.
`
`UNITED STATES
`ENIERNATEONAE4 TRADE COMMISSION
`
`
`
`In the Matter of:
`
`‘ CERTAIN MOBILE DEVICES
`
`AND RELATED SOFTWARE
`
`)
`
`)
`
`)
`
`Investigation No.
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`337-TAV750
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`.
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`OPEN SESSION
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`Pages:
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`101 through 432 (with excerpts)
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`Place:
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`Washington, D.C.
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`Date:
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`September 26, 2011
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`HERITAGE REPORTING CORPORATION
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`Ojficial Reporters
`1220 L Street, N.W., Suite 600
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`Washington, D.C. 20005
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`(202) 628-4888
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`Contracts@hrcc0urtreporters . com
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`n
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`0
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`UNITED STATES
`ENIERNATEONAE4 TRADE COMMISSION
`
`
`
`In the Matter of:
`
`‘ CERTAIN MOBILE DEVICES
`
`AND RELATED SOFTWARE
`
`)
`
`)
`
`)
`
`Investigation No.
`
`337-TAV750
`
`.
`
`OPEN SESSION
`
`Pages:
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`101 through 432 (with excerpts)
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`Place:
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`Washington, D.C.
`
`Date:
`
`September 26, 2011
`
`HERITAGE REPORTING CORPORATION
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`Ojficial Reporters
`1220 L Street, N.W., Suite 600
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`Washington, D.C. 20005
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`(202) 628-4888
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`Contracts@hrcc0urtreporters . com
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`n
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`0
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`BEFORE THE
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`UNITED STATES INTERNATIONAL TRADE COMMISSION
`
`In the Matter of:
`
`CERTAIN MOBILE DEVICES
`
`AND RELATED SOFTWARE
`
`)
`
`)
`
`)
`
`Investigation No.
`
`337~TA—75O
`
`Hearing Room A
`
`United States
`
`International Trade Commission
`
`500 E Street, Southwest
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`Washington, D.C.
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`Monday, September 26,
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`2011
`
`VOLUME I
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`The parties met, pursuant to the notice of the
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`Judge,
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`at 9:00 a.m.
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`BEFORE:
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`THE HONORABLE THEODORE R. ESSEX
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`Heritage Reporting Corporation
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`APPEARANCES:
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`For Complainant Apple:
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`MARK G. DAVIS, ESQ.
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`BRIAN E. FERGUSON, ESQ.
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`ROBERT T. VLASIS, ESQ.
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`EDWARD S.
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`JOU, ESQ.
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`CHRISTOPHER T. MARANDO, ESQ.
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`Weil,
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`Gotshal & Manges LLP
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`1300 Eye Street, N.W.,
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`Suite 900
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`Washington, D.C.
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`20005
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`JILL J. HO, ESQ.
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`BRIAN C. CHANG, ESQ.
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`Weil, Gotshal & Manges LLP
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`201 Redwood Shores Parkway
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`Redwood Shores, CA 94065
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`MATTHEW D. POWERS, ESQ.
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`STEVEN S. CHERENSKY, ESQ.
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`PAUL T. EHRLICH, ESQ.
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`ROBERT L. GERRITY, ESQ.
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`Tensegrity Law Group LLP
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`201 Redwood Shore Parkway
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`Redwood Shores, CA 94065
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`APPEARANCES (Continued):
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`For Respondent Motorola Mobility,
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`InC.:
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`CHARLES K. VERHOEVEN, ESQ.
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`DAVID EISEMAN, ESQ.
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`Quinn Emanuel Urquhart & Sullivan LLP
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`50 California Street, 22nd Floor
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`San Francisco, CA 94111
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`EDWARD J. DeFRANCO, ESQ.
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`Quinn Emanuel Urquhart & Sullivan LLP
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`51 Madison Avenue, 22nd FLoor
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`New York, New York 10010
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`DAVID A. NELSON, ESQ.
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`Quinn Emanuel Urquhart & Sullivan LLP
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`500 West Madison Street, Suite 2450
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`Chicago, Illinois 60661
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`APPEARANCES (COnt’d):
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`For ITC Staff:
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`LISA KATTAN, ESQ.
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`ANNE GOALWIN, ESQ.
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`U.S. International Trade Commission
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`500 E Street, S.W.
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`Washington, D.C. 20436
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`Attorney~Advisor:
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`GREGORY MOLDAFSKY, ESQ.
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`Attorney—Advisor
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`Office of Administrative Law Judges
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`U.S. International Trade Commission
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`500 E Street, S.W.
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`Washington, D.C. 20436
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`*** Index appears at end of transcript ***
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`P R O C E E D I N G S
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`JUDGE ESSEX: All right. Let's come
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`(9:00 a.m.)
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`to order. We're in case 337—TA—750.
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`Complainants, do we have any
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`housekeeping to take up before we get into
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`opening statements of the case?
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`MR. POWERS: Yes, Your Honor, we do.
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`The parties continued to work over the weekend
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`to reach additional agreements to streamline
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`the case, and we have achieved certain
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`stipulations that we think will do that. We
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`would like to present those to you now if we
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`may.
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`JUDGE ESSEX: You may.
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`MR. POWERS: Mr. Ferguson has a list
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`and copies of those.
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`MR. FERGUSON: Good morning, Your
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`Honor.
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`JUDGE ESSEX: Good morning.
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`MR. FERGUSON: We have, as Mr. Powers
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`indicated, we did reach a number of
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`stipulations or agreements over the weekend
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`that hopefully will reduce the time of the
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`trial. That includes a number of witnesses who
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`have submitted witness statements, but through
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`agreement of the parties, we will -— the
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`parties will forego live cross—examination of
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`some of those witnesses and instead rely on
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`deposition designations.
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`So the list of witnesses that you have
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`had in the pretrial briefs has changed. And if
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`I may,
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`I will pass up a list of what now
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`appears to be the actual witnesses who will
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`appear here at the trial for examination.
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`There is some estimated times there
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`that are just times that we have put in and
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`have included Motorola's times. That may
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`change, but let me get that list and I will
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`provide those.
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`JUDGE ESSEX: All right.
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`MR. FERGUSON: May I approach?
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`JUDGE ESSEX: You may. Does the court
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`reporter have one?
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`MR. FERGUSON:
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`The other issue is,
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`Your Honor,
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`the parties have discussed the
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`objections to the expert witness statements,
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`and we have reached an agreement last night
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`that resolves all outstanding objections to all
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`of the expert witness statements.
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`There are a couple of edits that will
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`be made to those,
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`so revised statements will go
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`in, but I believe as it currently stands,
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`there
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`is no need for Your Honor to rule on any
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`outstanding objections to any of the expert
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`witness statements.
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`JUDGE ESSEX: All right.
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`MR. FERGUSON: And then we have also,
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`last night, Apple provided to Motorola and the
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`Staff a list of all the exhibits that Apple
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`intends to enter as part of its case—in—chief.
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`And I believe we have reached agreement and
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`resolved all outstanding objections to those
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`exhibits. And we will, pursuant to your
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`direction at the pretrial, provide those lists
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`to the court reporter for entry.
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`JUDGE ESSEX: Excellent.
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`Thank you.
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`MR. FERGUSON: And I believe those are
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`the stipulations and the agreements that have
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`been reached that we wanted to bring to your
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`attention this morning.
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`JUDGE ESSEX: All right.
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`MR. FERGUSON: Did I forget anything?
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`MR. VERHOEVEN:
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`For the most part,
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`I
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`agree with that.
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`I notice on the handout,
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`the
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`schedule indicates we will finish by Friday.
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`That's a little optimistic. That's a hoped—for
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`goal.
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`So ——
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`JUDGE ESSEX: We have every right to
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`hope.
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`I understand.
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`I am not holding you to
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`it and releasing the room.
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`MR. VERHOEVEN:
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`Thank you, Your Honor.
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`And I agree we have agreed on resolving all the
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`objections to the witness statements.
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`In terms
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`of the exhibits, Mr. DeFranco is going to
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`address that,
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`if that's okay, Your Honor.
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`JUDGE ESSEX: That's all right.
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`MR. FERGUSON: Your Honor,
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`if I may
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`clarify one point,
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`too,
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`the exhibits that we
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`provided last night to Motorola are all of the
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`exhibits that were cited in the Apple witness
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`statements,
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`the witness statement of the Apple
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`witnesses.
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`There are, as you know, a number of
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`exhibits that the parties submitted to you as
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`part of the joint stipulation for entry of
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`exhibits —— for receipt of exhibits without a
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`sponsoring witness.
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`Those were the
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`submissions,
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`I think, on August 29th. And
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`there was a follow—up on,
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`I believe, September
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`21st.
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`There are numerous exhibits there, of
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`course. And I believe on Friday, you had
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`indicated that you did not have any specific
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`problem with that, but we were seeking your
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`guidance as to how to actually enter those
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`exhibits into the record.
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`JUDGE ESSEX: Well,
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`if the parties
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`have agreed on those, and agree they can come
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`in without a sponsoring witness,
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`then I will
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`allow them. Again,
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`just present the list to
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`the court reporter, use them as you will, and
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`if there is a disagreement and so on,
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`then we
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`will take it up at its appropriate time and I
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`will rule on it at that time.
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`But how are we on the exhibits without
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`a sponsoring witness? Because generally those
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`are disfavored.
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`If there is a disagreement,
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`you will have to find a sponsoring witness.
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`If
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`there is agreement,
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`that is acceptable to me.
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`MR. FERGUSON:
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`I believe I can
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`represent there is an agreement with all of
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`those exhibits that they would be admitted.
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`JUDGE ESSEX: All right. That will be
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`fine,
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`then.
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`MR. FERGUSON:
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`Thank you, Your Honor.
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`MR. DeFRANCO:
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`Two quick comments,
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`Your Honor.
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`Just on the last point, no
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`surprise, it was a bit of a late night last
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`night. We're confirming that we have an
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`agreement on all the exhibits.
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`JUDGE ESSEX: All right.
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`MR. DeFRANCO: That's —— we will take
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`care of that this evening.
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`JUDGE ESSEX: All right.
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`MR. DeFRANCO:
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`Then one other issue.
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`The parties have discussed, of course,
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`sequestration, plan on following the normal
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`rule that fact witnesses will be sequestered.
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`It doesn't apply to experts.
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`Just wanted to
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`make sure that that was in the record.
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`JUDGE ESSEX: Normally,
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`the designated
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`experts stay in the room as long as they are
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`signed on to the confidential order.
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`MR. DeFRANCO:
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`Thank you, Your Honor.
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`MS. KATTAN: Your Honor,
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`I would just
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`like to clarify also that the parties’ schedule
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`does not include any cross—examination time by
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`the Staff.
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`JUDGE ESSEX: And the Staff will have
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`the opportunity to cross—examine, and that's
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`why it is very optimistic to get out by Friday,
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`but you will get your time and they have been
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`neglectful of that, and I would remind the
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`parties to bear in mind that we have three, and
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`include Staff in these matters, but whatever
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`cross you feel is appropriate, you will have a
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`chance to do.
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`MS. KATTAN:
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`Thank you, Your Honor.
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`JUDGE ESSEX: All right.
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`Do we have
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`anything else to take up?
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`MR. POWERS: There is one small
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`item,
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`Your Honor, we're not quite ready, but we
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`wanted to advise Your Honor of it. With
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`respect to the experts we have been discussing
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`and agreed qualification as to them related to
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`all the patents, we haven't yet finalized that,
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`but we wanted to advise you that that's in the
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`works and we expect that we will be able to
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`reach agreement on that as well to remove that
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`issue.
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`JUDGE ESSEX: All right. And having
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`said that, are you ready to proceed?
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`MR. POWERS:
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`I am, Your Honor.
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`JUDGE ESSEX:
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`Proceed.
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`MR. POWERS: May it please the Court,
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`Your Honor,
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`I would like to begin with a
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`discussion of some of the contributions that
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`both parties have made to various aspects of
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`technology, because in fairness, both parties,
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`Apple and Motorola, have made significant
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`contributions over the years in various ways.
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`And both are justly proud of those
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`contributions.
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`The point of this case from
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`Apple's perspective is that this case involves
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`a particular set of contributions, a particular
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`type of technology with which Apple is very,
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`very familiar as a result of its background and
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`with which Motorola is not particularly
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`familiar by virtue of its background.
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`And I would like to go through that a
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`little bit to explain that before we talk about
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`the patents in specifics.
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`So with respect to
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`Apple, one of the aspects of Apple's history of
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`innovation, which is very well—known, was the
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`introduction of the Maclntosh computer in 1984.
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`And I want to pause there briefly
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`because what's important here is really two
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`different things. One is that what made the
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`MacIntosh famous at some level was its user
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`interface. And the concept of an easy,
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`familiar user—friendly user interface was
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`something that Apple was known for very early,
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`has focused on for very long, and is central to
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`the issues in this case where a different user
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`interface is at the core of the inventions that
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`led to the iPhone and the other products we're
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`talking about.
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`But
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`the other aspect of the MacIntosh,
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`which is not quite so obvious,
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`is the advances
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`in computer engineering, software engineering,
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`software architecture that Apple has been known
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`for as well. Apple has been known for that for
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`35 years because it started out, of course, as
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`a computer company.
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`And one aspect of this case,
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`in
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`addition to the user interface technology for
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`which Apple is well~known,
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`is the application
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`of concepts integral to the development of
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`computers to how a cell phone works.
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`Those two aspects will be at the heart
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`of this case.
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`Those two aspects are at the
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`heart of Apple's competence and long,
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`long
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`history of innovation.
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`In 2001, Apple released OS X, which
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`was a very, very famous advance in operating
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`systems, known for many, many, many things, but
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`one of them,
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`in particular, it was known for is
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`relevant to this case as well, which is a
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`particular way of associating and finding new
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`attributes, new components, new parts of the
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`system and loading them quickly so that you can
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`use them.
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`It turns out that that advance in
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`computer architecture,
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`in software
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`architecture, was essential to some of the
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`things that we now take for granted in cell
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`phones today.
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`Also in 2001, Apple continued its
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`advances in user interfaces with the release of
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`the iPod.
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`The iPod had a different user
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`interface;
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`the famous click spinning wheel.
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`And that iPod, of course, went on to transform
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`and explode an entirely new industry,
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`the MP3
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`or music player industry.
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`2007, of course, came the introduction
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`of the iPhone, which is directly relevant to
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`this case. And the iPhone, again, had many,
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`many innovative aspects and many things that
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`were relevant, but
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`two most relevant here are,
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`again,
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`the user interface, advancing the user
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`interface from the Maclntosh,
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`from the iPod,
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`now to include multi—touch technology, about
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`which you will hear quite a bit in this trial,
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`but also, again,
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`integrating and applying and
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`extending some of the computer technology Apple
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`had been working on for so long as a computer
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`company.
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`Of course,
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`the introduction of the
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`iPad in 2010 was yet another innovation of
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`Apple's. Again, extending some of the same
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`technologies that we're talking about here.
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`And the world noticed with regard to
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`the introduction of the iPhone,
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`I want to point
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`out and focus on that because that, of course,
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`is what we're really talking about with many of
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`the technologies here, Steve Jobs when he
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`released it in January of 2007 proclaimed it
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`was a revolutionary product that will change
`
`everything.
`
`Well, although there were some
`
`skeptics about
`
`the grandiosity of that
`
`statement, it was proved to be true. And it
`
`was proved to be true really because,
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`in part,
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`in large part, of the two things I have just
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`been talking about,
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`the multi~touch user
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`interface and the extensions of computer
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`technology that Apple had been working on for
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`quite some time.
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`First, let's talk about the
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`multi~touch touchscreen; That really takes two
`
`things to make it work that we're going to talk
`
`about here. First is hardware, which can
`
`accurately sense multiple touches. Because the
`
`gestures that we're all now familiar with on an
`
`iPhone aren't just touching a button and
`
`releasing it, but very complex gestures, which
`
`the screen has to be able to recognize and
`
`differentiate from other complex gestures.
`
`But once you have got hardware that
`
`can actually accurately sense those multiple
`
`complex touches, you have to have software that
`
`interprets those touches or gestures and
`
`understands what user command they translate
`
`into.
`
`So that you understand a pinch to zoom
`
`is a pinch to zoom and causes that to happen on
`
`the screen that you're looking at.
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`And we will be talking about both of
`
`those.
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`And, of course, both of those
`
`correspond to two of the patents—in-suit in
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`this case.
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`Now,
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`the world recognized the advances
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`of the iPhone and, more importantly,
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`specifically recognized that the iPhone
`
`advances were directly linked in large part to
`
`the aspects that we're talking about here.
`
`Bloomberg Business Week called that iPhone
`
`touchscreen "magic." And said it was -— the
`
`most impressive feature of the new iPhone was
`
`the sophisticated, multi—point touchscreen.
`
`And,
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`in particular, what that
`
`particular article talked about was try more
`
`than one finger on a conventional
`
`touchscreen.
`
`The screen outlined in Apple's patent
`
`application will be able to react to as many as
`
`15 simultaneous touches.
`
`Now,
`
`the patent application that that
`
`article is referring to is exactly the
`
`application that led to the '60? patent in this
`
`case.
`
`So there is —— you cannot find,
`
`I
`
`think, more direct evidence of nexus,
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`if you
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`will.
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`The success of the iPhone was recognized
`
`by the world as linked in large part to the
`
`success of that particular patented touchscreen
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`represented by the ’607 patent because of its
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`capability of recognizing multiple,
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`independent, simultaneous touches.
`
`PC World was another example of the
`
`chorus that finally came around and saw the
`
`iPhone as the incredible advance that it was.
`
`One of the things PC World said was “due in
`
`large part to the overwhelming success of
`
`Apple's iPhone and Smartphone,
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`touchscreen
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`technology is winning more attention than ever
`
`before. Countless handset makers have tried to
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`mimic Apple's success with the iPhone by
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`creating touchscreen—based devices of their
`
`own."
`
`That of course goes directly to
`
`another indicia of the significance of Apple's
`
`inventions.
`
`They say the most sincere form of
`
`flattery is imitation. Well, Apple was
`
`flattered. But Apple was also copied.
`
`And the world before the iPhone in
`
`terms of how phones looked, how phones operated
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`was dramatically different, a sea change from
`
`before the iPhone until after the iPhone. And
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`that fact is also directly relevant to an
`
`appreciation of the significance of Apple's
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`innovations.
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`PC World also said in March of 2011
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`"touchscreen panels have been around for more
`
`than a decade, but it was the 2007 introduction
`
`of the multi—touchscreen in Apple's iPhone that
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`galvanized the market.
`
`Now,
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`the business is
`
`going gang busters, everybody is trying to do
`
`the same thing."
`
`But importantly, PC World also noted,
`
`"before the iPhone, most touchscreens used
`
`pressure—sensitive, resistive touch panels,
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`which required the user physically press down
`
`on the screen. Resistive screens could track
`
`the position of just one finger at a time.
`
`Apple chose a competing technology, projected
`
`capacitance, which responds to a light touch
`
`and can also sense a finger as it enters the
`
`electronic field" —— that's a typo —~ "above
`
`the touch surface, a technique called proximity
`
`sensing."
`
`So what the world,
`
`the industry noted
`
`was that Apple went a different way.
`
`It
`
`bucked,
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`if you would,
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`the conventional wisdom
`
`because the conventional wisdom at that time
`
`for this type of application used these
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`resistive pressure—sensitive screens, which
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`really didn't work for the type of applications
`
`Apple wanted.
`
`Apple bucked the conventional wisdom
`
`and despite the skepticism, Apple proved itself
`
`to be right.
`
`There is a second aspect, of course,
`
`to how the touchscreen operates.
`
`I alluded to
`
`it earlier, and that's the software.
`
`It is one
`
`thing to have the hardware that can recognize
`
`and record the individual touches. You then
`
`have to have software that understands and
`
`translates those touches or gestures into
`
`commands.
`
`That relates to the ’828 patent.
`
`Wayne Westerman is one of the inventors of that
`
`patent and will testify here. His invention
`
`was acknowledged also in the press as a
`
`technology that was only developed a few years
`
`ago.
`
`He did it at the University of Delaware.
`
`And was acknowledged to help drive Apple's key
`
`breakthrough in the new iPhone.
`
`Why? Well, "the wonder lies in an
`
`entirely new way of controlling computers, cell
`
`phones, and other electronic devices, allowing
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`users to initiate computer commands with just
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`finger gestures."
`
`That
`
`innovation, again, was not
`
`something that had been existing anywhere in
`
`the market in any respect beforehand, was
`
`ground~breaking, and key to the innovation and
`
`success of the iPhone.
`
`And the iPhone, let's not
`
`underestimate how significant it is.
`
`It is
`
`only four years ago.
`
`Four years ago the iPhone
`
`was released.
`
`And you literally have four—year old
`
`children now walking up to television sets and
`
`touching them and can't figure out why they
`
`don't respond to their touch.
`
`The ubiquity of
`
`the technology that Apple developed and made
`
`possible, and the ubiquity of its influence on
`
`how we live our lives in four short years is
`
`astounding.
`
`Motorola: Again, Motorola has made
`
`significant contributions over the years in
`
`many ways of which it is justly proud.
`
`I have
`
`taken a few from their web site to show the
`
`progression in history.
`
`But one of the things that you will
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`see from Motorola's history is that it has been
`
`strong historically in hardware, not, of
`
`course, a computer company, but hardware.
`
`But not so strong in software. And
`
`the problem, of course,
`
`for Motorola is as the
`
`handset market has changed, it used to be
`
`primarily a piece of hardware. That's where
`
`Motorola was strong. That's where its history
`
`was.
`
`Smartphones now are much more about
`
`software and much more about areas of
`
`competence that Motorola has historically not
`
`had. Let's begin from their web site from one
`
`of their first contributions. Of which they
`
`are very, very proud which they put on their
`
`web site,
`
`the walkie—talkies which helped our
`
`GIs in World War II. That formed the basis of
`
`some of their early pager technology, which
`
`they then are also very well—known for, going
`
`from the '50s into the '70s.
`
`And I don't think anybody has not seen
`
`a Motorola walkie—talkie or a Motorola pager or
`
`a Motorola —— or something that was used by
`
`repair crews to communicate with each other.
`
`Motorola, of course, was very, very significant
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`in those markets.
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`Continuing into the mid—’90s, with
`
`their pagers,
`
`the bottom right one is they
`
`called it the Tango pager. That's 1995.
`
`Pagers, of course, are now not so significant
`
`in a world dominated by cell phones and
`
`Smartphones.
`
`So Motorola moved from pagers to
`
`cell phones. Again,
`
`to its credit, giving it
`
`its due, Motorola actually did —— was
`
`significant in the early days of the cell phone
`
`market.
`
`They had a product called the DynaTAC
`
`8000, about which some of Motorola's witnesses
`
`have testified in their direct witness
`
`statements. And they are quite proud, again,
`
`from their web site of the first —-
`
`they claim
`
`credit for having the first private handheld
`
`mobile phone call ever made. And this was a
`
`recreation by one of the Motorola people using
`
`that DynaTAC.
`
`And that's in 1983.
`
`In more modern
`
`times, of course, Motorola has made somewhat
`
`smaller and more conventional—looking cell
`
`phones.
`
`It is best known,
`
`I think, for the
`
`RAZR, which was in the early to mid—’90s, but
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`the problem, of course, for Motorola is that
`
`the market for cell phones changed. And what
`
`changed it was Apple.
`
`And that is reflected over and over
`
`again in the commentary and just the facts of
`
`how Motorola has been progressing as a company.
`
`The New York Times,
`
`I think, probably put it
`
`best in April of 2009 with the headline,
`
`"Motorola scrambles to restore its lost cell
`
`phone glory."
`
`Motorola was a dominant cell phone
`
`manufacturer in the early '90s.
`
`The problem,
`
`of course, as The New York Times reported,
`
`is
`
`that by 2009,
`
`they were "stuck heavily in the
`
`handset death spiral." Why?
`
`Well, of course,
`
`the reason was cell
`
`phones had changed.
`
`"Apple and others had
`
`transformed the market with phones that can do
`
`anything a computer can do and more."
`
`That quote is significant in two
`
`respects. One, of course, Apple was leading
`
`the charge but
`
`two,
`
`the notation about the
`
`change from a simple piece of hardware that's a
`
`cell phone to a phone that is really a
`
`computer.
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`That's the technology that Apple, of
`
`course, had since 1975 and been developing.
`
`And that's an area of expertise which, of
`
`course, Motorola had not historically had.
`
`So in the New York Times article,
`
`Motorola's CEO gave his prescription for how he
`
`was going to turn Motorola around, how to
`
`reverse that handset death spiral. What did he
`
`say?
`
`He said: Well,
`
`in the current and
`
`next quarter, Motorola will begin shipping
`
`touch—screen phones,
`
`the kind that Apple and
`
`others already have.
`
`So the world and Motorola recognized
`
`that Apple's introduction of the iPhone changed
`
`the world, and that Motorola had to play
`
`catchup and to start shipping the types of
`
`phones that Apple had introduced.
`
`And that meant a touchscreen phone.
`
`And that's at the heart of two of the patents
`
`in this case.
`
`A very quick time line for Motorola's
`
`phone and Smartphone history:
`
`The RAZR, of
`
`course, was 2004, very, Very popular phone, but
`
`none of those are touchscreen phones.
`
`They are
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`just basic phones of the type that we were all
`
`familiar with.
`
`In 2006,
`
`the year before the iPhone
`
`came out, Motorola actually had a very
`
`simplistic touchscreen phone, but not one that
`
`you could use your fingers on.
`
`It required a
`
`stylus.
`
`And that's significant because that
`
`really was in many ways the state of the art in
`
`2006.
`
`If you wanted a touchscreen, you would
`
`use a stylus that would poke it. That was that
`
`resistive type of screen we talked about
`
`earlier.
`
`In 2007,
`
`the iPhone came into
`
`existence and changed the world. And it took
`
`Motorola two more years until it released its
`
`first touchscreen phones,
`
`the Cliq and the
`
`Droid, 2009 for both of them. Both of those
`
`were simpler phones,
`
`they were not multi-touch,
`
`they were single touch. But they were in many
`
`ways attempting to mimic the iPhone, attempting
`
`to put Motorola out of that handset death
`
`spiral.
`
`And it wasn't until 2010,
`
`three years
`
`after the iPhone,
`
`that Motorola released the
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`Droid X and the Bionic later in 2011, which
`
`were multi—touch cell phones fully utilizing
`
`the capabilities Apple had introduced three and
`
`four years before.
`
`Those were the types of phones that
`
`Motorola knew it needed to introduce to try to
`
`compete and those are the types of phones that
`
`are squarely covered by Apple's innovations and
`
`patents.
`
`Those are also the phones that when
`
`you use them, you can do the same types of
`
`things that Apple's phones made popular and
`
`introduced four years earlier. One example is
`
`this multi—touch capabilities,
`
`is the pinch to
`
`zoom or moving around.
`
`Anyone who has used these phones,
`
`knows how convenient it is to zoom in and see a
`
`bit of text larger if it is too small in your
`
`e—mail or something else, or move through a map
`
`and change which part of the map you are
`
`looking at. That's available because of
`
`Apple's multi-touch technology that is patented
`
`in this case.
`
`Motorola has adopted it in 2010.
`
`In
`
`addition, Motorola's devices adopted Apple's
`
`patented computer-based technology. What that
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`computer—based technology, which is reflected
`
`in the ’43O patent that we're going to talk
`
`about in a bit, it talks about a way of
`
`dynamically finding applications that you need
`
`to use on the fly and need to use quickly.
`
`And a good example of that that we now
`
`take simply for granted is if you are in an
`
`e—mail and the e—mail —— in the e—mail someone
`
`lists their phone number, we now take for
`
`granted that you can just touch the phone
`
`number in the e—mail and the phone will dial
`
`that number.
`
`What we may not be aware of is that in
`
`order to do that,
`
`the phone has to change the
`
`application. We're actually in an e—mail
`
`application that doesn't dial phone numbers.
`
`So the cellular phone,
`
`the Smartphone
`
`has to figure out which program to go use, go
`
`get that right program that can make the phone
`
`call,
`
`launch that program that can make the
`
`phone call, and all we see is we touch the
`
`phone number on the e—mail program and we get a
`
`phone call.
`
`But underneath that, under the covers
`
`is a series of computer—based architecture,
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`software steps that Apple innovated that made
`
`that possible,
`
`that Motorola has now adopted.
`
`And now I would like to get into more
`
`detail, Your Honor,
`
`for a bit about the
`
`multi—touch patents at issue here, beginning
`
`with the ’607 patent, which is the hardware
`
`patent.
`
`The title is multi—point touchscreen.
`
`And the inventor who will be here to talk about
`
`that is Steve Hotelling.
`
`He is Apple's senior
`
`director for touch hardware, named inventor on
`
`about 50 U.S. patents. And almost 100 pending
`
`applications.
`
`And he will be our first witness.
`
`He
`
`recognized the problem with the prior art
`
`software —— prior art hardware.
`
`The prior art
`
`hardware had various configurations, but what
`
`it couldn't do was accurately recognize the
`
`location and movement of multiple finger
`
`contacts.
`
`And one of the problems he will
`
`testify about is that if you had two fingers as
`
`shown in the screen on two different positions,
`
`because of the way these hardware devices were
`
`designed, you couldn't tell whether the actual
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`touch was where the fingers were or almost the
`
`mirror image of where the fingers were.
`
`And that was one of the problems that
`
`was shown in the prior art that he was trying
`
`to solve. And he did solve it.
`
`Another problem in the prior art is
`
`that when you had touchscreens or touch
`
`sensitive panels,
`
`they were usually not
`
`transparent.
`
`They were often on an opaque
`
`touch pad on a computer that we have all seen
`
`before, or they were something like this
`
`quantum board, which is one of the pieces of
`
`prior art that Motorola relies upon here, which
`
`when you put it on top of a real touchscreen,
`
`you can see is not at all transparent.
`
`It
`
`obscures the whole face.
`
`So that is one of the problems with
`
`prior art hardware is that in addition to not
`
`being able to recognize accurately multiple
`
`touches, it wasn't transparent, which you need
`
`for the new type of device Apple was creating.
`
`The solution in the '607 patent is
`
`what is called row/column intersection
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`capacitance. That is one part of the solution.
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`That's one way that you are accurately able to
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`Heritage Reporting Corporation
`(202) 628-4888
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`detect multiple touches.
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`But,
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`in addition, it was transparent.
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`So it let you have the iPhone that we're —~
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`the
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`iPhone and iPhone—like devices that we're used
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`to seeing today. And it was the combination of
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`those two inventions, and the other aspects of
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`the '607 patent that make the iPhone able to
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`recognize the gestures that we all take for
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`granted today.
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`The infringement with regard to the
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`Motorola devices is quite straightforward with
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`res
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