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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`SIMPLEAIR, INC. * Civil Docket No.
` * 2:11-CV-416
`VS. * Marshall, Texas
` *
` * January 15, 2014
` *
`MICROSOFT CORPROATION, ET AL * 8:30 A.M.
`
`TRANSCRIPT OF JURY TRIAL
`BEFORE THE HONORABLE JUDGE RODNEY GILSTRAP
`UNITED STATES DISTRICT JUDGE
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`APPEARANCES:
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`FOR THE PLAINTIFFS:
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`FOR THE DEFENDANTS:
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`MR. GREGORY DOVEL
`MR. JEFFREY EICHMANN
`Dovel & Luner
`201 Santa Monica Blvd.
`Suite 600
`Santa Monica, CA 90401
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`MR. CALVIN CAPSHAW
`Capshaw DeRieux
`114 East Commerce Avenue
`Gladewater, TX 75647
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`MR. MITCHELL STOCKWELL
`MR. RUSSELL KORN
`Kilpatrick Townsend & Stockton
`1100 Peachtree Street, Suite 2800
`Atlanta, GA 30309
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`APPEARANCES CONTINUED ON NEXT PAGE:
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`COURT REPORTERS:
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`MS. SHELLY HOLMES, CSR
`MS. SUSAN SIMMONS, CSR
`Official Court Reporters
` 100 East Houston, Suite 125
` Marshall, TX 75670
`903/935-3868
`
`(Proceedings recorded by mechanical stenography,
`transcript produced on CAT system.)
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`

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`APPEARANCES CONTINUED:
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`FOR THE DEFENDANTS:
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`MS. DANIELLE WILLIAMS
`Kilpatrick Townsend & Stockton
`1001 West Fourth Street
`Winston-Salem, NC 27101
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`MS. JENNIFER PARKER AINSWORTH
`Wilson Robertson & Cornelius
`909 ESE Loop 323, Suite 400
`Tyler, TX 75701
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`***************************************
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` P R O C E E D I N G S
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`(Courtroom unsealed.)
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`COURT SECURITY OFFICER: All rise.
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`THE COURT: Be seated.
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`All right. Is the Plaintiff prepared to
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`read into the record from the podium the exhibits used
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`from the list of pre-admitted exhibits from yesterday's
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`portion of the trial?
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`MR. EICHMANN: Yes, Your Honor.
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`THE COURT: Proceed.
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`MR. EICHMANN: Plaintiff's Exhibit 7, 37,
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`38, 49, 54, 83, 139 -- excuse me, pause, 139 -- 139,
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`146, 174, 181, 244, 258, 266, 267, 268, 269, 270, 271,
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`272, 273, 275, 284, 285, 286, 287, 295, 304, 305, 308 --
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`and it's unclear whether we said it wrong yesterday.
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`It's in the transcript as 408. We might have said it
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`wrong, or it might just got -- which is probably what
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`happened, but 308 was used yesterday, not 408. 514,
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`527.
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`And then from Defendants' exhibit list,
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`Defendants' 204, 362, 367, 458, 459.
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`And then, I'm sorry, one more from
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`Plaintiff's list, Plaintiff's No. 99.
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`THE COURT: All right. Is there
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`objection to that rendition by the Defendant?
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`objection.
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`MS. AINSWORTH: Yes, Your Honor.
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`THE COURT: All right. Let me hear your
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`MS. AINSWORTH: Your Honor, Plaintiff's
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`Exhibit 37 and 38 were not pre-admitted. They were
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`Plaintiff's expert reports of Dr. Mills -- Mr. Mills and
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`Dr. Srinivasan. They were not pre-admitted by the
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`Court, and those are the two objections that Google
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`would have to the Plaintiff's exhibits that were read.
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`Mr. Eichmann also mentioned Defendants'
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`Exhibit 458 and 459 which were also excerpts from the
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`Knox expert report and the Srinivasan expert reports.
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`They were on Defendants' exhibit list to be used for
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`impeachment. They were -- but they would be hearsay to
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`be offered into evidence by Plaintiff.
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`THE COURT: Well, the question is were
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`they pre-admitted by the Court?
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`MS. AINSWORTH: The excerpts --
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`THE COURT: For general purposes?
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`MS. AINSWORTH: Defendants' exhibit list,
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`458 and 459, were pre-admitted by the Court. But the
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`full Plaintiff's expert reports, 37 and 38 on the
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`Plaintiff's exhibit list were not pre-admitted by the
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`Court.
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`MR. STOCKWELL: May I be heard further,
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`Your Honor?
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`THE COURT: All right.
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`MR. STOCKWELL: Just on the Defendants'
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`use of those exhibits -- of the Defendants' exhibits
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`that were pre-admitted, I used those in impeaching Dr.
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`Knox, and then Ms. Williams used one of them in
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`impeaching Mr. Mills. Just because they're pre-admitted
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`on our list, if we use them for impeachment, doesn't
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`mean that the use by us enters them into the record, and
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`we're not moving those exhibits in. In fact, we've
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`objected to them. The only reason they were ever on our
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`list was for convenience so that we could use them for
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`impeachment and pull them up through the trial software.
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`THE COURT: All right. Mr. Eichmann.
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`MR. EICHMANN: Your Honor, the exhibits
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`that Ms. Ainsworth identified, they were erroneously
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`listed on our sheet here. We're not -- that is our
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`mistake. We're not seeking to --
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`THE COURT: All right. Let's identify
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`for the record the exhibit numbers that were not
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`pre-admitted that were erroneously read.
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`MS. AINSWORTH: Plaintiff's Exhibit 37
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`and 38.
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`THE COURT: All right. Those are not a
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`part of the record. They were not on the list of
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`pre-admitted exhibits.
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`As to these other exhibits, they were
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`pre-admitted, and being pre-admitted does not limit them
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`to only being used by the party who offered them, just
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`as during a trial either party may use the other party's
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`exhibits, they're pre-admitted and they are a part of
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`the record in the case, okay?
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`MR. EICHMANN: Thank you.
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`THE COURT: Does Defendant have a list
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`of exhibits it used yesterday?
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`MS. AINSWORTH: Yes, Your Honor.
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`THE COURT: Read those for us, please.
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`MS. AINSWORTH: That is only Defendants'
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`Exhibit 204.
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`THE COURT: Is there an objection from
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`the Plaintiff?
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`MR. EICHMANN: No, Your Honor.
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`THE COURT: All right. Then those will
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`be the exhibits for the record from yesterday's portion
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`of the trial.
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`All right. It appears we have some more
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`deposition clip objections, even though these were also
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`filed a little bit late. You know, I said during
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`pre-trial that deposition clip objections had to be
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`filed the day before the depositions were to be played.
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`That was for a reason. And the Court was under
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`additional pressure yesterday in dealing with those that
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`were not filed in advance as stated. These were filed
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`right at or about midnight last night.
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`Again, the purpose of the Court's rule is
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`so there's adequate time for me to review them. And
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`that's not controlled by whether one side doesn't bring
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`enough resources to the trial to cover what the Court
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`requires or not. I'm going to rule on these, and we're
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`going to dispose of them. If there are other deposition
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`clip disputes that I don't get the day before they're
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`proposed, they're going to be rejected out of hand from
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`this point forward, all right?
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`All right. With regard to the deposition
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`clip -- this is, I believe, for Mr. Katz -- and Google
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`has proposed a designation -- I believe this is Page 22,
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`Line 17 through 22 -- excuse me, 17 through 25, and then
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`23, 2 through 4, SimpleAir has objected to that
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`designation.
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`I'm going to overrule the objection,
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`allow the designation, and allow the corresponding
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`counter designation.
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`Also, there's a designation beginning at
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`38, Line 5 through 12, and Page 38, 15 through 25, and
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`then Page 39, 1 through 22. I am going to grant the
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`objection and exclude the designation and any
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`corresponding counter designation.
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`Okay. Those are the deposition clip
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`objections.
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`Is there some agreement between the
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`parties that I need to know about with regard to an
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`exception to one of my orders in limine?
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`MR. EICHMANN: Yes, Your Honor.
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`THE COURT: Let me hear from you on that,
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`Mr. Eichmann.
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`MR. EICHMANN: There's no dispute about
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`it, but I wanted to get it in the record. They had a
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`motion in limine that we could not talk about unasserted
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`patents. Both parties have already gotten into that
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`just generally. So when Mr. Payne goes on today, I very
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`briefly intend to have him explain the history of the
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`patents, how the first one came out and then the next
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`one. We're not getting into whether they infringe those
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`or anything like that and talking at just a very high
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`level that there's other patents out there that they
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`have. And my understanding is that Google does not
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`object to my intended discussion in that regard.
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`THE COURT: Is that correct?
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`MR. STOCKWELL: Given counsel's
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`representation as to exactly what he's going to do, that
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`is correct, Your Honor.
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`THE COURT: All right. So that resolves
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`any potential limine issue when that comes up.
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`All right. Is there anything further,
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`Counsel, that the Court needs to take up before we bring
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`the jury in?
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`MR. EICHMANN: I believe so, Your Honor.
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`THE COURT: All right.
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`MR. EICHMANN: Very briefly, there are a
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`few issues that I believe they're going to go into on
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`cross-examination with Mr. Payne which will be occurring
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`very shortly. And these are ones that we'd objected to
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`in advance. Some of them are addressed by limines.
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`The first is they appear to be ready to
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`cross examine him about the prosecution history of the
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`patents. We've already objected to the use of the
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`prosecution history. The Court did overrule that, but
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`we believe that what they're going to be doing is
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`eliciting very confusing and irrelevant testimony about
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`claim amendments and things of that nature. So just
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`because the document itself is pre-admitted, I could be
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`misunderstanding the Court's ruling, it doesn't mean
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`that they could delve into all the amendments with it
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`and -- and have him testify about all the prosecution
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`history.
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`THE COURT: Is -- is this related to your
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`second filing last evening, Mr. Eichmann, which as I
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`read it, was a heads up to the Court of problem area you
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`expected, or is this something outside of that?
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`MR. EICHMANN: That one was about their
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`witnesses. That was a heads-up for their witnesses.
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`This is a heads-up about this morning, about their cross
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`with -- with Mr. Payne.
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`THE COURT: Well, you know, I don't know
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`how you can expect me to rule now when you characterize
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`for me what I haven't heard yet. Certainly I intend to
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`enforce the Court's pre-trial rulings with regard to
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`motions in limine and other matters, but to ask me to
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`exclude something before I've heard it, based on how
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`you're going to characterize it is no more fair than if
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`the other side were trying to do the same thing to you.
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`I'll have to hear it.
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`MR. EICHMANN: This's one issue that
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`doesn't really fall into that category. I understand
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`what you're saying, Your Honor. This is more of a skunk
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`in the box type issue. The prior owner of the patents
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`is a company called Veris.
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`THE COURT: Right. I'm not going to get
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`into Bermuda or wherever it is and we're not going to
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`get into Ireland and all the money Google might have
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`hidden there. We're not going to get into foreign
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`countries and bad acts -- alleged bad acts of either
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`party. I don't see any relevance to that whatsoever.
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`MR. EICHMANN: Thank you. And then the
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`last thing, Your Honor --
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`THE COURT: We're not opening the door
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`for the other one to do it either. We're going to stay
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`away from that on both sides.
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`MR. EICHMANN: Thank you. And then the
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`last thing I'd just like to confirm is we filed this in
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`our pre-trial order, but the parties have stipulated
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`that SimpleAir has ownership of the '914 patent and the
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`right to assert claims for past infringement and collect
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`royalties. I just wanted to get that into the record so
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`I don't have to go through the tangential documents with
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`the witness.
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`MR. STOCKWELL: The stipulation was that
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`they -- they own the patent. We did not stipulate they
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`have the right to collect past damages and royalties.
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`And I don't want that read into the record in front of
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`the jury. A stipulation that they own the patent is
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`fine, Your Honor.
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`THE COURT: Well, if they own the patent,
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`then they own the rights that flow from that patent,
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`including the rights to collect if there is a basis to
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`collect. We're not going to presume a basis to collect
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`which is what I think you're afraid of. But certainly
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`ownership of the patent carries with it the rights of
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`ownership and the right to enforce.
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`MR. STOCKWELL: Understood, Your Honor.
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`But we're not contesting anything about ownership, and
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`we're not contesting that, you know, if you -- if
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`somehow their ownership is limited, so I think the
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`stipulation ought to be limited to they own the patents.
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`That's what we stipulated to in the pre-trial order.
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`Eichmann?
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`MR. EICHMANN: Here's --
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`THE COURT: Where's the difference, Mr.
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`MR. EICHMANN: Theoretically you can get
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`the patents and only have the right to sue for
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`infringement if it occurs after the date you get the
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`patents. Here's how I propose to proceed, Your Honor.
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`Just one question and answer from the witness on this
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`issue. I just don't want to get JMOL because I don't
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`have -- you know, you can't prove up an assignment
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`through oral testimony. I just want to get that in the
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`record, and I think that will be fine.
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`THE COURT: Well, my understanding is
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`unless an assignment carries with it the right to
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`collect past damages, they don't transfer, so that could
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`be --
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`MR. EICHMANN: It's not --
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`THE COURT: -- is that the issue that
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`you're concerned about establishing?
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`MR. EICHMANN: I'm concerned about both.
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`I'm concerned about just having the witness testify
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`orally that they own the patents and then them popping
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`up and saying, well, you can't do that, you have to have
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`an assignment in.
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`And a very similar issue happened to me
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`in front of Judge Everingham a couple of years ago. We
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`had a race to get the assignment in evidence. I'm just
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`trying to avoid something like that. We do own the past
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`damages. The assignments clearly say it. In addition,
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`they owned it before the patent even issued, so that's
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`not even an issue. I think he just is concerned with
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`the phrasing. And, Your Honor, I wasn't proposing that
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`the Court read a stipulation to the jury. I was trying
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`to confirm on the record the stipulation that already
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`exists by the parties so that if I go through it in a
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`very conclusory fashion with Mr. Payne, I don't really
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`have some issue pop up on JMOL.
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`THE COURT: All right. Then let's try to
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`get this resolved before I bring the jury in.
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`Tell me, Mr. Eichmann, what you
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`understand your stipulation in this regard with counsel
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`is, and then I'll hear if counsel agrees with it. That
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`way we'll resolve this outside of the presence of the
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`jury, but for the record.
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`MR. EICHMANN: My understanding is that
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`Google stipulates that SimpleAir does, in fact, own the
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`patent and that they have no argument -- they certainly
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`never raised it in interrogatory that we either don't
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`have ownership or don't have the right to sue for or
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`collect any royalties for past damages that the jury may
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`award.
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`MR. STOCKWELL: Stipulated.
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`THE COURT: All right. Then there's no
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`reason to bring it up before the jury.
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`What else, Counsel?
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`MR. EICHMANN: That's it.
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`THE COURT: Anything from your side,
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`Mr. Stockwell?
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`MR. STOCKWELL: No, sir.
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`THE COURT: All right. Let's see, we
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`finished Mr. Mills yesterday. Our next -- Plaintiff's
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`next witness is?
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`MR. DOVEL: Jon Gold, about 45 seconds of
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`deposition testimony.
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`THE COURT: 45 seconds. All right. And
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`then after Mr. Gold?
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`MR. EICHMANN: Mr. Payne.
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`THE COURT: All right. All right. Let's
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`bring in the jury, Mr. Floyd.
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`COURT SECURITY OFFICER: Yes, sir.
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`All rise for the jury.
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`(Jury in.)
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`THE COURT: Good morning, ladies and
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`gentlemen. Welcome back. Please have a seat.
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`The Court had a few matters I had to take
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`up with counsel. I appreciate your patience while we
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`got that handled.
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`All right. Plaintiff, call your next
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`witness.
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`MR. DOVEL: Your Honor, SimpleAir calls
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`Jon Gold by videotape. This will be less than a minute.
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`THE COURT: All right. Proceed with the
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`deposition testimony.
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`(Video clip playing.)
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`QUESTION: What is your name?
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`ANSWER: Jon Gold.
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`QUESTION: Where do you work?
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`ANSWER: At Google.
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`QUESTION: What are your job
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`responsibilities at Google?
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`ANSWER: I'm a finance manager.
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`QUESTION: What is the typical split that
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`is used for app-related purchases between the developer
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`and Google?
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`ANSWER: 70 percent to the developer is
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`the typical split.
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`QUESTION: 30 percent to Google?
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`ANSWER: Yes.
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`(End of video clip.)
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`MR. DOVEL: That concludes that
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`testimony, Your Honor.
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`THE COURT: All right. Plaintiff, call
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`your next witness.
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`MR. EICHMANN: Your Honor, Plaintiff
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`25
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`calls John Payne.
`
`

`
`16
`
`THE COURT: All right. If you'll come
`
`forward, Mr. Payne. You've been sworn, have you not?
`
`THE WITNESS: Yes, I have.
`
`THE COURT: Please have a seat.
`
`All right. Mr. Eichmann, you may
`
`proceed.
`
`JOHN PAYNE, PLAINTIFF'S WITNESS, PREVIOUSLY SWORN
`
`DIRECT EXAMINATION
`
`BY MR. EICHMANN:
`
`Q.
`
`A.
`
`Q.
`
`Good morning, Mr. Payne.
`
`Good morning -- or Mr. Eichmann. Sorry.
`
`Can you introduce yourself to the jury,
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`please?
`
`14
`
`A.
`
`Yes. My name is John Payne. I'm the
`
`15
`
`president and founder of SimpleAir.
`
`16
`
`Q.
`
`And are you also an inventor on the '914
`
`17
`
`patent?
`
`18
`
`19
`
`20
`
`A.
`
`Q.
`
`Yes, I am.
`
`Who else is a --
`
`MR. EICHMANN: Sorry, Your Honor. May I
`
`21
`
`have just a moment?
`
`22
`
`Q.
`
`(By Mr. Eichmann) Sir, you are one of the
`
`23
`
`inventors on the '914 patent that's asserted in this
`
`24
`
`case?
`
`25
`
`A.
`
`That's correct.
`
`

`
`17
`
`Q.
`
`A.
`
`Q.
`
`A.
`
`And what is your position at SimpleAir?
`
`I'm its founder and president.
`
`Who else is a member of SimpleAir?
`
`There are two other shareholders of SimpleAir,
`
`Tim von Kaenel and Seth Weisberg.
`
`Q.
`
`A.
`
`And who is Mr. von Kaenel?
`
`Mr. von Kaenel is the co-inventor of the '914
`
`patent, and --
`
`Q.
`
`A.
`
`And Mr. Weisberg?
`
`Mr. Weisberg is a shareholder in the company,
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`but not an inventor on the patent.
`
`12
`
`Q.
`
`Let's hear for a moment about your personal
`
`13
`
`background. Can you tell us where you grew up and where
`
`14
`
`you went to school?
`
`15
`
`A.
`
`I grew up in California, went to Wilson High
`
`16
`
`School in Long Beach, California, and then the
`
`17
`
`University of California.
`
`18
`
`19
`
`Q.
`
`A.
`
`And what did you study at school?
`
`I was an economics major. I studied a broad
`
`20
`
`array of things around economics and business.
`
`21
`
`Q.
`
`Over the years, you've worked at a number of
`
`22
`
`companies. Can you briefly explain some of the work
`
`23
`
`that you've done?
`
`24
`
`A.
`
`Sure. I've been in large companies and small
`
`25
`
`companies at various times in my life, but my first job
`
`

`
`18
`
`essentially was helping to found a banking software
`
`company that was originally located in California and
`
`then relocated to Plano, Texas, because this is where
`
`most of our customers were, that I was involved in -- we
`
`built that company and sold it, built another one and
`
`sold it.
`
`And I became involved in larger companies,
`
`one, for example, that some of you may have heard of,
`
`the company stamps.com that lets you print postage over
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`the Internet. I was the CEO of stamps.com.
`
`11
`
`THE COURT: Mr. Payne, as you answer the
`
`12
`
`question, you're turning your head away from the
`
`13
`
`microphone. Would you make an adjustment so we get a
`
`14
`
`little bit of benefit of that amplification?
`
`15
`
`16
`
`17
`
`18
`
`THE WITNESS: I'm sorry.
`
`THE COURT: Thank you.
`
`Go ahead, Counsel.
`
`Q.
`
`(By Mr. Eichmann) Mr. Payne, also if you could
`
`19
`
`slow down a bit just to make sure the reporter can get
`
`20
`
`it all down.
`
`21
`
`22
`
`A.
`
`Q.
`
`Got it.
`
`Did you also at some point work at a company
`
`23
`
`called AirMedia?
`
`24
`
`25
`
`A.
`
`Q.
`
`Yes, I did.
`
`And AirMedia is the company where the patent
`
`

`
`19
`
`in this case was first developed; is that right?
`
`A.
`
`Q.
`
`That's correct.
`
`These are the three topics that we're briefly
`
`going to cover today. The first one is AirMedia.
`
`Tell us about how you came to AirMedia and what your job
`
`was there?
`
`A.
`
`Well, I was originally hired as a consultant
`
`to help the company develop its strategy and determine
`
`how to best take advantage of the technology that I had
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`developed. I subsequently became the president of the
`
`11
`
`company on a full-time basis, and later became the chief
`
`12
`
`executive officer.
`
`13
`
`Q.
`
`And who else was part of the management there?
`
`14
`
`Was Mr. von Kaenel?
`
`15
`
`A.
`
`Mr. von Kaenel was the vice president and the
`
`16
`
`general manager of our AirMedia Live Division.
`
`17
`
`18
`
`Q.
`
`A.
`
`Where was AirMedia, the company, located?
`
`Well, the -- the company was located -- the
`
`19
`
`backend piece of the company that connected to the
`
`20
`
`Internet was located in New York City. And we also had
`
`21
`
`offices in California where we developed parts of the
`
`22
`
`software that operated on the client side.
`
`23
`
`Q.
`
`During the period of time that you worked
`
`24
`
`there, how big a company was AirMedia?
`
`25
`
`A.
`
`Well, it was -- as measured in employees, it
`
`

`
`20
`
`was in excess of a hundred employees. We were building
`
`a very complex technology platform, so it was -- it was
`
`a fairly reasonable sized company.
`
`Q.
`
`Let's talk about the summer of 1995. At that
`
`time, what was your job at AirMedia?
`
`A.
`
`I was the -- I believe I was the president of
`
`AirMedia.
`
`Q.
`
`And does this timeframe have relevance to this
`
`case?
`
`A.
`
`Q.
`
`A.
`
`It does.
`
`In what way?
`
`Well, this is the period during which much of
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`11
`
`12
`
`13
`
`the work that was done that resulted in the inventions
`
`14
`
`that were filed in our patent application on January
`
`15
`
`1996.
`
`16
`
`Q.
`
`We heard from Dr. Knox about all the specific
`
`17
`
`words in the patents and what they mean, but I'd like
`
`18
`
`a -- sort of a more general explanation from you, sir,
`
`19
`
`about what you and the other inventors came up with in
`
`20
`
`the summer of 1995.
`
`21
`
`A.
`
`Well, most inventions happen because you're
`
`22
`
`trying to solve a problem of some kind. And the -- the
`
`23
`
`problem we were trying to solve was how to be able to
`
`24
`
`gather information from a number of different websites
`
`25
`
`across the Internet, and then in the most efficient way
`
`

`
`21
`
`possible transmit it wirelessly over networks so that we
`
`can provide notifications to people when something
`
`occurred on the Internet.
`
`There are things that happen all over the
`
`Internet. You wouldn't know that they had occurred
`
`unless you received an alert that told you, gee,
`
`something happened exciting; it's a sports game; you
`
`should go check it out.
`
`Q.
`
`Do you actually remember the initial
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`discussions or meetings that led to the development of
`
`11
`
`this idea?
`
`12
`
`13
`
`14
`
`A.
`
`Q.
`
`A.
`
`I do, yes.
`
`Can you tell us a little about that?
`
`Well, we had -- we were working on a project
`
`15
`
`that was intended for use by large corporations called
`
`16
`
`AirMedia Publisher, and AirMedia Publisher was a way of
`
`17
`
`sending information out to large sales forces. What we
`
`18
`
`discovered was that given the bandwidth constraints that
`
`19
`
`were available at that time have very limited bandwidth,
`
`20
`
`that wasn't a viable product.
`
`21
`
`In the course of determining what viable
`
`22
`
`product could actually work on the network, we -- we
`
`23
`
`developed a plan for a system that would connect the
`
`24
`
`Internet -- which the World Wide Web was relatively new
`
`25
`
`at that time -- and wireless networks in a highly
`
`

`
`22
`
`efficient way.
`
`Q.
`
`What made you think that what you came up with
`
`was something new, something that other people didn't
`
`offer?
`
`A.
`
`Well, we -- we -- first of all, we knew it
`
`wasn't available for us. We couldn't -- we couldn't
`
`find such a service that would actually work for us, but
`
`we also got a lot of support for the idea that this was
`
`new by virtue of press coverage and industry awards and
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`things like that that declared that no one had ever done
`
`11
`
`this before.
`
`12
`
`Q.
`
`Where were you and who else was there when you
`
`13
`
`first started talking about the idea for AirMedia?
`
`14
`
`A.
`
`Well, I developed the original sketches for
`
`15
`
`the system and how it would work. And we then conducted
`
`16
`
`a white board session essentially with Mr. von Kaenel
`
`17
`
`and other software engineers who were part of the
`
`18
`
`company.
`
`19
`
`20
`
`Q.
`
`A.
`
`What's a white board?
`
`Well, a white board is like a big chalk board,
`
`21
`
`except you use a pen eraser that can be wiped off of it.
`
`22
`
`Q.
`
`Now, after you and the other inventors, Mr. --
`
`23
`
`excuse me -- after you and Mr. von Kaenel and some of
`
`24
`
`the other engineers started having this discussion, what
`
`25
`
`did you then do?
`
`

`
`23
`
`A.
`
`Well, we -- we had a lengthy discussion about
`
`how this would actually work, and we determined that
`
`we -- we thought it could be viable. We did some
`
`analysis that told us that it could. And so we
`
`developed a team and began to build the application and
`
`system that would operate both on the backend and on the
`
`frontend in people's individual personal computers.
`
`Q.
`
`A.
`
`What do you mean by that last part?
`
`Well, it was a very complex job. We were
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`building something that didn't exist. It was a very
`
`11
`
`complex job, because we had to not only build all the
`
`12
`
`backend software that connected to the Internet in
`
`13
`
`various ways, but we also had to build the software that
`
`14
`
`connected to the wireless networks. And we had to build
`
`15
`
`the software that would be resident on the -- the
`
`16
`
`customer's or the user's PC, much like apps are
`
`17
`
`available on a smartphone today.
`
`18
`
`Q.
`
`On the slide here, we have some images of some
`
`19
`
`of the AirMedia Live products; is that right?
`
`20
`
`21
`
`A.
`
`Q.
`
`22
`
`the top?
`
`That's right.
`
`Can you kind of walk us through the image at
`
`23
`
`A.
`
`Sure. The -- so we -- we developed a number
`
`24
`
`of different products that were offered by large
`
`25
`
`well-known companies. Philips was a company that had a
`
`

`
`24
`
`handheld device that used our wireless network and
`
`wireless receiver so that people who used its handheld
`
`device in the -- this was in the mid-'90s, of course --
`
`could receive alerts and notifications as they happened
`
`on the Internet.
`
`NEC was another large, well-known company that
`
`similarly built a product that was based upon our
`
`service. And so basically, we provided the service and
`
`we provided a reference design. We actually had to
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`build a piece of hardware in order to make this work,
`
`11
`
`because nothing existed in the marketplace to make it
`
`12
`
`work. So we came up with a hardware what's called a
`
`13
`
`reference design.
`
`14
`
`And so each of these manufacturers built our
`
`15
`
`reference design to their own specifications, but like a
`
`16
`
`radio, it listened to our service.
`
`17
`
`18
`
`Q.
`
`A.
`
`What did you call the service?
`
`The service was called AirMedia Live Internet
`
`19
`
`Broadcast Network.
`
`20
`
`Q.
`
`And what exactly is happening there with the
`
`21
`
`signal coming down?
`
`22
`
`A.
`
`Well, essentially, we would aggregate
`
`23
`
`information from content providers, well-known people
`
`24
`
`like CNN, more specialty people sometimes, and -- and
`
`25
`
`then we would broadcast it based upon the user's
`
`

`
`25
`
`interest so that they received it in their -- in their
`
`computer or handheld device.
`
`So that -- that device -- that little thing to
`
`the left there that's round on the top and square on the
`
`bottom, that's an AirMedia Live wireless receiver.
`
`Q.
`
`And are these also other versions of the
`
`receiver at the bottom?
`
`A.
`
`That's right. Some people chose a form factor
`
`which was shaped like a pyramid with a little red light
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`that went off to let you know any time you had new
`
`11
`
`broadcast from the Internet.
`
`12
`
`Hewlett-Packard built an entire computer
`
`13
`
`specification; in other words, they sold a computer in a
`
`14
`
`box that was differentiated based upon the fact that it
`
`15
`
`had an AirMedia Live antenna in it. So their design was
`
`16
`
`this sort of moon-shaped, rounded, modern-looking thing.
`
`17
`
`Q.
`
`Did the company also have ideas, have plans
`
`18
`
`for sending notifications to other types of devices
`
`19
`
`besides those receivers we saw?
`
`20
`
`A.
`
`Absolutely. We -- in the initial market just
`
`21
`
`because that's what was available in the market at the
`
`22
`
`time was personal computers, but the product was built
`
`23
`
`to operate with handhelds with a whole wide variety of
`
`24
`
`cellular phone handsets and so on.
`
`25
`
`Q.
`
`And what's shown on this slide?
`
`

`
`26
`
`A.
`
`Well, this was -- we were building a consumer
`
`product, one that anyone could license and could use in
`
`their home or small business. And so it was important
`
`that it work anywhere in the country. And so we used a
`
`wireless network where we could make broadcasts from
`
`Plano, Texas, that could go out through cell towers or
`
`through at that time paging towers all over the United
`
`States. So we had -- I think at the time, it was
`
`somewhere in the mid-90s percent coverage of the
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`population in the U.S.
`
`11
`
`Q.
`
`And on the left and right of the map, that's
`
`12
`
`where the AirMedia offices were?
`
`13
`
`A.
`
`That's right. And New York was our -- our
`
`14
`
`broadcast center, which was the area that was connected
`
`15
`
`to the Internet. And in California was our software
`
`16
`
`development center for the PC and device site software.
`
`17
`
`Q.
`
`And this is from Exhibit 98. Do you see that
`
`18
`
`on the slide, sir?
`
`19
`
`20
`
`21
`
`A.
`
`Q.
`
`A.
`
`I do.
`
`Now, what's shown on this slide?
`
`Well, when information would arrive on a
`
`22
`
`computer, part of the -- the -- the commercial offering
`
`23
`
`that we built out, it was very important that we be able
`
`24
`
`to give people notification about what was going on.
`
`25
`
`And so when a notification arrived, there were a variety
`
`

`
`27
`
`of different ways that you could view it in what we
`
`called then viewers, but what would be called an app
`
`today.
`
`Q.
`
`A.
`
`And is this an example of some of those apps?
`
`That's right. This is an example of a CNN app
`
`with a message that's just arrived. And you can see the
`
`headline at the top, the first few paragraphs of the
`
`story, and then you'd be able to click a link in that
`
`headline or elsewhere. And it will automatically
`
`1 2 3 4 5 6 7 8 9
`
`10
`
`transport you to the CNN website so you can see all the
`
`11
`
`news coverage about this topic.
`
`12
`
`Q.
`
`In the upper left portion of this diagram, it
`
`13
`
`says channels, and then lists some -- some -- some more
`
`14
`
`graphics there.
`
`15
`
`16
`
`Can you explain what's going on there?
`
`A.
`
`Well, we had a variety of different channels
`
`17
`
`so that users could easily indicate their areas of
`
`18
`
`interest. Some people are interested in sports; other
`
`19
`
`people are interested in business.
`
`20
`
`And so we made -- our channels made a simple,
`
`21
`
`easy way for them to say I'm interested in all the stuff
`
`22
`
`that's on this channel.
`
`23
`
`24
`
`Q.
`
`A.
`
`What do you mean by channel?
`
`Well, a channel is information about a
`
`25
`
`specific topic. Sometime -- sometimes it can be as
`
`

`
`28
`
`narrow as an information from a specific website, like
`
`CNN or quote.com or other sources of information. And
`
`

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