Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 1 of 145 PageID #: 19481
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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
` ) 8:17 a.m.
`ZTE USA, INC. June 29, 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
` ) 8:17 a.m.
`ZTE USA, INC. June 29, 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 296 Filed 08/28/18 Page 2 of 145 PageID #: 19482
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`FOR THE PLAINTIFF:
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`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 296 Filed 08/28/18 Page 3 of 145 PageID #: 19483
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`P R O C E E D I N G S
`(Jury out.)
`COURT SECURITY OFFICER: All rise.
`THE COURT: Please be seated.
`Good morning, everyone.
`Okay. We had a productive informal charge
`conference back in chambers last night after many of you all
`left, and worked through a number of objections, and the
`counsel were able to sort of highlight the major differences
`between the parties. We did make some progress.
`And when we concluded, the counsel, Mr. Levy and
`Ms. O'Connell, endeavored to work out their differences. And
`I think on many of those they were able to -- to do that and
`resubmitted revised proposed jury instructions to us early
`this morning.
`So I have taken a look at those. And, obviously,
`subject to the argument on the motions for judgment as a
`matter of law, we'll make some final changes to those
`proposed jury instructions and get those completed.
`And then after that, I will give you an opportunity
`to put any objections -- any remaining objections on the
`record.
`
`There was one issue, and I don't know -- and I
`notice Ms. O'Connell is not in the courtroom. I don't know
`if someone is prepared to address instructions.
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 4 of 145 PageID #: 19484
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`MR. FINDLAY: I will, Your Honor. She had a family
`emergency and was called away.
`THE COURT: Oh, okay. All right.
`Ms. Haley, I think, has a copy of the 101
`instruction that we have -- obviously, subject to the rulings
`on the motions for judgment as a matter of law, is our sort
`of preliminary take on what that instruction would look like.
`And what we did in principal part is to take out
`the section -- there was a sentence that read: To be
`well-understood, routine, and conventional means that the
`claim elements were widely prevalent or in common use in the
`relevant industry.
`And I just -- I know there's some source -- the
`source, apparently, is some USPTO guidance on that, but
`there's not any Federal Circuit authority that's been
`provided for that phrase, "widely prevalent or in common use
`in the relevant industry" language.
`Mr. Findlay, can you help me on that?
`MR. FINDLAY: I'm comparing that language with the
`Aatrix Software case, Your Honor, and I don't have anything
`more I could add other than that case.
`THE COURT: Very well.
`MR. FINDLAY: So subject to the JMOLs and
`preserving the objection, I understand the Court's position.
`THE COURT: Okay. Very well.
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 5 of 145 PageID #: 19485
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`MR. FINDLAY: Thank you.
`THE COURT: And then likewise -- you can stay
`there, Mr. Findlay, if you want to -- I did take out the
`sentence -- the next sentence primarily because it's
`confusing and that it seems to imply the jury must regard
`statements in the specification when considering 101.
`The sentence that was removed read: Your
`determination must depend upon the combination of the claim
`elements in the patent and not statements in the
`specification of the patents.
`If -- if the statement is geared towards telling
`the jury that they have to look at the -- you know, at the
`claim to decide whether the claim elements are -- are, you
`know, well-understood, routine, that -- it seems to me that
`concept is already, you know, well covered in the previous
`sentence that says: You must decide if the elements in each
`of these claims, taken individually or as a combination,
`involve well-understood, routine, and conventional activity.
`MR. FINDLAY: That's -- that's fine.
`THE COURT: Is that all right with you all?
`Okay. Maybe at this time what we should do is hear
`argument on the motions for judgment as a matter of law.
`I've told the jury we'll start as -- as close to
`8:45 as we possibly can, so I encourage the parties to make
`their arguments as concise as possible. But whoever would
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 6 of 145 PageID #: 19486
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`like to go forward at this time may do so.
`MR. BAKEWELL: Your Honor, Clark Bakewell for
`Plaintiff Maxell.
`Maxell moves for judgment as a matter of law under
`Rule 50(a) on several grounds. May I present these grounds
`to the Court?
`THE COURT: You may.
`MR. BAKEWELL: Maxell first moves for judgment as a
`matter of law on the four patent invalidity grounds for which
`ZTE has not contested at trial. This involves the validity
`of the '493, the '729, '491, and '695 patents. The validity
`of these four patents was not challenged in the pretrial
`order. Moreover, no evidence to support such a finding was
`presented to the jury.
`Next, Maxell moves for judgment as a matter of law
`that the '794 patent is not invalid under Section 101. As a
`threshold matter under Burkheimer the determination of
`well-understood, routine, and conventional is from the
`perspective of the priority date of the patent at issue.
`ZTE has put forth no evidence about the state of
`the art at the time of the '794 patent. And Dr. Wolfe has
`offered no testimony about any such evidence.
`Given the clear and convincing standard for the
`factual determinations about Section 101 issues, no
`reasonable jury could find for ZTE on this ground. Thus,
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 7 of 145 PageID #: 19487
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`given that Your Honor has already denied ZTE's motion for
`summary judgment of invalidity, the '794 partially on the
`basis of underlying factual issues which have not been proven
`in this case, judgment as a matter of law is appropriate
`here.
`
`Next and on similar grounds, Maxell moves for
`judgment of -- on a matter of law that the '317 patent is not
`invalid.
`
`First, ZTE has maintained assertion that the '317
`patent is also invalid under Section 101. But this assertion
`fails for the same reason as the '794 patent.
`The burden is on ZTE to show well-understood,
`routine, and conventional as of the priority date of the '317
`patent. ZTE has presented no evidence to this effect.
`At most, we were looking through the transcript,
`and Mr. Andrews said once that a device for inputting
`information may be a standard device like a mouse or a
`keyboard. But this only addresses one element of the claims
`of the '317 patent.
`Other elements claimed by the '317 patent, like the
`orientation device, are left completely unaddressed. As
`Aatrix has shown, an expert's declaration alone cannot make a
`showing of routine and conventional. Moreover, a mere
`scintilla of evidence is insufficient in the Fifth Circuit to
`avoid judgment as a matter of law.
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 8 of 145 PageID #: 19488
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`Again, the fact that there were unresolved
`underlying factual determinations that was part of your
`rejection of ZTE's motion for summary judgment, those
`underlying factual determinations haven't been resolved in
`this case and judgment here is also appropriate.
`With the '317 patent, ZTE also argues anticipation
`by the Alumbaugh reference, but ZTE's expert, Mr. Andrews,
`testified merely that the orientation limitation was inherent
`and provided no additional evidence beyond -- of this
`assertion beyond his say-so.
`Inherency is not the same as single reference
`obviousness. And as Dr. Braasch has pointed out, there can
`be no reasonable inference that an orientation device of the
`type claimed by the '317 patent is inherent in Alumbaugh
`because Alumbaugh has it own different method of providing
`the position of the system. So it's just not an inherent
`component of that system.
`Accordingly, the Court should also grant summary
`judgment with regard to the '317 patent.
`Finally, Maxell moves for judgment as a matter of
`law that the '193 patent is not invalid. ZTE has presented
`only a single ground of invalidity for this patent, which is
`obviousness over the combination of Wheatley, Mucke, IS-95,
`and Kim. Motivation to combine is an important part of any
`finding of obviousness.
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 9 of 145 PageID #: 19489
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`And while KSR lacks evidentiary basis for finding
`motivation to combine to include common sense, the inquiry
`remains, and there must be something supporting such a
`finding. Dr. Ding offered no testimony and presented no
`evidence regarding any motivation to combine Wheatley with
`Mucke, with IS-95, and with Kim.
`Similarly, these documents do not stand on their
`own to show that the combination would be self-evident, and
`there's been no suggestion to the contrary. Accordingly, ZTE
`cannot carry its burden of showing invalidity of the '193
`patent by clear and convincing evidence, and judgment as a
`matter of law should be granted.
`Your Honor, we also have some 50(a) motions on
`infringement. I don't know if you want me to --
`
`THE COURT: Go ahead and do those now.
`MR. BAKEWELL: Next, Maxell moves for judgment as a
`matter of law of infringement of each of the asserted patents
`by the respected accused ZTE products.
`Based on the actual evidence of the accused ZTE
`products and the testimony of Maxell's witnesses, Drs. Maher,
`Caloyannides, Phinney, and Madisetti, a reasonable jury must
`conclude that the representative products practice each and
`every claim of the asserted patents.
`Regarding the '493 patent, Dr. Madisetti walked
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 10 of 145 PageID #: 19490
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`through nearly a dozen pieces of evidence for the Max Duo LTE
`and Axon 7, almost none of this evidence rebutted by ZTE's
`expert, and for each limitation of claim 5 of the '493
`patent.
`
`For example, he walked through the circuit
`schematics and wiring diagrams to show not only that the
`accused products had the claimed signal processing unit
`display an image sensing device, but also to show that -- the
`interconnections between these components and how image
`signals are passed from one component to the next.
`He also explained the source code and how he
`directed the teardown of the image sensing devices of the
`accused products to verify that they contain the claim
`arrangement of the pixels.
`Importantly, on the other hand, Dr. Mansoorian
`presented no evidence to the jury of how the ZTE products
`operate. He merely asked the jury to take him on his word
`that he was sure how the products work because of
`his examination of a different image sensor.
`Mere conclusory statements do not create issues of
`genuine fact such that Maxell has not proved its case by a
`preponderance of the evidence.
`Regarding the '729 patent, Dr. Madisetti relied on
`all the same evidence as the '493 patent for his analysis of
`claim 1 of the '729 patent. He walked through the -- the
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 11 of 145 PageID #: 19491
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`jury through the circuit diagrams, user manuals, teardown
`photos, promotional materials for the products, and the
`source code.
`He also described third-party documents for this
`infringement theory, pointed to numerous pages of source
`code, and described the EIS functionality, and actually
`showed the jury the version of this product happening on the
`phone.
`
`In addition, both ZTE's expert and its corporate
`representative for these patents conceded that the Axon 7
`uses optical image stabilization. Dr. Madisetti testified
`that this too would meet the claim 1 requirement for
`correcting image instability and provided this live
`demonstration showing this and showed that it was not
`performed only by OIS.
`Again, Dr. Mansoorian presented no actual evidence
`to the jury about how the ZTE products operate. And in light
`of these mere conclusory denials, Maxell should be granted
`judgment as a matter of law of infringement of the '729
`patent.
`
`Regarding the '317 patent, Dr. Caloyannides walked
`through the ZMAX 2 website, several -- another half dozen
`parts of evidence and showed a video of the ZMAX 2 performing
`with all the requisite functionality to meet all asserted
`claim elements.
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 12 of 145 PageID #: 19492
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`Dr. Wolfe didn't dispute any of the core elements
`of Dr. Caloyannides' infringement theory. While ZTE
`emphasized a version control issue, the difference in
`versions presented no difference in the actual functionality
`of the accused device. Judgment as a matter of law of
`infringement of the '317 patent is, therefore, also
`appropriate.
`Regarding the '193 patent, Dr. Caloyannides
`presented evidence that the ZMAX 2 technical specification,
`the FCC test report, the partial UMTS report, 3GPP standards,
`the schematics of the device, the block diagram, and the
`source code clearly showed that the ZMAX 2 includes all of
`the claimed components required by the claims.
`In fact, Dr. Ding also agrees that all of these
`components are present in the ZMAX 2. The only thing that
`Dr. Ding disputed was that the ZMAX 2 doesn't control --
`include a controller that sends a control signal to the
`variable amplitude amplifier.
`But Dr. Caloyannides testified to this very signal
`connecting the two devices, and Dr. Ding admitted that there
`was -- at least the MSM8916 configures the WTR board showing
`this exchange of information.
`Accordingly, by a preponderance of the evidence, a
`reasonable jury must find that the '193 patent is infringed.
`Regarding the '794 patent, Dr. Phinney walked
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 13 of 145 PageID #: 19493
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`through a block diagram of the ZMAX 2, depicted several
`exemplary function devices, including WiFi, Bluetooth, and
`cellular modems in the LCD display of the phone. Dr. Phinney
`discussed the schematic and the relevant functionality of
`this device.
`ZTE presented no evidence showing that
`Dr. Phinney's opinions were not how the accused products
`work. Merely, it argued with his definitions. But by the
`preponderance of the actual evidence, a reasonable jury must
`find that the accused ZTE devices infringed the '794 patent
`according to the claimed meanings of the '794.
`Regarding the '491 and '695 patents, which I'll do
`together, Dr. Maher showed that the ZTE Axon 7 and ZMAX 2
`include all the requisite components for infringement and
`have the requisite relationship to one another.
`Dr. Maher pointed to the MSM8996 device
`specification, the Hexagon DSP, the Fast RPC instruction from
`Qualcomm to show all of the functionality that was actually
`happening in the accused devices.
`On the other hand, Dr. Mayer-Patel disputed not
`whether the accused functionality existed or performed as
`Dr. Maher said; but, again, rather, whether it met the
`language of the claim.
`Dr. Mayer-Patel didn't actually personally examine
`the accused devices in any depth and thus cannot offer a
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`credible counter-opinion about the factual matter of the
`functionality of the accused devices.
`Accordingly, the scintilla of evidence that ZTE
`presents is insufficient, and judgment as a matter of law is
`appropriate.
`Regarding willfulness, Maxell moves for judgment as
`a matter of law that based on all evidence presented, no
`reasonable jury could conclude that ZTE's infringement was
`not willful. Maxell has presented negotiation documents and
`the testimony of Mr. Nakamura and Dao Tian, all of
`which establish conclusively that ZTE USA, through its
`parent, ZTE Corp, was well aware and willfully infringed the
`asserted patents, including for the duration of this lawsuit.
`Finally, Maxell moves for judgment as a matter of
`law that based on the documents in evidence and the testimony
`of Maxell's witnesses, including Mr. Nakamura, Ms. Mulhern,
`Dr. Erdem, a reasonable jury must conclude that Maxell is
`entitled to damages from ZTE in the form of a reasonable
`royalty totaling $43.3 million.
`Thank you.
`THE COURT: Thank you.
`Response?
`MR. WISNIA: Thank you, Your Honor. Howard Wisnia
`on behalf of Defendant, ZTE.
`My understanding is there are several motions just
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 15 of 145 PageID #: 19495
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`brought. There was invalidity with respect to the '493,
`'729, '491, and '695. Those are not in the pretrial order.
`Validity has been dropped.
`My understanding is the practice generally in this
`district is that there's an encouragement of the parties to
`narrow issues for trial, and therefore, it's inappropriate to
`actually have a finding or a judgment with respect to those
`patents' validity.
`THE COURT: So they've been -- they're not
`contested; is that correct?
`MR. WISNIA: They're not in play. That's right.
`It's just as if -- we're not moving for -- we're not moving
`for judgment as a matter of law of non-infringement of all
`the unasserted claims, there shouldn't be a JMOL on
`invalidity of patents that -- where we're not challenging the
`patents, and they're not part of -- not part of the pretrial
`order.
`
`With respect to the '193, the '794, and the '317
`validity challenges, other folks will address those. I'll
`address '193.
`With respect to the infringement JMOLs, we have our
`own non-infringement JMOLs, so unless the Court would prefer
`otherwise, we will just reserve our argument in response to
`their JMOLs on the infringement to responding with respect to
`our non-infringement. The same would go for willfulness.
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 16 of 145 PageID #: 19496
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`So I would address the '193 JMOL with respect to
`validity, and then particularly, we would say that we believe
`the testimony of Dr. Ding, as well as the adverse admissions
`of Dr. Caloyannides, clearly established that all the
`limitations of claim 1 of the '193 patent were met, and, in
`fact, there was a motivation to combine, and a reason to
`combine the references were presented. So we would urge the
`Court to deny that motion.
`With respect to the 101 motions, I will defer to my
`colleague, Mr. Stephens, unless the Court has questions.
`THE COURT: I do not. Thank you.
`MR. STEPHENS: Good morning, Your Honor. Matt
`Stephens on behalf of ZTE USA.
`THE COURT: Good morning.
`MR. STEPHENS: I'll address the 101 issues, and
`I'll start with the '794 patent.
`It is our position that judgment as a matter of law
`should not be granted in favor of Maxell. The claims are
`directed to the abstract idea of sending power consumption
`reduction instructions to a portion of a component device
`according to priority. Dr. Andrew Wolfe testified throughout
`the trial that ordinary conventional modems are all that's
`required by the claims. And as such, there's not an
`inventive concept that brings this abstract idea into
`something that is patent eligible.
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 17 of 145 PageID #: 19497
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`17
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`In addition, Dr. Phinney testified that a human
`could be prompted to actually bring the device into power
`saver mode, which all -- just goes to highlight the
`preemptive effect and the scope and breadth of these claims.
`And for that reason we would suggest -- we urge the
`Court to deny their motion as to the '794 patent.
`As to the '317 patent, we also contend that
`judgment is not -- judgment as a matter of law is not
`appropriate to be granted to the Plaintiff. The claims are
`directed to the abstract idea of just providing a walking
`navigation system and do not have any sort of inventive
`concept or spark that brings that idea out of the realm of
`abstraction.
`We understand that Dr. Andrews has offered -- or
`Mr. Andrews has offered validity -- or invalidity opinions
`and that this is -- would be improper to take away from the
`jury.
`
`And I would also like to emphasize for the Court
`that we will be making similar Rule 50(a) motions with
`respect to our 101 challenges as well.
`THE COURT: Okay. Does Plaintiff want to respond
`to the Defense?
`MR. BAKEWELL: Very briefly, Your Honor.
`THE COURT: And let me -- let me maybe ask
`Mr. Wisnia before you speak.
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 18 of 145 PageID #: 19498
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`So the JMOLs on the invalidity, were those -- were
`those claims of invalidity dropped with prejudice?
`MR. WISNIA: They were dropped in the same manner
`as the claims that -- of infringement that the Plaintiffs had
`previously made and dropped during the case.
`So, in other words, as we have narrowed the case,
`the pretrial order has been amended to remove claims of
`infringement and now we've -- also have dropped claims of
`validity, basically to streamline the trial.
`And I just want to clarify because I --
`Ms. O'Connell took care of certain things -- is that I know
`that there were some circulations about the latest narrowing
`of the pretrial order with respect to the '491 and '695. I
`assume that actually got in, but we have an agreement between
`the parties, even if it's not in the Court's record, that
`those would be removed from the pretrial order.
`THE COURT: I guess what I'm confused about,
`Mr. Wisnia, and you really haven't answered --
`MR. WISNIA: I apologize.
`THE COURT: -- is whether your claims of invalidity
`on those four patents are dropped with prejudice or not.
`If -- if -- if they are, then I don't think there's
`any reason for me to rule on the JMOL. But if they're not,
`perhaps I might need to rule.
`MR. WISNIA: Understood, Your Honor. I've got to
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 19 of 145 PageID #: 19499
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`be honest. I don't know the -- the procedural posture of
`that, but I would say that whatever -- however that is being
`treated with respect to the prior art has to be the same with
`respect to claims of infringement that have been dropped. I
`don't see how they can say, oh, you infringe claim 3, but
`we've now narrowed the pretrial order to no longer drop --
`assert claim 3. And that has to be the -- I would think that
`has to be treated the same as whatever we're doing with
`respect to these prior art challenges.
`THE COURT: Let me ask the Plaintiff to address
`
`that.
`
`MR. WISNIA: I'm sorry. Including, for example,
`the fact that they had previously asserted the '443 patent
`and dropped that patent entirely.
`MR. LEVY: Your Honor, the -- the rules are pretty
`
`clear.
`
`So as the Plaintiff Maxell has asserted, say --
`let's say five claims of the '317, just making the number up,
`against certain products of ZTE, we've now gone to trial. I
`don't think there's any question that if tomorrow we were to
`file a complaint on those five claims against the products of
`ZTE, just because we didn't address two of them during the
`case, that that wouldn't be dismissed. I mean, there's
`pretty good case law for that.
`So effectively when you're not bringing them in,
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 20 of 145 PageID #: 19500
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`you are dismissing them with prejudice to some extent. It
`works the same with prior art.
`Not only that, the reason the pretrial order hasn't
`been amended to address some of these is because they were
`dropped pretty late in the game. Two of the patents weren't
`dropped in terms of invalidity until Wednesday night. And
`I'm not talking about Wednesday night a few weeks ago; I'm
`talking about two nights ago.
`And so, you know, we're entitled to some sort of --
`the Plaintiff is entitled to some sort of understanding
`regarding that. You can't carry these claims all the way
`through to trial and then the night before decide, well, you
`know what, we're not going to challenge them, but we reserve
`the right to challenge validity later. This is your
`opportunity.
`THE COURT: Okay. Very well.
`Mr. Bakewell.
`MR. BAKEWELL: Thank you.
`And I'd like to just address the 101 issues real
`
`quickly.
`
`And just to reiterate that the standard for the
`Defendant's burden on these underlying factual matters is
`clear and convincing evidence on the factual matters.
`And what ZTE just presented was, at best, deep,
`deep inferences in kind of obscure references by the experts
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 21 of 145 PageID #: 19501
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`into the functionality of these devices, which we don't
`believe actually supports a finding on clear and convincing
`evidence that all of the claim components were routine,
`conventional, and well-understood in line with the Burkheimer
`recent precedent.
`THE COURT: Thank you.
`I guess, Mr. Wisnia, what I'm confused about is
`why -- why you all would be entitled to judgment as a matter
`of law on the invalidity positions that you have dropped
`and --
`
`MR. WISNIA: Why we would be entitled?
`THE COURT: Yes.
`MR. WISNIA: We're not seeking judgment as a matter
`of law in our favor with respect to validity challenges that
`we've dropped.
`THE COURT: Okay. Well, then I guess explain to me
`why they shouldn't be entitled to that.
`MR. WISNIA: Because --
`THE COURT: I mean, in the contentions you all
`have -- in the contentions that were -- that were submitted
`in the instructions, you all have not contested invalidity on
`any of those patents. And so -- I think Mr. Levy states the
`law accurately.
`MR. WISNIA: My understanding, Your Honor, is that,
`obviously, we have a certain amount of time to try the case.
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 22 of 145 PageID #: 19502
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`The Court was very generous with the amount of time they gave
`us in this case. But trial decisions have to be made, and we
`narrowed the case.
`And a narrowing of the case does not mean that
`we've given up substantive rights, I don't believe, with
`respect to the validity of those patents. We don't expect
`the jury -- and we're not asking the jury to be given a
`question on validity of these patents. We understand that
`that has not been joined for the jury, but we think,
`therefore, it's not an issue for this trial.
`THE COURT: All right. Well, here -- let me tell
`you the way I understand all of this.
`And you can sit down, Mr. Wisnia.
`I am required when considering motions for judgment
`as a matter of law to review all of the evidence in the
`record, to draw all reasonable inferences in favor of the
`nonmoving party, to give credence to the evidence that
`supports the movement -- the movant that is not contradicted
`or impeached, but also to refrain from making any credibility
`determinations or -- or weighing the evidence. All of those
`are jury functions.
`JMOL should be granted when there's no legally
`sufficient evidentiary basis for a reasonable jury to find on
`an issue on which that party has been fully heard, and that
`usually happens in two -- in one of two types of situations,
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 23 of 145 PageID #: 19503
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`where there is a complete absence of pleading or proof on an
`issue material to the claim or defense or where there's no
`controverted issue of fact on which a reasonable -- on which
`reasonable persons could differ.
`If the evidence construed in the light most
`favorable to the nonmoving party allows only one reasonable
`conclusion, then I think judgment as a matter of law is
`proper. If, on the other hand, reasonable minds could differ
`as to the import of the evidence, then I think judgment as a
`matter of law should be denied, and the case should be
`submitted to the jury.
`With respect to the willfulness issue, specifically
`regarding the corporate relationship between ZTE USA and ZTE
`Corporation, I think the evidence on this point, candidly, is
`scant. But that is not the test. The test is whether there
`is more than a mere scintilla of evidence. And, although I
`think this is a very close question, I think there has been
`sufficient evidence presented to the jury to allow this issue
`to be submitted.
`The same goes with respect to the 101 issue. There
`is no requirement I am aware of that compels a party's expert
`to use the magic words "well-understood, routine, or
`conventional." But again, as with willfulness, I do think
`the evidence on this issue is scant.
`Having said that, I'm going to carry the motions
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`Case 5:16-cv-00179-RWS Document 296 Filed 08/28/18 Page 24 of 145 PageID #: 19504
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`for judgment as a matter of law on those two points.
`Obviously, depending on how the verdict turns out,
`the parties may file renewed motions for judgment as a matter
`of law under Rule 50(b). And at that point, a more careful,
`considered scrutiny of the record and the transcript of the
`testimony that was presented at trial will be possible.
`With respect to the motions for judgment as a
`matter of law as to invalidity of the '493, '729, '491, and
`'695 patent, I'm likewise going to carry those motions and
`look at the law on that point. I've not had that come up
`before.
`
`And, Mr. Wisnia, you've made a unique argument I've
`never heard presented before. So I will carry that motion.
`With respect to the other grounds urged by the
`parties, I do think there is sufficient evidence in the
`record that's been presented to the jury from which the jury
`would have a legally s
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