelling production of this invention record for the
`'235 patent, SAP -- SAP believes the Court should have
`those materials before it.
` So I will -- I will address the crime-fraud
`exception first. The parties, I think, agree that the
`Spalding Sports case sets out the legal standard for you
`for finding that the crime-fraud exception to the
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`Page 11
`privilege applies. It's the Spalding Sports case. It
`sets out a test that requires SAP to make a prima facie
`showing of essentially five elements, a representation
`of a material fact, the falsity of that representation,
`the intent to deceive or -- or at least a state of mind
`so reckless as to the consequences that is held to be
`the equivalent of intent, a justifiable reliance upon
`the misrepresentation by the party deceived, that's the
`patent office, which induces him to act thereon, and the
`injury to the party deceived.
` And -- and, Your Honor, it's important to
`note that the Spalding Sports case makes clear that this
`is not a threshold where SAP must prove today by clear
`and convincing evidence that the inventors and their
`patent counsel committed inequitable conduct. We
`believe that at the right time, we will show that by
`clear and convincing evidence, but that's not what we're
`required to show today.
` Today's threshold for finding that the
`crime-fraud exception applies to this invention record
`is much lower. Today the question is has SAP made a
`prima facia showing of each of these elements, and a
`prima facia showing has been likened in the Fifth
`Circuit to a showing very similar to that of probable
`cause, evidence such as will suffice until contradicted
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`Page 12
`and overcome by other evidence. And SAP, Your Honor, we
`submit has made that showing. So -- so --
` THE COURT: Of course, if I find that
`they've produced it to you and that you pointed out at
`least with respect to certain other documents they look
`like they were privileged and then Versata says, We're
`investigating it, and we'll let you know if there's
`anything else, and then you tell them in response to
`that that in light of you -- your investigation, we're
`not going to tell you anything else, then you'll hear
`nothing more about it, as I understand the facts, until
`the deposition. Is that -- do I have the facts?
` MR. NELSON: Your Honor, I think at -- at a
`high level you have the facts. Let me --
` THE COURT: I mean, I'm moving --
` MR. NELSON: You're moving to the point,
`Your Honor.
` THE COURT: If I agree with you on the
`waiver, I don't even have to get into --
` MR. NELSON: Yeah.
` THE COURT: -- crime fraud, right?
` MR. NELSON: That's correct.
` THE COURT: Okay.
` MR. NELSON: If you'd like me to move to
`waive -- to waiver --
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` THE COURT: I mean, I'll let you -- I don't
`mean to interrupt your argument, but, you know, it
`struck me as --
` MR. NELSON: Okay.
` THE COURT: -- unnecessary to address that
`if I agreed with you on the other one.
` MR. NELSON: So let me move to -- to the
`waiver slides.
` Veronica, can you pull it up and please move
`us to -- I apologize, Your Honor -- Slide 37.
` So, Your Honor, on -- on the waiver point,
`you asked a question about what the relevant facts were,
`and I -- I can show you that quickly -- well, relatively
`quickly, Your Honor. I apologize. Great.
` So -- so the first thing to note is -- is
`prior to the event in which Versata produced to us a set
`of records, like two boxes worth of records from its
`patent prosecutors, four times prior to that, we, SAP,
`had found in Versata's production documents that we
`questioned whether or not were subject to the
`attorney-client privilege. Each time we wrote them a
`letter saying, you know, What is your position on this?
`Each of those four times prior to this, they clawed
`those documents back under the protective order in this
`case as privileged information.
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`Page 14
` On July 1st, 2008, this is the -- this is
`the -- the -- what you asked about. Versata made a
`small production of about 796 documents, but really two
`banker boxes worth of documents from its patent
`prosecution regarding the -- the preparation of the
`application for the '235 patent and the prosecution
`of that patent application, and -- and the -- before the
`U.S. patent office.
` SAP, very interested in this very important
`highly relevant set of documents, immediately look at
`these documents, encounters several documents that we
`say, Hey, these appear to be subject to a claim of
`privilege. And so we wrote S -- we wrote Versata 10
`days later and said, you know, Please confirm that these
`documents are not subject to a -- to a claim of
`privilege.
` Three days later, Versata responds, and
`exercising a provision of the protective order in the
`case, it claws back those documents as privileged. It
`says, Give those back to us.
` THE COURT: Do you have the language of the
`protective order handy there?
` MR. NELSON: I do, Your Honor.
` THE COURT: And tell -- tell me what exactly
`it says.
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`Page 15
` MR. NELSON: It's -- it's actually on Slide
`45. It -- it reads -- and -- and this language is
`critical. It reads, "Inadvertent disclosure of
`privileged material, if information subject to a claim
`of attorney-client privilege, work product immunity, or
`any other applicable claim of privilege or immunity is
`inadvertently produced, such production shall in no way
`prejudice or otherwise constitute a waiver of or
`estoppel as to any claim of privilege or immunity.
` And -- and then it goes on, The receiving
`party may move the Court for an order compelling
`production of such information, but the motion shall not
`assert as ground for production the fact or
`circumstances of the inadvertent production. And -- and
`there's -- there's -- and, of course, Versata's argument
`here about waiver is, Yeah, Your Honor, not to worry,
`there's a claw-back provision that's iron clad. It
`means that SAP can't raise any fact about what happened
`here as -- as a basis for waiver, and we just think
`that's not true for two reasons.
` First of all, this provision deals with
`inadvertent production, production of documents. As --
`as -- as I'm -- as I hope to show you, no part of this
`motion is based upon the fact that on July 1st they
`produced these documents to us. The -- the waiver, our
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`argument is, that after notifying them, putting them on
`notice that this very small production of the most
`sensitive documents in the patent case contained
`privileged information, they did nothing to evaluate the
`rest of that production. They clawed back only those
`documents we --
` THE COURT: The alternative inference would
`be that they did investigate and concluded it wasn't
`inadvertently produced, right?
` MR. NELSON: Correct, Your Honor. Correct,
`Your Honor.
` The second -- the second point -- so this
`deals with production. We're not arguing the -- the
`fact of the July 1st production was -- was what gives
`rise to the waiver. It was their leaving that -- those
`documents in our hands for more than seven months, seven
`months, and then and only then clawing them back at a
`deposition. That's what gives rise to the waiver.
` And second of all, this provision deals with
`inadvertent disclosure. Nothing about their conduct
`after we put them on notice that they had produced
`privileged information was inadvertent in any way. It
`was reckless. It was reckless because they let those
`documents sit in our hands for more than seven months.
`And how do we know it was reckless? Because just a week
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`ago, Versata clawed back another document as privileged
`from that same production, just a week ago, and, again,
`it was an instance where we notified them, Look, is this
`document subject to a claim of privilege? They wrote
`back, Oh, yes it is. You can't use it. Give it back.
` So not only did -- even after the deposition
`where it was made abundantly clear they had not done
`their job in reviewing these documents, they still did
`nothing and we -- and they clawed back another one four
`months later. That is reckless conduct, Your Honor, not
`inadvertent, and that's what gives rise to a waiver.
` So if you'd like, I'm -- I'm happy to
`continue in this vein, or move back to the crime fraud.
`I'm not sure --
` THE COURT: No, I understand your argument.
`Tell me exactly what relief you're asking me for.
` MR. NELSON: Your Honor, we -- we think
`that -- that at -- first of all, those documents that
`were clawed back at the deposition of Jocelyn Goldfein
`need to be produced. They waived the privilege as to
`those documents.
` We also believe that the -- the nature of
`that waiver as a reckless waiver, not an inadvertent
`one, of letting those documents sit in our hands for
`seven months gives rise to a broad subject matter
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`Page 18
`waiver, all documents concerning the preparation and
`prosecution of this patent, those documents go to the
`heart of that. They go to the heart of the inequitable
`conduct case. They are critical evidence of inequitable
`conduct. We think the entire --- they have waived the
`privilege as to the entire subject matter of -- of the
`prosecution and preparation of the patent application
`for the '235 patent.
` That -- that's the relief we seek, Your
`Honor.
` THE COURT: Tell me, again, the name of
`the -- of the product that you contend the inventor
`withheld from the attorney.
` MR. NELSON: The name of that product, Your
`Honor, is Order Trust. I know it's confusing.
`the -- the PC Order or Trilogy entity had a product
`called Order Server.
` THE COURT: We -- we agree on that part.
` MR. NELSON: Yes, we do.
` THE COURT: It is confusing.
` MR. NELSON: Yes, yeah. So -- so they had
`a -- PC Order had a product called Order Server, so
`there's some confusion. But Order Trust is the withheld
`reference.
` THE COURT: Okay.
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` MR. NELSON: And -- and we contend that
`those documents show that the -- the inventor withheld
`those -- that reference from her patent attorney.
` THE COURT: Okay. Okay. All right. Thank
`you.
` MR. NELSON: Thank you. Would you like me
`to address the crime fraud or --
` THE COURT: I know what -- I know your
`position on that.
` MR. NELSON: Thank you, Your Honor.
` THE COURT: Okay.
` MR. KNEUPPER: May it please the Court.
` THE COURT: Counsel.
` MR. KNEUPPER: The parties agreed to the
`protective order which makes no stipulation or has no
`language saying that recklessness or any other behavior
`can lead to a waiver here. The production of these
`documents was not intentional, and the -- the protective
`order states that if the production was inadert --
`inadvertent, that production shall not be considered to
`waive -- waive privilege as to the documents.
` THE COURT: What evidence do I have that it
`was inadvertent?
` MR. KNEUPPER: Well, Your Honor, the -- we
`investigated and did investigate after we were informed
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`Page 20
`of the specific Bates numbers of these documents that
`they have located in this production, and these came
`from roughly five to six bankers boxes where the
`documents that Ms. Gallun and myself had personally
`reviewed for whether or not they were privileged, and we
`had actually done several reviews of these prior to them
`being produced.
` After -- because of that fact, because
`these -- these documents when we looked back to the
`boxes, they were documents that had been previously
`reviewed, not by outside vendors, not by any other
`attorneys, but by McKool Smith attorneys, we believe
`these were isolated instances of error, essentially,
`in -- in our review process.
` After the additional documents that SAP did
`not specifically notify us of, we -- we believe it
`may -- the other potential source of error may have been
`in terms of that these documents -- the McKool Smith
`attorneys had identified specific ranges out of these
`boxes to produce and not produce using notes tabbed to
`the documents, so we think that there -- it -- it's also
`possible that there had been a vendor error in
`essentially the communication between the McKool
`attorneys and -- and the vendor who was ultimately doing
`the production of the documents that we had identified
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`Page 21
`
`as privileged.
` We also don't think that it's reckless, at
`least in part, because of the ethical duties that apply
`to California attorneys to notify us of documents that
`are privileged. And McKool Smith was -- I think can say
`we were aware of this ethical duty at this time as far
`back as in July 2008 and believed that this was the
`basis for SAP sending us these letters that would
`identify specifically Bates numbers that SAP believed
`might be privileged and give us a chance to review those
`essentially for whether or not we did assert a
`privilege, and we had no reason to believe that SAP was
`withholding certain documents in contravention of what
`the Supreme Court of California had said is required of
`attorneys who are members of the California bar.
` So we believe this was a narrow limited set
`of documents at that time that had been produced
`inadvertently because either myself or Ms. Gallun had
`made an error of reviewing the documents or had had one
`clumped into another document. They're essentially
`reviewed in the forms that we received them from the
`patent attorneys, so they were just basically sets of
`files that had the documents stapled together as they --
`as the patent attorneys had kept them essentially
`without any -- not -- not essentially just a stack of
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`Page 22
`printed out documents. They were basically in -- in
`their original filing system.
` So there is no -- there's no intentional
`decision to produce these documents, and, also, there's
`no suggestion here that Versata has attempted to rely on
`these documents as a sword, essentially, which would be
`what is necessary to allow there to be a broader waiver
`rather than just using privilege as a shield. There's
`no suggestion that we've attempted to go take these
`documents, and the reason we produced them was just
`to -- was to gain some advantage, essentially, by
`selectively producing documents that we thought helped
`us and not producing documents that we thought hurt us.
`There's no suggestion of that or really no suggestion
`whatsoever that anything we've done would be an
`intentional and not an inadvertent production of these
`documents here.
` THE COURT: Tell me what investigation was
`done after y'all received this July 14th letter where
`Mr. Nelson told you that -- acknowledged that Versata is
`continuing to investigate this matter and further
`informed y'all that SAP will no longer affirm --
`affirmatively seek Versata's confirmation that its
`produced documents are nonprivileged but instead will
`await your communication.
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` MR. KNEUPPER: Yes, sir.
` THE COURT: Tell me, again, what
`investigation is to the -- into these -- these banker
`boxes, into the prosecution files was done after that.
` MR. KNEUPPER: We looked at the specific
`documents, and we did not go back, Your Honor, and
`rereview all of --
` THE COURT: Okay.
` MR. KNEUPPER: -- the documents in the
`banker boxes, that is correct that Versata did not
`conduct a second review of the documents but looked at
`the actual documents that had been produced.
` THE COURT: Okay. All right. Go ahead.
` MR. KNEUPPER: Okay. And the -- with
`respect to the document that was produced last week that
`Mr. Nelson cites as something else that we've also
`clawed back, with respect to that document, we think the
`claim is essentially borderline, but the reason that
`this document has been recently clawed back and was not
`initially contained within Versata's privileged claims
`is because of the broad and -- and essentially the
`number of -- of times that SAP has been asserting that
`different documents have constituted a waiver if Versata
`essentially lets anything through that might possibly
`relate to a communication. They've been arguing that
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`Page 24
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`that results in a waiver of privilege as to that
`document. So we made the decision just to avoid any
`chance, essentially, that this communication could lead
`to a further waiver, that we would assert the privilege
`given that SAP apparently believed that this had
`potential, based on at least a portion of it, to be
`privileged.
` So we don't believe that that should result
`in any broader waiver, and also that this -- if the
`Court decides that with respect to these two documents
`that SAP's referring to that there has been reckless
`conduct and that the protective order as agreed to by
`the parties allows essentially a waiver of privilege
`based on that reckless conduct, there's no basis for
`broadening that waiver somehow to other documents
`because there is no assertion here that this has been
`done essentially as an effort by Versata to gain some
`advantage tactically here by using the privilege as a
`sword versus a shield.
` So we would ask that in the event the Court
`does believe that -- that this is reckless, that the
`waiver not be extended more broadly than these two
`documents, but -- but, again, we don't believe that
`under the protective order that there is a recklessness
`exception essentially. The reason for the wording of
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`Page 25
`the protective order is because, as we stated in our --
`in our brief, there are two million native documents
`that Versata has produced here, 700,000 pages of images,
`and this is not the only set of documents that the --
`the attorneys here have been reviewing. There's --
`there's large chunks of material essentially, and in
`litigation of this size, material is going to slip
`through, and the parties are aware of this, and that's
`the reason for having this type of provision in a
`protective order to catch situations where it gets
`through the net of the different checks that we have on
`trying to prevent privileged documents from being
`produced that were also described in our briefing.
` THE COURT: Okay. Okay.
` MR. KNEUPPER: Thank you, Your Honor.
` THE COURT: All right. I'm granting the
`motion. I'm ordering the production of the two
`documents that were clawed back at the deposition. I'm
`ordering the production -- well, I reject the argument
`that there's a broad subject matter waiver as a result
`of the production of these two documents. The scope of
`the waiver is prosecution documents that refer or relate
`to the Order Trust product, and I'm -- once that
`production is made, it needs to be made within seven
`days, you got two hours of deposition time to reconvene
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