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`IPR2014-00171 - IPR2014-00177
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`Conference Call
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`1
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` UNITED STATES PATENT AND TRADEMARK OFFICE
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00171
`VIRNETX INC. | Patent 6,502,135
` Patent Owner. |
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00172
`VIRNETX INC. | Patent 6,502,135
` Patent Owner. |
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00173
`VIRNETX INC. | Patent 7,490,151
` Patent Owner. |
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00174
`VIRNETX INC. | Patent 7,921,211
` Patent Owner. |
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00175
`VIRNETX INC. | Patent 7,921,211
` Patent Owner. |
`——————————————————————————————
` (Caption continues on next page)
` Monday, March 3, 2014
` 3:00 p.m. EST
` CONFIDENTIAL PURSUANT TO PROTECTIVE ORDER
`Teleconference before the Patent Trial and Appeals Board
`
`202-220-4158
`
`Henderson Legal Services, Inc.
`www.hendersonlegalservices.com
`
`VIRNETX EXHIBIT 2059
`RPX v. VirnetX
`Trial IPR 2014-00172
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` (Continued caption:)
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00176
`VIRNETX INC. | Patent 7,418,504
` Patent Owner. |
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00177
`VIRNETX INC. | Patent 7,418,504
` Patent Owner. |
`——————————————————————————————
`
` Monday, March 3, 2014
` 3:00 p.m. EST
` Teleconference before the Patent Trial and Appeals
`Board, the proceedings being recorded stenographically
`by Jonathan Wonnell, a Registered Professional Court
`Reporter (NCRA #835577) and Notary Public of the State
`of Minnesota, and transcribed under his direction.
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` A P P E A R A N C E S O F C O U N S E L
` (All participants appearing by phone)
`
` On behalf of the Patent Trial and Appeal
` Board:
` MICHAEL P. TIERNEY, ESQ., Administrative
` Patent Judge
` STEVEN C. SIU, ESQ., Administrative Law
` Judge
` KARL D. EASTHOM, ESQ., Administrative Law
` Judge
`
` On behalf of RPX Corporation:
` OLIVER R. ASHE, JR., ESQ.
` Ashe P.C.
` 11440 Isaac Newton Square North, Suite
` 210
` Reston, Virginia 20190
` (703) 467-9001
` oashe@ashepc.com
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` A P P E A R A N C E S (Cont'd)
`
` On behalf of Virnetx Inc.:
` NAVEEN MODI, ESQ.
` Finnegan, Henderson, Farabow, Garrett &
` Dunner, LLP
` 901 New York Avenue, N.W.
` Washington, D.C. 20005
` (202) 408-4000
` naveen.modi@finnegan.com
`
` On behalf of Apple Computers:
` JEFFREY P. KUSHAN, ESQ.
` JOSEPH A. MICALLEF, ESQ.
` Sidley, Austin, Brown & Wood
` 1501 K Street, N.W, Suite 600
` Washington, D.C. 20005
` (202) 736-8000
` jkushan@sidley.com
` jmicallef@sidley.com
` -- and --
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` A P P E A R A N C E S (Cont'd)
`
` On behalf of Apple Computers (Cont'd):
` JENNIFER L. YOKOYAMA, ESQ.
` Apple Inc.
` 1 Infinite Loop
` Cupertino, California 95014
` (408) 974-0761
`
` ALSO PRESENT:
` JONATHAN WONNELL, Court Reporter
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` P R O C E E D I N G S
` (3:00 p.m. EST)
` JUDGE TIERNEY: Okay. We'll begin with
`a brief roll call starting with -- let's start with
`the patent owner today.
` MR. MODI: Your Honor, this is Naveen
`Modi, counsel for Virnetx. It's just going to be
`me today. Mr. Palys could not make it because of
`the snowstorm and his traveling, so --
` JUDGE TIERNEY: Understood. Thank you
`for joining us. Now let's turn it over to RPX. Do
`we have counsel for RPX on the line?
` MR. ASHE: Yes, Your honor. This is
`Oliver Ashe.
` JUDGE TIERNEY: Is there anyone joining
`you today?
` MR. ASHE: Mr. Howison may join. I'm
`not sure. But let's proceed without him.
` JUDGE TIERNEY: Okay. And is there a
`representative from Apple on the line today?
` MR. KUSHAN: Yes, Your honor. This is
`Jeff Kushan. And we may be joined by my partner,
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`Joe Micallef, and also one in-house attorney at
`Apple depending on the snow.
` JUDGE TIERNEY: Understood.
` MR. MICALLEF: This is Joe Micallef.
`I'm on the line.
` JUDGE TIERNEY: Thank you. And I'm just
`going to throw this out beginning with the patent
`owner and then we'll go to RPX and Apple. Are
`there any issue we'll be discussing today that are
`going to be subject to a protective order?
`Beginning with the patent owner.
` MR. MODI: Your Honor, there might be.
`I think there are documents that were marked
`confidential under the protective order by RPX. So
`we might get into some of those issues today.
` JUDGE TIERNEY: Do you have any
`objections to the people that were identified by
`RPX or Apple attending this call, given the nature
`of the potential protective order issues?
` MR. MODI: Your Honor, we do not.
`Obviously it's up to RPX because I believe RPX is
`the one that had marked these documents as
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`confidential under the protective order.
` JUDGE TIERNEY: Okay. Going next to
`RPX, do you have any objections to the additional
`individuals that were identified during the roll
`call?
` MR. ASHE: My understanding is that all
`of them have signed off on being subject to a
`default protective order. So we don't have any
`objection unless that understanding is incorrect.
`There was mention of somebody from Apple joining.
`I don't know who that is and whether they're under
`the protective order or not.
` MS. YOKOYAMA: Hi, Mr. Ashe. This is
`Jennifer Yokoyama from Apple. I was the one who
`signed the protective order in this matter.
` MR. ASHE: Okay.
` JUDGE TIERNEY: Okay. Going lastly to
`Apple are there any individuals that you're
`concerned with regarding protective order issues?
` MR. KUSHAN: No, as long as -- I mean,
`from the last couple of comments it sounded like
`there would be a basis for treating this transcript
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`as being subject to the protective order, but we
`don't have any problem with the participants in the
`call subject to that.
` JUDGE TIERNEY: Okay. At this point in
`time I'm going to ask that before the transcript be
`filed with the board that the parties confer and
`determine whether or not it needs to be filed under
`seal. If it's going to be filed under seal, also
`see if there is an opportunity to provide a
`redacted copy for public consumption. Any
`objections, beginning with the patent order?
` MR. MODI: No objections, Your Honor.
` JUDGE TIERNEY: RPX?
` MR. ASHE: No, Your Honor.
` JUDGE TIERNEY: Apple?
` MR. KUSHAN: No, Your Honor.
` JUDGE TIERNEY: All right. With that we
`have the procedural matters out of the way. Let's
`begin. My understanding is that patent owner has
`requested this conference call. Is that correct,
`patent owner?
` MR. MODI: Yes, Your Honor.
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` JUDGE TIERNEY: Okay. If you would
`begin by giving us a brief overview of the purpose
`of the call.
` MR. MODI: Thank you, Your Honor, and I
`really appreciate the board holding this call on a
`snow day. But it sounds like that's kind of the
`norm in D.C. now. So we had requested this call,
`Your Honor, because the parties have a disagreement
`over the board's order that defined the scope of
`discovery.
` So that's specifically Paper Number 31
`in the '171 proceeding. As you may recall, that
`order required RPX to respond to the discovery by
`last Thursday and Apple's response is due three
`business days after RPX's response. Now, we did
`receive RPX's response on Thursday and their
`response raised several issues. And I just wanted
`to raise these issues with the board promptly given
`the nature of the issues.
` So with that, we have several issues. I
`thought, Your Honor, it would be best to sort of go
`issue by issue and maybe get everyone's thoughts on
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`them and sort of move that way if that's acceptable
`to the board.
` JUDGE TIERNEY: Okay. Please begin.
` MR. MODI: Okay. So the first issue we
`have is the parties disagree regarding the scope of
`the request. I think it is best to use one of the
`discovery requests to illustrate the dispute. As
`you may recall, the board ordered RPX and Apple to
`produce documents or things containing
`communications within Apple and RPX regarding the
`preparation or filing of the RPX IPRs.
` The discovery request defined Apple and
`RPX to include their agents. Agents include
`attorneys such as Sidley Austin. When you insert
`this definition back into the request, RPX and
`Apple were to produce documents or things
`containing communication between Apple's agents and
`RPX's agents, including communications between
`Sidley and Apple regarding the Apple IPRs since
`Sidley was acting behalf of Apple and RPX.
` Here's where the dispute arises. First,
`it is not clear to us how Apple and RPX are
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`interpreting the definition of Apple and RPX.
`We've asked them to clarify it and we have actually
`asked direct questions and they have not given us
`answers.
` Second, Apple and RPX appear to be
`refusing to provide or log any communications
`between Apple's agents and RPX's agents, including
`communications between Sidley and Apple. As you
`may recall, during one of the many calls we have
`had on these issues we had discussed how the
`parties would address privilege concerns and
`everyone seemed to agree that any communications
`that are withheld on the basis of privilege would
`be logged and provided for in-camera review by the
`board.
` But now Apple and RPX appear to be not
`only withholding communications that fall under the
`scope of the board's order; they also do not want
`to provide any log. Accordingly, we seek the
`board's guidance on this issue.
` And maybe, Your Honor, it's appropriate
`for me to stop here and see if the board has any
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`questions for me.
` JUDGE TIERNEY: Actually let's go back
`to the first point. You had a question about how
`Apple and RPX have interpreted certain provisions?
` MR. MODI: Yes, Your Honor.
` JUDGE TIERNEY: Okay. Could you please
`clarify again what provision you're asking for
`interpretation of?
` MR. MODI: Sure, Your Honor. Sure. So
`in the discovery request Apple and RPX respectively
`were defined to include their agents. So we've
`asked Apple and RPX to tell us when they responded
`to the discovery requests whether they produced any
`communications between Apple's attorneys and RPX's
`attorneys, given their definition of agents, or
`given their definition of Apple and RPX. And they
`have not given us a clear answer to that question.
` JUDGE TIERNEY: Okay. Why don't we stop
`there and turn it over to RPX and Apple to hear
`their views on that point. Beginning with RPX,
`could you please respond to the question that was
`raised?
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` MR. ASHE: Sure. That question was put
`to us and we referenced the instructions that were
`in the Apple proposal which defined RPX and Apple
`as including its agents, which would presumably
`include their outside counsel, and whether there
`were any communications, using those definitions,
`between Apple and RPX regarding the filing and
`preparation of the IPR petitions.
` And we responded in the paper filed on
`Thursday that there were no tangible communications
`that were responsive to that request given those
`definitions, and we identified two non-written
`communications between Apple and RPX that related
`to the filing and preparation of the petitions.
` And, frankly, we were ordered to produce
`those communications. We did that, so I really
`don't know how to respond to the question of
`whether or not we've responded to the order. We
`did, and the appropriate communications have been
`identified.
` JUDGE TIERNEY: Okay. Before I go over
`to Apple I would like to hear a little more from
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`Virnetx why that was -- why RPX's response was
`allegedly insufficient.
` MR. MODI: Sure, Your Honor. The reason
`we felt RPX had not given us the information, I
`think Mr. Ashe just responded to the question. We
`had e-mail communications on this point, Your
`Honor, before we scheduled the call with the board
`asking RPX to basically answer this question saying
`whether they had produced communications between
`Apple's attorneys including outside counsel and
`RPX's attorneys including outside counsel, and we
`never got a clear answer as provided by Mr. Ashe.
` JUDGE TIERNEY: Let's stop here. Do we
`have a sufficient answer or is there something more
`that you're requiring at this point?
` MR. MODI: So for that specific issue,
`Your Honor, we do have the answer. But there was a
`second part to my inquiry. But before we go to
`that maybe we can ask Apple to confirm that they
`will also be --
` JUDGE TIERNEY: Okay.
` MR. MODI: To respond that that's their
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`understanding of, you know, the instructions.
` JUDGE TIERNEY: Let's stop and let's
`turn it over to Apple. Can you confirm what RPX
`just stated in response to the question or is there
`some additional information we need to be aware of?
` MR. KUSHAN: No. I just have one
`clarification. The definition of agency was a
`person acting as an agent of either party within
`the scope of agency. So it very clearly was
`intended to be communications from an employee or a
`representative of Apple acting in the scope of the
`agency to the other party; for example, Apple to
`RPX or RPX to Apple.
` And I think the very clear boundary we
`tried to draw in the Apple proposal made it clear
`we were aiming at the communications that had went
`from one party to the other, which would logically
`then be produced by any kind of discovery order.
` So as long as we're on the same page as
`far as what that definition is, we have no further
`points to add regarding Mr. Ashe's clarification.
` JUDGE TIERNEY: Okay. Virnetx, as to
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`point 1, how Apple and RPX have interpreted, do we
`need any more clarification or can we move on to
`the second point at this point?
` MR. MODI: Your Honor, I think we can
`move on to the second point. And I think it's
`actually tied to what Mr. Kushan mentioned in his
`last point regarding the definition. So maybe it
`is appropriate at this point with Your Honor's
`permission to move on to the second point.
` JUDGE TIERNEY: Yes, please. If you
`could move to the second point.
` MR. MODI: Sure. So our second point,
`Your Honor, is it is our belief that the discovery
`that Apple was ordered to -- Apple and RPX were
`ordered to provide includes communications within
`Apple and Sidley since Sidley was representing both
`Apple and RPX at the same time. So, again, maybe
`with the board's indulgence if I could give an
`example I think that might help frame this issue.
` So, again, as you know, Apple and RPX
`shared counsel, Sidley Austin. And here's the
`example that I wanted to provide for the board.
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`Let's say we have a whiteboard in a conference
`room. Party A comes to the room and writes certain
`things on the whiteboard and leaves the room.
`Party B then comes to the room and reads the
`whiteboard.
` Even though party A and party B never
`talked to each other, they were able to communicate
`with each other using the shared room and the
`whiteboard.
` Given the shared counsel situation here
`the board -- we believe the board's order required
`Apple and RPX to produce a log, communications that
`were between Apple and Sidley. And to the extent
`it sounds like Mr. Kushan may be interpreting the
`board's order differently, or maybe perhaps it was
`Virnetx's misunderstanding if it is, we ask that
`the board now order Apple and RPX to provide such
`communication.
` JUDGE TIERNEY: Let's turn it over to
`Apple first on this issue. Apple could you please
`respond to the allegations raised?
` MR. KUSHAN: Sure. I'm having a hard
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`time deciphering the difference between what we
`wrote in our proposal and now this new
`interpretation that Mr. Modi has --
` JUDGE TIERNEY: This is Judge Tierney.
`Let's go to the highest level.
` MR. KUSHAN: Sure.
` JUDGE TIERNEY: Did you comply with the
`order that effectively put in place your discovery
`option?
` MR. KUSHAN: Yes. Well, Your Honor,
`we're producing tomorrow --
` JUDGE TIERNEY: I'm sorry. You're
`right.
` MR. KUSHAN: But I can confirm we will
`comply with the order. I want to just clarify one
`point. As we just flagged, the language of our
`definition of "who is an agent of either party"
`made it very clear that we're not in a shared
`counsel representation here. The mandate for
`production spoke to each party, RPX and Apple, and
`sought discovery of communications from those
`entities to the other party.
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` It was not an order that sought
`discovery of Apple and its counsel that were never
`communicated to RPX or vice-versa. And that is
`something we spelled out very clearly at pages 1 to
`2 of the Apple proposal. We made it very clear
`that the proposed discovery excludes communications
`between Apple and its counsel that were never
`conveyed to RPX.
` JUDGE TIERNEY: This is Judge Tierney.
`That is my understanding of it too. Judge Siu,
`Judge Easthom, do you have any difference that you
`would like to articulate?
` JUDGE EASTHOM: No. That was my
`understanding. That is Judge Easthom.
` JUDGE TIERNEY: Okay. So the board
`agrees that Apple's interpretation was the
`interpretation of the panel. Virnetx, could you
`please explain what more that we need to provide
`here that has not already been provided or will be
`provided?
` MR. MODI: Sure, Your Honor. And I'm
`sorry to interrupting you. I think the issue here
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`is clear, Your Honor, that what Apple tried to do
`with their definitions, it seems to me they are
`reading that in a limited way -- and it sounds like
`the board's understanding is in comport with
`that -- in that they are saying to the extent Apple
`and Sidley had communications regarding the RPX
`IPRs that they claim never made their way on to RPX
`they don't need to produce or log.
` The problem with that, Your Honor, is
`that Sidley -- as you know, the facts are
`undisputed at this point -- represents not only
`RPX; it represents Apple. And it represented Apple
`and RPX during the relevant time frame here.
` From the documents that have been
`produced to us it's clear that Sidley Austin was
`engaged at least as early as October 21st. And as
`you may recall, Your Honor, the Apple IPRs were
`ongoing at that point. And it's not been disputed,
`I don't think, by anyone that Sidley Austin has
`represented Apple and continues to represent Apple.
` So to the extent there were
`communications between Apple and Sidley regarding
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`the RPX IPRs, even though Sidley Austin claims that
`they may not have made their way to RPX in, let's
`say, a verbal communication, the fact that there
`were common attorneys working on this, on the RPX
`and Apple IPRs, we believe those communications
`should be produced or logged. If they believe
`they're privileged they can certainly log them.
` And as we discussed before they should
`be produced for in-camera review, because
`otherwise, Your Honor, they're essentially --
`what's happening here is they're using this shared
`counsel situation as a sword and a shield and we
`don't think that's proper.
` JUDGE TIERNEY: Okay. Let's take this
`at a high level. Sidley and Apple are going to
`allege attorney-client privilege, correct, patent
`owner?
` MR. MODI: Your Honor --
` JUDGE TIERNEY: That's what they've been
`alleging to date. Do we have any understanding
`that they will waive attorney-client privilege
`between Sidley and Apple?
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` MR. MODI: Your Honor, that's my
`understanding, that that's what they might claim.
`But I'm not sure. I think it still has to be
`articulated exactly what the privilege is. But
`yes, I believe that's what they're going to claim.
` JUDGE TIERNEY: So then what are we
`hoping to gain from this measure? You're going to
`get a privilege log, at best, and from the
`privilege log these communications are said not to
`have been given by RPX. So we have an internal --
`a privilege log of internal communications between
`attorney and client. And the need to provide that
`over to Virnetx is -- I'm trying to figure out what
`the need is in this case.
` MR. MODI: Your Honor, I think the issue
`is, again, they're hiding behind the attorney-
`client privilege. We have a unique situation here,
`Your Honor. They are using this shared counsel
`situation to basically hide these communications.
`And we believe it actually -- obviously, if they're
`claiming privilege, Your Honor, we are not able to
`see them unless there is a waiver of privilege or
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`there's -- some sort of -- one of the exceptions to
`privilege applies. And of course we don't have --
`we haven't seen the privilege log to make those
`arguments.
` But we think the fact that those
`communications exist and the fact that we're
`fighting so hard over these communications, if they
`don't have any communications, they should just
`tell us.
` JUDGE TIERNEY: Well, now wait. Let's
`back up. You're wanting to hear are there
`communications between the attorney and their
`client. And I think the safe assumption is there's
`going to be communications between an attorney and
`their client.
` MR. MODI: Your Honor, I'm sorry. I
`guess I should have clarified. The communications
`we're talking about are communications between
`Apple and Sidley regarding the RPX IPRs, Your
`Honor. So it's more limited. We're not asking for
`all communications, Your Honor.
` JUDGE TIERNEY: If those communications
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`were never provided to RPX, what are we trying to
`learn from that?
` MR. MODI: So, Your Honor, I guess
`maybe -- I guess I could give you another example.
`So let's say -- as you know, Sidley Austin prepared
`these petitions. If there was a draft that Sidley
`Austin prepared for these petitions, that draft
`was, let's say, given to Apple for review. Yet
`there are no communications regarding this draft
`because Sidley was acting as a conduit.
` If that is the case, Your Honor, those
`communications are relevant to the Guan factors and
`they certainly show control, suggestion,
`participation by Apple in these proceedings. They
`cannot hide behind Sidley Austin and participate
`through Sidley Austin as a conduit.
` JUDGE TIERNEY: Again, let's take --
`what my understanding is -- and I want Apple to
`chime in on this. My understanding is what you've
`been asking for is not communications going from
`RPX to Sidley through to Apple, but rather
`communications that were between Sidley and Apple
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`that were never communicated back to RPX.
` MR. MODI: Your Honor, yes, I agree with
`you. But I just want to -- I quibble with your
`last part. And I apologize. I just want to make
`sure I'm framing the issue correctly for you. The
`problem that we have is they keep on saying the
`communications don't go back to RPX. But the
`problem is they may not need to because Sidley
`represents RPX. Those are the undisputed facts.
` And one of the reasons Sidley was
`presumably hired is because of their expertise in
`these IPRs. So that's the problem we have, Your
`Honor. And we think it's right -- to the extent
`Your Honor doesn't feel that those communications
`should be logged, they can give them to the board
`for in-camera review and Your Honor can decide for
`yourself whether they go to the issue of control or
`privity.
` But we think they are extremely relevant
`and it would be extremely prejudicial to exclude
`those communications from either a log perspective
`or from having the board look at it from an
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`in-camera review perspective.
` JUDGE TIERNEY: Okay. I'd like to hear
`from either Apple or RPX, one of the parties step
`forward. Particularly let's start with Apple.
` MR. KUSHAN: Sure.
` JUDGE TIERNEY: What would be the
`prejudice to providing a privilege log at this
`point in time regarding the communications that are
`in discussion?
` MR. KUSHAN: Well, the prejudice -- let
`me -- I think it's -- I guess I would back up
`before the question gets engaged about a privilege
`log because Mr. Modi's theory rests on an
`assumption that isn't true. He's already been
`given a production from RPX that identifies, I
`think, the single interchange between RPX and Apple
`prior to the filing of the RPX petitions.
` And what Mr. Modi wants to find that
`does not exist is other communications that were
`indirect or some other theory that he's advancing.
`And there's nothing there. That's the problem with
`our reaction to this story.
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