Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 1 of 85
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` UNITED STATES DISTRICT COURT
` WESTERN DISTRICT OF TEXAS
` AUSTIN DIVISION
`ANCORA TECHNOLOGIES,
`) Docket No. A 20-CA-034 ADA
`INC.
`)
` )
`vs.
` ) Austin, Texas
` )
`LG ELECTRONICS, INC.,
`)
`LG ELECTRONICS USA, INC.,)
`SAMSUNG ELECTRONICS
`)
`AMERICA, INC., SAMSUNG
`)
`ELECTRONICS CO., LTD.
`) May 29, 2020
`
`
` TRANSCRIPT OF MARKMAN HEARING
` BEFORE THE HONORABLE ALAN D. ALBRIGHT
`
`APPEARANCES:
`For the Plaintiff:
`(Telephonically)
`
`For LG Electronics:
`
`Mr. Andres Healy
`Mr. Steven M. Seigel
`Susman Godfrey, LLP
`1201 3rd Avenue, Suite 3800
`Seattle, Washington 98101
`Ms. Lexie G. White
`Susman Godfrey, LLP
`1100 Louisiana Street, Suite 5100
`Houston, Texas 77002
`Mr. Charles L. Ainsworth
`Parker, Bunt & Ainsworth, P.C.
`100 East Ferguson, Suite 418
`Tyler, Texas 75702
`
`Mr. Winstol D. Carter, Jr.
`Ms. Elizabeth M. Chiaviello
`Mr. Thomas R. Davis
`Morgan, Lewis & Bockius, LLP
`1000 Louisiana Street, Suite 4000
`Houston, Texas 77002
`
`
`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
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` UNITED STATES DISTRICT COURT
` WESTERN DISTRICT OF TEXAS
` AUSTIN DIVISION
`ANCORA TECHNOLOGIES,
`) Docket No. A 20-CA-034 ADA
`INC.
`)
` )
`vs.
` ) Austin, Texas
` )
`LG ELECTRONICS, INC.,
`)
`LG ELECTRONICS USA, INC.,)
`SAMSUNG ELECTRONICS
`)
`AMERICA, INC., SAMSUNG
`)
`ELECTRONICS CO., LTD.
`) May 29, 2020
`
`
` TRANSCRIPT OF MARKMAN HEARING
` BEFORE THE HONORABLE ALAN D. ALBRIGHT
`
`APPEARANCES:
`For the Plaintiff:
`(Telephonically)
`
`For LG Electronics:
`
`Mr. Andres Healy
`Mr. Steven M. Seigel
`Susman Godfrey, LLP
`1201 3rd Avenue, Suite 3800
`Seattle, Washington 98101
`Ms. Lexie G. White
`Susman Godfrey, LLP
`1100 Louisiana Street, Suite 5100
`Houston, Texas 77002
`Mr. Charles L. Ainsworth
`Parker, Bunt & Ainsworth, P.C.
`100 East Ferguson, Suite 418
`Tyler, Texas 75702
`
`Mr. Winstol D. Carter, Jr.
`Ms. Elizabeth M. Chiaviello
`Mr. Thomas R. Davis
`Morgan, Lewis & Bockius, LLP
`1000 Louisiana Street, Suite 4000
`Houston, Texas 77002
`
`
`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
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`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 2 of 85
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`(Appearances Continued:)
`For Samsung Electronics: Mr. Robert T. Haslam
`Mr. Anupam Sharma
`Covington & Burling, LLP
`3000 El Camino Real
`5 Palo Alto Square, 10th Floor
`Palo Alto, California 94306
`Ms. Melissa R. Smith
`Gillam and Smith, LLP
`303 South Washington Avenue
`Marshall, Texas 75670
`Mr. Richard L. Rainey
`Covington & Burling, LLP
`One City Center
`850 Tenth Street, NW
`Washington, D.C. 20001
`Ms. Lily Iva Reznik, CRR, RMR
`501 West 5th Street, Suite 4153
`Austin, Texas 78701
`(512)391-8792
`
`
`Court Reporter:
`
`
`Proceedings reported by computerized stenography,
`transcript produced by computer-aided transcription.
`
`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
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`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 3 of 85
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`THE CLERK: Court calls: A-20-CV-34, Ancora
`Technologies, Inc. vs. LG Electronics, Inc., et al, for a
`Markman hearing.
`THE COURT: Thank you. You may be seated. If I
`could hear announcements from counsel, please.
`MR. AINSWORTH: Your Honor, Charlie Ainsworth and
`I'm here with Lexie White. And on the phone, we have
`Andres Healy and Mark Seigel, and client, Miki Mullor, on
`the phone. And they will be the speakers, Andres and Mark
`-- yeah, Mark will be speakers for today.
`THE COURT: Very good. Thank you.
`Good morning. How are you?
`I would have said hello to you, too, if you'd
`done like Mr. Ainsworth did and, you know, got right up
`close to the bar and showed off. How are you doing?
`MS. SMITH: I'm doing well. I'm socially
`distancing. Thank you, your Honor.
`I am appearing on behalf of Samsung this morning,
`your Honor. I'm joined -- and all of our speakers will be
`addressing you in the courtroom.
`THE COURT: Very good.
`MS. SMITH: Joined by Mr. Bob Haslam.
`MR. HASLAM: Good morning, your Honor.
`THE COURT: Good to see you again. You're always
`welcome here.
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
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`
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`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 4 of 85
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`MR. RAINEY: Good morning, your Honor.
`THE COURT: Good morning.
`MS. SMITH: And Mr. Anupam Sharma.
`MR. SHARMA: Good morning, your Honor.
`THE COURT: Thank you.
`MS. SMITH: And, your Honor, we're ready to
`proceed. I believe we have a few folks on the phone, as
`well.
`
`THE COURT: Very good.
`Counsel.
`MR. CARTER: Good morning, your Honor.
`THE COURT: Good to see you.
`MR. CARTER: Good to see you. Good to be in your
`courtroom again.
`My name is Win Carter. I represent the LG
`Defendants. And with me here in the courtroom today is
`Tom Davis.
`THE COURT: Mr. Davis.
`MR. CARTER: And Elizabeth Chiaviello.
`THE COURT: Good morning.
`MR. CARTER: And we also have on the phone from
`Morgan Lewis, Collin Park and, also, two of our client
`representatives are on the phone, Chaeul Jeon and Woongho
`Lee.
`
`THE COURT: And where are they at?
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
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`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 5 of 85
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`MR. CARTER: They're in South Korea.
`THE COURT: Well, let me start off not to not
`give equal thanks to representatives from the plaintiff
`who are here by phone, as well, that they would take the
`time. I've lost track.
`MR. CARTER: It's a little dark there.
`THE COURT: I know. They're going to have to
`stay up quite late to do it. I always like to point
`out -- you may be seated if you like.
`MR. CARTER: Thank you.
`THE COURT: I always like to point out how
`grateful I am when clients take the time to come and -- in
`this period of time by phone. They might have been here
`in person had it not been for the virus. But I think it's
`incredibly important to our legal system not only that the
`lawyers attend these hearings, but that the clients attend
`them so they're not hearing back from you all how you all
`did and, importantly to me, how I did. I think it's
`important if their legal rights are going to be affected
`by how I do in a courtroom, they oughta experience how I
`am in a courtroom. Hopefully that will inform them going
`forward, too, as you guys move forward down towards trial,
`or whatever else happens.
`So let me give a special thanks to the folks who
`are attending from Asia, but all clients who are aboard, I
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
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`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 6 of 85
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`very much appreciate them taking the time to be here.
`Yes, sir.
`MR. HASLAM: I won't get my next bill paid if I
`don't say that Mr. Jae-il Park from Samsung is on the
`phone. One of the client reps.
`THE COURT: Very good. Well, my guess is he
`would still pay you, but you would hear about it.
`MR. HASLAM: Probably already have an e-mail.
`THE COURT: Probably so. You know, so better
`late than never but -- and it is -- I think it's also very
`good for the record to reflect that those folks attended.
`I really can't express to you how important it is
`to the Court that these -- you know, I ran into a friend
`of mine this morning on the way over here. I told him I
`was like a kid right before Christmas, you know, getting
`to go shop because this is the first hearing I've had with
`people in it in a long time, and he looked at me like I
`was a little crazy. But he's a real estate lawyer, what
`does he know. But I think this is terrific and I'm glad
`everyone could attend.
`Also, what I need to do is, it's my understanding
`that we're only taking up maybe six of the claim terms
`this morning. Or whatever number it is is fine with me.
`That's not as important as I'd like to know, starting with
`the plaintiff, with respect to those claim terms -- claim
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
`
`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 7 of 85
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`constructions that the plaintiff proffered that we are not
`going -- the Court is not going -- you already know the
`Court is not going to adopt, but that you're not going to
`argue.
`
`Are you maintaining that your proffered claim
`constructions are correct and you just want to not argue
`any further than the papers? Or are you agreeing with
`what the Court has done, or both?
`MR. HEALY: Thank you, your Honor. This is Mr.
`Healy. We are maintaining our position, but except that
`we won't be arguing those terms.
`THE COURT: Okay. Thank you, sir.
`You might -- if you are on a speaker phone, you
`might try not being on speaker phone because we're getting
`some feedback, and I worry that the court reporter will
`have a hard time hearing you. But thank you for that.
`Counsel, same question for defendants. Samsung.
`MR. HASLAM: We rest on the papers. I think
`
`we --
`
`THE COURT: Yes, sir.
`MR. HASLAM: -- agreed with your constructions,
`and we're only going to argue the ones that we want to
`argue today.
`THE COURT: Thank you, sir.
`Counsel.
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
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`
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`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 8 of 85
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`MR. CARTER: That's the same for LG, your Honor.
`THE COURT: Okay. And did you all also -- I'll
`start with plaintiff. Did you all find it was helpful to
`have the constructions given to you -- the preliminary
`constructions given to you? It seems this is about, what,
`Josh, six times, seventh time? It seems to be working
`pretty well? But I'd like input from you all whether you
`think it's beneficial or not.
`MS. WHITE: Your Honor, for the plaintiff, I
`thought it was very helpful. I think it's demonstrated by
`the handful of terms that we're going to ask to argue
`today, that it has narrowed the focus, at least of
`counsel's arguments, and given us some insight into where
`argument may be beneficial.
`THE COURT: Right.
`MS. WHITE: So thank you.
`THE COURT: You bet.
`Counsel.
`MR. HASLAM: I would echo what Ms. White said.
`It's very helpful to know what the Court was thinking, it
`avoids arguing things that we think just aren't going to
`change and then, be asking for clarification. But having
`a sense of what the Court was already thinking really
`helped focus the argument.
`MR. CARTER: And since we're not arguing most of
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
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`
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`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 9 of 85
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`the terms that I was assigned, your Honor, it was very
`helpful, except the one term that I've got responsibility
`for is "order of steps" and I got no direction there. So.
`THE COURT: Well, you know, we have -- I'll tell
`you, we have an idea of what we want to do, but we felt on
`that one that we would benefit by having you all come in
`and argue it as though -- not though. Argue it not
`knowing what we think because we really think it will be
`helpful to hear you all. Not try and tinker with what we
`did, but more explain why it is that you think what you
`all are doing is right. That's obviously a very important
`claim term.
`So -- and we're going to start with that claim
`term. So could we do this, though. Could counsel --
`let's see, I should have this -- I should have talked to
`this with my clerks. Let me get to the one I know we
`wanted to cover. The claim term we're going to start with
`is "order of the claim 1 steps." If the plaintiff would
`like to start by arguing what their -- what they believe
`the construction should be.
`I'll state in the record, it is the, quote,
`verifying a program, close quote, step cannot be completed
`until the, quote, selecting a program, close quote, and,
`open quote, using an agent, close quote, steps have been
`completed, and the, open quote, acting on the program,
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
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`
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`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 10 of 85
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`close quote, step cannot be completed until the, quote,
`verifying, close quote, step has been completed.
`I'll hear from counsel.
`MR. HEALY: Thank you, your Honor. This is Mr.
`
`Healy.
`
`I did want to say up front that we certainly --
`Mr. Siegel and myself appreciate the Court's flexibility
`in allowing us to appear telephonically. And then, just
`to note for your Honor, both myself and Mr. Seigel, who's
`an associate in our Seattle office, will be arguing the
`claims today. I will be arguing the first term and what I
`believe is the last term. And then, as is our custom at
`Susman Godfrey, Mr. Seigel will continue to do most of the
`heavy lifting here.
`With respect to the order of the claim 1 steps,
`your Honor, I appreciate that our construction is lengthy.
`Effectively, what we are just trying to capture here is
`what I understand to be the only distinction between the
`parties' construction, and that is whether the verifying
`step and the acting steps that your Honor quoted can
`overlap to any degree, or whether, as defendants argue,
`these two steps must occur sequentially such that, you
`know, each step can start and can only start once the
`prior step has been fully performed. And it's certainly
`Ancora's position that our construction is the correct
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
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`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 11 of 85
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`one.
`
`Mr. Boles, if you would turn to slide 19.
`Ancora's position is based on two basic claim
`construction principles. Number one, it is understood
`that method steps can be performed in any order unless the
`claims specify or something in the written description
`specifies a particular order; and number two, it also is
`understood that method steps may overlap and, again,
`that's in the absence of a clear statement in the patent
`that such overlapping action is not permitted.
`And so, in light of these presumptions, we think
`the Federal Circuit's decision in Kaneka is exactly on
`point. The Federal Circuit explained in that case that
`claims should not be construed as to require or to exclude
`overlapping operations, except and unless there's clear
`language is excluding such a continuous process. And we
`simply don't have that here.
`Mr. Boles, if you would turn to defendants' slide
`
`No. 6.
`
`THE COURT: Okay. Give me one second. I'll get
`there. Okay. Thank you, sir.
`MR. HEALY: Thank you, your Honor.
`So hopefully your Honor can see this is
`defendants' slide No. 6. It's the claim 1 in full form.
`And as defendants point out in step three and step four,
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
`
`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 12 of 85
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`12
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`No. 3 and No. 4 here, highlighted in green and purple,
`step three is the verifying the program. There's an
`antecedent basis for the program term in step one, and
`there's an antecedent basis for the verification structure
`in step two. We certainly don't deny that. We never
`have.
`
`Similarly in step -- what is labeled here as step
`four, the program again refers either to the step one, a
`program or to step three, there's the -- again, the
`antecedent basis. And then, we have never denied that the
`verification set forth in the acting step has an
`antecedent basis in the verifying step. So we don't deny
`in this case that there is in some or certain respects an
`order that's specified in the claims. To be very clear,
`your Honor, this is no different from Kaneka.
`And, Mr. Boles, if you would turn to slide 21 of
`our presentation.
`I apologize, your Honor. If the Court will let
`me know if it's ready for me to proceed.
`THE COURT: You can assume that I am unless I
`tell you otherwise. But thank you for asking.
`MR. HEALY: Thank you, your Honor.
`So in Kaneka, as well as demonstrated by the
`green highlighted text, the latter step referred to the
`result of the prior step. It required oxidizing
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
`
`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 13 of 85
`
`13
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`thus-obtained reduced coenzyme Q10 to oxidized coenzyme
`Q10. But what the Federal Circuit said was that the mere
`fact that one step refers to the product of the result of
`a prior step does not require that that first step be
`fully completed before the second step can begin.
`And that's exactly the same as what's occurring
`here. At most, as we've acknowledged, one step refers to
`the product of the prior step, but that does not require,
`as the Federal Circuit made clear, or exclude concurrent
`actions or doesn't exclude the possibility that certain
`preliminary steps or preliminary portions of a latter step
`may overlap.
`And, frankly, your Honor, this reality is also
`demonstrated by a number of independent claims. Mr.
`Boles, if you would turn to slide 22. Here is one
`example, your Honor. Claim 1, again, the verifying the
`program step, and claim 17, which is a dependent claim
`that ultimately traces its way back to claim 1, further
`elaborates on what the verifying the program step may
`entail. And it specifies that verifying the program and
`this embodiment includes encrypting the license record
`that is accommodated in the program using at least the
`unique key.
`And as the slide demonstrates, there's nothing
`about this additional step and this embodiment that would
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
`
`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 14 of 85
`
`14
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`preclude it from occurring either before the using an
`agent step, you know, concurrently with the using the
`agent step, and then, certainly it might also occur after
`using the agent step. The main point is that the claims
`themselves do not preclude the concurrent action that we
`are arguing about here today.
`We also point it out in our briefs that claim 4
`provides -- dependent claim 4 provides additional examples
`of verifying steps that may occur, and there's no --
`nothing in the claims, there's nothing in the
`specification that would preclude these steps from
`occurring concurrently with what has been labeled as a
`prior step. So, for example, the selecting a program step
`or the using an agent step.
`And finally, your Honor, I would just conclude by
`pointing out that the extrinsic evidence in this case, the
`limited extrinsic evidence on this point further supports
`Ancora's construction. Mr. Boles, if you would turn to
`slide 23. Ancora's expert in this matter, Mr. Jestice,
`has testified that a POSITA, a person of ordinary skill in
`the art at the time of the invention, would have
`understood that step-by-step execution was the exception
`and not the rule, and that computers generally are able to
`and do execute multiple instructions concurrently. And I
`think it's important to note that defendants' expert did
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
`
`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 15 of 85
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`15
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`not disagree with that testimony, did not disagree with
`that principle. His declaration is absolutely silent on
`this point.
`And, Mr. Boles, if you would actually turn to
`slide -- defendants' slide No. 8.
`Not only is defendants' expert silent on this
`point, but defendants themselves agree that as a general
`principle, the general rule, it's understood that the
`computer-implemented steps can be programmed to occur
`concurrently.
`And so, for all of these reasons, your Honor, we
`believe that the proper construction here is one that
`doesn't preclude this concurrent operation. Again, we
`certainly have never disputed and don't dispute that the
`ultimate products of the verifying step is used in the
`acting step and so that the process -- the prior steps --
`I'm sorry. That the latter step cannot be completed until
`the prior step has been completed. But we believe that it
`should not be construed in a way that would preclude any
`and all concurrent operations.
`THE COURT: So --
`MR. HEALY: Thank you, your Honor.
`THE COURT: No. That was great. Would you agree
`-- well, tell me this.
`Do you believe there are any restrictions as to
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
`
`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 16 of 85
`
`16
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`when any of the limitations can begin or start?
`MR. HEALY: Yes, your Honor.
`We would certainly agree that the acting on the
`program according to the verification, that verification
`again refers to the prior steps. And so, as we set forth
`in our construction, the acting on the program couldn't
`complete until the prior verifying the program is
`completed; and so, as a result, it's a bit hard to talk
`about in the abstract, but, you know, to the extent that a
`particular embodiment -- the requirement of a step
`completing before the next step could be completed, we
`would certainly agree that that principle would hold
`throughout.
`THE COURT: And do you know -- do you believe
`there are any restrictions one way or the other as to when
`any -- when any of the four steps must fully complete?
`MR. HEALY: I apologize, your Honor. As to when
`any of the four steps would fully -- I'm not -- perhaps
`I'm misunderstanding your question. I apologize, your
`Honor.
`
`THE COURT: Are there any restrictions, do you
`believe, as to when any of the -- with the four steps, is
`there any restriction as to -- with respect to when others
`begin, whether or not the entire step must fully complete?
`MR. HEALY: Yes, your Honor. I certainly would
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
`
`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 17 of 85
`
`17
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`understand that the acting on the program step cannot be
`fully completed until the verifying the program step has
`been fully completed. Similarly, we would understand that
`the verifying the program step cannot be fully completed
`until the selecting a program and the using an agent steps
`have been fully completed.
`THE COURT: Okay. Anything else?
`MR. HEALY: No, your Honor.
`THE COURT: Okay. Thank you, sir.
`Counsel for -- I think it was LG that was going
`to handle this.
`MR. CARTER: Yes, your Honor.
`THE COURT: Okay.
`MR. CARTER: Thank you.
`THE COURT: And let me -- as you start talking,
`let me make sure from Mr. Healy, if you'll just say a
`couple of words, I want to make sure Mr. Healy is able to
`understand you.
`MR. CARTER: Sure, Judge. I'm going to speak
`about the order of steps.
`THE COURT: Okay. Mr. Healy, are you all able to
`hear him?
`MR. HEALY: Yes, your Honor. Thank you.
`THE COURT: Very good. Thank you. You may
`proceed. Thanks.
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
`
`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 18 of 85
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`MR. CARTER: And so, Judge, from the plain
`language of the claim, and as we've pointed out in slide 6
`of our presentation, the plain language speaks to an
`order. Claim 3 follows from either 1 or 2, and claim 4
`follows from 3. The verification has to be completed
`or -- excuse me. Yes, the verification has to be
`completed before the program can be acted upon. And so,
`that's -- that step, it's a clear pathway that's set forth
`in the order of the claim. And claims require order here.
`THE COURT: Let me interrupt you. I apologize.
`I just want to put in the record what is that you
`are arguing for. The quote, verifying the program, close
`quote, step, end quote, acting on the program, close
`quote, step of claim 1 must occur in order after the,
`quote, selecting a program, close quote, step, end quote,
`using an agent, close quote, step. Thank you, sir.
`MR. CARTER: That's correct, your Honor.
`THE COURT: Okay.
`MR. CARTER: In the verifying step and the acting
`on step must come in order after steps one and two, as we
`just discussed.
`THE COURT: And also, let's put down in the
`record because I think this is the way we're going to do
`it in our construction. I'm looking at slide 6.
`MR. CARTER: Yes, sir.
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
`
`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 19 of 85
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`THE COURT: And I think we are going to
`reference -- we're going to use your numbering for the
`step, which is a little unusual. We don't have to do that
`very often. So when I -- in my claim construction, when I
`use my claim -- sorry. Distracted.
`When I use one, for example, in -- the number one
`in my order, it's going to be "selecting a program
`residing in the volatile memory." So basically slide 6 is
`going to be the key for the numbers that I'm going to use
`in my preliminary construction just so I don't have to
`repeat them. But that's -- I've gone through and done
`that in what I'm doing.
`MR. CARTER: Thank you, your Honor.
`THE COURT: So I can follow if you, for example,
`want to use the numbers now in step one or two step,
`whatever, I've got it in front of me, I'll know what
`you're talking about.
`MR. CARTER: Thank you, your Honor, for the
`clarification.
`They cite -- the plaintiffs cite the Kaneka case,
`but it is no safe harbor for their claim that there's no
`order recited here. I mean, in Kaneka, that was an
`oxidation process, and once oxidation begins, oxidation is
`going to continue so that process could occur. The claim
`language is totally different here versus the claim
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
`
`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 20 of 85
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`language that the court was faced with in Kaneka. And in
`fact, your Honor, and we've quoted for you the language.
`THE COURT: If you'll tell me what page you're
`on, please.
`MR. CARTER: Yes. On slide 11 of the defendants'
`presentation.
`THE COURT: And for the court reporter, Kaneka is
`K-A-N-E-K-A, Corp.
`MR. CARTER: And it's clear that if a step refers
`to the result of a prior step, the claim requires the
`steps to be performed in order. And as I mentioned,
`Kaneka dealt with a continuous oxidation process, and the
`language is quoted here in the slide, where the steps of a
`method claim actually recite an order. We ordinarily
`construe the claim to require order. And a method claim
`can also be construed to require that steps be performed
`in order or the claim implicitly requires order, for
`example, if the language of a claim step refers to the
`completed results of the previous step.
`And that's the situation here. The language as
`it's being used is discussing the completion of the prior
`step of number three before the process begins in number
`four.
`
`THE COURT: Yes, sir.
`MR. CARTER: If we will turn to slide 8, the
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`LILY I. REZNIK, OFFICIAL COURT REPORTER
`U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
`
`
`
`Case 1:20-cv-00034-ADA Document 75 Filed 07/01/20 Page 21 of 85
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`plaintiffs also a made a representation or discussed their
`expert's testimony, but Mr. Jestice was not speaking
`specifically about the claim itself when he was presenting
`his discussion in his affidavit. He was ta
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