`
` UNITED STATES PATENT AND TRADEMARK OFFICE
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
` ------------------------------------------X
` UNIFIED PATENTS, INC.,
`
` PETITIONER(s),
`
` -against- CASE:
` IPR2014-01252
` DRAGON INTELLECTUAL PROPERTY,
` PATENT OWNER(s).
` ------------------------------------------X
`
` DATE: November 26, 2014
` TIME: 2:00 p.m.
`
` TELEPHONIC conference of the
` parties, taken before LATONIA C. LEWIS,
` RPR, a Notary Public of the State of New
` York.
`
`Job No. 87776
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`Unified v. Dragon Ex. 3001, pg. 1
`IPR2014-01252
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`Page 2
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` A P P E A R A N C E S:
`
` OBLON SPIVAK McCLELLAND MAIER &
` NEUSTADT
` Attorney for the Petitioner
` 1940 Duke Street
` Alexandria, Virginia 22314
` BY: MICHAEL KIKLIS, ESQ.
`
` FREITAS ANGELL & WEINBERG
` Attorneys for the Patent Owner
` 350 Marine Parkway
` Redwood Shores, California 94065
` BY: JASON ANGELL, ESQ.
`
` * * *
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`Unified v. Dragon Ex. 3001, pg. 2
`IPR2014-01252
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` PROCEEDINGS
` MR. KIKLIS: I would like to
` alert the Board, I sent an e-mail
` this morning that we have arranged
` for a court reporter who is already
` on the line to transcribe the phone
` call.
` THE COURT: We just ask that
` you file the transcript of the phone
` call as an exhibit then.
` MR. KIKLIS: Yes, your Honor.
` Do I have permission to use one of
` the board's exhibit numbers or would
` you like us to use our own?
` THE COURT: You may use one of
` the boards.
` MR. KIKLIS: Thank you, your
` Honor.
` THE COURT: Do we have
` representative from the patent owner
` on the line?
` MR. ANGELL: Yes, your Honor.
` This is Jason Angell from Freitas,
` Angell & Weinberg for patent owner,
` Dragon Intellectual Property, LLC.
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`Unified v. Dragon Ex. 3001, pg. 3
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` THE COURT: Well, as I
` understand it from the e-mail that
` were changed prior to the phone call,
` there are two issues that the parties
` want to discuss. One issue is
` petitioner's desire to file a reply
` to the preliminary response to deal
` with the issue of real party in
` interest, and the other issue is that
` the patent owner wants to seek leave
` to file an opposition to the motion
` to seal file by the petitioner.
` I'm going to start with the
` first of the two issues because I
` think it's probably a little bit more
` straightforward. And I think that
` that issue in particular is a good
` opportunity to remind the parties,
` again, that you really should try to
` workout as many of these procedural
` issues as you can beforehand. It's a
` bit of a burden on the Board and the
` rest of the parties to -- or stated
` another way, it is beneficial to
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` PROCEEDINGS
` everyone to the extent that we can
` workout procedural issues like, the
` motion to seal ahead of time. With
` that said, I would like to give the
` parties a chance to be heard on the
` matter. So I guess we'll start with
` the patent owner regarding the
` opposition. What are your concerns
` and why do you want to file the
` opposition?
` MR. ANGELL: On a motion to
` sale, your Honor, Mr. Kiklis has
` never expressed to me that there was
` any objection to us filing an
` opposition to their motion. We've
` told them from a very early point in
` the case that we did intend to oppose
` a motion to seal. The reason that we
` intended to oppose the motion to seal
` is two-fold.
` First of all, we don't think
` that the petitioner has presented a
` sufficient showing to establish that
` the information that they're trying
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` PROCEEDINGS
` to seal is entitled to sealing. The
` issue of real party in interest is
` one of critical importance in this
` case. Given the nature of the
` petitioner, which is an entity that
` was setup and specifically designed
` to -- for the purpose of filing IPR's
` against NPE's on behalf of its
` members. So the fact that its
` claiming on the one hand to be the
` real party in interest and at the
` same time attempting to hide through
` sealing information how it's
` constituted and how it works we think
` is directly contrary to the public
` interest in the purpose of the Board
` in providing parties with whom
` invited the apple as far as
` litigating the validity issues.
` The second reason is that we
` believe that they have overdesignated
` information for sealing, even if
` there is a basis to seal some of the
` information, they've redacted entire
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` documents where the CEO of Unified
` Patents testified that most of it is
` not entitled to sealing and indeed
` they do not claim confidentiality
` over it. So those are the two
` primary reasons that we seek to
` oppose the motion.
` MR. KIKLIS: Your Honor, if I
` may respond?
` THE COURT: Certainly.
` MR. KIKLIS: Yes, every time
` that we have responded to all
` requests by the patent owner in terms
` of overdesignation, if there is
` something specific, he should alert
` us before this call and we would be
` happy to address it. We have
` addressed, we have de-designated some
` documents based on request from the
` patent owner and we will continue to
` work with him.
` I think I need to start with
` the first issue that he had
` mentioned, is his attempt to
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`Unified v. Dragon Ex. 3001, pg. 7
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` PROCEEDINGS
` basically out our membership, which
` in one of our first phone calls
` regarding additional discovery, I
` need to kind of start this whole
` discussion off, by we went to the
` patent owner because we have filed,
` Unified Patents have called a half
` dozen -- seven IPR's. And in some of
` those, IPR's, people have questioned
` real party in interest because there
` is some information out there in the
` public domain that is incorrect. And
` so we have -- with a clouding case,
` it was suggested to us by Judge
` Jameson Lee to provide some
` interrogatories, we provided that.
` The issue just simply went away. We
` haven't had a lot of issues regarding
` or of companies of patent owners
` raising this issue.
` Nevertheless, we reached out to
` them at the beginning saying hey,
` some people have raised this issue.
` If you'd like additional discovery,
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` we would be happy to provide that to
` you. You don't have to bother the
` Board et cetera. The parties did
` reach an agreement and there was one
` issue in terms of cost of a
` deposition, which was raised in front
` of this Board. And we had a phone
` call, I would like to remind your
` Honors about that. There was a
` ruling about that in paper number
` eight. So kind of all behind this is
` this whole additional discovery,
` which we voluntarily provided.
` Well, at the very beginning,
` one of the representations that
` Mr. Angell said to me was that he
` found it within the public interest
` to reveal who our membership is, all
` the companies who consist of members.
` And that's what he's trying to do
` here. There are membership
` agreements in place between unified
` and its members where this
` information is confidential
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` information bound by the
` confidentiality provisions within
` these membership agreements. And
` this is held very closely to this
` company. It is very confidential
` information highly business sensitive
` information. Not only is it held in
` secrecy because of contractual
` reasons, but also for fear of
` retaliation from the NPE's who are
` out there.
` We have -- the members are very
` concerned as Unified is as well that
` if Jason Angell and his client are
` successful in outing the membership,
` then this would be -- this would
` subject the memberships to
` retaliation, retaliatory lawsuits and
` et cetera. So we have solid reasons
` on our side for keeping this
` confidential. And we, in addition,
` to that -- the public interest here
` is in the substance of the case
` itself, the patentability arguments
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` themselves. And so we don't feel
` that any of this information needs to
` be within the public record. It's
` our confidential information and we
` need to protect that.
` MR. ANGELL: Your Honor, if I
` may just briefly respond to that.
` THE COURT: Yeah, well,
` briefly. And I would note the --
` yeah, at this point, we're kind of
` getting a bit into the substance of
` whether we're going to seal this
` stuff. The issue at hand today
` really is the question of whether
` we're going to authorize the
` opposition to the motion to seal if,
` in fact, the parties cannot come to
` an agreement otherwise. So I think
` the main thing to keep in mind as you
` respond, Mr. Angell is try to keep it
` brief and let's keep it to the issue
` of whether we're going to have to
` deal with an opposition as opposed to
` the merits of whether certain
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` documents will be sealed.
` MR. ANGELL: Sure, your Honor.
` Just briefly on the procedural
` question whether we may file an
` opposition to the motion to seal.
` Taking on everything that Mr. Kiklis
` just said about the sealability of
` the information. The fact that
` private confidentiality agreements do
` not trump a public right of access to
` information. Mr. Kiklis says that
` the real issue in the case is the
` patentability of the events that's
` claimed in the Dragon Patents.
` That's true in part, but in order to
` get in the door, they need to
` establish they are the real party in
` interest and we believe that they are
` not.
` We believe that Mr. Jakel, the
` CEO's testimony establishes that they
` are not and keeping of the
` information from the public does not
` serve the public interest. There is
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` -- we'd like the opportunity to take
` on, on a motion to seal level what
` Mr. Kiklis is saying about the
` sealability of the information
` because much of it is contrary to
` what the CEO testified about in his
` deposition about the confidentiality
` of the information. We'll present
` that in our opposition.
` THE COURT: Okay. One question
` that arises for us is the patent
` owner is, do you anticipate opposing
` the motion to deal with respect to
` everything that the patent petitioner
` has identified as something that
` should be sealed or are there
` particular documents, exhibits that
` you think should be public, and, if
` so, which?
` MR. ANGELL: I don't think we
` will oppose every single thing that
` they have sought to seal, but for
` example, the information that we
` think is important is how much the
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` company has been paid by its members
` who are definitive in the district
` court litigation we think is in a
` public interest. It is directly
` relevant to the question of real
` party in interest. We don't have a
` desire contrary to the view that
` Mr. Kiklis described to me, which is
` incorrect. We do not have an
` interest in outing all of their
` members. But we do have an interest
` in addressing the real party in
` interest question. I would say no,
` is the answer to your question, your
` Honor, we do not intend to challenge
` every aspect of their sealing motion.
` MR. KIKLIS: Your Honor, if I
` may, I don't know which aspect they
` intend to challenge so --
` THE COURT: Okay.
` MR. KIKLIS: I'm left in the
` dark. I think that this is
` premature, your Honor.
` THE COURT: All right. Well, I
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` think we're going to put you on hold
` here for a minute or so and I'm going
` to talk about it with my panel
` members.
` (Whereupon, an off-the-record
` discussion was held.)
` THE COURT: Okay. Gentleman,
` we've made a decision on this. It
` sounds like, first of all, again,
` that there may be some opportunity
` for you guys to discuss details and
` workout a protective order that is
` agreeable to both sides. We
` encourage you to do that. To the
` extent that those efforts do not bear
` fruit and you remain in disagreement
` about which things may or may not be
` sealed then we will authorize the
` filing of an opposition.
` MR. KIKLIS: Your Honor, if I
` may. This petitioner's counsel, Mike
` Kiklis. You raised the protective
` order. We did file -- the parties
` have agreed to a protective order.
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` That was submitted with our motion to
` seal, so we would request that that
` is entered by the Board. And then, I
` do -- I would like to agree that I
` think, that if the patent owner
` presents us with a list of items that
` he would like to challenge, the
` designation, we would be happy to
` take that under advisement and
` respond and then that would reduce
` the amount of briefing that would be
` presented to this Board. So if there
` is specific items that he's
` interested in challenging the
` designation, let us know what they
` are and then we can put our position
` on the record as to whether we
` opposed or we will de-designate or
` whatever various items. And then
` that can resolve, at least narrow
` issues for the Board.
` MR. ANGELL: In general, your
` Honor, I think that sounds okay. I
` just want to clarify a couple of
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` things. On the first thing
` Mr. Kiklis asked about, we don't
` object to the information being
` maintained under seal during the time
` that the discussion about this is
` pending. We don't object to that.
` I'm not sure if Mr. Kiklis was asking
` for anything more than that. So
` that's a point of clarification.
` MR. KIKLIS: I was actually,
` Jason, asking for entering of the
` protective order that we agreed to
` that was filed as an exhibit. That's
` all.
` MR. ANGELL: So not the
` designations, we can contest that --
` MR. KIKLIS: You can contest
` that if you'd like.
` THE COURT: Is that accurate,
` patent owner, that you agree to the
` protective order, but not the
` designations?
` MR. ANGELL: That's correct,
` your Honor. The second point
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` Mr. Kiklis raised, we are happy to
` work with him, but we think that as
` the party seeking to seal, they
` really need to show a basis for
` motion to seal or show a basis for
` sealing on everything. And the
` burden is kind of shifting to us, you
` know, to point out what isn't
` entitled to sealing, but we can work
` that out with Mr. Kiklis.
` THE COURT: I think it is a
` little more efficient if the two of
` you can find, like, say -- if the
` two of you can find common ground on
` this for these issues or any
` opposition that's filed, that will
` help us all out. Also, it warrants
` mention here that -- try not to talk
` over each other -- well, you're not
` really talking over each other. Try
` not to jump back and forth. I will
` ask when you want to talk.
` I think that resolves the issue
` with respect to the opposition. The
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` parties will discuss the matter and
` see if they can resolve anything with
` respect to any of the designations as
` to whether some may be agreeable and
` then to the extent that they are not,
` we authorize an opposition to the
` motion to seal. And digressing, we
` also will enter the protective order
` agreed to by the parties.
` MR. ANGELL: Thank you, your
` Honor.
` THE COURT: That takes us to --
` my colleague has pointed out that
` there have been due dates for the
` opposition, rules specify that any
` opposition should be filed a month
` from service of the motion. And if I
` remember correctly, you can guys can
` confirm this for me, November 15th, I
` believe, was the date of service for
` the opposition motion. Is that
` correct?
` MR. ANGELL: Our motion was
` filed on the 15th, your Honor, that's
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` correct.
` THE COURT: Served as well.
` MR. ANGELL: Yes, your Honor.
` THE COURT: So then the due
` date for the opposition will be
` December 15th. And to digress again
` I think what we're going to do with
` respect to the protective order is we
` will have to look at that and make
` sure that it doesn't deviate too much
` from -- that we're comfortable with
` it vis-à-vis our standard protective
` order, so we will take that issue
` under advisement and issue an order.
` MR. KIKLIS: If I may just
` address the protective orders
` briefly, your Honor. The main
` departure, your Honor, is two levels
` of protection. So there is highly
` confidential, attorneys eyes only,
` which we negotiated with the other
` side, which is standard, as you know,
` in most district courts protective
` orders. The other change is really
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` directed to the situation where we
` have, in our case, where one party
` produces the confidential information
` and it is filed by the other party.
` It just seems that the default
` protective order really didn't cover
` those specific circumstances rather
` than the default protective order
` seems to contemplate the situation
` where a party files its own
` confidential information. As the
` Board reviews our protective order,
` which again has been agreed to by
` both sides, I will just like to give
` the Board that guidance that that's
` what we're attempting to do.
` THE COURT: Okay. That's
` helpful. So we will, as I mentioned,
` take it under advisement and issue an
` order on the issue. So that takes us
` to the other point that was raised,
` which were e-mails, which is the
` petitioner's desire to file a reply
` to the patent owner's preliminary
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` report from the real party in
` interest issue. I'm going to go
` ahead and let the petitioner start on
` this one as to why it feels it's
` necessary and then we'll give the
` patent owner a chance to speak.
` Petitioner you have the floor.
` MR. KIKLIS: Thank you, your
` Honor. Mike Kiklis, for the court
` reporter. As I said at the very
` beginning of this call, we provided
` this additional discovery and the
` patent owner took advantage of it and
` utilized it. They cited to and used
` the testimony of Mr. Jakel in their
` preliminary response, which is
` technically a violation of the rules
` in terms of no new testimonial
` evidence. They even filed their
` preliminary response late, it was
` after midnight on the following day.
` We are not going to object to any of
` that, your Honor, all we simply want
` is the chance to respond to their
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` argument regarding real party in
` interest. Our feeling is that first,
` we produced a lot of information to
` them. Mr. Jakel sat for over a
` seven-hour deposition and we served
` interrogatories. So the information
` was all there, the patent owner
` simply cherry-picked some
` information, didn't even provide the
` Board with interrogatory, which would
` contradict arguments that they had
` been made, so we would like the
` opportunity to show all of the
` information to the Board and to
` present our view of real party in
` interest. And this is a very
` important issue to our client. And
` this has come up in other cases, so
` we would like the opportunity to kind
` of lay this to rest particularly
` since the public domain has
` information out there that's just
` simply incorrect. There are some
` press reports that are out there that
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` are wrong and we would just like to
` correct the record and have an
` opportunity to provide a fifteen-page
` response brief and have it due if at
` all possible a week from Friday given
` the holiday, your Honor.
` THE COURT: Patent owner, your
` thoughts on the matter.
` MR. ANGELL: Our starting part,
` your Honor, is that the roles do not
` provide for a preliminary response.
` Unified Patents was aware before they
` filed the case that real party in
` interest, was likely to be challenged
` in this case. They did call us up
` and they did offer some cover
` discovery initially. And the
` procedure was that we were to provide
` them with the discovery in which we
` were interested and they would
` respond to the discovery. I don't
` mean respond, give us everything that
` we ask for, but they would tell us
` what they thought about the discovery
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` that we requested.
` So we provided them with some
` discovery. And they said well, we're
` got going to give you that, but we're
` going to give you this. They very
` carefully controlled the information
` to which we had access. Importantly
` we were offered that if the discovery
` that they had agreed to give us,
` which was not everything that we
` asked for.
` If at that point, we wanted
` more that we could ask and they would
` consider the request. So after Mr.
` Jakel's deposition, we did, we asked
` for more discovery. We asked for
` documents that would show how the
` money traveled within Unified Patents
` from its members and how that money
` would spend. They refused that
` request and that information was
` directly germane to our challenge to
` their real party in interest status.
` We haven't made a big deal
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` about that at this point, but the
` idea that they've been entirely
` forthcoming about discovery is not at
` all correct. They did know that
` their status as real party in
` interest was going to be challenged.
` They had an opportunity to present
` evidence with their petition, they
` chose not to do it. We are not
` saying they were required to do it,
` but they did have the chance to do it
` and they didn't.
` So we think that there is no
` reason that the ordinary schedule
` should get adjusted to accommodate
` their strategic choice not to justify
` their status as real party in
` interest. And that's why we believe
` that the -- they should not be
` granted leave to file a response.
` Although if they do, we would like
` the chance to file a surreply.
` THE COURT: This raises the
` question for the petitioner or we
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` have a question for the petitioner.
` That is, whether the petitioner
` anticipates that it would file
` additional evidence with this reply.
` MR. KIKLIS: Your Honor, we
` would utilize only the evidence that
` we've served on the patent owner,
` which is the interrogatories which
` has not been made of record by
` Mr. Angell and any of the documents
` that we served on the other side
` within the confines of all the
` evidence that we produced, we would
` file our preliminary response.
` THE COURT: Okay.
` MR. KIKLIS: I'm sorry not our
` preliminary response, a reply brief.
` And I would note, your Honor, this
` has happened in other cases.
` THE COURT: What has happened?
` MR. KIKLIS: Reply briefs have
` been authorized on real party in
` interest in other cases.
` THE COURT: I wasn't aware of
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` that. All right. Well, I think
` we've reached another moment where
` I'm going to put you guys on hold and
` talk to the panel about this.
` (Whereupon, an off-the-record
` discussion was held.)
` THE COURT: Okay. We've
` figured out what we're going to do
` with this. This is a complicated
` issue. Accordingly we are going to
` authorize a reply -- petitioner file
` a reply regarding -- limited to the
` real party in interest due by
` December 4th. I believe that's when
` the petitioner asked for.
` MR. KIKLIS: I think it's the
` 5th, your Honor, if I may.
` THE COURT: You're correct, it
` is the 5th. So due Friday, December
` 5th. We're going to go with ten
` pages on the limit. Submission of
` evidence is okay, but you should
` limit it to evidence that was
` available to the patent owner prior
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` to filing their preliminary response.
` For the time being, we are not going
` to authorize the reply to the
` petitioner's response here. So I
` think that covers it. Aside from
` those issues, does the petitioner
` have any other issues that it needs
` to cover at the moment?
` MR. KIKLIS: Your Honor, first
` of all, I think you for the
` authorization to file the reply
` brief. We are very appreciative of
` that. I would like to offer and
` suggest that this is such an
` important issue that the Board may
` consider holding a hearing and we
` would be available the following week
` for a live hearing in Alexandria,
` Virginia. In fact, we would make
` Mr. Jakel the CEO of Unified Patents
` available as a live witness. I can
` direct him, Mr. Angell can cross
` examine him and the Board can ask
` whatever questions of Mr. Jakel they
`
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` would like.
` Like I said, this is a very
` important issue to the company and we
` would like to just simply put this to
` rest and correct the public record
` out there, which is incorrect. The
` only thing that highly confidential
` information could be discussed or
` asked by the Board, we might have to
` have some confidential -- the room
` sealed, for example, or something
` like that to protect the
` confidentiality of the information
` discussed. So the petitioner would
` like to offer that and suggest that
` to the Board.
` THE COURT: Well, briefly, any
` thoughts on that from the patent
` owner?
` MR. ANGELL: Your Honor, we
` would welcome the opportunity to do
` that. We're not available the
` following week, but we could probably
` work it out the week after that, I
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` will have to double check my
` schedule. I hadn't been aware that
` this offer was coming.
` THE COURT: But generally
` speaking --
` MR. ANGELL: Generally
` speaking, we do not object.
` THE COURT: At this juncture,
` in sum, we are not inclined to go
` that avenue yet. We appreciate the
` offer and the cooperation on the
` matter. Well, let's leave it as we
` will take it under advisement and get
` a decision on that matter in paper.
` MR. KIKLIS: Your Honor, just
` to the extent that the Board is
` considering scheduling it. Mr. Jakel
` is out of the country the week of the
` 15th and I am in another trial just
` so the Board knew that in advance.
` THE COURT: Okay. Fair enough.
` MR. ANGELL: Your Honor, if I
` may just address the scheduling
` issue, I may be able to help. May I
`
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` address it?
` THE COURT: Sure. Just very
` briefly. I think generally speaking,
` we're going to take the issue under
` advisement so probably before we get
` too far down the road on it.
` Actually, in fact, I think -- I
` think at this juncture, there is no
` issue to address the scheduling
` issue.
` MR. ANGELL: Okay.
` THE COURT: We'll take the
` matter under advisement besides
` whether we think it is appropriate
` for us to have such a hearing and we
` will iron out any scheduling issues
` if we decide that helps.
` MR. ANGELL: Sure. No problem.
` I did have just one question. This
` is Jason Angell again. I can ask it
` at an appropriate time, your
` preference.
` THE COURT: Sure, go ahead and
` ask the question.
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` MR. ANGELL: The question had
` to do with the surreply request that
` we made. The question is simply, do
` I understand correctly, that you're
` saying at this point, no surreply,
` but we may request a surreply later
` certainly if additional evidence is
` going to be submitted we think that
` would be important, we don't need to
` -- we understand your order at this
` point, your Honor, I just want to
` make sure that, we may ask later if
` we foresee the need or that it would
` be helpful, for the record, for us to
` do so that we may, in fact, request
` to file a surreply.
` THE COURT: I'm glad you asked
` the question, clarification on that
` issue is appropriate. The answer is,
` I don't think we're going to answer
` that definitively on the phone