Case 6:12-cv-00855-RWS Document 990 Filed 11/02/20 Page 1 of 148 PageID #: 63948
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`632
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`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
`)(
`12:45 P.M.
`)(
`
`TRANSCRIPT OF JURY TRIAL
`AFTERNOON SESSION
`BEFORE THE HONORABLE JUDGE ROBERT W. SCHROEDER, III
`UNITED STATES 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
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`632
`
`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
`)(
`12:45 P.M.
`)(
`
`TRANSCRIPT OF JURY TRIAL
`AFTERNOON SESSION
`BEFORE THE HONORABLE JUDGE ROBERT W. SCHROEDER, III
`UNITED STATES 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
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`Case 6:12-cv-00855-RWS Document 990 Filed 11/02/20 Page 2 of 148 PageID #: 63949
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`633
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`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.)
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`P R O C E E D I N G S
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`(Jury out.)
`COURT SECURITY OFFICER: All rise.
`THE COURT: Okay. Let's have the jury brought
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`back.
`
`(Jury in.)
`THE COURT: Please be seated.
`Okay. Ladies and gentlemen of the jury, welcome
`back. I apologize for the longer lunch hour. We did have
`an issue arise with one of your fellow jurors this morning.
`I want to tell you about that very briefly.
`He was notified by his employer this morning while
`we were here in court that he was potentially exposed to
`someone who has not tested positive for COVID-19 but that
`has displayed some symptoms of it. And after getting some
`additional information about his potential exposure and
`after having consulted with the attorneys, we determined
`out of -- I determined out of an abundance of caution that
`the safest, most conservative approach would be to ask that
`juror to step aside, in other words, to dismiss him. So he
`won't continue to be here in the courtroom, in the jury
`room, or to participate in the deliberations of this case.
`The reason, of course, I have been fairly
`insistent about observing appropriate CDC social distancing
`protocol is for exactly this reason. It is the world we're
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`Case 6:12-cv-00855-RWS Document 990 Filed 11/02/20 Page 4 of 148 PageID #: 63951
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`living in right now, and it's very important that we all
`continue to do everything that we can to ensure all of our
`health and safety, and that includes social distancing and
`mask-wearing and all of the other things -- measures that
`we've put into place.
`So I think we're fine. We'll be able to continue
`without any problems. Obviously, if anyone has any
`concerns in that regard, you may feel free to let me know
`that, but with those comments, at this time, Apple may
`cross-examine the witness.
`MR. JONES: Thank you, Your Honor.
`May it please the Court.
`Ladies and gentlemen of the jury.
`KENDALL LARSEN, PLAINTIFFS' WITNESS, PREVIOUSLY SWORN
`CROSS-EXAMINATION
`
`BY MR. JONES:
`Q. Mr. Larsen.
`A. Yes, sir.
`Q. Good afternoon.
`A. Good afternoon, sir.
`Q. For the record, my name is Mike Jones, and I represent
`Apple in this case.
`Now, VirnetX contends in this case that Apple
`should pay a reasonable royalty for its technology; is that
`correct, sir?
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`636
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`A. That's correct.
`Q. And in this case, the dispute is not over whether a
`reasonable royalty should be paid but it's the amount of
`that reasonable royalty, that's the dispute, that's the
`issue in the case, fair enough?
`A. I agree with you, Mr. Jones.
`Q. Thank you so much. Now, I'd like to go back to your --
`a little bit to your testimony on direct. And you recall
`on your direct that you talked about certain license
`agreements that applied to -- and I believe the term
`Mr. Cassady used was IP phones. Do you remember those?
`A. Yes, sir.
`Q. And that would be the Aastra, Siemens, Mitel, Avaya and
`NEC license agreements, correct?
`A. Correct.
`Q. And I refer to those as desktop. Why don't we just
`combine the term IP desktop licenses, is that okay? If I
`use them collectively like that, would we both know what
`we're talking about?
`A. Yes.
`Q. Thank you so much. Now, in this case, we're dealing
`with devices -- got to get back here to the microphone --
`we're dealing with devices like this, the iPhone and the
`iPad, right?
`A. Correct.
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`Case 6:12-cv-00855-RWS Document 990 Filed 11/02/20 Page 6 of 148 PageID #: 63953
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`Q. And in regard to the IP desktop phones, we would be
`dealing with something like this, which is an Aastra phone,
`right?
`A. Correct.
`Q. Now, did I understand -- let me get back to the mic.
`Did I understand your testimony correct in
`answering Mr. Cassady's questions that you equate those
`types of products?
`A. I think they're very similar is my testimony.
`Q. Okay. So your testimony is those products are very
`similar, right, sir?
`A. Correct.
`Q. Thank you, sir.
`Now, this case is about a reasonable royalty, but
`when we want to know what the reasonable royalty should
`apply to, we know that it only applies to two patents, the
`'135 patent and the '151 patent, correct?
`A. Correct.
`Q. And it is certainly -- it is certainly not about Apple
`paying a royalty for any other patents that VirnetX owns
`other than those two patents, the '135 and the '151 --
`A. Correct.
`Q. -- right, sir?
`A. Correct.
`Q. And with regard to those IP desktop phone licenses that
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`Case 6:12-cv-00855-RWS Document 990 Filed 11/02/20 Page 7 of 148 PageID #: 63954
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`638
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`we just talked about, we know that they applied to many
`more patents than that, correct?
`A. Yes, sir.
`Q. Thank you. For example --
`MR. JONES: If we could go to Slide 1.
`Q. (By Mr. Jones) And what we see here are the licensed
`patents with regard to NEC, and there are 17 patents there,
`right, sir?
`A. That's correct.
`Q. So that's -- again, that's many more than two, we can
`both agree on that?
`A. Yes.
`Q. Thank you, sir.
`MR. JONES: Now, if we could go to Slide 2.
`Q. (By Mr. Jones) This is from Plaintiff's Exhibit 406,
`and it's the agreement between VirnetX and Aastra USA, and
`it's for 16 patents, right?
`A. Yes.
`Q. And we can agree that's many more patents, correct?
`A. We can agree.
`MR. JONES: If we go to Slide 3.
`Q. (By Mr. Jones) This is the settlement agreement
`between VirnetX and Siemens and it's for 17 patents, right,
`sir?
`A. Yes, sir.
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`639
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`Q. And it's many more patents, right, sir?
`A. Yes, sir.
`MR. JONES: And if we go to Plaintiffs' Exhibit
`407, which is Slide 4.
`Q. (By Mr. Jones) We will see the settlement agreement
`between VirnetX and Mitel and we see that it's for 17
`patents, right, sir?
`A. I agree.
`Q. And, again, that's many more patents, right, sir?
`A. Yes, sir.
`MR. JONES: And if we go to Slide 5, the final
`one, which is Plaintiffs' Exhibit 1086.
`Q. (By Mr. Jones) We see the agreement between VirnetX
`and Avaya. Am I pronouncing that right? I always butcher
`that. Can you help me with that, Mr. Larsen?
`A. You are.
`Q. How should I say it?
`A. You're saying it perfect.
`Q. I am? Oh, man, thank you for that.
`And it's for 19 patents, and, again, we -- we know
`that's many more patents than two, fair enough?
`A. Fair enough.
`Q. And you would agree with me, no doubt in your mind,
`that when the jury thinks about what would have happened at
`this negotiation and sits at the table for both sides, they
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`need to consider that fact that these patents -- that these
`licenses are for more patents, right? That's something to
`take into consideration?
`A. It's something to take into consideration, sure.
`Q. Thank you, sir.
`Now, when the jury is determining a reasonable
`royalty for these two patents and only these two patents,
`they will look at and go back and try to determine back in
`2013 at the bargaining table what VirnetX would have agreed
`to receive and what Apple would have been willing to pay,
`right, sir?
`A. Correct.
`Q. And they will be looking at -- they will be trying to
`determine what is the value in the marketplace of these two
`patents, correct?
`A. Correct.
`Q. And that will govern what a reasonable royalty is in
`this case, fair enough?
`A. Correct.
`Q. Thank you, sir.
`Now, I would like to talk to you a little bit more
`about the IP desktop phone licenses?
`MR. JONES: If we could, could we bring up Slide
`
`7?
`Q. (By Mr. Jones) And let me explain Slide 7 to you. I
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`Case 6:12-cv-00855-RWS Document 990 Filed 11/02/20 Page 10 of 148 PageID #: 63957
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`think you'll recognize these figures.
`Slide 7 has first the names of the licensees that
`are on the desk -- the desktop licensees, right? In the
`first column?
`A. Correct.
`Q. In the second column, you see the number of patents or
`patent applications applicable to those licenses, right,
`sir?
`A. Yes.
`Q. And then the next column is the royalties paid through
`2015. Do you see that column, the third column?
`A. I do.
`Q. Now, are you familiar with those figures? Do those
`look about right?
`A. They look about right, yes.
`Q. Okay. Great. If you wanted to, we could go back to
`some other sources, but if you think they look --
`A. I'll agree with that.
`Q. Thank you, sir.
`And the final column are the royalties paid to
`date that you just testified to, fair enough?
`A. Fair enough.
`Q. Now, I want to talk to you just a minute about one of
`those desktop licensees, Avaya, okay?
`A. Okay.
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`Q. Now, the Avaya had a provision in its patent license
`agreement which the jury is going to be able to look at, if
`it cares to, Plaintiffs' Exhibit 1086, that four payments
`should be made of two and a half million dollars each,
`right?
`A. Yes.
`Q. And once those payments were made, a total lump sum
`with regard to that particular section of the agreement, it
`would have totaled $10 million, right?
`A. In that particular part of the agreement, yes.
`Q. Thank you, sir.
`And that's why we see for Avaya in both columns
`$10 million. Fair enough?
`A. That's right.
`Q. Now, there was another provision, and, again, the jury
`will be able to see this if it cares to where it says in
`Section 2 of Article 8 that if there are any excess
`revenues, as it's defined by the agreement, then a royalty
`of 1.6 percent will be paid, right, sir?
`A. That's correct.
`Q. Now, this agreement was entered into -- and I'll be
`happy to show it to you if I -- if I need to -- but this
`agreement is dated August the 7th, 2013, right, sir?
`A. I believe that's the date, yes.
`Q. Okay. And no excess royalties have ever been paid
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`pursuant to the terms of that agreement, right, sir?
`A. Not yet, no.
`Q. Okay. So there were no excess revenues in 2013, right?
`A. Correct.
`Q. No excess revenues in 2014, right?
`A. Correct.
`Q. No excess revenues in 2015, right?
`A. No.
`Q. No excess revenues in 2016, right?
`A. No.
`Q. None in 2017, none in 2018, none in 2019, right, sir?
`A. Correct.
`Q. So based upon the history of this agreement, there's no
`indication they'll ever be paid, is there, sir?
`A. It's possible. But it hasn't been as of yet, as I
`said.
`Q. Okay. Now, let's look if we could at Column 3 on
`Slide -- on this slide, which is I think No. 7, and
`Column 4, do you see that? The total there at the bottom?
`A. The 10-million-8?
`Q. Right.
`A. Yes, uh-huh.
`Q. So what we know is from the time of those license
`agreements until the end of 2015, that VirnetX had received
`$10.8 million, right?
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`A. Yes.
`Q. And then we know you've continued to collect revenues
`for the years 2016, 2017, 2018, 2019, and I guess up to now
`in 2020, right, sir?
`A. Correct.
`Q. And what we see with regard to these licenses is that
`Aastra, during that four-and-a-half-year period, has paid
`no more in royalties, right?
`A. That's correct.
`Q. And what we see is Siemens has paid no more in
`royalties, correct?
`A. Yes, sir.
`Q. And what we see is Avaya has paid no more in royalties,
`right?
`A. Yes, that's right.
`Q. The two that have paid a little bit more or -- not a
`little bit -- hundreds of thousands of dollars more are
`Mitel and NEC, correct?
`A. That's right.
`Q. But for that four-and-a-half-year period, we see that
`the increase that has occurred is only around $307,000.00,
`right?
`A. It looks like that -- that's -- without a calculator
`here, I just would say yes.
`Q. So for all of the desktop licenses that have been
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`entered into, all of them, for that period, including 2016
`through year-to-date, on all of them, the amount of
`royalties that's been paid is 300,000 -- a little over
`$300,000.00, fair enough?
`A. That's right.
`Q. Thank you, sir.
`Now, together, they total 700 -- excuse me,
`together, they total $11.1 million for somewhere between 16
`and 19 patents each, right, sir?
`A. Yes, sir.
`Q. But with regard to Apple, it is VirnetX's contention
`that for two patents, Apple should pay over $700 million,
`right, sir?
`A. Yes, sir.
`Q. And you would agree with me that's over 70 times what
`is the total of all the desktop licenses, fair enough?
`A. Yes.
`Q. Thank you, sir.
`Now, when we talk about this reasonable royalty
`for these two patents, VirnetX is not including any amount
`to try to punish Apple, correct?
`A. That's correct.
`Q. And App -- and VirnetX is not contending in any way
`shape, form, or fashion and agrees with Apple that no
`amount should be included to punish Apple, right, sir?
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`A. That's correct.
`Q. I would like to next turn your attention to the
`Microsoft licenses that you talked about with Mr. Cassady.
`Now, you personally negotiated the Microsoft
`license, right, sir?
`A. I -- I did.
`Q. And as you told us, you were a very experienced, very
`knowledgeable patent negotiate -- negotiator who had done
`over 200 deals, right, sir?
`A. Correct.
`Q. And you also -- you also had help when you did that
`deal for some very experienced and well-known lawyers,
`right, sir?
`A. Yes, sir.
`Q. Sam Baxter helped you negotiate that, right, sir?
`A. Yes, sir.
`Q. And he's been referred to in some publications as a
`patent law icon, right?
`A. That's right.
`Q. And you also had another very experienced,
`sophisticated lawyer that negotiated this deal on the part
`of VirnetX by the name Mr. Luke McElroy, correct?
`A. Correct.
`Q. And additionally, as -- as Mr. Cassady has told us,
`there was a lawsuit going on with Microsoft, right?
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`A. Yes.
`Q. And you were in a strong position with regard to that
`lawsuit, weren't you, sir?
`A. Yes.
`Q. In fact, you had told your investors in August of 2009
`that VirnetX was in a strong position regarding Microsoft
`as they headed into trial, right, sir?
`A. We did.
`Q. And, in fact, you had also told them that you had such
`a strong position, that VirnetX was well positioned to have
`a great result against Microsoft, right, sir?
`A. I believe that was in one of our filings, yes.
`Q. And you further told the investors -- you told them
`that we are not going to settle for small licensing deals
`just to get one done quickly. You told your shareholders
`that, too, didn't you, sir?
`A. I need some context. That's a long time ago.
`Q. Okay. Thank you.
`MR. JONES: If we could, why don't we start -- if
`you would, bring up Slide 20.
`Q. (By Mr. Jones) And these are minutes of a call you had
`with your shareholders, I believe. It's August 13th, 2009,
`and it's called VirnetX Holding to Discuss Markman Order
`and Business Strategy Conference Call -- Finally. Do you
`see that?
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`A. Yes.
`Q. And you were noted as having participated in it. Do
`you see that?
`A. I do.
`Q. And if you'll look --
`MR. JONES: If we could go to Slide 24.
`Q. (By Mr. Jones) As part of those minutes, as part of
`the transcript of the call, you say: With a favorable
`Markman order in hand -- and let's talk about what a
`Markman order is. A Markman order is when the Court
`construes what the patent means, right?
`A. Correct.
`Q. And you say you've got a favorable one of those and the
`right lawyers engaged, and we believe we are well
`positioned for a great result in our trial against
`Microsoft.
`Do you see that?
`A. I do.
`Q. And is that what you said at that time?
`A. I'll agree with that.
`Q. Thank you.
`MR. JONES: And then if we could, let's go to
`Slide 25, which continues this same transcript.
`Q. (By Mr. Jones) And it says here: Obviously, we are
`not going to settle for small licensing deals just to get
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`one done quickly.
`Do you see that, sir?
`A. I do.
`Q. And, again, that was what you told them at the time of
`that call, fair enough?
`A. Fair enough.
`Q. Thank you, sir.
`Now, you got the deal done, you negotiated it,
`and -- and you considered it a great accomplishment,
`correct, sir?
`A. Well, during -- at this point, we had not negotiated
`the deal.
`Q. Okay. I know at that point you hadn't negotiated a
`deal. I'm sorry. But when you got the deal done, you
`thought it was a momentous occasion?
`A. Yes.
`Q. All right. Thank you, sir.
`Now, let's look at that deal just a little bit.
`As part of that deal, you received -- when I say "you,"
`VirnetX received $200 million, right, sir?
`A. Yes.
`Q. And it was a lump-sum payment, right?
`A. It was.
`Q. Could you explain to the jury what you mean when you
`say lump-sum payment?
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`A. It was a special deal where it was a one-time payment,
`and we had made some considerations to take that in
`exchange for what our normal practice is, which is a
`royalty bearing deal going forward. So it was a one-time
`payment.
`MR. JONES: Now, if I could -- could -- Mr. Beall,
`could you bring up Slide 28, please?
`Q. (By Mr. Jones) And this is part of that agreement.
`But -- but the Microsoft deal applies -- and, again, you
`can count them, but we'll probably waste our time, but I
`think it's 68 different patents and patent applications are
`included in the Microsoft deal.
`A. It's our whole family of patents, both domestically and
`internationally, that's correct.
`Q. So when Microsoft got that license, they got a license
`to use every patent and patent application that VirnetX
`owns, right, sir?
`A. Within the field of use, yes, sir.
`Q. Okay.
`A. There was some carve-outs, and I just would not
`characterize it as --
`Q. Well, you've already described the carve-outs with us,
`right? I think Mr. Cassady did go through that with us,
`right?
`A. I just wanted to make sure you understood that that was
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`just not all the patents to do whatever they wanted to with
`it. It had a field of use that they were adhering to.
`Q. I understand, sir. And I -- and I remember you telling
`us about the carve-outs.
`This, though, was a license for the Microsoft
`Windows operating system, fair enough?
`A. Correct.
`Q. Thank you, sir.
`Now -- so you're licensing the Microsoft operating
`system, right, sir?
`A. That's right.
`Q. And you're licensing every patent and every patent
`application owned by VirnetX for that Microsoft operating
`system -- Windows operating system, correct, sir?
`A. That's correct, yes, sir.
`Q. And now, in this case, the difference is going to be
`that if you were sitting down at the negotiating table with
`Apple, you would be talking about Apple's iOS operating
`system, right?
`A. Yes, sir.
`Q. And you would agree with me that Windows is a very
`complex, multi-feature operating system, right, sir?
`A. Yes.
`Q. And so is Apple. Apple's iOS, the one at issue in this
`case, is also a complex, multi-featured operating system,
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`right, sir?
`A. Yes.
`Q. Thank you, sir.
`Now, every family -- you've referred to a number
`of times in your testimony here today that VirnetX owns
`various families of patents, right?
`A. That's correct.
`Q. And every family of VirnetX patents and patent
`applications which it had at the time of this deal were
`included in this license, right, sir?
`A. Yes.
`Q. Thank you, sir.
`Now, when we -- when we look at this deal, too, we
`find out that part of it was that Microsoft got a license
`not only to the U.S. patents of VirnetX but also to all the
`foreign patent -- patents, fair enough?
`A. Fair enough.
`Q. That's referred to by you patent negotiators, and I
`don't mean that to be offensive, so please don't take it
`that way, but y'all would refer to that as worldwide
`coverage, right, sir?
`A. That is correct.
`Q. Okay. And that is something that is different from
`what would be going on at the negotiating table between
`VirnetX and Apple because the -- the license that would
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`result at that negotiation would not include worldwide
`coverage, right, sir?
`A. That's correct.
`Q. And foreign patents -- the foreign patents that VirnetX
`owns are important to VirnetX, right, sir?
`A. They are.
`Q. In fact, VirnetX issues press releases when foreign
`patents are issued, right, sir?
`A. We do.
`Q. You want the public to know about that, right?
`A. We do.
`Q. Because you know there's value in that, and you want
`people to know it, correct?
`A. Correct.
`Q. Thank you, sir.
`MR. JONES: Now, if we could, let's go to Slide --
`excuse me. Let's go to -- let's -- let's just go at it
`this way and let's forget about going to a slide because I
`think we can do this pretty easily.
`Q. (By Mr. Jones) You -- you would agree with me that, as
`a result of that license agreement, Microsoft paid $200
`million, right?
`A. Yes, sir.
`Q. Now, I know they're going to pay you more money there,
`so I'm not trying -- we're going to talk about that in just
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`a second.
`But they paid $200 million for rights to all the
`patents you had, worldwide coverage, correct?
`A. Correct.
`Q. And, again, what VirnetX in this case contends is that
`for two patents for U.S. coverage, that the amount should
`be 700 million, right?
`A. That's correct.
`Q. Thank you.
`Now, we talked about the fact that when you did
`this first Microsoft deal, that it was a momentous
`occasion, you were proud of it, right, sir?
`A. Yes, sir.
`Q. And, in fact, VirnetX was so proud of this first
`Microsoft deal that it released a press release about it,
`right, sir?
`A. Yes, sir.
`MR. JONES: If we can go to Slide 35.
`Q. (By Mr. Jones) And we see here that press release, and
`it says here: During our second quarter, 2010, we achieved
`many and important milestones.
`Right, sir?
`A. Yes.
`Q. And this is a statement you're making, sir, right?
`A. It is.
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`Case 6:12-cv-00855-RWS Document 990 Filed 11/02/20 Page 24 of 148 PageID #: 63971
`655
`
`Q. And you authorized it?
`And you say: And I am particularly pleased with
`the validation of our patent rights that came out of our
`first nine-figure license with Microsoft.
`And you continue on, and you say: With that, we
`had the opportunity to pay a special dividend to our
`shareholders.
`Right, sir?
`A. Yes.
`Q. So after this Microsoft license was done, the first
`one, you thought it was a milestone for VirnetX, right,
`sir?
`A. That's right.
`Q. After it was done, you were particularly pleased with
`it, right, sir?
`A. Yes.
`Q. And after it was done, it was such a good deal, you
`could pay special dividends because of it, right, sir?
`A. That's correct.
`Q. And nowhere in here -- nowhere in here do we hear any
`mention about any disappointment about the deal, do we,
`sir?
`A. It's generally not something we would send a press
`release out on, that we would have hoped to have gotten
`more, no.
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