`
` IN THE UNITED STATES DISTRICT COURT
` NORTHERN DISTRICT OF ILLINOIS
` EASTERN DIVISION
`TRADING TECHNOLOGIES )
`INTERNATIONAL, INC., )
` Plaintiff, )
` vs. ) No. 04 C 5312
`eSPEED, INC., eSPEED )
`INTERNATIONAL, LTD., ECCO, LLC )
`and ECCOWARE LTD., et al., )
` Defendants. )
` The videotaped deposition of
`DAVID LEE SILVERMAN, called by the Plaintiff for
`examination, taken pursuant to the Federal Rules of
`Civil Procedure of the United States District
`Courts pertaining to the taking of depositions,
`taken before CORINNE T. MARUT, C.S.R. No. 84-1968,
`a Notary Public within and for the County of
`DuPage, State of Illinois, and a Certified
`Shorthand Reporter of said state, at the offices of
`McDonnell Boehnen Hulbert & Berghoff LLP, Suite
`3100, 300 South Wacker Drive, Chicago, Illinois, on
`the 24th day of August, A.D. 2007, commencing at
`10:10 a.m.
`
`
`
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`TRADING TECH EXHIBIT 2293
`TRADESTATION ET AL. v. TRADING TECH
`CBM2016-00051
`
`
`
`Page 2
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`PRESENT:
` McDONNELL BOEHNEN HULBERT & BERGHOFF, LLP,
` (300 South Wacker Drive,
` Chicago, Illinois 60606-6709,
` 312-913-0001), by:
` MR. MICHAEL D. GANNON,
` gannon@mbhb.com,
` MS. MICHELLE McMULLEN-TACK, Ph.D.,
` mcmullen-tack@mbhb.com,
` -and-
` TRADING TECHNOLOGIES,
` (222 South Riverside Plaza, Suite 1100,
` Chicago, Illinois 60606,
` 312-476-1018), by:
` MR. STEVEN F. BORSAND, Inhouse Counsel,
` Executive Vice President,
` Intellectual Property,
` appeared on behalf of the Plaintiff;
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`PRESENT (Continued):
` WINSTON & STRAWN, LLP,
` (35 West Wacker Drive,
` Chicago, Illinois 60606-9703,
` 312-558-5600), by:
` MR. RAYMOND C. PERKINS,
` rperkins@winston.com,
` appeared on behalf of the eSpeed
` Defendants;
`
` FAEGRE & BENSON, LLP,
` (1900 Fifteenth Street,
` Boulder, Colorado 80302-5414,
` 303-447-7700), by:
` MR. NEAL COHEN,
` ncohen@faegre.com,
` appeared on behalf of the CQG
` Defendants.
`
`VIDEOTAPED BY: WES FRANCE, Legal Videographer,
` Esquire Deposition Services.
`
`REPORTED BY: CORINNE T. MARUT, C.S.R. No. 84-1968
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` THE VIDEOGRAPHER: Good morning. We are going
`on the video record at 10:10 a.m.
` My name is Wes France and I am a legal
`videographer in association with Esquire Deposition
`Services. Our address is 311 West Monroe Street,
`Chicago, Illinois. The Court Reporter today is
`Corey Marut of Esquire Deposition Services.
` Here begins the videotaped deposition of
`David Silverman taking place at 300 South Wacker
`Drive, Chicago, Illinois.
` Today's date is August 25, 2007.
` This deposition is being taken in the
`matter of Trading Technologies International,
`Incorporated vs. eSpeed, Incorporated, et al.
` Correction on the date. This is
`actually the 24th.
` This deposition is being taken in the
`matter of Trading Technologies International,
`Incorporated vs. eSpeed, Incorporated, et al., in
`the United States District Court, Northern District
`of Illinois, Eastern Division, Case No. 04 C 5312.
` Will counsel please state their names
`for the record.
` MR. GANNON: Yes. My name is Mike Gannon of
`
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`McDonnell Boehnen Hulbert & Berghoff. I'm here
`today on behalf of the Plaintiff, Trading
`Technologies.
` With me today is Michelle McMullen-Tack,
`also of MBHB, and Steve Borsand, in-house counsel
`at Trading Technologies.
` MR. PERKINS: Good morning. Ray Perkins from
`Winston & Strawn representing eSpeed and ECCO.
` MR. COHEN: Neal Cohen from Faegre & Benson
`for the CQG Defendants.
` THE VIDEOGRAPHER: Will --
` MR. GANNON: Good morning. Go ahead, sorry.
` THE VIDEOGRAPHER: Will the court reporter now
`swear in the witness, please.
` (WHEREUPON, the witness was duly
` sworn.)
` DAVID LEE SILVERMAN,
`called as a witness herein, having been first duly
`sworn, was examined and testified as follows:
` EXAMINATION
`BY MR. GANNON:
` Q. Will you state your name for the record,
`please.
` A. Yes. My name is David Lee Silverman.
`
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` Q. And your address?
` A. My address is 16, that's 1-6, Carman
`Lane, C-a-r-m-a-n, Lane, St. James, New York,
`11780, USA.
` Q. And are you currently employed?
` A. Yes, I am.
` Q. And by whom are you employed?
` A. I'm employed by Reuters, R-e-u-t-e-r-s.
` Q. And in what capacity are you employed at
`Reuters?
` A. My title is executive vice president.
`My functional responsibility is that I work in a
`division of Reuters which has been recently formed.
`It's known as Search and Content Technologies.
` And within that division I'm responsible
`for investigating strategy, investigating customer
`needs and as a special adviser on intellectual
`property and specifically patents.
` Q. When you say "adviser," I presume that's
`an adviser to Reuters?
` A. That is as an adviser to Reuters, that's
`correct. It's an adviser to some of the executive
`committees of Reuters.
` Q. Are you -- are you a full-time employee?
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` A. Yes. I'm a contract employee in the --
`I'm under special terms, yes.
` Q. Well, when you say "contract employee,"
`can you explain what that means?
` A. I can. Up until roughly 2004, I was a
`full-time employee as I think you would understand
`it; that is, subject to the same terms and work
`conditions as most other employees.
` In 2004, my employment transitioned into
`a slightly different format in which I worked from
`my home as opposed to going into the office. I
`work on special assignments that were given to me.
`My salary and compensation were determined by
`contract as opposed to being reevaluated
`periodically. And that contract condition, with
`some modifications, continues to the present time.
` Q. When you were -- in 2004 when you were
`full time at Reuters, what was your position then?
` A. Do you mind if I refer to my CV which is
`attached --
` Q. Sure.
` A. -- to my expert report?
` Q. Sure. Go right ahead.
` A. So, in the beginning of 2004, so my
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`employment conditions transitioned in roughly the
`middle of 2004, June of 2004.
` So, in the first half of 2004, my role
`was head of content architecture in Reuters; and in
`that capacity I was working in an architecture
`division, technical architecture division, and
`my -- the purpose of my job was to define a
`comprehensive architecture for financial
`information so that we could have a way of
`describing that content for the consumers of it,
`whether it be programs or people.
` Q. How long have you been at Reuters?
` A. Been at Reuters since 1983. So, 24
`years.
` Q. Have you ever been an officer of
`Reuters?
` A. Yes, I -- I believe I am an officer.
`It's, strange as though it may seem, it's not
`always clear to me whether I -- which division I'm
`an officer of. But I know at times I have been
`officers -- an officer of various divisions or
`subsidiaries.
` Q. Currently are you an officer?
` A. I don't know. I mean, as an executive
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`vice president I'm subject to certain trading
`restrictions on stock, for example, but I have
`no -- for example, I don't sign off explicitly on
`Sarbanes-Oxley or other things which senior
`officers do.
` Q. In your CV you reference, in your
`employment history, being an expert consultant in
`electronic trading for a major private equity firm.
` Do you see that?
` A. Yes, I do.
` Q. What firm was that?
` A. That was KKR.
` Q. What is KKR?
` A. I believe it's Kohlberg Kravis and
`Roberts.
` Q. What is that?
` A. A major private equity firm, but they
`basically -- it was at that time a private
`partnership I believe and what they did is invested
`their money and institutional money in acquisition
`of businesses, either taking them private or taking
`them public.
` And, so, they were specifically involved
`in looking at a financial services company and were
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`considering acquiring it and were in that case
`utilizing my expertise to give them advice on the
`value of the company.
` Q. So, when you were an expert consultant
`for KKR, you were also employed by Reuters?
` A. That is correct.
` Q. You're working in this case on behalf of
`who? Is it Winston & Strawn or eSpeed?
` A. On behalf of eSpeed.
` Q. And ECCO?
` A. I believe my retainer agreement is
`between me and eSpeed.
` Q. And you've sent invoices to Winston &
`Strawn in connection with your work in the case?
` A. That is correct.
` Q. Are the moneys that are -- have you been
`paid?
` A. For the most part, yes.
` Q. Who -- who is getting paid?
` A. I am.
` Q. Not Reuters?
` A. Not Reuters, correct.
` Q. Okay. Does Reuters know that you're
`acting in this consulting role, consulting role in
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`no re-centering feature or have a user-directed
`re-centering feature, and combine that with the
`well-known art of rapid order entry.
` So, I'm sorry I had to go to that level
`of depth to explain it, but those are the
`considerations the person of ordinary skills in the
`art.
` Q. So, is the INTEX screen that you were
`referring to, is that a dynamic screen or always
`centered screen?
` A. My understanding of the INTEX screen is
`that the logic which exists in the software which
`generates that screen attempts always to center the
`inside market near the center of that screen.
` I use the word "near" because there are
`obviously examples where you have a spread that's
`more than one tick where it can't be precisely on
`center.
` Q. So, let me just see if I can sort of
`boil down what we're talking about here.
` Is it your testimony, then, that if the
`only two pieces of prior art known to mankind were
`INTEX and a trading screen that had single action
`order entry and just looking at those two elements,
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`are you saying it would have been obvious to one of
`ordinary skill in the art to arrive at the TT
`invention based on those two pieces of prior art?
` MR. PERKINS: Object to the form of the
`question, also vague and ambiguous.
`BY THE WITNESS:
` A. So, the -- I think to answer that
`properly, we would need to be sure we have an
`agreement on what a person of ordinary skill in the
`art is.
` I am obviously relying on the definition
`which I proposed in my expert report in which I
`describe a person of ordinary skill in the art.
`And rather than mischaracterize it, can we take a
`look at it?
` In paragraph 17, page 7 of my report I
`state that "Generally speaking, the '132 and '304
`patents relate to a field of technology in which
`invention, design and development is typically
`conducted by skilled software engineers with at
`least a college and often postgraduate degree, plus
`three to five years experience in the design and
`coding of commercial software systems. The
`software engineers would be experienced in the
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`development of systems involving real time
`processing and graphical user interfaces and have
`knowledge either themselves, or from communications
`or interactions with others, about the work flow of
`professional traders."
` Now, in my experience such people
`received guidance on the actual design of screens
`from their customers, which might be traders or it
`might be a marketing person as a proxy or as a
`stand-in for a trader.
` So, if such a person, if a trader said,
`you know, I have this INTEX screen and I have this
`screen over here which gives me order entry and I'd
`like you to -- to make the INTEX screen be one in
`which the markets don't stay centered but move and
`that you allow me to click on it and trade, I think
`to a person with ordinary skill in the art, it
`would have been obvious how to make that
`combination and it would have been well within
`their skill level to do that.
` Q. Did you read the deposition transcript
`of a Mr. McCausland in this case?
` A. I believe that I have reviewed portions
`of Mr. McCausland's deposition, but I don't recall
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`the specifics.
` Q. Do you recall whether you read all of
`his transcript?
` A. I don't recall.
` Q. What's the basis for your testimony that
`you believe you read just portions of it?
` MR. PERKINS: Object to the form of the
`question.
`BY THE WITNESS:
` A. I believe there is a mention of
`McCausland somewhere in my expert report, and I
`generally speaking wasn't able to sift through the
`entirety of any deposition.
`BY MR. GANNON:
` Q. How did you determine which portions of
`that deposition transcript to read?
` A. In some cases I used a search function
`to try to look for a relevant page and in many
`other cases I was instructed by eSpeed's attorneys
`to -- to read certain portions.
` Q. What about in this case with respect to
`the McCausland?
` A. I have no specific recollection. I
`would speculate, dangerous, but I'd speculate that
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