`
`Patent Owner SightSound Technologies, LLC
`
`Paper No.
`
`By: David R. Marsh, PhD.
`Kristan L. Lansbery, Ph.D.
`ARNOLD & PORTER LLP
`
`555 12th Street, NW.
`Washington, DC 20004
`Tel: (202) 942-5068
`Fax:
`(202) 942-5999
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.
`
`Petitioner
`
`V.
`
`SIGHTSOUND TECHNOLOGIES, LLC,
`
`Patent Owner
`
`Case CBM2013-00023
`
`Patent 5,966,440
`
`DECLARATION OF JOHN P. STAUTNER CONCERNING
`
`COMPUSONICS CORP. AND COMPUSONICS VIDEO CORP.
`
`SIGHTSOUND TECHNOLOGIES
`EXHIBIT 2321
`
`CBM2013-00023 (APPLE v. SIGHTSOUND)
`PAGE 000001
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`
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`I, John Stautner, declare as follows:
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`1.
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`I am a resident of The Woodlands, Texas.
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`I provide this Declaration
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`in connection with the above-captioned proceeding. I am being compensated by
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`SightSound Technologies, LLC for time spent in connection with my factual
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`research and providing testimony in this matter at the rate of $ 450 per hour. My
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`compensation is in no way dependent on the contents of this Declaration or any
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`testimony I may provide, nor on the outcome of this proceeding. I make this
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`declaration of my own personal knowledge and could testify competently to the
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`contents herein.
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`2.
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`I am a technologist with over thirty years of experience in digital
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`audio and video and computer technologies.
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`I have an undergraduate degree in
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`Physics and a Masters of Science from the Department of Electrical Engineering
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`and Computer Science from the Massachusetts Institute of Technology (MIT).
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`3.
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`In 1983, shortly after graduating the master’s program at MIT or at
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`approximately that time, I was contacted by David Schwartz and asked to join
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`CompuSonics as its second employee. (At first, CompuSonics was known as
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`CompuSound. For sake of clarity, unless otherwise specified, by “CompuSonics” I
`
`mean the audio company founded by Mr. Schwartz in or around 1983 .) I worked
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`full-time for CompuSonics beginning in late 1983 or early 1984. At the time, I
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`was living in Cambridge, MA. Later, I relocated to Palo Alto, CA, after
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`CompuSonics moved its base of operations there from Denver, CO.
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`4.
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`In 1985, I also became President of CompuSonics Video Corporation,
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`a company affiliated with CompuSonics.
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`I remained President of CompuSonics
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`Video until both it and CompuSonics went out of business in late 1989 or 1990.
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`However, at all times, CompuSonics and CompuSonics Video were small, closely
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`related companies, and I continued to be closely involved in CompuSonics
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`throughout my time as president of CompuSonics Video. The two companies
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`-1-
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`PAGE 000002
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`shared common offices in Palo Alto, often partnered in development and
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`marketing efforts, and pursued largely similar objectives, in all of which I was
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`generally aware or involved.
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`5.
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`The objective of CompuSonics was to sell high-end audio equipment
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`to consumers, “prosumers” and professional users. The devices sold by
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`CompuSonics were called DSP’s, or digital signal processors, which were special-
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`purpose devices or “audio computers”. A secondary objective of CompuSonics
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`was to license its CSX technology, which consisted of its patents and various
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`implementations of digital audio compression technology, operating software and
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`hardware designs.
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`6.
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`DSP’s came in two series. The first CompuSonics devices to be sold
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`were professional-grade devices in the 2000 series, which included models such as
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`the DSP-2002 (a 2-channel digital stereo recorder) and the DSP-2004 (a digital
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`recorder capable of simultaneously recording 4 channels). With multiple devices,
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`recording studios could record on eight or more channels simultaneously. DSP-
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`2000 series devices were sold to professional sound recording, post-production,
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`mixing, and editing studios. Like all DSP’s, these devices were capable of
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`converting analog sound signals into digital waveforms, where the signals could be
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`recorded, edited, mixed, and mastered. The prices for devices in the DSP-2000
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`series started at $35 ,000. The first such recorder was sold in 1984. During
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`CompuSonics’ existence, the company sold fewer than approximately 40 DSP-
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`2000 series devices (this is a rough estimate).
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`7.
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`Originally, Compusonics intended to develop a consumer audio
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`product and use “super floppy” discs for storage on all of its DSP’s. However,
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`because the storage capacity of floppy discs was not advancing quickly enough, I
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`proposed using hard drives in the interim and developing a product for professional
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`audio studio and post-production use. Thus, the DSP-2000 series devices used
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`-2-
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`PAGE 000003
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`arrays of Maxtor 5 1/4” hard drives. Because the of expense (each 140MB drive
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`cost on the order of $1000, I estimate), the noise emitted by the drives, and
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`impracticality of using hard drives for consumer equipment, Compusonics
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`intended to return to using “super floppy” discs or a similar form of removable
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`storage once the storage capacity of the superfloppies was sufficient and once the
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`compression technology had developed sufficiently. The combination of high
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`capacity disk storage and a high ratio of audio compression and the cost of each of
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`these is what would determine the eventual feasibility of building and marketing a
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`consumer product. In the meantime, the 2000 series was a feasible product to
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`build and market to audio professionals.
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`8.
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`CompuSonics also made consumer DSP devices, in the 1000 series,
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`which were based on a single integrated circuit board design and which featured
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`removable storage (such as an optical disk or a floppy disk). DSP-1000’s were
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`digital stereo recorders that were chiefly intended to replace audio tape recorders in
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`home stereo systems. Compusonics intended that the DSP-1000’s would also
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`allow consumers to archive albums that were contained in analog storage mediums
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`(vinyl or cassette). The goal with digital storage was that sound quality wouldn’t
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`degrade over time in addition to providing other benefits, like random access
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`playback and the ability to edit the audio. DSP-1000’s had the promise of giving
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`consumers the ability to edit out clicks or defects in their existing music
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`collections. Finally, consumers could record their own music. Like the DSP-2000
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`series devices, DSP 1000’s stored music in digital form. For playback, digital
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`signals would be converted to analog form and transmitted via conventional analog
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`RCA output jacks to a home stereo system. For recording, DSP’s contained analog
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`RCA input jacks that could receive an analog digital signal from the components of
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`a home stereo system and convert that signal to a digital waveform.
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`PAGE 000004
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`9.
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`CompuSonics made approximately 20-50 (rough estimate) DSP-
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`1000’s in 1985 and early 1986. Some of these were pilot models and some were
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`“production,” though we never got into any high volume production. The DSP
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`1000’s used a floppy disk storage system as well as cartridge floppy storage and
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`cartridge optical disk storage. Many of the units were sold to radio stations and
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`broadcasters, where the machines were used in lieu of “cart machines.” These
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`units were called DSP 15 00’s if they had record and play capability, and they were
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`called DSP 1200’s if they had only play capability. Cart machines were broadcast
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`systems that employed a tape-based recording and playback system. The short
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`audio clips that could be saved on DSP 1500’s using floppy disks or cartridge
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`storage were well-suited to use with broadcast radio and were a great replacement
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`for the tape based cart machines that were commonly in use. A UK based
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`company called “Ferrograph” even licensed the CompuSonics DSP 1500 and 1200
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`series for sale in Europe. (As a point of clarification: we would refer to audio
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`computers that were built using the single board design as the DSP-1000 series,
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`which would include the DSP-1000, DSP-1200 and DSP-1500.)
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`10. Another run of DSP-1000’s was produced in late 1986. These were
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`sold to high-end consumer stereo dealers. Given the lack of high-density floppy
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`disk storage sufficient to store more than a few minutes of digital audio data, these
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`DSP-1000’s utilized a write-once optical disk drive.
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`11.
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`The DSP-2000 series devices sold by CompuSonics were based on a
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`Unix operating system (or a variant of Unix called Regulus or something like that),
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`and in this regard resembled many other computers of the day. In addition to
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`building the machines, CompuSonics also developed the software needed to run
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`the DSP’s recording, playback, editing and other functions. The software for the
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`DSP-1000 series devices was written directly for the host processor and comprised
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`its own operating system. (The DSP-1000’s did not run Unix or Regulus.) As
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`-4-
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`PAGE 000005
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`noted, the main functionality supported in software was the ability to record and
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`edit digital audio signals. All DSP devices featured on-board compression
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`algorithms that reduced the memory required to store a given recording.
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`Developing sophisticated compression algorithms, supported in hardware and
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`software, was critical to CompuSonics’ and CompuSonics Video’s mission to sell
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`digital recording devices. The compression algorithms software was written to be
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`run on the Texas Instruments TMS 320 digital signal processing chips which were
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`utilized in both the DSP-2000 series and DSP-1000 series devices.
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`12. And like other computers of the era, DSP’s came with serial ports and
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`parallel ports that allowed the device to connect to other computers, networks, and
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`telecommunications lines. Just as other forms of digital data could be transmitted
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`by computers, CompuSonics developed and tested software that enabled DSP’s to
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`transmit digital audio files locally and over distances. CompuSonics referred to
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`transmitting, via a digital communication link, digital audio files from a DSP in
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`one location to a DSP in another location as “telerecording.”
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`13.
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`In 1985 and 1986, CompuSonics engaged in internal testing and one
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`demonstration that I am aware of to show how DSP-2000 devices could be used to
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`send digital audio data over telecommunications lines and record the transmission.
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`In the course of all of these tests and the demonstration, CompuSonics retained
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`control of the DSP devices on both ends of the telecommunications link.
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`CompuSonics never made or received payment for the data transfers it made
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`during the course of these transmissions.
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`14.
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`The demonstration referred to in the foregoing paragraph involved a
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`1985 experimental transmission and recording of audio from Chicago to NY. In
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`that demonstration, digital audio signals were transmitted from one CompuSonics
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`DSP-2002 machine to another Compusonics DSP-2002 machine, with
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`CompuSonics personnel controlling both machines. There was no payment
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`-5-
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`PAGE 000006
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`associated with this transmission and none was contemplated or discussed. At that
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`time, with telerecording, the focus of Compusonics was simply achieving the
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`transmission of the signal—i.e., moving data from point A to point B digitally. We
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`did not formulate a specific method or plan for how the telerecording could be
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`used as part of a transaction.
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`15.
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`Telerecording capability never existed on any DSP that was sold or
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`commercially available by Compusonics. Compusonics did not pursue
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`telerecording as a practical application or incorporate telerecording capabilities
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`into the DSP due to numerous challenges that stood in the way of the adoption of
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`telerecording. Very few high-capacity digital connections existed, they were very
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`expensive, and virtually none reached consumers in their homes. Also, the
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`compression algorithms available were insufficient to fit a meaningful amount of
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`digital music onto available storage means, and furthermore were insufficient to
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`reduce the size of the data to where it could be transmitted in a time-effective
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`manner. In other words the transmission of high fidelity music would take much
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`longer to accomplish than the duration of the audio being transmitted. To the
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`extent we did identify potential practical or commercial applications of the
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`telerecording technology at that time, we anticipated that it could be used by audio
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`professionals and perhaps in the broadcast market to transfer audio segments
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`between studio locations.
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`16.
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`In or around this timeframe, between approximately 1984 - 1987, as
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`part of its marketing activities, employees and officers of CompuSonics, including
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`David Schwartz and myself, occasionally mentioned the idea of an “Electronic
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`Record Store.” This was not an idea that we actually developed, but rather one to
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`which we believed CompuSonics devices, and possibly telerecording, could
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`perhaps be used in the future. In connection with presentations concerning the
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`“Electronic Record Store,” CompuSonics suggested that content could be
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`-6-
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`PAGE 000007
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`transferred over distances directly to consumers. Other than articulating this
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`general concept and potential future application of telerecording, Compusonics did
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`not envision any particular business model or type of transaction or method for
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`payment for the music. Instead, CompuSonics suggested various possibilities for
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`using its devices with telecommunications equipment—just as there are many
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`ways one can conduct telecommunications with a general-purpose computer.
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`17. Among other things, I recall general discussions concerning:
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`(1) allowing users to obtain content via cable television services utilizing coaxial
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`cabling, and having any costs of obtaining the content added to a subscriber’s
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`monthly cable bill (we believed that cable was an attractive option given the
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`bandwidth of cable); (2) transmitting content via telephone lines to consumer
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`homes (we had worked with AT&T who envisioned their Accunet potentially
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`being used in this capacity) without any specified billing or payment method; and
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`(3) the concept of using telerecording to transmit digital files containing master
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`records to retail distribution locations, where a copy of the recording could be
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`printed locally on floppy disks and sold to consumers. All of these ideas involved
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`the concept that the audio signals would be recorded onto floppy disks or other
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`removable media. None of the ideas relating to the so-called “electronic record
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`store” were pursued or specifically articulated beyond as just discussed.
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`18. David Schwartz and others at CompuSonics discussed these
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`“electronic record store” ideas in connection with promotional and marketing
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`activities to generate interest and excitement about potential uses for our stereo
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`equipment and in hopes of spurring sales and investments. These were broad and
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`futuristic technology ideas at the time that did not yet have any associated specifics
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`or business model at the time. David Schwartz referred to the concept as
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`“Futurama City” during a lecture at Stanford University on or about February 20,
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`1987.
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`I was present for this lecture, at that time, Compusonics was making no
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`PAGE 000008
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`efforts to develop the concept nor the functionalities that would be required in
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`DSP’s to support downloading digital content in exchange for electronic payment.
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`19.
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`Thus, while in theory CompuSonics’ DSP devices, like other
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`computers of the day, could have been configured to receive digital data via
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`telecommunications lines in exchange for payment, CompuSonics did not devote
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`engineering time, business development time, or any other time to making an
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`electronic record store or to making the DSP devices compatible with any such
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`consumer download service, nor to my recollection was CompuSonics working on
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`developing any business model or on making any overtures to music industry
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`partners or others to develop a feasible approach to this potential future music
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`delivery method. As discussed above, the primary focus of CompuSonics was
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`developing and getting to market a high volume consumer product that would
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`replace the tape recorder.
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`20.
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`CompuSonics did not plan the use of telerecording in any specific or
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`particular type of transaction methodology and no DSP was ever configured to
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`transmit or accept payment information. To my knowledge, CompuSonics never
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`discussed creating a machine with any type of payment capabilities. Further, to my
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`knowledge, no DSP product sold or commercially available ever had telerecording
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`capability. Some of the early DSP-1000 series had the DATI parallel port
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`transmitter/receiver hardware or chip populated on the board, though it was
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`unsupported by the software as I recall. This was really just a concept that we
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`tested internally and demonstrated on the occasion mentioned above.
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`21.
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`Similarly, CompuSonics never developed a system or method for
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`selling digital audio or video signals over telecommunications lines, nor did
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`CompuSonics ever develop or write software that would enable DSP’s to be used
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`to transfer money electronically. Specifically, CompuSonics never wrote or
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`specified software that would allow individuals to exchange account or credit card
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`-8-
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`PAGE 000009
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`information in conjunction with transmission of digital audio signals.
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`I am
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`unaware of any person or company having ever configured or used a DSP to sell
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`digital audio signals, transfer a credit card number, or otherwise provide account
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`information in exchange for the receipt of digital audio or video content.
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`22.
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`I have reviewed the document marked as exhibit 1310 by Apple. The
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`discussion in this article does not represent a business concept that CompuSonics
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`was pursuing at the time. Specifically, the idea of “routing music through an IBM
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`PC” was not something that CompuSonics was pursuing as CompuSonics was
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`focusing on applications for its DSP machines, and not anticipating having a PC do
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`any operating or storing of any music at that time. This was because we believed
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`that the storage capacity and computational capacity was superior on the DSP as
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`compared to a PC. The statements in this article regarding what CompuSonics was
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`doing and considering are not accurate. (We later conceived and developed a
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`program for the PC to control the DSP, but that did not involve transferring audio
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`between the DSP and the PC, but rather involved having the PC control functions
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`of the DSP via the low-speed serial connection.)
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`23.
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`I have reviewed the document marked as eXhibit 1315 by Apple.
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`I am
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`familiar with this slide and believe it generally reflects the manner in which the
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`Chicago to NY demonstration occurred.
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`I do not believe this slide was ever
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`provided to the public, but was likely shown as part of a typical slide show for a
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`few seconds or a minute or so during a presentation.
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`I believe this slide reflects the
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`idea of a professional use of the telerecording technology, with an audio studio on
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`each end of the connection. The music recording equipment presented on each
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`side of the diagram (1.6., symbolized by the treble clef and microphone), and the
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`reference to our professional DSP-2002 machines, suggests to me that this was a
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`intended to convey a studio to studio transmission with each side transmitting and
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`recording music. There is no payment suggested or contemplated by this diagram.
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`-9-
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`PAGE 000010
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`I also note that the diagram contains an image of traditional telephones and a
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`telephone line. The only purpose of the telephones depicted in the diagram would
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`have been so that individuals on either end could communicate with each other to
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`initiate the transmission or to confirm that the transmission was proceeding
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`successfully.
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`24.
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`I have reviewed the document marked as exhibit 1320 by Apple.
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`I am
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`familiar with this slide and recall it being presented during the Stanford lecture,
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`where it was shown briefly as part of the slide presentation.
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`I do not believe this
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`slide was ever provided to the public, although it could have been shown as part of
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`a slide show briefly during a slide presentation. This slide is consistent with my
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`recollection that CompuSonics identified a variety of possibilities regarding the
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`delivery of audio content and the transmission of audio signals, although none
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`were specified with any particularity or pursued.
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`25.
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`I have reviewed the video of the lecture that David Schwartz and I
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`gave at Stanford University in February 1987 that was submitted by Apple. The
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`video confirms my recollection as described herein that by far, the primary focus
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`of CompuSonics was compression technology and storage technology, the two
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`necessary and critical ingredients for making a consumer DSP-1000 a feasible
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`product. The great majority of the lecture was devoted to the latest developments
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`in removable storage technology, audio compression algorithms and
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`methodologies, the single board audio computer that was the basis for the DSP-
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`1000, the database and control program running on the PC, and the DSP-1000
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`itself, which at the time used a removable cartridge optical disk drive. For
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`example, the slide entitled “Consumer Applications” discusses that the
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`functionality of the DSP-1000 permitted users to preserve their favorite recordings
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`for archival purposes, record their own music, custom dubbing and home music
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`editing. There was mention of the parallel port as a communications port on the
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`PAGE 00001 1
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`back panel and a suggestion that CompuSonics would offer a converter for that
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`port to accept data from compact disc output. However, this use of the parallel
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`port, to my recollection, was never actually supported. Although connection to the
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`AT&T Accunet using the parallel port is mentioned in the “Futurama City”
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`context, there was no support for such functionality in the software of the DSP
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`product. As mentioned above, while the DATI parallel port transmitter/receiver
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`hardware or chip was populated on some earlier machines, it was never supported
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`in software.
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`26.
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`I have reviewed the document marked as exhibit 1333 submitted by
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`Apple, which is an image of a box that appears to be a DSP—1000 with a button that
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`reads “telerecord.” I specifically recall that this box and the creation of this image
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`were made for promotional purposes only. This box was a mock-up of what could
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`have been a future product that was never created or produced. It’s possible that
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`we used that box at some point as part of a prototype to demonstrate recording to a-
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`floppy disk, however the button labeled “telerecord” did not work and was not
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`actually connected to anything (it was merely a nonoperational button appearing on
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`the box used in the image). An accurate image of the DSP—1000 as actually
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`marketed and sold in late 1986 is attached hereto as exhibit 2322. This image was
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`used in advertising and reflects the DSPlOOO as it actually existed. Consistent with
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`my recollection, there is no “telerecord” button on this machine.
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`I swear under penalty of perjury that the foregoing is true and correct.
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`Signed this 20th day of December, 2013, at San Francisco, CA.
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` JOHN P. STA TNER
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`PAGE 000012
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