throbber
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`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
`*
`May 17, 2021
`CLOUDOFCHANGE, LLC
`*
`* CIVIL ACTION NO. W-19-CV-513
`VS.
`*
`*
`NCR CORPORATION
`BEFORE THE HONORABLE ALAN D. ALBRIGHT
`JURY TRIAL PROCEEDINGS
`Volume 1 of 4
`
`APPEARANCES:
`For the Plaintiff:
`
`John H. Barr, Jr., Esq.
`John Allen Yates, Esq.
`Barden Todd Patterson, Esq.
`Edgar Neil Gonzalez, Esq.
`Kyrie Kimber Cameron, Esq.
`Patterson & Sheridan, LLP
`24 Greenway Plaza, Suite 1600
`Houston, TX 77046
`Abelino Reyna, Esq.
`Patterson & Sheridan, LLP
`900 Washington Ave, Suite 503
`Waco, TX 76701
`Charles E. Phipps, Esq.
`Locke Lord LLP
`2200 Ross Avenue, Suite 2800
`Dallas, TX 75201
`Charles S. Baker, Esq.
`Scarlett Collings, Esq.
`Locke Lord LLP
`600 Travis St., Suite 2800
`Houston, TX 77002
`Kristie M. Davis, CRR, RMR
`PO Box 20994
`Waco, Texas 76702-0994
`(254) 340-6114
`Proceedings recorded by mechanical stenography, transcript
`produced by computer-aided transcription.
`
`For the Defendant:
`
`Court Reporter:
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`2
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`(May 17, 2021, 8:44 a.m.)
`THE BAILIFF: All rise.
`THE COURT: Good morning, everyone. You may be seated.
`What do we have to take up? Mr. Barr?
`MR. BARR: Yes, Your Honor. For the plaintiff, we have a
`couple of disputes about some of the opening exhibits that the
`defendants would like to use.
`THE COURT: Okay. If you'd just hand them up.
`Okay. I've got 2.36.
`MR. BARR: Yes, sir. So in 2.36 what we object to is
`they've got "building a POS terminal" in quotations which is a
`construed term. And then below it they say "computer
`programmers writing thousands of lines of code." That's not
`how the Court construed the term. The Court just said plain
`and ordinary meaning.
`So we believe that suggesting that that's the way it
`should be construed in opening statement would be
`inappropriate.
`THE COURT: I'm going to overrule that.
`What's next?
`MR. BARR: Next one is 6.2. And that one is the -- 6.2 is
`some code, and it violates the motion in limine from the
`defendants about using an expert -- using a fact witness as an
`expert. This is a document that's never been produced in the
`case. They want to use it with their employee witness,
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`Mr. McGill Quinn.
`We've never seen that code before. We don't know what it
`is. And we think it violates that motion in limine. It's also
`unauthenticated hearsay.
`THE COURT: What do you intend to say about this code,
`Counsel?
`MR. BAKER: Your Honor, we're just using it as a
`demonstrative. He's going to try -- as a fact witness --
`again, he's a software engineer and he's going to say this is
`what software looks like.
`THE COURT: I will allow you to say that about this slide,
`that this is what software looks like. Not anything about what
`this -- what is on this slide.
`MR. BAKER: Okay. Yes, Your Honor.
`MR. BARR: And the last one, Your Honor, is 6.9. That is
`another document that they want to use with Mr. McGill Quinn,
`their fact witness. And that is a document that hadn't been
`produced in the case. We believe it was created by their
`expert witness, Dr. Chatterjee, and that Dr. Chatterjee created
`that document for this case.
`He's got -- added things to that document such as what
`he's going to argue as an application server. It's hearsay,
`it's unauthenticated. We don't think Mr. Quinn should be
`talking about it. It also violates the motion in limine that
`Mr. Quinn is not supposed to be testifying as an expert.
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`MR. BAKER: Your Honor, if I may. Again, he's a fact
`witness. This is his software, this is how it works. And he's
`going to say this is how it works.
`MR. BARR: It wasn't produced and no one's ever said that
`was the software in the case.
`THE COURT: We'll see what he's going to say. I mean,
`I'll tell you all -- I'll put on the record, the hardest job I
`have during a patent case is trying to figure out what the
`boundary is on a person who sounds like one of your employees
`or engineers who is a fact witness and has expertise that's --
`and so the way I deal with that during trial is I just -- you
`know, you'll ask a question. Mr. Barr can object if he thinks
`it's inappropriate expert testimony rather than just whatever.
`And so I'm going to exclude 6.9 just because it's easier
`to not bring it in during opening. And then -- but I have no
`idea what I'm going to do when your witness is on the stand.
`MR. BAKER: Okay, Your Honor. And 6.9 is -- which one
`
`is --
`
`fine.
`
`THE COURT: This --
`MR. BAKER: Okay. That's fine. That's fine. That's
`
`THE COURT: And I don't care what you -- much what you say
`about it with broad brush in opening. I mean, you can talk
`about the NCR Silver and how it operates. It's just I don't
`want you attaching that yet to what someone's going to say.
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`I'm not sure -- I'm not sure that that's --
`MR. BAKER: Mr. Barr is right. That has -- our expert has
`been prepared to use that as a demonstrative in his --
`THE COURT: And if he has -- I'm sure he has. If he's
`adequately laid the groundwork in his report to do it, then I
`won't have a problem with it. It's just easier -- I tend to
`exclude things during openings.
`You all -- I was in your position for a long time. I've
`learned that you all, as I did, think there's much greater
`power to the openings and closings than I think that there is.
`And that what is in the PowerPoints that you all show them, the
`impact it has on people, I'm skeptical of that, I will tell
`you.
`I'm not sure after -- if I allowed the defendant to show
`the slide on the NCR Silver, I'm not sure that by lunch anyone
`on the jury would be able to recall that they saw it.
`By the way, as far as I'm concerned, I'm going to -- this
`has nothing to do with the slides. I've thought long and hard.
`I'm not -- because I don't know how the jurors will feel about
`wearing masks, I worry that there will be jurors who will be
`unhappy if we are wearing masks. I figure there are jurors who
`will be unhappy if we are not wearing masks. But I don't want
`to -- but I don't want to ask, put the jurors on the spot. I
`am perfectly okay with people not wearing masks when the jury
`is not in here. If you all are comfortable not wearing masks,
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`6
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`that's up to you when the jury's in here.
`I think this is going to be my last trial where I maintain
`requiring everyone to wear masks when the jury is in here. I'm
`going to talk -- this doesn't matter to you all. I'm going to
`talk to them at the end of the week and find out how they felt
`about wearing masks and y'all wearing masks, and that may help
`me go forward. But I certainly don't want to talk to them
`about wearing masks now before you all --
`I thought long and hard about asking the jury -- so you
`know, I thought really hard about asking the jury what they
`thought. But, again, I'm just worried that there'll be someone
`who's either happy you're wearing masks or unhappy you're
`wearing masks. And because I was in your shoes, I don't
`want -- I worried about what color tie I wore.
`(Laughter.)
`THE COURT: So I don't want people -- I don't want you all
`worrying about whether, you know, the mask thing. It'll be
`my -- I'll let them know it's my rule and my protocol that we
`are wearing masks despite the current debate that's going on in
`the nation about whether or not you have to wear masks, and
`that you all are complying with my edict to wear them. So if
`they're unhappy with someone, they're unhappy with me and not
`you all. But when the jury's not in here, you all do what you
`want to in terms of masks.
`Is there anything else we need to take up before the jury
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`7
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`comes in?
`MR. BARR: Yes, Your Honor. Just one thing we wanted
`to -- Mr. Baker and I have agreed and wanted to put on the
`record so it was clear, that the joint exhibits that the
`parties have agreed to are pre-admitted and that we don't have
`to offer the joint exhibits.
`THE COURT: That's the way I always do it. Now, here's
`the catch -- there's no catch, but here's -- to protect you all
`because, you know, again, it doesn't affect me.
`What we'll do at some point tomorrow, and I don't care
`when, this will be on you because plaintiff goes first. At
`some point tomorrow before we start or sometime you need to
`make sure you read into the record a list of everything that
`you think got into evidence today, and defense will listen and
`make sure they agree that it did get into evidence today. And
`we have a record every day of what you all think the day before
`got into the record. That way you all are protected.
`And if there's a discrepancy, if you say I think I got in
`45 and the defendant thinks you didn't, we'll figure that out,
`but I just -- to protect you all at some point tomorrow remind
`me and have someone read into the record. And then obviously
`when defendants put on their case, we'll do the same thing.
`I tend to -- I don't know. I assume Jeff read the --
`Judge Manske read the preliminary deal. I tend to tell the
`jury a couple of times during the trial, when I think of it, to
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`remember that when you all are using demonstrative exhibits
`that they don't go into -- that they don't go into evidence.
`And the reason I do that is in virtually every trial the
`first -- the second or third -- first question is who the jury
`foreperson is. But the second or third is we want to see
`Exhibit 19, and it was a demonstrative, and they don't get to
`see it.
`So I tell them if you all identify something as a
`demonstrative, that doesn't make it more or less credible, but
`they're not going to get it. And so they -- you know, that
`solves that problem.
`Anything else we need to take up?
`MR. BARR: Not for plaintiff, Your Honor.
`THE COURT: I don't know if I told you or not, hopefully I
`did. You have 30 minutes of opening that does not get credited
`against your time. After that whatever you use will be
`credited against your time.
`MR. BAKER: Yes, sir.
`THE COURT: So I don't know if I told you all this, but
`maybe I did. I'll stop -- remind me to stop if I did. I had a
`trial a couple weeks ago where we had -- it was a bad faith
`claim. Did I tell you all this? I did a pretrial hearing in
`it. And I asked the lawyers how long they wanted on opening
`argument, and one of them said, Judge, we just need 10 or
`15 minutes. I said that'll be nice because the last trial I
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`9
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`had they each took about two hours. And one of the lawyers
`said, well, Judge, if I was making $700 an hour like those
`fancy lawyers do, I'd take two hours too. I told him there
`wasn't a lawyer in that courtroom who would have shown up for
`just $700 an hour.
`(Laughter.)
`THE COURT: And then he was -- I don't know if he was
`offended or jealous or what, but anyways. So...
`Okay. We will -- I'll make sure --
`The jurors are all here?
`THE BAILIFF: Yes, sir.
`THE COURT: Then you all get ready. If you have to do
`anything, a little break. I'll come in pretty much exactly at
`9:00.
`And here -- one more thing I'll tell -- hopefully I'll
`remember to tell the jury this. I tend -- a couple of quirks I
`have. One is -- well, it isn't a quirk -- I take a break.
`Everyone does that mid morning, mid afternoon. That's not a
`quirk.
`What I try my very best to do though is to not take a big
`break with someone left on the witness stand. Sometimes that's
`unavoidable, like at lunch or whatever. But in the evening, so
`you all know, around -- just depending how it breaks, if we
`start Mr. Barr's witness at 4:00, I'm going to do my very best
`to make sure he's complete before we leave. I don't like
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`people being held overnight.
`Now, what I will do also though, just to get a little bit
`of time in, is let's say at the end of the day today you tell
`me, we're about to put on our technical expert. I'll let you
`prove him up as an expert, which is pretty rote. And then
`we'll take the break just to get a little time in, but nothing
`substantive.
`So I try to do my very best to do everything that's
`substantive and get that done without -- I'm not talking about
`the five-minute break for morning or afternoon. But at the end
`of the day I really try and get someone done, because I just
`don't like people being held overnight. And so that -- if I
`can't do that, I can't.
`And so it's not, I guess -- this will eventually -- well,
`for the moment it's the plaintiff but eventually for the
`defendant as well, whenever it is that the plaintiff
`finishes -- and we'll know better in a day or two -- you all --
`defendants -- need to have someone ready to go.
`And, again, I say all this because I've had problems with
`it where Mr. Barr will finish and you'll stand up and say, oh,
`we didn't think he was going to finish until 5:00 so we don't
`have anyone here. That will not be a good thing. So, you
`know -- by here, I mean in Waco in the courthouse ready to go.
`They don't -- if they can't be in the courtroom, they can't.
`Are you all invoking the rule, by the way?
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`MR. BARR: I don't think so, Your Honor. We're not going
`to invoke the rule.
`MR. BAKER: Oh, really? Okay. That's fine with us.
`THE COURT: Fine with me too. Easier on me.
`Okay. I'll be back in about five minutes.
`THE BAILIFF: All rise.
`(Recess taken from 8:59 to 9:05.)
`THE BAILIFF: All rise.
`THE COURT: Please remain standing for the jury.
`(The jury entered the courtroom at 9:05.)
`THE COURT: Thank you. You may be seated.
`Good morning, everyone. You may be seated.
`Ladies and gentlemen of the jury, welcome.
`Suzanne, would you call the case, please?
`DEPUTY CLERK: Jury trial proceedings in Civil Action
`W-19-CV-513, styled CloudofChange, LLC versus NCR Corporation.
`THE COURT: If I could have announcements from counsel,
`starting with plaintiff.
`MR. BARR: Your Honor, John Barr --
`THE COURT: And when you all talk, I appreciate the mask
`protocol, but the only way at least I can hear you is if you'll
`take the mask off at least when you're speaking to me.
`And, ladies and gentlemen of the jury, I've done this a
`couple of times now. Again, the reason everyone's wearing a
`mask is because I've asked everyone to wear a mask. But
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`oftentimes I'll have to remind the lawyers that they have to
`take the mask off to talk to me. So you'll see that happen a
`couple of times.
`Mr. Barr, I apologize for interrupting you. If you'd
`introduce everyone at your table.
`MR. BARR: Thank you, Your Honor. John Barr with Jay
`Yates and Kyrie Cameron for the plaintiff, CloudofChange.
`THE COURT: And for defendant?
`MR. PHIPPS: Your Honor, I'm Charles Phipps with the law
`firm of Locke Lord, proud to represent NCR Corporation.
`Also with me is Mark Rogers, senior litigation counsel.
`He is the corporate representative of NCR Corporation here
`throughout the trial.
`Also with me with Locke Lord is Mr. Charles Baker and
`Ms. Scarlett Collings.
`Thank you, Your Honor.
`THE COURT: Ladies and gentlemen, just a very short
`housekeeping. What you should plan on for your days, we tend
`to start at 9:00 unless at the end of the day I typically will
`ask you all if you'd like to start earlier. I'm happy to start
`like at 8:30. I have some sympathy for -- I don't know how far
`you all have to drive, some far, some not. But we may go as
`late as 6:00 to get witnesses finished.
`I do my very best throughout the course of the trial,
`because you all are the judges here, to defer as much as
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`possible to whatever you all think is best for you and your
`schedule.
`We will take -- by the way, the first thing you should
`know is that clock's wrong. So not by much, but I keep getting
`confused by it. But typically in the morning somewhere around
`mid morning we'll take a short break. And then in the
`afternoon we'll take a short break as well. And that's what
`you can expect to have during the course of the day until the
`trial is complete.
`Mr. Barr, if you'd like to make your opening -- Mr. Barr
`or Mr. Yates, whoever's making the opening argument.
`MR. BARR: Thank you, Your Honor.
`THE COURT: And, again, if you'd favor us by taking your
`mask down so we can hear you.
`OPENING STATEMENT ON BEHALF OF THE PLAINTIFF
`MR. BARR: Good morning. This is a case that's about an
`idea that forever changed the way that merchants do business.
`An idea so novel that the United States government granted two
`patents on it. An idea so valuable that NCR Corporation has
`made over $100 million since 2016 using it.
`In the time that I have for opening statement today, I'd
`like to go through several things about what the evidence will
`show in this case. I'll start with the background. We're
`going to talk about the background of the inventors,
`Mr. Baratta and Mr. Olson. We'll talk about their invention
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`that became the '640 and the '012 patents.
`Next, we'll tell you what we believe that the evidence
`will show in this case that you'll hear from this witness
`stand.
`After that we'll talk about damages. We'll discuss the
`damages that we believe that NCR Corporation owes to
`CloudofChange for their unauthorized infringement of the
`patents-in-suit.
`And last we'll preview some of the arguments that we
`believe that NCR will give you to try to excuse their conduct
`in this case.
`Patents are so important to this country that they're in
`the United States Constitution. They're in Article 1, Section
`8. Article 1 is the same one that has the freedom of speech
`and the freedom of religion.
`The reason that the founding fathers put the patents in
`the Constitution is because the founding fathers recognized
`that having a patent system would encourage inventors to
`publish their ideas to the rest of the country so that those
`ideas would spur innovation and progress.
`The bargain that the patent system is in America is that
`inventors like Mr. Baratta and Mr. Olson publish their ideas by
`filing a United States patent on them which people can then
`read. But in exchange for publishing their ideas, the United
`States government gives the inventor a monopoly, for 20 years
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`usually, where they have the exclusive right to use their
`ideas.
`You may remember on Thursday in jury selection when I
`previewed for you that a point-of-sale system, which you're
`going to be hearing a lot about in this case, that's the thing
`that happens between a merchant and a customer in coffee shops
`and stores and restaurants all over the country, where the sale
`occurs and items are exchanged in commerce.
`In this case the point-of-sale systems are going to be the
`computer software and the equipment that's used by those
`merchants to execute these point-of-sale transactions.
`The evidence is going to show that before Mr. Baratta and
`Mr. Olson's inventions, merchants had to have local computer
`servers in their stores for every store where they had a
`point-of-sale device. The evidence will also show that before
`the inventions in this case that merchants had to call in
`computer programmers to program computer code if they wanted to
`change or customize their point-of-sale systems.
`The inventions of Mr. Baratta and Mr. Olson changed all
`that.
`So the story of the ideas that Mr. Olson and Mr. Baratta
`had goes back to 2008, as I mentioned in jury selection. Back
`in 2008 you'll remember that stores had -- most stores had
`old-fashioned cash registers like the ones that were
`manufactured by NCR.
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`The cash register was invented back in the 1800s, and NCR
`was one of the first companies that made cash registers back in
`those days. And they didn't change that much in the next
`100 years.
`You'll hear from Quentin Olson in this case. Quentin
`Olson was a computer scientist. He's been work -- or is a
`computer scientist. He's been working with computers since the
`1970s. And his experience with computers got him a job at
`Starbucks back in the 1990s where he managed the entire support
`system, the store support system, for the entire Starbucks
`operation, over 3,000 stores. And he managed that from the
`company headquarters in Seattle, Washington.
`Back then the Starbucks computer support system consisted
`of a big bank of modems that had to call up the stores, the
`3,000 stores, every night and send that information about all
`the lattes that had been sold that day back to company
`headquarters.
`Mr. Olson saw that every time Starbucks wanted to modify
`their point-of-sale systems in a particular store to add a new
`item or to change the prices, that they had to call a group in
`called the configuration group, that had trained computer folks
`who could do that for the store owners. It was expensive and
`it was time consuming.
`Mr. Olson left Starbucks around 2002 and he started his
`own computer consulting company. As a side project for
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`himself, he started working on trying to develop his own
`point-of-sale system.
`Now, Mr. Olson will tell you that he had two goals for his
`point-of-sale system. The first thing that he wanted was for
`his system to be flexible. By flexible, Mr. Olson meant that
`the point-of-sale system could be changed easily and work in
`any kind of a restaurant or store, whether it was just a coffee
`shop or a big chain store with lots of different locations.
`The next goal that Mr. Olson had for his invention was
`that it would have enterprise functionality. And what that
`means is that it could support multiple locations. So if you
`had stores like Starbucks that have 3,000 locations back then,
`you could use the same system and it could be supported by the
`same system.
`The evidence will show that Mr. Olson was contacted by
`Mr. Baratta back in 2005. Mr. Baratta was a gentleman who had
`decades of experience owning convenience stores. Mr. Baratta
`initially contacted Mr. Olson about asking Mr. Olson to see if
`he could help do some computer work for Mr. Baratta with
`electronic cash registers.
`After they got to know each other, Mr. Olson told
`Mr. Baratta about an idea that Mr. Olson had about his
`point-of-sale project. And so back about 2005 they started
`talking about this idea, and Mr. Baratta will tell you that he
`thought it was an amazing idea that Mr. Olson had, to have
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`remote servers that were accessible through the Internet in the
`Back Office. And you could use that to get rid of the server,
`the local server that I told you about, that all those
`Starbucks had to have in their 3,000 stores.
`Now, the system that Mr. Olson had put together back in
`2005 at the time that he originally started talking with
`Mr. Baratta was fairly rudimentary. At that point it was
`pretty much a standalone system, and he hadn't really developed
`all the Back Office part and the other inventions that you're
`going to hear about in this case.
`But he and Mr. Baratta started working together from this
`idea about the remote servers. And later you'll hear that when
`they were working together that Mr. Baratta and Mr. Olson came
`up with the idea of a way to get rid of these computer
`programmers that you would have to have customize the
`point-of-sale screens. And the way that they did that is they
`had the idea to come up with what's called a point-of-sale
`builder. And you're going to hear a lot about that in the
`case, because that's one of the very disputed issues that NCR
`has here. They disagree that we have a -- that they have a
`point-of-sale builder.
`And you'll hear that the advantage of the point-of-sale
`builder is that it allows the merchants, the mom and pops, to
`make changes to their own point-of-sale systems in their stores
`as they want them, to customize them their way to meet their
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
`
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`19
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`business without having to call in expensive computer
`programmers to do that work for them.
`So the first patent is the '640 patent. And it was -- the
`evidence will show that it was filed in 2008. And by that time
`Mr. Olson had been working on his idea for about six years.
`And I think Mr. Baratta had been working on the idea for about
`three years. And so the bottom line is the inventors spent a
`lot of time working on these ideas that showed up in these
`patents.
`And the old way of doing things before -- as I said,
`before Mr. Olson or Mr. Baratta's idea, were the way that
`things were done in Starbucks back in 1999 with the local
`computer servers in the store and computer experts to make
`changes.
`The evidence will show that the point-of-sale builder that
`Mr. Olson and Mr. Baratta came up with was new. It was a new
`idea at the time of their invention. Nobody else was doing it
`this way. And it allowed remote servers, and as I mentioned,
`point-of-sale builders.
`Mr. Olson and Mr. Baratta were the first people to come up
`with the idea that's going to be described in this courtroom,
`and that's why the United States government has granted them
`two patents on it.
`Now, no one questions that the Internet has changed the
`way that we all do business. Mr. Olson and Mr. Baratta did not
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`20
`
`invent the Internet. I'm sure that they wish that they had.
`But what they did invent is a web-based point-of-sale system.
`So as you can see on this demonstrative we have the old
`cash registers from back in the 1800s. Then we move on to
`what's called an electronic cash register, or an ECR. You'll
`hear a little bit about those in this case. And then last, the
`invention in this case which utilizes the cloud to do these
`transactions.
`Now, at this point you're probably wondering, as I was
`when I first started working on this case, what is the cloud?
`So the cloud refers to computer servers that are accessed over
`the Internet and software and databases that run on those
`servers. And the evidence will show that by using cloud
`computing the merchants don't have to keep these computer
`servers in their stores.
`The evidence will show that a good analogy for cloud
`computing is shown on this demonstrative here. So what we have
`here is if you can think about cloud computing kind of like a
`water utility. So you can see we've got the water tower on the
`left side. And the water tower is a utility that provides
`water to your home or your business through the plumbing pipes.
`Now, you can open up your tap and you can have just as much
`water as you need. You may need a glass of water. You might
`want a whole bathtub full of water. You're allowed to do that.
`A good analogy for cloud computing, you'll hear companies
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`like Google Cloud Services, Amazon Web Services. These are
`companies that provide cloud computing. They're like the water
`utility. They provide cloud computing to you through the pipes
`of the Internet. And similar to the utility, you can have just
`as much cloud computing as you need or just as little as you
`need.
`So how do we use the cloud? Well, the way we use the
`cloud -- and most of you will probably recognize this -- is
`with your iPhone. Before the cloud and with the old phones,
`you had to -- when you take pictures with your phone and
`download them onto your phone, you had to erase them or you had
`to take some pictures off before you could take any new
`pictures. Well, now with the cloud, as I'm sure you notice as
`I do, Apple charges you $0.99 a month for the privilege of
`storing your pictures in the cloud on their servers. And so
`that's how we use the cloud.
`In addition to your photos, your photos up there in the
`cloud are actually kept on these computer servers, these cloud
`computer servers that are out there in the world that are being
`utilized. There's banks of computers all over the world.
`And that's what we refer to as the cloud. They're not
`really up there in space. They're not in the clouds. But they
`do go through the Internet, through the worldwide web, and
`enables you to use all these computers that people like Google
`and Amazon have, and to leverage the power of those computers
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`KRISTIE M. DAVIS, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)
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`not only to store your family photos but to run software like
`the software that's used on these point-of-sale systems in this
`case.
`So let's talk for a little bit about the invention. As I
`mentioned, there were two patents that were issued in this
`case. And you've got them in your notebooks there, you've got
`some juror notebooks in your chair when you came in this
`morning. They've got copies of the patents in them.
`They've also got copies of the Court's claim construction,
`where the Court has gone in and looked at some of the terms in
`the -- that are in the claims of the patent. And the Court has
`given you definitions for those terms to help you in deciding
`this case.
`There's also a tab in those notebooks that has a picture
`of all the witnesses that we believe will testify in this case
`and a picture to help you remember who you've heard from. I
`think there's even some space where you can take some notes if
`you'd like to when each witness is testifying.
`Now, you're going to be hearing from both of the inventors
`in this case, Mr. Olson and Mr. Baratta. You're going to hear
`the story of their invention. And you're going to hear a
`little bit from Mr. Olson about the -- just a general
`explanation of the invention.
`We're also going to have some experts in this case. We're
`going to have Mr. Crouse who's sitting in the back right now.
`
`1 2

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