RICHARDSON, 111
`Reexam of Pat. No. 5,490,216
`Control No. 90/010,831
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`Exhibit A
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`Joint Appendix Excerpts
`A2210-A2270
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`A2425—A243 1
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`A2690-A2745
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`A3297-A3298
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`Atty. Dkt. No. 2914.001REXO
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`1,
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`Patent Owner Ex. 2005 Page 1
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`Patent Owner Ex. 2005 Page 1
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`
`Reexam of Pat. No. 5,490,216
`Control No. 90/010,831
`
`Exhibit A
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`Joint Appendix Excerpts
`A2210-A2270
`
`A2425—A243 1
`
`A2690-A2745
`
`A3297-A3298
`
`Atty. Dkt. No. 2914.001REXO
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`1,
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`Patent Owner Ex. 2005 Page 1
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`Patent Owner Ex. 2005 Page 1
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`to provide any opinions on infringement; is that true?
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`A. That's correct.
`
`Q. Sojust at a very base level, do you have an
`
`understanding of the problem that the '216 patent
`
`solves?
`
`A. My understanding is that it solves the problem of
`
`casual copying.
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`Q. What is "casual copying," Mr. Gemini?
`
`A. The way I see casual coping is if l bought one
`
`license of Office and I installed it on all of my
`
`employees machines that same copy, that is my
`
`understanding 0 casual copying.
`
`Q. Would that be an example of one form?
`
`A. Yes.
`
`Q. Looking at the time of the hypothetical
`
`negotiation in this case, which I believe you said is
`
`March of 2001, what, if any, concern did Microsoft have
`
`with casual copying?
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`A. Microsoft from what I've seen had a huge concern
`
`with casual copying. Microsoft had indicated in some
`
`documents that anti-piracy was a $7 billion a year
`
`problem and casual copying was half of that problem, or -
`
`$3.5 billion a year, according to Microsoft.
`
`Q. How did Microsoft address this problem, if at all?
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`A. Well, they implemented Microsoft Product
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`Unilocl Microsoft
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`Activation, a system of Product Activation.
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`Q. Now in your role as an expert, Mr. Gemini, what is
`
`your understanding, if any, of how Product Activation
`
`relates to this case?
`
`A. My understanding is that's what's being accused, a
`
`Microsoft Product Activation system as is used by
`
`Microsoft is accused of infringing the '216 patent.
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`Q. As a damages expert, what, if anything, are you
`
`required to assume about Product Activation?
`
`A. As we said, that it infringed based on what's
`
`being accused.
`
`Q. Now, did the Product Activation system, did it
`
`work?
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`A. From Microsoft information, it did, yes.
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`Q. Okay. So again, at the time of the hypothetical
`
`negotiation, in what products was Microsoft planning to
`
`use Product Activation, if any?
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`A. Microsoft was planning to use it in what they
`
`would call their crown jewel products, which are Office
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`and Windows.
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`Q. Now, you say crown jewels. Please tell us how big
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`these products were to Microsoft in terms of revenues,
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`gross revenues at the time of the hypothetical
`
`negotiation.
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`A. The revenues for those products were in the
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`Uniloc / Microsoft
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`billions of dollars a year.
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`Q. What's the basis for you to say that they're in
`
`the billions?
`
`A.
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`I've seen information from their annual reports
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`and documents produced in the case.
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`Q. And would all of this information about Product
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`Activation success and Microsoft's revenues be known to
`
`Uniloc at the time of this hypothetical negotiation?
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`A. Yes.
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`Q. And why is that?
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`A. Under the idea, again, of perfect knowledge.
`
`Q. And what, if any. effect does this have on the
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`reasonable royalty that's being negotiated at the time
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`between Uniloc and Microsoft?
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`A. Well, based on this information, in my opinion, it
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`would be a benefit to Uniloc.
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`Q. Why is that?
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`A. Well, you could see that Microsoft had a major
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`financial problem with casual copying. And Uniloc had
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`a patent that would assist to reduce casual copying.
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`Q. Mr. Gemini, in the group of factors that we looked
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`at, we're doing Group IV, so let's round this out and
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`talk about Factor 14.
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`I believe you touched on it.
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`Would you please briefly explain what that
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`means, Factor 14.
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`Uniloc I Microsoft
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`A. Generally, that's the opinions of qualified
`
`experts, such as myself, or any other qualified experts
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`in the case.
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`Q. Let's move on now, Mr. Gemini, to Group I. And
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`would you please tell us just a bit about this group.
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`A. This group deals with licenses and licensing
`
`policies of the parties, generally. Parties meaning
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`Uniloc and Microsoft.
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`Q. What, if any, evidence have you seen that relates
`
`to these factors?
`
`A.
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`I've seen license agreements produced by both
`
`parties.
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`Q. So Uniloc and Microsoft have produced licenses in
`
`this case?
`
`A. Yes.
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`Q. Let's take a look at Uniloc's first.
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`MR. SCHERKENBACH: There's no objection to any
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`of these, your Honor.
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`THE COURT: Thank you.
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`Q. Mr. Gemini, I'm going to hand you what's been
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`marked as PX 625, 626 and 627.
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`Would you take just a few minutes to look at
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`them. Just briefly review those. Let me know when
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`you're done.
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`A. Okay.
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`Uniloc I Microsoft
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`Q. Do you recognize what I've handed to you as 625,
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`Tn'a| Transcript - Day 5 3/27/2009 9:00:00 AM
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`626 and 627?
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`A. Yes.
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`Q. Would you please tell the jury what they are.
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`A. These are licenses of Uniloc entered into for
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`anti-piracy technology.
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`Q. And have you reviewed and considered these in
`
`forming your opinion in this case?
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`A. Yes.
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`Q. Would you please tell me what, if any, technology
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`or patents did these license agreements relate to?
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`A. They relate to anti-piracy technology, and one of
`
`them includes the '216 patent at issue in this case.
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`Q. Which one is that, Mr. Gemini?
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`A. That would be Exhibit 625, the license agreement
`
`between Uniloc Corporation and XtreamLok.
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`Q. So the XtreamLok license is a license to the '216
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`patent?
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`A. Yes.
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`Q. And are the other two agreements licenses to
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`Uniloc's technology?
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`A. Yes.
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`Q. And based on your review of these agreements,
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`Mr. Gemini, please tell the jury what, if any, payment
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`terms they contain.
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`Uniloc / Microsoft
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`A. They contain payment terms under a running
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`royalty. And a running royalty, basically, means that
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`as the user or the person licensing the technology
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`sells something, Uniloc gets paid a royalty based on
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`that sale, each and every sale they get a royalty,
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`whether it be a percentage or a per unit dollar amount
`
`per sale, that's how Uniloc entered into these
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`agreements.
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`Q. Mr. Gemini, if you could look at PX-626, which I
`
`believe is the license to Curious Software. Do you see
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`that?
`
`A. Yes.
`
`Q. Would you please tell us what specific payment
`
`terms it contains, if any.
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`A. Well, according to Exhibit B of the license
`
`agreement, Uniloc agreed to a royalty with Curious of
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`3% on products with the list price in excess of $900
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`and 5% on products with a list price of less than $900.
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`0. So for products that are priced less than $900,
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`this license gives Uniloc a 5% running royalty?
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`A. Yes. And, additionally, it says:
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`In no event
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`should it be less than one dollar, just to be clear.
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`Q. So Mr. Gemini, all three of these licenses of
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`Uniloc were all running royalty licenses?
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`A. Yes.
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`Uniloc I Microsoft
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`Q. And they all related to anti-piracy technology or
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`the '216 patent?
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`A. Yes.
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`Q. What, if anything, does that tell us or tell you
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`about Uniloc's licensing practices?
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`A. That Uniloc enters into agreements based on a
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`running royalty for their anti-piracy technology.
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`Q. Mr. Gemini, I'm going to hand you PX-458. 459, 462
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`and 463.
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`MR. SCHERKENBACH: There's no objection to any
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`of these, your Honor.
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`THE COURT: Thank you..
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`(Plaintiffs Exhibits 458, 459, 462 and 463
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`admitted in full.)
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`Q. Have you had a chance to look through them,
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`Mr. Gemini?
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`A. Yes.
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`Q. And do you recognize them?
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`A. Yes.
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`Q. Have you reviewed them in this case? '
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`A. Yes, I have.
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`Q. Could you please tell the jury what they are.
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`A. These are license agreements entered into by
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`Microsoft where they're licensing somebody else's
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`technology related, again, to anti-piracy technology.
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`Unilocl Microsoft
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`Q. So these four Microsoft license agreements relate
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`to anti-piracy technology?
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`A. Yes.
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`Q. Could you tell the jury what, if any, payment
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`terms these Microsoft licenses contain.
`
`A. These, again, are licenses based on a running
`
`royalty rate.
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`Q. So based on this, Mr. Gemini, what does it tell us
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`about Microsoft's licensing practices when it comes to
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`anti-piracy technology?
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`A. Again, based on this information, Microsoft enters
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`into agreements based upon a running royalty for
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`anti-piracy technology.
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`Q. Now, based on Microsoft's and UniIoc's licenses,
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`the licenses that you've just discussed with the jury
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`or shown to the jury, in your view, what type of
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`license would Microsoft and Uniloc entered into at the
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`time of the hypothetical negotiation?
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`A. A running royalty based on, as I showed you on the
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`slide of summarizing my calculation based on each
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`license issued.
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`Q. Now, the licenses that we just looked at, both
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`Uniloc and Microsoft, were they exclusive or
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`non-exclusive?
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`A. They were non-exclusive.
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`Unilocl Microsoft
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`Q.
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`I believe you mentioned that just briefly when you
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`were going through the factors, but tell the jury a bit
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`about what the difference is between exclusive and
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`non-exclusive, if you will.
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`A. An exclusive license would mean you're only going
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`to license one party to use your patent. So you're not
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`going to license it to anybody else.
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`Non—exclusive means you're open to license it to
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`whoever you want. And, normally, an exclusive license
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`because you're focusing just on one party would call
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`for a higher royalty because you're not able to license
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`other people in the industry.
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`So I've assumed in this case that a license
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`would be non-exclusive because that's the policy at
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`least of what I've seen of these licenses that we just
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`looked, they're non-exclusive, which tends to favor
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`Microsoft because it would be a higher royalty if it
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`were exclusive, nonnally.
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`Q. So in considering, I belive, Factor 3, exclusive
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`or non-exclusive, your opinion is that factor favors
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`Microsoft?
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`A. Yes.
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`Q. And, Mr. Gemini, do Uniloc and Microsoft compete?
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`A. No, they do not.
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`Q. Can you explain to the jury a bit about what that
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`Unilocl Microsoft
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`"
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`means and its relation to the Georgia-Pacific factors.
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`A. Well, sometimes you have situations where you have
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`a patent owner who actually makes a product and sells
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`it in competition with the accused infringer.
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`So when they're making a product that is in
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`direct competition with the accused infringer's
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`product, the patent owner might be less likely to want
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`to license because they want to keep the patent to
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`themselves so they can make their own product and make
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`their own profit.
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`This not the situation here. Uniloc does not
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`compete in the same area of business as Microsoft. So
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`in my opinion, it's a non-competitive situation, which,
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`again, would tend to favor Microsoft in a hypothetical
`
`negotiation.
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`Q. Mr. Gemini, when did the '216 patent issue, if you
`
`know?
`
`A.
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`I believe November of 1996.
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`Q. And do you know when it expires?
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`A.
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`In 2013.
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`Q. How does that evidence or those facts relate to
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`the Georgia-Pacific factors, if at all?
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`A. Well, Factor 7 deals with the life of the patent.
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`And what you want to do is consider what life would be
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`remaining at the time of the hypothetical negotiation.
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`Uniloc / Microsoft
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`And since the negotiation occurs in 2001, the patent
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`would have had a good dozen years or so left on its
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`life.
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`Now, the technology industry is somewhat fluid.
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`Technology changes pretty quickly, and I don't think
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`the duration of the patent is very significant in this
`
`situation. So I didn't give it any weight, meaning I
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`didn't say it favored Microsoft and I didn't say it
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`favored Uniloc, because ljust don't believe, in my
`
`opinion, it has any effect on the negotiation.
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`Q. Mr. Gemini, let's now turn to Group II. Please
`
`tell us about Factors 9 and 10, briefly.
`
`A. Factors 9 and 10 generally deal with the
`
`advantages of the patent and how it's used.
`
`Q. What, if any, evidence have you seen that relates
`
`to Factors 9 or 10?
`
`A.
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`I've seen evidence indicating that it's a
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`break-through technology, this technology of the '216
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`patent.
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`Q. Mr. Gemini, l'm handing you what's been marked as
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`PX-251.
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`MR. SCHERKENBACH: No objection.
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`THE COURT: Thank you.
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`(Plaintiff's Exhibit 251 admitted in full.)
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`Q. Mr. Gemini, are you familiar with this document?
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`Uniloc I Microsoft
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`_
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`A. Yes.
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`Q. And have you seen it and reviewed it in
`
`consideration in forming your opinion in this case?
`
`A. Yes.
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`Q. Please tell us what it is.
`
`A. This is an internal-use document of Microsoft.
`
`It's entitled "Product Activation - Frequently Asked
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`Questions - Internal Use Only."
`
`Q.. Do you see on the first page it says: What is
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`Product Activation?
`
`A. Yes.
`
`Q. What, if anything, does it say about Product
`
`Activation right under that heading?
`
`A.
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`It says: Product Activation is new anti-piracy
`
`technology that has been tested in seven countries and
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`Office 2000's Office Registration Wizard.
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`Q. Mr. Gemini, what else does this document indicate,
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`if anything, about Factors 9 and 10?
`
`A.
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`If you turn to page three, the first question
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`there, it states: Hasn't this kind of anti-piracy
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`technology been tried before and failed.
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`Then it states: Activation technologies that
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`have been used in the past have not beeneasy for
`
`customers and were generally viewed as unacceptable by
`
`customers in the industry.
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`Unilocl Microsoft
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`And it says a couple lines later: Product
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`Activation is a break-through technology that makes
`
`activating a natural part of using the software and
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`avoids the pitfalls of anti-piracy methods used in the
`
`early days of the PC industry.
`
`So this indicates to me that the accused
`
`Microsoft Product Activation is a break-through
`
`technology that is an advantage over older
`
`technologies.
`
`Q. What, if any, effect would this have on the
`
`hypothetical negotiation and the royalty rate that's
`
`being negotiated between Microsoft and Uniloc?
`
`A.
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`In my opinion, this factor would favor Uniloc.
`
`Q. Mr. Gemini, is that because you have to assume
`
`that the patent infringes?
`
`A. Yes. You assume that, as I said at the beginning,
`
`I'm assuming there's infringement and that the Product
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`Activation is the infringing act.
`
`Q. Okay. Mr. Gemini, let's turn to Group III, which
`
`is, I believe, our last group of the Georgia-Pacific
`
`factors.
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`Would you tell us briefly about this grouping of
`
`the factors.
`
`A. This grouping generally deals with the
`
`profitability of the products made using the patent or
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`Unilocl Microsoft
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`implementing the patent and the extent of use by
`
`Microsoft of those products and the patents.
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`Q. Let's touch on Factor 6 just briefly. What, if
`
`any, evidence have you seen in this case that relates
`
`to Factor 6?
`
`A.
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`I. haven't seen anything to indicate that by using
`
`Product Activation Microsoft is able to sell, like I
`
`said earlier, stuff like X—Box or unrelated products to
`
`Office or Windows. So at this point, I don't consider
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`that factor relevant.
`
`Q. Let's look at Factor 13, cost. Please tell us
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`about cost.
`
`A. Microsoft has indicated that they spend
`
`approximately $65 million a year to facilitate Product
`
`Activation; 55 million, roughly, is based on -- or is
`
`the cost to facilitate a phone facility for people who
`
`call in to activate, and then $10 million is related to
`
`the Internet portion of their activations.
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`So I've considered that, that Microsoft spends
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`money to -- spends a significant amount of money to
`
`keep this Microsoft Product Activation working.
`
`Q. So on a yearly basis, Microsoft spends
`
`approximately $65 million just to keep Product
`
`Activation in service?
`
`A. Yes.
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`Uniloc / Microsoft
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`Q. What, if anything, does that telling you about the
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`value or benefit of Product Activation to Microsoft?
`
`A.
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`It tells me that it's important to them to spend
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`that much money to keep maintaining that type of
`
`service.
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`Q. We're going to turn now to Factors 8 and 11. Let
`
`I ask you, Mr. Gemini, what, if any, evidence have you
`
`seen that relates to these factors?
`
`A. Well, l've seen a number of documents indicating
`
`that Microsoft - as we've said earlier, Microsoft had
`
`a problem with casual copying and that to solve this
`
`problem they wanted to implement Product Activation.
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`And as a result of implementing Product Activation,
`
`they've seen an increase in sales.
`
`Q. Let's take a look at some of the documents you've
`
`seen.
`
`Mr. Gemini, I'm going to hand you a group of
`
`documents and ask you to review them briefly. PX-374,
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`238, 71, 375,415, 631, and 148.
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`MR. SCHERKENBACH: There's no objection.
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`THE COURT: Thank you.
`
`(Plaintiffs Exhibits 374, 238, 71, 375,415,
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`631 and 148 were admitted in full.)
`
`Q. Mr. Gemini, have you had a chance to flip through
`
`the documents that I've handed you?
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`Uniloc I Microsoft
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`A. Yes.
`
`Q. Do you recognize them?
`
`A. Yes.
`
`Q. Have you reviewed and considered them in forming
`
`your opinion in this case?
`
`A. Yes, I have.
`
`Q. Please tell us what they are.
`
`A. They're, basically, internal Microsoft documents
`
`that talk about Microsoft Product Activation and the
`
`problem they were having with Product Activation and
`
`certain other situations related to Product Activation.
`
`Q. Okay. Mr. Gemini, would you please find PX-238,
`
`which is probably the second document in that package.
`
`A. Okay.
`
`Q. So you reviewed this document, Mr. Gemini?
`
`A.. Yes.
`
`Q. Please tell us what it is.
`
`A.
`
`It's an internal Microsoft document entitled
`
`"Office XP Product Activation Review" dated February
`
`21st, 2001.
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`And this document would have been right at the
`
`time -- it's timely because it was right at the time of
`
`the hypothetical. You remember I talked about March
`
`2001 being the first infringement that would have been
`
`the time of the hypothetical, so this is right around
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`Uniloc I Microsoft
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`that timeframe.
`
`Q. Mr. Gemini, would you please the tell the jury
`
`what, if anything, this document indicates about
`
`Microsoft's concerns with casual copying.
`
`A. On the, I think, the third page in it talks about
`
`the piracy situation. You recall what I stated earlier
`
`about the 7 billion and 3-and-a-half billion.
`
`It
`
`states" MS pirate market share is huge. Over $7
`
`billion a year in apps. Apps are Office and Windows.
`
`And 50% of losses are due to casual copying.
`
`It also says: Microsoft Product Activation
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`reduces casual copying by limiting installs on diverse
`
`HW, or hardware. Product Activation will force
`
`counterfeiters to use non-retail master media.
`
`So that's kind of the information I considered.
`
`Q. Have you also reviewed the deposition testimony of
`
`Mr. Nieman?
`
`A. Yes.
`
`Q. What, if anything, did he say about the problem
`
`with casual copying?
`
`A. He agreed with the statement about the
`
`quantification of those numbers.
`
`Q. And Mr. Gemini, could you find PX-71 in that
`
`group.
`
`A. Yes.
`
`Uniloc / Microsoft
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`Page 43
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`A 2227Patent Owner Ex. 2005 Page 18
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`Patent Owner Ex. 2005 Page 18
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`
`
`Q. Have you reviewed and considered this document in
`
`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
`
`forming your opinions in this case?
`
`A. Yes.
`
`Q. Please tell the jury what it is.
`
`A.
`
`It's a Microsoft document, and it indicates
`
`that — you can see in the heading there, Windows
`
`Product Activation. the key to increasing sales and
`
`reducing software piracy. Then it goes on to say, you
`
`can see the highlighted -- do you want me to read that
`
`in?
`
`Q. Sure. The first paragraph.
`
`A.
`
`(Reading:) Some of the toughest competition you
`
`will face in your business comes from software pirates.
`
`Thirty-seven percent of all software world-wide was
`
`pirated in 2000. Software piracy means lower sales and
`
`less need for customers to have new systems configured.
`
`But now with Microsoft Windows XP, there's a way to
`
`fight back.
`
`And then it talks in the next paragraph about
`
`Windows Product Activation's new anti-piracy technology
`
`that has been integrated into each unit of Microsoft
`
`Windows.
`
`So it kind of talks about the problem with
`
`piracy or casual copying and how Product Activation
`
`will solve that.
`
`Uniloc I Microsoft
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`Page 44
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`A 2228
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`Patent Owner Ex. 2005 Page 19
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`Patent Owner Ex. 2005 Page 19
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`Q. Mr. Gemini, do the other documents in that bundle
`
`also address the issue of casual copying?
`
`A. Yes.
`
`Q. To save us all some time, we won't go through them
`
`all. We have other documents to move on to.
`
`Now, in the document we just discussed, which
`
`was PX-71, I believe it said that the key to increasing
`
`sales and reducing software piracy, have you seen any
`
`other documents indicating that Product Activation
`
`increases sales or reduces piracy?
`
`A. Yes.
`
`Q. Mr. Gemini, I'm going to hand you another package
`
`of documents, PX-391, 72, 494, 423, 238, 71 is also in
`
`there, we already looked at that, 238 and 434.
`
`MR. SCHERKENBACH: There's no objection.
`
`THE COURT: Thank you.
`
`(Plaintiffs Exhibits 391, 72, 494, 423, 238 and
`
`434 were admitted in full.)
`
`Q. Mr. Gemini, after you've had a moment to look
`
`through those, please let me know.
`
`A. Okay.
`
`Q. Mr. Gemini. are those all Microsoft documents?
`
`A. Yes.
`
`Q. And you recognize them?
`
`A. Yes.
`
`Uniloc / Microsoft
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`Page 45
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`A 2229
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`Patent Owner Ex. 2005 Page 20
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`Patent Owner Ex. 2005 Page 20
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`
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
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`1
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`2
`
`3
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`4
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`5
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`6
`
`7
`
`8
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`9
`
`Q. And you've reviewed and considered them in forming
`
`your opinion in this case?
`
`A. Yes, I have.
`
`Q. Please tell us, generally, what those documents
`
`address.
`
`A. They address Microsoft discussions of a casual
`
`copying problem and that Microsoft Product Activation
`
`is a solution to that problem.
`
`Q. Mr. Gemini, let's take a look at PX-391. Would
`
`10
`
`you please tell us what this document is.
`
`11
`
`A. This is entitled "Microsoft Product Activation
`
`12
`
`Facts Sheet" and it's dated January of 2001. Again,
`
`13
`
`right at the at the time of the hypothetical
`
`14
`
`negotiation.
`
`15
`
`Q. What, if anything, does this document indicate
`
`16
`
`about Product Activation and casual copying?
`
`17
`
`A.
`
`It says in the first paragraph, last sentence:
`
`18 Microsoft Product Activation is designed to reduce
`
`19
`
`casual copying.
`
`20
`
`Q. Would you please take a look at PX-494. Have you
`
`21
`
`seen this document?
`
`22
`
`A. Yes.
`
`23
`
`Q. Please tell us what it is.
`
`24
`
`A.
`
`It's an activation update dated July 7, 2003.
`
`25
`
`Q. What, if anything, does this document indicate
`
`Unilocl Microsoft
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`A 2230
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`Page 46
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`Patent Owner Ex. 2005 Page 21
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`Patent Owner Ex. 2005 Page 21
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`
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
`
`1
`
`2
`
`3
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`4
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`5
`
`6
`
`7
`
`8
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`9
`
`about Product Activation and casual copying?
`
`A. This goes to the extent of use and the results.
`
`And if you look at page six, it asks the question:
`
`Does our current activation approach, and if you look
`
`at the fourth column there, reduce casual copying.. And
`
`you can see for retail and emerging market system
`
`builder and OEM, it's all yes.
`
`Q. Mr. Gemini, would you please now take a look at
`
`PX-423. Please tell us what this document is.
`
`10
`
`A. This is another Microsoft document entitled
`
`11
`
`"Windows Product Activation Overview."
`
`12
`
`Q. What, if anything, does it indicate about Product
`
`13
`
`Activation and casual copying?
`
`14
`
`A.
`
`It says in the first paragraph: Windows Product
`
`15
`
`Activation reduces the amount of illegal software
`
`16
`
`copying of Windows, which hurts consumers,
`
`17 manufacturers and software publishers alike.
`
`18
`
`Incomplete software and documentation packages and lack
`
`19
`
`of customer support hurts consumers and the lost
`
`20
`
`revenue is damaging to manufacturers and publishers.
`
`21
`
`Again, it tells me that Windows -- or Microsoft
`
`22
`
`is trying to use Product Activation to increase revenue
`
`23
`
`and reduce sual copying.
`
`24
`
`Q. Mr. Gemini, do you have PX-238?
`
`25
`
`A. Yes.
`
`Uniloc I Microsoft
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`A 2231
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`Page 47
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`Patent Owner Ex. 2005 Page 22
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`Patent Owner Ex. 2005 Page 22
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`
`
`Trial Transcript- Day 5 3/27/2009 9:00:00 AM
`
`1
`
`2
`
`3
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`4
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`5
`
`6
`
`7
`
`8
`
`9
`
`Q. Okay.
`
`I believe we took a look at this already.
`
`A. Yes.
`
`Q. Could you please tell us — I believe the page is
`
`116 — and what, if anything, it indicates there about
`
`Product Activation and casual copying.
`
`A. This page talks about Product Activation
`
`effectiveness. And if you see in the second bullet
`
`point, it talks about quantified evidence of
`
`effectiveness. And it says: SORG revenue growth 35%
`
`10
`
`to 48%. Now, SORG is small organizations, which is
`
`11
`
`part of what Microsoft is targeting with Microsoft
`
`12
`
`Product Activation. So this is indicating, at least at
`
`13
`
`that point, they were experiencing revenue growth of
`
`14
`
`35% to 48% as a result of Product Activation.
`
`15
`
`Q. Mr. Gemini, have you seen the deposition testimony
`
`16
`
`of Mr. Nieman in relation to this document?
`
`17
`
`A. Yes.
`
`18
`
`Q. What, if anything, did Mr. Nieman have to say
`
`19
`
`about the word "quantified" as shown on the ELMO in
`
`20
`
`this document?
`
`21
`
`A. He indicated that it meant "measured."
`
`22
`
`Q. He meant measured?
`
`23
`
`A. Yes.
`
`24
`
`Q. Mr. Gemini, if you could look at PX-72.
`
`25
`
`A. Yes.
`
`Uniloc I Microsoft
`
`A 2232
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`Patent Owner Ex. 2005 Page 23
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`Page 48
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`Patent Owner Ex. 2005 Page 23
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`
`
`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`1 1
`
`12
`
`Q. Would you please tell us what this document is.
`
`A.
`
`It's a Microsoft document.
`
`It's titled "Piracy
`
`Basics, Microsoft Product Activation."
`
`Q.. What, if anything, does this document indicate
`
`about casual copying and Product Activation?
`
`A. Do you want me to read all that? I can.
`
`THE COURT: No.
`
`I don't think that's necessary.
`
`A. Okay.
`
`I'll just summarize.
`
`It says, essentially,
`
`Microsoft is committed to protection of intellectual
`
`property rights and to reduction of software piracy
`
`world-wide.
`
`It goes on to say that the goal of Product
`
`13
`
`Activation is to reduce a form of piracy known as
`
`14
`
`casual copying.
`
`15
`
`So again, this is an indication of what the goal
`
`16
`
`and what Microsoft was using Product Activation to do.
`
`17
`
`Q. Now, Mr. Gemini, we've seen some documents
`
`18
`
`indicating Microsoft's concern with product casual
`
`19
`
`copying, is that -- withdrawn.
`
`20
`
`We've seen some documents indicating Microsoft's
`
`21
`
`concerns with casual copying; is that true?
`
`22
`
`A. Yes.
`
`23
`
`Q. And we've seen some documents indicating how
`
`24 Microsoft was to go about to solve the problem; is that
`
`25
`
`true?
`
`Unilocl Microsoft
`
`A 2233
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`Patent Owner Ex. 2005 Page 24
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`Page 49
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`Patent Owner Ex. 2005 Page 24
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
`
`A. Yes.
`
`Q. Have you also seen documents that speak to what,
`
`if any, success Microsoft was having with Product
`
`Activation in solving this problem?
`
`A. Yes, I have.
`
`Q. Mr. Gemini, I'm going to hand you a bundle of
`
`documents, and we're not going to go through them
`
`all — I think we'd be here for a long time -- PX-424,
`
`433, 435, 440, 436, 238, 445, 446,447, 248, 629, 240,
`
`261, 434, 441, and 427.
`
`MR. SCHERKENBACH: No objection to any of those.
`
`THE COURT: Thank you.
`
`(Plaintiff's Exhibits 424, 433, 435, 440, 436.
`
`238,445,446, 447, 248, 629, 240,261, 434,441, and
`
`427 were admitted in full.)
`
`Q. Mr. Gemini, I think I forgot to give you a couple.
`
`A. Okay.
`
`Q. Mr. Gemini, have you had a chance to thumb through
`
`those documents? If you do, let me know.
`
`A. Yes.
`
`Q. Do you recognize those documents?
`
`A. Yes.
`
`I considered all of these documents.
`
`Q. Okay. They're Microsoft documents?
`
`A. Yes.
`
`Q. And you've reviewed them and made them part of the
`
`Uniloc I Microsoft
`
`A 2234
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`Page 50
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`Patent Owner Ex. 2005 Page 25
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`Patent Owner Ex. 2005 Page 25
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`
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
`
`opinion you're giving in this case?
`
`A. Yes.
`
`Q. Please tell us, generally, what these documents
`
`show.
`
`A. These documents generally discuss how Microsoft's
`
`Product Activation has been successful at increasing
`
`revenues or sales.
`
`Q. Let's just take a look at a few of them. And the
`
`first document we'll look at is PX-424.
`
`A. Okay.
`
`Q. Can you please tell the jury what this document
`
`is.
`
`A. This is a Microsoft document entitled,
`
`"Anti-piracy and Licensing Technology Update,“ dated
`
`October 12th, 2000.
`
`Q. What, if any, significance does the date have in
`
`this document?
`
`A. Again, this was prior or right around the time of
`
`the hypothetical. You have to understand, also, that
`
`Microsoft was testing Product Activation in other
`
`countries prior to the infringement date that I've used
`
`of March 2001. That's why you'll see a document like
`
`this, at least my understanding is why you'll see a
`
`document like this.
`
`It's talking about Product
`
`Activation prior to the date of first infringement.
`
`Uniloc / Microsoft
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`Page 51
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`Patent Owner Ex. 2005 Page 26
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`Patent Owner Ex. 2005 Page 26
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`
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
`
`Q. Okay. Would you please tell the jury what, if
`
`anything, this document says about the benefit of
`
`Product Activation.
`
`A. This talks about on page 21 -- it's labeled "OAW
`
`Experience to Date." And I understand that OAW is
`
`Office Activation Wizard, which I also understand is a
`
`pre-name of Product Activation. And it talks about
`
`highlights in the middle of the page there. And the
`
`second bullet says: Revenue increases in all subs in
`
`FY '00, fiscal year '00, I assume, means for that
`
`fiscal year in China Office 140% revenue growth. Okay?
`
`It also says: All pilot countries SORG revenue growth
`
`73% due to OAW.
`
`So again, it shows me Microsoft was experiencing
`
`increased sales as a result of Product Activation in
`
`those countries.
`
`Q. This would have been just before the time of the
`
`hypothetical negotiation?
`
`A. Yes.
`
`Q. Mr. Gemini, if you'd please take a look at --
`
`actually, let's look at that document one more time.
`
`Please tell the jury what "FPP" and "open" mean?
`
`A. FPP is full package product, which is -- my
`
`understanding is what you go into the store and buy.
`
`Q. Okay. Now, let's take a look at PX-433. And
`
`Uniloc I Microsoft
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`Page 52
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`A 2236
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`Patent Owner Ex. 2005 Page 27
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`Patent Owner Ex. 2005 Page 27
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
`
`you've seen this document before?
`
`A. Yes.
`
`Q.
`
`It's a Microsoft internal e-mail?
`
`A. Yes.
`
`Q. And it's dated around the same time as that
`
`document we just saw?
`
`A. Yes.
`
`Q. Please tell us what, if anything, it says about ‘
`
`the benefit of Product Activation.
`
`A. Well, it says in the first paragraph: Windows
`
`Product Activation is an anti-piracy measure intended I
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`to recapture Windows revenues lost to casual copying,
`
`13
`
`especially in the retail and system builder channels.
`
`14
`
`So again, showing me that Windows was intending
`
`15
`
`to capture additional revenues through Product
`
`16
`
`Activation.
`
`17
`
`Q. Mr. Gemini, the next document we'll look at is
`
`18
`
`19
`
`PX-435, if you could take that, please. You've seen
`
`this document?
`
`20
`
`A. Yes.
`
`21
`
`Q. And you've considered it in forming your opinion?
`
`22
`
`A. Yes.
`
`23
`
`Q. Let's -- if you turn to page -- it ends with 770
`
`24
`
`at the bottom and continues to the next page. Tell the
`
`25
`
`jury what, if anything, this document tells you about
`
`Uniloc I Microsoft
`
`A 2237
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`Page 53
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`Patent Owner Ex. 2005 Page 28
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`Patent Owner Ex. 2005 Page 28
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`Trial Transcript - Day 5 3/27/2009 9:00:00 AM
`
`the benefit of Product Activatio
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