`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`) Docket No. 10 C 715
`
`))
`
`
`TRADING TECHNOLOGIES
`INTERNATIONAL, INC.,
`
` v.
`
`(Cons. with:
`) 10 C 718, 10 C 720
`) 10 C 721, 10 C 884)
` )
` ) September 10, 2015
` ) Chicago, Illinois
`BGC PARTNERS, INC.,
`)
`
`)
` Defendant.
`)
`
`
`
`TRANSCRIPT OF PROCEEDINGS - MOTION
`BEFORE THE HONORABLE VIRGINIA M. KENDALL
`
`
`
`APPEARANCES:
`
`For the Plaintiff:
`
`
`For the Defendant
`CQG:
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`
`
`
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`
`Court Reporter:
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`
`
`McDONNELL BOEHNEN HULBERT & BERGHOFF by
`MS. JENNIFER KURCZ
`MR. LEIF R. SIGMOND, JR.
`300 South Wacker Drive
`Suite 3100
`Chicago, Illinois 60606
`
`LOEB & LOEB LLP by
`MR. WILLIAM JOSHUA VOLLER
`321 North Clark Street
`Suite 2300
`Chicago, Illinois 60610
`
`GAYLE A. McGUIGAN, CSR, RMR, CRR
`Federal Official Court Reporter
`219 South Dearborn, Room 2318-A
`Chicago, Illinois 60604
`(312) 435-6047
`Gayle_McGuigan@ilnd.uscourts.gov
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`Page 1 of 14
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`TRADING TECH EXHIBIT 2018
`IBG ET AL. v. TRADING TECH
`CBM2015-00182
`
`
`
`A P P E A R A N C E S : (Continued)
`
` 2
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`MANDELL MENKES LLC by
`MR. STEVEN P. MANDELL
`One North Franklin
`Suite 3000
`Chicago, Illinois 60606
`
`STADHEIM & GREAR LTD by
`MR. GEORGE C. SUMMERFIELD
`400 North Michigan Avenue
`Suite 2200
`Chicago, Illinois 60611
`
`FISH & RICHARDSON PC by
`MR. DAVID J. HEALEY
`One Houston Center
`1221 McKinney, Suite 2800
`Houston, Texas 77010
`
`
`
`For the Defendant
`Interactive Brokers
`Group:
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`
`For the Defendant
`TradeStation:
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`(In open court:)
`
`THE CLERK: Case number 10 C 715, Trading Technologies
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`versus BGC Partners.
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`MS. KURCZ: Good morning, your Honor. Jennifer Kurcz
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`on behalf of plaintiff Trading Technologies.
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`THE COURT: Good morning.
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`MR. SIGMOND: Good morning, your Honor. Leif Sigmond
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`for Trading Technologies.
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`THE COURT: Good morning.
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`MR. HEALEY: Good morning, your Honor. David Healey,
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`Fish and Richardson, for TradeStation.
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`THE COURT: Good morning.
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`MR. MANDELL: Good morning, your Honor. Steve Mandell
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`on behalf of Interactive Brokers, LLC.
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`THE COURT: Good morning.
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`MR. VOLLER: And good morning, your Honor. Bill
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`Voller on behalf of defendants CQG.
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`THE COURT: Good morning.
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`MR. SUMMERFIELD: Good morning, Judge. George
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`Summerfield on behalf of TradeStation.
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`THE COURT: Okay. Good morning.
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`So I have to tell you I'm not surprised to see this,
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`nor does it fall on deaf ears.
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`So let me hear from TT as to what we're doing here.
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`You want to break them up and move on.
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`MS. KURCZ: Yes, your Honor.
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`THE COURT: Go ahead.
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`MS. KURCZ: As you can imagine, we're seeking
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`deconsolidation because the very basis for consolidation --
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`which is streamlining, efficiency -- has not been served by
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`consolidation in this case. The cases are over five years old,
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`and discovery hasn't even gotten off the ground.
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`THE COURT: Let's just make a record that you all
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`chose -- some of you chose to bring it up and back, so it
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`wasn't that Judge Kendall is making this five years old, but
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`that there's lots of other issues that have delayed this case
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`based upon the parties' interactions.
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`MS. KURCZ: And that's exactly where I'm going, your
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`Honor.
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`Defendants have used consolidation to gain delay --
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`delay and unfairly break the case apart by engaging in
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`piecemeal litigation tactics. They've only independently
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`attacked certain patents on certain issues. And all of this
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`has enured to the delay in this case.
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`For instance, in the trade -- or the TD Ameritrade
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`CBM, the cases were stayed because of their request, and only
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`they were the ones that were involved in those CBM petitions.
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`None of the other parties chose to join in those matters.
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`THE COURT: Right.
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`MS. KURCZ: And now they want to redo it all over
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`again.
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`THE COURT: Right.
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`MS. KURCZ: And, you know, they've had that
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`opportunity for over three years. So at this point, enough is
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`enough. The cases should proceed independently. If there is a
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`reason to delay one case, for whatever reason, the Court can
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`decide that at that time, but they shouldn't be all hinged
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`together and incurring additional delay or any delay by any
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`defendant.
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`THE COURT: Okay. You're missing one of your best
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`arguments about the prejudice, about the delay for your
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`technology as well.
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`MS. KURCZ: Yes, your Honor. And with respect to the
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`prejudice that we've suffered, not only is it economic, we've
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`lost sales. We can't be going after people who are infringing
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`in our marketplace. There's also an evidentiary loss that we
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`are suffering. For instance, in the CQG case that just went to
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`trial, we had issues with getting information from non-parties.
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`Even from CQG, who was under a duty to preserve information,
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`had, you know, overwritten important and invaluable information
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`in that case. And so we believe that that's going to continue
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`happening, while defendants are also unfairly invading our
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`market space and we're not able to preclude them from
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`infringing.
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`THE COURT: Okay. Who wants to go first?
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`MR. HEALEY: Your Honor, Dave Healey for TradeStation.
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`Most of what the counsel for Trading Technologies just
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`said isn't true. They're not asking for real deconsolidation.
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`They want shared discovery, shared interrogatories, shared RFA,
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`shared depositions, and yet they want to put TradeStation on an
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`advanced schedule presumably on the basis that they've already
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`done contentions.
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`Not true.
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`Five years of products, for whatever reason, and any
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`delay in this case has either been because of court order,
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`appeals, or because TT did nothing for months at a time. Five
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`years of --
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`THE COURT: Where does -- what is that, that they did
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`nothing for months at a time? They wanted to prosecute and
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`move forward from day one.
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`MR. HEALEY: From -- I'm sorry, your Honor. From May
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`when the motion to stay was filed by TD Ameritrade until --
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`THE COURT: Which they objected to.
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`MR. HEALEY: Which they objected to. They didn't try
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`to do anything, seek anything, get anything effected in terms
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`of that case until early the following year, I believe. So
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`they went right there for months.
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`But putting that aside, your Honor, you can't have us
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`be in a position where we have to share interrogatories, where
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`we have to share RFAs, we have to share requests for
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`production, share depositions, and yet be on different
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`schedules. That doesn't work.
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`Second of all, as to TradeStation, we have no
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`contentions for three of the patents they raised against us,
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`which they raised after consolidation. We have no contentions
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`for five years of products, including three base product
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`changes, major overhauls, and over 30 updates.
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`Quite simply, the contentions they have are for the
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`original seven patents they alleged against TradeStation and
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`the -- and the products that ended in June 2010 or were last on
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`the market in that June/summer 2010 period.
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`So in terms of where TradeStation is, we're no
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`different from everybody else. And in terms of how they want
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`to treat us, they want us to share depositions with everyone
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`else, share interrogatories, share RFAs. We can't do that if
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`we're on a different schedule. You've got to be on the same
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`schedule if you're going to share all the discovery.
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`And in terms of gaming the CBM system, that's just not
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`true. The Patent Office rules are very, very sticky about
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`joinder, consolidation. And it's very, very expensive to even
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`seek to join. For TradeStation to seek to join the
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`TD Ameritrade petition, the filing fee alone on the '304
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`patent, for example, would have been about $48,000, just to pay
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`the patent --
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`THE COURT: Which in this case is nothing compared to
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`what you've been litigating for all these years. Nothing,
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`compared to the attorneys' fees that have been generated in
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`this case. Honestly. Probably less -- I would love to see one
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`month's bills. Cannot be an expensive venture.
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`MR. HEALEY: I would assure you, your Honor, $48,000
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`is more than the typical one-month bill in this case for
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`TradeStation.
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`THE COURT: During a stay.
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`MS. KURCZ: Because it's been stayed.
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`Your Honor, if I can respond.
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`THE COURT: No, you can't respond yet. All right.
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`You're done.
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`Do you want to say something?
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`MR. MANDELL: Yeah, well, the only thing I would say
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`is the delay is not -- you shouldn't blame consolidation for
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`the delay. It makes no sense to deconsolidate this case.
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`There's 16 patents involved. There's over 400 claims. Can you
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`imagine the situation? We're going to have multiple Markman
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`hearings. We're going to have multiple motions for summary
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`judgment on invalidity. There's going to be a proceeding on
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`discovery disputes between different magistrates. It makes no
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`sense to deconsolidate these cases whatsoever. They came in
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`2010 and advocated for efficiency reasons that, and for all the
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`same reasons I just mentioned, that these cases all be
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`consolidated in front of one court. Nothing has changed. They
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`say, well, there's fewer -- fewer defendants --
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`THE COURT: There's a lot fewer defendants.
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`MR. MANDELL: But that's even another reason why
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`consolidation should -- should continue because there's fewer
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`defendants to split all the work that needs to be done.
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`So deconsolidation really isn't the answer here, your
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`Honor. It makes no sense to deconsolidate the cases.
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`THE COURT: Anyone else?
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`MR. VOLLER: Your Honor, if I may, with a practical
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`anecdote, having just litigated the CQG case, I think to
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`deconsolidate these matters would do a disservice to the
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`magistrate.
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`As Mr. Mandell just indicated, we were in front of
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`Mr. -- Magistrate Schenkier on a near weekly basis arguing a
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`variety of --
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`THE COURT: In that case.
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`MR. VOLLER: In that case.
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`THE COURT: Not in my case.
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`MR. VOLLER: That is true, your Honor.
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`THE COURT: Nobody has been doing anything on a weekly
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`basis in my case.
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`MR. VOLLER: That is true. And the proposal to
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`deconsolidate would further frustrate and erode any efficiency
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`that could be gained by having a magistrate decide all of the
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`common issues that would likely need to be decided at one time
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`Page 9 of 14
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`instead of having a magistrate independently and piecemeal
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`decide the same dispute time and time again over and over
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`again.
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`THE COURT: Well, I don't know. Look at where you are
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`in that case. You've had a trial and you're done. Right? We
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`don't have even the slightest glimpse of a trial on the
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`horizon. Right? And that was just one case assigned to one
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`judge. So it was single, right?
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`MR. VOLLER: There was two patents, your Honor, and so
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`single case.
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`THE COURT: One case.
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`MR. VOLLER: That's correct.
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`THE COURT: With two patents.
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`MR. VOLLER: Correct.
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`THE COURT: And it moved, and now you're completed.
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`And, boy, that seems reasonable.
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`What's your position?
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`MR. SUMMERFIELD: Your Honor, I'm just local counsel
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`for TradeStation, but I can say the thing I would point to is
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`the 10 term limit that this Court is to construe under the
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`local rules. And if you break these cases up, you're
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`effectively allowing the parties to do an end-around that,
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`theoretically.
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`THE COURT: But the 10 term limit, the first thing you
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`guys are going to do is run in here and say, "We need more
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`terms because we've got all of these patents and all of these
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`cases." We're not going to hold you to 10 terms on one case,
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`right?
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`me.
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`MR. SUMMERFIELD: Your Honor --
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`THE COURT: It will be the first thing you file for
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`MR. SUMMERFIELD: I think that depends. Yes, if there
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`are 400 claims being asserted, that may be true. But if the
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`goal of the rule is satisfied and the number of claims are
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`limited, making it manageable to use only 10 terms for
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`construction, then, sure, I don't think there would be a basis
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`for us to come in and say we need to construe 20 or 30.
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`But right now we have 400 claims being asserted and --
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`yeah, I think it's impractical. But it would almost be a
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`guarantee that that 10 claim term limit isn't going to stick if
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`consolidation is done away with.
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`THE COURT: All right. Now you can reply.
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`MS. KURCZ: Thank you, your Honor.
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`I'd like to clarify TT's position. In our paper on
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`page 12, it's pretty clear that if the Court deconsolidates
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`these actions, TT is seeking the limits set forth in the
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`federal and local rules per case. We're not seeking
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`consolidation of all discovery even if this Court
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`deconsolidates.
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`We are, however, to the extent that it's workable
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`Page 11 of 14
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`among the parties for -- convenient to witnesses, I think that
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`the Court could still require coordination of depositions, not
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`to burden parties or non-parties unduly. But we would not be
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`seeking that they just still proceed as if the cases are
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`consolidated if your Honor agrees to deconsolidation.
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`THE COURT: Okay. So this is a 14-page motion with a
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`proposal and a schedule, and I assume that you want to give me
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`a written response. If that's not true, that's fine.
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`MR. HEALEY: Yes, we do, your Honor.
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`THE COURT: All right. But two weeks from today.
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`MR. HEALEY: Two weeks from today --
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`THE COURT: All right? I don't want a reply.
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`I'll see you in three weeks.
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`MS. KURCZ: Your Honor --
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`THE COURT: What?
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`MS. KURCZ: They did respond to our consolidation
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`request on pages four and five of their response.
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`THE COURT: Oh, I don't have a response in front of
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`me, so that's not good.
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`MR. MANDELL: Actually, that's not true, your Honor.
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`THE COURT: Because that means that I didn't -- hold
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`on a second. Let me just see.
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`MS. KURCZ: Docket 629.
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`THE COURT: Hang on.
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`MS. KURCZ: Defendants' Proposed Discovery and Case
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`Management.
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`MR. HEALEY: It's not -- it's not a response, your
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`Honor. It was our proposed discovery statement that covered
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`multiple issues. And it mentioned that they had brought up the
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`possibility of deconsolidation, and we gave an initial reaction
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`as to why it's not a good idea. We didn't respond to what we
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`saw later that night when it got filed, which is, as you point
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`out, roughly a 10- or 15-page motion. And we would like the
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`two weeks to reply to that.
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`THE COURT: Oh, it's the same day that it came in,
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`right?
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`MR. MANDELL: They were both filed in the evening.
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`THE COURT: Yeah, because it was your position.
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`MR. HEALEY: Yes.
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`THE COURT: And your proposed discovery schedule.
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`MS. KURCZ: Our motion only spans three pages, just so
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`it's clear. It was combined with the proposed discovery case
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`management order that your Honor had required both parties to
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`file.
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`THE COURT: Right. Right. So you can address the
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`case law on it in two weeks from today, and I don't want a
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`reply. I can do my own case work on it, and I will see you in
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`three weeks. Let me see if I'm here.
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`So two weeks from today is what, Tresa?
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`THE CLERK: 24th.
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` 8
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` 9
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`10
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`11
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`12
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`13
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`14
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`15
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`16
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`17
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`18
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`19
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`20
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`21
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`22
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`23
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`24
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`25
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`THE COURT: The 24th. Okay. I'll see you on
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`October 1st at 9:00 a.m.
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`MS. KURCZ: Last point of clarification, your Honor,
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`if I may.
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`Discovery is open, so there's no reason they shouldn't
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`be responding to discovery requests that have been propounded
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`in the interim. Is that consistent with your Honor's --
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`THE COURT: I don't have a motion to compel. You all
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`are lawyers. If discovery is open, the stay is not there.
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`You're doing your work. Right?
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`It's like -- I keep getting motions from people that
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`says, "Follow the rules." You know? Follow the rules.
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`MS. KURCZ: Thank you, your Honor.
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`THE COURT: All right. I'll see you on October 1st at
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`9:00.
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`ALL PRESENT: Thank you, your Honor.
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`(Proceedings concluded.)
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`C E R T I F I C A T E
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`I certify that the foregoing is a correct transcript of the
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`record of proceedings in the above-entitled matter.
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`
`
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`/s/ GAYLE A. McGUIGAN_____________ September 11, 2015
`Gayle A. McGuigan, CSR, RMR, CRR Date
`Official Court Reporter
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`__________________________________ September 11, 2015
`Gayle A. McGuigan, CSR, RMR, CRR Date
`Official Court Reporter
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`Page 14 of 14
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