Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 1 of 285 PageID #: 31775
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
`
`1
`
`CIVIL ACTION NO.
`
`6:12-cv-855-RWS
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`(Lead Consolidated Case)
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`Tyler, Texas
`
`January 26, 2016
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`8:46 a.m.
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`VIRNETX INC. AND SCIENCE
`
`APPLICATIONS INTERNATIONAL
`
`CORPORATION,
`
`Plaintiffs,
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`VS.
`
`APPLE INC.,
`
`Defendant.
`
`---------------------------------------------------------
`
`REPORTER'S TRANSCRIPT OF JURY TRIAL, VOLUME 2
`
`BEFORE THE HONORABLE ROBERT W. SCHROEDER III
`
`UNITED STATES DISTRICT JUDGE
`
`---------------------------------------------------------
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
`
`1
`
`CIVIL ACTION NO.
`
`6:12-cv-855-RWS
`
`(Lead Consolidated Case)
`
`Tyler, Texas
`
`January 26, 2016
`
`8:46 a.m.
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`*
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`*
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`* * *
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`*
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`VIRNETX INC. AND SCIENCE
`
`APPLICATIONS INTERNATIONAL
`
`CORPORATION,
`
`Plaintiffs,
`
`VS.
`
`APPLE INC.,
`
`Defendant.
`
`---------------------------------------------------------
`
`REPORTER'S TRANSCRIPT OF JURY TRIAL, VOLUME 2
`
`BEFORE THE HONORABLE ROBERT W. SCHROEDER III
`
`UNITED STATES DISTRICT JUDGE
`
`---------------------------------------------------------
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 2 of 285 PageID #: 31776
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`APPEARANCES:
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`COURT REPORTER:
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`2
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`BRENDA HIGHTOWER SMITH, CSR-FCRR
`Official Court Reporter
`Eastern District of Texas
`Texarkana Division
`500 N. State Line Ave, Third Floor
`Texarkana, Texas
`75501
`903.794.1018
`brenda_smith@txed.uscourts.gov
`
`(Proceedings recorded by mechanical stenography,
`transcript produced on CAT system.)
`
`FOR THE PLAINTIFF:
`
`FOR THE DEFENDANT:
`
`BRADLEY W. CALDWELL
`JASON D. CASSADY
`JOHN AUSTIN CURRY
`CALDWELL CASSADY & CURRY
`2101 Cedar Springs Road, Suite 1000
`Dallas, Texas
`75201
`
`T. JOHN WARD, JR.
`WARD, SMITH & HILL, PLLC
`1127 Judson Road, Suite 220
`Longview, Texas
`75601
`
`ROBERT CHRISTOPHER BUNT
`PARKER BUNT & AINSWORTH
`100 East Ferguson, Suite 1114
`Tyler, Texas
`75702
`
`GREGORY S. AROVAS
`ROBERT A. APPLEBY
`JEANNE M. HEFFERNAN
`JOSEPH A. LOY
`LESLIE M. SCHMIDT
`KIRKLAND & ELLIS LLP
`601 Lexington Avenue
`New York, New York
`
`10022
`
`F. CHRISTOPHER MIZZO
`KIRKLAND & ELLIS LLP
`655 Fifteenth Street, N.W.
`Washington, D.C.
`20005
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 3 of 285 PageID #: 31777
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`3
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`AKSHAY S. DEORAS
`KIRKLAND & ELLIS LLP
`555 California Street
`San Francisco, California
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`94104
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`MICHAEL E. JONES
`JOHN F. BUFE
`ALLEN F. GARDNER
`POTTER MINTON
`110 North College Avenue, Suite 500
`Tyler, Texas
`75702
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`******************************************
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 4 of 285 PageID #: 31778
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`(Open court, all parties present, jury not
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`4
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`present.)
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`COURT SECURITY OFFICER:
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`All rise.
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`THE COURT:
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`Please be seated.
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`Good morning, everyone.
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`I hope everybody had
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`a nice evening.
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`A couple of things before we start with
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`the jury this morning.
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`I had an opportunity to review Apple's motion
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`to preclude VirnetX's assertions of willfulness against
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`iMessage, as well as VirnetX's motion for a curative
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`instruction based on Apple's improper arguments made to
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`the jury, as well as the responses that were filed.
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`Would the parties like to be heard on those?
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`MR. CALDWELL:
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`We would certainly like to be
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`heard on the motion for curative instruction.
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`THE COURT:
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`All right.
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`Mr. Caldwell.
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`MR. CALDWELL:
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`Thank you, sir.
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`Good morning, Your Honor.
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`THE COURT:
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`Good morning.
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`MR. CALDWELL:
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`May it please the Court.
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`Given that this was briefed on somewhat of an
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`expedited basis, but nevertheless brief, I will try to be
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`brief myself.
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`I feel and I know, at least on behalf of
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`VirnetX, we feel that the parties need to be truthful to
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 5 of 285 PageID #: 31779
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`5
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`both you and to the jury; and that didn't happen
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`yesterday during Apple's opening.
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`You understand the
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`background of basically what we're complaining about,
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`that Apple has made this pitch to the jury that VirnetX
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`is trying to move its fence post.
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`And they even take it
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`further to say the Federal Circuit rebuked VirnetX for
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`misrepresenting where its fence posts were in front of
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`that jury.
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`And that's just completely not true.
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`And
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`it's utterly unfair and terribly prejudicial.
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`The primary crux of Apple's response that,
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`hey, we should be okay with it, is that if you were to
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`cure it, that would be a negative for Apple.
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`But you
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`can't step right into something that's a violation of a
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`motion in limine, make an improper argument and get away
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`with it because correcting it might hurt you.
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`Apple also argues quite improperly -- and I
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`quote -- VirnetX first virtuously informed the jury of
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`the prior vacated jury verdict that FaceTime infringed.
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`The person who introduced that to the jury was
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`Mr. Mike Jones in voir dire.
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`And I can show you that on
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`the ELMO if that would be helpful.
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`But Mr. Ward didn't touch that on voir dire.
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`And, instead, Mr. Jones got up and argued, well, yeah,
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`that's just on that "always" feature on VPN On Demand.
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`But you're going to find out there's this other thing
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 6 of 285 PageID #: 31780
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`6
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`which is infringement.
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`And that got reversed and sent
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`back down.
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`That's where it came up.
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`Not with me.
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`And I stuck with that, and I also followed all
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`of Your Honor's rulings in limine when I argued in
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`opening.
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`So to the extent that this is some sort of a
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`door opening, certainly Apple can't open its own door to
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`improper argument, or to any argument, much less an
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`improper one.
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`Second, Apple argues, well, Judge, you already
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`gave us permission to say whatever we want about the
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`appeal.
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`And plainly, that's not true.
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`What Apple --
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`what Apple cites is Apple cites a portion of the
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`transcript where Mr. Ward and either Mr. Arovas or
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`Mr. Jones -- I can't remember.
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`I think it was
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`Mr. Arovas -- they were arguing the issue of whether we
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`would talk about the former trial at all.
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`And that's the
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`portion of the transcript that Apple cites.
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`And you said, obviously, if the door is open,
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`we'll talk about what happened.
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`That doesn't mean you get to make an improper
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`legal argument as though it wasn't the Judge's
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`construction that we tried in the last case.
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 7 of 285 PageID #: 31781
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`7
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`And more to the point, a few hours after that
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`we argued a different motion in limine to you that same
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`day, and it was the one that was particularly curious
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`where we had a motion in limine that Apple should not be
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`able to refer to rejected claim constructions.
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`And, I
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`mean, we even remarked at the time it was very curious
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`why Apple was opposing this thing, it makes no sense.
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`Why would we be talking about rejected ones, they opposed
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`it and lost.
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`That motion in limine was granted.
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`But yesterday rather than talking about what
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`really happened, that the Court had a construction that
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`was reversed, Apple said VirnetX is moving its fence
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`post, they're the ones who got reversed and rebuked by
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`the Federal Circuit.
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`That was terribly prejudicial.
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`Whereas I tried to carefully stay within the bounds of
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`what the motions in limines permitted.
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`As mentioned, everybody in here that, you
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`know, works in the patent law world anyway, understands
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`it was the Court's construction.
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`And there's no doubt
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`that the parties had competing proposals.
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`But at the district court level, neither --
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`Judge Davis didn't adopt our proposal and he didn't adopt
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`Apple's proposal.
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`He adopted a different proposal.
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`After that, Apple came back to him and -- I
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`mean, I can pass all of this up.
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`We thought this was a
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 8 of 285 PageID #: 31782
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`8
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`motion in limine issue.
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`Apple changed the battleground
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`by making this our issue on claim construction.
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`But
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`Apple came back to Judge Davis and filed a motion for
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`reconsideration of the construction of "secure
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`communication link."
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`And they asked for word-for-word
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`the construction we presented to the jury in the last
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`case.
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`If memory serves, they did that maybe ten days
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`or a week before a hearing.
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`And I think we stood up in
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`the hearing and I don't know if this is correct or if we
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`filed a notice of non-opposition, but in any event we
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`just told Judge Davis we don't oppose.
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`So he puts out an order, which I could show
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`you if it will be helpful.
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`It's really only -- I mean,
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`it's 3 inches worth of an order.
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`Can I have the document camera?
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`There we go.
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`Before the Court is Defendant's -- and there's
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`no doubt that was -- included Apple -- motion for
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`reconsideration of the construction of the term in light
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`of VirnetX's notice of non-opposition, Defendant's motion
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`for reconsideration.
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`The Court grants Defendant's motion
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`for reconsideration.
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`The term "secure communication
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`link" is construed to mean "a direct communication link
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`that provides data security through encryption."
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`And, Your Honor, that is the construction that
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 9 of 285 PageID #: 31783
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`9
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`was in the Court's binder -- I'm sorry -- the jury's
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`binder last time.
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`That is a construction that Dr. Short
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`stuck with, Dr. Jones stuck with, I stuck with, and my
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`colleague stuck with.
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`So yesterday Mr. Arovas made some argument,
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`now obviously we must not have agreed to it because we
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`wouldn't have been able to appeal it.
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`We can have a
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`debate about that estoppel effect until the cows come
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`home.
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`It was in our appeal brief.
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`The Federal Circuit
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`didn't even address it.
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`What they said is, we -- we
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`address claim construction terms de novo.
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`So they did a de novo review and found that
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`the Court had failed to include the word "anonymity" in
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`the construction.
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`So they send that back.
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`And any suggestion
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`that what we've argued isn't proper, is out of line.
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`I have the Federal Circuit opinion, which I
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`don't know that it's worth showing you.
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`But it says the
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`case is remanded -- the case is remanded to -- for
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`further proceedings to determine whether Apple's FaceTime
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`servers provide anonymity.
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`That was the basis of the remand.
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`Apple's suggestion that we misled the jury is
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`just terrible, and it's eerily reminiscent of the last
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`time we tried a VirnetX case.
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`And what ended up
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 10 of 285 PageID #: 31784
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`10
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`happening was the case evolves into a fight over claim
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`construction with each witness saying he said/she said
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`about what's in the spec, what's in the intrinsic record,
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`who said what in a Markman hearing or in a Markman brief.
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`Constant races to the bench.
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`And it ultimately led to a
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`corrective instruction that was very, very late in the
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`game.
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`And that's why VirnetX submits it's absolutely
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`necessary to get on top of this right now.
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`Or else
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`because of the way Apple has kicked open the claim
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`construction door, we are going -- either -- either they
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`get to violate the MIL and it penalizes us or else we all
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`end up engaging on a battleground that really isn't
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`proper because Your Honor has provided a construction and
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`the Federal Circuit has provided a construction.
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`So we put the quote from VirnetX -- I'm
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`sorry -- from Apple's opening statement in our brief
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`where they say that the Court said, VirnetX, you told the
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`jury that the fence was over here when it was actually
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`over here.
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`That's so misleading.
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`We all presented the
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`agreed construction, the ordered construction to the jury
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`in that case.
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`They gave an inconstruction -- incorrect
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`construction of law by making that argument to the jury.
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`They misrepresented the course of claim construction by
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 11 of 285 PageID #: 31785
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`making that argument to the jury.
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`11
`They violated multiple
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`motion in limines, but it's very readily apparent that
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`they violated the ones on rejected claim construction.
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`And a corrective instruction is warranted because they
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`have impugned improperly the credibility of VirnetX,
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`Dr. Short, Dr. Jones, me, and my colleagues.
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`And that -- just kicking off the trial that
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`way is absolutely improper, Your Honor.
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`THE COURT:
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`Thank you, Mr. Caldwell.
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`Mr. Arovas.
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`MR. AROVAS:
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`Thank you, Your Honor.
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`Your Honor, I -- I was the one who argued the
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`issue about the prior litigations.
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`And when we made that
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`argument -- it's in the briefing -- the kinds of comments
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`that were made in the opening by VirnetX's counsel was
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`exactly the reason we brought that motion and the issues
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`I raised.
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`When we did that argument, I said, you know, I
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`had a concern.
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`We said it was a 7th Amendment concern
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`that we were being denied a fair right to a jury trial to
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`have that prior verdict that was reversed and did not
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`exist anymore brought up in front of this jury to make
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`the suggestion.
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`And we actually discussed this
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`specifically, the suggestion that there was really not
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`much more work to be done, nothing wrong was done before,
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 12 of 285 PageID #: 31786
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`12
`and that this jury really had to just figure out whether
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`one word was present in the accused products; that is, a
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`fundamental violation of Apple's 7th Amendment right to a
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`jury trial.
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`That is not permissible.
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`That was what we
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`discussed.
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`I understand we lost that.
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`But, you know,
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`when we lost that, the Court said, look, if that door is
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`opened -- and this was in their opening slides that we
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`had the night before that they were going to talk about
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`the Federal Circuit, that, in fact, we even argued about
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`that timeline in chambers, that they were going to talk
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`about that verdict.
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`Obviously, when we picked the jury, we had to
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`see how that was got going to affect the jury.
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`It was an
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`attempt to get a fair jury.
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`But this was exactly the issue I raised a
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`concern.
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`I said that the fed -- the decision on FaceTime
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`should not come up in an attempt to suggest that Apple
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`was, in fact, playing unfair.
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`And if Your Honor remembers, it was the very
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`first line of the opening statement by VirnetX, playing
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`fair in the sandbox.
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`I think it was "Everything that I
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`learned, I learned in kindergarten."
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`That was the whole
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`theme.
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`Then they go on.
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`And what do they say in the
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 13 of 285 PageID #: 31787
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`13
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`opening?
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`They say there was a verdict in 2012 that VPN
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`and FaceTime infringed.
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`And then they said what the
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`appeals court decided, the appeals court didn't say the
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`jury mis-analyzed the fact or got it wrong, right?
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`All
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`they want -- what they said is they wanted it to be
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`considered again with one word added to the definition.
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`This is a fundamental violation of our 7th
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`Amendment right to a jury trial.
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`That is an incorrect
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`statement of law.
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`That is an incorrect recitation of
`
`what the Federal Circuit did.
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`The Federal Circuit did
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`not approve the jury's verdict but for one word.
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`We had
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`to respond to that.
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`Now, the intent of all of my comments was to
`
`make one fundamental point, which is to this jury, this
`
`decision was not made.
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`You need to make this again.
`
`Why?
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`We all know that claim construction defines the
`
`meets and bounds of the patent.
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`In fact, Mr. Ward in his voir dire referred to
`
`patents as compared to land and setting the boundaries of
`
`land.
`
`And it's frankly -- and there's nothing wrong with
`
`that, right?
`
`That is a very common analogy to give
`
`juries to understand the abstract issue of patent scope
`
`in a more concrete set of terms and language.
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`So my point was it was a fact that the
`
`boundaries of these patents had been changed.
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`And when
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 14 of 285 PageID #: 31788
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`14
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`we discussed this at the motion in limine stage and I
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`raised this concern, that was raised to VirnetX that if
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`they were to do this and go into that, that we could
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`explain the Federal Circuit opinion.
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`And that's exactly
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`what I did.
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`The statements made about the Federal Circuit
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`opinion are all 100 percent factually correct.
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`We cited
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`in our brief, these were VirnetX's arguments.
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`It was a
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`construction proposed by VirnetX.
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`The Federal Circuit
`
`evaluated both arguments.
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`They are here with their
`
`inventor testifying about the scope of the patents and
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`his inventions.
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`And that is the fundamental point.
`
`They
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`had an argument it was this big; we had an argument it
`
`was this big.
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`The Federal Circuit said it's this big.
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`And that's what comes down to this jury.
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`And this jury
`
`needs to entirely decide the decision of infringement,
`
`not just look at one word in isolation.
`
`Now, this difference, too, that they would
`
`like to do, right?
`
`And we even talked about this in some
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`of the Daubert issues where I raised an issue, I said,
`
`look, I got a fundamental concern about how they're
`
`presenting this case.
`
`They don't go through, right,
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`claim by claim -- claim element by claim element and say,
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`here's where we meet it, here's where we meet it, here's
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`where we meet it, as if we were trying a new infringement
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 15 of 285 PageID #: 31789
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`15
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`case.
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`They're presenting this case as if we don't need
`
`the factual findings of the prior jury are somehow
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`imported into this jury's mind, an entirely new jury,
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`entirely new finder of fact, and they're just going to
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`look at a couple of differences and they're going to say,
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`okay, well, this changed and that changed, and that's all
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`we need to do.
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`All right.
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`We raised that as a -- at the
`
`issue in the Daubert, the fundamental approach that they
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`were taking.
`
`Well, in the opening statement they say, what
`
`did the Federal Circuit do?
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`Oh, it just added one word.
`
`It's no big deal.
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`Just one word.
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`Right.
`
`What do we know from the Federal
`
`Circuit opinion?
`
`It was the primary inventive
`
`contribution of the patent that they were saying that
`
`VirnetX was fundamentally wrong in the way they were
`
`reading the scope of the patent to read out the
`
`fundamental inventive contribution.
`
`And so what we needed to do is we needed to
`
`set that record straight, to let this jury know they have
`
`a job to do and they have to decide the issue of
`
`infringement fresh, that the statement that the court of
`
`appeals didn't say the jury got that wrong.
`
`No, in fact,
`
`the court of appeals did say the jury got that wrong.
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 16 of 285 PageID #: 31790
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`16
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`Now it may not be the jury's fault that they got that
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`wrong but the fact is the decision was wrong and it was
`
`reversed.
`
`And, Your Honor, if I may just comment on one
`
`additional point, this notion that somehow this is a
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`stipulated construction actually defies understanding.
`
`The issue of anonymity, and whether anonymity was a part
`
`of this patent or these -- a limitation on these claims
`
`was a fundamental issue from the beginning.
`
`Okay?
`
`Decisions were certainly made, and they were related
`
`claim constructions.
`
`VirnetX made an argument just like
`
`this.
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`In fact, Mr. Caldwell mentioned it to the Federal
`
`Circuit.
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`If it was, in fact, waived, the Federal Circuit
`
`would not have even reached a decision.
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`The Federal
`
`Circuit doesn't even address the waiver argument, instead
`
`goes directly to the claim construction issue and
`
`addresses it.
`
`This was never a stipulated construction.
`
`We
`
`have, since the beginning of this case, been saying that
`
`anonymity should be part of these claims.
`
`And for that reason, Your Honor, we believe
`
`that there's really nothing to cure.
`
`The record is
`
`balanced.
`
`We do not intend to cross Mr. Jones on the old
`
`claim construction.
`
`We do not intend to cross on
`
`rejected claim constructions when people put different
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 17 of 285 PageID #: 31791
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`17
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`constructions to the Court.
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`But this issue, this claim construction, the
`
`issue of anonymity was squarely put before the jury.
`
`It
`
`was what I raised in the motion in limine arguments.
`
`And
`
`it was exactly what we did to say, as the Court noted
`
`about going in and explaining the Federal Circuit
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`opinion, is to explain what the Federal Circuit did.
`
`Thank you, Your Honor.
`
`THE COURT:
`
`Thank you.
`
`MR. CALDWELL:
`
`Okay.
`
`Your Honor, I don't
`
`think there's anybody in here forward of the bar in this
`
`courtroom that disagrees that claim construction was
`
`issued as a matter of law under Markman by the Judge.
`
`So the problem is a lot of this argument that
`
`was just made is utterly irrelevant.
`
`You can't suggest
`
`that VirnetX somehow moved the fence.
`
`And he's making my point exactly.
`
`Are we
`
`going to have this trial turn into, well, first Apple
`
`argued it's a VPN link, and we argued it's this other
`
`thing, Judge Davis says it's not?
`
`After -- then after
`
`that, without even saying they reserve their old
`
`construction or anything, they file a motion for
`
`reconsideration and say, hey, we looked at something in a
`
`re-exam.
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`Now we should add this "through encryption" at
`
`the end of construction.
`
`VirnetX didn't oppose.
`
`They
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 18 of 285 PageID #: 31792
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`18
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`got what they want.
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`Is that what the trial is going to become?
`
`Because that's really -- that's really what I just heard.
`
`But more fundamentally, when we're trying to
`
`respect Your Honor's orders, does Apple just get to open
`
`their own door and do they get to just decide when a door
`
`is open?
`
`Because I suspect if we had gone to the bench
`
`rather than Apple just marching right through, we would
`
`have been able to agree -- or at least gotten an order
`
`from Your Honor -- that they would have to acknowledge it
`
`was the Court's construction, not try and put it out like
`
`VirnetX just came in and lied to the jury.
`
`And it's true, Mr. Arovas says they don't
`
`intend to cross Dr. Jones on it.
`
`I don't blame them.
`
`If
`
`they crossed Dr. Jones on that point, he would crush them
`
`on it.
`
`He was applying the Court's construction at that
`
`last point.
`
`And one last thing, less there be any
`
`question, in the last trial Apple had a non-infringement
`
`argument on FaceTime.
`
`Their non-infringement argument on
`
`FaceTime was whether the connections were direct.
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`And I showed you what the Federal Circuit
`
`said, we remand for further proceedings to determine
`
`whether they provide anonymity.
`
`As to Apple's point suggesting that there's
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 19 of 285 PageID #: 31793
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`19
`some broader scope of this reversal, the Federal Circuit
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`actually goes on to analyze Apple's other argument that
`
`they do not provide NAT communications; and we don't have
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`to read that and wear out our court reporter's fingers.
`
`But the point is, at the end of the day, the
`
`Federal Circuit said we don't think the district court
`
`erred in finding there was substantial evidence on that
`
`point of direct.
`
`That was a non-infringement point they
`
`tried to argue at trial and took up to the Federal
`
`Circuit.
`
`In any event, Apple effectively gave an
`
`improper legal instruction.
`
`They've definitely violated
`
`a motion in limine, and we've been prejudiced by it.
`
`It
`
`was the Court's construction, and everybody used it in
`
`that case.
`
`We had no option.
`
`THE COURT:
`
`Thank you, Mr. Caldwell.
`
`Let me just say, you know, I'm going to deny
`
`the motion.
`
`I think having reviewed the transcript,
`
`having reviewed VirnetX's motion in limine, which I think
`
`was E, you know, VirnetX had an opportunity and has
`
`already reiterated that the Court is, you know, where the
`
`claim constructions come from and construes the claim
`
`terms, not the parties.
`
`I do think there was some, I wouldn't call it
`
`mischaracterization, but perhaps misunderstanding of what
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 20 of 285 PageID #: 31794
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`20
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`the motion in limine ruling on rejected claim
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`constructions was.
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`I certainly did not intend to
`
`restrict the parties' ability to explain how anonymity
`
`was added to a term on appeal from the Federal Circuit.
`
`And I'll also note that yesterday VirnetX
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`essentially provided its own curative comment during the
`
`direct of Dr. Short when you asked, "And do you
`
`understand that VPN, or virtual private network, is one
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`of the terms that the Court construed and is in the
`
`jury's binder?"
`
`It seems to me that the cure really,
`
`Mr. Caldwell, is to allow you to get in through testimony
`
`the fact that VirnetX is required to follow the Court's
`
`claim constructions, not your own.
`
`And, you know, I do think it's -- it's --
`
`it's, you know, important, Mr. Arovas, not to now further
`
`confuse the issue by claiming that VirnetX was somehow
`
`coming up with its own claim constructions.
`
`That would
`
`not be appropriate.
`
`And so I will deny the motion, Mr. Caldwell.
`
`But I certainly think you're fully entitled to ask your
`
`infringement expert, you know, where those claim
`
`constructions came from on direct.
`
`So that's going to be
`
`my ruling.
`
`MR. CALDWELL:
`
`So, you think we can do
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 21 of 285 PageID #: 31795
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`21
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`that with respect to addressing the point of the
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`technology in the last case where we were using the
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`Court's claim construction and in this case we're using
`
`the Court's claim construction.
`
`THE COURT:
`
`Yes.
`
`MR. CALDWELL:
`
`Thank you, Your Honor.
`
`THE COURT:
`
`Yes.
`
`Now, with respect to Apple's motion to
`
`preclude VirnetX's assertion of willfulness against
`
`iMessage, we're now well into the jury's time this
`
`morning.
`
`So unless the parties believe there is some
`
`reason this absolutely must be decided right now,
`
`we'll -- we'll put this off to a later point.
`
`In fact, it seems to me, having reviewed the
`
`motion and the response, it would make more sense to
`
`address this issue as we get further toward the end of
`
`trial in connection with the discussions on final jury
`
`instructions.
`
`MR. MIZZO:
`
`Your Honor, I think that's a fine
`
`approach.
`
`The only, I think, thing we would want to
`
`avoid is any insinuation or argument before we get to
`
`those discussions on jury instructions.
`
`By, for example,
`
`Dr. Jones's testimony.
`
`Anything to support where they
`
`may allege that there is willfulness with regard to
`
`iMessage.
`
`So I guess as long as we can be careful
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 22 of 285 PageID #: 31796
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`22
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`regarding the testimony and any argument that's made
`
`before we get to that juncture and have the opportunity
`
`to have that discussion with you, I think that's fine.
`
`THE COURT:
`
`Okay.
`
`Well, certainly Apple's --
`
`has the ability to object if they think Dr. Jones is
`
`getting into an area that he shouldn't.
`
`But I think for
`
`now, be happy to hear from VirnetX on this point before
`
`we move on.
`
`But it seems to me this is something that we
`
`can address later on.
`
`Mr. Curry.
`
`MR. CURRY:
`
`Thank you, Your Honor.
`
`And good
`
`morning.
`
`What we plan to do with Dr. Jones for iMessage
`
`is prove up infringement, obviously.
`
`And then there are
`
`some elements of 271(b) that would overlap with Apple's
`
`willfulness with iMessage.
`
`Dr. Jones is not going to
`
`present willfulness of Apple.
`
`I think that's something
`
`that's outside of his realm as a technical expert.
`
`THE COURT:
`
`All right.
`
`Very well.
`
`Thank you,
`
`Mr. Curry.
`
`Seems like we've agreed.
`
`MR. MIZZO:
`
`Yes, Your Honor.
`
`Thank you.
`
`THE COURT:
`
`All right.
`
`Anything further
`
`before we have the jury brought in?
`
`MR. AROVAS:
`
`Very quickly, Your Honor.
`
`Just
`
`to let you know.
`
`There is one objection to Dr. Short's
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 23 of 285 PageID #: 31797
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`23
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`exhibits.
`
`We're happy to make the objection while the
`
`jury is here if Your Honor wants to bring the jury in, or
`
`we could raise it with Your Honor.
`
`It's up to the Court.
`
`THE COURT:
`
`Let's just address it when it --
`
`when it comes up.
`
`MR. AROVAS:
`
`Thank you, Your Honor.
`
`THE COURT:
`
`Thank you, Mr. Arovas.
`
`Ms. Mayes.
`
`COURT SECURITY OFFICER:
`
`All rise for the
`
`jury.
`
`(Jury in.)
`
`THE COURT:
`
`Please be seated.
`
`Ladies and gentlemen of the jury, welcome
`
`back.
`
`I hope you had a pleasant evening last night.
`
`I
`
`appreciate everyone being here promptly this morning.
`
`I do apologize.
`
`We were somewhat late
`
`starting this morning.
`
`We did have a couple of matters
`
`we needed to take up outside of your presence, and so
`
`that required us to start a little bit late this morning.
`
`And for that, I do apologize.
`
`When we concluded at the end of the day
`
`yesterday, Mr. Caldwell was examining his -- his witness,
`
`Dr. Short.
`
`Mr. Caldwell, you may continue.
`
`MR. CALDWELL:
`
`Thank you, Your Honor.
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`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 24 of 285 PageID #: 31798
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`24
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`May it please the Court.
`
`ROBERT SHORT, III, PLAINTIFF'S WITNESS, SWORN
`
`DIRECT EXAMINATION (CONTINUED)
`
`BY MR. CALDWELL:
`
`Q.
`
`A.
`
`Q.
`
`Good morning, Dr. Short.
`
`Good morning.
`
`Let's talk a little bit about what you did after
`
`applying for your patents.
`
`Did your employer SAIC make a
`
`go at practicing the inventions?
`
`A.
`
`Q.
`
`A.
`
`Yes, we did.
`
`Is SAIC a product company?
`
`No, not really.
`
`It's a technical services
`
`research company.
`
`They don't build products and
`
`certainly not commercial products.
`
`Q.
`
`So in what way while you were at SAIC did you look
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`at practicing the -- the inventions?
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`A.
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`Well, we were allowed -- and we were given some
`
`funding to support it -- to go out and tried to get some
`
`commercial investment to help us to do that.
`
`Q.
`
`When you first looked for commercial investment,
`
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`approximately what time frame was this?
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`A.
`
`Q.
`
`A.
`
`That was in like 2001, I believe.
`
`How did the fundraising efforts go in 2001?
`
`Well, those -- if I can remember back that far,
`
`that was right at the same time of the -- the e-commerce
`
`09:14AM
`
`09:14AM
`
`09:14AM
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`09:14AM
`
`09:15AM
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`
`
`Case 6:12-cv-00855-RWS Document 434 Filed 02/04/16 Page 25 of 285 PageID #: 31799
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`25
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`bubble burst.
`
`There was a lot of investment into
`
`e-commerce, and suddenly it just all kind of fell apart.
`
`Q.
`
`A.
`
`Was it hard to raise money then?
`
`Yes.
`
`The investments in new projects had pretty
`
`much dried up altogether, and people were just trying to
`
`keep the projects they had going.
`
`Q.
`
`Were you able to keep pursuing the id
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