Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 1 of 212 PageID 23933
`
`EXHIBIT C
`
`Exhibit 2009, Page 1
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`EXHIBIT C
`
`Exhibit 2009, Page 1
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 2 of 212 PageID 23934
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE NORTHERN DISTRICT OF TEXAS
`
`DALLAS DIVISION
`
`
`
`( 3:11-CV-00367-O
`
`DALLAS, TEXAS
`
`MARCH 29, 2013
`
`(((
`
`(
`
`((
`
`
`(
`(
`
`SUMMIT 6 LLC,
` Plaintiff,
`
`VERSUS
`
`RESEARCH IN MOTION CORP.,
` Defendants.
`
`VOLUME 1
`
`TRANSCRIPT OF TRIAL
`
`BEFORE THE HONORABLE REED C. O'CONNOR
`
`UNITED STATES DISTRICT JUDGE, and a jury
`
`A P P E A R A N C E S:
`
`FOR THE PLAINTIFF: THEODORE STEVENSON, III
`McKool Smith
`300 Crescent Court
`Suite 1500
`Dallas, TX 75201
`214/978-4000
`214/978-4044 FAX (fax)
`tstevenson@mckoolsmith.com
`
`PHILLIP M. AURENTZ
`McKool Smith PC
`300 Crescent Court
`Suite 1500
`Dallas, TX 75201
`214/978-4206
`214/978-4044 (fax)
`paurentz@mckoolsmith.com
`
`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 2
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 3 of 212 PageID 23935
`
`FOR THE PLAINTIFF:
`
`
`
`ASHLEY N. MOORE
`McKool Smith PC
`300 Crescent Court
`Suite 1500
`Dallas, TX 75201
`214/978-6337
`214/978-4044 (fax)
`amoore@mckoolsmith.com
`
`JOHN B. CAMPBELL
`McKool Smith
`300 W 6th St
`Suite 1700
`Austin, TX 78701
`512/692-8730
`512/692-8744 (fax)
`jcampbell@mckoolsmith.com
`
`BRADLEY W. CALDWELL
`Caldwell Cassady Curry, P.C.
`1717 McKinney
`Suite 700
`Dallas, TX 75202
`214/593-7129
`214/978-4044 (fax)
`bcaldwell@caldwellcc.com
`
`FOR THE DEFENDANT: JAMES R. NELSON
`DLA Piper US LLP
`1717 Main St
`Suite 4600
`Dallas, TX 75201-4605
`214/743-4512
`214/743-4545 (fax)
`jr.nelson@dlapiper.com
`
`FOR THE DEFENDANT: MARK D. FOWLER
`DLA Piper LLP (US)
`2000 University Ave
`East Palo Alto, CA 94303
`650/833-2048
`650/833-2001 (fax)
`mark.fowler@dlapiper.com
`
`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 3
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 4 of 212 PageID 23936
`
`
`
`CLAUDIA WILSON FROST
`DLA Piper LLP
`1000 Louisiana
`Suite 2800
`Houston, TX 77002
`713/425-8450
`713/300-6050 (fax)
`claudia.frost@dlapiper.com
`
`ANDREW P. VALENTINE
`DLA Piper LLP (US)
`2000 University Avenue
`East Palo Alto, CA 94303-2214
`650-833-2000
`650-833-2001 (fax)
`andrew.valentine@DLAPiper.com
`
`ERIK FUEHRER
`DLA Piper US LLP
`2000 University Avenue
`East Palo Alto, CA 94303
`650/833-2045
`650/833-2001 (fax)
`erik.fuehrer@dlapiper.com
`
`TODD S. PATTERSON
`DLA Piper LLP (US)
`401 Congress Ave
`Suite 2500
`Austin, TX 78701
`512/457-7000
`512/457-7001 (fax)
`todd.patterson@dlapiper.com
`
`COURT REPORTER: PAMELA J. WILSON, RMR, CRR
` 1100 Commerce Street, Room 1535
` Dallas, Texas 75242
`214.662.1557
`pam_wilson@txnd.uscourts.gov
`
`
`
`Proceedings reported by mechanical stenography,
`
`transcript produced by computer.
`
`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 4
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 57 of 212 PageID 23989
`
` Vol 1 56
`
`
`in the courtroom so we can continue the trial.
`
`Of course this rule does not apply to expert witnesses
`
`and it does not apply to representatives of the parties.
`
`So, Ms. Wood, if you would take the stand. And if
`
`everyone else would please retire to where you need them to
`
`be.
`
`Yes, sir.
`
`MR. NELSON: That's all.
`
`THE COURT: That's all, okay. Very good.
`
`MR. CALDWELL: Your Honor, may we have just two or
`
`three minutes to kind of get some things organized?
`
`It will kind of make things move a little quicker.
`
`MR. CALDWELL: Sorry about that brief delay.
`
`May it please the court.
`
`DIRECT EXAMINATION
`
`BY MR. CALDWELL:
`
`Q.
`
`Good morning or good afternoon.
`
`Good afternoon.
`
`Mrs. Wood, would you please introduce yourself to the
`
`jury.
`
`A.
`
`My name is Lisa Wood.
`
`THE COURT: Go ahead and speak into that microphone
`
`good and loud. Just speak so that everyone in the courtroom
`
`can hear.
`
`You're the first to take the stand, we may need to adjust
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 5
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 100 of 212 PageID 24032
`
` Vol 1 99
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`that Friday, he prepared for the NAR demo, all moving along
`
`quite smoothly. Images are scaled to Moore's specifications
`
`and they seem to truly appreciate the result.
`
`What is Mr. Fried reporting that's being going on in
`
`October?
`
`A.
`
`He was getting ready to prepare -- helping provide a
`
`demonstration for the National Association of Realtors Show,
`
`which is which NAR stands for, demonstration of the
`
`pre-processing controls on the client side.
`
`Q.
`
`And did you-guys present a demonstration of your
`
`invention at the NAR conference?
`
`A.
`
`Yes, we did.
`
`MR. CALDWELL: May we have Plaintiff's Exhibit 43,
`
`Mr. Moreno.
`
`BY MR. CALDWELL:
`
`Q.
`
`And by Friday, November 6th, Mr. Fried expresses that as
`
`of November 6th, '98, he had worked with Roy. Who's Roy?
`
`A.
`
`Roy was one of the engineers that we had also hired to
`
`help with the project.
`
`Q.
`
`And Mr. Fried had worked with Roy to wrap-up his work on
`
`the client-side submission piece. Do you see that?
`
`A.
`
`Q.
`
`A.
`
`Yes, I do.
`
`Had they built a product implementing your invention?
`
`They had written the software, yes, to implement the
`
`invention.
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 6
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 108 of 212 PageID 24040
`
` Vol 1 107
`
`
`Q.
`
`So when -- when Mr. Lewis and the others first met with
`
`eBay, was eBay disagreeing that it could benefit from your
`
`invention or were they more worried about the size and
`
`stability of your company in that day and age?
`
`A.
`
`They didn't disagree that we could help solve the
`
`problem.
`
`As a matter of fact, it was their number one technical
`
`support complaint. Nearly all of their technical support
`
`issues were related to photo uploading. And they simply just
`
`felt we weren't large enough to be able to have the expertise
`
`to handle it for them.
`
`Q.
`
`A.
`
`Q.
`
`Now, do you recognize the book that I'm holding?
`
`Yes, I do.
`
`I realize you probably can't see it from there, at least
`
`the little markings. This is the first edition of EBay for
`
`Dummies, and for the record, excerpted portions of it are at
`
`Plaintiff's Exhibit 335, but this is Plaintiff's Demonstrative
`
`1, the original document.
`
`Before we talk about what you did to help address eBay's
`
`problem --
`
`MR. CALDWELL: Can we have the document camera,
`
`Mr. Moreno.
`
`BY MR. CALDWELL:
`
`Q.
`
`I won't read through all this by any means, but what I do
`
`want to do is comment on have you -- have you explained to us
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 7
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 109 of 212 PageID 24041
`
` Vol 1 108
`
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`what the industry was observing about eBay at the time?
`
`There's a section in EBay for Dummies. If you're
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`actually going to have a picture, you need to make your images
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`web-friendly. It talks about large pixels are made -- large
`
`pictures are made up of all those pixels you showed us and
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`right after you take the picture you have problems, like they
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`contain more computer instructions, bigger pictures. They
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`take longer to build or appear on the buyer's screen and time
`
`can be precious in an auction.
`
`What are they describing, Mrs. Wood?
`
`A.
`
`They're des-- they're describing those upload problems
`
`with large images.
`
`MR. NELSON: Excuse me.
`
`Objection, Your Honor. I know this document is in, but
`
`what they are describing, her interpretation of the document,
`
`is inappropriate.
`
`THE COURT: Why should she -- if that's in, why --
`
`why is she qualified to talk about this?
`
`MR. CALDWELL: Because Mrs. Wood and her company met
`
`with eBay and ultimately became the host for eBay that
`
`addressed all these problems that consumers had.
`
`So they understood the problems that eBay was -- was
`
`facing and they went out and specifically addressed 'em and --
`
`and ultimately installed eBay's new image --
`
`THE COURT: So you're wanting her to read this for
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 8
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 110 of 212 PageID 24042
`
` Vol 1 109
`
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`what purpose?
`
`To show the problems that -- to show what they could do?
`
`MR. CALDWELL: Yes, Your Honor. It's to show what
`
`problems that eBay had, the problems that she solved. And
`
`also it goes to value because it shows how the industry was
`
`needing a solution like they had to offer.
`
`THE COURT: Okay.
`
`I will overrule the objection.
`
`BY MR. CALDWELL:
`
`Q.
`
`Okay. Now, Mrs. Wood, again, I'll say we won't belabor
`
`this, but the instructions it's telling you suggest too big of
`
`an image takes too long to build. And what is that -- what is
`
`that getting at?
`
`A.
`
`Well, for eBay they want auction items to sell so that
`
`they can receive a part of the revenue from that. So if the
`
`pictures take too long to load they're not able to quickly
`
`display the auction pages and people won't stay to bid on the
`
`auction items. So it's -- it's basically a bad-for-business
`
`deal.
`
`Q.
`
`Now, on the white board that we had, on the far right you
`
`were writing some of the image criteria that websites might
`
`have like a resolution and a file format. There could be
`
`other criteria beyond just those two; is that fair?
`
`A.
`
`Q.
`
`Yes.
`
`Okay. And we won't belabor all of it, but the eBay for
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 9
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 111 of 212 PageID 24043
`
` Vol 1 110
`
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`Dummies book tells you try to get the resolution at 72 dots
`
`per inch, try and make it a 4 inch square, crop unnecessary
`
`areas or change the contrast, when you're done save it as a
`
`jpg and then check the total size and see if it's around 40
`
`kilobytes.
`
`Based on your experience at that point in the industry
`
`with users who are trying to manipulate images, how did this
`
`sort of challenge come across to users, your average consumer?
`
`MR. NELSON: Objection, Your Honor, that's pure
`
`speculation.
`
`THE COURT: Sustained.
`
`BY MR. CALDWELL:
`
`Q.
`
`Mrs. Wood, did you believe you needed to address the
`
`complexity issues that not only this book but the industry was
`
`recognizing about eBay?
`
`A.
`
`Q.
`
`Absolutely.
`
`Now, did you in fact, after going to eBay and learning
`
`that they thought you-guys and your company was too small, did
`
`you just throw your hands up in the air and say we're done,
`
`never mind, we'll never land eBay, let's just give up on
`
`them?
`
`A.
`
`Q.
`
`A.
`
`No, we didn't.
`
`Okay. What did you do?
`
`Well, we took that well-show-them attitude and we built
`
`our own website to demonstrate and offer hosting services for
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 10
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 112 of 212 PageID 24044
`
` Vol 1 111
`
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`auctions.
`
`Q.
`
`A.
`
`Okay. What did you call your website?
`
`To be a little sassy we named it pBay, a close
`
`approximation to the word "eBay" and used some -- some of the
`
`similar look and feel of the site, just to get the attention
`
`of the industry. And we offered free picture uploading
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`services for all auction websites.
`
`Q.
`
`A.
`
`Q.
`
`A.
`
`Q.
`
`Did eBay take notice?
`
`Yes, they did.
`
`Did the industry take notice?
`
`Absolutely.
`
`So as of the first edition of EBay for Dummies there's a
`
`reference to using a third party image hosting website. And
`
`who's the one listed right there?
`
`A.
`
`Q.
`
`A.
`
`Q.
`
`Pbay, the unrelated twin of eBay.
`
`Was that your company?
`
`Yes, it is.
`
`Now, I understand that eBay had originally blown you off,
`
`but how did they react to the fact that users started using
`
`your website that you were running independently of -- of eBay
`
`and users were uploading pictures to your website?
`
`A.
`
`Q.
`
`Well, they certainly -- they contacted us, certainly.
`
`What came next in terms of a formal relationship between
`
`you-guys and eBay?
`
`A.
`
`Well, by that time our website that we launched, pBay, we
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 11
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 113 of 212 PageID 24045
`
` Vol 1 112
`
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`were the number one hosting site for auction items in the
`
`industry, so eBay took note and decided obviously customers
`
`were needing the solution so they put out an open bid request
`
`to software providers to try and solve that problem for them.
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`And we were invited to participate.
`
`Q.
`
`Your software that had become the number one hosting
`
`site, was it using the patented invention with the
`
`pre-processing of images?
`
`A.
`
`Q.
`
`Yes, it was.
`
`Now, at that point you had filed your -- I don't even
`
`know at that point if you -- you had probably hadn't even yet
`
`got the patent on file, but your patent certainly hadn't been
`
`issued by the United States Government yet in 1998/99; is that
`
`fair?
`
`A.
`
`Q.
`
`That is fair.
`
`Okay. So if eBay said, okay, we've taken notice and we
`
`think we may need to do this, did they still have concerns
`
`about hiring your company, PictureWorks, to run their imaging
`
`based on the size of eBay versus the size of PictureWorks?
`
`MR. NELSON: Two objections.
`
`One is speculation.
`
`Two is he's continually leading the witness.
`
`THE COURT: All right.
`
`Do you know if eBay -- do you know, did eBay still -- do
`
`you know, did eBay still have concerns about hiring your
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 12
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 114 of 212 PageID 24046
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` Vol 1 113
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`company?
`
`THE WITNESS: I do know.
`
`THE COURT: And how do you know that?
`
`THE WITNESS: I was at the meeting.
`
`THE COURT: They communicated that --
`
`THE WITNESS: Or series of meetings where we were
`
`discussing these topics.
`
`THE COURT: All right.
`
`Overruled. Both objections are overruled.
`
`BY MR. CALDWELL:
`
`Q.
`
`So previously eBay had expressed a concern. Were they
`
`still expressing a concern about your company's ability to
`
`handle their image load?
`
`A.
`
`It was still a question for them but they weren't as
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`concerned since we were hosting millions for providers on the
`
`Internet.
`
`Q.
`
`A.
`
`Q.
`
`Were you permitted to put in a bid for the eBay business?
`
`Yes, we were.
`
`And did eBay ever implement your invention as its own
`
`photo uploaded solution?
`
`A.
`
`Q.
`
`A.
`
`Yes, they did.
`
`Okay. Tell us how that came about.
`
`Well, at the time we were bidding against other companies
`
`in the industry, a couple that were actually larger than we
`
`were. And one of those companies actually engaged in an
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 13
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 115 of 212 PageID 24047
`
` Vol 1 114
`
`
`acquisition process while the bid process was going on.
`
`Q.
`
`So eBay is taking bids from a few companies and you're --
`
`were you the smallest of the companies they were taking bids
`
`from?
`
`A.
`
`Q.
`
`I believe so.
`
`And one of the larger companies that was having to
`
`compete against you in the bid process acquired you at about
`
`the same time eBay was doing the evaluation; is that what you
`
`explained?
`
`A.
`
`Q.
`
`A.
`
`Q.
`
`Yes, it is.
`
`What was the name of that company that acquired you?
`
`Well, the company that acquired us was iPIX.
`
`Now -- now, as your name changed from PictureWorks into
`
`iPIX did eBay implement your photo solution as their uploader?
`
`A.
`
`Q.
`
`Yes, they did.
`
`So by the time of second edition of eBay for Dummies,
`
`which is Plaintiff's Demonstrative Exhibit 2, Plaintiff's
`
`Exhibit 937, what does it -- what does this mean, Mrs. Wood,
`
`that "In early 2000, Internet Pictures Corporation and eBay
`
`joined together to offer image hosting directly through eBay"?
`
`I won't read through all of it. But what is that expressing?
`
`MR. NELSON: Objection. Your Honor, he's asking her
`
`to say what someone else wrote, to describe the meaning of
`
`what someone else wrote.
`
`THE COURT: Well, just describe what you what you
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 14
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 116 of 212 PageID 24048
`
` Vol 1 115
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`take that to mean.
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`THE WITNESS: I was in charge of the implementation
`
`of our invention at eBay and so I believe that means that our
`
`invention was implemented and became the picture services at
`
`eBay.
`
`BY MR. CALDWELL:
`
`Q.
`
`Do you recognize the screen shot that is described in the
`
`second edition of EBay for Dummies?
`
`A.
`
`Q.
`
`A.
`
`Yes, I do.
`
`What is it?
`
`The screen shot of an embodiment of our invention for
`
`image uploading within the eBay website.
`
`Q.
`
`A.
`
`Q.
`
`Did you-guys actually run this service for eBay?
`
`Yes, we did.
`
`Now, do you agree with the statement that using eBay's
`
`picture services couldn't be easier, here's the upload page
`
`used prior to the Sell Your Item page?
`
`MR. NELSON: Objection, Your Honor. It's
`
`speculation. And I think we're getting a bit afield from
`
`relevance with this testimony as well.
`
`THE COURT: Overruled.
`
`BY MR. CALDWELL:
`
`Q.
`
`A.
`
`Q.
`
`Do you agree with that, Mrs. Wood?
`
`Can you repeat the question?
`
`Do you agree that once you had implemented the solution
`
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 15
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 117 of 212 PageID 24049
`
` Vol 1 116
`
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`use of eBay's photo upload service couldn't be easier?
`
`A.
`
`Q.
`
`I would agree.
`
`What did it do for your company to sign up eBay as a
`
`customer?
`
`A.
`
`Well, it certainly put us on the map.
`
`I mean, in the day there wasn't a bigger vendor in the
`
`industry. And it was quite a feather in our cap to provide
`
`this very high volume, 24 hour service hosting millions of
`
`images for eBay.
`
`Q.
`
`And did you have an understanding of how it benefited
`
`eBay, based on the relationship that you had with them?
`
`A.
`
`Q.
`
`A.
`
`Yes, I did have an understanding of that.
`
`And what's your understanding?
`
`Well, my understanding is that the picture services
`
`enabled -- enabled eBay to grow significantly, both in revenue
`
`and volume of users.
`
`Q.
`
`I want to catch that point you mentioned earlier that one
`
`of the competitors, iPIX, acquired PictureWorks around the
`
`time of the bidding.
`
`When did that acquisition take place?
`
`A.
`
`That acquisition happened around the end of March or the
`
`beginning of 2000.
`
`Q.
`
`How much did iPIX pay to buy PictureWorks in March 2000
`
`while competing for the eBay business?
`
`A.
`
`They paid 175 million dollars of stock.
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 16
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 118 of 212 PageID 24050
`
`Q.
`
`A.
`
`Q.
`
`For the company you had founded?
`
`That is correct.
`
`Do you have an understanding of how your company came to
`
` Vol 1 117
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`be valued at $175 million?
`
`A.
`
`Q.
`
`Yes, I do.
`
`And what is that?
`
`MR. NELSON: Objection. Foundation, Your Honor. He
`
`said does she have "an understanding," but I don't know what
`
`the source of that understanding is.
`
`THE COURT: I will sustain that objection.
`
`MR. CALDWELL: Your Honor, I'm -- I'm hoping to ask
`
`her, since she told her company to another company, she had to
`
`certainly agree to the deal. I --
`
`THE COURT: She -- she testified to how much she
`
`sold it for.
`
`His objection is does she wanted to the source of the
`
`valuation method. And so you need to -- you need to lay a
`
`foundation as to whether she does, how she -- what it is and
`
`how she knows what the source of that is, as opposed to what
`
`someone else -- what -- what method someone else may have used
`
`to come up with that figure.
`
`The figure is in evidence.
`
`MR. CALDWELL: True.
`
`THE COURT: But how they -- how they came about it,
`
`she needs to explain how she knows that.
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 17
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 119 of 212 PageID 24051
`
` Vol 1 118
`
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`MR. CALDWELL: Fair enough.
`
`BY MR. CALDWELL:
`
`Q.
`
`And let me -- let me just make clear.
`
`You don't have to tell me how -- you don't have to speak
`
`as to how iPIX valued it, necessarily. Let me just ask you
`
`about yourself.
`
`When you and the other managers at your company were
`
`selling to eBay, what did you perceive as your chief asset
`
`driving the value of your company?
`
`A.
`
`Q.
`
`The chief asset driving the value was our invention.
`
`Mrs. Wood, if you were employee number one at
`
`PictureWorks and iPIX later acquired PictureWorks for $175
`
`million, did you personally make a big style -- big stack of
`
`cash off of that deal?
`
`A.
`
`Q.
`
`A.
`
`No, I didn't.
`
`Why not?
`
`Well, the stock that was offered during that transaction
`
`was called restricted stock. So the stock had a certain
`
`number of rules and constraints on it before I could sell it.
`
`By the time I was able to sell it we had had 9/11 and the
`
`technology crash and my stock was financially worthless.
`
`Q.
`
`Now, we understand that your patents later issued in '05
`
`and then the one that's in this trial issued in 2010.
`
`Were those patents that you've got there before you, were
`
`they later assigned to the company, Summit 6 that is the
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 18
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 151 of 212 PageID 24083
`
` Vol 1 150
`
`
`just has to fit anywhere on the ammunition and it fires. And
`
`it was analogous to you don't need this precise expertise to
`
`get things to move fast.
`
`Q.
`
`Now, after the realtor convention did PictureWorks have
`
`some early customers for the Rimfire product?
`
`A.
`
`Q.
`
`A.
`
`Yes, we did.
`
`Who were they?
`
`Well, by August of that year we had signed some
`
`significant customers, Clairol, Homestore, and also the
`
`Polaroid Corporation.
`
`Q.
`
`How did Polaroid use the Rimfire product in the early
`
`days after Rimfire was built?
`
`A.
`
`They used it two ways. They had a camera called the
`
`Izone camera that was targeted at teenagers and they created a
`
`website called the Izone, which was a social media sharing
`
`site where people could upload pictures and then share them,
`
`and also a site that was targeted at an older audience, called
`
`mypolaroid.com.
`
`Q.
`
`And how about Clairol, how were they using the Rimfire
`
`invention?
`
`A.
`
`Well, Clairol used it, which was part of Proctor and
`
`Gamble for uploading your own image, really good, high
`
`resolution photo of yourself, processed the right way, so that
`
`you could try on different hairstyles, different hair colors,
`
`different makeup products before you bought those products,
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 19
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 152 of 212 PageID 24084
`
` Vol 1 151
`
`
`the idea being you would try them, see they how looked on you
`
`and you would in turn buy them.
`
`Q.
`
`Finally, you mentioned another customer called Homestore.
`
`They were they using Rimfire?
`
`A.
`
`Well, Homestore was the official website of the National
`
`Association of Realtors. And their process that they had at
`
`the time was that realtors would take pictures, a lot of them
`
`on film or Polaroid cameras, and then they would write what
`
`was called the MLS number or the multiple listing number on
`
`the back on a Sharpie and they would send them to the scanning
`
`department. The scanning department would put all those in
`
`and then they would be posted to their website. And so that
`
`was a very cumbersome process and very time-consuming. So
`
`they implemented our product into their website so that the
`
`realtors could in real time use digital media to upload those
`
`images, which increased the traffic of the content on their
`
`site, the speed of the content and then would drive more
`
`visitors to their site looking for homes.
`
`Q.
`
`Mrs. Pate, am I correct that you were not one of the
`
`inventors on the patents?
`
`A.
`
`Q.
`
`Correct.
`
`Have you done anything just related to the work with the
`
`patent office or prosecution of the patents?
`
`A.
`
`Q.
`
`No.
`
`Okay. Have you done anything at all in connection with
`
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 20
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 158 of 212 PageID 24090
`
` Vol 1 157
`
`
`offer at whatever the appropriate time is, Your Honor.
`
`BY MR. CALDWELL:
`
`Q.
`
`Okay. So let's pick right back where we were.
`
`Who is Jeff Jordan at eBay?
`
`He's the senior vice president of eBay USA.
`
`Now, where was this presentation given?
`
`I believe it was Los Angeles and given at the eBay
`
`A.
`
`Q.
`
`A.
`
`community event.
`
`Q.
`
`We won't trudge through every page of this by any means.
`
`MR. CALDWELL: But can we flip to page 8,
`
`Mr. Moreno?
`
`BY MR. CALDWELL:
`
`Q.
`
`What did you come to understand to be key challenges for
`
`eBay's businesses -- business with respect to images?
`
`A.
`
`Well, eBay told us it was their number one service issue
`
`and it was a cost -- it was creating a lot of cost for them
`
`and a lot of frustration. And they told us the reason that
`
`they -- would value is we needed to solve that.
`
`And what it became is it became so much easier for
`
`sellers to be able to post images that the sellers increased,
`
`it you was more seamless for buyers to be able to see what
`
`they were buying so buyer volume increased and then it
`
`generate -- generated its own direct revenue stream.
`
`MR. CALDWELL: And, Mr. Moreno, can we just flip to
`
`the next page?
`
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 21
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 159 of 212 PageID 24091
`
` Vol 1 158
`
`
`BY MR. CALDWELL:
`
`Q.
`
`So here on page 9 of Plaintiff's Exhibit 187, what is
`
`Mr. Jordan saying about the benefit provided by your iPIX
`
`Rimfire software?
`
`MR. NELSON: Objection, Your Honor. The document
`
`has been admitted but again he's asking what another person is
`
`saying. It requires the witness to speculate.
`
`THE COURT: She can identify what the document says,
`
`but I don't think she can talk about other thoughts in his
`
`mind based upon what the document says.
`
`MR. CALDWELL: Certainly.
`
`BY MR. CALDWELL:
`
`Q.
`
`And I -- I believe I -- I'm just asking what does the
`
`document say about -- about eBay's perception of iPIX or what
`
`iPIX had?
`
`A.
`
`Well, what eBay is saying is what happened before they
`
`implemented our product into their picture services. And so
`
`they're saying that it's complicated. They're saying you have
`
`to have an image uploaded to the web, which is a big problem,
`
`that you have to know -- and have it hosted and know what the
`
`URL or address of it is, and then it seems to be -- well, I
`
`won't speculate. It says you have to have an electrical
`
`engineering degree to be able to accomplish all this.
`
`Q.
`
`A.
`
`In the time before your solution?
`
`Correct. This is before our solution.
`
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 22
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 160 of 212 PageID 24092
`
` Vol 1 159
`
`
`MR. CALDWELL: Thank you, Mr. Moreno.
`
`BY MR. CALDWELL:
`
`Q.
`
`A.
`
`How did having eBay as a customer impact your business?
`
`Two major ways.
`
`One, we grew very rapidly in the fact that it was
`
`generating new revenue for the company.
`
`But, two, we grew incredibly fast and we had to keep up.
`
`We had to learn how to scale and how to provide security and
`
`how to grow incredibly fast to keep up with the eBay volume.
`
`Q.
`
`How much revenue did eBay generate for your company
`
`during the time it was a customer?
`
`A.
`
`Q.
`
`52, 53 million dollars.
`
`And how -- how was that roughly 52 million dollars for
`
`your company generated through eBay?
`
`A.
`
`Well, we provided the picture services for them under
`
`contract, the contract you have seen. And that amounted to
`
`about 44 million dollars.
`
`And then at the end of the -- our agreement, when they
`
`wanted to take the service in-house, we reached agreement on
`
`an eight million dollar license.
`
`Q.
`
`Were you with PictureWorks around the same time the eBay
`
`deal was done and at the same time that the larger competitor,
`
`iPIX, bought your company for $175 million?
`
`A.
`
`Q.
`
`Yes, I was.
`
`Did you stay with iPIX after it purchased PictureWorks
`
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`PAMELA J. WILSON, CSR/RMR/CRR
`U.S. DISTRICT COURT - 214.662.1557
`
`Exhibit 2009, Page 23
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00686-Summit 6 LLC
`
`
`
`Case 3:11-cv-00367-O Document 570-3 Filed 04/12/13 Page 161 of 212 PageID 24093
`
` Vol 1 160
`
`
`for 1
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