`IN TiE JNITED STATES D
`FOR THfi WfiSTfi
`RN DISTRICT OF PENNSYLVANIA
`
`In re:
`
`MAXIM NTfiGRATfiD PRODUCTS,
`
`INC.
`
`Miscellaneous
`No. 12-244
`MDL No. 2354
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`Transcript of proceedings on Wednesday, March 20, 2013,
`United States District Court, Pittsburgh, Pennsylvania, before
`Joy Flowers Conti, District Judge.
`
`SPECIAL MASTER: Richard D. Eagan, Esq.
`SPECIAL DISCOVERY MASTER: Tina 0. Miller, Esq.
`
`APPEARANCES:
`
`Maxim:
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`Matthew Powers, Esq.
`Leland P. Schermer, Esq
`William P. Nelson, Esq.
`Mary Fuller, Esq.
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`Bank of America/Merrill
`Lynch:
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`Kevin S. Katona, Esq.
`Kevin J. Culligan, Esq.
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`Bank of the West:
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`BMO Harris Bank NA:
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`fisq.
`Edward J. Benz, II ,
`Kirsten R. Rydstrom, Esq.
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`Harry F. Kunselman, Esq.
`Robert M. Masters, Esq.
`Ryan D. Fabre, Esq.
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`Court Reporter:
`
`Juliann A. Kienzle, RMR, CRR
`5300 USPO & Courthouse
`700 Grant Street
`
`PA 15219
`Pittsburgh,
`(412) 261-6122
`
`Proceedings recorded by mechanical stenography;
`transcript produced by computer—aided transcription.
`
`Mln Exhibit 2001 - JPMC, CBM2014-00179 - Page 2001-001
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`Maxim Exhibit 2001 - JPMC, CBM2014-00179 - Page 2001-001
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`1 APPEARANCES:
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`Branch Banking and Trust
`Company:
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`Kevin S. Katona, Esq.
`Kirsten R. Rydstrom, Esq.
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`Capital One Financial Corp:
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`Maya Miriam Eckstein, Esq.
`Daniel G. Vivarelli, Jr., Esq.
`Stephen S. Stallings, Esq.
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`Chipotle Mexican Grill,
`Inc.:
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`Benjamin Baughman Lieb, Esq.
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`CitiBank,
`NA/Citigroup;CitiBank,
`National Association:
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`Benjamin Baughman Lieb, Esq.
`Robert L. Masterson, Esq.
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`Comerica, Inc.:
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`William F. Long, Esq.
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`Deutsche Bank AG:
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`Jeffrey A. Finn, Esq.
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`Expedia,
`Inc./Mobiata/Hotels.com
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`LP/Hotels.com GP,
`LLC/Hotwire:
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`Amanda Rose Pezzano, Esq.
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`Fidelity Brokerage Services,
`LLC:
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`J. Anthony Downs, Esq.
`Christopher Verdini, Esq.
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`Groupon, Inc.:
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`Ryan R. Smith, Esq.
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`Jack Henry & Associates,
`Inc./First United Bank:
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`Russell S. Jones, Jr., Esq.
`Richard A. Ejzak, Esq.
`Thomas H. Soehl, Esq.
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`JP Morgan Chase:
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`Samuel W. Braver, Esq.
`Shamita Etienne—Cummings,
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`Esq.
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`Keycorp/Key Bank National
`Association:
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`Tracy S. Johnson, Esq.
`Georgia K.E. Yanchar, Esq.
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`PNC Financial Services
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`Inc.
`Group,
`Group, Inc.:
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`& The Vanguard
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`Elizabeth Laughton,I
`Lionel M. Lavenue, Esq.
`Scott R. Leah, Esq.
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`QVC,
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`:Nc.:
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`Timothy S. Durst, Esq.
`Richard A. Ejzak, Esq.
`Thomas H. Soehl, Esq.
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`Page 200 1 -002
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`Page 2001-002
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`APPEARANCES: Cont'd.
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`Starbucks Corp.:
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`John A. Schwab, Esq.
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`Target:
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`Eric G. Soller, Esq.
`Daniel M. Lechleiter, Esq.
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`Union Bank, N.A./Unionbancal
`Corp.:
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`Andrew J. Isbester, Esq.
`John Hall, Esq.
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`U.S. Bancorp, US Bank:
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`Wal-Mart:
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`Wells Fargo:
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`Kadie M. Jelenchick, Esq.
`Jeffrey W. Spear, Esq.
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`Cynthia E. Kernick, Esq.
`Khurram N. Gore, Esq.
`Robert A. Muha, Esq.
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`John Hall, Esq.
`Jonathan E. Harris, Esq.
`Andrew James Isbester, Esq
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`Page 2001-003
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`Page 2001-003
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`9
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`guess what I want to make sure that the Court understands is
`that in our proposal, the scheduling proposal, what we put
`together, taking the local rules, the local patent rules in
`mind, what we believe we put together was something that was
`still very aggressive and still very reasonable, and, for the
`most part, only deviated from the local rules for the time
`frames in between us by minimal amounts of dates, one day in
`some situations, 14 days in other situations.
`The issue that we have with following the local
`rules to a tee is a belief that the local rules were intended
`for the typical patent case where you have one, two, maybe
`three defendants. We have here 49 some defendants, 27 groups
`of defendants. There are three Capital One defendants. We're
`one group of 27 some groups. We think it would be -- I think
`it would be beneficial for the Court, for Maxim, for everybody
`if these opposing parties were able to coordinate their
`positions as much as possible.
`THE COURT: Just so you understand. I'm envisioning
`that you have a lead counsel representing all of the opposing
`parties. The issues, there may be some special issues for a
`particular opposing party, but by and large, I would assume
`that most of the responses coming in will be somewhat similar.
`I could be wrong in that.
`Are you envisioning that each opposing party is
`going to have their own responses, because that's not what I
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`Page 2001-004
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`was thinking.
`MS. ECKSTEIN: We want to achieve the same thing.
`We want to coordinate as much as possible so we have one claim
`construction group, for example, on behalf of everybody. That
`takes time, though. Frankly, this is worse than herding cats.
`THE COURT: What I'm going to leave you to do, with
`that in mind, that's why I wanted you to set aside the time
`today with the Special Master to go over it and have everyone
`be able to make whatever comments you feel are appropriate.
`The Special Master can consider those and come back and make an
`informal report to me and then I'll come back and make a final
`decision.
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`I'm not ruling it out, I'm giving you what my
`preference would be.
`Anything else on that?
`MR. POWERS: No, Your Honor.
`THE COURT: So that's the case schedule.
`One other thing I'm going to be doing with respect
`to the Special Master, who is going to be filing an affidavit
`to demonstrate no conflicts, and then I'm going to circulate --
`it's a fairly short order, going into a little more detail
`about his payment and that type of thing so everyone will be
`able to see that and, hopefully, that will be entered
`relatively soon.
`Now, the next thing has to do with the protective
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`Page 2001-005
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`Since I'm doing this in the quick version,
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`I'm going
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`to go rather quickly.
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`If we go to Slide No. 5,
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`this shows the distinction
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`between the original opposing parties and the new opposing
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`parties. We distinguish that based upon when the initial case
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`management conference occurred before Judge Fischer on October
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`2nd.
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`THE COURT:
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`It would be fair to say now you're all
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`just opposing parties because we're going to have the new —— as
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`I said,
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`whatever is f‘
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`"ed on Friday about the infringement
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`contentions,
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`that app"es to all the present parties here who
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`are the opposing parties, whether new or the original ones.
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`If
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`there are ones that come along after this, we'll deal with
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`those later.
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`MR. LAVENUE: Slide 6 shows all of those opposing
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`parties put into a chart divided by the different technology
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`groups.
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`So you can see that there are vast,
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`different --
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`everything from finance to food services, Starbucks, Chipotle,
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`to air"nes, Southwest Airlines,
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`there are all these different
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`technology areas.
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`As you know,
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`the accused devices here are apps,
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`applications on a phone.
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`So, all of these different entities
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`provide apps that you can download onto your iPhone and use,
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`and that is what —— that is part of what Maxim is going after.
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`Page 200 1 -006
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`Page 2001-006
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`At the original scheduling con_erence,
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`they were only going
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`after the apps.
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`In their new infringement contentions,
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`they
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`have also added in some claims to websites. We're not sure
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`where they're going with that, but it's now either apps or
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`websites or both.
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`THE COURT: Okay.
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`MR. PAVfiNUfi:
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`The next slide, Slide 7,
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`shows all of
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`the third parties that have received discovery in the case.
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`You'll see when we do our quick run—through through
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`the patents,
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`the patents are all directed to hardware aspects,
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`not software aspects alone, and,
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`in fact, most of the patent
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`claims in the case are mostly hardware with software thrown in.
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`So,
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`interestingly, Maxim did not sue the hardware
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`manufacturers,
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`that is,
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`the smart phone manufacturers,
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`which
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`their claims are primarily directed to.
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`They have only sued
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`us,
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`the application providers,
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`so because of that, after the
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`infringement contentions when we filed our initial motion to
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`strike, we said,
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`look, you have nothing.
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`You can't show
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`infringement.
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`They then —— notice this began in November
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`'09.
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`They then began seeking discovery from all of the smart phone
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`manufacturers. That's where all this is coming from,
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`is in
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`order to prove their case on hardware,
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`they have to get that
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`information from those smart phone companies.
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`So, if we go to Slide 9,
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`this shows the patents.
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`Page 200 1 -007
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`Page 2001-007
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`There are five patents in the case.
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`The first three on the top
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`of the slide are asserted against everyone.
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`The ‘O95 patent is
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`asserted against all but one party, QVC.
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`Then the '702 is
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`asserted only against two parties.
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`Slide 10 shows the overall timing of how these
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`patents came to exist.
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`On the left—hand side of the screen you can see that
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`these were filed in 1995 and 1996,
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`so many, many years ago.
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`They issued in 1998 through 2001, and then it wasn't until 10
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`to 12 years later that these patents were actually accused
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`against the parties in this case, either in the origina'
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`filings in January of 2012 or the supplemental filings in
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`October.
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`Slide 11 gives an overview of the patents as to what
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`the different patents are directed to.
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`I won't go through this, other than to just note
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`that it deals with what is shown on the next slide, which is
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`the iButton.
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`This iButton is a devise that is the pre_erred
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`embodiment for the patents on which the patents were written
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`and on which they're based. This was created by a company
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`named Dallas Semiconductor. Maxim purchased that company, and
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`along with it, its patents. And then after they bought the
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`patents they figured, ah, we have some patents and we can sue
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`on them.
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`So this iButton that you see on the screen,
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`this was
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`the basis of that.
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`Page 2001-003
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`Page 2001-008
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`The way the iButton works is it is used with a
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`reader. What is called a digital cash equivalent is placed
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`onto the iButton, and you can see it's filled, one can walk
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`around with it, and then go to a reader and use that iButton.
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`So, you can see Maxim looks at this and they say,
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`well, if we just replace that iButton with that smart phone and
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`we replace that reader with the airwaves, that's where our
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`infringement case is.
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`Of course,
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`the distinction is we're not cell phone
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`manufacturers, we're app providers,
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`so that's the difference.
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`Slide 14 shows the patent figure which divides the
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`patent or the patented technology into three sections. We have
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`those numbered 1,
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`2 and 3.
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`No.
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`1 is the portable module,
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`the little iButton.
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`No.
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`2 is one of the readers that allows you to read
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`the iButton.
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`And then No.
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`3 is after you have loaded information
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`or digital cash equivalents onto the iButton, you can then use
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`that at No. 3.
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`Slide 15 shows that the iButton is hardware—based
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`and so,
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`in order to prove infringement,
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`they're going to have
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`to show these hardware elements that are shown in the patent
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`and are in the claims.
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`These are in the claims of the patent.
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`Slide 16 shows the portable module reader, again,
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`hardware—based.
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`It's described as a microprocessor—based
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`Page 200 1 -009
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`Page 2001-009
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`device not an application, which we provide.
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`Slide 17 shows the third element, which is the
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`security device or accessing the portable module, again,
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`describing very specific hardware. Note that it even has such
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`things as math coprocessors. Well, back in the 1990s math co
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`processors were something that were new.
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`It's now many, many
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`years later and computers don't have math coprocessors anymore.
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`So Maxim is going to have problems proving these things because
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`these are old technologies in their patents.
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`So,
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`the overview of the accused technology on Slide
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`we point out what T mentioned before,
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`which is there are
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`two things that are accused of infringement,
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`the applications
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`that go on a phone and the new allegations by Maxim of the
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`website.
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`Slide 20 makes the distinction that the opposing
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`parties, we do not provide mobile phones, we only provide the
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`applications.
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`And Maxim does not, for some reason, accuse the
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`phones in this case, only the applications.
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`Slide 21, basically, that's the heart of the matter
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`and that's what this case will be about is,
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`is that iButton
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`equal to a cell phone and can Maxim prove that claims that are
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`written to that iButton are the same as applications that work
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`on a phone.
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`The next
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`few slides are basically slides that are
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`Page 2001-010
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`Page 2001-010
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`directed to the complexities of the case.
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`Slide 23 shows that they'll have to go to all of
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`these cell phone manufacturers to get
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`information to prove
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`infringement.
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`Slide 24 is really directed more to our motion to
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`strike their infringement contentions,
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`so I won't go into
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`details there other than to mention that they have accused
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`1,376 mobile phones of infringement, using our apps,
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`with 51
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`different cell phone manufacturers using our apps, but yet,
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`in
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`their infringement contentions,
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`they have not provided one
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`chart that maps a single specified device to a software
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`combination. What they do is they pick and choose.
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`They take
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`a little from here, a little from there. This will all be in
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`our motion to strike.
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`THE COURT: You're going to have to be very careful
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`the motion to strike isn't a disguised Markman issue.
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`So, you
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`are going to be very careful about that because if it is,
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`I'm
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`not going to entertain it.
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`MR . T.AV*'.NU *1:
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`Understood, Your Honor.
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`Our motion to
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`strike is based on case law from the Eastern District of Texas,
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`the Northern District of California --
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`THE COURT:
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`I don't want to go into it.
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`I'm getting
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`a sense here that you're trying to do a preemptive strike,
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`so
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`to speak, on this and if it's really something that is going to
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`get into what should be reserved for the Markman hearing,
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`I'm
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`Pq52mH0ll
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`Page 2001-011
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`l those types of disputes and I don't want this to be a situation
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`2 where people are running to the Court with that type of
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`3 quarrel. But, I'll leave that for you to put into your
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`4 submissions.
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`7 you.
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`Now,
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`is there anything else?
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`MR. POWERS: Nothing from Maxim, Your Honor.
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`Thank
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`THE COURT: Anything from any of the other parties?
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`The other thing I will be circulating is the draft
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`10 order for the Special Master appointment of Mr. Egan and that
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`ll should be coming out shortly.
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`MR. POWERS:
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`Thank you, Your Honor.
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`THE COURT:
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`Thank you all.
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`(Court adjourned.)
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`-----
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`C E R T I F I C A T E
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`19
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`I, Juliann A. Kienzle, certify that the
`foregoing is a correct transcript from the record of
`20 proceedings in the above—titled matter.
`
`s/Juliann A. Kienzle
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`Juliann A. Kienzle, RMR, CRR
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`N
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`Page 2001-012
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`Page 2001-012