Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 1 of 111 PageID #: 19170
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`1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
`
`MAXELL, LTD. )
`
` DOCKET NO. 5:16cv179
`-vs- )
` Texarkana, Texas
` ) 8:32 a.m.
`ZTE USA, INC. June 19, 2018
`
` TRANSCRIPT OF TRIAL
` MORNING SESSION
` BEFORE THE HONORABLE ROBERT W. SCHROEDER III,
` UNITED STATES DISTRICT JUDGE,
`AND A JURY
`
`A P P E A R A N C E S
`
`
`FOR THE PLAINTIFF:
`
`MR. JAMIE B. BEABER
`MAYER BROWN LLP
`1999 K Street, NW
`Washington, DC 20006
`
`MR. GEOFFREY P. CULBERTSON
`PATTON TIDWELL & CULBERTSON, LLP
`2800 Texas Blvd.
`Texarkana, TX 75503
`
`COURT REPORTER: MS. CHRISTINA L. BICKHAM, RMR, CRR
` FEDERAL OFFICIAL COURT REPORTER
` 300 Willow, Ste. 221
` Beaumont, TX 77701
`
`
`Proceedings taken by Machine Stenotype; transcript was
`produced by a Computer.
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`1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
`
`MAXELL, LTD. )
`
` DOCKET NO. 5:16cv179
`-vs- )
` Texarkana, Texas
` ) 8:32 a.m.
`ZTE USA, INC. June 19, 2018
`
` TRANSCRIPT OF TRIAL
` MORNING SESSION
` BEFORE THE HONORABLE ROBERT W. SCHROEDER III,
` UNITED STATES DISTRICT JUDGE,
`AND A JURY
`
`A P P E A R A N C E S
`
`
`FOR THE PLAINTIFF:
`
`MR. JAMIE B. BEABER
`MAYER BROWN LLP
`1999 K Street, NW
`Washington, DC 20006
`
`MR. GEOFFREY P. CULBERTSON
`PATTON TIDWELL & CULBERTSON, LLP
`2800 Texas Blvd.
`Texarkana, TX 75503
`
`COURT REPORTER: MS. CHRISTINA L. BICKHAM, RMR, CRR
` FEDERAL OFFICIAL COURT REPORTER
` 300 Willow, Ste. 221
` Beaumont, TX 77701
`
`
`Proceedings taken by Machine Stenotype; transcript was
`produced by a Computer.
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`Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 2 of 111 PageID #: 19171
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`FOR THE PLAINTIFF:
`
`MR. ALAN GRIMALDI
`MR. KFIR B. LEVY
`MR. JAMES A. FUSSELL III
`MR. BRYAN C. NESE
`MR. WILLIAM J. BARROW
`MS. TIFFANY MILLER
`MR. BALDINE B. PAUL
`MR. SAQIB J. SIDDIQUI
`MR. CLARK S. BAKEWELL
`MAYER BROWN LLP
`1999 K. Street, NW
`Washington, DC 20006
`
`FOR THE DEFENDANT:
`
`MR. ERIC H. FINDLAY
`FINDLAY CRAFT PC
`102 N. College Ave., Ste. 900
`Tyler, Texas 75702
`
`MS. CALLIE A. BJURSTROM
`MR. HOWARD N. WISNIA
`MS. NICOLE S. CUNNINGHAM
`MR. SARA J. O'CONNELL
`PILLSBURY WINTHROP SHAW PITTMAN LLP
`501 W. Broadway, Ste. 1100
`San Diego, CA 92101-3575
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`Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 3 of 111 PageID #: 19172
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`P R O C E E D I N G S
`(Jury out.)
`THE COURT: Good morning, everyone.
`MR. FINDLAY: Good morning, Your Honor.
`MR. CULBERTSON: Good morning.
`THE COURT: I know the parties have a number of
`objections they want to raise before we do preliminary
`instructions and openings.
`Who would like to be heard?
`MR. FINDLAY: Good morning, Your Honor. Eric
`Findlay on behalf of ZTE USA.
`Ms. Bjurstrom will handle the specific objections
`to the slides.
`More from an overview issue and concern that we had
`and perhaps clarification, we understand that Your Honor has
`ruled on the Motion in Limine No. 4, specifically the 408 and
`the NDA. This may just be reiterating the objection for the
`record, Your Honor, but I think it is sincerely putting us in
`a really difficult situation.
`If I understand the Court's ruling, part of the
`rationale was that Maxell is entitled to disclose its
`confidential information, what it did, but all of what it's
`going to disclose and talk about, I believe, beginning in
`opening statements, are things which happened under these 408
`discussions with ZTE.
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`So it puts us in, I think, a kind of classic
`catch-22. We can't be compelled to disclose our 408 exchange
`that we had with them. They are not at liberty, from what I
`understand, so far the Court has ruled, to force that out or
`to put that out there. It's our choice.
`And so, as I say, I think it puts us in a catch-22
`where either we remain silent, and it looks like we didn't
`respond to anything they had to say and just, you know,
`closed our hands and closed our mouths and walked away, or
`we're into this situation where now we've got to disclose all
`the things and all the discussions and all of the information
`we exchanged, which we believed at the time, and I think
`was -- there's no question -- covered by, one, the NDA and
`then would be protected under FRE 408.
`And I think that really puts a chilling potential
`impact on these sorts of pre-suit settlement negotiations.
`Normally, when those happen, they're successful. Not always.
`Here we ended up in court; they weren't successful. But I
`think it really puts a chilling effect on folks engaging in
`those.
`
`THE COURT: The parties negotiated this
`nondisclosure agreement at arm's length, correct?
`MR. FINDLAY: Yes, sir.
`THE COURT: Okay. Well, I mean, I just don't --
`you know, it seems to me -- let me hear from the Plaintiff on
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`Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 5 of 111 PageID #: 19174
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`this.
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`MR. FINDLAY: Thank you, Judge.
`MR. LEVY: Your Honor, first, I think you hit the
`nail on the head. The parties negotiated the NDA. There are
`provisions in the NDA for this. So that's first.
`Second, you know, the claim of prejudice is a
`little disingenuous because, on the one hand, they're
`claiming, hey, we didn't know about these patents until the
`complaint was filed or, you know, there's no willfulness
`here.
`
`On the other hand, when there's evidence of notice
`or awareness or willfulness, then they say, oh, you can't
`bring that in because -- you know, because it puts us in a
`bad situation.
`The parties negotiated the NDA. It's pretty clear.
`The case law is pretty clear that this information could come
`in for things like notice. The Defendant has certainly put
`things like notice and awareness of the patent and whatnot at
`issue by, you know, making certain -- taking certain
`positions that are contrary to what these documents show.
`So, ultimately --
`THE COURT: As I understand it, Mr. Levy, the terms
`of the NDA only restrict Maxell's use of ZTE's information
`and ZTE's use of Maxell's information, correct?
`MR. LEVY: Yes, Your Honor.
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`THE COURT: Does the NDA cover Maxell's use of
`Maxell's information?
`MR. LEVY: We think it does, and we think
`Your Honor ruled on that, in that in the provision -- and I
`don't have it right here in front of me -- about, you know,
`use under a protective order, that -- that portion of it.
`But even if that wasn't the case, even if it turned
`out we couldn't use ZTE's information, we're fine just using
`Maxell's version of -- Maxell's side of this.
`The whole point here is to show that Maxell did
`provide notice. ZTE's response -- they can present it or
`not -- frankly, it's largely irrelevant. It's the fact that
`they did get the notice. It's that they were aware of these
`patents.
`
`ZTE can respond that, you know, hey, you know, we
`didn't think we infringed. They can put whatever evidence
`they want in response to that, but those are the facts, and
`the NDA doesn't preclude Maxell from using those facts.
`THE COURT: Mr. Findlay, I mean, I -- go ahead.
`MR. FINDLAY: Your Honor, I -- I understand
`Your Honor's point that the NDA was negotiated at arm's
`length, and I don't disagree with that, but these are also, I
`think, the most classic sort of 408 negotiations that even --
`irrespective, I think -- unless I'm missing something, Judge,
`and I might be, but irrespective of an NDA, evidence when --
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`of compromise and negotiations, they don't come in. They
`can't be used against somebody.
`And for them to just say, well, look, all we're
`saying is what we did. We're not saying what you did. You
`can choose to disclose that or not --
`THE COURT: Well --
`MR. FINDLAY: -- but it is under --
`THE COURT: I'm sorry. I didn't mean to interrupt
`
`you.
`
`MR. FINDLAY: When it's under a 408 negotiation
`attempt to compromise, I think that's just classic -- it
`stays out, because it puts us in a very prejudicial spot.
`THE COURT: Well, it doesn't stay out if it goes to
`provide notice or if it goes to the issue of willfulness. I
`mean, and the law is clear about that. As long as the
`information is not being used to, you know, prove validity or
`invalidity of the claim -- and as I understand it, it's not
`being used for those purposes -- it seems to me it's
`permissible.
`MR. FINDLAY: One moment.
`(Pause in proceedings.)
`MR. FINDLAY: It's much more, though, than just
`notice, Judge. And I think it might be -- I think I tend to
`agree that if it just is an issue of notice, did somebody
`know about the patents beforehand, that's one issue, but this
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`Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 8 of 111 PageID #: 19177
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`goes way beyond that, and I just --
`THE COURT: Well --
`MR. FINDLAY: -- for the record --
`THE COURT: -- to be honest, Mr. Findlay, I'm
`not -- it's really somewhat unclear to me that these
`discussions were really settlement negotiations. I mean,
`isn't it -- isn't it true that they occurred years before the
`lawsuit was filed? How could they be settlement
`negotiations?
`MR. FINDLAY: They did. But if you look at the
`documents, which I know you haven't ruled on their
`admissibility yet, the documents are talking claim charts;
`the documents are talking claim construction positions.
`It clearly was a situation where, I think, if it
`wasn't stated in the materials, there's -- you can't escape
`the conclusion that Hitachi was shopping -- Maxell -- excuse
`me -- was shopping these patents around, and if they couldn't
`get a deal, they're probably going to file suit. The
`documents clearly reflect that, I think, Your Honor.
`THE COURT: Is there a way that we can deal with
`the prejudice that you've identified, Mr. Findlay, with some
`sort of a redaction --
`MR. FINDLAY: To the --
`THE COURT: -- process?
`MR. FINDLAY: To the documents, I think there
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`perhaps could be. We'd have to look at them on a
`case-by-case basis, I think.
`THE COURT: I mean, there's not any way to do it
`globally that as -- at least, if I understand your concerns,
`but maybe look at it on a document-by-document basis?
`MR. FINDLAY: That, I think, is -- and Mr. Wisnia
`has handed me a note. The documents are all marked 408. So
`regardless of what they claim they're now trying to use them
`for, it doesn't fit any exception that I see under 408.
`THE COURT: Okay. Well, again, Mr. Levy, anything
`you want to add?
`MR. LEVY: Yeah, I would just -- you know,
`Mr. Findlay said, you know, it doesn't -- they don't fall
`into any exception. We cited the exception to the Rule 408
`with regards to providing notice, so it squarely falls within
`that.
`
`Second, you know, there is -- we -- we mentioned
`during -- I think during the pretrial conference and -- I
`think that was when it came up first -- that, you know, we're
`happy to do redactions to some of these documents if that's
`what ZTE wants to do. We offered that then. We're
`comfortable doing it now if that's what Your Honor needs.
`And then, third, I just -- I think it's important
`because it's going to come up in just a moment when we talk
`about Maxell's objections to just a couple slides in ZTE's
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`opening. There is a difference between, you know, offers --
`offers to compromise and just general -- you know, the
`general, hey, here's a -- a patent. We think you infringe
`it, and we think you should -- we think you should license
`it. That clearly does go to notice. It clearly does go to
`willfulness.
`On the other hand, there was a document where
`Maxell had made an offer to ZTE. We withdrew that. We
`recognized, look, that's an actual offer in compromise.
`Those offers in compromise. Those get to the heart of what
`Rule 408 is.
`And it's -- you know, rather than going into a
`lawsuit, rather than, you know, extended negotiations, we're
`willing to take such-and-such offer and to use -- to bring in
`the offer, that would be clearly, you know, in violation of
`Rule 408 because it goes to show, you know, the value of the
`patents or the portfolio or whatnot. And I -- I would just
`distinguish those to the extent Your Honor has any concerns
`about that.
`THE COURT: All right.
`MR. FINDLAY: The last point I would indicate, Your
`Honor, is we are not going to say that ZTE Corp was not on
`notice of these patents. I mean, I think if we were going to
`somehow suggest that ZTE Corp didn't even know about the
`patents, I would think that's the situation where we're
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`improperly trying to use it as a sword and a shield. We're
`not going to deny that ZTE Corp had notice.
`THE COURT: I understand.
`MR. LEVY: Again, I think Your Honor addressed this
`in the order yesterday.
`THE COURT: Mr. Findlay, I -- I note your
`objections. I think you've made your record on this, but
`I -- you haven't convinced me to change my mind about it.
`MR. FINDLAY: Fair enough. Thank you, Judge.
`THE COURT: Okay. Other objections, specific
`objections to slides that we need to address?
`MR. LEVY: I was just going to note that we did
`meet and confer this morning, and they have withdrawn
`objections to about four of the slides. And then to another
`two if we make some amendments. And we've agreed to make
`those amendments. We're going to have to kind of hurry
`through those this morning.
`THE COURT: Sure. Are there -- so are there any
`remaining objections?
`MR. LEVY: There are still. They have a few. We
`have a couple.
`THE COURT: All right. Let's move expeditiously.
`MS. O'CONNELL: Thank you, your Honor.
`There is one slide. It appears twice in the slide
`deck, slightly modified versions of Maxell's opening
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`statements. It's Slide PDX001-3, and also Slide PDX001-30.
`This is No. 1 and No. 8 in our written objections.
`And we do maintain our objections to the slide. It
`is very prejudicial. The slide illustrates a bundle of U.S.
`currency, billions of dollars, going to a map of China with a
`building labeled ZTE in the middle of it.
`It clearly violates the Court's ruling on Motion in
`Limine No. 6 which precluded reference to ZTE corporation's
`size, market power, total revenue or operating profits. This
`could only relate to ZTE Corporation, as it's the only entity
`in China. The caption "Billions in U.S. sales," this
`isn't -- I mean, their damages expert doesn't even request
`billions --
`THE COURT: Let me hear from the Plaintiff on that.
`MR. LEVY: Thank you, your Honor.
`So there were a number of objections, and I'll try
`to kind of run through them.
`First, we do think we're sticking to the facts as
`Your Honor requested that we do.
`There's nothing about ZTE Corporation's size,
`power, or overall revenue. The billions in smartphones, if
`Your Honor will recall, at one of the hearings -- I think it
`was on the motions in limine -- we were saying, look, we're
`not going to talk about their overall revenue, but we want to
`be able to talk about revenue of accused products.
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`They have provided us sales and revenue information
`for the accused products. We want to be able to use those
`numbers.
`
`That's the number we're talking about. That is
`billions of dollars in revenue for the accused products. So
`that's point one. It's not about ZTE Corp's size, revenue,
`that kind of stuff. This is strictly about revenue from the
`accused products.
`Second, you know, these phones are designed,
`they're made, they're manufactured in China. Then they're
`imported into the United States. We need to explain that. I
`mean, it's part of the -- it's part of the infringement proof
`to -- to some extent that these -- these products come in,
`that they're imported here, that they're sold here by ZTE
`USA, also.
`ZTE USA does the importing, does the selling, all
`that kind of stuff. Where they're made and whatnot is not an
`irrelevant fact. Where they're designed is not an irrelevant
`fact, especially since the design of these phones is an
`issue. We need to explain how this relates to U.S. patents,
`and this is one way of doing that.
`There was an objection about whether this gets to
`U.S./China trade wars. I'm not even sure, you know, how --
`how that ties into this. We -- we don't talk about that at
`all.
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`THE COURT: All right. Let me --
`MR. LEVY: I think Your Honor was very clear about
`
`that.
`
`THE COURT: Let me suggest this, Mr. Levy, as a way
`to sort of short-circuit this: I'm going to suggest that you
`take the pile of cash off the slide and the "billions" off,
`and just change it to smartphone/tablet sales. Is that fair
`enough?
`
`MR. LEVY: Yeah.
`THE COURT: I mean, that's -- that's my ruling.
`Ms. O'Connell, does that satisfy your concerns?
`MR. LEVY: So just to be clear, the -- the dollars,
`the bundle of dollars --
`THE COURT: The bundle of dollars --
`MR. LEVY: I guess whether it satisfies their
`concern is a separate issue, so maybe we should hear from
`them to see what --
`THE COURT: Right. I mean, I -- I understand what
`your ZTE Corp argument is, but I disagree with you about
`that. I think that's -- I think those are -- the facts are
`the facts, and I think the jury is going to hear about all of
`that.
`
`I do think it is somewhat inflammatory to have the
`pile of cash there and the reference to billions in sales.
`So to -- to that extent, I'm going to sustain your
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`Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 15 of 111 PageID #: 19184
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`objection to it.
`MS. O'CONNELL: Your Honor, if I might just add,
`Maxell has consented to add "Corp" to other slides where it
`had simply said "ZTE" before because, of course, we're
`concerned about this conflation of the two. If they could
`add "Corp" to this that would also --
`THE COURT: Any objection to that, Mr. Levy?
`MR. LEVY: So, you know, in this case the sales are
`actually -- so the money is actually earned by both as far as
`we can tell, right? ZTE USA -- or whichever entity that
`provided us the sales revenue -- actually is getting that
`money, and it does eventually go back to help, you know, make
`more phones.
`So these revenues -- unless they have given us ZTE
`Corp's revenues, these revenues would be ZTE USA's revenues.
`But I do also have another question.
`THE COURT: Well, hold on. Let me have
`Ms. O'Connell.
`MS. O'CONNELL: Your Honor, Maxell doesn't have to
`demonstrate currency going to ZTE Corporation. This case is
`about USA's profits and revenues, and this is just totally
`inflammatory.
`THE COURT: Well, what's -- what's inflammatory is
`the pile of cash and the reference to the word "billions."
`MS. O'CONNELL: Well, it's --
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`THE COURT: And so I'm sustaining your objection.
`MS. O'CONNELL: It doesn't explain in --
`THE COURT: Ms. O'Connell, when I'm speaking,
`please do not interrupt me.
`MS. O'CONNELL: I'm sorry.
`THE COURT: What's inflammatory -- and I agree with
`you -- is that -- is the reference -- is the pile of cash and
`the reference to "billions." I'm sustaining your objection
`on that point.
`On the other objection, I'm overruling that, all
`
`right?
`
`What's your next objection?
`MS. O'CONNELL: This is the only slide we have an
`objection to in the opening slide deck.
`THE COURT: All right. Let me hear the
`Plaintiff -- from the Plaintiffs.
`MR. LEVY: Just two points.
`One, I just want a point of clarification on the
`slide, and then Mr. Beaber has a point to make.
`So for the slide we take out the pile of cash, and
`then we take out the dollar sign, the "billions" and the word
`"in"?
`
`THE COURT: Well, yeah. I mean, you can change it
`to revenue from smartphone/tablet sales, if that's
`acceptable.
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`MR. LEVY: So revenues from smartphone/tablet
`sales? I just want to be clear because we're making the
`change.
`
`THE COURT: That's what I would suggest.
`MR. LEVY: Thank you.
`MR. BEABER: Just one point -- one additional point
`of clarification. We're still going to be able to talk about
`the sales, the billions of dollars in sales.
`THE COURT: Of course, you are.
`MR. BEABER: It's just the visual that you have an
`issue with?
`THE COURT: That's correct.
`MR. BEABER: Thank you, your Honor.
`THE COURT: Yeah.
`Anything else?
`MR. BEABER: Not from Maxell, Your Honor.
`MR. LEVY: Well, I think there are objections to a
`couple of their slides.
`THE COURT: All right. Let me hear those.
`MS. O'CONNELL: Judge, if I might?
`THE COURT: Yes.
`MS. O'CONNELL: The royalty base is not billions.
`Nobody has alleged that the royalty base is billions. All
`they've got to show is sales in the U.S. Everything else is
`irrelevant.
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`Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 18 of 111 PageID #: 19187
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`MR. LEVY: I'm -- I'm not quite sure how to address
`this other than we asked for sales of accused products. We
`were provided sales of accused products, the number of units
`sold, and the revenues. And the revenues are billions. I
`mean, I'm not -- again, these aren't our numbers. These were
`provided to us so --
`THE COURT: Is that right, Ms. O'Connell?
`MS. O'CONNELL: I don't believe so.
`MR. LEVY: We -- I can -- I mean, we can --
`THE COURT: I mean, we can figure that out. It's
`one way or the other.
`MR. LEVY: Yeah, we can pull Ms. Mulhern's report.
`We'll -- we'll pull that now.
`MR. BEABER: If I could add one thing, also.
`Mr. Findlay got up here during voir dire yesterday and talked
`about how ludicrous, how crazy, how ridiculous our damages
`amount of $50 million was.
`We should be able to put that in comparison to the
`billions in sales that -- in sales revenues that they have
`made.
`
`I don't think there's anything prejudicial about
`that. And the facts are the facts, Your Honor. The billions
`of dollars that they sold, that's what our damages are
`compared to, right?
`THE COURT: I mean, that's the way I see it. I'd
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`Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 19 of 111 PageID #: 19188
`19
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`be glad to hear from the Defendant on that.
`Ms. O'Connell?
`MS. O'CONNELL: Your Honor, if I might, I'd like to
`pull up the actual numbers so that I'm not speculating, for
`you?
`
`THE COURT: Please.
`MR. LEVY: Your Honor, we have the number.
`So this is confidential information. We'll need
`the Maxell folks to step outside for just moment.
`THE COURT: Okay.
`MR. LEVY: Sorry.
`MR. FINDLAY: Why don't we just look at it.
`THE COURT: Yeah, can we do it without putting it
`
`on the --
`
`(Pause in proceedings.)
`MR. LEVY: Your Honor, the -- the number -- the
`revenue from the accused -- from sales of the accused
`products, revenue from sales of the accused phones, is
`
`. That's the number we're
`
`referring to.
`THE COURT: Okay. And what -- what are you
`referring -- what -- what's the source of that information?
`MR. LEVY: That is -- it's cited -- it's -- it's
`the sales spreadsheet that was provided to us by whichever of
`the Defendants provided the sales information.
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`Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 20 of 111 PageID #: 19189
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`THE COURT: All right. Ms. O'Connell?
`MS. O'CONNELL: Your Honor, my understanding is
`that under current damages law, the damages expert here and
`everywhere, unless they're making an argument based on the
`total entire value of the product, don't get to bring in the
`entire sales price in any case.
`Ms. Mulhern opined on the cost of the components
`that she says embody the inventions in this case. That's
`what her opinion is on. And these sales numbers -- these
`huge sales numbers are so much more than those component
`costs, that they're simply inflammatory and irrelevant.
`THE COURT: She's relied on those numbers, hasn't
`
`she?
`
`prices.
`
`MS. O'CONNELL: She's relied on the component cost
`
`MR. LEVY: She's relied on both, the numbers and
`the component costs. The component costs are a percentage of
`the total numbers. Obviously, you have to start with the
`total numbers.
`Also, I think we're -- we're arguing a Daubert
`
`motion.
`
`THE COURT: I do, too. I think we're way past that
`point. The objection is overruled.
`Next objection.
`MS. O'CONNELL: None on the opening slide deck.
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`Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 21 of 111 PageID #: 19190
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`THE COURT: Thank you.
`MR. LEVY: Your Honor, the only objection we have
`is with regards to a particular set of slides provided by --
`in their opening. Yeah. And unfortunately, this -- well, I
`guess let me try it without having to seal anything.
`Essentially what the slide does is it shows, you
`know, Maxell's -- or Hitachi's standard rate of 1 percent,
`and then it -- you have it there in front of you, Your Honor.
`THE COURT: I actually do, yes.
`MR. LEVY: And then the rate, which I won't
`describe -- the offered rates in other negotiations, those
`offered rates, I mean, this is -- this gets to the heart of
`what 408 is for.
`Their suggestion is that these offered rates are
`going to -- well, I'm not sure how they're not compromise
`negotiations, how this isn't an offer made in compromise.
`I'm not sure what other use they're for, so maybe they can
`explain.
`
`THE COURT: Let me hear.
`MS. BJURSTROM: And, Your Honor, we've been hearing
`a lot about all of the information that their expert is going
`to rely on and these grossly inflated figures that they're
`going to put in front of the jury, and it appears that what
`they want to do is prevent us from being able to
`cross-examine their witnesses about information that goes to
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`Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 22 of 111 PageID #: 19191
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`the reasonable royalty.
`And as we indicated in connection with our
`briefing, Ms. Mulhern talks all about the other percentage.
`They actually argued their Daubert challenge and said, don't
`worry about it, Your Honor. Deny the motion. They can
`vigorously cross-examine Mr. Nakamura, and they can
`vigorously cross-examine Ms. Mulhern.
`And now they're taking that back, and they can't do
`that. This is absolutely fair. The jury needs to hear what
`reasonable royalties would be, and they need to have the
`panoply of information available to them.
`Ms. Mulhern and Maxell want you to hear one of the
`offers that they claim they give as an offer, but they don't
`want the jury to hear other offers that they get. So they're
`picking and choosing, and that's not fair.
`THE COURT: I'll overrule the objection.
`Next objection?
`MR. LEVY: I'm sorry. You overruled?
`THE COURT: Overrule your objection.
`MR. LEVY: May I respond or --
`THE COURT: I've made up my mind.
`MR. LEVY: Thank you, Your Honor.
`THE COURT: Any other objections?
`MR. LEVY: Well, I mean, I would just like to note,
`I guess, just for the record, then, that Ms. Mulhern isn't
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`going to rely on these other offers; Mr. Nakamura isn't going
`to testify about these other offers because they are 408
`inadmissible.
`And I guess we've got that on the record, and thank
`you, Your Honor.
`THE COURT: Okay. Other objections?
`MR. LEVY: None from Maxell with regards to the
`openings. I understand ZTE has a number of objections for
`the first witness's slides. I don't know if Your Honor wants
`to address those right now.
`THE COURT: Not at this time.
`Any other objections that we need to address for
`either preliminary instructions or opening statements?
`MS. O'CONNELL: No, Your Honor.
`THE COURT: Okay. Do you want to see if the jury
`
`is here?
`
`COURT SECURITY OFFICER: Yes, sir.
`(Pause in proceedings.)
`COURT SECURITY OFFICER: Please rise for the jury.
`(Jury in.)
`THE COURT: Good morning, ladies and gentlemen of
`the jury, and welcome back. I hope you had a pleasant
`evening last night.
`Just a little roadmap about what the morning is
`going to look like for us. I will begin by giving some
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`Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 24 of 111 PageID #: 19193
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`preliminary jury instructions to you, which will take
`probably about 30 minutes.
`And then following that, the attorneys for the
`parties will have an opportunity to present their opening
`statements to you, and then we'll hear from our first witness
`following that.
`You've now been sworn as the jury to try this case.
`As the jury, you will decide disputed questions of fact, and
`as the Judge, I will decide questions of law and procedure.
`There will be times during the trial and at the end
`of the trial when I will instruct you on the rules of law
`that you must follow in making your decision.
`Very soon the lawyers, as I said, will make what is
`called an opening statement. Opening statements are intended
`to assist you in understanding the evidence.
`However, what the lawyers say during their opening
`statements is not evidence. It's only what they expect the
`evidence will show.
`What you should base your decision on is the
`evidence that you will hear from the witness stand that comes
`into evidence, also through what we call depositions, and
`from the exhibits that are admitted into evidence. You will
`rely only on this evidence in making your decision as to the
`verdict in this case.
`The party who brings a lawsuit is called the
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`Case 5:16-cv-00179-RWS Document 293 Filed 08/28/18 Page 25 of 111 PageID #: 19194
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`Plaintiff, and the Plaintiff in this case is Maxell, Ltd.,
`and they will be referred to as Maxell or the Plaintiff.
`The party against whom this suit is brought is
`called the Defendant. And in this action, the Defendant is
`ZTE USA, Inc. And they will be referred to as ZTE or the
`Defendant.
`As I told you yesterday during voir dire, this is a
`case of alleged patent infringement.
`After opening statements, Maxell will call
`witnesses and present its evidence, and then ZTE will have an
`opportunity to call its witnesses and present evidence.
`After the parties' main cases are completed, Maxell
`will then be permitted to present what we call rebuttal
`evidence.
`
`And after all of the evidence is in, I will
`instruct you on the applicable law. I will give you detailed
`instructions, both orally, as I'm doing now, and at the end
`of the case, you will also have written instructions that you
`will be able to take with you to the jury room.
`After I've given you your final instructions, after
`all of the evidence is in and after you've heard those final
`instructions, then you'll hear the closing arguments of the
`attorneys.
`And after you've heard the closing arguments, then
`and only then will y
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