Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 1 of 115 PageID #: 63310
`
`248
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
`
`VIRNETX INC., ET AL,
`
`PLAINTIFFS,
`
`VS.
`
`APPLE INC.,
`
`DEFENDANTS.
`
`
`
`CIVIL ACTION NO.
`6:12-CV-855-RWS
`
`
`)(
`)(
`)(
`)(
`)(
`TYLER, TEXAS
`)(
`)( OCTOBER 27, 2020
`)(
`9:15 A.M.
`)(
`
`TRANSCRIPT OF JURY TRIAL
`MORNING SESSION
`BEFORE THE HONORABLE JUDGE ROBERT W. SCHROEDER, III
`UNITED STATES CHIEF DISTRICT JUDGE
`
`APPEARANCES:
`
`FOR THE PLAINTIFF:
`BRADLEY W. CALDWELL
`JASON D. CASSADY
`JOHN AUSTIN CURRY
`CALDWELL CASSADY & CURRY
`2121 N. Pearl St., Suite 1200
`Dallas, Texas 75201
`T. JOHN WARD, JR.
`WARD, SMITH & HILL PLLC
`1507 Bill Owens Parkway
`Longview, Texas 75604
`R. CHRISTOPHER BUNT
`PARKER BUNT & AINSWORTH
`100 East Ferguson, Suite 418
`Tyler, Texas 75702
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`
`
`248
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
`
`VIRNETX INC., ET AL,
`
`PLAINTIFFS,
`
`VS.
`
`APPLE INC.,
`
`DEFENDANTS.
`
`
`
`CIVIL ACTION NO.
`6:12-CV-855-RWS
`
`
`)(
`)(
`)(
`)(
`)(
`TYLER, TEXAS
`)(
`)( OCTOBER 27, 2020
`)(
`9:15 A.M.
`)(
`
`TRANSCRIPT OF JURY TRIAL
`MORNING SESSION
`BEFORE THE HONORABLE JUDGE ROBERT W. SCHROEDER, III
`UNITED STATES CHIEF DISTRICT JUDGE
`
`APPEARANCES:
`
`FOR THE PLAINTIFF:
`BRADLEY W. CALDWELL
`JASON D. CASSADY
`JOHN AUSTIN CURRY
`CALDWELL CASSADY & CURRY
`2121 N. Pearl St., Suite 1200
`Dallas, Texas 75201
`T. JOHN WARD, JR.
`WARD, SMITH & HILL PLLC
`1507 Bill Owens Parkway
`Longview, Texas 75604
`R. CHRISTOPHER BUNT
`PARKER BUNT & AINSWORTH
`100 East Ferguson, Suite 418
`Tyler, Texas 75702
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 2 of 115 PageID #: 63311
`
`249
`
`FOR THE PLAINTIFFS:
`
`ANDY TINDEL
`MT2 LAW GROUP
`MANN TINDEL THOMPSON
`112 E. Line Street
`Suite 304
`Tyler, Texas 75702
`
`FOR THE DEFENDANT:
`GREGORY S. AROVAS
`ROBERT A. APPLEBY
`JEANNE M. HEFFERNAN
`JOSEPH A. LOY
`LESLIE M. SCHMIDT
`AARON D. RESETARITS
`KIRKLAND & ELLIS LLP
`601 Lexington Avenue
`New York, New York 10022
`AKSHAY S. DEORAS
`KIRKLAND & ELLIS LLP
`555 California Street
`San Francisco, California 94104
`MICHAEL E. JONES
`POTTER MINTON
`110 North College Avenue, Suite 500
`Tyler, Texas 75702
`
`COURT REPORTER:
`
`Ms. Shelly Holmes, CSR, TCRR
`Official Court Reporter
`United States District Court
`Eastern District of Texas
`Marshall Division
`100 E. Houston
`Marshall, Texas 75670
` (903) 923-7464
`
`(Proceedings recorded by mechanical stenography, transcript
`produced on a CAT system.)
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 3 of 115 PageID #: 63312
`
`250
`
`P R O C E E D I N G S
`
`(Jury out.)
`COURT SECURITY OFFICER: All rise.
`THE COURT: Please be seated.
`Good morning, everyone.
`Okay. I understand there is a dispute over some
`opening slides and demonstratives for Dr. Jones and perhaps
`for openings, as well.
`Who from Apple wishes to be heard?
`MR. AROVAS: Your Honor, I would like to address
`
`it.
`
`THE COURT: That would be fine.
`Mr. Arovas, if you can turn that podium around
`you're welcome to do so.
`MR. AROVAS: Maybe I can do it this way. Maybe
`there's a corner or something that I can pull out.
`THE COURT: All right. That's fair enough.
`MR. AROVAS: So hopefully my papers don't end up
`all over the floor.
`All right. So, Your Honor, let me -- I'll try to
`very quickly address what I think are the core issues and
`what we thought were the reasonable solutions, given the
`various MILs and the constraints we've all been trying to
`work under.
`So last night, obviously, Your Honor I think got a
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:15:42
`
`09:15:42
`
`09:15:43
`
`09:16:05
`
`09:16:09
`
`09:16:17
`
`09:16:26
`
`09:16:28
`
`09:16:35
`
`09:16:37
`
`09:16:38
`
`09:16:40
`
`09:16:43
`
`09:16:44
`
`09:16:46
`
`09:16:49
`
`09:16:51
`
`09:16:54
`
`09:16:56
`
`09:16:58
`
`09:17:01
`
`09:17:04
`
`09:17:11
`
`09:17:12
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 4 of 115 PageID #: 63313
`
`251
`
`preview of some of the issues we were all concerned about.
`When we saw the slides last night for the opening and for
`Dr. Jones, and they are very similar, it really kind of
`confirmed our concerns about how VirnetX was going to put
`on some of this evidence. In fact, some of those slides
`come from the intent sections of Dr. Jones from the prior
`trial. So they're specifically put forward to prove the
`issue of intent.
`And what we're concerned about is this should --
`this is a damages trial, and the evidence that should come
`in should be directed to the issues on damages. It
`shouldn't be turned into a trial on willfulness or intent
`or prior conduct or prior verdicts that are going to incent
`this jury to punish, to -- or to encourage them to enhance
`damages.
`This is a case about compensatory damages, and it
`should be focused on that.
`And so we had a couple of MILs that went to what
`we believe were these core issues, MILs that went to
`intent, the length and duration of the litigation, to
`payment or nonpayment, to prior verdicts. They kind of
`attacked these issues from sort of all different angles.
`I think, Your Honor, in that email that we sent
`last night, the timeline from the opening I think captures
`a lot of what we believe are the problems with what is --
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:17:15
`
`09:17:19
`
`09:17:22
`
`09:17:25
`
`09:17:29
`
`09:17:32
`
`09:17:36
`
`09:17:39
`
`09:17:41
`
`09:17:44
`
`09:17:47
`
`09:17:50
`
`09:17:54
`
`09:18:00
`
`09:18:05
`
`09:18:05
`
`09:18:10
`
`09:18:12
`
`09:18:14
`
`09:18:18
`
`09:18:22
`
`09:18:27
`
`09:18:31
`
`09:18:33
`
`09:18:39
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 5 of 115 PageID #: 63314
`
`252
`
`VirnetX is trying to present. And I don't know if Your
`Honor has it. I can try --
`THE COURT: I do. I have -- I have the only slide
`that was provided to me by Apple. I've got a couple of
`other slides that I think were provided by the -- by the
`plaintiff. I'm looking at a slide --
`MR. AROVAS: Okay.
`THE COURT: -- that is Plaintiffs' 1.36.
`MR. AROVAS: Yes, that's it. And I'll use that as
`an example. This is a build, and so the different pieces
`come up, but this is where all the pieces come together, so
`we thought it'd be the most efficient way to put
`everything -- everything on one page.
`And so this shows a lot of the very things that
`we -- we believe the MILs excluded. The duration of the
`infringement. The timeline goes through -- all the way
`back to 2009 giving all the years of infringement including
`for prior features. That would just incent them to -- the
`jury to conclude that we're a bad actor, a serial
`infringer.
`THE COURT: I mean, that -- that is a fact, is it
`not? I mean, the date -- the dates without the hyperbole
`or the rhetoric or insinuation -- I mean, those -- those
`are facts, are they not, Mr. Arovas? Why would they not be
`relevant?
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:18:45
`
`09:18:48
`
`09:18:49
`
`09:18:52
`
`09:18:54
`
`09:18:57
`
`09:18:59
`
`09:18:59
`
`09:19:02
`
`09:19:05
`
`09:19:07
`
`09:19:11
`
`09:19:14
`
`09:19:15
`
`09:19:19
`
`09:19:23
`
`09:19:27
`
`09:19:33
`
`09:19:38
`
`09:19:41
`
`09:19:42
`
`09:19:44
`
`09:19:50
`
`09:19:54
`
`09:19:59
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 6 of 115 PageID #: 63315
`
`253
`
`MR. AROVAS: Well, the fact the duration of the
`infringement for products that are not in this case we
`don't think would be relevant to the damages in this case.
`And if I could just go -- maybe jump to what I believe is
`potentially -- or what we believe was the solution.
`And when we've talked about this in the past,
`we've tried to find out what shortcuts to give the jury the
`information the jury needs to make decisions it needs to
`make without pulling in all this prejudicial information.
`And so the issue as -- as we saw it was
`fundamentally a question of value, value of the feature.
`And as Your Honor mentioned yesterday, there was customer
`backlash. What we proposed as a solution is they use the
`emails on the customer backlash but we redact the dates, we
`redact the feature, so the jury doesn't need to know that
`the feature had different names over time, doesn't need to
`know how long it was used in a prior iteration, but the
`jury would see the emails and the complaints and the
`customer backlash that said when Apple proposed taking out
`patented technology, the customers complained, and we
`didn't do it.
`And that, we believe, would get all the evidence
`in that is relevant to the issue of damages.
`How long that feature was in place is irrelevant
`and encourages the jury to speculate on all sorts of
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:19:59
`
`09:20:01
`
`09:20:04
`
`09:20:07
`
`09:20:10
`
`09:20:13
`
`09:20:16
`
`09:20:20
`
`09:20:23
`
`09:20:25
`
`09:20:29
`
`09:20:32
`
`09:20:36
`
`09:20:43
`
`09:20:49
`
`09:20:52
`
`09:20:54
`
`09:20:57
`
`09:21:01
`
`09:21:05
`
`09:21:09
`
`09:21:09
`
`09:21:15
`
`09:21:16
`
`09:21:23
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 7 of 115 PageID #: 63316
`
`254
`
`things, right. I mean, if the jury's hearing that, okay,
`there was an agreed infringement for iOS 3 through 6, what
`happened? Did Apple pay money? Did they not pay money?
`Did they have a verdict?
`None of that is relevant to the issue at hand
`here, which is what is the value of the feature in the new
`version, iOS 7 forward? And so as I understand it, what
`they want to say is we couldn't take it out, we didn't take
`it out, we didn't take it out for good reason because
`customers were complaining. All that can come in without
`the timelines and with modest redactions of some of these
`documents.
`The issue of FaceTime, which is in here, as well,
`FaceTime is not even a feature in this case. Now, the '504
`and the '211 patents were licensed to others and are part
`of the bucket of patents that they paid for, but the fact
`that FaceTime -- a prior version of FaceTime was infringing
`is not an issue in this case either. Again, just in --
`introduced with the intention to show that Apple was a
`serial infringer.
`And so all of this evidence, we believe, the exact
`timing, the timeline, how long it was in there, is just
`going to encourage the jury to speculate about all sorts of
`the legal procedures that we've been trying to -- to work
`around with the compromises that we've reached and that all
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:21:26
`
`09:21:30
`
`09:21:34
`
`09:21:37
`
`09:21:38
`
`09:21:41
`
`09:21:45
`
`09:21:50
`
`09:21:54
`
`09:21:56
`
`09:21:59
`
`09:22:07
`
`09:22:07
`
`09:22:10
`
`09:22:15
`
`09:22:20
`
`09:22:23
`
`09:22:27
`
`09:22:33
`
`09:22:37
`
`09:22:38
`
`09:22:42
`
`09:22:48
`
`09:22:51
`
`09:22:56
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 8 of 115 PageID #: 63317
`
`255
`
`of that evidence about value can come in in other ways
`without the timelines.
`THE COURT: So Mr. Arovas, have you independently
`proposed this to the plaintiff?
`MR. AROVAS: Yes, we have.
`THE COURT: All right. And when was that?
`MR. AROVAS: Last night.
`THE COURT: All right. And you couldn't reach
`agreement, I assume?
`MR. AROVAS: The -- the issue, I think, that was
`really the sticker was the timelines.
`THE COURT: So my question about Plaintiffs' Slide
`1.36 is where on this slide does it indicate that somehow
`VirnetX is relying on what Apple's intent was?
`MR. AROVAS: Well, it does -- what this slide
`does, this slide specifically doesn't address the issue of
`intent, okay? There are other slides that I think go to
`the issues of intent.
`THE COURT: Well, I don't have those other slides.
`MR. AROVAS: Yeah, okay. So just to take this
`slide, what does this slide do? This slide suggests that
`there was a period of infringement that extended since
`2009, okay. That goes to the length and duration of the
`litigation and the length and duration of the infringement
`for a feature which is not in this case.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:22:59
`
`09:23:02
`
`09:23:03
`
`09:23:06
`
`09:23:07
`
`09:23:08
`
`09:23:11
`
`09:23:11
`
`09:23:15
`
`09:23:16
`
`09:23:18
`
`09:23:21
`
`09:23:26
`
`09:23:32
`
`09:23:36
`
`09:23:42
`
`09:23:46
`
`09:23:49
`
`09:23:50
`
`09:23:52
`
`09:23:55
`
`09:23:58
`
`09:24:02
`
`09:24:05
`
`09:24:08
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 9 of 115 PageID #: 63318
`
`256
`
`THE COURT: Well, but hold on just a moment.
`I mean, this is -- seemingly, this -- this is a
`timeline of the underlying factual circumstances, right?
`It doesn't say anything about litigation. Doesn't --
`doesn't discuss anywhere the litigation between the
`parties, does it?
`MR. AROVAS: Well, what it does say is that there
`is infringement for a period of time. It says there's
`infringement for VPN on Demand and Face -- and FaceTime,
`and the jury in the context of this case is going to
`speculate that there has been a -- is a reason why there
`was infringement in two periods of time.
`I don't see how the jury can come to any other
`conclusion but to think that there is a period of time
`either where VirnetX was being paid for these patents, and
`they're going to start speculating about why and how they
`were being paid, or they'll speculate that VirnetX was
`never paid for those patents, or they're going to speculate
`that there was legal proceedings between the parties.
`So I think that the question -- at least the
`question, as we saw it, is really if the question that
`we're trying to answer here is what are the damages for the
`feature that starts in 2013, why is it necessary to go into
`all of this history that's going to encourage the jury to
`speculate about all of the legal issues that the parties
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:24:10
`
`09:24:14
`
`09:24:18
`
`09:24:21
`
`09:24:26
`
`09:24:29
`
`09:24:30
`
`09:24:32
`
`09:24:36
`
`09:24:39
`
`09:24:43
`
`09:24:48
`
`09:24:51
`
`09:24:53
`
`09:24:57
`
`09:25:00
`
`09:25:04
`
`09:25:07
`
`09:25:10
`
`09:25:13
`
`09:25:15
`
`09:25:19
`
`09:25:23
`
`09:25:29
`
`09:25:34
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 10 of 115 PageID #: 63319
`257
`
`have had for all of those years, because they can put in
`the evidence.
`So what does this -- the fact that there was a
`prior version of the -- of the feature that we all have
`determined, because we had a second trial, was different
`enough that we needed to have a new infringement trial, and
`to use that to try to prove the damages for the feature in
`this trial is simply not relevant to the question that
`we're litigating.
`What is relevant is the issue of importance of the
`new feature.
`Now, as I understand it is they're saying that the
`fact that there was an old feature and that there was
`customer complaints about removing that old feature is
`evidence of importance of the patented technology to
`customers and to the marketplace, which is a damages issue.
`That can come in without the timeline.
`And so this timeline just encourages the jury to
`speculate about all sorts of maneuvering, legal
`maneuvering, legal procedures, damages, verdicts, whatever
`they can -- they're going to realize that this all happened
`somehow, when the core evidence, right, the timing is not
`relevant, right.
`What is relevant for iOS 7 forward is the customer
`complaints, and we can address that in a different way
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:25:39
`
`09:25:45
`
`09:25:46
`
`09:25:48
`
`09:25:53
`
`09:25:56
`
`09:26:01
`
`09:26:04
`
`09:26:10
`
`09:26:12
`
`09:26:17
`
`09:26:18
`
`09:26:22
`
`09:26:25
`
`09:26:28
`
`09:26:31
`
`09:26:36
`
`09:26:39
`
`09:26:42
`
`09:26:47
`
`09:26:50
`
`09:26:53
`
`09:26:56
`
`09:26:59
`
`09:27:03
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 11 of 115 PageID #: 63320
`258
`
`without the timeline.
`THE COURT: Okay. Let me hear from -- did you
`have anything else, Mr. Arovas?
`MR. AROVAS: That's it, Your Honor.
`THE COURT: Okay. Let me hear from VirnetX.
`MR. CALDWELL: Thank you, Your Honor.
`I think quite frankly the simplest answer is these
`are just the facts.
`So many things to respond to in that point -- or
`in Mr. Arovas's argument. But I think one of the things
`that I want to convey to you is we actually prepared this
`slide to track what you told us in the limine ruling that
`we were permitted to say.
`And I -- I think actually it's interesting, and
`the thing we submitted this morning, you can see a previous
`version and a new version, and I -- even yesterday, part of
`the reason I wanted to make sure we had extra time to
`exchange is I can go back and we put like the older part,
`made sure it said agreed, made sure it's like kind of more
`in gray, it's not meant to insight anything. It says it's
`agreed. They're just the facts. We literally tracked what
`your order told us that we could do.
`And this whole discussion about FaceTime, we had
`an entire limine argument all about this, and what's going
`to happen -- what -- the context in which this came up was
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:27:06
`
`09:27:08
`
`09:27:10
`
`09:27:11
`
`09:27:12
`
`09:27:14
`
`09:27:33
`
`09:27:39
`
`09:27:40
`
`09:27:45
`
`09:27:48
`
`09:27:56
`
`09:28:01
`
`09:28:04
`
`09:28:06
`
`09:28:09
`
`09:28:12
`
`09:28:15
`
`09:28:18
`
`09:28:21
`
`09:28:24
`
`09:28:28
`
`09:28:30
`
`09:28:36
`
`09:28:41
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 12 of 115 PageID #: 63321
`259
`
`we argued to Your Honor that the judgment should come in as
`evidence of $1.20 and it was whether that's a compulsory
`license and what not. And Your Honor said not, said that
`couldn't come in.
`But the problem is they want to bring their expert
`to suggest that there's significance to the fact that the
`'504 and '211 are not infringed via FaceTime.
`And our point was wait a minute, we have the best
`argument ever as to why he's wrong. We had damages on VPN
`on Demand only units. We had a judgment -- or we had a
`verdict, a judgment, and an affirmance on appeal for that.
`But we can't use that evidence.
`And so I specifically raised this to Your Honor
`when we had the pre-trial. It's like this is fundamentally
`unfair if he comes in and they try to promote the notion
`that FaceTime was determined not to infringe or the '504
`and '211, as he's now characterizing it, were determined
`not to be infringing. If he's allowed to promote that and
`we can't actually describe the context that we have always
`maintained, even if it's VPN on Demand only, that it's the
`same rate.
`Moreover, as we even discussed in great detail and
`we have attached to our limine grouping that Mr. Bakewell
`we believe has been inconsistent with that in the past, the
`price would be the same even if it's VPN on Demand only.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:28:45
`
`09:28:49
`
`09:28:54
`
`09:28:58
`
`09:28:59
`
`09:29:01
`
`09:29:06
`
`09:29:08
`
`09:29:13
`
`09:29:18
`
`09:29:22
`
`09:29:25
`
`09:29:27
`
`09:29:30
`
`09:29:33
`
`09:29:37
`
`09:29:40
`
`09:29:44
`
`09:29:47
`
`09:29:51
`
`09:29:55
`
`09:29:56
`
`09:29:59
`
`09:30:01
`
`09:30:04
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 13 of 115 PageID #: 63322
`260
`
`I debated this with Ms. Heffernan in front of you
`at the pre-trial, and you specifically said, okay, we're
`not going to have the verdict come in because she wasn't
`even asking that anything other than the verdict be kept
`out. The motion in limine was only about the verdict.
`I specifically said we need to delve into the fact
`that it has always been our position, and, in fact, it was
`his position previously that VPN on Demand-only
`infringement would have the same rate.
`And so these are merely the facts. It is setting
`forth the facts in which they occurred, and it is providing
`a construct under which we have some chance of rebutting
`what is going to be Apple's big theme about the '504 and
`'211 being determined not to infringe.
`I don't know if you saw it, I think it's in our --
`in our submission from last night. Just one of their
`slides -- and we're not big on raising a whole ton of
`objections, but one of their slides is it's a big thing for
`opening '504, '211, not infringed. And that's what we're
`going to hear here in opening. It has absolutely no
`context without that prior timeline.
`THE COURT: Let me ask you about the slide that
`I've been provided.
`MR. CALDWELL: Sure.
`THE COURT: On the left side, from 2009 to 2013,
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:30:08
`
`09:30:11
`
`09:30:14
`
`09:30:16
`
`09:30:19
`
`09:30:21
`
`09:30:23
`
`09:30:26
`
`09:30:29
`
`09:30:31
`
`09:30:34
`
`09:30:37
`
`09:30:42
`
`09:30:46
`
`09:30:47
`
`09:30:51
`
`09:30:55
`
`09:30:58
`
`09:31:02
`
`09:31:05
`
`09:31:08
`
`09:31:10
`
`09:31:12
`
`09:31:13
`
`09:31:14
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 14 of 115 PageID #: 63323
`261
`
`the -- the -- the heading on that section is Agreed
`Infringement of iOS 3 through 6.
`MR. CALDWELL: Yes, sir.
`THE COURT: And then post-hypothetical negotiation
`date of 2013, the right side of the slide at the top says:
`Infringement, previously determined.
`MR. CALDWELL: Yes, sir.
`THE COURT: Why the difference?
`MR. CALDWELL: I -- I think it's just different
`times that we wrote it, to be honest with you, because when
`I went back last night, I said, okay, let's make sure that
`says agreed infringement. And I was trying to get a lot of
`things done before we served it -- if -- if the formatting
`with the parenthetical or, you know, not with a
`parenthetical --
`THE COURT: Well, it's confusing to me, so --
`MR. CALDWELL: Okay. Well, I'm happy to fix that.
`That's like a 30-second fix, I think. It's not -- there's
`no -- there's -- there's no significance that's meant
`there.
`
`THE COURT: I was trying to understand the
`significance.
`MR. CALDWELL: Yes, sir. And as -- as Mr. Arovas
`said, it's kind of a slide that -- that builds. And, you
`know, I mean, nobody, I think, wanted to submit necessarily
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:31:16
`
`09:31:20
`
`09:31:23
`
`09:31:23
`
`09:31:27
`
`09:31:30
`
`09:31:33
`
`09:31:33
`
`09:31:34
`
`09:31:36
`
`09:31:38
`
`09:31:42
`
`09:31:43
`
`09:31:45
`
`09:31:48
`
`09:31:50
`
`09:31:51
`
`09:31:53
`
`09:31:56
`
`09:31:59
`
`09:31:59
`
`09:32:00
`
`09:32:00
`
`09:32:02
`
`09:32:08
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 15 of 115 PageID #: 63324
`262
`
`30 of them in a brief to you.
`But the point of this also is to this very issue
`that you and I discussed with Ms. Heffernan yesterday at
`the end of court, where what we actually talk about is --
`and in -- I'm sorry, let me -- let me back up to frame what
`I'm about to say.
`Mr. Arovas just said: I tell you what, let's get
`rid of all timelines because that invites the jury to
`speculate.
`What the context is, and the point I made to you
`yesterday, when Apple announced that it was going to try to
`remove the feature and then there was this customer
`backlash, the timing is critical. We can't merely hold up
`an email and say, hey, guess what, there was backlash
`whenever it was that this happened.
`That backlash was literally in the couple-month
`period of VPN-on-Demand-only infringement when Apple walked
`into the hypothetical negotiation that's applicable in this
`case. It was right there in that 2013 where they had taken
`FaceTime and gone to relay, so FaceTime was not infringing.
`That was relay we had always said would never infringe.
`And they announced this VPN on Demand change.
`So the timing there is critical. And we've cited
`cases to you, and I don't think it's really in dispute.
`But you -- you look at the timing of a hypothetical
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:32:09
`
`09:32:11
`
`09:32:14
`
`09:32:18
`
`09:32:23
`
`09:32:26
`
`09:32:27
`
`09:32:31
`
`09:32:33
`
`09:32:34
`
`09:32:36
`
`09:32:39
`
`09:32:42
`
`09:32:46
`
`09:32:50
`
`09:32:52
`
`09:32:56
`
`09:33:03
`
`09:33:07
`
`09:33:11
`
`09:33:15
`
`09:33:18
`
`09:33:23
`
`09:33:26
`
`09:33:29
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 16 of 115 PageID #: 63325
`263
`
`negotiation and what would have been in the parties' mind
`at the time. This was literally at the time.
`As for the earlier stuff, I mean, one -- one thing
`I've contemplated -- I don't honestly know how this helps,
`but one thing I've contemplated is if we needed to sort of
`scale up the timeline to where you didn't see that it began
`right in 2009. If we wanted to do that, that's fine. But
`quite frankly, I was afraid if I did that, Apple would then
`complain that it's -- that not seeing the far left end of
`the timeline would suggest it had gone back forever into
`perpetuity.
`THE COURT: Mr. Arovas, would you prefer he remove
`2007 and 2008 and the indicators -- or the -- the notations
`above that? I mean, would that help alleviate some of the
`concern?
`MR. AROVAS: I don't believe it solves the
`problem, Your Honor.
`THE COURT: I'm not saying it solves the problem.
`Does it -- does it help?
`MR. AROVAS: May I just clarify exactly what
`you're proposing to remove?
`THE COURT: Yes.
`MR. AROVAS: May I?
`THE COURT: Of course.
`MR. CALDWELL: Just if the timeline began, like
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:33:31
`
`09:33:34
`
`09:33:37
`
`09:33:40
`
`09:33:44
`
`09:33:47
`
`09:33:51
`
`09:33:54
`
`09:33:57
`
`09:34:00
`
`09:34:04
`
`09:34:05
`
`09:34:08
`
`09:34:13
`
`09:34:17
`
`09:34:18
`
`09:34:20
`
`09:34:20
`
`09:34:22
`
`09:34:24
`
`09:34:27
`
`09:34:29
`
`09:34:29
`
`09:34:30
`
`09:34:31
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 17 of 115 PageID #: 63326
`264
`
`late 2009 or something? In other words, you couldn't see
`the -- you couldn't see the left edge. And I didn't do
`that because I thought you would complain about -- then
`there would be a suggestion that maybe it infringed for
`many, many years in the past. I was trying to be
`completely fair to the facts.
`MR. AROVAS: I -- I don't -- I don't think that.
`That doesn't resolve the problem, I don't think.
`THE COURT: I understand that.
`MR. AROVAS: I would -- yeah, and I can respond to
`some of these issues.
`THE COURT: Mr. Caldwell?
`MR. CALDWELL: So I think another thing that Your
`Honor said actually hits the nail on the head. These are
`the facts, and they're not surrounded by some sort of
`hyperbole. What I tried to do is actually sanitize the
`facts to the things that literally matter.
`When they first put out the iPhone, there's -- one
`of the documents that we've used I think in every single
`trial is that they did face resistance in the enterprise.
`I mean, it seems like an eternity ago, but BlackBerry was
`dominant at the time. And people didn't want the iPhone to
`be connected to corporate networks, and that leads to these
`big corporate customers who buy them by the thousands. It
`faced resistance in the enterprise, which is what the
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:34:34
`
`09:34:37
`
`09:34:40
`
`09:34:43
`
`09:34:45
`
`09:34:48
`
`09:34:49
`
`09:34:50
`
`09:34:53
`
`09:34:56
`
`09:34:57
`
`09:34:58
`
`09:34:59
`
`09:35:02
`
`09:35:06
`
`09:35:10
`
`09:35:13
`
`09:35:16
`
`09:35:18
`
`09:35:22
`
`09:35:26
`
`09:35:29
`
`09:35:33
`
`09:35:36
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 18 of 115 PageID #: 63327
`265
`
`documents say.
`And in -- you know, preference was given towards
`BlackBerry and other devices like that because Apple lacks
`the security features that were necessary, including VPN on
`Demand.
`
`At the time they were going to release the
`infringing version of VPN on Demand, they also had a
`version of it for the Mac that did not work correctly and
`IT directors did not like it. There were complaints about
`it.
`
`So they went to the mode that happened to
`infringe. And nobody's going to talk about any verdict or
`anything like that. It's just that they knew from the
`beginning that they had to have a version that would
`initiate a VPN based on a domain name. They had to. And
`they did.
`So later when they talked about, well, we'll just
`take Always Mode out, what they were suggesting even later
`was we'll just go back to the thing we already rejected
`previously. And it's no surprise that that's when there's
`customer backlash, and that framed this hypothetical
`negotiation.
`So I think as to the slides, everything about it
`is -- is perfectly factual. It is not argued in a
`hyperbolic way. It provides absolutely necessary context.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:35:39
`
`09:35:39
`
`09:35:41
`
`09:35:44
`
`09:35:48
`
`09:35:48
`
`09:35:52
`
`09:35:55
`
`09:35:59
`
`09:36:02
`
`09:36:03
`
`09:36:05
`
`09:36:07
`
`09:36:11
`
`09:36:14
`
`09:36:19
`
`09:36:19
`
`09:36:24
`
`09:36:28
`
`09:36:31
`
`09:36:33
`
`09:36:36
`
`09:36:36
`
`09:36:40
`
`09:36:43
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 19 of 115 PageID #: 63328
`266
`
`And if that weren't enough, it is absolutely necessary in
`view of the fact that Apple wants to argue through
`Mr. Bakewell or cross-examination, hey, guess what, there's
`a '504 and '211 that was not infringed.
`And here's the thing that drives me nuts is Apple
`keeps saying, we don't want to leave the suggestion that
`there was a verdict or prior trial. Well, think about
`this. This jury walks in here to award damages, and we're
`worried about them thinking there might have been a prior
`trial. Who was it that made this big red determination
`that '504 and '211 don't infringe?
`If there's anything in any slide that sort of
`invites the jury to guess that there was some sort of a
`trial and somebody won or lost something, it's Apple with
`this whole theme about the '504 and '211.
`My final point, I think, although I'm sure there's
`several more -- to be honest with you, not to throw stones,
`but these suggestions were not made to us last night. This
`is the first time we've heard of them. Mr. Arovas wasn't
`on the call. He was probably practicing his opening, just
`as I was. And I asked Mr. Pearson, I said: If -- if Greg
`gets on there and wants to talk directly with me, let me
`know. But we had never heard these suggestions before.
`I will say if people are trying to adapt the
`slides, looking at their slide, which we've copied in here
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:36:49
`
`09:36:54
`
`09:36:57
`
`09:37:01
`
`09:37:03
`
`09:37:07
`
`09:37:10
`
`09:37:12
`
`09:37:16
`
`09:37:20
`
`09:37:23
`
`09:37:25
`
`09:37:28
`
`09:37:31
`
`09:37:35
`
`09:37:37
`
`09:37:40
`
`09:37:47
`
`09:37:50
`
`09:37:52
`
`09:37:58
`
`09:37:59
`
`09:38:02
`
`09:38:05
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 20 of 115 PageID #: 63329
`267
`
`in our brief, it says: '504 and '211 Not Infringed. I
`note that that slide doesn't mention that FaceTime wasn't
`infringing. It just says the '504 and '211 weren't
`infringing.
`If it would somehow address a concern that Apple
`has to never talk about FaceTime and instead just put on,
`for example, our slides that there was a limited window of
`time when they also infringed the '504 and '211, without
`talking about some other product, if that would alleviate
`Apple's concerns, they just want to say, oh, there was a
`'504/'211 period, but now that's no longer being -- those
`are no longer being infringed, I'd be fine with that, too.
`I'm just trying to respond to exactly what Apple
`told us in the limine briefing and argument they were going
`to say and what Mr. Bakewell puts in his report about
`FaceTime and what Your Honor said we could say in order to
`respond.
`Thank you.
`Do you have any questions?
`THE COURT: I don't. Thanks.
`MR. AROVAS: Your Honor, may I make a couple brief
`comments?
`THE COURT: Yes.
`MR. AROVAS: So, Your Honor, if I could take this
`into three basic pieces. One is the comments on the '504
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`09:38:10
`
`09:38:15
`
`09:38:22
`
`09:38:25
`
`09:38:25
`
`09:38:31
`
`09:38:41
`
`09:38:43
`
`09:38:46
`
`09:38:52
`
`09:38:55
`
`09:38:58
`
`09:39:02
`
`09:39:04
`
`09:39:07
`
`09:39:11
`
`09:39:15
`
`09:39:15
`
`09:39:17
`
`09:39:19
`
`09:39:20
`
`09:39:22
`
`09:39:39
`
`09:39:39
`
`
`
`Case 6:12-cv-00855-RWS Document 985 Filed 11/02/20 Page 21 of 115 PageID #: 63330
`268
`
`and '211 with FaceTime. And I'm happy to put different
`words than "not infringed." We had an agreement that we
`could say that those two patents were adjudicated or -- or
`determined, I think it was, to not be used.
`But what was just said was particularly misleading
`because -- if we could put up the previous slide that leads
`into that in the opening?
`Oh, you don't have control?
`Maybe, Your Honor, I could just --
`THE COURT: We've got it.
`MR. AROVAS: Oh, there we go.
`Okay. The point with the '504 and '211 has
`absolutely nothing to do with whether a previous version
`was infringing or not infringing or the current version.
`The issue with the '504 and '211, okay, is that the five
`licenses that they use in the average -- and this is the
`previous slide that leads into that, includes three patents
`on the face of those licenses which were the three main
`patents that drove that deal.
`And two of them are not part of this reasonable
`royalty, right? The reasonable royalty is two patents, the
`'135 and the '151. It is not the '504 and the '211.
`And so the issue that's being made here is that if
`you're goin
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
