Embed Size (px)
Citation preview
Exhibit 1
Trading Technologies International, Inc. v. CQG et.al Doc. 1222 Att. 2
Dockets.Justia.com
34d31484-ec2c-4925-acc5-3d1a6f917421
Page 1
IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
TRADING TECHNOLOGIES INTERNATIONAL, ) No. 05 C 4811INC., ) ) Plaintiff, ) ) v. ) )CQG, INC. and CQGT, LLC., ) February 25, 2015 ) Chicago, Illinois ) 10:05 a.m. Defendants. ) Trial
VOLUME 1 TRANSCRIPT OF PROCEEDINGSBEFORE THE HONORABLE SHARON JOHNSON COLEMAN, and a jury
APPEARANCES:
For the Plaintiff: TRADING TECHNOLOGIES INTERNATIONAL, INC. 222 South Riverside Drive Suite 1100 Chicago, Illinois 60606 BY: MR. STEVEN F. BORSAND
MC DONNELL BOEHNEN HULBERT & BERGHOFF LLP 300 South Wacker Drive Suite 3200 Chicago, Illinois 60606 BY: MR. LEIF R. SIGMOND, JR. MR. S. RICHARD CARDEN MS. JENNIFER M. KURCZ MR. JAMES C. GUMINA MR. MATTHEW J. SAMPSON MR. MICHAEL D. GANNON
TRACEY DANA McCULLOUGH, CSR, RPR Official Court Reporter 219 South Dearborn Street Room 1426 Chicago, Illinois 60604 (312) 435-5570
34d31484-ec2c-4925-acc5-3d1a6f917421
Page 2
1 APPEARANCES CONTINUED:
2 IRWIN IP 1333 Burr Ridge Parkway
3 Suite 200 Burr Ridge, Illinois 60527
4 BY: MR. BARRY F. IRWIN
5For the Defendants: LOEB & LOEB LLP
6 321 North Clark Street Suite 2300
7 Chicago, Illinois 60610 BY: MR. ADAM G. KELLY
8 MR. WILLIAM J. VOLLER MR. JOHN A. COTIGUALA
9 MR. CHRISTOPHER M. SWICKHAMER
10 LOEB & LOEB LLP 10100 Santa Monica Boulevard
11 Suite 2200 Los Angeles, California 90067
12 BY: MS. LAURA A. WYTSMA MR. TERRY D. GARNETT
13
14
15
16
17
18
19
20
21
22
23
24
25
db588f42-0559-4d58-805e-a5f74775634c
Page 264
1 and they can be a helpful part of the trial as we begin our
2 case, and so the defense CQG has the opportunity to present
3 their opening statement.
4 OPENING STATEMENT ON BEHALF OF THE DEFENSE:
5 MR. KELLY: Thank you, your Honor.
6 Ladies and gentlemen of the jury, I know we've
7 already met. My name is Adam Kelly. You already met the
8 president of CQG, Rod Giffen, and our team.
9 I can appreciate that Wednesday morning when you
10 woke up and had breakfast before the snow that you didn't
11 think you'd be sitting here for a patent case learning more
12 about the futures industry than you probably thought you
13 could know, but I know you'll be fine.
14 Now, I know we just heard a lengthy presentation,
15 and I'm going to keep my remarks rather brief, because
16 there's one main issue in this case, and that's whether or
17 not the price column in our product is static.
18 But before we discuss static, and that is a special
19 word, I wanted to introduce you to CQG. To talk about CQG,
20 you first need to talk about its founder, Tim Mather. Tim
21 was a trader in the '70s who at night would generate his own
22 charts and analytics so he could make more educated trades
23 during the day. Tapping into his own entrepreneurial spirit,
24 he believed that other traders could benefit from the work
25 that he was doing at night, and so in the early '80s he
db588f42-0559-4d58-805e-a5f74775634c
Page 265
1 founded CQG.
2 I'm sure up until now you have been wondering what
3 does CQG stand for, because those three letters don't really
4 normally go together. Well, it's simply charts, quotes, and
5 graphs. Our main product is what's called Integrated Client.
6 I'm sure several of you have used Microsoft Word, you know
7 with Microsoft Word there's several screens that you can
8 access once you access that program. There's Microsoft
9 Outlook, there's PowerPoint, there's Word, there's a variety
10 of different types of screens that you can bring up once you
11 have that product. Our Microsoft Word is what we call
12 Integrated Client. So in two slides I'll show you what
13 Integrated Client looks like.
14 You heard from the beginning remarks that there was
15 a history between the founder of our company, Mr. Mather, and
16 Mr. Brumfield and others at Trading Technologies; that they
17 did meet in the late '90s. The evidence will show that the
18 trading screen that Mr. Mather saw is nothing like the
19 trading screen that's in the patent. In fact, you're not
20 going to see any evidence to suggest that somehow Mr. Mather
21 or anyone at CQG attempted to copy Trading Technology's
22 patent. Let me repeat that. Because TT isn't even arguing
23 this. You will see no evidence that we copied their product.
24 Now, we know that when those two gentlemen met,
25 they weren't able to reach an agreement for a partnership.
db588f42-0559-4d58-805e-a5f74775634c
Page 266
1 CQG went its way, TT went its way. For its part, CQG
2 developed its own order routing interface in 2001. That was
3 called Order View. It's a pretty basic interface. You see a
4 price column on the left, it's vertical, there are some
5 buttons. But we wanted to come out with a different product
6 beyond that.
7 This is what our Integrated Client looks like to a
8 trader. I'm not really tech savvy, and this is admittedly a
9 really busy screen. And I know you've seen images yesterday
10 in the presentation that her Honor's externs had put
11 together, and they had some great pictures of these traders
12 sitting at their desks, and there's all these screens, and it
13 looks really busy. I'm just going to walk through what one
14 of these busy screens looks like.
15 If you look up here in the top left-hand corner you
16 see that box right here. That box is providing news stories.
17 Let's say, for example, we're all corn traders, and there's a
18 report that comes out in the Wall Street Journal that says we
19 expect corn futures to be really high because the
20 meteorologists are predicting droughts across the midwest.
21 There is going to be less of a corn crop. A story like that
22 would be right in here.
23 Another common example would be the Federal Reserve
24 decides to raise or lower interest rates. Frankly I don't
25 know how that affects corn, but something like that, it could
601a31c1-bf0e-41b9-8d21-522f815b08a5
Page 760
1 MR. GARNETT: Objection, your Honor.
2 THE COURT: Basis.
3 MR. GARNETT: Calls for speculation.
4 THE COURT: Overruled. He said they're friends of
5 his.
6 You may answer.
7 THE WITNESS: It's very significant to the way they
8 trade and important to them.
9 BY MR. IRWIN:
10 Q. Why did they move from TT to CQG?
11 MR. GARNETT: Objection, your Honor, calls for
12 speculation. Lacks foundation.
13 THE COURT: That general question, objection
14 sustained.
15 BY MR. IRWIN:
16 Q. Do you know what the price was for the product that the
17 customer, M & M Trading, acquired from CQG as compared to TT?
18 A. Yes. It was -- one of the owners told me that they were
19 all in, it was $1600 all in for everything CQG.
20 MR. GARNETT: Your Honor, he just testified
21 hearsay.
22 THE COURT: Yes, he did.
23 MR. GARNETT: Strike the answer?
24 THE COURT: The objection is a little late. Stand.
25
601a31c1-bf0e-41b9-8d21-522f815b08a5
Page 761
1 Q Last topic, Mr. Burns. At some point did you investigate
2 the operation of the DOMTrader?
3 A Yes, I did.
4 Q What did you investigate?
5 A I wanted to see how it operated. So I had CQG, so I --
6 Q Was there any specific functionality that you were trying
7 to determine whether or not it existed?
8 A Well, I wanted to see how the -- how their vertical
9 presentation worked.
10 Q What did you determine?
11 A Well, I determined that it was -- it would not -- I was
12 under the impression -- or under the understanding that it
13 would automatically -- the prices would automatically recenter
14 if it went above, above the screen, the top of the screen or
15 below the bottom of the screen.
16 Q And did it?
17 A It did not. When I clicked on the -- anywhere in the
18 price column, it would stop moving.
19 Q How long did it take you to figure that out?
20 A It was less than an hour.
21 Q And what did happen when the price would go -- or when the
22 quantities would go off the screen?
23 A You would see the price column, and you wouldn't see
24 anything else until the prices went up there. And once they
25 went up -- when I say up there, you'd be watching them and all
601a31c1-bf0e-41b9-8d21-522f815b08a5
Page 762
1 of a sudden this window would pop up. And that would be the,
2 what I guess is now the -- is the inside market. It would just
3 pop up there.
4 Q And did you investigate the characteristics of that
5 screen?
6 A I did. Once it popped up, there's a -- it was a line, a
7 black line. That it -- it made it very easy to click on. So I
8 just clicked on it and pulled it down a little bit and to see
9 how big I could get it. And it was -- you know, it was showing
10 four and five. So then I just pulled it all the way down,
11 almost all the way down and then it -- and I recentered and I
12 moved it around a little bit. And that it was static. It
13 was -- just operated like MD Trader.
14 Q Did you consider what you did unnatural?
15 A Well, any time you see a line on some sort of spread
16 sheet, it looks like you can move it. So I figured that was
17 the same thing with the -- with that line.
18 Q Why would you want to eliminate that window?
19 A Well, I found -- I found it a distraction and kind of an
20 annoyance.
21 Q Did you convey what you discovered to CQG?
22 A I did.
23 Q And who specifically did you convey that to?
24 A That was Russian -- his first name Yuriy. And the
25 counselor for -- attorney for, lawyer for CQG, Nina.
601a31c1-bf0e-41b9-8d21-522f815b08a5
Page 763
1 Q Nina. What was Yuriy's reaction?
2 MR. GARNETT: Objection, Your Honor. Calls for
3 hearsay.
4 MR. IRWIN: Admission.
5 THE COURT: What did you say?
6 MR. IRWIN: It's an admission, Your Honor. Yuriy's a
7 party. He's an employee. He's an employee. He's a senior
8 person at the --
9 THE COURT: You're going to have to show me more than
10 that, Counsel. Objection is sustained.
11 BY MR. IRWIN:
12 Q Okay. Do you know who Yuriy worked for?
13 A CQG.
14 Q Do you know relatively what his position was within CQG?
15 A He was on the development side.
16 Q And what did Yuriy -- what was Yuriy's reaction when you
17 told him about what you discovered?
18 MR. GARNETT: Objection, calls for hearsay.
19 THE COURT: Objection sustained. That's beyond the
20 development side. I assume this person is also going to be
21 testifying?
22 MR. GARNETT: Yes, he is, Your Honor.
23 THE COURT: Objection sustained.
24 BY MR. IRWIN:
25 Q Okay. What was Nina's --
e28e6320-b4b8-4721-abc8-f34db46bee65
Page 1156
1 All right. Now that snack time is over, we'll proceed
2 with Mr. Borsand's testimony.
3 BY MR. SIGMOND:
4 Q Now, Mr. Borsand, this case goes back to 2005, correct?
5 A Correct.
6 Q And you know an issue in this case is the word "static."
7 A Yes.
8 Q Was there a time that CQG made representations as to how
9 their product worked?
10 MS. WYTSMA: Objection. Calls for hearsay.
11 THE COURT: Was there any time CQG made
12 representations? Objection is overruled, hearsay.
13 MS. WYTSMA: Foundation.
14 THE COURT: You're CQG.
15 MS. WYTSMA: I want to make sure we're not going into
16 408 territory, your Honor.
17 So I'll withdraw the objection.
18 THE COURT: All right. Objection is withdrawn.
19 Proceed, Counsel. You know what her concern is.
20 Proceed.
21 THE WITNESS: Yes, they did make representations.
22 They filed a paper on it with a statement from their president,
23 Mr. Schroeter.
24 MS. WYTSMA: Objection, your Honor. There are
25 objections that have been lodged with respect to this.
e28e6320-b4b8-4721-abc8-f34db46bee65
Page 1157
1 THE COURT: There may be objections that are lodged,
2 but objection is overruled.
3 BY MR. SIGMOND:
4 Q Could you tell us about those.
5 A Yeah. So this is back in 2007. We had some guidance about
6 what we talked about earlier, what's static, what's in and
7 what's out of this patent.
8 And the statement was our -- CQG products have
9 automatic movement. The prices are always subject to a risk of
10 automatic movement, all of the prices. That's what we were
11 told.
12 Q And then what happened next?
13 A So based on that and some other factors, as kind of the --
14 what the meaning of static was being finally determined, this
15 case was put on hold for a while as we waited to see what the
16 ultimate bounds of static was.
17 Q And then what happened?
18 A So that -- you know, so those representations were made in
19 2007. And in 2010, we knew -- okay? -- set in stone this is
20 what static means.
21 And after we learned that, we started the process of
22 getting more information from CQG about how their product works
23 to confirm basically the representations of --
24 THE COURT: Excuse me. I am sorry, Mr. Borsand, but
25 you just said, "And in 2010, we knew -- okay? -- set in stone
e28e6320-b4b8-4721-abc8-f34db46bee65
Page 1158
1 this is what static means." I need you to clarify that answer
2 because --
3 THE WITNESS: Oh, I'm sorry.
4 THE COURT: -- the way that is presented is not clear.
5 All right? Do you understand what I'm saying?
6 THE WITNESS: Sure.
7 THE COURT: All right.
8 THE WITNESS: I'm not sure -- what I'm trying to say
9 is that there was -- we knew from, you know, a court process
10 that static means what we've heard it means here, the
11 construction.
12 THE COURT: Thank you. As opposed to static being set
13 in stone.
14 THE WITNESS: I'm sorry.
15 THE COURT: Disregard that. All right.
16 THE WITNESS: So I forgot where we were here.
17 THE COURT: I'm sorry. Court reporter, why don't you
18 give him his last statement.
19 Or you know what? Put another question. Thank you.
20 BY MR. SIGMOND:
21 Q So then what happened next with CQG?
22 A Okay. So CQG counsel told us the same thing: Product
23 prices are always automatically moving, you know, no other way
24 of operating it.
25 But then we heard from Mike Burns. Mike Burns at TT
e28e6320-b4b8-4721-abc8-f34db46bee65
Page 1159
1 called me into his office one day saying, "Take a look at
2 this." And I observed, well, wait a second. There was -- he
3 had it running so that there was a range that wasn't moving and
4 little things at the top and bottom where the market could move
5 into. And then it's set up another way where he said he
6 resized it, and the whole column was static.
7 Q And then what did you do next, Mr. Borsand?
8 A Well, I was surprised by this and a little upset because it
9 was not what I thought was -- things were supposed to be
10 working based on a couple of years of delay here.
11 So but I didn't -- I wasn't sure, so I reached out,
12 you know, e-mailed CQG counsel to let them know what I was
13 seeing and just trying to get to the bottom of it and had some
14 e-mails back and forth where I was trying to put in words what
15 we were observing.
16 Q And who was that counsel?
17 A Her name is Nina Wang. Nina Wang.
18 Q And then what happened next?
19 A So Ms. Wang called me and said, "Can you make a video of
20 this instead of trying to describe it in words." So, you know,
21 just capture what was on the screen using some software that
22 records what's on the screen.
23 So we did that, recorded both of those things. And I
24 e-mailed it to Ms. Wang.
25 Q And then what happened?
e28e6320-b4b8-4721-abc8-f34db46bee65
Page 1160
1 A So then we had a phone call with myself, Mike Burns,
2 Ms. Wang, and Yuriy Shterk, who was the head of product
3 development at CQG, so we can get to the bottom of how the
4 product was working.
5 Q And what did you find out during that phone call?
6 MS. WYTSMA: Objection. 408.
7 THE COURT: Response?
8 MR. SIGMOND: It's the same thing Mr. Burns testified
9 to. I don't think it's 408, your Honor.
10 THE COURT: The objection is overruled at this time.
11 However, if it tends to go beyond Mr. Burns' testimony, the
12 Court will revisit it.
13 Proceed.
14 THE WITNESS: So on the call, Mr. Shterk confirmed the
15 functionality we were seeing and, you know, that we -- we
16 weren't mistaken.
17 BY MR. SIGMOND:
18 Q And did Ms. Wang relay any -- any reaction to you?
19 A She was surprised. She did not know about this before
20 that.
21 Q How do you know that?
22 A She said so.
23 Q What happened after that?
24 A So that -- that was like in November of 2010. We continued
25 to get information, facts about, you know, how their product
e28e6320-b4b8-4721-abc8-f34db46bee65
Page 1161
1 worked. You know, Ms. Wang would relay it to us from CQG,
2 things like, well, how is it working exactly, where did it come
3 from, was it a defect or not, things like that, over a period
4 of time. And we just -- the information we were getting
5 inevitably would turn out to be incorrect.
6 Q What was your relationship with Ms. Wang?
7 A Well, she was opposing counsel. You know, she represented
8 CQG. But, you know, smart person. Tough adversary, but honest
9 and -- you know, I thought she was trying to get us the
10 information -- the true information. I just think --
11 Q And why do you think she was giving you information that
12 you thought was incorrect?
13 A Because --
14 MS. WYTSMA: Objection. Calls for speculation.
15 BY MR. SIGMOND:
16 Q If you know.
17 THE COURT: Well, first of all, as to -- objection to
18 the form of the question is sustained. He hasn't said that --
19 he didn't say what your question said. So objection sustained.
20 BY MR. SIGMOND:
21 Q Do you think Ms. Wang was giving you incorrect information
22 from your investigation?
23 A Yes. Not intentionally. It would just turn out to be
24 wrong, and she would have to explain that she was -- got the
25 wrong information from her client.
e28e6320-b4b8-4721-abc8-f34db46bee65
Page 1162
1 Q And do you yourself know, Mr. Borsand, why she had the
2 wrong information?
3 MS. WYTSMA: Objection. Calls for speculation.
4 THE WITNESS: I believe I do.
5 THE COURT: Objection -- objection sustained,
6 speculation.
7 BY MR. SIGMOND:
8 Q Now, Mr. Borsand, I want to move on and talk about a
9 subject called marking. Do you have an understanding of the
10 term "marking," patent marking?
11 A Yes.
12 Q Would you explain it to the jury.
13 A So there's two ways you can put -- a patent owner can put
14 someone on notice that they have a patent. One is actual
15 notice, saying, you know, "I think you're infringing a patent.
16 Here's our patents."
17 And the other one is constructive, which is you can
18 mark your products with your patent number. So marking is
19 that, putting the public on notice by putting markings on your
20 product.
21 Q And did TT mark the MD Trader with the '132 and
22 '304 patents?
23 A Yes, we did.
24 Q Do you know what products you marked?
25 A So MD Trader shows up in all of our products. So anywhere
e28e6320-b4b8-4721-abc8-f34db46bee65
Page 1163
1 there is MD Trader: X_Trader, X_Trader Pro, and a couple
2 peripheral products, like one is called Navigator, and one is
3 called Equalizer. Anywhere those were, we marked product.
4 Q And for how long has TT marked MD Trader with the
5 patents-in-suit?
6 A I -- at least since the date of the second patent, which
7 August 3rd, 2004, we started the marking. I know as of that
8 date we started.
9 Q And why did TT mark?
10 A Just so we can put people on notice that we had the patent.
11 Q And how do you know that TT marks the MD Trader product?
12 A Because I was involved with it, working with engineering to
13 get that done.
14 Q And has TT continuously marked all of its products since
15 2004?
16 A Yes.
17 Q How did TT mark MD Trader in 2004 and 2005?
18 A Couple ways. One is right on the product at the bottom,
19 right on the ladder. Also, an "About" screen that you can
20 click on in the menu and then in the splash screen that comes
21 up when you first launch the software.
22 Q And have you personally seen these screens with the patent
23 numbers?
24 A Yes.
25 Q Does TT mark today?
e28e6320-b4b8-4721-abc8-f34db46bee65
Page 1192
1 BY MS. WYTSMA:
2 Q So --
3 MR. SIGMOND: And --
4 THE COURT: Objection sustained. Jury doesn't
5 consider questions as evidence.
6 Proceed.
7 MS. WYTSMA: Let me move on.
8 BY MS. WYTSMA:
9 Q Mr. Borsand, during your direct examination, you mentioned
10 that the patents in this case had gone through what you called
11 a reexamination. Do you recall that?
12 A Yes.
13 Q Are you aware that the '132 patent is being reviewed by the
14 patent office right now?
15 A The '132 is, but not on any prior art grounds.
16 MS. WYTSMA: So you and I will talk a little bit about
17 the prosecution history next week during our case. But at this
18 point in time, I have no further questions. Thank you.
19 THE COURT: All right. Thank you very much.
20 Redirect.
21 REDIRECT EXAMINATION
22 BY MR. SIGMOND:
23 Q Mr. Borsand, it was brought out on cross that you own
24 shares in Trading Technologies, correct?
25 A Yes.
e28e6320-b4b8-4721-abc8-f34db46bee65
Page 1193
1 Q What other employees own shares in Trading Technologies?
2 A All employees.
3 Q Every single employee?
4 A Yes.
5 Q And how many employees are there?
6 A Around 350.
7 MR. SIGMOND: Could we put up 5326.
8 BY MR. SIGMOND:
9 Q I think Ms. Wytsma talked to you about the expense of
10 litigation. Do you remember that?
11 A Yes.
12 Q Is that why some of these royalties are less than what
13 Mr. Sims is asking for from CQG?
14 A It's one of the factors. I think I listed more in my
15 testimony before.
16 Q Of all those companies up there, how many made TT go to
17 trial?
18 A None of these. The only one was eSpeed.
19 Q And you settled with them well before trial, correct?
20 A Yes.
21 Q Now, in 2005 when Trading Technologies sued CQG, you had a
22 belief that there was infringement, correct?
23 A Absolutely.
24 Q But then something caused TT to evaluate the -- to
25 reevaluate the infringement, right?
e28e6320-b4b8-4721-abc8-f34db46bee65
Page 1194
1 A Right, which was the claim construction of static, saying
2 you need -- to infringe, you have to have a mode where there's
3 no automatic movement and CQG representing to us and the Court
4 at the time that they didn't have such a thing. That's why the
5 case got put on hold for several years.
6 Q And who was representing it to you?
7 A CQG's counsel.
8 Q And who was that?
9 A Ms. Wang. She's no longer their counsel. She was let go
10 in end of 2011.
11 MS. WYTSMA: Objection.
12 THE COURT: Objection sustained. As to how she left
13 the company is not relevant. Objection sustained.
14 BY MR. SIGMOND:
15 Q Now, why did Mr. Burns look into CQG's products?
16 A Because after this appeal came back and it was -- I want to
17 use the same words as before -- it was established that that
18 was going to be the construction, we were trying to check to
19 see if CQG's representations about how the product worked were
20 correct.
21 Q And he found what?
22 A They were not.
23 Q And then the further information you were given from
24 Ms. Wang, was that correct?
25 A No.
e28e6320-b4b8-4721-abc8-f34db46bee65
Page 1195
1 Q eSpeed case. Ms. Wytsma brought it up. The products
2 that were found not to infringe in the eSpeed case, did they
3 go to trial in front of the jury?
4 A No.
5 Q How were they found not to infringe?
6 A Because of their claim construction, the judge ruled on it.
7 But it was clear from his claim construction that that -- they
8 didn't have a mode in which the prices didn't move, except for
9 manually. They only had automatic movement. So those were
10 left out.
11 Q Mr. Borsand, every single eSpeed product that went to trial
12 in front of the jury was found to infringe, correct?
13 A Correct.
14 MR. SIGMOND: No further questions.
15 MS. WYTSMA: Can we have one question?
16 THE COURT: Sure.
17 RECROSS-EXAMINATION
18 BY MS. WYTSMA:
19 Q Mr. Borsand, we've heard a lot about the Georgia-Pacific
20 analysis and the hypothetical negotiation that occurs in
21 reaching a reasonable royalty, correct?
22 A Yes.
23 Q Okay. And you've sat through a lot of the testimony.
24 You're familiar with the hypothetical negotiation.
25 A I have some understanding of the law on that.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1290
1 THE COURT: Anything else, defense?
2 MS. WYTSMA: No, Your Honor.
3 (Before the jury:)
4 THE COURT: Next witness from the plaintiff.
5 MR. SIGMOND: Your Honor, plaintiffs call Peter
6 Hwang.
7 THE COURT: All right. Mr. Peter Hwang, H-W-A-N-G,
8 is the next witness. And this witness is unavailable, also out
9 of the country. And he will be presented by video deposition
10 and video testimony. You will consider his testimony as you
11 would if he were here to testify in person. Proceed.
12 PETER HWANG, PLAINTIFF'S WITNESS, THROUGH HIS
13 VIDEOTAPED DEPOSITION,
14 (Whereupon, said videotape was played in open court.)
15
16
17
18
19
20
21
22
23
24
25
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1291
1 THE COURT: Is that completed?
2 All right, ladies and gentlemen. That completes the
3 testimony from Mr. Peter Hwang. Again, Mr. Hwang's testimony
4 should be considered by you as if he were here in person to
5 testify.
6 The next witness, I believe, is live. However, we
7 have to do some things to get ready for that testimony.
8 Please, once again, ladies and gentlemen, as to any of
9 the videotaped testimony, this videotaped testimony or evidence
10 that's previously taken is not unusual in jury trials, and if
11 we didn't have this option, believe me, cases would take a lot
12 longer and be a lot more difficult logistically.
13 So, again, consider the evidence that you have heard
14 up to this point from every person who comes in by way of
15 videotaped deposition as you would for any person who is coming
16 in person?
17 All right. All rise.
18 Ladies and gentlemen, my guess is we'll start back up
19 at 2:00. At 2:00. So if you want to step out, you can. Just
20 stay away from the front of the courtroom.
21 (Jury out at 1:40 p.m.)
22 THE COURT: All right. Be seated. Are you ready for
23 me now, or do you need a few moments before we get going?
24 MR. GARNETT: I think we're ready.
25 THE COURT: All right. This is -- do you have
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1292
1 anything for me from -- oh, I've got my -- I've got my -- the
2 exhibits that are CQG's objections to the exhibits. Were there
3 responses to that?
4 MR. CARDEN: Yes. And, actually, that document, your
5 Honor, with respect to non-demonstrative exhibits is narrowed
6 down to two documents.
7 THE COURT: I'm -- when you say that document, I'm
8 talking about the seven-page document from --
9 MR. CARDEN: Docket -- Document No. 1111 is what I
10 have.
11 THE COURT: Yes, mm-hmm. All right. If you have
12 something else for me, or you're just saying you're going to
13 work off of this?
14 MR. CARDEN: I think we can just work off of it
15 because this is only two documents, your Honor.
16 THE COURT: Great. Perfect. Tell me. Let's go.
17 MR. CARDEN: The first would actually be 2418, which
18 is on page 2, the very top category. It's the last document.
19 And this is actually just another version of 403,
20 which was discussed this morning. It actually has a different
21 chain. I'm happy to substitute it for 403 if we'd rather have
22 that. But I assume that the objections are the same.
23 Mr. Nixon is going to use this to say -- not to say
24 anything about the truth of whether anything came from a
25 customer; it's just about different information being relayed
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1293
1 to different people at different times and how that impacts
2 upon the validity of the information that was given to
3 Mr. LeMond. So they're talking about functionality that was
4 present in the time Mr. LeMond was --
5 THE COURT: Do you have a copy? I don't have this.
6 MR. CARDEN: Absolutely, your Honor.
7 THE COURT: At least if I have it, I don't have it
8 readily available.
9 MR. CARDEN: Sure. I'm sorry.
10 MR. GARNETT: It's basically the same document that we
11 talked about --
12 THE COURT: The same e-mail?
13 MR. GARNETT: The same e-mail.
14 MR. CARDEN: It's just more of -- it's more of the
15 chain.
16 THE COURT: From Schroeter to -- from Hwang to
17 Schroeter.
18 MR. GARNETT: Correct.
19 MR. CARDEN: Yes. There's a --
20 THE COURT: Then the same ruling --
21 MR. CARDEN: Okay.
22 THE COURT: -- that I had earlier.
23 MR. GARNETT: I mean, I -- if I could just address
24 this a little bit more globally.
25 THE COURT: All right.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1294
1 MR. GARNETT: Okay? There was a Daubert motion filed
2 against Mr. Nixon, and --
3 THE COURT: There was a what? I'm sorry.
4 MR. GARNETT: A Daubert challenge to Mr. Nixon. And
5 in your ruling, you said the Court believes that a fact-finder
6 would be assisted by the testimony of a practicing patent
7 attorney on the standards and practices related to the
8 preparation of an infringement opinion and the reasonableness
9 of those opinions.
10 Mr. Nixon is now being offered as an expert on willful
11 infringement, not on the opinion itself or the reasonableness
12 of the opinion. So he's going into issues of fact, so he's
13 usurping the jury's duty to find the facts related to
14 willfulness. This is a prime example of that.
15 He's going to get up there and testify about who knew
16 what when, interpret the e-mails, suggest based on deposition
17 testimony and e-mails from no personal knowledge whatsoever
18 what somebody thought, what they were thinking at the time, and
19 based on his opinion, they must not have known this fact, so
20 they didn't give that fact to Mr. LeMond. It's all that kind
21 of testimony.
22 I don't think that's what your Honor had in mind. I
23 think it would be fine if Mr. Nixon wanted to get up there and
24 testify about what an opinion of counsel should look like based
25 on his years of experience, what should be included in that
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1295
1 opinion. That's fine. But for him to get up there as an
2 expert on willfulness I think is improper.
3 It also --
4 THE COURT: Okay. Why don't you stop right there.
5 MR. GARNETT: Sure.
6 THE COURT: Response.
7 MR. CARDEN: Sure, your Honor. There's a lot more to
8 your opinion than that. And at no point did you strike his
9 report, which contains all of this information.
10 In fact, you said Nixon's report provides the sort of
11 opinions helpful to a fact-finder in a case such as this by
12 providing a thorough analysis of the evaluation that should be
13 undertaken to reach a final resolution of the willfulness
14 issue.
15 CQG's already raised this issue about usurping role of
16 the jury, and you said CQG's remaining arguments for striking
17 Nixon's report are equally unpersuasive. Nixon is not simply
18 telling the jury what result to reach.
19 And, finally, we raised the very issue of Mr. LeMond
20 and his knowledge, and you said CQG will not be prejudiced by
21 denial of this motion since they've been on notice that TT
22 questioned the viability of CQG's advice of counsel defense and
23 thus challenged Mr. LeMond's opinion where it is apparent that
24 the counsel was not provided an accurate description of product
25 functionality.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1296
1 That's the type of thing we're having Mr. Nixon do
2 with a document like this, to show that they're telling
3 Mr. Hwang one thing, they're telling TT it's a bug or a defect,
4 and they're telling Mr. LeMond precisely nothing.
5 MR. GARNETT: So each of these folks involved in this
6 e-mail are going to testify. I think the jury should make up
7 their own minds. I don't think they need Mr. Nixon to tell
8 them what Mr. Hwang might have meant or what Mr. Schroeter
9 might have meant or what this e-mail is suggesting about the
10 timing of who learned what when.
11 He is basically reading the tea leaves, if you will.
12 He's looking at these documents, reading deposition
13 transcripts. No personal knowledge whatsoever. Mr. Nixon has
14 not spoken to a single one of these individuals.
15 THE COURT: Well, experts don't have to, do they?
16 MR. GARNETT: I understand. But why is his
17 interpretation of these e-mails being allowed in? It's the
18 jury's job to decide whether there's anything here, who said
19 what when.
20 THE COURT: Response as to not the admissibility of
21 the e-mails, but to --
22 MR. CARDEN: Sure.
23 THE COURT: -- his -- he's got a lot to testify
24 about --
25 MR. CARDEN: Sure.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1297
1 THE COURT: -- as to this particular one and why, and
2 the Court doesn't even think this was -- this may have been in
3 his report, but this definitely wasn't something that -- I
4 didn't have this e-mail, I don't think, when I reached this
5 decision. Was that e-mail attached to his report?
6 MR. CARDEN: That e-mail was cited in his report and
7 actually quoted in his report.
8 THE COURT: That specific section?
9 MR. CARDEN: Correct.
10 THE COURT: Where was that?
11 MR. CARDEN: In his report?
12 THE COURT: Of course, you all have filed so much
13 stuff with me.
14 MR. GARNETT: Right. It's a long report that goes
15 through --
16 MR. CARDEN: And, actually, I apologize, your Honor.
17 I may not --
18 THE COURT: Not only a long report, I'm talking about
19 the 2,000 -- almost 2,000 documents. That is -- that's a
20 10,000-page report.
21 MR. CARDEN: No, no, no. No, this is not Mr. Sims's
22 report, your Honor. This is --
23 THE COURT: Not Sims?
24 MR. CARDEN: Not Sims. Mr. -- no, Mr. Nixon's was
25 much, much shorter.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1298
1 THE COURT: What's much shorter, a couple thousand
2 pages?
3 MR. CARDEN: No, not even close.
4 THE COURT: All right. Go ahead.
5 MS. WYTSMA: While we're on the subject of the report,
6 though, your Honor, there is an extensive section on the
7 prosecution history in this case.
8 MR. CARDEN: It's not at issue.
9 MS. WYTSMA: Okay. So we're not going to hear about
10 this --
11 THE COURT: Well, why don't we let them -- you're
12 jumping ahead.
13 MS. WYTSMA: I'm sorry.
14 THE COURT: Yeah. They're handling it. I know you're
15 the one that -- let's see. If they forget, you can step back
16 up, Ms. Wytsma.
17 Go ahead.
18 MR. CARDEN: Actually, again, so there's a section of
19 Mr. Nixon's report that deals with activities that occurred
20 after the issuance of the opinions that are directed to showing
21 the reasonableness and the competency of the opinion to begin
22 with because it shows how CQG viewed it after, and it shows
23 what they did after when they had it in hand.
24 And this particular point Mr. Nixon uses to show that
25 if they're providing information, incorrect information to
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1299
1 their attorneys -- which has already been established -- then
2 they're providing -- and they're providing different
3 information to the astrologer and they're providing different
4 information to opinion counsel, his point is opinion counsel
5 was missing the necessary information to render a competent
6 opinion.
7 MR. GARNETT: So Mr. Nixon has absolutely,
8 unequivocally, and utterly no personal knowledge of any of
9 these documents that he's analyzing, none whatsoever. He is
10 completely and totally usurping the role of the jury and this
11 Court.
12 THE COURT: Well, first of all, the fact that he
13 doesn't have personal knowledge doesn't matter. That part
14 is -- that's not what this Court would look at.
15 What the Court is looking at -- and, again, and the
16 Court understands what my order was, once again. There's so
17 many orders and so many motions and so many documents.
18 As to this particular point of willfulness, it's one
19 thing for all of this to come out. It's another thing for an
20 expert on one issue to be able to say, well, because it's very
21 plain -- I mean, jurors are supposed to be directed by experts
22 when it's something that's out of their ken.
23 And if they have the information that this person said
24 this, this person said that, this third person said this, how
25 do you -- you know, and it's nothing but this is astrology, you
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1300
1 know, this is what we said we're going to do, why is it -- what
2 is it about -- other than the fact that he had that
3 information, what is it that makes you think that they can't
4 decide this without an expert?
5 MR. CARDEN: And, frankly, it has nothing to do with
6 whether he's an astrologer or not. It could have been any of
7 their people.
8 THE COURT: Yeah, but I'm saying, what would make --
9 MR. CARDEN: Sure.
10 THE COURT: What makes you think that the jury will be
11 incapable if he doesn't connect the dots for them of doing this
12 on their own, or you obviously even being able to argue it? If
13 it's in evidence, you can argue it till the cows come home.
14 MR. CARDEN: I understand we can argue it, your Honor.
15 THE COURT: You just want to have the imprimatur of
16 having an expert to say that's what it is.
17 MR. CARDEN: It's the opinion he rendered about what
18 Mr. LeMond had in his possession at the time he --
19 THE COURT: What he had in his possession at the time?
20 Then objection sustained. I'm not going to allow that in. You
21 don't need opinion to say what somebody had in their
22 possession. That's not specialized.
23 MR. GARNETT: So, in essence, then that goes to I
24 think the other document and -- one, two, three, four, five,
25 six, seven, eight -- eight of their slides, or seven of their
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1301
1 slides, actually, because Mr. Nixon, as the Court points out --
2 THE COURT: Now, let me say this. I didn't say I was
3 taking out -- again, you all have so much more knowledge than I
4 do. I didn't say the document, for you to say, okay. Now that
5 you ruled on that, the document is out as to everything. I
6 don't know how else he's using it, how he's testifying to it.
7 All I'm saying is that on the issue of trying to
8 connect the dots and saying, well, because this e-mail said
9 this, this e-mail said that, and this e-mail said this,
10 willfulness is found. That's all I'm saying, that he can't
11 give that opinion based on that. I don't know about cutting
12 out the entire -- I don't have, you know, the exhibits.
13 MR. GARNETT: I understand.
14 MR. CARDEN: He wasn't -- and I'm sorry if that's what
15 I was conveying, your Honor. He was saying that there's no
16 proper factual foundation for the opinion letters. That's the
17 point he was using these documents for, not that that's a
18 necessary --
19 THE COURT: Show me. Somebody's got the test. Show
20 me what you're -- I'm still working in a vacuum.
21 MR. GARNETT: For example, your Honor, this slide,
22 Slide 6, relevant willfulness factors.
23 THE COURT: I was given portions of slides. I don't
24 think --
25 MR. CARDEN: Would you like a full set, your Honor?
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1302
1 THE COURT: Yeah, or something to show me what you're
2 talking about.
3 (Counsel conferring.)
4 THE COURT: All right. So where are you taking me to?
5 MR. GARNETT: Well, let's look at Slide No. 6,
6 relevant willfulness factors.
7 THE COURT: Is Mr. Nixon in the room?
8 MR. CARDEN: He is in the room, your Honor.
9 THE COURT: Please step out, sir.
10 You all might not think that's important, but the
11 Court does.
12 MR. GARNETT: I understand, Judge.
13 MR. CARDEN: I apologize.
14 (Mr. Nixon exits the courtroom.)
15 THE COURT: All right. Proceed.
16 MR. GARNETT: Slide No. 6, for example, relevant
17 willfulness factors.
18 THE COURT: 6, 590 -- what's Slide No. 6?
19 MR. GARNETT: 5905.
20 THE COURT: Thank you. All right.
21 MR. GARNETT: In the far right corner, there's a slide
22 number, I think.
23 THE COURT: All right. It starts with relevant
24 willfulness factors?
25 MR. GARNETT: Yes. So this is what he's -- he's
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1303
1 starting with.
2 And then from there, you get a time line on the next
3 slide, PTX5909. And he's going to connect all these dots, take
4 all these facts and connect them together and render an opinion
5 that CQG was willful based on representations made to Mr. Hwang
6 and representations made to counsel and who knew what when.
7 That's the purpose of this testimony.
8 THE COURT: All right. Let me hear him respond.
9 MR. GARNETT: Sure.
10 MR. CARDEN: Sure.
11 THE COURT: Mr. Carden.
12 MR. CARDEN: So 5906 is the factors he considered in
13 rendering his report. There's no dispute.
14 THE COURT: 5906?
15 MR. CARDEN: I'm sorry. 5905.
16 THE COURT: Thank you.
17 MR. CARDEN: My fault.
18 Neither of the experts dispute that those are factors
19 to consider in the analysis.
20 5909 should be the next one in your binder. It's the
21 time line.
22 THE COURT: Yeah.
23 MR. CARDEN: I think you have a different one because
24 there was a bill before.
25 THE COURT: Right. I've got it.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1304
1 MR. CARDEN: This is about knowledge of the patents as
2 a prerequisite for them to even do anything. This has nothing
3 to do with any of the other testimony.
4 Now, I will say that the April 29th, '03, date, which
5 it shows PTX280 at the bottom of that time line, that's the
6 other document that's in dispute right now between the parties.
7 THE COURT: Which one? I'm sorry.
8 MR. CARDEN: On 5909, there's a time entry for -- or a
9 date entry for April 29th, '03.
10 THE COURT: Uh-huh.
11 MR. CARDEN: And that PTX number is a document that is
12 still in dispute.
13 THE COURT: The opinions that you have on 5951 that
14 he's going to give that he didn't -- CQG didn't receive a
15 competent opinion of counsel, do that. They didn't reasonably
16 rely on a competent opinion of counsel. Considered but chose
17 not to implement several noninfringing alternatives.
18 Misrepresented the functionality of their products.
19 Where is it listed that he's giving an opinion on
20 willfulness, if that's his --
21 MR. CARDEN: He --
22 THE COURT: Where is that?
23 MR. CARDEN: This is what he's going to testify to,
24 your Honor. Now, I do think at some point he would say --
25 MR. GARNETT: Let me -- go ahead.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1305
1 MR. CARDEN: -- that -- and you can tell us what you
2 want us to do on this. He will say that in his experience, in
3 his -- it's his opinion, having reviewed everything, this
4 evidences a reckless disregard. But that's the extent. He's
5 not going to say that that equals willful infringement because
6 he recognizes that the full determination involves you as well.
7 MR. GARNETT: So that's an opinion of willfulness.
8 THE COURT: And it is. This won't come out. All
9 right?
10 MR. CARDEN: The entire slide, your Honor?
11 THE COURT: That slide is not going to be in, right.
12 You can use that in closing. This is willfulness
13 factors.
14 MR. GARNETT: If we look at PTX5948, here's where he
15 reads the tea leaves, I would suggest, and he's not --
16 THE COURT: Now, wait a minute. You had an objection
17 to 5909 also? And what's that?
18 MR. CARDEN: Yeah, 5909 is the other time line.
19 THE COURT: Yeah, that --
20 MR. GARNETT: I mean, 5909 --
21 THE COURT: It's the time line.
22 MR. GARNETT: There was a -- I mean, we object to the
23 document.
24 THE COURT: What document?
25 MR. GARNETT: PTX280.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1306
1 THE COURT: Oh, the document that's contained on 5909.
2 MR. GARNETT: Yes. And then I think we need to look
3 at the time lines together. So that's PTX5909 in conjunction
4 with PTX5948, which is much later in the binder.
5 So he's going to -- first he's going to interpret
6 PTX280 on PTX5909, on the first time line. He's going to tell
7 the jury what that e-mail says and why it goes to reckless
8 disregard.
9 And then he's going to go back to this time line and
10 fill in a whole bunch of other facts from other deposition
11 transcripts, other -- I think mostly depositions that he's
12 read, the declaration that Mr. Schroeter filed with the Court,
13 the dismissal of Nina Wang, when particular employees at CQG
14 left, and he's going to say all of these facts together show a
15 reckless disregard, and, therefore, CQG was willful.
16 THE COURT: Response, Mr. Carden.
17 MR. CARDEN: Absolutely, your Honor. First of all,
18 the two time lines are unrelated. The first time line goes to
19 show their knowledge of the patents. And what he will say
20 about the document from 2003 -- and if you'd like a copy, I'll
21 give it to you -- is it shows that they were aware of the
22 applications and concerned about the applications, and they
23 continued to monitor and then got the applications as soon as
24 they were issued. So it's going to show knowledge of the
25 patents and the applications.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1307
1 The second time line is about issues that show, A,
2 again, to some extent, the validity of the product information
3 that was provided to Mr. LeMond for purposes of rendering his
4 opinion and because if he doesn't have sufficient information,
5 he can't render a competent opinion. And that will go to some
6 of the information especially in that 2010 to 2011 time frame.
7 The other issues that are contained in there as well,
8 again, will go to issues about the reasonableness of the
9 reliance because they're doing other things that completely
10 ignore their supposed reliance on an infringement opinion.
11 MR. GARNETT: So he can say to the jury, obviously, if
12 Mr. LeMond did not have adequate information, his opinion would
13 not be competent. I think that falls within this Court's
14 order. And I don't have an objection to that, although I don't
15 think we need Mr. Nixon, so I'm not -- I'm renewing my Daubert
16 challenge, but I understand the Court's ruling is what I'm
17 trying to say.
18 What I don't think he should be allowed to do is take
19 the next step and say this evidence, therefore, shows that he
20 didn't have the information that he needed, and, therefore,
21 we're subjectively reckless. We don't need Mr. Nixon to tell
22 the jury that.
23 THE COURT: All right. As to the -- as to the -- I
24 already said willfulness is out. The first time line is in,
25 over your objection.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1308
1 MR. CARDEN: Does that include the document, your
2 Honor?
3 THE COURT: Yeah.
4 MR. CARDEN: I'm just making sure.
5 THE COURT: And it's not the time lines that seem to
6 be the problem; it's the way you're going to use them.
7 MR. GARNETT: Yes. Well, I think -- I do think it's
8 the time line to some degree because, again, he's -- he doesn't
9 have personal knowledge of any of these facts. Subjective
10 recklessness is a state of mind. It goes to intent. Intent is
11 not the type of topic subject to expert testimony.
12 THE COURT: Again, I mean, some of these right here,
13 I'm not admitting this -- these time lines into evidence. You
14 know, right now they're demonstrative. He's an expert. This
15 case spans a series of time. This could come in anyway. It's
16 more the way he uses it, as opposed to the fact as to the time
17 line itself. That's what I see.
18 I don't see where they say -- what part of the time
19 line do you feel goes -- is outside of something that he should
20 say?
21 MR. GARNETT: Well, he says CQG compares itself to the
22 noninfringing eSpeed product. He's just interpreting a
23 document there.
24 Schroeter declaration regarding CQG product
25 functionality. What he's going to say there is that
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1309
1 Mr. Schroeter misrepresented the functionality of CQG's
2 products. Based on what, I don't know.
3 THE COURT: All right. Stop right there. That says
4 Schroeter declaration. I'm assuming there's a declaration.
5 You all agree that there is one?
6 MR. GARNETT: There is a declaration.
7 THE COURT: And it was April 7th -- April of 2007?
8 MR. GARNETT: Yes.
9 THE COURT: All right.
10 MR. GARNETT: And he's going to interpret what that
11 declaration means. He's going to tell the jury Mr. Schroeter
12 didn't know all the functionality --
13 THE COURT: He can't do that.
14 MR. GARNETT: But that's what he wants to do. That's
15 why I'm objecting.
16 THE COURT: But, again, we're talking about apples and
17 oranges here. You're talking about a time line and asking some
18 appropriate questions, and then you're talking about questions
19 that may be objectionable.
20 Now, you keep saying what you think he's getting ready
21 to do. I'm sure you have a pretty good idea.
22 MR. GARNETT: I do, your Honor.
23 THE COURT: They also, though, have also probably done
24 some preparation, and there's some things that maybe they've
25 changed or way they're doing things that you might not know.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1310
1 And I think you're all just going to have to litigate
2 it, and I can't do it all up front. I mean, otherwise, I might
3 as well just have the guy testify for me and then come in in
4 the morning and testify for everybody else. I just can't.
5 I mean, but as far as these time lines are concerned,
6 right now I'm not seeing anything in them --
7 (Counsel conferring.)
8 THE COURT: -- that raises something that is
9 objectionable for demonstrative evidence.
10 MS. WYTSMA: We'd like to take you up on that offer.
11 MR. GARNETT: To do it before your Honor.
12 THE COURT: No.
13 MR. GARNETT: Okay.
14 THE COURT: No. I was being facetious.
15 MS. WYTSMA: Well --
16 THE COURT: I mean, there's no way I'm going to try
17 the case that you all have had. I know you all are coming into
18 it late. That would be great. I'm not doing that. I'm not
19 going to sit through this and then have the jury come back
20 tomorrow, not to mention sit through this and then tonight have
21 you all file all of your objections and responses and wanting
22 me to reconsider it before he comes in, start all over again,
23 and then be done by 12:30 tomorrow. I'm not going to do it.
24 So --
25 MS. WYTSMA: Understood.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1311
1 THE COURT: -- I misspoke.
2 MS. WYTSMA: Well, it's --
3 THE COURT: Like a lot of things that are going on in
4 here.
5 MS. WYTSMA: I have put experts on for a judge to
6 decide the admissibility --
7 THE COURT: If you have some very specific things that
8 you wanted to ask. But it sounds to me like you now want a
9 preview of what their case is. That's what it sounds like to
10 me.
11 MS. WYTSMA: I think what I was -- the Court said it
12 couldn't deal with this at the outset. And I think if we
13 understand the fact -- you know, if we understand what
14 Mr. Nixon is going to try and testify to -- and he is going to
15 try and -- I know because I deposed him. He said, "If
16 permitted, I am going to tell the jury what these e-mails mean.
17 If the judge allows me, I'm going to tell the jury exactly what
18 these e-mails mean."
19 THE COURT: He can't. He cannot do that. He cannot
20 interpret e-mails unless there's some very specialized
21 knowledge that the jury can't do. An e-mail with regular
22 language, English language in it, just, like, you know,
23 nobody's asking -- there's e-mails that were presented by
24 Mr. Hwang, and he wasn't saying what he meant by them. It's up
25 to the jury to determine what he meant by them, which is
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1312
1 clearly what you want on that.
2 MR. CARDEN: But --
3 THE COURT: For the jury to think about it, as opposed
4 to now you have other e-mails. They are what they are. And
5 you can argue till the cows come home, or they can
6 cross-examine them. You know, and you can also cross-examine
7 him or ask questions on the other side on what is meant by his
8 ultimate opinion on what he has stated he will opine on, which
9 is, again, the decision not to -- what kind of information they
10 had, which would show that they chose not to implement certain
11 steps.
12 So you have -- that he can testify to because he --
13 there's no way that a layperson would understand that -- what
14 certain information means. But if the e-mails are basic
15 e-mails of we know this, we don't know that, then --
16 MR. GARNETT: That's --
17 THE COURT: -- I don't see where, you know --
18 MR. GARNETT: That's what they are.
19 THE COURT: -- the jury should be asked to interpret
20 that. But that's the kind of thing that, you know, unless you
21 have one little pack that you know is this is all that's going
22 to be asked, I can preview that. But I'm not going to go
23 through Mr. Nixon's entire testimony covering umpteen e-mails.
24 And, you know, you can lay a foundation and say he's
25 seen all these various e-mails. That's one of the things that
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1313
1 he's looked at. He's looked at these; he's looked at these;
2 he's looked at these. He can give you opinions that are set
3 out, but he cannot give the ultimate decision of willfulness in
4 this case. He can't. He can't say, "In my opinion, based on
5 all my review of all these e-mails, this is willfulness." He
6 can't do that.
7 MR. GARNETT: Well, he can't interpret those e-mails
8 for the jury either, that this means --
9 THE COURT: I mean, he can interpret it if it uses
10 language -- patentese language. He can interpret that.
11 MR. GARNETT: That's why -- and I likely wouldn't
12 object. That's not what these e-mails are.
13 What he's going to say is "This particular e-mail
14 shows that Mr. LeMond, in my opinion, didn't have the
15 information from Mr. Glista that he should have had."
16 THE COURT: Okay. If it's that's kind of question,
17 whether you do it up front or do it in front of the jury, the
18 objection would be sustained. All right?
19 Sounds to me as if he needs to go on the stand. And
20 if we need to bring him in tomorrow to continue, he'll just be
21 a lengthy witness. But I just -- I mean, I have to be able to
22 rule on the objections, or you all have to reconfigure what
23 your questions are going to be, knowing that if he comes up
24 with anything close to what Mr. Garnett just said, it's not
25 coming in.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1314
1 On the other hand, if it has a basis, if it's a
2 natural connection on something that the jury could not come to
3 by themselves, the Court will allow it. And for demonstrative
4 purposes, most of this stuff is in. It's demonstrative
5 evidence. All right?
6 MR. CARDEN: If you don't mind, your Honor, I suppose
7 I have one particular slide that I would like to fully
8 address --
9 THE COURT: Sure.
10 MR. CARDEN: -- because it is something that --
11 THE COURT: Which one is that?
12 MR. GARNETT: The same slide I want too.
13 MR. CARDEN: 5912.
14 THE COURT: 5912. See, I knew you guys know this
15 stuff. 5912. What is it, the picture?
16 MR. CARDEN: So 5912 is the entire source -- and,
17 again, this is not going to be in dispute. The entire source
18 of product functionality Mr. LeMond had for purposes of his
19 opinion letters was a half-hour WebEx with Mike Glista. And so
20 what Mr. Nixon is intending to testify is he reviewed all the
21 testimony, and from that it is clear what is not contained in
22 the WebEx.
23 MR. GARNETT: He never saw the WebEx.
24 MR. CARDEN: No one has ever seen the WebEx.
25 MR. GARNETT: He never spoke to Mr. Glista.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1315
1 THE COURT: Wait a minute. Excuse me. Wait a minute.
2 MR. GARNETT: He never saw --
3 THE COURT: Wait, wait, wait. Wait a minute.
4 MR. GARNETT: I'm sorry.
5 THE COURT: You just said there's a WebEx that nobody
6 ever -- he's going to refer to that nobody's seen?
7 MR. CARDEN: It doesn't exist, your Honor, so no one
8 has been able to see it.
9 THE COURT: Then why are we referring to it?
10 MR. CARDEN: Because it is -- it's referred to in the
11 opinion letters as the basis for the opinion letters and
12 because it's in the bills of Mr. LeMond as --
13 THE COURT: Mr. Garnett, what are you saying? You're
14 making it sound like he never saw it and everybody else did.
15 MR. GARNETT: I'm happy if all they say is he saw a
16 WebEx from Mr. Glista. What I don't want him to then say is
17 "That WebEx, in my opinion, based on Mr. Glista's testimony and
18 some other pieces of information that I looked at, to me that
19 means that WebEx didn't include price select functionality."
20 First of all, it's not true. Mr. Glista's going to
21 testify, and Mr. Nixon is now again usurping the jury's
22 function of deciding whether to believe Mr. Glista, whether
23 Mr. LeMond had adequate information.
24 I don't mind if Mr. Nixon wants to say that Mr. Glista
25 provided him with a WebEx. What I don't want him to do is then
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1316
1 say, well, clearly then, Mr. LeMond didn't have any information
2 about price selection functionality because --
3 THE COURT: Because Mr. Glista didn't have it.
4 MR. GARNETT: Well, and he knows that why? Because he
5 supposedly listened to Mr. Glista's deposition testimony.
6 THE COURT: All right. Let me hear the response. Let
7 me hear the response.
8 MR. CARDEN: We keep coming back to this personal
9 knowledge issue. Experts are not required to rely upon things
10 they have personal knowledge of. This is exactly the type of
11 information they're allowed to look at, consider, rely upon.
12 Their expert relied upon this type of information.
13 MR. GARNETT: It's not --
14 MR. CARDEN: And it is -- it is to show that --
15 THE COURT: Wait a minute. When you say their expert
16 relied on it, the expert that's going to testify.
17 MR. CARDEN: Correct.
18 THE COURT: Well, like I said, what rulings are good
19 are going to cross right over.
20 MR. CARDEN: Understood.
21 MR. GARNETT: Sure.
22 THE COURT: So, and in my opinion, just based on jury
23 trial experience, common terms and decisions like -- it will be
24 almost like, well, is this reckless? You don't need an expert
25 who has all this information to say something was reckless.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1317
1 You take him to -- lead him up to it. It stops, and then you
2 argue it and point to it in the jury instruction.
3 You don't have an expert say, "And in my opinion, this
4 was reckless" --
5 MR. CARDEN: But that's not --
6 THE COURT: -- or "This was willful" --
7 MR. CARDEN: That's not --
8 THE COURT: -- or "This was wanton," or "There was
9 disregard." And I just don't see where you all are going with
10 this.
11 MR. CARDEN: That's not the point of the slide, your
12 Honor. This is about the reasonableness of the opinion letters
13 because if the sole information that it was based upon is
14 lacking, then it can't be reasonable.
15 MR. GARNETT: But he doesn't know that. And Mr. Nixon
16 has no specialized knowledge required of an expert to interpret
17 Mr. Glista's deposition transcript, which is where he's getting
18 this. He's looking at Mr. Glista's deposition transcript and
19 saying, "Well, in my opinion, Mr. Glista must not have known
20 about price functionality."
21 THE COURT: Based on that deposition.
22 MR. GARNETT: Based on a deposition. That's forbidden
23 under Rule 601.
24 THE COURT: All right. Where is his expertise in
25 interpreting --
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1318
1 MR. BORSAND: Well --
2 THE COURT: -- just a deposition and giving his
3 opinion on what's credible and what isn't? That's basically
4 what it sounds like are credibility determinations.
5 MR. CARDEN: It's not. It's --
6 MR. BORSAND: It's what he said.
7 MR. CARDEN: -- about what Mr. Glista said he knew
8 and, therefore, what he could actually convey to Mr. LeMond.
9 THE COURT: But how do you get in somebody's head and
10 say what they knew when you haven't looked at a dep?
11 MR. CARDEN: He testified about that.
12 MR. BORSAND: He testified already. So the
13 deposition, again --
14 THE COURT: Who testified already?
15 MR. CARDEN: Mr. Glista.
16 MR. BORSAND: Mr. Glista. In his deposition, he's
17 already answered all the --
18 THE COURT: Right.
19 MR. GARNETT: By the way, your Honor --
20 THE COURT: But, I mean, but still you have to get in
21 his -- if he didn't say -- if all you're basing is on that
22 deposition that something is not -- first of all, if he
23 testified already at deposition, why do you need him to
24 interpret what somebody else said if you have it in a
25 deposition, if all he's doing is interpreting what another
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1319
1 person said.
2 And the other --
3 MR. GARNETT: And Mr. Glista will be here to testify.
4 THE COURT: You are giving me a headache. I need a
5 break.
6 MR. GARNETT: Understood.
7 (Recess at 2:13 p.m., until 2:21 p.m.)
8 THE COURT: All right. Are we going to argue, or are
9 you going to show me something that you've agreed to?
10 MR. CARDEN: I think we have an agreement as to how to
11 approach it, I hope. So if we -- go ahead, Terry.
12 MR. GARNETT: Everything but the time line I think we
13 agreed on. And I still have a problem with that time line
14 because I think it's Mr. Nixon's interpretation of various
15 pieces of evidence that he uses as the basis for those entries
16 on that time line. And that's why I object to it, because,
17 again, it's reading the tea leaves, and the jury can pull those
18 facts from the various witnesses and decide for themselves.
19 And counsel can argue it at closing.
20 THE COURT: It's demonstrative evidence that counsel
21 could even put up the same way at closing or whichever. The
22 Court will allow it in. All right?
23 MR. GARNETT: Okay.
24 THE COURT: And everything else you've agreed to?
25 MR. CARDEN: I believe -- I believe so, your Honor, as
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1320
1 to how we're going to approach it with Mr. Nixon.
2 THE COURT: Before you put that time line up, I will
3 say that it's demonstrative evidence and that it's prepared by
4 you in a way to help the jury see the case as you see it so
5 that they won't think it's being handed down from the stars.
6 MR. GARNETT: So just -- just -- sorry I'm laughing.
7 THE COURT: Sorry. I'm sorry for saying it.
8 MR. GARNETT: I think, just so the record is clear,
9 I'm going to hand a piece of paper to you. I wanted to put in
10 the record which demonstratives we've agreed to remove. So
11 we're removing Slides 6, 7, 19, 22, 24, 26 was already taken
12 out, and 27.
13 And the scope of the questioning will be that an
14 opinion -- someone rendering an opinion of counsel would need
15 to have adequate information in order to adequately assess
16 whether there's infringement or not.
17 That's the -- that's the type of question and answer
18 that we'll expect from Mr. Nixon.
19 THE COURT: The Court would agree. Again, as long as
20 it's obviously legal patent, all of that, that's his area of
21 expertise. It's when you start getting into comparing just
22 basic informative e-mails: Did you send this here? He sent
23 that here.
24 If it's just basic one said A, one said B, and I'm
25 going to say what that means, and it's generally putting
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1321
1 somebody on notice of something, it's up to the jury to decide
2 whether a certain letter put somebody on notice or was an
3 indication.
4 So, again, I -- it's one of those things I know it
5 when I hear it and see it.
6 MR. GARNETT: Thank you, your Honor.
7 THE COURT: All right?
8 MR. CARDEN: So, your Honor, I would -- could I beg
9 your indulgence for 15 minutes?
10 THE COURT: To talk to him? Not 15. 15 minutes?
11 MR. CARDEN: I need to clean up the presentation and
12 also just let him know what's going on.
13 THE COURT: I can't give you 15 minutes. You've got
14 five to seven minutes. You've got till 2:30.
15 MR. CARDEN: Thank you, your Honor.
16 THE COURT: Thank you.
17 And we'll continue with him tomorrow if we need to.
18 MR. SIGMOND: Your Honor --
19 THE COURT: Is there something else?
20 MR. SIGMOND: Can we talk off the record about
21 something?
22 THE COURT: Sure. Step over.
23 Let Mr. Carden go do his work.
24 MR. SIGMOND: Yeah, yeah. Go, please.
25 (Off-the-record discussion at sidebar.)
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1322
1 (Recess at 2:28 p.m., until 2:35 p.m.)
2 THE COURT: All right. Mr. Carden -- oh, he's here.
3 All right. Anything else from the plaintiff?
4 MR. SIGMOND: No, your Honor.
5 THE COURT: Anything else from defense?
6 MR. GARNETT: No, your Honor.
7 THE COURT: All right. Let's have -- why don't you --
8 Mr. Nixon, why don't you come up.
9 THE WITNESS: Sure.
10 THE COURT: Do I have a cover sheet for Mr. Nixon?
11 MR. CARDEN: We were just having it retyped because we
12 were revising it.
13 THE COURT: Okay. That's fine. No problem. I
14 just -- that's fine.
15 All right. How are you, sir?
16 THE WITNESS: Good.
17 THE COURT: We'll swear you in a second.
18 THE WITNESS: Okay.
19 THE COURT: All right. Let me --
20 MR. SIGMOND: The only other thing we were wondering
21 about, your Honor, is the adverse inference, when we're going
22 to put that in, only because Mr. Nixon is the last witness
23 we're calling.
24 THE COURT: But, again, the Court doesn't even know if
25 that's the appropriate place to put it. I mean, because it's
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1329
1 applications that led to one of the patents-in-suit here
2 actually became public knowledge. It was published.
3 THE COURT: All right. And I'm going to interrupt
4 you, Mr. Nixon, for a second.
5 Ladies and gentlemen, these are -- this is a
6 demonstrative exhibit that was prepared by the plaintiffs and
7 so -- to help with the testimony. All right? And so this is
8 their version of the time line.
9 All right. Proceed.
10 THE WITNESS: And although it's not shown here, the
11 second application was published in early 2003 as well.
12 The next item on the time line is an internal e-mail
13 that discusses those pending patent applications and recognizes
14 that there could be a problem.
15 Then in the time line goes along and in early -- or
16 middle of 2004, these two patents at issue in this lawsuit did
17 actually issue. And on July 20th, 2004, the first one did, and
18 on August 3rd, 2004, the second one did, so very close in time.
19 And approximately two weeks later, there is -- there
20 was an outline of those two patents that was sent by facsimile.
21 And it came from the files of CQG. So that indicates that they
22 knew about the existence of the patents at that time.
23 BY MR. CARDEN:
24 Q And what are -- are you aware of what CQG did after
25 learning of the patents?
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1330
1 A Yes. One of the things they did after learning of the
2 patents was to hire a patent attorney named Mr. LeMond, who
3 then issued two opinions, one for each of the two patents. And
4 those opinions were issued on January 6th, 2005.
5 Q And in general, is it -- is it considered a good thing for
6 a company to do to obtain opinions of counsel?
7 A Yes, that is a very reasonable thing for a company to do
8 when they're concerned about possibly infringing a patent is to
9 get the professional advice of a patent attorney to see whether
10 or not there is or is not a problem.
11 Q Now, is the existence of an opinion alone sufficient for a
12 company to avoid issues later down the road?
13 A No, it is not.
14 Q Why not?
15 A Well, of course, you can get a -- you can get an opinion of
16 counsel, pieces of text on a piece of paper, but it doesn't
17 mean that the opinion is necessarily a competent opinion, nor
18 does it mean that the recipient of the opinion relied upon it
19 reasonably in good faith. So those are elements that
20 reasonable business people normally do.
21 And so if it's a competent opinion of counsel and it's
22 relied upon in good faith, then that may have some favorable
23 consequence for the party that sought the opinion if they later
24 are discovered to have infringed the patent.
25 Q Did you review the opinion letters that CQG obtained in
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1331
1 this case?
2 A I did.
3 Q And you prepared a report about those opinions?
4 A I did.
5 Q I hand you a binder.
6 If I could just ask you to turn in your binder to
7 PTX236 and 237. Take a look at those documents and tell me if
8 you recognize them.
9 A Yes. Exhibit 236 is the letter Mr. LeMond wrote on
10 January 6, 2005, concerning the '132 patent.
11 And the other exhibit you mentioned, 237, is the
12 letter of the same exact date, January 6, 2005, that Mr. LeMond
13 wrote concerning the '304 patent.
14 I might just note that these patents -- or these
15 letters actually have a typed date of January 6, 2004, but
16 that's the usual kind of a clerical error that one makes at the
17 beginning of the year when you forget that it's a new year.
18 The fact is that these patents weren't even granted
19 yet in January of 2004. And I know from many other things that
20 I've read that these were actually generated -- or dated --
21 correctly dated would have been January 6, 2005.
22 Q Okay.
23 MR. CARDEN: So can we put up 237, please, Brian.
24 BY MR. CARDEN:
25 Q And this is one of the letters that you reviewed,
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1332
1 Mr. Nixon?
2 A Yes, it is.
3 Q This is the opinion letter for the '304 patent?
4 A That's correct. You can see that in the subject line
5 there.
6 Q Tell us, are there similarities between the opinion -- two
7 opinion letters?
8 A Yes, they are very similar. They are substantively
9 identical, frankly, except for some customization to take into
10 account that there are different patent numbers, different
11 claim numbers, and slightly different words used in the claims
12 of the two patents to relate to essentially the same subject
13 matter that was analyzed in these two letters.
14 Q So let's take a look at the substance of Exhibit 237. And
15 I want you to focus on the second paragraph. Can you tell the
16 jury your understanding of that paragraph.
17 A Yes. This is a paragraph that you would typically find in
18 an opinion letter explaining to the recipient the information
19 that was relied upon in making this opinion. In other words,
20 in rendering this opinion, what is the universe of information
21 that was considered.
22 And in this instance, the universe of information that
23 was considered were really three things: an Exhibit A and
24 Exhibit B, which is a copy of the patent, and the United States
25 Patent and Trademark Office file history, or prosecution
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1333
1 history.
2 And then, in addition to that, the understanding of
3 the CQG products about which an opinion was sought. And that
4 information came through a telephone conversation and a
5 computer demonstration via Mr. Mike Glista of CQG.
6 Q In your review of the opinion letters, did you see any
7 product materials attached?
8 A No.
9 Q And in your experience, is there a best practice with
10 respect to attaching product materials when preparing an
11 opinion of counsel?
12 A Yes. If -- if it's available, if there's an operator's
13 manual, for example, or screen shots in the case of a graphical
14 user interface as we have at present in this case, would be
15 typical to -- and best practice to attach a copy of some of
16 that material, at least, to the letter.
17 Q Now, you mentioned a WebEx. Do you know the length of the
18 time that was spent on that WebEx between Mr. LeMond and
19 Mr. Glista?
20 A Yeah. Well, I know the maximum time. I -- the telephone
21 conversation and WebEx demonstration --
22 MR. GARNETT: Objection, your Honor.
23 THE WITNESS: -- was --
24 THE COURT: Basis?
25 MR. GARNETT: He's speculating. Lacks foundation.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1334
1 He's interpreting --
2 THE COURT: Foundation sustained.
3 Let's get a little more foundation as to how he would
4 know.
5 MR. CARDEN: Certainly, your Honor.
6 BY MR. CARDEN:
7 Q Did you review the bills in this case that were submitted
8 by Mr. LeMond?
9 A I did.
10 Q And did they contain information about the meeting between
11 Mr. LeMond and Mr. Glista?
12 A They did.
13 Q And what was your basis for saying that the timing was no
14 more than half an hour?
15 A The time entry that Mr. LeMond made in his billing records
16 for the conversation with Mr. Glista on -- on a particular
17 date.
18 MR. CARDEN: Can we put up 5955, Brian.
19 BY MR. CARDEN:
20 Q Is this the billing reference that you're referring to?
21 A Yes, it is.
22 Q Can you walk the jury through that billing reference.
23 A This is a printout of a computerized billing entry that was
24 made for the 23rd day of November 2004. The next number that
25 you see there is a number that makes it unique to this
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1339
1 And those words have meanings, but they may be somewhat
2 different meanings to laypeople than to people skilled in the
3 art, and they may be somewhat different meaning to people
4 skilled in the art at different times.
5 And they may have somewhat different meanings
6 depending upon what was said about those terms in the
7 specification of the patent. And they might have somewhat
8 different meanings depending upon what was argued and what was
9 said by the examiner and what was said by the applicant in
10 order to convince the patent office to grant the patent in the
11 first place.
12 So although you start with the words that you find in
13 the claims, you must always construe those words to have their
14 proper meaning in light of the specification and the
15 prosecution history, something that patent attorneys sometimes
16 refer to as the intrinsic evidence.
17 Q Okay. Now, let's go back to 237, which is the '304
18 opinion, very quickly. And I want to turn to the third page.
19 If you could do that with me.
20 A All right.
21 Q And you'll see this is a section about the relevant
22 applicable law that Mr. LeMond was applying.
23 A Yes.
24 Q Is it a standard practice to include a section on the law
25 in a competent opinion?
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1340
1 A Yes. As I indicated earlier, the opinion needs to evidence
2 the fact that the writer of the opinion comprehended the
3 applicable law. Doesn't have to be a full Law Review article
4 in complete detail about every aspect of the law, but at least
5 enough to convey the fact that the author understood a relevant
6 part of the law.
7 Q And then does a competent opinion then also apply that law?
8 A Yes, of course, that's -- having understood the relevant
9 facts, including all of the functionalities that might be
10 argued to be infringements, and having now understood the law,
11 the next step, of course, is to apply the law to the facts, to
12 reach some logical, rational basis, rational conclusion as to
13 whether or not there would be infringement.
14 Q Let's look at the very first sentence of Mr. LeMond's legal
15 section. And is this a reference to what you were talking
16 about earlier as claim construction?
17 A Yes. As Mr. LeMond states here: "Before comparing the
18 claims of a patent to an allegedly infringing device or method,
19 the claims of the patent must be interpreted to determine their
20 meaning."
21 Q So you would look at the words in the claims and decide
22 what those mean for purposes of the analysis.
23 A In light of the specification, in light of the prosecution
24 history, all of that, yes, has to be taken into account.
25 Q Okay. And did you review both of the opinion letters?
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1341
1 A I did.
2 Q Did you identify any claim construction in either of them?
3 A No, there is no claim construction actually performed by
4 Mr. LeMond in either of these letters.
5 MR. CARDEN: So let's move farther down on the second
6 page, if we could.
7 And then let's go to that third paragraph, Brian.
8 BY MR. CARDEN:
9 Q Can you describe for the jury what's referenced in this
10 third paragraph.
11 A Well, this actually has reference to a doctrine -- a
12 doctrine called infringement under the doctrine of equivalents.
13 So if there is not exact infringement literally by applying the
14 properly construed words, there may still be infringement under
15 the doctrine of equivalents if the differences are
16 insubstantial.
17 But there is still an exception to that because you
18 cannot by the doctrine of equivalents go back and recapture
19 that which you gave up in order to get the patent in the first
20 place.
21 So this has to do with something that would then be
22 called prosecution history estoppel. And this is -- it says
23 here: "Explicit statements made by a patent applicant during
24 the prosecution history to distinguish a claimed invention over
25 prior art may also serve to define the meaning of the claim."
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1342
1 So this is part of the claim construction process; but
2 also if you're going to use the doctrine of equivalents, one
3 must always consider the possibility of the prosecution history
4 estoppel at the same time.
5 Q And in the '304 opinion, is there a doctrine of equivalents
6 analysis?
7 A There purports to be a paragraph about that, but, among
8 other things, it fails to analyze the prosecution history in
9 accordance with this aspect of the law that's quoted here in
10 this part of the letter.
11 Q So you weren't able to identify that prosecution history
12 estoppel in the opinion letters.
13 A No, there is -- there is no analysis of prosecution history
14 estoppel.
15 MR. CARDEN: Let's actually back up for a moment to
16 the second paragraph. And let's again look at the first
17 sentence.
18 BY MR. CARDEN:
19 Q And you see where it says: "While there's a presumption
20 that the words of a claim have their ordinary meaning, the
21 specification and prosecution history must always be consulted
22 to determine whether a purported ordinary meaning is consistent
23 with the use of the words by the inventor."
24 A I see that, yes.
25 Q And do you agree with that for purposes of preparing an
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1343
1 opinion?
2 A Well, I -- it's slightly incomplete. Normally the
3 dictionary or encyclopedias would be referred to only after you
4 have referred to what's called the intrinsic evidence. And you
5 have to construe the meaning of the words through the eyes of a
6 person having skill in the relevant art at the time the
7 invention was made, in this case 2000.
8 So I think it's probably not an entirely accurate
9 description. You only go to the extrinsic evidence, like
10 dictionaries and encyclopedias, under certain circumstances.
11 But in general, he is here explaining that while there
12 is the presumption that this special ordinary meaning can
13 apply, it has to be -- you must always consult the
14 specification and the prosecution history to make sure that
15 that ordinary meaning is the proper meaning after it's a part
16 of the claim construction process.
17 Q And in your review of the opinion letters, were you able to
18 identify any discussion of an ordinary meaning of any of the
19 claim terms?
20 A No, there is no such discussion.
21 Q And in your review of the opinion letters, were you able to
22 identify any discussion of the claim terms in view of the
23 specification and the prosecution history?
24 A No.
25
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1344
1 Q. So I want to just summarize -- actually, let's step back
2 for a minute. Let's go two and a half pages in, I think the
3 legal section covers the next two and a half pages, and let's
4 see where the infringement analysis begins. On page 5.
5 Now, what's the second paragraph in this
6 infringement analysis?
7 A. Well, the second paragraph is a summary that mostly
8 quotes some of the words in claim 1 from the '304 patent.
9 The claim is actually directed to a lot of different things,
10 but Mr. LeMond has chosen to focus on one aspect of the
11 functionality that is recited in that claim.
12 Q. How long are these opinion letters?
13 A. Roughly eight pages. One is maybe a third of a page
14 longer than the other because there is an extra claim in one
15 of the patents and there's a few more words in one of the
16 claims.
17 This '304 patent uses more words to say essentially
18 the same thing as was the case in the other patent.
19 Q. And so through the first five pages we have an
20 introduction, we have a description of the products, we have
21 a description of the patent, and we have a legal section.
22 A. Yes.
23 Q. Can you show the jury where the actual infringement
24 analysis occurs?
25 Why don't you use the copy in your binder,
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1345
1 Mr. Nixon.
2 A. Well, the paragraph we're looking at here actually is
3 setting it up, is setting up his opinion of noninfringement
4 by, in some respects quoting, although he doesn't use quote
5 marks in here, but he's paraphrasing and quoting language
6 from claim 1. And then he goes to the conclusion on the next
7 page.
8 In this paragraph he concludes that there is no
9 literal infringement of claim 1. And again, he actually
10 simply refers back to the description that he's given earlier
11 of the CQG Trader, and he uses the word auto focuses, which I
12 haven't been able to find in other documents.
13 But he concludes that: "Accordingly, it is our
14 opinion that the CQG Trader does not literally infringe claim
15 1."
16 Q. And in your experience over the years, are conclusory
17 opinions competent?
18 A. No. One must explain the rationale. In other words,
19 how does the product actually function in the mode of
20 operation that is most closely connected to the claimed
21 invention. In other words, what is it likely that an
22 opponent, the other party that owns the patent, is going to
23 assert does infringe the patent. And then that's the
24 modality of the accused device that is being analyzed. That
25 is the functionality that should be carefully described in
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1346
1 detail, accurately, and then possibly even explain how
2 somebody might argue that this is an infringement, but then
3 argue why that view would be wrong.
4 And so there is a rationale chain of explanation
5 and argument to conclude normally that there is no
6 infringement rather than simply basically saying in essence
7 that the product is always dynamic, the claims require
8 something called static, and there is no literal infringement
9 because of that.
10 MR. CARDEN: Can we turn to page 8, please, Brian.
11 BY MR. CARDEN:
12 Q. Mr. Nixon, do you see that in that second paragraph it
13 says: "While it's impossible for us to predict with
14 certainty," do you see that paragraph?
15 A. Yes, I do.
16 Q. And the second sentence reads: "While our opinion of
17 invalidity infringement represents our careful analysis,
18 litigation is an inherently unpredictable procedure where the
19 outcome is often uncertain."
20 Did you find any invalidity analysis in this
21 opinion?
22 A. No, there is no invalidity analysis whatsoever in this
23 opinion.
24 Q. Is there any invalidity analysis in either opinion?
25 A. No, there is none.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1347
1 Q. So I want to summarize some of the points you've
2 identified with the opinion.
3 Can we get 5930.
4 A. Want me to find it?
5 Q. It's not in that binder, Mr. Nixon. It's a
6 demonstrative.
7 Let me see if I can just summarize for the jury
8 what you said.
9 Were you able to identify claim construction?
10 A. No, there is no -- the need for claim construction is
11 identified in these letters in describing the applicable law,
12 but the actual claim construction process itself was never
13 accomplished in these letters.
14 Q. Were you able to identify comparison of the terms of the
15 claims to the specification in the prosecution history?
16 A. No, there was no such comparison made.
17 Q. Were you able to identify in the prosecution history
18 estoppel analysis?
19 A. No, there was no estoppel analysis.
20 Q. Were you able to identify an effective doctrine of
21 equivalence analysis?
22 A. No. There was a paragraph that purported to find no
23 infringement on the doctrine of equivalence, but it was
24 little more than simply a restatement of the basis for
25 finding no literal infringement.
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1348
1 Q. We walked through the '304 opinion. You mentioned the
2 132 opinion is very similar.
3 A. Yes. In my opinion, they are substantively identical,
4 except for the substitution of patent numbers, and claim
5 numbers, and slightly different numbers of words to describe
6 the same thing.
7 Q. Let's pull up 5914. Can you just walk the jury through
8 the parties that you're aware of that are identical as
9 opposed to the ones that aren't.
10 A. Yes. Well, actually everything highlighted in yellow is
11 identical. The first pages here, as you can see, are all
12 identical except for the patent numbers.
13 Q. Can we just flip through the rest of the pages quickly.
14 A. On the second page, that is largely also the same
15 situation, although now there are a few dates, filing dates,
16 for example, and there are some priority information. It's
17 all clerical information that has been customized a little
18 bit from one to the other to make it applicable to the
19 different patents.
20 Q. There is nothing different in the legal section?
21 A. No, there is nothing.
22 Q. Can we go to the next page.
23 A. Pages 3 and 4, page 5, there is a little more difference
24 here, because the claims in the two different patents use
25 slightly different words and different numbers of words to
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1349
1 say essentially the same thing. There's also some
2 highlighting in red here. I think one of the patents uses
3 the word prices and the other patent uses the word price
4 levels. Those are the kinds of minor changes in wording that
5 really don't make any change.
6 Q. Let's just finish up with the last two pages.
7 A. And that's the same sort of difference here. Again,
8 they're slightly different words and different numbers of
9 words used in the different claims, all directed to the same
10 feature that we have been talking about.
11 Q. Okay.
12 A. And on page 6 in 1 and 7 in the other, for some reason,
13 again, there actually is an extra claim I guess in one of
14 them, and so there are some different words, but there is no
15 difference in substance between these two.
16 Q. Let's just finish the conclusions.
17 A. The conclusions are identical, again, except for the
18 patent numbers.
19 Q. Now, you reviewed how much time Mr. LeMond invested in
20 these opinions, correct?
21 A. I did.
22 Q. Can you describe for the jury how much time he spent?
23 MR. GARNETT: Objection, your Honor. Lacks
24 foundation. Calls for speculation.
25 THE COURT: Can you review how much time --
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1350
1 MR. CARDEN: I should have said for the jury. I'll
2 set some more foundation.
3 THE COURT: Objection sustained.
4 BY MR. CARDEN:
5 Q. You reviewed Mr. LeMond's bills in this case.
6 A. I did.
7 Q. That indicated to you how much time he had spent
8 preparing the different opinions.
9 A. It did.
10 Q. You reviewed his specific time entries for these various
11 opinions?
12 A. Yes. For each of the opinions separately.
13 Q. Can you tell the jury how much time Mr. LeMond spent in
14 preparing the two opinion letters?
15 MR. GARNETT: Objection, your Honor. Calls for
16 speculation. This is the exact issue we discussed.
17 THE COURT: I don't know if it calls for
18 speculation, but all he can do is just add up the time for
19 that. That doesn't mean there wasn't more time. So he can
20 only just basically do the math for them, which I believe you
21 could put up a chart and he can do.
22 Objection sustained. The objection is sustained.
23 BY MR. CARDEN:
24 Q. In your experience, Mr. Nixon, is it a standard practice
25 or a best practice to update opinion letters?
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1351
1 A. Yes, it's actually a necessary part of the practice. If
2 there's going to be good faith reliance upon an opinion
3 letter, then that opinion letter needs to be updated as time
4 goes on if there are events that may change the facts that
5 are applicable. Or, for example, if the client gets the
6 opinion letter and looks at it, and somebody right away with
7 knowledge of the facts becomes worried and suspicious that
8 this letter is not quite correct and it needs to be changed
9 almost from the outset, whether or not there is any new
10 events.
11 But certainly as there are new events that impact
12 either the law or the facts that are relevant, then a
13 reasonable business person who is relying in good faith upon
14 the opinion letter would seek an update of that opinion, and
15 the attorney would update the opinion and provide a new
16 updated opinion that would take into consideration whatever
17 it is, whether it's a change in the law or a change in the
18 facts, that has come to the surface.
19 Q. And some of those facts could be changes in the
20 products?
21 A. Oh, yes, definitely that would -- as a change in the
22 product is contemplated, you would expect a reasonable
23 business person under these circumstances to seek an opinion
24 from the attorney before that new change, that new product is
25 introduced, to make sure that it either doesn't change the
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1352
1 opinion or that the same opinion applies to the new product
2 with the new functionality.
3 Q. And to your knowledge, since these opinion letters were
4 issued in January of 2005, have there been any updates?
5 A. There has not.
6 Q. Now, Mr. Nixon, there's a lot that's gone on since those
7 opinion letters came out, right?
8 A. Yes.
9 Q. Okay. Can you tell the jury how, if at all, it should
10 factor in things that occurred after those opinions issued in
11 determining whether they were competent?
12 A. Well, the competency of the opinions can be called into
13 question by facts that occur later on, for example, when
14 perhaps the client recognizes that the letter was based upon
15 incomplete or misleading factual assumptions. And so if that
16 recognition occurs later, that is an indication there that
17 the letter as drafted earlier was not competent, and could
18 not be relied upon, and was not relied upon in good faith
19 because it was recognized right away to be deficient.
20 And similarly, as communications occur later on,
21 for example, and it may turn out that different facts were
22 being given to different people, and that it becomes clear
23 that the attorney who gave the opinion was not given the
24 complete story, then that, of course, also reflects upon the
25 competency of the opinion to begin with as well as the good
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1353
1 faith reliance upon the opinion when the people who are
2 supposed to be relying upon the opinion are aware of the fact
3 that they did not give the full story with respect to all of
4 the functionality to the attorney when he is writing the
5 opinion.
6 Q. Mr. Nixon, I want to return to one issue very quickly.
7 You saw the number of hours that were spent preparing these
8 opinions, correct?
9 A. Yes.
10 Q. And in your experience, how does the number of hours
11 spent on an opinion weigh into the competency of the opinion?
12 MR. GARNETT: Objection, your Honor. Lacks
13 foundation.
14 THE COURT: Overruled.
15 THE WITNESS: Well, if it's too few hours, of
16 course, one could conclude that there is no way it could be
17 competent. I've looked at the hours in this case, and while
18 they're on what I would call the low end, I don't think it
19 would be impossible for a competent opinion to have been
20 rendered with the number of hours that were at issue.
21 However, there would have been many more hours required I
22 think had the attorney known the full sets of facts.
23 MR. GARNETT: Objection, your Honor.
24 THE COURT: Objection to speculation, the last part
25 of the answer?
c7cefc6d-7d05-449d-a5ca-650433e291e2
Page 1354
1 MR. GARNETT: Yes, your Honor.
2 THE COURT: That part will be stricken.
3 BY MR. CARDEN:
4 Q. So Mr. Nixon, having reviewed all of the opinions and
5 all of the additional evidence that you looked at in this
6 case, did you come to a conclusion as to whether the opinions
7 were competent?
8 A. Yes, I did.
9 Q. What is that opinion?
10 A. My opinion --
11 MR. GARNETT: Objection, your Honor.
12 THE COURT: I'm sorry?
13 MR. GARNETT: Foundation. Calls for an ultimate
14 conclusion.
15 THE COURT: As to the competency?
16 MR. GARNETT: Yes, your Honor.
17 THE COURT: Response?
18 MR. CARDEN: It's not the issue that's in front of
19 the jury, your Honor.
20 THE COURT: Yes. The objection is overruled.
21 THE WITNESS: In my opinion, neither of these
22 letters is a competent opinion of counsel.
23 MR. CARDEN: Thank you, Mr. Nixon. No further
24 questions.
25 THE COURT: Cross-examination.
3e29c5da-78af-4baf-81fa-a19e30c7bfe5
Page 1456
1 Court's definition of a common static price axis does it say
2 "stays still at least one time"?
3 A. You know, this is the construction of "static." That other
4 slide is not talking about this. The other slide is talking
5 about what is precluded, what someone cannot assert equivalents
6 against --
7 Q. Okay.
8 A. -- and what you can. So it's a different issue.
9 Q. So, in fact, the Court's construction of a common static
10 price axis does not say anything about whether the price axis
11 stays still at least one time, correct?
12 A. Yeah, that's not talking about that.
13 Q. Okay. In fact, the patents themselves, they don't say
14 anything about staying still at least one time, correct?
15 A. Well, no, the "wherein" clause, the amended language, the
16 "wherein" clause does.
17 Q. And so --
18 A. That's what was surrendered. Prices do not move when
19 there's a change in the market, just focusing on that language
20 only.
21 Q. But the Court's construction of a common static price axis,
22 you would agree with me that this is a limitation in the '304
23 patent, correct?
24 A. Correct.
25 Q. And it's in each one of the independent claims of the '304
3e29c5da-78af-4baf-81fa-a19e30c7bfe5
Page 1457
1 patent, correct?
2 A. Right.
3 Q. And in this claim construction provided by the Court to the
4 jurors, "static" means a price -- or "common static price axis"
5 means a line comprising price levels that do not change
6 positions unless a manual re-centering or re-positioning
7 command is received, correct?
8 A. That's the literal definition of "static," right.
9 MS. WYTSMA: I have no further questions. Thank you
10 for your time.
11 THE COURT: Anything further?
12 MR. SIGMOND: No, Your Honor.
13 THE COURT: All right. As Mr. Borsand steps down,
14 the Court thanks both counsel. As he steps down, the Court
15 reminds him as I did when he testified before. The fact that
16 Mr. Borsand is an active participant in the litigation at
17 counsel table does not give him any greater weight or any less
18 weight by that fact alone than if he were just a witness who
19 was not part of the legal team. All right?
20 The Court also believes it is important just so
21 there's no confusion, there was testimony from Mr. Borsand, I
22 think, as to each counsel questioning him about copying. Some
23 infringement cases involve an alleged infringer who has copied
24 an invention. This is not the case here. Any testimony or
25 exhibits which make reference to, quote-unquote, copying are to
3e29c5da-78af-4baf-81fa-a19e30c7bfe5
Page 1458
1 be disregarded by you. That is the Court's instruction.
2 Proceed. Next witness, CQG?
3 MR. VOLLER: Your Honor, the defense calls Yuriy
4 Shterk.
5 THE COURT: Mr. Shterk, step forward please, sir, and
6 raise your right hand.
7 (Witness duly sworn.)
8 THE COURT: All right. I see you have your own water
9 there. If you run out, you can serve yourself here. Have a
10 seat, please, sir. Keep your voice up. That doesn't move. It
11 just swivels.
12 THE WITNESS: Okay.
13 THE COURT: All right. You can adjust the mike
14 however you need to. All right. Wait until each question is
15 fully asked before you answer.
16 Anytime you're ready, Mr. Voller, proceed.
17 MR. VOLLER: Thank you, Your Honor.
18 YURIY RUDOLFOVICH SHTERK,
19 DEFENDANT'S WITNESS, DULY SWORN
20 DIRECT EXAMINATION
21 BY MR. VOLLER:
22 Q. Good afternoon, Mr. Shterk.
23 A. Hello.
24 Q. Can you please state your full name for the record?
25 A. Yuriy Rudolfovich Shterk.
3e29c5da-78af-4baf-81fa-a19e30c7bfe5
Page 1459
1 Q. Okay. Sir, where do you live?
2 A. Currently I live in Greenwich, Connecticut.
3 Q. And are you a college graduate?
4 A. Yes, I am.
5 Q. And what degree or degrees have you earned?
6 A. I have two degrees, two Bachelor's Degrees, one in computer
7 engineering from Tashkent Technical University and then one in
8 computer science from the University of Colorado-Boulder.
9 Q. And when did you earn the computer engineering degree?
10 A. In 1993.
11 Q. How about the computer science degree?
12 A. In 1996.
13 Q. Are you currently employed?
14 THE COURT: One second.
15 BY MR. VOLLER:
16 Q. Are you currently employed?
17 A. Yes, I work for the company called Fidessa, Inc.
18 Q. And what is your title?
19 A. I am head of product market -- head of product management
20 for the derivatives service line in the sell side division of
21 Fidessa.
22 Q. And prior to working at Fidessa, where did you work?
23 A. I worked at CQG.
24 Q. And when did you first join CQG?
25 A. In November of 2000.
3e29c5da-78af-4baf-81fa-a19e30c7bfe5
Page 1486
1 A. I have seen this document, yes.
2 MR. VOLLER: Your Honor, I'd like to publish this
3 document for the jury.
4 THE COURT: Any objection?
5 MS. KURCZ: No, Your Honor.
6 THE COURT: It will be published.
7 BY MR. VOLLER:
8 Q. So, Mr. Shterk, I want to go to page 3 of this document,
9 the second row, and let's actually -- there's a number on the
10 right side there. Mr. Shterk, what is that number? What does
11 it represent?
12 A. That's the defect number, a number of the defect that was
13 attached to this record.
14 Q. Okay. Let's go now back out to the column with all the
15 text in it. Can you just briefly tell the jury what it is that
16 we're looking at?
17 A. Basically, we're looking at the defect record in the defect
18 tracking system of CQG that describes the problem or the defect
19 which we just discussed.
20 Q. Okay. There's a statement in there that says:
21 "Per Yuriy Shterk, this is P1 for 8.x3."
22 What does "P1" mean?
23 A. "P1" means priority 1. Basically it's the indication of
24 priority urgency, and priority 1 means drop whatever you're
25 working on, jump on this issue, and resolve it as soon as
3e29c5da-78af-4baf-81fa-a19e30c7bfe5
Page 1487
1 possible.
2 Q. Okay. Sir, do you know if CQG fixed this defect?
3 A. We definitely did.
4 Q. Okay. Do you know how CQG fixed the defect?
5 A. As far as software is concerned?
6 Q. Yes.
7 A. We did not allow the market window to be as big as the
8 DOMTrader. We stopped allowing it.
9 Q. And how quickly did CQG fix this defect once it learned of
10 it?
11 A. I don't remember the exact dates, but I'm sure we fixed it
12 within a day or hours.
13 MR. VOLLER: Okay. Let's show Mr. Shterk only a copy
14 of DTX 2287.
15 (Brief pause.)
16 BY MR. VOLLER:
17 Q. Mr. Shterk, can you tell me what you're looking at?
18 A. So this is the e-mail that basically shows the code change
19 that was done by developers in response to the defect.
20 Q. Do you recognize this document?
21 A. I do.
22 Q. Have you seen it before?
23 A. I have.
24 MR. VOLLER: Your Honor, I'd like to publish this
25 document for the jury.
3e29c5da-78af-4baf-81fa-a19e30c7bfe5
Page 1488
1 THE COURT: Any objection?
2 MS. KURCZ: No, Your Honor.
3 THE COURT: That will be admitted.
4 BY MR. VOLLER:
5 Q. Okay. Let's start with the third field down. There's a
6 bracket "defect" and then a hash tag. There's a number below
7 that. What does that number represent?
8 A. So this number associates the defect that this specific
9 code change was done to correct.
10 Q. Is that the same defect number we just saw?
11 A. Yes.
12 Q. And then in the middle of the document, there is a section
13 that says "output description." Do you see that?
14 A. I do.
15 Q. And what's being discussed in that section?
16 A. Specifically, the description there is the change that was
17 done by developer to ensure that this defect doesn't ever
18 happen again.
19 Q. Okay. What's the date of this check-in?
20 A. It is Tuesday, November 16th.
21 Q. So how quickly then did CQG fix the defect?
22 A. Within a day.
23 MR. VOLLER: Okay. Let's look at another document.
24 I'd like to show Mr. Shterk only a copy of PTX 334.
25 (Brief pause.)
3e29c5da-78af-4baf-81fa-a19e30c7bfe5
Page 1496
1 available in the DOMTrader. Then his assertion is that this
2 change was done specifically to improve the performance of the
3 DOMTrader four years ago.
4 But again, as we've seen from the other e-mail from
5 Alexey Coolnev, this change, basically, the functionality which
6 we looked at is behavior that has nothing to do with the --
7 THE REPORTER: I'm sorry. What was that?
8 THE WITNESS: The behavior that is described here has
9 nothing to do with the optimization or the behavior of the
10 DOMTrader and was introduced due to the lack of requirements.
11 BY MR. VOLLER:
12 Q. And do you know why it was introduced? Did it prevent
13 anything?
14 A. No. So the answer to this question is no. But typically
15 when you have no requirements, you know, nobody tests for a
16 specific case, nobody designs for a specific case. So the fact
17 that the software behaved that way and not the other way was
18 just unexpected. It's not something that we planned for.
19 MR. VOLLER: Okay. I think we can take this exhibit
20 down.
21 (Brief pause.)
22 BY MR. VOLLER:
23 Q. Mr. Shterk, did you ever receive a request from a CQG
24 customer to implement the functionality that's associated with
25 this defect?
3e29c5da-78af-4baf-81fa-a19e30c7bfe5
Page 1497
1 A. Sorry. Let me make sure I understand. Did we ever get a
2 request to implement the functionality that the market window
3 was larger than the DOMTrader?
4 Q. Let me restate that question. Was the reason why this
5 defect was introduced because a customer requested it, do you
6 know?
7 A. No. I do know. The answer is no.
8 MR. VOLLER: Okay. Then let's go back.
9 I'm sorry, Your Honor. I know you just put the
10 lights back on.
11 Can we go to PTX 334? We previously published this.
12 (Brief pause.)
13 BY MR. VOLLER:
14 Q. At the very top is an e-mail from you to Mr. Schroeter.
15 That's your e-mail, right?
16 A. Yes.
17 Q. Who is Mr. Schroeter?
18 A. Joe Schroeter at the time was the president of CQG.
19 Q. And your e-mail states that, quote:
20 "Defect was written as a result of TT pointing it
21 out."
22 What does that mean?
23 A. That means that we became aware of this defect because of
24 the video that we received from Trading Technologies'
25 attorneys.
3e29c5da-78af-4baf-81fa-a19e30c7bfe5
Page 1498
1 Q. And had you ever heard of anyone using the DOMTrader
2 configured in this way?
3 A. No.
4 MR. VOLLER: Okay. Your Honor, I'm at a breaking
5 point other than that one e-mail.
6 THE COURT: All right. We'll take a break now.
7 Ladies and gentlemen of the jury, we'll still be listening to
8 this witness, but we're going to take our afternoon break.
9 All rise.
10 (Jury out.)
11 THE COURT: All right. Sir, you may step down and
12 take a break. Don't discuss your testimony. Don't look at
13 anything and don't talk to anybody about the case. Just stay
14 outside the door until we call you back in.
15 THE WITNESS: Okay.
16 THE COURT: Thank you.
17 (Witness excused.)
18 THE COURT: Before I hear discussion on this matter,
19 the Court needs to take a break. So if you all need to talk,
20 please do. Thank you.
21 MR. VOLLER: Thank you.
22 (Recess.)
23
24
25
3e29c5da-78af-4baf-81fa-a19e30c7bfe5
Page 1499
1 (In open court outside the hearing of the jury.)
2 THE COURT: All right. Arguments on the last exhibit?
3 What is the exhibit and then the objection? I forget what it
4 was. Make it again.
5 MS. KURCZ: Yes, your Honor. I believe it's
6 Defendants' Exhibit 2112.
7 MR. VOLLER: 2114.
8 MS. KURCZ: 2114. We have the same objections to that
9 one. It's an e-mail from -- the bottom of it is an employee at
10 CQG to Spreader, Spreader Group. Mr. Shterk is on the second
11 e-mail, but within the e-mail, it contains a lot of hearsay
12 about what the Spreader needed.
13 MR. VOLLER: I think you are looking at the wrong
14 document. I think we're looking at the wrong document, your
15 Honor. It's 2114. She was looking at 2112.
16 THE COURT: All right. Is this the document that's up
17 now?
18 MR. VOLLER: Yes, it is.
19 MS. KURCZ: Yeah. So if you look at the bottom,
20 there's hearsay on the bottom. This is one of our top
21 Spreaders. He's been asking for this since the start. And we
22 object to it as hearsay with respect to what this Spreader is
23 asking for.
24 THE COURT: What part do you object to? Mike's really
25 getting miffed or what?
7881038c-8793-4f7c-a586-ca21dbee4c51
Page 1682
1 at the time it's moving, you're hovering on the wrong price.
2 So, you know, then you may have to click again to execute the
3 order, but it doesn't solve the problem. It simply moves it
4 back a step.
5 Q. But when the trader clicks after hovering, the trader gets
6 his price, right?
7 A. He gets the price that is in the hover view at the time.
8 That doesn't mean that that's the price he intended.
9 Q. And, again, you remember when I took your deposition
10 September 2013, right?
11 A. Yes.
12 Q. And you were under oath?
13 A. Yes.
14 Q. And did I ask you these questions and did you give me
15 these answers? And this is from page 224.
16 "QUESTION: Is it so that when you're selecting a
17 price, you don't, you don't miss your price, is that what it
18 does?
19 "ANSWER: Yeah, in a sense, yes."
20 And that was your answer, right?
21 A. I don't have the transcript here. I will have to take
22 your word for it.
23 THE COURT: Sir, you are very right.
24 MR. SIGMOND: Here it is. Sorry.
25 THE COURT: All right. Refer him to the page again,
7881038c-8793-4f7c-a586-ca21dbee4c51
Page 1683
1 Counsel.
2 BY MR. SIGMOND:
3 Q. Page 224.
4 Actually, I tell you what. Why don't we put it up on
5 the screen. Page 224, lines 7 through 13. There it is for
6 you right there, Mr. Mather.
7 That was my question and that was your answer,
8 correct?
9 THE COURT: Refer him to the lines. There you go.
10 Why don't you read it again, Counsel.
11 BY MR. SIGMOND:
12 Q. I think I selected the wrong -- sorry. It should be page
13 224, line 2 through line 6.
14 "Is it so that when you're selecting a price, you
15 don't, you don't miss your price, is that what it does?
16 "ANSWER: Yeah, in a sense, yes."
17 A. I see that.
18 Q. And that was your answer, right?
19 A. Yes.
20 Q. Now, Mr. Mather, why don't we look at PDX -- sorry, let's
21 look at PTX 0236.
22 THE COURT: It will come up in a second, sir.
23 MR. SIGMOND: I think we can publish, your Honor.
24 There is no objection that I know of to this.
25 THE COURT: Is there an objection to this?
7881038c-8793-4f7c-a586-ca21dbee4c51
Page 1684
1 MR. KELLY: No, your Honor.
2 THE COURT: All right. Proceed.
3 THE WITNESS: You want me to review this?
4 MR. SIGMOND: No, if you can look at the whole box.
5 THE COURT: There will be a question in a second.
6 BY MR. SIGMOND:
7 Q. Mr. Mather, I gave you this at your deposition and you
8 didn't recognize it, you didn't know what this was, correct?
9 A. May I read it?
10 Q. Sure.
11 A. I can only see part of it.
12 Was this a letter from Mr. LeMond?
13 Q. Yes.
14 A. Yeah, you know, I was confused at that time. I knew that
15 there was the Silicon Valley patent attorney. It had been --
16 I never had direct meetings with Mr. LeMond. I didn't
17 recognize the name, and so I'm sorry, but I mischaracterized
18 because I looked at Kevin LeMond, I said I don't know who that
19 guy is, and I didn't realize that this was our Silicon Valley
20 patent attorney. So in all likelihood, I gave you a wrong
21 answer at that time, but that's the reason why.
22 Q. So at the time you didn't recognize the documents or the
23 name?
24 A. Right.
25 Is this the full-blown opinion, or is this the
7881038c-8793-4f7c-a586-ca21dbee4c51
Page 1685
1 preliminary opinion?
2 Q. Sir, this is the opinion that was produced by your
3 counsel. This is one of the two.
4 A. I can only see a little bit of it.
5 THE COURT: Excuse me one second. If you are showing
6 it to the jury, you need to show who it's to and who it's
7 from, not just the top of it.
8 Are you only showing this one page?
9 MR. SIGMOND: Yes. We can scroll through.
10 THE COURT: All right.
11 MR. SIGMOND: Keep going.
12 THE COURT: I think you need to make clear whether or
13 not he wrote this letter, who wrote the letter, was it to him.
14 Can you make some clarification for the jury?
15 MR. SIGMOND: Sure.
16 THE COURT: Thank you.
17 BY MR. SIGMOND:
18 Q. So this was a letter to Mr. Schroeter from Mr. LeMond,
19 right?
20 A. I can see it was to Mr. Schroeter,
21 Q. Sir, you are not familiar with this document?
22 A. Now I see it's Kevin LeMond.
23 No, I am not.
24 Q. And when I took your deposition, you didn't even know that
25 CQG had received opinions of counsel, correct?
7881038c-8793-4f7c-a586-ca21dbee4c51
Page 1714
1 THE COURT: You can object and say irrelevant.
2 MR. KELLY: Okay.
3 THE COURT: So, I mean, if he wants to keep hammering
4 it, it can be a plus or it can end up being a minus depending
5 on how the jury feels about what he's doing.
6 MR. SIGMOND: Yeah.
7 THE COURT: So it's up to the jury to decide how much
8 weight to give to it. All right?
9 (In open court in the hearing of the jury.)
10 MR. SIGMOND: So let's bring up PTX279. And we can
11 publish that.
12 BY MR. SIGMOND:
13 Q And you see, Mr. Mather, that's an e-mail July 11th, 2011,
14 from you to Josef Schroeter. Right?
15 A Yes.
16 Q And can you remind us, Josef Schroeter is who?
17 A Let's see. When was this? Yes, he was president of CQG at
18 that time.
19 Q Okay. And in this e-mail, you relate to him that you were
20 just talking with Peter. And that's Peter Hwang, correct?
21 A That's correct.
22 Q And you say in it that -- in the second sentence, second
23 paragraph: "Nina needs to be replaced. She is a problem
24 astrologically. According to Peter, we can't win with her.
25 Too many astrological clashes with CQG and me personally."
7881038c-8793-4f7c-a586-ca21dbee4c51
Page 1715
1 And that's what you told Mr. Schroeter, right?
2 A I was -- you know, may I read the e-mail here?
3 Q Sure.
4 A "Just talking with Peter." Here were Peter's comments.
5 That's the way I take this. Peter's comments were "Mark checks
6 out great." Peter's comments were "Nina needs to be replaced.
7 She is a problem astrologically. According to Peter, we can't
8 win with her."
9 Okay. So, yes, I read that.
10 Q And the last paragraph talks about the CQGT: "We need to
11 get back active with CQGT," and it goes on. That's that
12 company that we talked about, CQGT, that was formed with the
13 advice of the astrologer.
14 A Same company, yes.
15 Q Now, sir, you didn't replace Nina Wang because she gave you
16 bad advice, did you?
17 A Boy, I would sure be -- no. That was never anything I ever
18 heard. There was -- you know, Nina was a good lady.
19 MR. KELLY: Relevance, your Honor.
20 THE COURT: Objection sustained.
21 Proceed.
22 BY MR. SIGMOND:
23 Q You recall that Ms. Wang was frustrated that she was
24 sometimes given information that was wrong about how your
25 products worked, correct?
7881038c-8793-4f7c-a586-ca21dbee4c51
Page 1716
1 MR. KELLY: Relevance, your Honor.
2 THE COURT: Objection is overruled.
3 THE WITNESS: Our products are complex. She would ask
4 specific questions and get answers sometimes that, you know,
5 sometimes she may have felt I didn't get as complete an answer
6 as I needed. But she was asking questions as a lawyer, talking
7 to people who were engineers and software developers. And
8 there were times that confusion happened there. And I believe
9 she was frustrated from time to time over that.
10 BY MR. SIGMOND:
11 Q And in particular, CQG at one point represented the
12 operation of the products in one way, and it turned out to work
13 differently, correct?
14 MR. KELLY: Foundation.
15 THE COURT: Objection sustained.
16 And, Counsel, be careful if you can't prove this up
17 with Ms. Wang, which I don't think we can prove anything up
18 with her. You need to be careful where we're going.
19 BY MR. SIGMOND:
20 Q Well, you told me that in your deposition, right?
21 THE COURT: Told what? The objection to foundation is
22 sustained. So you also have to fix that.
23 Last question was and in particular, at one time
24 represented the operation of the products one way, and it
25 turned out to work differently. We need some foundation as to
7881038c-8793-4f7c-a586-ca21dbee4c51
Page 1717
1 what you're talking about.
2 BY MR. SIGMOND:
3 Q You mentioned that she was frustrated. And was part of it
4 that she was told the products worked one way when they really
5 worked a different way?
6 A Could you show me what you claim that I said so I can read
7 it?
8 Q Sure. Why don't we look at your transcript, page 182.
9 MR. SIGMOND: And why don't -- let's not publish this
10 to the jury, just to the witness and the judge.
11 BY MR. SIGMOND:
12 Q And let's look at 182, line 20, through 183, line 13.
13 And my question was:
14 "Q: Was part of the reason that you replaced Ms. Wang that
15 CQG didn't like the advice she was giving?"
16 A One thing at a time.
17 Q Sure.
18 A So you want me to look at page 182, line -- I'm sorry.
19 Q I'll tell you what. Why don't we shorten it a little bit,
20 and let's go to 183, line 5 through line 14. Sorry. Line 13.
21 A Oh, now it's over here. Okay.
22 Q Tell me when you've had a chance to review it, Mr. Mather,
23 because I'd like to ask you a question about it.
24 A Okay. Yes, I've read it.
25 Q So did I ask the question:
7881038c-8793-4f7c-a586-ca21dbee4c51
Page 1718
1 "Q: The last line of this?
2 "A: Listen. Going back to that early one, I do remember
3 that Nina -- sorry -- I do remember Nina being frustrated
4 that she was sometimes given information that was wrong
5 about how our products operated. And I think she was --
6 she was frustrated, I believe, primarily with Yuriy. And I
7 do remember some things about that where he represented it
8 one way to her, and then she found out later that it was --
9 it was different than what he was saying."
10 Do you remember that answer?
11 MR. KELLY: Objection. Completeness, your Honor.
12 THE COURT: Objection sustained.
13 Also, Counsel, there's no way to prove this up.
14 MR. SIGMOND: All right. I'll move on.
15 BY MR. SIGMOND:
16 Q You mentioned that Ms. Wang was frustrated -- or sorry --
17 Ms. Wang was frustrated, right?
18 A In what context, please?
19 Q About the information she was getting about your products.
20 Right?
21 A I think that's a very generalized statement. Were there
22 times when she may have been frustrated in trying to understand
23 the functionality of the product? I believe that happened,
24 yes.
25 Q And --
7881038c-8793-4f7c-a586-ca21dbee4c51
Page 1719
1 A But to make it as a general statement that she was
2 frustrated, I think that's overstating it.
3 Q And Yuriy Shterk caused some of that frustration, correct?
4 A Her primary contact was Yuriy Shterk.
5 Q And shortly after -- well, sorry. After that, you replaced
6 Nina Wang, right?
7 A If you can show me the date. You know, you have the dates
8 there. I don't know the sequence of this.
9 Q You know it was after -- after this, though, correct?
10 MR. KELLY: Objection.
11 THE WITNESS: Can you show me the dates?
12 THE COURT: Excuse me. You know that it was after
13 this. Objection is --
14 THE WITNESS: I mean --
15 THE COURT: Wait. Wait, sir. You have to wait for my
16 objections, Mr. Mather.
17 All right. Objection to foundation sustained.
18 BY MR. SIGMOND:
19 Q Let's look at Exhibit 403.
20 MR. SIGMOND: And I think we can publish this. I
21 don't think there's been an objection.
22 THE COURT: Any objection?
23 MR. KELLY: Just our general objection.
24 THE COURT: All right. Over your general objection --
25 and how are we using this?
dc6efbc4-46e3-4477-a684-c13657e731da
Page 1810
1 A. No. When I was asked the name, Kevin LeMond, out of the
2 blue within the deposition, I didn't remember the name Kevin
3 LeMond, no.
4 Q. But you remember it today?
5 A. I remember it today. In the deposition, you gave me
6 documentation, and I'm like, yes, I gave Kevin LeMond
7 demonstrations.
8 Q. Okay. Let's talk a little bit about your demonstration of
9 products to customers.
10 What types of features do you show the customers when
11 you demonstrate?
12 A. As I said, I usually talk to the customer to find out what
13 his trading style is, and I'll try and show him everything
14 that is -- you know, that he's going to potentially use.
15 Q. So you would show them both responsive and dynamic mode,
16 correct?
17 A. In a lot of occasions, yes. I would show them both
18 responsive and dynamic, yes.
19 Q. And would you show customers order entry through the
20 responsive mode, you've done that?
21 A. Yes.
22 Q. And you've shown customers order entry using a single
23 click with no confirmations through the responsive mode,
24 correct?
25 A. Correct.
dc6efbc4-46e3-4477-a684-c13657e731da
Page 1811
1 Q. And you think you would have shown that type of
2 functionality to Mr. LeMond?
3 A. That was ten years ago. I would assume that I did, yes.
4 Q. Okay. So that was in 2004 when you had a meeting -- when
5 you had a discussion with Mr. LeMond?
6 A. Not a discussion. I did a demonstration for Mr. LeMond.
7 Q. You've never met Mr. LeMond?
8 A. No, I have never personally met Mr. LeMond.
9 Q. You had a demonstration for him in late 2004, correct?
10 A. If I see documentation, that will recollect my memory,
11 yes, but I can't specify to a particular day on when I gave
12 him the demonstration, you know, 11 years ago.
13 Q. Okay. You joined CQG in March of 2004, correct?
14 A. Correct.
15 Q. So you gave him a demonstration not long after you joined?
16 A. Correct.
17 Q. And you don't recall exactly what you showed Mr. LeMond in
18 this demonstration, correct?
19 A. How I did the demonstration exactly, no. What my
20 statement was is I would have shown Mr. LeMond all of the
21 functionality that was currently available in the product at
22 that time.
23 Q. Okay. All of the functionality that you were personally
24 aware of?
25 A. That I was aware of at that point in time, yes.
dc6efbc4-46e3-4477-a684-c13657e731da
Page 1812
1 Q. Now, do you consider yourself the person most
2 knowledgeable at CQG about the operation of the DOMTrader
3 today?
4 A. No.
5 Q. And did you in 2004?
6 A. I knew a lot about it. Did I know everything, no, I did
7 not write the code.
8 Q. Let's talk about some of the things you were familiar with
9 at the time when you had this demonstration with Mr. LeMond.
10 But before I do, can you tell the jury what actually
11 the demonstration was, how was it performed?
12 A. It would have been performed via WebEx.
13 Q. And it was no more than half an hour, correct?
14 A. No, I do not remember the length of time of the
15 demonstration. For me to show CQG Trader and the Integrated
16 Client, I do not recall how long the demonstration took.
17 Q. But you wouldn't be surprised if the bills reflected it
18 was less than half an hour?
19 A. I would be surprised, yes. I definitely would be
20 surprised.
21 Q. Now, you're familiar with price selection in the
22 DOMTrader, correct?
23 A. Correct.
24 Q. But you don't know if the prices in the DOMTrader move if
25 a price is selected, correct?
dc6efbc4-46e3-4477-a684-c13657e731da
Page 1813
1 A. Sorry. Can you re-ask the question?
2 Q. Sure.
3 You don't know if the prices in the DOMTrader move if
4 a price is selected?
5 A. If a price is selected and was the market action that's
6 occurring at that point in time, so depending on the market
7 action, if I've bid the price select and the market were to
8 move up or down, that would bring -- the inside market was
9 always in view, so I don't understand the question.
10 Q. Okay. Well, you understood it when I asked it to you in
11 your deposition, right?
12 A. In my deposition, you were talking a lot of different
13 things before that particular question, so my train of thought
14 may have been completely different when you were asking about
15 it in my deposition.
16 Q. All right. Let's talk about your deposition. Let me just
17 get it for you. I am going to hand you -- this is actually
18 the wrong one. Sorry.
19 Let me hand you a copy of your deposition,
20 Mr. Glista. Why don't we turn to page 204 in your deposition.
21 A. Okay.
22 Q. You recall we were discussing what happens to the prices
23 in the DOMTrader when you use your selected price, correct?
24 A. Yes.
25 Q. And at that deposition, you were represented by counsel
dc6efbc4-46e3-4477-a684-c13657e731da
Page 1814
1 for CQG, correct?
2 A. Yes.
3 Q. And that deposition was videotaped?
4 A. Yes.
5 Q. And you recall being under oath at that deposition?
6 A. Yes.
7 Q. And were you not asked the following question and did you
8 not give the following answer? This is from 205, lines 14
9 through 19.
10 "QUESTION: Will the prices move?
11 "ANSWER: The prices, I'm not sure if the prices move
12 when the price selected is activated."
13 Were you not asked that question and did you not give
14 that answer?
15 A. I did give that answer. It's just the conversation that
16 we were having.
17 Q. And you don't know if there was ever a time when the
18 prices shown in the main DOM grid would not move if a price
19 was selected, correct?
20 A. Sorry. Restate the question.
21 Q. Absolutely.
22 You don't know if there was ever a time when the
23 prices shown in the main DOM grid wouldn't move when the price
24 was selected?
25 A. I don't know how to answer that question because I didn't
dc6efbc4-46e3-4477-a684-c13657e731da
Page 1815
1 see every single DOMTrader and everything else, so I would
2 have to say I can't answer that question.
3 Q. Let's go to your deposition again. Page 205, if you can
4 look at lines 21 to 23 through 206, lines 2. Were you not
5 asked the following question and did you not give the
6 following answer?
7 "QUESTION: And do you know if there has ever been a
8 time where when a user selects a price, the prices that are
9 shown in the main grid don't move?"
10 And your answer was no, correct?
11 A. Correct.
12 Q. You don't recall talking to Mr. LeMond about price
13 selection functionality, correct?
14 A. I cannot be sure if I talked to Mr. LeMond about price
15 selection. I most likely would have shown it.
16 Q. You don't recall it, though, correct?
17 A. No, I don't recall it.
18 Q. Now, you're familiar with specific functionality in the
19 DOMTrader that's referred to as the market window?
20 A. Yes.
21 Q. And your understanding of that window is that depending on
22 the market action, this window would appear that would show
23 the best bid and the best ask, correct?
24 A. Correct.
25 Q. And you understood that the market window could appear at
dc6efbc4-46e3-4477-a684-c13657e731da
Page 1816
1 the top or the bottom of the DOMTrader screen?
2 A. It would appear in the DOMTrader screen.
3 Q. At the top or the bottom?
4 A. Correct.
5 Q. But you don't believe that there was a way for the user to
6 configure how many rows it showed, correct?
7 A. I never showed anybody on how the amount of rows that
8 could be selected, correct.
9 Q. And in fact, you don't even know if the user could do
10 that?
11 A. I do not know that a user could do that. It would make no
12 logical sense for a trader to do that.
13 Q. You're not aware of any traders that have had more than a
14 -- let me ask this question. You don't even know what the
15 default size for the market window is, do you?
16 A. I didn't remember what the default size was. It was
17 something that would show up on the screen when the market
18 moved up or down. I really didn't pay a whole lot of
19 attention to it.
20 Q. So you didn't show any market window resizing to
21 Mr. LeMond?
22 A. I would not have shown market resizing to the window.
23 Q. Because you didn't know it could happen?
24 A. I did not know it could happen.
25 Q. You know what hover is, correct?
dc6efbc4-46e3-4477-a684-c13657e731da
Page 1817
1 A. Correct.
2 Q. And you know that the purpose of hover is for when a user
3 clicks, when he's hovering, he gets the price even if the
4 market has moved at that time?
5 A. You're using terminology where when in my deposition, you
6 talked about price. Are you talking order, trade, or what are
7 you -- that the order gets placed at the price that if the
8 market is moving and he successfully gets the price that he
9 wants in this hover, not the wrong price?
10 Q. Correct.
11 A. Yes, he is going to place an order at that price.
12 Q. Okay.
13 A. And not ensure the trade.
14 Q. And you know that feature wasn't available at the time
15 that you discussed functionality with Mr. LeMond, correct?
16 A. It's not correct. I did not remember when exactly hover
17 was introduced.
18 Q. Okay. But if hover wasn't available, you couldn't have
19 discussed it with Mr. LeMond?
20 A. Correct.
21 Q. And in fact, you agree that you could not have discussed
22 with Mr. LeMond anything that you didn't know existed at the
23 time?
24 A. Eleven years ago, no.
25 Q. All right. Let's talk about another issue about
dc6efbc4-46e3-4477-a684-c13657e731da
Page 1818
1 demonstrations. You demonstrated the other order entry
2 interfaces that CQG has available?
3 A. The majority of them, yeah.
4 Q. And it's your understanding that for those order entry
5 interfaces, if you entered an order in them, you could then
6 view it and access it in the DOMTrader?
7 A. Yes.
8 Q. And that's true for all of the other interfaces that
9 you've talked about?
10 A. Yes.
11 Q. All right. Now, I want to talk about one last issue,
12 Mr. Glista. And if we could show Mr. Glista alone PTX 157,
13 please.
14 Can you see that document, sir?
15 A. Yes, I can.
16 Q. And this is an email that's from you dated September 8th,
17 2005; is that correct?
18 A. Correct.
19 Q. And do you have any reason to believe that you did not
20 send this email on or about September 8th, 2005?
21 A. No. I probably sent this email, yes.
22 Q. Okay.
23 MR. CARDEN: Your Honor, we'd like to publish Exhibit
24 157 to the jury.
25 THE COURT: Any objection?
dc6efbc4-46e3-4477-a684-c13657e731da
Page 1824
1 talking about the market window, or there's too many
2 variables, and I don't remember if we had just gotten done
3 talking about the market window or not talking about the
4 market window and that. So I would have to reread a lot of
5 the deposition to be able to tell you what I was thinking when
6 I answered that particular question.
7 Q. You didn't note that confusion in these questions and
8 answers, did you, sir?
9 A. I did not.
10 Q. And the next question that was asked was, With the price
11 selected, and you said, The market depth will move with the
12 price selected, yes, not the prices, correct?
13 MR. GARNETT: Objection, your Honor.
14 Mischaracterizes the testimony.
15 THE COURT: Wait one second. Are you going to stick
16 with the question?
17 MR. CARDEN: I will rephrase the question, your
18 Honor.
19 THE COURT: The question is rephrased.
20 BY MR. CARDEN:
21 Q. Your answer was, The market depth will move with the price
22 selected, yes?
23 A. Yes.
24 Q. And the market depth is not the prices, correct?
25 A. Correct.
dc6efbc4-46e3-4477-a684-c13657e731da
Page 1825
1 Q. All right. And at least for purposes of this testimony,
2 you were referring to the bid and ask quantities?
3 A. Correct.
4 Q. All right. And then the next question, sir, was, Will the
5 prices move, do you see that?
6 A. Yes.
7 Q. And your answer was, I'm not sure if the prices move when
8 the price selected is activated. Is that an accurate
9 statement of your testimony at your deposition?
10 A. Yes, it is.
11 MR. CARDEN: Thank you.
12 THE COURT: Any further questions?
13 MR. GARNETT: No further questions, your Honor.
14 THE COURT: All right. Sir, you may step down.
15 Although this witness was fairly short, this Court is
16 going to take a quick break.
17 (Short break.)
18 (The following proceedings were had in open court outside
19 the presence of the jury:)
20 THE COURT: Just to let you know, we have a juror
21 with morning sickness, so the Court had to address that.
22 All right. As we soldier on.
23 All right. Who is next?
24 MR. COTIGUALA: Ms. Ashton from CQG.
25 THE COURT: Is she in the room?
dc6efbc4-46e3-4477-a684-c13657e731da
Page 1826
1 MR. COTIGUALA: Yes.
2 MR. CARDEN: I think it's our general objection.
3 THE COURT: Other than your general objections,
4 nothing else?
5 MS. KURCZ: No, your Honor.
6 THE COURT: Why don't you come on up, Ms. Ashton.
7 MR. COTIGUALA: Your Honor --
8 THE COURT: I am glad we were able to accommodate
9 you.
10 It looks like we are going to be a few more minutes.
11 Anything else on the record?
12 MS. KURCZ: No, your Honor.
13 THE COURT: I think we are ready to go.
14 (The jury enters the courtroom.)
15 THE COURT: You may be seated, ladies and gentlemen.
16 (Witness sworn.)
17 THE COURT: Please be seated. It doesn't move other
18 than swivel. You can adjust it. Serve yourself some water,
19 if you need to.
20 Ladies and gentlemen, this is CQG's next witness,
21 Ms. Ashton; am I correct?
22 THE WITNESS: Yes.
23 MR. COTIGUALA: Yes.
24 THE COURT: And Ms. Ashton is the manager of the U.S.
25 customer service group at CQG. Proceed.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2186
1 became HR manager of people for just one year until 2009.
2 Since 2009, I hold my current position as a client system
3 owner.
4 Q. I want to start with the original position you identified,
5 software developer in 1998.
6 Can you tell the jury what you did as a software
7 developer?
8 A. I wrote code, I wrote requirements, designed
9 implementation associated with the code.
10 Q. Sir, are you familiar with the DOMTrader?
11 A. Yes.
12 Q. And how are you familiar with it?
13 A. From my own experience as a developer. Then as a project
14 manager and system owner.
15 Q. And do you know who developed the very first DOMTrader?
16 A. Yes.
17 Q. Who developed it, sir?
18 A. It was myself, Andrei Nikulin, with the help of Mr. Mather
19 and Mr. Shterk.
20 Q. And in that very first DOMTrader, are you familiar with
21 the concept of the Market Window?
22 A. I am.
23 Q. And remind us what the Market Window is.
24 A. So the Market Window is a portion of the DOM grid that is
25 responsible for showing inside market, when the price is
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2187
1 selected and the inside market is about to leave a display, a
2 visible portion of the display.
3 Q. Now, as a software developer, team lead, project manager,
4 and system owner, are you familiar with the DOMTraders that
5 have existed since the very first one in 2004 to the present?
6 A. Yes.
7 Q. And has that functionality that you just described about
8 the Market Window, has that changed from version to version?
9 A. That core functionality didn't really change. It stayed
10 the same.
11 Q. Are you aware of a time when the Market Window could be
12 configured to be larger than the DOMTrader?
13 A. Yes.
14 Q. Okay. And when that happened, what was the result of
15 that?
16 A. The result of that would be that Market Window is not
17 shown in the cases when it shall be shown.
18 Q. And do you know when CQG became aware of this behavior?
19 A. Yes. We became aware of that in 2010, and we fixed that
20 defect right away.
21 Q. So you just used the word defect. Why did you call it a
22 defect?
23 A. I called it a defect because it violates the very core
24 requirement associated with a Market Window.
25 Q. Okay. You've also used the word requirement now at least
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2188
1 once, if not twice. Can you tell us what a requirement is?
2 A. Sure. So as part of the developing of our product,
3 developers took -- had conversations with the business people,
4 and they captured statements that describe functionality of
5 the product we are trying to develop in the requirements.
6 Those statements that we take from business and we put it as
7 requirements, and they generally describe what product we are
8 trying to build.
9 Q. So does that mean it's the intended functionality of the
10 software?
11 A. Yes.
12 MS. KURCZ: Objection. Form.
13 THE COURT: To the form, the objection is overruled.
14 Proceed.
15 BY MR. VOLLER:
16 Q. Now, is there a particular requirement that this defective
17 behavior doesn't follow?
18 A. Yes, there is -- there are requirements that the defect
19 doesn't follow.
20 Q. Let's take a look and show Mr. Katin only PTX 196, please.
21 Mr. Katin, have you seen this document before?
22 A. Yes.
23 Q. Okay. Let's go to page 2.
24 All right. Have you seen the attachment here?
25 A. I have seen them before, yes.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2222
1 the user selects a price and the inside market leaves visible
2 area of the display, the Market Window is going to be shown.
3 MR. VOLLER: Thank you, your Honor. No further
4 questions.
5 THE COURT: Redirect. You can address that point if
6 you wish.
7 - - -
8 MAXIM KATIN, RECROSS-EXAMINATION
9 BY MS. KURCZ:
10 Q. Just one question.
11 Mr. Katin, I know Mr. Voller highlighted that you
12 served for many depositions. But you were actually appointed
13 by CQG to serve as its corporate representative for all of
14 those depositions, correct?
15 A. Yes, that's correct.
16 MS. KURCZ: Nothing further. Thank you.
17 THE COURT: Anything further?
18 MR. VOLLER: No, your Honor.
19 THE COURT: You may step down, sir. Thank you.
20 THE WITNESS: Thank you.
21 (Witness excused.)
22 THE COURT: All right. We are going to take about a
23 five-minute break.
24 (Short break.)
25
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2223
1 THE COURT: All right. We had some objections for
2 the next witness?
3 MS. WYTSMA: Correct. Your Honor, you may recall
4 that we filed a motion in limine -- and this was motion in
5 limine number 4 -- relating to settlement-related
6 communications. I have copies of the order and the motion, if
7 I can hand those up.
8 THE COURT: You can.
9 MR. CARDEN: (Handing document to the Court.)
10 THE COURT: Okay.
11 MR. CARDEN: In the motion, we discussed the fact
12 that several exhibits that plaintiff had designated related
13 directly to internal communications regarding settlement
14 positions, analysis done in preparation for settlement
15 conferences with Magistrate Judge Schenkier. The motion cited
16 to the case of Lyondell Chemical versus Occidental. This is
17 page 1 of our motion:
18 "Rule 408 extends to legal conclusions, factual
19 statements, internal memoranda, and the work of non-lawyers and
20 lawyers alike."
21 The Court reserved ruling on our motion and indicated
22 that it would take up the issue on an exhibit-by-exhibit basis,
23 and now we're at that point.
24 THE COURT: Actually, you can put that down. Just
25 bend it down. We don't need the extra volume because of the
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2224
1 jurors.
2 MS. WYTSMA: Okay.
3 THE COURT: All right.
4 MS. WYTSMA: So the first exhibit that Mr. Carden
5 intends to use that we believe is protected Rule 408 is a
6 June 20th, 2011 e-mail from Mr. Fischer, who as you know is now
7 deceased, to Mr. Schroeter. This is an e-mail that followed a
8 May 25th settlement conference with the magistrate judge, and
9 this is internal analysis from Mr. Fischer to Mr. Schroeter
10 discussing his understanding of TT's argument and his thoughts
11 on those arguments.
12 We would object to that as hearsay. Mr. Fischer
13 cannot be here to tell us why he believed this and the reasons
14 he believed this, but it is his follow-up analysis specifically
15 related to a settlement conference occurring the month before
16 and which was going to be continued to another date to allow
17 the parties to exchange additional information and thoughts.
18 I can just go through the three documents, and then
19 maybe we can do it as a group. The second document is Exhibit
20 -- I'm sorry. If I didn't mention it, the one I was just
21 referring to was Plaintiff's Trial Exhibit 335. The second
22 document that we object to under Rule 408 is Plaintiff's Trial
23 Exhibit 336. This is a May 27, 2011 e-mail from Mr. Fischer to
24 Mr. Schroeter again. This is an e-mail that was --
25 THE COURT: Hold on a second. If you want to pop
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2225
1 that up on the screen for me, thank you.
2 MR. CARDEN: I've got it. I can put it on the ELMO.
3 Have you got it?
4 THE COURT: Thank you.
5 MR. CARDEN: That's 335.
6 THE COURT: That one I have.
7 MS. WYTSMA: It's 336.
8 (Brief pause.)
9 MS. WYTSMA: And can we pop up the top?
10 (Brief pause.)
11 MS. WYTSMA: This is a May 27 --
12 THE COURT: I've got that one.
13 MS. WYTSMA: -- a May 27 e-mail. This is just two
14 days after the mediation occurred, and it's clear that they're
15 talking about settlement-related issues. Mr. Schroeter's
16 e-mail to Mr. Fischer says:
17 "Their price point for loyalty incensed us to
18 litigate."
19 It's clear that this is a follow-up on the settlement
20 conference, an additional analysis. Mark Fischer's e-mail at
21 the bottom of that page talks about the arguments and what's
22 persuasive or not. It all comes directly out of a settlement
23 conference two days earlier.
24 The last document, I think, is even easier.
25 THE COURT: But there's not a mention of the
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2226
1 settlement in that document, though.
2 MS. WYTSMA: There's not a mention.
3 THE COURT: You're saying it's a continuation of a
4 settlement conference or comments made at a settlement
5 conference, but the references to it being a settlement
6 conference are not contained therein.
7 MS. WYTSMA: They're not contained within the
8 document. There was an ongoing process that began with the
9 May 25th settlement conference, but there were a number of
10 follow-up conferences. The Lyondell case talks about the
11 protection extending to internal memoranda of non-lawyers if
12 they were intended to be part of negotiations towards
13 compromise. These e-mails were created in an effort to
14 understand TT's arguments as a part of a process towards
15 compromise under a court-ordered mediation process.
16 The last exhibit, this is Plaintiff's Trial Exhibit
17 338. It specifically says in the re line "settlement, summary
18 of TT damages and settlement." This is a document that
19 preceded the May 25th settlement conference, and it's pretty
20 clear that this is a document that was prepared in preparation
21 for that settlement conference.
22 So under Rule 408 as well as the Lyondell Chemical
23 case that we cited in our motion in limine, we would ask to
24 have those documents excluded during Mr. Schroeter's
25 examination.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2227
1 MR. CARDEN: Certainly, Your Honor. First of all, if
2 we start with 335 and 336, I think as the Court properly
3 pointed out, there's no references in those to being related to
4 the settlement. Mr. Fischer was not involved in those
5 settlement discussions. He was providing -- essentially, as
6 the deposition testimony points out, he was continuing to
7 provide guidance, even as a non-lawyer, internally at CQG about
8 issues.
9 THE COURT: So TT's position is this was not during a
10 time that settlement was being discussed, and this would not
11 have related at all to settlement talks.
12 MR. CARDEN: No, our position is that they can't
13 simply say that because there was a period where settlement was
14 being discussed, every internal communication directly relates
15 to that, especially when it doesn't indicate that that's what
16 it's about. Mr. Schroeter's and Mr. Fischer's analyses of the
17 strength of their argument, there's no suggestion here that
18 he's preparing something for purposes of the settlement.
19 THE COURT: And Mr. Fischer is no longer with us.
20 MR. CARDEN: Mr. Fischer is no longer with us,
21 agreed. Mr. Schroeter is on these communications, however.
22 THE COURT: Yes. But my point is you're saying that
23 Mr. Fischer didn't have anything to do with the settlement,
24 that this wasn't about the settlement, but he's the one who
25 could really tell us other than Mr. Schroeter, right?
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2228
1 MR. CARDEN: He has told us. He's given his
2 impression in the documents, and he's not available here to
3 testify about it.
4 MS. WYTSMA: For that reason, we would also make the
5 objection under 403 that it's prejudicial because we can't
6 bring the author of these documents into court. It's already
7 been established, I think, before the jury that he was at one
8 point counsel of record. In fact, we heard him talking from
9 the grave, unfortunately, during one of the videos. So they
10 know he was at one time counsel of record in this case. So
11 it's unfairly prejudicial.
12 THE COURT: So do you really think with all the
13 counsel --
14 MS. WYTSMA: No.
15 THE COURT: Thank you.
16 MS. WYTSMA: No.
17 THE COURT: -- on this case that they remember who
18 the counsel of record was? I don't think so.
19 MS. WYTSMA: But here's the problem, too. If
20 Mr. Carden is allowed to use these exhibits with Mr. Schroeter,
21 in order to respond to these e-mails, it will be necessary for
22 Mr. Schroeter to testify what he did in response to receiving
23 these e-mails, and that's going to involve conversations he had
24 with trial counsel, Nina Wang, and what she said about these,
25 and the fact that she didn't agree with Mr. Fischer. Then that
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2229
1 opens a whole other can of worms. So if we go down this path,
2 we're just getting so off the course.
3 Mr. Carden can ask Mr. Schroeter what he thought as
4 president of this company during this time period. We're not
5 suggesting that everything that happened during that time
6 period is somehow privileged. But in terms of whether, you
7 know, the documents relate to settlement, the trial exhibit,
8 Plaintiff's Trial Exhibit 336 couldn't make it any clearer.
9 There's a court-ordered settlement conference on the
10 25th. This is the 27th, and it's talking about, you know, what
11 the TT arguments were and trying, you know, trying to respond
12 to the things that came out of that settlement conference. So
13 I think if read in context and within the chronology of the
14 events, it's pretty clear that this is the type of internal
15 memoranda that the case law says is part of a process to
16 facilitate settlement.
17 THE COURT: All right. Mr. Carden, last word.
18 MR. CARDEN: Sure. 336 is a very interesting example
19 because it points out exactly what Mr. Wytsma said before. If
20 we're going to ask him about what his thoughts were, 336
21 contains them.
22 THE COURT: Okay. Again, 336 is the e-mail that's up
23 now.
24 MR. CARDEN: That's correct, Your Honor.
25 THE COURT: Where are you all getting 336 on this?
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2230
1 MR. CARDEN: It's at the very bottom, PTX 336-001,
2 the bottom right-hand corner, Your Honor.
3 THE COURT: Oh, okay.
4 MR. CARDEN: Sorry.
5 THE COURT: It's not on the one I'm looking at.
6 MR. CARDEN: Oh, I'm sorry.
7 THE COURT: All right. I was just confused.
8 MR. CARDEN: So this contains Mr. Schroeter's
9 analyses of things. Again, there is not a mention that this
10 discussion is being had in furtherance of the settlement
11 discussions.
12 THE COURT: Well, okay. The Court is reviewing this
13 while I've been listening to you, and I do also see the
14 language. I agree with your assessment yesterday. If the
15 timing is that this was right after the settlement talks, an
16 assessment was made yesterday they're still talking about
17 things in that way, coupled by the fact that Mr. Fischer is no
18 longer with us and we can't know for sure, the Court is not
19 going to allow this in. All right?
20 MS. WYTSMA: Thank you. Just to preserve the record,
21 I want to renew our objection to --
22 MR. CARDEN: I'm sorry. Before you go on, I want to
23 make sure. Did that extend to all three documents then?
24 THE COURT: What's the other documents again?
25 MR. CARDEN: 335.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2231
1 THE COURT: Which is?
2 MR. CARDEN: This is the June 10th e-mail.
3 THE COURT: June 20th?
4 MR. CARDEN: June 20th, yes.
5 MS. WYTSMA: This is one where they're again
6 communicating after the settlement conference. For example,
7 I'm looking at the paragraph right underneath the box, you
8 know, and it talks about one argument could be -- it says:
9 "Now I suppose that they will argue that for the
10 middle" -- and it goes on.
11 So it's going back and forth, you know, what they're
12 going to argue based on the settlement conference and our
13 response. You know, the re line is "understanding the
14 infringement argument." What they're trying to understand is
15 what TT disclosed during a settlement conference less than a
16 month before this e-mail was written.
17 THE COURT: Your objection to that one is overruled.
18 MS. WYTSMA: Okay. Then the last one says
19 "settlement" right in the re line. This is a document that --
20 THE COURT: Sustained.
21 MS. WYTSMA: Thank you.
22 THE COURT: Anything else?
23 MS. WYTSMA: Yes. I just wanted to preserve the
24 record. It's an e-mail we've dealt with extensively. I don't
25 think we needed to address it, but it's Plaintiff's Trial
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2232
1 Exhibit 342. We object to it even --
2 THE COURT: Overruled.
3 MS. WYTSMA: Thank you. May I approach with
4 Mr. Carden on the last objection?
5 THE COURT: Yes.
6 MS. WYTSMA: Thank you.
7 (Discussion at sidebar on the record.)
8 MS. WYTSMA: The last three documents relate to
9 astrology, and I wanted to do it here. Mr. Mather is sitting
10 in the courtroom, so I wanted to do this outside of his
11 presence. This is the first one. This is about Nina being
12 replaced because she has a problem astrologically. You know,
13 this case has gotten on such a tangent with astrology. This is
14 another e-mail, you know, another potty e-mail. This is about
15 an internal e-mail between Mr. Schroeter and Mr. Fischer about
16 Peter Hwang putting his nose into, you know, which attorney
17 should be fired or retained.
18 THE COURT: Rasputin, that sums it up.
19 MS. WYTSMA: As I said many times, you know, most of
20 the other people at the time company don't --
21 THE COURT: Well, to me, that's valid.
22 MR. CARDEN: I can redact it.
23 THE COURT: Okay.
24 MS. WYTSMA: You know, this is about cosmic matches
25 in finding a new attorney. It's just piling on with the
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2246
1 next sentence?
2 A. Yes. It says:
3 "I wanted to let you" -- (sic) know -- "that my
4 opinion is that CQG's products do not literally infringe any
5 claims of U.S. Patent Nos." -- I'll just say '132 and '304 --
6 "nor do they infringe under the Doctrine of Equivalents."
7 Q. Prior to becoming involved with TT's patents, had you ever
8 heard of anything called the Doctrine of Equivalents?
9 A. No.
10 Q. Okay. You indicated Mr. LeMond followed up with something
11 that you called formal opinions. Let's go ahead and take a
12 look very briefly at Plaintiff's Trial Exhibit 236 first.
13 A. Okay.
14 Q. You can look at the re line to begin with.
15 A. The what?
16 Q. The re line.
17 A. Oh, okay. Thanks.
18 Q. This is an opinion that relates to the '132 patent,
19 correct?
20 A. Yes, that's correct.
21 Q. Okay. I think we've heard from testimony previously that
22 date is incorrect, January 6th, 2004?
23 A. Yes, it was January 6th, 2005.
24 Q. And did you, in fact, receive a copy of Plaintiff's Trial
25 Exhibit 236 in January of 2005?
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2247
1 A. Yes, I did.
2 Q. And did you read it?
3 A. Yes, I read it, as well as Mr. Mather read it, and I shared
4 it with some other people in the company as well.
5 Q. Was there anything in the opinion letter that caused you to
6 believe that Mr. LeMond did not understand the functionality of
7 CQG's products?
8 A. No. You know, from what I read of the opinion as well as
9 from the people that I shared the opinion with, we felt as
10 though it was a complete opinion.
11 MS. WYTSMA: Let's just briefly turn to PTX 236.0007,
12 and if we could blow up the last paragraph.
13 (Brief pause.)
14 BY MS. WYTSMA:
15 Q. Mr. Schroeter, do you recall reading this last paragraph of
16 the letter?
17 A. Can you give me just a second?
18 Q. Sure. Well, let me, actually, try and move this along.
19 Let me direct your attention to the line that says:
20 "Rather, the prices" -- underscored -- "do move."
21 Do you see that?
22 A. Yes, I do.
23 Q. His explanation of why the CQG products didn't infringe
24 TT's patents, was that consistent with the belief, the internal
25 belief that you had developed previously as to why the products
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2248
1 did not infringe?
2 A. Yes, it did. I mean, our general idea was that we had a
3 price scale that essentially moved. So when Kevin or
4 Mr. LeMond gave us this opinion, he confirmed that belief.
5 Q. And is that the same position that CQG is asserting in this
6 case now?
7 A. That's my understanding, yes.
8 Q. So in ten years CQG's position as to why it doesn't
9 infringe has not changed, is that correct?
10 A. That's correct.
11 Q. Let's take a quick look at Plaintiff's Trial Exhibit 237.
12 Again, Mr. Schroeter, that's probably a typo at the top,
13 correct?
14 A. Yes.
15 Q. And is Plaintiff's Trial Exhibit 237 a letter you received
16 from Mr. LeMond in January of 2005?
17 A. Yes, it is.
18 Q. And does this letter relate to the '304 Patent?
19 A. Yes, it does.
20 Q. And did you read this opinion?
21 A. Yes, I read it.
22 Q. And was there anything in the opinion that caused you to
23 believe that Mr. LeMond didn't understand product
24 functionality?
25 A. No, we felt that he understood the product functionality
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2249
1 and had given us a full opinion of it, and we relied on his
2 opinion.
3 Q. And based on your review of Mr. LeMond's opinion, what did
4 you understand his position to be with respect to the reason
5 why CQG's products did not infringe?
6 A. Again, this patent was nearly identical to the other
7 patents, and he felt that our products moved whereas the patent
8 was on something that did not move.
9 Q. Was there anything in his opinions that caused you -- you
10 were previously a lawyer. So was there anything as a
11 previously practicing lawyer that caused you to believe that
12 these were not adequate opinions?
13 A. No, although I had never seen a patent opinion before this,
14 but I thought that they were extremely well written.
15 Q. In fact, they were each many pages long, correct?
16 A. Yes, that's right.
17 Q. Eight single-spaced pages long, if we go to the back?
18 A. Yes, that's right.
19 Q. All right. So you indicated you forwarded the opinion
20 letters on to some other people at CQG. Do you recall who
21 those individuals were?
22 A. Yeah, I think I forwarded them on to Tim Mather and Rod
23 Glista and Mike, of course, Mike Glista and Rod Giffen. You
24 know, I think I may have forwarded it on to Yuriy Shterk as
25 well.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2250
1 Q. And what would be your reason for doing that?
2 A. They were people that would have been interested and had
3 feedback for us about the opinion. Of course, Tim ultimately
4 is our decision-maker, so he would have needed to know what the
5 opinions were.
6 Q. And do you know if any of these individuals, did they ever
7 indicate to you that they actually read the opinions?
8 A. I know, or I remember anyway, that Mike did, and I spoke
9 about the opinions specifically with Tim several times. We
10 reviewed it together.
11 Q. And that "Mike" that you referenced, that was Mike Glista?
12 A. Sorry. Yes, Mike Glista.
13 Q. And did Mr. Glista ever indicate to you that he believed
14 that Mr. LeMond didn't understand the product functionality?
15 A. No. I mean, Mr. Glista is great at giving product demos,
16 and he never indicated that Mr. LeMond did not understand the
17 functionality of the product.
18 Q. I'm not sure everyone can hear you. You might want to lean
19 in a little bit more.
20 A. Okay. I was getting feedback before.
21 THE COURT: I'll adjust it. Go ahead.
22 THE WITNESS: Okay. Sorry.
23 THE COURT: Answer that last question again.
24 BY THE WITNESS:
25 A. Could you give me the question back one more time?
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2255
1 going to get any additional information from anyone?
2 A. Yes, his indication was that he was going to verify it with
3 Mike Glista.
4 Q. And after he did that, did Mr. LeMond provide you any
5 further opinions?
6 A. Yes. After he spoke with Mike Glista and, I think, some
7 other people in the organization, he provided us with an
8 updated e-mail that said we didn't infringe and he didn't have
9 any concerns.
10 Q. Let's take a look at Plaintiff's Trial Exhibit 247. This
11 is a March 10, 2005 e-mail from Mr. LeMond to you, is that
12 correct?
13 A. That's correct.
14 Q. Under the confidential attorney-client privilege line, what
15 does that first line say?
16 A. Well, it's a follow-along from the subject line, I guess.
17 Q. You're right. So we should start with the subject line.
18 What's the subject line there?
19 A. "I still believe."
20 Q. Dot, dot, dot?
21 A. Yes. Then "we don't infringe," exclamation point,
22 exclamation point.
23 Q. How did you interpret the double exclamation point?
24 A. That he was pretty happy with his review of the opinion, or
25 of the eSpeed opinion.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2256
1 Q. Did it suggest any equivocation on his part?
2 A. No.
3 Q. In this e-mail, he says he's going to provide you updated
4 opinion letters. Did you ever receive any updated opinions
5 letters?
6 A. I don't think so. I think we did a follow-up call with all
7 of the people that needed to be involved rather than having
8 updated opinion letters.
9 Q. Do you recall whether you ever told Mr. LeMond that it was
10 unnecessary to send opinion letters?
11 MR. CARDEN: Objection, Your Honor, lack of
12 foundation.
13 THE COURT: Objection sustained.
14 BY MS. WYTSMA:
15 Q. Did you ever give Mr. LeMond any further instructions on
16 whether to provide an updated written opinion letter?
17 A. We put a call on the calendar and had an updated call with
18 Mr. LeMond where he shared with us his opinions verbally, and
19 at that time we frankly didn't feel a need for him to update
20 his opinion letters.
21 Q. So let's take a look at Plaintiff's Trial Exhibit 243. Is
22 this an e-mail scheduling the call that you just referred to?
23 A. Yes, it is.
24 Q. Now, prior to this lawsuit being filed in 2005, did you
25 have communications with anyone from TT concerning its patents?
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2257
1 A. Yes. Sometime in May or early June of 2004, Tim
2 Geannopulos left us a message that we should call him, and Tim
3 Mather and I called Mr. Geannopulos and had a call with him
4 about the TT patents.
5 Q. And what did Mr. Geannopulos say to you during this phone
6 call?
7 A. Mr. Geannopulos indicated that CQG was on a list.
8 MR. CARDEN: Objection under Rule 408.
9 MS. WYTSMA: This is prior to the lawsuit, and it was
10 not 408. It goes to state of mind and willfulness.
11 THE COURT: All right. Right now I'm going to
12 reserve ruling on it. I'll hear more argument. Let's go on to
13 something else, Ms. Wytsma.
14 BY MS. WYTSMA:
15 Q. At some point, did CQG address the issue of whether it
16 needed to take a license from TT before it was sued?
17 MR. CARDEN: Objection, vague and 408.
18 MS. WYTSMA: I'm trying to get around the 408, Your
19 Honor.
20 THE COURT: The Court knows that, and he's trying to
21 stop you. At some point? The objection is overruled.
22 You may answer.
23 BY THE WITNESS:
24 A. At some point, we had the sense from Trading Technologies,
25 and from Tim Geannopulos specifically, that we would either
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2265
1 that we knew how at that time.
2 Q. At that time, did you personally have a belief that CQG did
3 not infringe TT's patents?
4 A. Absolutely.
5 Q. Did you have an opinion as to -- did you have a personal
6 opinion as to what would have happened if CQG had licensed
7 TT's patents at the time?
8 MR. CARDEN: Again, calls for speculation.
9 MS. WYTSMA: I'll lay a foundation.
10 THE COURT: All right. Lay a foundation.
11 BY MS. WYTSMA:
12 Q. You decided you were going to defend yourself in filing a
13 lawsuit because you didn't want to take a license from TT. Was
14 taking a license from TT in your perspective an option at that
15 time?
16 A. I really looked to Tim on that. He is the lead business
17 guy at CQG, and he felt as though taking a license would
18 essentially involve us not participating in the trade routing
19 space at all.
20 Q. That the license would require you to not --
21 A. Participate in the trade routing space, because it would
22 just be too expensive.
23 Q. Now we know the case didn't stay in Denver because here we
24 are in Chicago. Can you tell the jury what happened?
25 A. As I understand it, pretty rapidly TT filed its own --
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2266
1 Trading Technologies filed its own lawsuit here in Chicago.
2 Then our case was dismissed, and then this is where the case
3 has been ever since.
4 Q. And in connection with this case, did you ever provide a
5 declaration to the court?
6 A. Yes, I did. It was in 2007, I think.
7 Q. Let's take a look at that declaration, Plaintiff's Trial
8 Exhibit 343. If you could go to page 3 now, Mr. Schroeter, is
9 this a declaration you signed on the 17th of April of 2007?
10 A. Yeah, that's what it says.
11 Q. And that's your signature?
12 A. Yep.
13 Q. Okay. In paragraph 13, you state:
14 "DOMTrader, in both Integrated Client and as
15 CQGTrader, also features a dynamic scale of prices, which
16 adjusts with every change of the inside market to maintain the
17 inside market in the center of the display of prices."
18 Do you see that language?
19 A. Yes, I do.
20 Q. At the time you signed this declaration, did you believe
21 that to be true?
22 A. Yes, I did.
23 Q. Did you have any knowledge that would have led you to
24 believe that this was not a true statement when you signed the
25 declaration?
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2267
1 A. No, I didn't.
2 Q. Were you aware at the time you signed this declaration that
3 the DOMTrader could be manipulated in a way to make the market
4 window disappear off the price ladder, creating a static price
5 ladder?
6 A. No, I was made aware of a defect in the product quite a bit
7 later. It wasn't until -- I think the date was like December
8 of 2010.
9 Q. And were you aware at the time you signed your declaration
10 in 2007 that an INI file could be adjusted to create that same
11 result?
12 A. No, I was not aware of that.
13 Q. Now, you just mentioned a defect. Did I understand you
14 correctly that you learned about that in 2010?
15 A. Yes, I learned about it from Trading Technologies.
16 Q. And what did you do after learning of the defect?
17 A. After Trading Technologies had reported what they called
18 odd behavior in the product, I really initiated or turned over
19 an investigation into what the defect was as well as caused it
20 to go to Yuriy Shterk in the product development department.
21 They essentially investigated it and came to some results where
22 they understood what the defect was, what the impact was, and
23 they fixed it. It was a pretty simple fix, maybe a day or so
24 of work, but it took them from beginning to end, I think, a
25 couple of weeks.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2268
1 Q. And within a couple of weeks, what had happened with that
2 defect?
3 A. It had been fixed and put into a release of the product.
4 Q. Do you have any personal knowledge as to why that defect
5 existed?
6 A. I don't.
7 Q. Did you ever receive a report as to how that defect was
8 introduced into the software code?
9 A. I know that I received an e-mail stream essentially from PD
10 that discussed the process of their investigation and the
11 results, and it indicated that that defect had been present in
12 the product for a long time. I think even they said that that
13 defect had existed since the beginning of implementation. I
14 didn't understand what that meant, but I understood that it was
15 for quite a while.
16 Q. And what's "PD"?
17 A. Oh, I'm sorry. Product development.
18 MS. WYTSMA: Let's look at Plaintiff's Trial Exhibit
19 333, and let's go to the top.
20 (Brief pause.)
21 BY MS. WYTSMA:
22 Q. Mr. Schroeter, are you copied on this February 28, 2011
23 e-mail?
24 A. Yes, I am.
25 Q. Do you recall receiving it?
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2278
1 Mr. LeMond was selected because you were asked by Mr. Mather to
2 go get someone from Silicon Valley.
3 A. Yeah, it's why we went to Silicon Valley. It was Tim's
4 idea.
5 Q. Okay. At your deposition --
6 THE COURT: Excuse me. Don't look at anything else
7 until he tells you.
8 BY MR. CARDEN:
9 Q. At your deposition, you testified that you were unaware of
10 how Mr. LeMond was chosen, correct?
11 A. I actually testified at my deposition two different ways.
12 I testified at one point that I wasn't aware, and then at
13 another point I testified that I probably was aware at the time
14 that we selected him but that I had forgotten.
15 Q. Okay. Let's look at your deposition now.
16 A. Yes, sir.
17 Q. At page 65, line 18, through page 66, line 4, were you not
18 asked the following questions, and did you not give the
19 following answers:
20 "Who chose Mr. LeMond to be the opinion counsel?
21 "Answer: I don't know.
22 "Question: Was it you?
23 "Answer: I don't know. It may have been, but I
24 don't -- I can't recall how we selected him as the opinion
25 counsel.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2279
1 "Question: You don't know what that process was at
2 all?
3 "Answer: No.
4 "Question: Do you know how his name came to CQG?
5 "Answer: No."
6 Were those not the questions you were asked and the
7 answers you gave?
8 MS. WYTSMA: Objection, improper impeachment.
9 Counsel is simply reading the deposition testimony. It's not
10 proper impeachment.
11 THE COURT: Well, first of all, the objection is
12 overruled on improper impeachment. As to whether it is
13 impeaching, that's a close call, but I'll let the jury decide.
14 BY MR. CARDEN:
15 Q. Were those the questions you were asked and the answers you
16 were giving, sir?
17 A. Yes, it was.
18 Q. Okay. Now, you mentioned that when you read the opinions
19 your understanding was that Mr. LeMond had an accurate
20 understanding of the CQG products, correct?
21 A. I think that's correct.
22 Q. Okay. You don't really have any understanding of the
23 functionality of the DOMTrader, do you?
24 A. Very little, yeah.
25 Q. You've never really used it?
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2280
1 A. No.
2 Q. Okay. You don't know about specific features of the
3 DOMTrader?
4 A. Only within the context of the litigation.
5 Q. Okay. You don't know about features, for instance, such as
6 price selection?
7 A. Again, only within the context of the litigation.
8 Q. You don't know about focus?
9 A. Again, only within the context of the litigation.
10 Q. And you don't know about hover?
11 A. By "hover," do you mean price hold?
12 Q. Do you know about hover?
13 A. I've heard of hover from Mr. Brumfield.
14 Q. You don't know about that feature with respect to the
15 DOMTrader, though?
16 A. Oh, only with regard again to the litigation.
17 Q. And let's just set that stage. The litigation started in
18 August of 2005, correct?
19 A. Yes, that's correct.
20 Q. And you don't know anything about price hold with respect
21 to the DOMTrader?
22 A. That's correct.
23 Q. And you don't know how you would do fast-click with respect
24 to the DOMTrader?
25 A. That's correct.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2281
1 Q. And you don't know what ghost orders are with respect to
2 the DOMTrader?
3 A. That is correct.
4 Q. And, in fact, you can't even explain how the responsive and
5 dynamic scales work in the DOMTrader, correct?
6 A. Not currently, I cannot.
7 Q. You couldn't at your deposition, either, right?
8 A. That's correct.
9 Q. And you don't know how prices move in the DOMTrader,
10 correct?
11 A. Other than that they do move.
12 Q. Do you recall testifying at your deposition that you didn't
13 know how they move?
14 A. No, but I may have testified that way.
15 Q. You don't know how many different ways, if any, there are
16 for prices to move in the DOMTrader?
17 A. I don't.
18 Q. So let's pull up your declaration in this case.
19 A. Okay.
20 Q. Sorry. In the eSpeed case. Actually, I guess it is in
21 this case that Ms. Wytsma used with you. Let's come back to
22 that. Do you recall the paragraph that Ms. Wytsma pulled up
23 that talked about how all the prices were coming back to the
24 center?
25 A. Yes, I do.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2282
1 Q. Okay. Do you know if that's dynamic or responsive scale?
2 A. I believe that's dynamic scale.
3 Q. Okay. So not the responsive scale.
4 A. I believe that's correct. I would have to look at the
5 actual paragraph to confirm it.
6 Q. Sure. This is Plaintiff's Exhibit 232, paragraph 13 on
7 page 4. You see it says:
8 "DOMTrader, in both Integrated Client as CQGTrader,
9 also features a dynamic scale of prices."
10 Do you see that language?
11 A. I do.
12 Q. "Which adjusts with every change of the inside market to
13 maintain the inside market in the center of the display of
14 prices."
15 That's what we looked at before?
16 A. Yes, that's correct.
17 Q. And that's not the product accused of infringement in this
18 case, is it?
19 A. Currently?
20 Q. Has dynamic ever been accused of infringement in this case?
21 A. I don't think so, but I can't guarantee it. I know the
22 infringement contentions have changed quite a bit.
23 Q. Now, with respect to even any other language in your
24 declaration that might be there, whether it's responsive or
25 not, at the time you signed the declaration in 2007 you weren't
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2283
1 the person most knowledgeable at CQG about functionality of the
2 product, were you?
3 A. No, I was not the most knowledgeable about CQG.
4 Q. And the people you had talked to at CQG about
5 functionality, you talked to them for purposes of putting them
6 in touch with lawyers.
7 A. Could you ask the question again?
8 Q. Sure. For instance, you put Mr. Glista in touch with
9 Mr. LeMond to talk about functionality.
10 A. That's correct.
11 Q. And you put Mr. Shterk in touch with Loeb & Loeb to talk
12 about functionality.
13 A. That's correct.
14 Q. But your discussions with them were not about functionality
15 itself.
16 A. In the context of the litigation and in the context of
17 preparing this declaration, they were.
18 Q. When you had discussions with CQG personnel about
19 functionality, it was to put them in touch with counsel.
20 A. In part, yes, that's correct.
21 Q. Now, I think you told Ms. Wytsma that the position of CQG
22 hasn't changed very much in this litigation, right?
23 A. I think that's right.
24 Q. And you're aware that throughout the litigation you've had
25 to give some answers about functionality and issues like that,
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2284
1 correct?
2 A. When you say "you," do you mean CQG?
3 Q. CQG. I'm sorry.
4 A. Yes, I think that's right.
5 Q. You're aware of the interrogatory responses?
6 A. Yes.
7 Q. And you're aware that over an 18-month -- well, actually, a
8 two-year period that CQG provided 28 amended versions of its
9 responses regarding functionality?
10 MS. WYTSMA: Objection, relevance.
11 THE COURT: One second. Objection overruled. You
12 may answer.
13 BY THE WITNESS:
14 A. I'm not aware of all of those changes.
15 BY MR. CARDEN:
16 Q. Okay. Let's talk about the opinions for a moment. You
17 have no experience in patent law, that's correct?
18 A. At the time this case was filed, I had no experience in
19 patent law.
20 Q. You have no personal experience in practicing patent law.
21 A. That's correct.
22 Q. Okay. You've never prepared an infringement or a
23 non-infringement opinion?
24 A. That's correct.
25 Q. And you were asked about whether this was an eight-page
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2285
1 single-spaced document. Do you recall that?
2 A. Yes.
3 Q. You wouldn't have any idea whether a typical opinion is 20,
4 30, 50 pages.
5 A. That's correct.
6 Q. Now, you were asked about eSpeed and whether when that
7 ruling came out you had some further interactions with
8 Mr. LeMond. Do you recall that?
9 A. Yes.
10 Q. And I believe you testified that you told him to look at
11 the opinions and then to provide further information. Do you
12 recall that?
13 A. I think so, yes.
14 Q. Okay. Now, in your deposition, you didn't testify to that,
15 did you?
16 A. I don't know. I have a feeling you're going to tell me I
17 didn't.
18 Q. Sure. In fact, in your deposition you testified that you
19 didn't tell him to do so.
20 A. That's possible.
21 Q. So let's look at page 65, lines 8 through 14.
22 MS. WYTSMA: Objection.
23 THE COURT: Sorry?
24 MS. WYTSMA: Improper impeachment. He already
25 testified he didn't know.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2286
1 THE COURT: One second.
2 MS. WYTSMA: He can show it to the witness and let
3 him --
4 THE COURT: Counsel, thank you. He did say he didn't
5 know, so it's not impeachment. It's refreshing recollection.
6 Objection sustained.
7 BY MR. CARDEN:
8 Q. Mr. Schroeter, you testified when Ms. Wytsma asked you that
9 you instructed Mr. LeMond to provide more information to CQG
10 based upon the eSpeed rulings, correct?
11 A. I believe that I testified that I sent an e-mail to
12 Mr. LeMond asking him if the eSpeed opinion -- if his opinion
13 was impacted at all by the eSpeed opinion.
14 Q. And that is not what you testified to in your deposition,
15 is it?
16 A. I think you're correct, yes.
17 Q. All right. At this point, I'd like you to look at your
18 deposition, page 65, lines 8 through 14.
19 A. Did you say page 65 again?
20 Q. I did, 65 at lines 8 through 14.
21 A. Thanks.
22 Q. At that deposition, were you not asked the following
23 question, and did you not give the following answer:
24 "Do you recall if you asked him to look at any of the
25 developments in the eSpeed case as it applied to his opinions?
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2287
1 "Answer: I know that he knew of the eSpeed case, but
2 I did not ask him to follow up with anything with regard to the
3 eSpeed case."
4 Was that the question you were answered and the --
5 the question you were asked and the answer you gave, sir?
6 A. Yes, it was, Mr. Carden.
7 Q. And were you also -- I'm sorry. You also didn't know at
8 that time if anyone else had asked him to look at it, correct?
9 A. That's correct.
10 Q. Now, you mentioned that you had a follow-up call with
11 Mr. LeMond after he said he would render other opinions. Do
12 you recall that document?
13 A. Yes.
14 Q. Okay. You do recall that Mr. LeMond said -- if we could
15 pull up 247, in that last two sentences, Mr. LeMond says:
16 "I'm going to write up a more detailed analysis that
17 will also address the eSpeed issues in the next few days for us
18 all to look at that hopefully will help us all be on the same
19 page. When we are all on the same page, I'll provide updated
20 opinion letters."
21 Do you see that?
22 A. I do.
23 Q. Okay. You will admit there's no other detailed analysis
24 that's written?
25 A. That's correct.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2288
1 Q. And there are no updated opinion letters?
2 A. I don't think so.
3 Q. At your deposition, you did not testify about any follow-up
4 calls with Mr. LeMond?
5 A. No, I didn't.
6 Q. You were aware at the time that Ernie Popke had some
7 concerns about infringement in view of the eSpeed decision,
8 correct?
9 A. I can't remember if it was Ernie or if I was aware or if
10 Ernie reported some concerns to Mr. LeMond.
11 Q. Now, you were asked a lot of questions about discussions
12 with Mr. Geannopulos and TT asking CQG to sign a license,
13 essentially. You at CQG -- I shouldn't say "you." CQG is also
14 pursuing its own patent applications, correct?
15 A. We are not currently pursuing any patent applications.
16 Q. At one time, CQG had filed applications.
17 A. I think that's correct.
18 Q. They didn't issue?
19 A. We did not pursue them.
20 Q. But had they issued, would you have had any problem
21 asserting them against someone you believed to infringe?
22 A. Possibly. The context in which we even decided to file
23 patent applications was that you can either have an offensive
24 patent strategy or a defensive patent strategy, and our idea
25 was maybe we should have some patents laying around in case,
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2289
1 you know, in case we needed to defend ourselves against
2 someone.
3 Q. I want to very briefly touch on an issue that was raised by
4 Ms. Wytsma.
5 A. Okay.
6 Q. And that was the use of astrology at CQG. I believe that
7 you testified that that's Mr. Mather's thing and that you do
8 things at his request, correct?
9 A. That's correct.
10 Q. And I believe you testified that periodically you have had
11 some communications with Mr. Hwang.
12 A. That's correct.
13 Q. So it wouldn't surprise you that I have almost 200 e-mails
14 between you and Mr. Hwang.
15 A. That's correct.
16 Q. Okay.
17 A. That's about 20 a year for the past ten years.
18 Q. Okay. That's only part of what's been produced to us in
19 this case.
20 A. I don't know what's been produced to you.
21 Q. Now, there was a point -- and there was testimony about
22 this -- where Ms. Wang was let go as counsel. Do you recall
23 that?
24 A. I do.
25 Q. And astrology factored into that decision, correct?
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2304
1 Q Why do you believe that?
2 A Mr. Shterk was the head of product development through a
3 lot of the time period where the, the DOM was developed.
4 Q Do you believe Mr. Popke knows how the product functioned?
5 A Yes, I do.
6 Q Why is that?
7 A He was a senior member of product development.
8 Q Do you think Mr. Glista knows how the product functioned?
9 A Yes, definitely. He was one of the guys that spent a lot
10 of time demoing it to customers.
11 Q You think Mr. Mather knows how the product functioned?
12 A Yes.
13 Q Why you do you believe that?
14 A He along with I think a couple of guys from Russia was the
15 original designer of it.
16 Q So when you had this follow-up call with Mr. LeMond to
17 discuss his opinions, was there anyone on the call who fully
18 understood product functionality?
19 A Who fully understood?
20 Q When you had the call with Mr. LeMond to discuss his
21 opinion that CQG's products did not infringe because they did
22 not have a static price ladder, were there individuals who
23 participated in that call who understood the product
24 functionality at issue?
25 A Yes.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2305
1 MR. CARDEN: Objection, foundation, Your Honor.
2 THE COURT: Overruled.
3 BY MS. WYTSMA:
4 Q Was that a yes?
5 A Yes.
6 Q And in relying on Mr. LeMond's opinions did you also rely
7 on the knowledge of your colleagues that were responsible for
8 developing the products?
9 A Yes, I did.
10 Q And in relying on Mr. LeMond's opinions, did you rely on
11 the fact that he was an experienced patent attorney?
12 A Yes, I did.
13 Q And did you, in fact, rely on Mr. LeMond's opinions?
14 A Yes, we did as a company.
15 Q And did you continue to rely on LeMond's opinions as a
16 basis for not removing the DOMTrader from the CQG Integrated
17 Client?
18 A Yes, that's correct.
19 Q Now, Mr. Carden asked you about your declaration that you
20 signed in 2007. I'd like to pull up PTX 0343. Now, as you
21 conceded during cross-examination, there are certain features
22 of product functionality that you are not personally familiar
23 with, correct?
24 A That's correct.
25 Q And I'm wondering why you signed this declaration
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2306
1 attesting to product functionality of the DOMTrader. Can you
2 tell the jury?
3 A Yes. It, it was put together in support for a summary
4 judgment motion. And I consulted with Mike Glista and Rod
5 Giffen and Yuriy Shterk in the preparation of this declaration.
6 Q So you weren't relying on just your own personal knowledge
7 at the time you signed this declaration, is that correct?
8 A That's correct.
9 Q And those three individuals assisted you in making sure
10 that information that you provided was accurate to the best of
11 your knowledge?
12 A Yes, that's correct.
13 Q And in April of 2007 you were the president of the
14 company, correct?
15 A That's correct.
16 Q Okay. So you were signing this declaration as the
17 president of the company?
18 A Yes.
19 Q Okay. Now, let's take a look at -- Mr. Carden asked you
20 some questions about paragraph 13, and he correctly pointed out
21 that paragraph 13 related to the dynamic scale prices. But
22 let's take a look at paragraph 12. And this is at the top of
23 page 3. And let's highlight the first two lines. No, the
24 first two lines of page 3, please -- I'm sorry, paragraph 11.
25 Let me try this one last time. The first two lines
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2309
1 MR. CARDEN: Objection, Your Honor. Speculation.
2 THE COURT: I'm sorry.
3 MR. CARDEN: I withdraw the objection, Your Honor.
4 THE COURT: I just don't know what to say. Proceed.
5 MS. WYTSMA: Thank you.
6 BY MS. WYTSMA:
7 Q Again, on the issue of astrology, we've heard a lot about
8 letting counsel go, retaining counsel, birthdays. At the time
9 that Miss Wang was released from serving for CQG's trial
10 counsel was this case winding down a process that required
11 counsel in Chicago?
12 A Yes. We were at the tail end of --
13 Q A process?
14 A -- of a process that we knew that we'd be ramping up
15 discovery and litigation more. And so it made sense for us to
16 hire a Chicago based firm.
17 Q Now, did CQG hire Mr. Kelly as trial counsel simply
18 because he had the right birthday without consideration of any
19 other factors, such as his experience and his knowledge?
20 A He's a great lawyer. He's got a great pedigree. Top -- I
21 think top 100 litigation attorneys.
22 THE COURT: Okay. No commercials.
23 THE WITNESS: Sorry. He also loves Lionel Richie.
24 MS. WYTSMA: Well, I think we should stop on that
25 note. Thank you for your time.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2310
1 THE COURT: Anything else, Mr. Carden?
2 MR. CARDEN: Very briefly, Your Honor.
3 THE COURT: Sure.
4 RECROSS-EXAMINATION
5 BY MR. CARDEN:
6 Q Mr. Schroeter, you were asked if you have continued to
7 rely on the LeMond opinions, correct?
8 A Yes.
9 Q And you said yes. And that's true that even though CQG
10 has had many many many changes in its products over the years,
11 correct?
12 A That is correct.
13 Q And it's true even though there's been many many decisions
14 coming out of the courts and the related litigations about this
15 case, correct?
16 A Yes, that's correct.
17 Q Now, you were asked again about your declaration. And
18 that declaration is still in place today, correct?
19 A I don't know.
20 Q To your knowledge it's never been withdrawn?
21 A I don't know. My understanding is that there is something
22 about that motion was stayed, but I don't know anything beyond
23 that.
24 Q And you -- do you know that CQG admitted that information
25 in it was not correct at some point?
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2311
1 A I do not know that.
2 Q Now, you were asked about changes in circumstances that
3 required counsel in Chicago, correct?
4 A Yes.
5 Q And that was in 2012 roughly?
6 A That we changed counsel?
7 Q Yes.
8 A I think it was like late 2011.
9 Q And the counsel you had before from Denver.
10 A Uh-huh.
11 Q They participated in years worth of litigation in this
12 court, correct?
13 A Well, we had local counsel as well, but yes.
14 Q But your local counsel weren't the ones making arguments
15 in this court, were they?
16 A Boy, I came here so rarely that you're probably right
17 about that.
18 Q It was Faegre & Benson who were participating in multi-day
19 hearings in this court, not Chicago counsel.
20 You mentioned that you didn't have to -- you know,
21 you had a bunch of other reasons for hiring Mr. Kelly. No
22 concerns about his qualifications, nor do we. But isn't it
23 true that you went through 40 or 50 attorneys before you got to
24 him that Peter rejected?
25 A I actually don't know how many attorneys we went through.
bd2fe1ed-7ce1-4415-be83-0b0c4f58edc4
Page 2312
1 MR. CARDEN: Okay. No further questions.
2 FURTHER REDIRECT EXAMINATION
3 BY MS. WYTSMA:
4 Q Just one last question. Those 40 to 50 attorneys you were
5 looking at, they weren't employment lawyers or products
6 liability lawyers, were they?
7 A No. I mean, of course, they were all patent litigators.
8 Q So you were looking for experienced patent litigation
9 attorneys in the Chicago area to represent you here, correct?
10 A That's correct.
11 MS. WYTSMA: No further questions.
12 THE COURT: You're excused. Thank you.
13 (Witness excused.)
14 THE COURT: All right. Ladies and gentlemen, I know
15 you're hungry. You came in on time today. The Court's going
16 to go ahead and let you go for today. Enjoy the rest of
17 Friday. The Court's going to ask that you be here Monday at
18 8:45, as close as you can get to that. We'll try to start by
19 9. I'm moving my entire call over a day and trying to get
20 people not to come to try to accommodate this. All right. So
21 8:45 on Monday.
22 Now, warning. You may have a really big break which
23 will sort of make up for pushing you today. So even though you
24 come in, you may hear evidence, and then we may need a couple
25 of hours of a break in between to be able to deal with some
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2343
1 any of the weather. Couldn't have unless you have printers and
2 you were outside. So before we get to all of the various
3 things that you have filed, is there anything -- and you all --
4 we're still printing and still -- because frankly this Court
5 didn't look at anything for 48 hours, still trying to keep from
6 being sick and me not being here and really ruining things as
7 for all your efforts.
8 So what I want to do is know who we have left to
9 testify today, and let's deal with that this morning. Then
10 we'll let them have the beautiful day for three or four hours
11 if we need to, and then we'll get to what we need to with
12 closings. But we'll deal with all of your various filings that
13 don't need to be dealt with before the witness. We'll deal
14 with those first. I do want to find out whether or not Trading
15 Technologies is resting this morning. Mr. Carden.
16 MR. CARDEN: Let's address your first issue first,
17 which is the witnesses. I believe all we have left is
18 Mr. Hartmann and Mr. Giffen.
19 THE COURT: And those are for you too? That's what
20 I'm asking.
21 MR. CARDEN: Mr. Giffen, Mr. Giffen was identified
22 for us as well, Your Honor.
23 THE COURT: Are you calling him in your case in
24 chief?
25 MR. CARDEN: I don't believe we need to.
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2344
1 THE COURT: All right. So who else do you have to
2 call in your case in chief?
3 MR. CARDEN: We do not have anyone else.
4 THE COURT: So you're ready to rest?
5 MR. CARDEN: We are, Your Honor.
6 THE COURT: Have you looked at your exhibits and --
7 MR. CARDEN: We have, Your Honor.
8 THE COURT: All right. Why don't you step up.
9 Someone step up. Let's deal with exhibits. We're still
10 waiting for jurors, and we still have to make them aware of
11 what happened.
12 MS. WYTSMA: Your Honor, there's some evidentiary
13 issues relating to the witnesses this morning. Perhaps we
14 should deal with them first so we can put the testimony on as
15 soon as the jurors are here.
16 THE COURT: We've waited this long to rest. You have
17 any objection to --
18 MR. CARDEN: No.
19 THE COURT: All right. Come forward.
20 MS. WYTSMA: Your Honor, late last night, perhaps
21 even early this morning we received additional exhibits from
22 plaintiffs. They were, of course, added to -- I'm not sure if
23 we're at the 15th, 20th, or 30th exhibit list they filed now.
24 There's a real problem with one of these documents. It's
25 privileged. It contains privileged work product.
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2345
1 THE COURT: You want to refer to that document?
2 MS. WYTSMA: Sure. I have a copy I can pass up to
3 the Court. This is Plaintiff's Trial Exhibit 2924 that was not
4 identified on any exhibit list until, I am not sure what time
5 it was served last night or this morning. May I approach.
6 THE COURT: You may.
7 (Document tendered.)
8 MS. WYTSMA: Now, I just received an e-mail I think
9 two minutes ago that bears further on this issue, and I haven't
10 had a chance to look at it carefully. But the document that is
11 attached is a document -- and this is again, Exhibit PTX 2924.
12 As the Court can see, this is a case management schedule. This
13 was prepared by Loeb & Loeb. It reflects attorney work
14 product. It has to do with the schedule and our strategy.
15 THE COURT: All right. Hold up. Why would you be
16 presenting a case management from counsel?
17 MR. CARDEN: Sure, Your Honor. And this one actually
18 goes along hand in hand with 2925, which I can give you a copy
19 of as well.
20 MS. WYTSMA: May I have a copy.
21 THE COURT: Wait. Wait. Wait. Wait. Don't hand me
22 up anything that the other side doesn't have.
23 MS. WYTSMA: I don't have a copy of that because it
24 was just served two minutes ago. I believe what they're going
25 to suggest is that --
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2346
1 THE COURT: Counsel --
2 MS. WYTSMA: Sorry.
3 THE COURT: -- we'll let him suggest it. All right.
4 I'm so glad I started my day.
5 MR. CARDEN: 2925, Your Honor, is an e-mail from Mr.
6 Schroeter to Mr. Hwang, the astrologer again, attaching a
7 document called "TT versus CQG, 2005 Case Management Schedule,"
8 which is the document you have in front of you, 2924.
9 THE COURT: All right.
10 MR. CARDEN: And it is specifically provided to him
11 for purposes of having him weigh in on --
12 THE COURT: Okay. Wait a minute. Wait a minute.
13 You're saying you have another document in front of you that
14 goes along with what they're --
15 MR. CARDEN: Correct.
16 THE COURT: -- referring to.
17 MR. CARDEN: Right. I'm trying to get an extra copy
18 of it.
19 THE COURT: Oh, you don't have a copy for her?
20 MR. CARDEN: That's right. That's why I handed --
21 THE COURT: Okay. All right. I was going to say
22 just give it to her.
23 MR. CARDEN: Yes. And I can show you. What I tried
24 to give to Miss Wytsma --
25 THE COURT: Or as you're talking about it why don't
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2347
1 you just have it --
2 MR. CARDEN: Can we put it on the Elmo and everyone
3 can see it?
4 THE COURT: That's fine.
5 MS. WYTSMA: Why don't you just give her a copy.
6 MR. CARDEN: So this is 2925, Your Honor. So this is
7 the document providing it to Mr. Hwang for purposes of having
8 him weigh in on dates affiliated with the case management
9 schedule. And you can see it says, "Attached, TT versus CQG
10 2005 Case Management Schedule," which is what you have in front
11 of you. The issue with this document, Your Honor, is that in
12 the actual case management schedule it shows that the witnesses
13 they put on regarding reliance at best have been telling half
14 truths, because on page 2924.003, it says, "CQG has no advice
15 of counsel defense per Joe Schroeter in 2012."
16 So the fact that they've been up there suggesting
17 that they have relied on the opinions of counsel throughout is
18 simply not correct. And this document, which was provided to a
19 third party in the context of having him weigh in on the issue
20 of dates, renders this not privileged any further.
21 MS. WYTSMA: May I respond.
22 THE COURT: You may.
23 MS. WYTSMA: Your Honor, first of all, this is
24 attorney work product that can be waived only by the attorney,
25 not by Mr. Schroeter. This reflects Loeb & Loeb work product.
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2348
1 That is not waived. The issue of whether this 10/5/2012 entry,
2 "CQG has no advice of counsel defense per Joe Schroeter," if
3 they try and put that in, it's going to require a Loeb & Loeb
4 attorney to get into that witness chair and explain what was
5 meant by that entry.
6 Second, this issue has already been dealt with by
7 Magistrate Judge Schenkier. I'm not sure if it was this exact
8 document, but he has previously addressed the issues of whether
9 documents provided to Mr. Hwang resulted in a waiver of
10 privilege. And I believe, and I wasn't present at the time,
11 but I believe -- and we're trying to find the order that he
12 found that Mr. Hwang was either a confidant or a person of
13 trust, such that it didn't waive the privilege. Because they
14 just served this on us five minutes ago, we haven't had an
15 opportunity to locate that order.
16 But this is clearly work product. It should have
17 been returned when it was discovered. It should never have
18 been retained. That work product has never been waived by any
19 attorney at Loeb & Loeb. And moreover, this is Mr. Schroeter
20 sending this e-mail. Why didn't they raise this when Mr.
21 Schroeter was here to testify? When Mr. Schroeter could have
22 explained this. This is sandbagging. It's just -- Mr. Giffen
23 has no knowledge. Mr. Hartmann has no knowledge about this.
24 The only person who can explain this is either Mr. Schroeter or
25 a Loeb & Loeb attorney.
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2349
1 MR. CARDEN: Your honor, the -- and I won't dispute
2 we've had -- we had actual discussions with Judge Schenkier
3 about the scope of the privilege waiver. And I believe it's a
4 January 2014 order where he reconsidered an order of
5 November 2013 talking about work product. However, this is a
6 different situation, and this document was not specifically
7 considered in the context of those motions. And this one is
8 one that they asked him to review and comment on with respect
9 to dates.
10 THE COURT: Asked who to review and comment on?
11 MR. CARDEN: Mr. Hwang. Sorry, Your Honor.
12 THE COURT: And Mr. Hwang is no longer here, so he's
13 not a witness.
14 MR. CARDEN: Right.
15 THE COURT: Mr. Schroeter isn't here. He's not a
16 witness. Who do you --
17 MR. CARDEN: And --
18 THE COURT: And Mr. Kelly -- I mean, I know Mr.
19 Borsand took the stand, and he's at counsel table. But they
20 shouldn't be forced to have to put their counsel on.
21 MR. CARDEN: Understood. And to address the issue of
22 the alleged sandbagging and why it wasn't addressed with Mr.
23 Schroeter, because honestly in preparing further for Mr.
24 Hartmann, it's the first time we actually saw the document with
25 respect to Mr. Schroeter. So that's why it wasn't used before.
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2350
1 THE COURT: All right. It won't be allowed. It will
2 not be allowed. All right. What else do you have?
3 MS. WYTSMA: The other issue is a self-created
4 document that's never been produced in this case. It was given
5 a Plaintiff's Trial Exhibit number again late last night.
6 They -- I believe they're going to attempt -- and I have a
7 copy. I apologize. Plaintiff's Trial Exhibit --
8 THE COURT: You know what, one second. However, as
9 the Court is not allowing it, the Court is not saying there was
10 sandbagging. Just so the record is clear. All right. All
11 right. Proceed.
12 MS. WYTSMA: May I hand up a copy of 1597-C.
13 THE COURT: You may.
14 (Document tendered.)
15 MS. WYTSMA: This is a document that has never been
16 produced in this litigation. It appears to be a self-created
17 document. You can see it doesn't bear any production number in
18 the right-hand corner. It's never been disclosed to us before
19 late last night.
20 THE COURT: All right. When you say self-created,
21 are we talking about for demonstrative purposes only?
22 MS. WYTSMA: No.
23 THE COURT: Or created at some other time?
24 MS. WYTSMA: They are intending to use it as a
25 substantive exhibit.
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2351
1 THE COURT: Counsel.
2 MR. CARDEN: Sure. It's an excerpt from the pivot
3 table you've heard so much about, Your Honor. That's why it
4 has 1597 on it. That is the pivot table. This is intended to
5 show that the versions that are now at issue as a result of
6 Your Honor's ruling Friday night continue to be used through
7 2014. That they didn't simply end on the date when the new
8 versions came out. They were continuously in use through 2014.
9 The sole purpose of the document is an excerpt from the pivot
10 table, which both of the experts have relied on and said is the
11 best source of information regarding the transaction data in
12 this case.
13 And in addition, if we look at what was provided to
14 us with respect to Mr. Giffen, there are two gateway
15 transaction data reports. So apparently Mr. Giffen is familiar
16 with this type of information.
17 MS. WYTSMA: Well, I can guarantee you that he's
18 never seen this document before. He'll have no knowledge as to
19 how it was created. You know, they can try and lay a
20 foundation, but --
21 THE COURT: Is Mr. Giffen in the courtroom? Please
22 step out. Anyone else who's testifying this morning, please
23 step out.
24 (Brief pause.)
25 THE COURT: All right.
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2391
1 A When I wrote it?
2 Q Yes. When was it authored?
3 A October.
4 THE COURT: Of what year?
5 THE WITNESS: Of last year.
6 BY MR. CARDEN:
7 Q The end of last year.
8 A The end of last year. Toward the end of last year. You
9 mean my opinion? You mean my expert opinion?
10 Q Your report, sir.
11 A My report, yes. That's what I thought.
12 Q So the end of last year?
13 A The end of last year.
14 Q And in that report you nowhere say anything about
15 selecting a Silicon Valley attorney, do you?
16 A I don't, no. No, of course, not.
17 Q And you had spoken to Mr. Schroeter at the time you
18 rendered your report, correct?
19 A I believe I had, yes.
20 Q And yet your report contains nothing about CQG going to
21 Silicon Valley to find a software attorney, right?
22 A No, of course not.
23 Q Let's talk about the materials and information that Mr.
24 LeMond considered. And if we can pull up PTX 236. And let's
25 go to that second paragraph. And this is the opinion on the
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2392
1 '132 letter, correct, sir?
2 A Right.
3 Q And the materials that Mr. LeMond considered for purposes
4 of his understanding of the product were the demonstration by
5 Mr. Glista, correct?
6 A That's my understanding.
7 Q And you reviewed his deposition, correct?
8 A I have indeed.
9 Q And did you see the testimony that was presented from it
10 in court?
11 A Yes.
12 Q And you know that there's nothing else he relied upon for
13 his product functionality in this case, correct?
14 A I differ with you only in that as I recalled his
15 testimony, he said he did not recall what else there might have
16 been. Not that he might not have relied on other things, but
17 it was 10 years later or whatever. And he said I don't
18 remember what else I relied on.
19 Q But you recall him saying he couldn't identify anything
20 else in the opinions that were suggested, correct?
21 A I don't recall that. But if that's your representation, I
22 accept it.
23 Q And there's nothing else attached to this opinion in terms
24 of product information, correct?
25 A My understanding is the only things attached were the
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2393
1 prosecution history.
2 Q And you recall Mr. LeMond testifying that had he had
3 additional information, he would have attached it to the
4 opinions? That was his standard practice?
5 A I don't recall it per se, but if that's -- again, if
6 that's your representation, I accept it.
7 Q And, in fact, it would be your standard practice to do
8 that?
9 A You know, that's -- I would attach whatever I could
10 reasonably attach. As I said earlier, I've done a lot of
11 opinions involving software, and it is simply impossible
12 sometimes to attach it. You don't -- you know, the source code
13 comes in, you know, electronic form. So it would have to be
14 put on a CD or a -- you know, a USB stick or something. So
15 there's a problem with attaching software. Plus the source
16 code for many clients is very confidential. And so you have a,
17 so you have a hard time.
18 So in this case Glista's -- was it a Web X where
19 he -- he had some kind of a demonstration that Mr. Glista did.
20 Maybe that should have been transcribed, and if there had been
21 a transcription of it, it could have been attached or something
22 like that. But I can see where there's a bit of a problem in
23 this case of what to attach, Counsel. It wasn't readily -- and
24 it wasn't like one of those situations where I send you a
25 brochure and say, okay. Here's my product. Analyze it.
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2394
1 Q But CQG produced documentary discussions about its own
2 products, correct, sir?
3 A Produced in this lawsuit you mean?
4 Q Produced internally and for external distribution.
5 A Oh, I see. Yes.
6 Q Yes, user manuals, release notes, things like that that
7 describe product functionality?
8 A Yes.
9 Q And none of those are attached to those opinions?
10 A That is correct.
11 Q And Mr. LeMond testified that if he had them in his
12 possession, he could have attached them?
13 A If that's his testimony, that's his testimony.
14 Q Because that was his standard practice, and indeed that's
15 a best practice?
16 A I agree with you.
17 Q Now, let's talk about the understanding of the products
18 and the method at issue. It's not sufficient just to
19 understand the products, is it? You have to actually
20 understand the functionality that's at issue.
21 A Well, that's what I meant when I say by understanding the
22 products.
23 Q Okay. But it's not just a general understanding of the
24 fact that there may be some other order entry screens. It's
25 about the particular functionality that's potentially the
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2395
1 infringing functionality?
2 A I completely agree with you. Particularly in this case.
3 Q Okay. And then last on this slide I want to talk about
4 the demonstration that the author is familiar with current case
5 law. And again, it's not sufficient just to be familiar with
6 the current case law, is it? You actually have to apply it
7 properly?
8 A Yes, of course.
9 Q So let's look at your next slide. And you state that he
10 explains the patents in sufficient detail, correct?
11 A That is correct.
12 Q And you talked about in what's Plaintiffs Exhibit 236, two
13 paragraphs about the '132 patent, right?
14 A Plaintiff's Exhibit 236.
15 Q Yes. Let's look on page 2, second B.
16 A Maybe you think there's some --
17 Q The '132 patent.
18 A Okay.
19 Q Correct?
20 A Yes. You want to talk about the '132. Okay. Yes.
21 Q That's fine. Okay. And how long is the '132 patent?
22 A It goes on for a number of pages. Like five, six,
23 seven --
24 Q Right. Significantly longer than the opinions, right?
25 A I don't know about significantly longer, but it's longer.
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2635
1 didn't tell anybody. We knew it was in the code because it was
2 in there to fix a crash. We didn't know it was in there to
3 change the scaling functionality to enable a user to have a
4 static price column to enter a price order because they no
5 longer wanted to see the inside market.
6 And there was an e-mail where Mr. Shterk asked
7 Mr. Korepanov to fix it in 2009, and he didn't. And we
8 certainly fixed it in 2010. And again, there is no evidence
9 that any user ever used our product in this way except for Mike
10 Burns at TT. So if you reach the decision that our product is
11 not reasonably capable of operating the six-step manner,
12 there's no infringement.
13 Let's turn to the INI file theory. We heard a lot
14 about INIs. Mr. Katin and Mr. Shterk testified that there was
15 an internal document about the INI file shared among the
16 internal computer programmers, and that's what you saw earlier.
17 That's not a document that we give to customers to tell them
18 how to manipulate an INI file, whatever that is.
19 And Mr. Katin, he also identified this particular
20 exhibit. I know you're excited to see it again because when
21 you saw it on Thursday, I know you were excited to see computer
22 code up there, but literally use common sense for a minute.
23 What trader is going to look at that and be able to
24 figure out, just your ordinary futures trader, and figure out
25 how to read that? So Mr. Katin testified that if you really
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2636
1 wanted to try to go find this, you dig through six or seven
2 folders in your Windows. That's how you get to it. And that
3 assumes you know what you're doing, you know what you're
4 looking for, and you know how to change it.
5 We did hear from one witness who testified that he
6 remembered instructing customers how to do this, Mr. Prince.
7 Who does Mr. Prince work for? Trading Technologies. Of
8 course, there's no product literature to back up his statement.
9 There's no e-mail correspondence to back up that statement.
10 Please consider that when you weigh his testimony. We think
11 that on this INI file issue, all the facts should then suggest
12 that our product is not reasonably capable of operating in this
13 configured manner.
14 TT identified a handful of e-mails where our
15 developers, whose first language is Russian, used the term
16 "static," suggesting to you that somehow that's an admission of
17 one of our developers of the same static that's in the patent.
18 Really? What's the opposite of dynamic? Static.
19 Haven't we already discussed that our price column
20 automatically moves? It's in the code. So clearly their use
21 of the word "static" doesn't elevate to the term "static" in
22 the patent because we don't have a static price column.
23 What I think they're trying to do is suggest to you
24 that somehow we ripped off the technology, that we knew about
25 it. The Court has already instructed you this isn't a case
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2637
1 about copying or ripping off the technology.
2 Mr. Mather went into great detail explaining how he
3 built the plumbing behind our order entry products, how he
4 independently designed Order Ticket and DOMTrader. This is not
5 one of those cases.
6 Do you remember my colleague, Ms. Wytsma? She asked
7 Mr. Borsand, "Do you believe CQG copied the patented
8 technology?"Remember, he kind of hemmed and hawed and didn't
9 really give a straight answer? He said, "I believe that."
10 When this instruction is issued, I want you to remember his
11 answer when you're weighing the credibility of his testimony.
12 There's one last infringement theory, inducement. I'm
13 just going to spend a brief minute on this. Inducement
14 requires two things, intent to infringe and the direct
15 infringement of another. Here, there's no intent of CQG to
16 induce someone else to infringe.
17 They hired an outside counsel to offer us an opinion
18 which turned out to be that of non-infringement. Clearly we
19 didn't think our actions were inducing someone else. There's
20 no intent.
21 We've heard from Mr. Mather. We've heard from
22 Mr. Schroeter. We heard from Mr. Giffen. We've heard from
23 Mr. Glista. We've heard from Mr. Shterk. We've heard from
24 Mr. Katin. Did any of them offer any testimony which suggested
25 we intended to infringe? So for that reason, there's no
58065ff1-d01c-4ac5-a732-b62066ab83ed
Page 2638
1 inducement.
2 For a second reason, there's no proof of direct
3 infringement by someone other than CQG that we caused. There
4 is no inducement.
5 Now, I hesitate to talk about the next subject because
6 we believe that the testimony and the evidence shows
7 non-infringement. I sound like a broken record because our
8 product does have automatic movement. It always has automatic
9 movement. It's written in the source code.
10 But if you don't agree with me, we have to talk about
11 damages. Those damages are a reasonable royalty. The key word
12 is "reasonable." This is when your common sense should take
13 over because the differences in the parties' damages position
14 are stark.
15 What would Mr. Mather have agreed to pay
16 Mr. Brumfield? I forgot I had this. What would those two men
17 have agreed back in 2004? There's a concept called the Book of
18 Wisdom. We know that's not a real book. Mr. Peterson talked
19 about it.
20 You have the additional knowledge at your disposal of
21 knowing what's happened since 2004 that would allow you to
22 reach what a reasonable royalty is. We know that a reasonable
23 royalty is two numbers multiplied together, the rate and the
24 base.
25 I want to first talk about the rate. Then we'll talk
Exhibit 2
I !·
TOWNSEND and
TOWNSEND and
CREW 1.1.1'
January 6, 2004
CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE
VIA FED EX
JosefF. Schroeter President CQG,INC. CQG Corporate Headquarters Independence Plaza 1050 17th St., Ste 2000 Denver, CO 80265
Palo Alto, California Tel 650 326-2400
Walnut Creek, California Tel 925 472-5000
San Diego, California Tel 856-350-6100
Denver. Colorado Tel 303 571-4000
Seattle, Washington Tel 206 467-9600
Re: Infringement Analysis of U.S. Patent No. 6,772,132 Assignee: Trading Technologies International, Inc. Our Reference: 025720-000200US
Dear Joe:
San Francisco
Two Embarcadero Center 8th Floor San Francisco California 94111-3834 Tel415 576-0200 Fax 415 576-0300
CQG, Inc. has requested that we examine whether their products infringe U.S. Patent No. 6,772,132 (" '132 patent"). This letter reports the results of our examination and concludes that none of the CQG products infringes any claims of the '132 patent.
The opinions and analysis provided in this letter are based upon, among other things, our study of the '132 patent (attached Exhibit "A"), its prosecution history (attached Exhibit "B"), and our understanding of the CQG, Inc. products as related to us and demonstrated to us by Mike Glista ofCQG, Inc.
PARTI: BACKGROUND
A. The COG. Inc. Products
CQG, Inc. currently provides two· products. The first product is referred to as the "CQG Trader" and is a stand-alone application for electronically trading on a commodity exchange. The CQG Trader is used for tracking bids and offer volume of various commodities over the Internet. The CQG trader always shows the best current bids and offer volume within the screen. CQG Trader thus automatically focuses the lists of bids and offers to allow for this display and accordingly, the CQG Trader provides a dynamic display of prices for commodities.
' ' ' !
TI v. CQG (05-4811)
POX 2232 8/Z1/Z013
1 oi\Jinnrt ll ouin
Highly Conf - Outside Attorney Eyes Only CQG7703936
PTX 0236.0001TT v. CQG (05-4811)
TOWNSEND · and
TOWNSEND and
CREW
JosefF. Schroeter January 6, 2004
Page2
A second CQG product is the "CQG Application." Once again, this product auto focuses the bids and offer volume within the screen. The price listing associated with the bids and offers is dynamic. The CQG application includes several different ways of viewing bids and offers. A first is a "DOM" view, which is essentially the same as the CQG Trader view described above.
A second view is the "Heads-Up" display. This display appears in the form of a "wheel". One right clicks with an input device, such as a mouse, holds the right click in place and moves the on-screen cursor to the part of the display wheel that the person wishes to have displayed and then releases the right click, thus displaying the desired information. Thus, prices are dynamically displayed based upon the user's selection.
A third display is the "Chart Trader" view. This view keeps the area of the most heavy trading for the desired commodity in focus. Once again, this is a dynamic display of prices and provides an auto-focus display of the pricing.
· Finally, a fourth view is the "Order View." This view simply provides a price level bar and volume bar that dynamically changes with regard t~ activity in the market.
B. The '132 Patent
The '132 patent is generally directed to a method and system for reducing the time it takes for a trader to place a trade when electronically trading on an exchange, thus increasing the likelihood that the trader will have orders filled at desirable prices and quantities. The "Mercury" display and trading method of the '132 patent displays market depth on a vertical or horizontal plane, which fluctuates logically up or down, and left or right across the plane as the market prices fluctuate. Each location in the bid display region corresponds to a price level along a common static price axis that includes prices that do not move. However, at least one of first and second indicators moves in the bid or ask display regions relative to the common static pric~ axis.
The application for the '132 patent was filed on June 9, 2000. The '132 patent claims priority to a provisional application filed on March 2, 2000. The patent issued on August 3, 2004 and includes 56 claims. Of the 40 claims, claims 1, 8 and 14 are the only independent claims.
PART II: ANALYSIS
C. The Applicable Patent Law Principles for Infringement
Before comparing the claims of a patent to an allegedly infringing device or method, the claims of the patent must be interpreted to determine their meaning. Claim scope is a matter oflaw for the court to decide. Markman v. Westview Instru,-zents, Inc., 52 F3d 967 (Fed Cir 1995). To determine the meaning of an asserted claim, a court first looks· to "intrinsic" evidence, i.e., the language of the claim, the patent specification and the prosecution history. Alloc, Inc. v. International Trade Comm 'n, 342 F3d 1361, 1368 (Fed Cir 2003); Atlantic Thermoplastics Co. v. Faytex Corp., 970 F2d 834, 846 (Fed Cir 1992); Vitronics Corp. v. Conceptronic, Inc., 90 F3d 1576, 1582 (Fed Cir 1996). Where intrinsic evidence unambiguously
Highly Conf- Outside Attorney Eyes Only CQG7703937
PTX 0236.0002TT v. CQG (05-4811)
TOWNSEND and
TOWNSEND and
CREW
JosefF. Schroeter January 6, 2004
Page3
sets forth the meaning of the claims, reliance on "extrinsic" evidence is improper. Vitronics, supra, 90 F3d, at 1583.
While there is a presumption that the words of a claim have their ordinary meaning (e.g., as described in a dictionary or encyclopedia), the specification and prosecution history must always be consulted to determine whether a purported "ordhtary'' meaning is consistent with the use ofthe words by the inventor. Texas Digital Systems, Inc. v. Telegenix, Inc., 308 F3d 1193, 1203 (Fed Cir 2002). Indeed, "[t]he specification acts as a dictionary when it expressly defines terms used in the claims or when it defines terms by implication." Vitronics, supra, 90 F3d, at 1582. While care should be taken· not to unduly limit the claims to a particular preferred· embodiment from the specification, the definition of a claim term provided by the specification is usually dispositive. A/loc, supra, 342 F3d, at 1370; Vitronics, supra, 90 F3d, at 1582. In some cases, the "court looks to whether the specification refers to a limitation only as a part ofless than all the possible embodiments or whether the specification. read as a whole suggests that the very character of the invention requires the limitation to be part of every embodiment." Alloc,
·supra, 342 F3d, at 1370. The specification is "the single best guide to the meaning of a disputed term." Vitronics, supra, 90 F3d, at 1582.
Explicit statements made by a patent applicant during the prosecution history to distinguish a claimed invention over prior art may also serve to define the meaning of the claim. Spectrum Int'l, Inc. v. Sterilite Corp., 164 F3d 1372, 1378-79 (Fed Cir 1998). By distinguishing the claimed invention over the prior art, an applicant is indicating what the claims do not cover. Thus, a patentee who relinquished subject matter to di~tinguish a prior art reference asserted by the Patent Office during prosecution "cannot during subsequent litigation escape reliance [by the defendant] upon this unambiguous surrender of subject matter." /d., at 1379 (citations omitted).
The next step is to determine whether the claim, as properly construed, covers the product or process in question. Patent infringement is determined by comparing the claims of the patent at issue with the accused device or process. 35 USC §271(a). For a patent holder to show "literal" infringement of a claim, they must show that every element recited in the claim is found in the accused device or process. Corning Glass Works v. Sumitomo Electric USA, Inc., 868 F2d 1251, 1258, 9 USPQ2d 1962, 1967 (Fed Cit 1989); Pennwalt Corp. v. Durand-Wayland, Inc., 833 F2d 931, 935 (Fed Cir 1987). The absence of even a single element means that the claim at issu,e is not infringed. !d.
Where a claim does not "literally'' read on an accused device, the scope of the claim can be expanded in certain circumstances to include an accused device which ''performs substantially the same overall function or work, in substantially the same way, to obtain substantially the same result as the claimed invention." Pennwalt, supra, 833 F2d, at 934. This is referred to as the "Doctrine of Equivalents". Another formulation is the "insubstantial difference" test. Under this test, infringement under the Doctrine of Equivalents based on whether the differences between the claimed element and the accused device or process are "insubstantial." This test was given in the Federal Circuit decision Hi/tort-Davis Chemical Co. v. Warner-Jenkinson Co., Inc., 35 USPQ 2d 1641, 1645 (Fed Cir 1995). Although this Federal Circuit_ decision was reversed and
Highly Conf - Outside Attorney Eyes Only CQG7703938
PTX 0236.0003TT v. CQG (05-4811)
TOWNSEND and
TOWNSEND and
Josef F. Schroeter January 6, 2004
Page4
CREW 1.1 .1'
remanded in Warner-Jenkinson, the Supreme Court confirmed the potential applicability of the "insubstantial difference" test. Warner-Jenkinson Co., 117 S Ct 1040, 1054 (1997).
By the related doctrine of prosecution history estoppel, a claim cannot be broadened under the Doctrine of Equivalents to include subject matter that was disclaimed or surrendered during the prosecution of a patent. Pennwalt, supra, 833 F2d, at 934.
The next issue relating to prosecution history estoppel is to detennine wh(m prosecution history estoppel applies and how extensively it restricts claim interpretation. In Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.1
, the Federal Circuit held that prosecution history estoppel applies as a complete bar to equivalents.2 However, the Supreme Co~ reversed the Federal Circuit, holding that estoppel need not bar suit against every equivalent to an amended claim element, but that the patentee bears the burden of showing that the amendment does not surrender the particular equivalent in question. The Supreme Court stated:
Prosecution history estoppel ensures that the doctrine of equivalents remains tied to its underlying purpose. Where the original application once embraced the purported equivalent but the patentee narrowed his claims to obtain the patent or to protect its validity, the patentee cannot assert that he lacked the words to describe the subject matter in question. 4
***** Estoppel arises when an amendment is made to secure the patent and the amendment narrows the patent's scope .. .. A patentee who narrows a claim as a condition.for obtaining a patent disavows his claim to the broader subject matter, whether the amendment was made to avoid the prior art or to comply with §112.5
The prosecution history is thus critical to a detennination of infringement under the Doctrine of Equivalents. Although the Supreme Court has reintroduced some flexibility into application of the doctrine, the patentee must rebut the presumption that a narrowing amendment was made for purposes· of patentability.
Once it is determined that prosecution estoppel applies, it is presumed that the patentee has surrendered all equivalents of the amended, element unless the equivalent was unforeseen at the time of the application, the rationale underlying the amendment bears no more than a tangential relations to the equivalent in question, or there is some other reason suggesting that the patentee could not reasonably be expected to have described the insubstantial substitute in question. 6 The burden is on the patentee to show that the exception applies. 7
1 Festo Corp. v. Shoketsu Kinzoku Kogyo Kahushikt Co., 234 F3d 558,574 (Fed Cir 2000). 2 Id. 3 Festo Corp. v. Shoketsu Kinzoku Kogyo Kahushikt Co., Ltd., 535 US 722, 740 (2002) . 4 Id., at 734. · · 5 Id., at 736-37. 6 Id., at 740-41. 7 Id., at 741.
Highly Conf - Outside Attorney Eyes Only CQG7703939
PTX 0236.0004TT v. CQG (05-4811)
TOWNSEND and
TOWNSEND and
CREW l.Ll'
D. Infringement Analysis for the COG Products
JosefF. Schroeter January 6, 2004
PageS
With the applicable legal principles in mirid, we may now provide an analysis of whether the CQG products infringe any claim of the '132 patent. As noted above, only claims 1, 8 and 14 are independent.
Claim 1 is directed to a method of placing a trade order for a commodity on ali electronic exchange having an inside market with a highest bid price and a lowest ask price, using a graphical user interface and a user input deVice. The method includes·, among other things, displaying market depth of the commodity, through a dynamic display of a plurality of bids and a plurality of asks in the market for the commodity, including at least a portion of the bid and ask quantities of the commodity, the dynamic display being aligned with a static dis.play of prices corresponding thereto. wherein the static display of prices does not move in response to a change in the inside market.
As noted above, the CQG Trader is used for tracking bids and offer volume of various commodities over the Internet using a graphical user interface. The CQG Trader always shows the best current bids and offer volume within the screen. Thus, the CQG Trader auto focuses the lists of bids and offers to allow for this display. Accordingly, the CQG Trader provides a dynamic display of prices for commodities. The CQG Trader does not include a common static price axis wherein the prices do not move in response to a change in the inside market. Accordingly, it is our opinion that the CQG Trader does not literally infringe claim 1.
The CQG Application, as noted above, includes various options for ·displaying and viewing bids and offers. A first view is a "DOM" view, which is essentially the same as the CQG Trader view described above. A second viewing option in the CQG Application is the "Heads-Up" display. This display appears in the form of a "wheel." A user right clicks with an input device, such as a mouse, holds the right click in place and moves the on-screen cursor to the part of the display wheel that the _person wishes to have displayed and then releases the right click, thus displaying the desired information. Thus, prices are dynamically displayed based upon the user's selection. A third display provided by the CQG Application is the "Chart Trader" view. This view keeps the area of the most heavy trading for the desired commodity in focus. Once again, this is a dynamic display of prices and provides an auto-focus display of the pricing. Finally, a fourth view provided by the CQG Application is the "Order View." This view simply provides a price bar and volume bar that dynamically changes with regard to activity in the market. Accordingly, it is our opinion that the CQG Application does not literally infringe claim 1.
Claim 8 is directed to a computer readable medium having program code thereon, for execution on a computer having a graphical user interface and a user input device, to place a trade order for a commodity on a!?- electronic exchange having an inside market with a highest bid price and a lowest ask price. The computer readable medium comprises, among other things, a second program code displaying market depth of a commodity, through a dynamic display of a plurality of bids and a plurality of askS in the market for the commodity, including the bid and
Highly Conf- Outside Attorney Eyes Only CQG7703940
PTX 0236.0005TT v. CQG (05-4811)
TOWNSEND and
TOWNSEND and
CREW L.ll '
·-
JosefF. Schroeter January 6, 2004
Page6
ask quantities of the commodity, aligned with a static display of prices corresponding thereto. wherein the static display of prices does not move in response to a change in the inside market.
As previously discussed, the CQG Trader is used for tracking bids and offer volume of various commodities over the Internet on a graphical user interface. The CQG Trader always shows the best current bids and offer v~lum.e within the screen. Thus, the CQG Trader autofocuses the lists of bids and offers to allow for this display. Accordingly, the CQG Trader provides a dynamic display of prices fo.r commodities. The CQG Trader does not include a common static price axis wherein the prices do not move in response to a change in the inside market Accordingly, it is our opinion that a computer readable medium that includes computer code for the CQG Trader does not literally infringe claim 8.
·Likewise, the CQG Application, as previously discussed, includes various options for displaying and viewing bids and offers. A first view is a "DOM" view, which is essentially the same as the CQG Trader view described above. A second viewing option in the CQG Application is the "Heads-Up"- display. This display appears in the form of a "wheel." A user right clicks with an input device, such as a inouse, holds the right click in place and moves the on-screen cursor to the part of the display wheel that the person wishes to have displayed and then releases the right click, thus displaying the desired information. Thus, prices are dynamically displayed based upon the user's selection. A third display provided by the CQG Applica,tion is the "Chart Trader" view. This view keeps the area of the most heavy trading for the desired commodity in focus. Once again, this is a dynamic display of prices and provides an auto-focus display of the pricing. Finally, a fourth view provided by the CQG Application is the "Order View." This view simply provides a price bar and volume bar that dynamically changes with regard to activity in the market. Accordingly, it is our opinion that a computer readable medium that includes computer code for the CQG Application does not literally infringe claim 8.
Claim 14 is directed to a client system for placing a trade order for a commodity on an electronic exchange having an inside market with a highest bid price atid a lowest ask price. The · system comprises, among other things, a display device for displaying market depth of a commodity, through a dynamic display of a plurality of bids and a plurality of asks in the market for the commodity, including the bid and ask quantities of the commodity, aligned with a static display of prices corresponding thereto, wherein the static display of prices does not move when the inside. market changes.
As previously discussed, the CQG Trader is used for tracking bids and offer volume of various commodities over the Internet on a graphical user interface. The CQG Tmder always shows the best current bids and offer volume within the screen. Thus, the CQG Trader autofocuses the lists of bids and offers to allow for this display. Accordingly, the CQG Tr~der provides a dynamic display of prices for commodities. The CQG Trader does not include a common static price axis wherein the prices do not move in response to a change in the inside market. Accordingly, it is our opinion that a system that includes the CQG Trader does not literally infringe claim 14.
Highly Conf - Outside Attorney Eyes Only CQG7703941
PTX 0236.0006TT v. CQG (05-4811)
TOWNSEND and
TOWNSEND and
CREW 1i,l'
JosefF. Schroeter January 6, 2004
Page?
Likewise, the CQG Application, as previously discussed, includes various options for displaying and viewing bids and offers. A first view is a "DOM" view, which is essentially the same as the CQG Trader view described above. A second viewing option in the CQG Application is the "Heads-Up" display. This display appears in the form of a "wheel." A user right clicks with an input device, such as a mouse, holds the right click in place and moves the on-screen cursor to the part of the display wheel that the person wishes to have displayed and then releases the right click, thus displaying the desired information. Thus, prices are dynamically displayed based upon the user's selection. A third display provided by the CQG Application is the "Chart Trader" view. This view keeps the area of the most heavy trading for the desired commodity in focus. Once again, this is a dynamic display of prices and provides an auto-focus display ofthe pricing. Finally, a fourth view provided by the CQG Application is the "Order View." This view simply provides a price bar and volume bar that dynamically changes with regard to activity in the market. Accordingly, it is our opinion that a system that includes the CQG Application does not literally infringe claim 14.
Since the remaining claims depend upon one of claims 1, 8 and 14, the CQG, Inc. products do not literally infringe these claims either.
Even though a claim may not be literally infringed, a claim may still be infringed under the -Doctrine ofEquivalents as described above. As noted above, each of the views and displays of the .CQG, Inc. products are dynamic, with displayed information, including prices, changing. None of the views or displays include a common static price axis where the prices do not move. Rather, the prices do mo:ve. Accordingly, it is our opinion that the CQG, Inc. products do not infringe claims l, 8 and 14 under the Doctrine of Equivalents because they do not "perform substantially the same overall function of work, in substantially the same way, to obtain substantially the same result of the claimed invention" since they dynamically display prices as opposed to statically displaying prices that do not move. Since the remaining claims depend upon one of claims I, 8 and 14, the CQG, Inc. products do not infringe these claims under the Doctrine ofEquivalents either.
Highly Conf - Outside Attorney Eyes Only CQG7703942
PTX 0236.0007TT v. CQG (05-4811)
TOWNSEND and
TOWNSEND and
CREW 1 1.1'
CONCLUSION
JosefF. Schroeter January 6, 2004
PageS
For the reasons discussed above, it is our opinion that none of the CQG, Inc. products infringe any of the claims of the '132 patent.
While it is impossible for us to predict with certainty the outcome of any litigation that might occur, it is our opinion that, if litigation were to occur, CQG, Inc. would have a strong likelihood of prevailing. While our opinion of invalidity and infringement represents our careful analysis, litigation is an inherently unpredictable procedure where the outcome is often uncertain.
KTUsfs 60392787 vl
Highly Conf- Outside Attorney Eyes Only CQG7703943
PTX 0236.0008TT v. CQG (05-4811)
Exhibit 3
TOWNSEND and
TOWNSEND t' and
CREW I l l'
VIA FEDERAL EXPRESS
CONFIDENTIAL A1TORNEY-CLIENT PRIVILEGE
JosefF. Schroeter President CQG,INC. CQG Corporate Headquarters Independence Plaza 1050 17th St., Ste 2000 Denver, CO 80265
January 6, 2004
1'-Jio Allo. Calilorniu lei 650 31.6·2400
Wali1111 Lrullk. Calilormu fel 925 472-GOUO
San Diego. Californ111 In! 85!1-350·6100
Denver. Coloraclo Tel 303 571 ·4000
Seallle. Washington Tel 206 467·9600
Re: Infringement Analysis of U.S. Patent No. 6,766,304 Assignee: Trading Technologies International, Inc. Our Reference: 025720-000200US
Dear Joe:
Sa. Francisco
Two Embarca~oro Cen1e1 Blh Floor San francisco Cali lamia 94111-3834 Tal 415 576-0200 Fax 415 576-0300
TI v. CQG {05-4811)
POX 2233 8/21/2013
I AMn .. ~ Kf'vin
CQG, Inc. has requested that we examine whether their products infringe U.S. Patent No. 6, 766,304 (" '304 patent"). This letter reports the results of our examination and concludes that none of the CQG products infringes any claims of the '304 patent
The opinions and analysis provided in this letter are based upon, among other things, our study of the '304 patent (attached Exhibit "A"), its prosecution history (attached Exhibit "B"), and our understanding of the CQG, Inc. products as related to us and demonstrated to us by Mike Glista of CQG, Inc.
PARTI: BACKGROUND
A. The COG. Inc. Products
CQG, Inc. currently provides two products. The first product is referred to as the "CQG Trader" and is a stand-alone application for electronically trading on a commodity exchange. The CQG Trader is used for tracking bids and offer volume of various commodities over the Internet. The CQG trader always shows the best current bids and offer volume within the screen.
HIGHLY CONFIDENTIAL -ATTORNEYS' EYES ONLY
CQG7703780
PTX 0237.0001TT v. CQG (05-4811)
Tm·rN.'iEND and
TOWNSI:ND and
eru:w "'
JosefF. Schroeter January 6, 2004
Page2
CQG Trader thus automatically focuses the lists of bids and offers to allow for this display and accordingly, the CQG Trader provides a dynamic display of price leveJs for commodities.
A second CQG product is the "CQO Application." Once again, this product auto focuses the bids and offer volume within the screen. The price listing associated with the bids and offers is dynamic. The CQG application includes several different ways of viewing bids and offers. A first is a "DOM" view, which is essentially the same as the CQG Trader view described above.
A second view is the "Heads-Up" display. This display appears in the form of a "wheel11•
One right clicks with an input device, such as a mouse, holds the right click in place and moves the on-screen cursor to the part of the display wheel that the person wishes to have displayed and then releases the right click, thus displaying the desired information. Thus, price levels are dynamically displayed based upon the user's selection.
A third display is the "Chart Trader" view. This view keeps the area of the most heavy trading for the desired commodity in focus. Once again, this is a dynamic display of price levels and provides an auto-focus display of the pricing
Finally, a fourth view is the "Order View." This view simply provides a price level bar and volume bar that dynamically changes with regard to activity in the market.
B. The '304 Patent
The '304 patent is generally directed to a method and system for reducing the time it takes for a trader to place a trade when electronically trading on an exchange, thus increasing the likelihood that the trader will have orders filled at desirable prices and quantities. The "Mercury" display and trading method of the '304 patent displays market depth on a vertical or horizontal plane, which fluctuates logically up or down, and left or right across the plane as the market prices fluctuate. Each location in the bid display region corresponding to a price level along a common static price axis includes price levels that do not move. However, at least one of first and second indicators moves in the bid or ask display regions relative to the common static price axis.
The application for the '304 patent was filed on June 27, 2001. The application was a division of application 09/590,692, filed on June 9, 2000, which issued as U.S. Patent No. 6,772,132. The '304 patent also claims priority to a provisional application :filed on March 2, 2000. The patent issued on July 20, 2004 and includes 40 claims. Of the 40 claims, claims 1 and 27 are the only independent claims.
HIGHLY CONFIDENTIAL -ATTORNEYS' EYES ONLY
CQG7703781
PTX 0237.0002TT v. CQG (05-4811)
TO\\'NSEND a11d
TO\~'N.~END and
CREW
"'
PART II: ANALYSIS
C. Tbe Applicable Patent Law Principles for In:fiingement
JosefF. Schroeter January 6, 2004
Page3
Before comparing the claims of a patent to an allegedly infringing device or method, the claims of the patent must be interpreted to determine their meaning. Claim scope is a matter of law for the court to decide. Markman v. Westview Instruments, Inc., 52 F3d 967 (Fed Cir 1995). To determine the meaning of an asserted claim, a court first looks to "intrinsic" evidence, i.e., the language of the claim, the patent specification and the prosecution history. Alloc, Inc. v. InternaJional Trade Comm 'n, 342 F3d 1361, 1368 (Fed Cir 2003); Atlantic Thermoplastics Co. v. Faytex Corp., 970 F2d 834, 846 (Fed Cir 1992); Vitronics Corp. v. Conceptronic, Inc., 90 F3d 1576, 1582 (Fed Cir 1996). Where intrinsic evidence unambiguously sets forth the meaning of the claims, reliance on "extrinsic" evidence is improper. Vitronics, supra, 90 F3d, at 1583.
While there is a presumption that the words of a claim have their ordinary meaning (e.g., as described in a dictionary or encyclopedia), the specification and prosecution history must always be consulted to determine whether a purported "ordinary'' meaning is consistent with the use of the words by the inventor. Texas Digital Systems, Inc. v. TeJegentx1 Inc., 308 F3d 1193, 1203 (Fed Cir 2002). Indeed, "[t]he specificatic,n acts as a dictionary when it expressly defines terms used in the claims or when it defines tenns by implication." Vitronics, supra, 90 F3d, at 1582. While care should be taken not to unduly limit the claims to a particular preferred embodiment from the specification, the definition of a claim term provided by the specification is usually dispositive. A.lloc, supra, 342 F3d, at 1370; Vitronics, supra, 90 F3d, at 1582. In some cases, the "court looks to whether the specification refers to a limitation only as a part of less than all the possible embodiments or whether the specification rf'M as a whole suggests that the very character of the invention requires the limitation to be part of every embodiment." Alloc, supra, 342 F3d, at 1370. The specification is ''the single best guide to the meaning of a disputed term." Vitronics, supra, 90 F3d, at 1582.
Explicit statements made by a patent applicant during the prosecution history to distinguish a claimed invention over prior art may also serve to define the meaning of the claim. Spectrum Int'l, Inc. v. Sterilite Corp., 164 F3d 1372, 1378-79 (Fed Cir 1998}. By distinguishing the claimed invention over the prior art, an applicant is indicating what the claims do not cover. Thus, a patentee who relinquished subject matter to distinguish a prior art reference asserted by the Patent Office during prosecution "cannot during subsequent litigation escape reliance [by the defendant] upon this unambiguous surrender of subject matter." ld, at 1379 (citations omitted).
The next step is to determine whether the claim, as properly construed, covers the product or process in question. Patent infringement is detennined by comparing the claims of the patent at issue with the accused devjce or process. 35 USC §271(a). For a patent holder to show "literal".infringement of a claim, they must show that every element recited in the claim is found in the accused device or process. Corning Glass Works v. Sumitomo Electric USA, Inc., 868 F2d 1251, 1258,9 USPQ2d 1962, 1967 (Fed Cir 1989); Pennwalt Corp. v. Durand-Wayland, Inc.,
HIGHLY CONFIDENTIALATTORNEYS' EYES ONLY
CQG7703782
PTX 0237.0003TT v. CQG (05-4811)
. . Tl1\\.NSEND
und
TL1\X"NSEND and
JosefF. Schroeter January 6, 2004
Page4
CREW
'" 833 F2d 931,935 (Fed Cir 1987). The absence of even a single element means that the claim at issue is not infringed. Jd
Where a claim does not "literally" read on an accused device, the scope of the claim can be expanded in certain circumstances to include an accused device which "performs substantially the same overall function or work, in substantially the same way, to obtain substantially the same result as the claimed invention." Pennwalt, supra, 833 F2d, at 934. This is referred to as the .. Doctrine ofEquivalcnts". Another formulation is the "insubstantial difference" test. Under this test, infringement Wlder the Doctrine of Equivalents based on whether the differences between the claimed element and the accused device or process are "insubstantial." This test was given in the Federal Circuit decision Hilton-Davis Chemical Co. v. Warner-Jenkinson Co., Inc., 35 USPQ 2d 1641, 1645 (Fed Cir 1995). Although this Federal Circuit decision was reversed and remanded in W arner-Jenldnson, the Supreme Court confirmed the potential applicability of the "insubstantial difference" test. Warner-Jenlcinson Co., 117 S Ct 1040, 1054 (1997).
By the related doctrine of prosecution history estoppel, a claim cannot be broadened under the Doctrine of Equivalents to include subject matter that was disclaimed or surrendered during the prosecution of a patent Penmvalt, supra, 833 F2d, at 934.
The next issue relating to prosecution history estoppel is to determine when prosecution history estoppel applies and how extensively it restricts claim interpretation. In Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.1, the Federal Circuit held that prosecution history estoppel applies as a complete bar to equivalents.2 However, the Supreme Colll'f reversed the F~deral Circuit, holding that estoppel need not bar suit against every equivalent to an amended claim element, but that the patentee bears the bmden of showing that the amendment does not surrender the particular equivalent in question. The Supreme Cowt stated:
Prosecution history estoppel ensures that the doctrine of equivalents remains tied to its underlying purpose. Where the original application once embraced the purported equivalent but the patentee narrowed his claims to obtain the patent or to protect its validity, the patentee cannot assert that he lacked the words to describe the subject matter in question.4
1 Festo Corp. v. Shoketsu Kinzolat Kogyo KalniSJUki Co., 234 F3d SSS, 574 (Fed Cir 2000). z/d. 3 Festo Corp. v. Slwketsu Kinzoku Kogyo Kab11Shiki Co., Ltd., S3S US 7'1:2, 740 (2002). 4 ld., at 734.
HIGHLY CONFIDENTIAL -ATTORNEYS' EYES ONLY
CQG7703783
PTX 0237.0004TT v. CQG (05-4811)
TO\\":--ISEND trnd
TO\'i'NSEND tmd
CRE\X' liP
JosefF. Schroeter January 6, 2004
Page 5
Estoppel arises when an amendment is made to secure the patent and the amendment narrows the patent's scope .... A patentee who narrows a claim as a condition for obtaining a patent disavows his claim to the broader subject matter, whether the amendment was made to avoid the prior art or to comply with§ 112.5
The prosecution history is thus critical to a determination of infringement under the Doctrine of Equivalents. Although the Supreme Court has reintroduced some flexibility into application of the doctrine, the patentee must rebut the presumption that a narrowing amendment was made for purposes of patentability.
Once it is determined that prosecution estoppel applies, it is presumed that the patentee has surrendered all equivalents of the amended element unless the equivalent was unforeseen at the time of the application, the rationale wulerlying the amendment bears no more than a tangential relations to the equivalent in question, or there is some other reason suggesting that the paten~ could not reasonably be expected to have described the insubstantial substitute in question. 6 The burden is on the patentee to show that the exception applies. 7
D. Infringement Analvsis for the COG Products
With the applicable legal principles in mind, we may now provide an analysis of whether the CQG, Inc. products infringe any claim of the '304 patent. As noted above, only claims 1 and 27 are independent
Claim 1 is directed to a method for displaying market information relating to and facilitating trading of a commodity being traded in an electronic exchange having an inside market with a highest bid price and a lowest ask price on a graphical user interfuce. The method includes, among other things, dynamically displaying a first indicator in one of a plurality of locations in a bid display region, each location in the bid display region corresponding to a price level along a common static price access. A second indicator is dynamically displayed in one of a plurality of locations in an ask display region, each location in the ask display region corres.ponding to a price level along the common static price axis. The bid and ask display regions are displayed in relation to fixed price levels positioned along the common static price axis such that, when the inside market changes, the price levels along the common static price axis do not move and at least one of the first and second indicators moves in the bid or ask display regions relative to the common static price axis.
5 ld, at 736-37. 6 /d,ll1740-41. 7 Id, at 741.
HIGHLY CONFIDENTIALATTORNEYS' EYES ONLY
CQG7703784
PTX 0237.0005TT v. CQG (05-4811)
TD\'\":--JSE N D and
TO\'\"NSEND and
CI~EW
'"
JosefF. Schroeter January 6, 2004
Page6
As noted above, the CQG Trader is used for tracking bids and offer volume of various commodities over the Internet with a graphical user interface. The CQG Trader always shows the best current bids and offer volwne within the screen. Thus, the CQG Trader autofocuses the lists of bids and offers to allow for this display. Accordingly, the CQG Trader provides a dynamic display of price levels for commodities. The CQG Trader does not include a common static price axis wherein the price levels do not move while at least one of first and second indicators moves in the bid or ask display regions relative to the common static price axis. Accordingly, it is our opinion that the CQG Trader does not literally infringe claim 1.
The CQG Application, as noted above, includes various options for displaying and viewing bids and offers. A first view is a "DOM" view, which is essentially the same as the CQG Trader view described above. A second viewing option in the CQG Application is the "Heads-Up" display. This display appears in the fonn of a "wheel." A user right clicks with an input device, such as a mouse, holds the right cJick in place and moves the on-screen cursor to the part of the display wheel that the person wishes to have displayed and then releases the right click, thus displaying the desired information. Thus, price levels are dynamically displayed based upon the user's selection. A third display provided by the CQG Appli~on is the "Chart Tmder" view. This view keeps the area of the most heavy trading for the desired commodity in focus. Once again, this is a dynamic display of price levels and provides an auto-focus display of the pricing. Finally, a fourth view provided by the CQG Application is the "Order View." This view simply provides a price bar and volume bar that dynamically changes with regard to activity in the market. Accordingly, it is our opinion that the CQG Application does not literally infringe claim 1.
Claim 27 is directed to a computer readable medium having program code thereon, where the program code causes a machine to perform method steps including. among other things, dynamically displaying a first indicator in one of a plurality oflocations in a bid display region, each location in the bid display region corresponding to a price level along a common static price access. A second indicator is dynamically displayed in one of a plurality of locations in an ask display region, each location in the ask display region conesponding to a price level along the common static price axis. The bid and ask display regions are displayed in relation to fixed price levels positioned along the common static price axis such that, when the inside market changes, the price levels along th.e common static price axis do not move and at least one of the first and second indicators moves in the bid or ask display regions relative to the common static price axis.
As previously discussed, the CQG Trader is used for tracking bids and offer volume of various commodities over the Internet on a graphical user interface. The CQG Trader always shows the best current bids and offer volume within the screen. Thus, the CQG Trader autofocuses the lists of bids and offers to allow for this display. Accordingly, the CQG Tmder provides a dynamic display of price levels for col'nmoditi.es. The CQG Trader does not include a common static price axis wherein the price levels do not move while at least one of first and second ~ndicators moves in the bid or ask display regions relative to the common static price
HIGHLY CONFIDENTIAL -ATTORNEYS' EYES ONLY
CQG7703785
PTX 0237.0006TT v. CQG (05-4811)
'1'0\\":\ISEND and
l"<.n'i"NSEND and
CRt:\\' Ill'
JosefF. Schroeter January 6, 2004
Page7
axis. Accordingly, it is our opinion that a computer readable medium that includes computer code for the CQG Trader does not literally infringe claim 27.
Likewise, the CQG Application, as previously discussed, includes various options for displaying and viewing bids and offers. A first view is a "DOM" view, which is essentially the same as the CQG Trader view described above. A second viewing option in the CQG Application is the ''Heads-Up" display. This display appears in the. form of a "wheel." A user right clicks with an input device, such as a mouse, holds the right click in place and moves the on-screen cursor to the part of the display wheel that the person wishes to have displayed and then releases the right click, thus displaying the desired information. Thus, price levels are dynamically displayed based upon the user's selection. A third display provided by the CQG Application is the "Chart Trader" view. This view keeps the area of the most heavy trading fo~ the desired commodity in focus. Once again, this is a dynamic display of price levels and provides an auto-focus display of the pricing. Finally, a fourth view provided by the CQG Application is the "Order View." This view simply provides a price bar and volume bur that dynamically changes with regard to activity in the market Accordingly, it is our opinion that a computer readable medium that includes computer code for the CQG Trader does not literally infringe claim 27.
Since the remaining claims depend upon one of claims 1 and 27, the CQG products do not literally infringe these claims either.
Even though a claim may not be literally infringed, a claim may still be infringed under the Doctrine of Equivalents as described above. As noted above, each of the views and displays of the CQG, Inc. products are dynamic, with displayed infonnation, including price levels, changing. None of the views or displays include a common static price axis where the price levels do not move. Rather, the price levels do move. Accordingly, it is our opinion that the CQG, Inc. products do not infringe claims 1 and 27 under the Doctrine of Equivalents because they do not "perform substantially the same overall function of work, in substantially the same way, to obtain substantially the same result of the claimed invention" since they dynamically display price levels as opposed to statically displaying price levels. Since the remaining claims depend upon one of claims 1 and 27, the· CQG, Inc. products do not infringe these claims under the Doctrine of Equivalents either.
HIGHLY CONFIDENTIAL -ATTORNEYS' EYES ONLY
CQG7703786
PTX 0237.0007TT v. CQG (05-4811)
TOWNSEND cmd
TOWNSEND am/
'"
CONCLUSION
JosefF. Schroeter January 6, 2004
Page8
For the reasons discussed above, it is our opinion that none of the CQG, Inc. products infringe any of the claims of the '304 patent.
While it is impossible for us to predict with certainty the outcome of any litigation that might occur, it is our opinion that, iflitigation were to occur, CQO, Inc. would have a strong likelihood of prevailing. While our opinion of invalidity and infringement represents our careful analysis, litigation is an inherently unpredictable procedure where the outcome is often uncertain.
KTUsfs 60372026 vl
~~~ Kevin T. LeMond
HIGHLY CONFIDENTIALATTORNEYS' EYES ONLY
CQG7703787
PTX 0237.0008TT v. CQG (05-4811)
Exhibit 4
Trading Tech v CQG
Lemond, KevinT T. (Vol. 01) - 08/21/2013 1 CLIP (RUNNING 00:36:55.409)
All Designations_03
KL-TT_03 103 SEGMENTS (RUNNING 00:36:55.409)
1. PAGE 6:08 TO 6:09 (RUNNING 00:00:01.710)
08 Q: Good morning, Mr. LeMond. 09 A: Good morning.
2. PAGE 10:03 TO 10:19 (RUNNING 00:01:28.563)
03 Q: So since you've taken us there can you briefly 04 walk me through your employment history since obtaining 05 your JD? 06 A: I worked at Watts, Hoffman, Fisher & Heinke in 07 Cleveland, Ohio, upon graduation May 1990. 08 December 1992 I left Watts, Hoffman to go back 09 to school at University of Arizona. Graduated there May 10 1995. While working there I had several informal 11 clerkships not related to intellectual property, just 12 general things like you do as a law clerk. 13 May '95 when I graduated U of A I worked at 14 Snell & Wilmer. I left Snell & Wilmer I believe the end of 15 September of '96 to go to Townsend. And I left Townsend 16 mid February of 2006 and came to Schwabe, Williamson & 17 Wyatt. 18 And then left Schwabe April of 2011 and am 19 currently at Lee & Hayes.
3. PAGE 11:09 TO 12:08 (RUNNING 00:01:27.882)
09 Q: I'll just mark has Deposition Exhibit 2229 a 10 printout from LinkedIn and if you could just take a look at 11 that and tell me if that's your LinkedIn profile? 12 A: Yes. 13 Q: And does that accurately reflect your 14 employment history to the extent that it covers your 15 employment history? 16 A: Yes. Except I only started with Townsend. I 17 didn't go all the way back. 18 Q: And you've given me everything else, however 19 -- 20 A: Right. 21 Q: since the time you graduated from -- 22 A: Yes. 23 Q: From law school. 24 Now, since graduating from law school, how 25 many of your positions have involved patent law? 00012:01 A: Since graduating law school? 02 Q: Yes. 03 A: All of all of my positions at the law firms 04 I mentioned involved patent law except when I was at 05 University of Arizona for obtaining the bachelor of 06 electrical engineering degree I did some small clerkships, 07 you know, like just general running documents or research 08 but it was not related to patent law.
4. PAGE 12:14 TO 13:10 (RUNNING 00:01:37.224)
14 Q: Why did you go back to obtain that bachelor's 15 degree? 16 A: I always knew I wanted to go to law school and
CONFIDENTIAL page 1
TT v. CQG (05-4811) PTX 2921.0001
Trading Tech v CQG
17 I liked math/science in high school and I was told I should 18 look into engineering and then somebody said since you want 19 to go to law school that will be good for patent law. So I 20 went to Purdue and obtained an industrial engineering 21 degree, then went to law school, obtained a JD, came out. 22 1990 was I wanted to stay west. 1990 was 23 recession. I went back to the Midwest and I found a job 24 there doing patent law. Continued to try to come back 25 west. Was told a double E degree would be beneficial and 00013:01 then decided to go back and get the double E degree and 02 have been on the West Coast ever since. 03 Q: Other than your education at Purdue and the 04 University of Arizona do you have any additional scientific 05 or technical or engineering training? 06 A: I worked at Tektronix while at Purdue as 07 what's known as a cooperative engineering program. So 08 every other semester I came to Tektronix and worked 09 designing circuit boards, manufacturing processes for the 10 circuit boards and the circuits.
5. PAGE 13:16 TO 13:18 (RUNNING 00:00:07.489)
16 Q: Do you have any training in trading or trading 17 systems? 18 A: No.
6. PAGE 13:25 TO 14:01 (RUNNING 00:00:03.225)
25 first. Do you have any personal experience with trading 00014:01 software?
7. PAGE 14:03 TO 14:04 (RUNNING 00:00:09.272)
03 A: As in trading what? 04 Q: Trading stocks, commodities, futures, options.
8. PAGE 14:06 TO 14:08 (RUNNING 00:00:12.264)
06 A: Not that I recall. 07 Q: So you've never used any software for making 08 those types of transactions?
9. PAGE 14:10 TO 14:12 (RUNNING 00:00:06.284)
10 A: Trading types or -- 11 Q: Sure. Purchasing or selling any type of stock 12 or commodity?
10. PAGE 14:14 TO 14:14 (RUNNING 00:00:02.153)
14 A: No, not that I recall.
11. PAGE 26:02 TO 26:22 (RUNNING 00:01:12.676)
02 Q: Prior to authoring the opinion letters that 03 we'll talk about today, had you written opinions before? 04 A: Yes. 05 Q: Do you know how many you'd written before 06 doing the CQG opinions in '04/'05? 07 A: Do you just want an estimate? 'Cause that's 08 all I can do. 09 Q: Sure. 10 A: Six to eight. 11 Q: And why do you think that's the number? 12 A: Based on timing and trying to calculate my 13 percentage in my head from my various jobs. 14 Q: And is there a time that you're thinking of 15 then when you first began preparing opinions that you're 16 tying that to? 17 A: Back my first job at Watts Hoffman.
CONFIDENTIAL page 2
TT v. CQG (05-4811) PTX 2921.0002
Trading Tech v CQG
18 Q: Since preparing the CQG opinion letters, how 19 many have you done? 20 A: I believe three, maybe four. 21 Q: So writing opinions is not a large part of 22 your practice?
12. PAGE 26:24 TO 26:24 (RUNNING 00:00:02.346)
24 A: Not currently, no.
13. PAGE 38:25 TO 39:03 (RUNNING 00:00:16.877)
25 Q: Have you ever had a client officially rely on 00039:01 an opinion you had authored in the context of litigation 02 for purposes of a willfulness defense? 03 A: So at the trial stage?
14. PAGE 39:06 TO 39:19 (RUNNING 00:00:26.364)
06 Q: At any stage during litigation. 07 A: Yes. 08 Q: How many times has that happened? 09 A: Once. 10 Q: Other than CQG? 11 A: Yes. 12 Q: And who was that client? 13 A: Mediatech. 14 Q: Is that the same Is that the same 15 litigation you discussed previously? 16 A: Yes. 17 Q: And so they formally stated during litigation 18 they were relying on your opinion? 19 A: Yes.
15. PAGE 40:07 TO 40:09 (RUNNING 00:00:07.215)
07 Q: Are you familiar with current standards for 08 willfulness in the federal circuit law regarding 09 willfulness?
16. PAGE 40:11 TO 40:11 (RUNNING 00:00:02.019)
11 A: Not really, no.
17. PAGE 40:12 TO 40:22 (RUNNING 00:00:18.317)
12 (EXHIBIT 2232, 1-6-04 LEMOND LETTER TO 13 SCHROETER RE: INFRINGEMENT ANALYSIS ON 14 '132; BATES CQG7703936 THROUGH '3943) 15 16 (EXHIBIT 2233, 1-6-04 LEMOND LETTER TO 17 SCHROETER RE: INFRINGEMENT ANALYSIS ON 18 '304; BATES CQG7703780 THROUGH '7703787) 19 BY MR. CARDEN: 20 Q: I'll mark as Exhibit 2232 a document having 21 Production Nos. CQG7703936 through '3943. And I'm also 22 going to mark as Exhibit 2233 a document having Production
18. PAGE 40:23 TO 40:24 (RUNNING 00:00:26.766)
23 Nos. CQG7703780 through '7703787. I'll ask you to take a 24 look at these documents and tell me if you recognize them.
19. PAGE 40:25 TO 41:08 (RUNNING 00:00:29.169)
25 Do you recognize those documents? 00041:01 A: They appear to be the opinion letters. 02 Q: Okay. And so Exhibit 2232 is a letter where 03 the "re:" reads, "Infringement analysis of US Patent 04 No. 6,772,132." Do you see that? 05 A: Yes.
CONFIDENTIAL page 3
TT v. CQG (05-4811) PTX 2921.0003
Trading Tech v CQG
06 Q: And on the last page of this document is that 07 your signature? 08 A: Yes.
20. PAGE 67:23 TO 68:03 (RUNNING 00:00:28.252)
23 CQG7703776 THROUGH '3779) 24 Q: Let me mark as Exhibit 2238 an exhibit bearing 25 Production Nos. CQG7703776 through '3779, and ask you to 00068:01 take a look at this document and tell me if you recognize 02 it. Again I'll represent this was part of the production 03 we were given as part of the waiver of privilege.
21. PAGE 68:04 TO 68:22 (RUNNING 00:00:50.355)
04 Do you recognize this document? 05 A: No. 06 Q: I want to focus you on the second e-mail in 07 the chain, which is from Kevin T. LeMond; and is that you? 08 A: Yes. 09 Q: To Josef Schroeter? 10 A: Yes. 11 Q: Dated February 14th, 2005? 12 A: Yes. 13 Q: And so this would have been after you had 14 issued the signed opinion letters? 15 A: Correct. 16 Q: In this e-mail the first full paragraph 17 reads "I think we are still fine. ESpeed argued that their 18 price axis didn't infringe because it automatically 19 scrolled up or down." 20 Reviewing this document does it refresh your 21 recollection as to whether you had information regarding 22 the eSpeed case as part of your work for CQG?
22. PAGE 68:24 TO 68:25 (RUNNING 00:00:06.155)
24 A: I don't recall dealing with eSpeed when I was 25 working with CQG.
23. PAGE 69:14 TO 69:16 (RUNNING 00:00:05.930)
14 Q: But based on this e-mail it's clear you were 15 aware of the eSpeed case? 16 A: At that point, yes.
24. PAGE 71:10 TO 71:13 (RUNNING 00:00:11.328)
10 Q: And let me just be very clear. When you say, 11 "I think we are still fine," in this e-mail, you are saying 12 that you think your opinion regarding non-infringement is 13 still valid?
25. PAGE 71:15 TO 71:17 (RUNNING 00:00:05.285)
15 A: Yes, I believe so. 16 Q: Okay. So there is a relationship to your 17 original opinions?
26. PAGE 71:19 TO 71:20 (RUNNING 00:00:03.266)
19 A: Yes, there's a relationship here in this 20 e-mail.
27. PAGE 73:06 TO 73:11 (RUNNING 00:00:16.554)
06 Q: Do you have any understanding today of how 07 CQG's products from the 2004/2005 time frame worked? 08 A: No. 09 Q: At the time you were doing your opinions in 10 2004 and 2005 were you aware that CQG was modifying its
CONFIDENTIAL page 4
TT v. CQG (05-4811) PTX 2921.0004
Trading Tech v CQG
11 products?
28. PAGE 73:13 TO 73:16 (RUNNING 00:00:07.413)
13 A: Not that I recall, no. 14 Q: Were you Are you aware that they have 15 modified their products since you issued your opinions? 16 A: No.
29. PAGE 74:14 TO 74:17 (RUNNING 00:00:12.444)
14 Q: If they changed the product so that it didn't 15 operate in the way you described in your opinions, all 16 right, would your opinions apply equally to the changed 17 product?
30. PAGE 74:19 TO 74:22 (RUNNING 00:00:11.571)
19 A: It would depend on what was changed. 20 Q: I'm asking you about the functionality that 21 you specifically describe in your opinion. 22 A: If the functionality --
31. PAGE 74:24 TO 75:03 (RUNNING 00:00:11.145)
24 A: that was the basis of the non-infringement 25 is changed then, yes, it's possible the opinion could 00075:01 change. 02 Q: So your opinion is only as good as the 03 information they provided you about how the product worked?
32. PAGE 75:05 TO 75:05 (RUNNING 00:00:00.837)
05 A: Correct.
33. PAGE 78:12 TO 79:04 (RUNNING 00:00:54.420)
12 Q: Do you recall any of your interactions with 13 Mr. Glista? 14 A: No. 15 Q: Do you recall what information he provided you 16 about the products? 17 A: No. 18 Q: Do you recall how he provided you information 19 about the products? 20 A: I know I at least saw it work a few times on a 21 computer screen. 22 Q: How do you recall that? 23 A: I don't know why, I just recall that. 24 Q: When you say, "a few times," how many? 25 A: I don't know. It could be one, it could be -- 00079:01 I just recall seeing, you know, computer graphics. 02 Q: Do you know if you saw them again after you 03 issued the signed opinions in January of 2005? 04 A: No, I did not. I did not see them.
34. PAGE 80:05 TO 80:15 (RUNNING 00:00:30.658)
05 Q: Now, throughout Section D you described the 06 various CQG products and, to some extent, how they operate, 07 correct? 08 A: Correct. 09 Q: And you described each of them being dynamic; 10 is that correct? 11 A: Correct. 12 Q: Now, I want to make sure that we understand 13 what you're saying here. You characterize a common static 14 price axis as one that does not move in response to changes 15 in the inside market, correct?
CONFIDENTIAL page 5
TT v. CQG (05-4811) PTX 2921.0005
Trading Tech v CQG
35. PAGE 80:17 TO 80:21 (RUNNING 00:00:10.339)
17 A: That's correct. 18 Q: Look at the third paragraph. 19 A: Yes, I believe so. Correct. 20 Q: And am I correct in understanding that you're 21 saying that dynamic is the opposite of that?
36. PAGE 80:23 TO 81:03 (RUNNING 00:00:14.646)
23 A: Yes, that's what it appears. 24 Q: And that is how you describe the CQG products 25 based upon your understanding of how they worked? 00081:01 A: Correct. 02 Q: And that understanding was based upon 03 information provided to you by CQG?
37. PAGE 81:05 TO 81:08 (RUNNING 00:00:10.018)
05 A: Correct. 06 Q: And you didn't have any understanding that 07 there was any mode in which those products could have 08 operated in any other fashion?
38. PAGE 81:10 TO 81:10 (RUNNING 00:00:02.191)
10 A: Not to my recollection, correct.
39. PAGE 82:06 TO 82:09 (RUNNING 00:00:08.815)
06 Q: Were you aware at the time you did your 07 opinions that the CQG products had modes in which the users 08 could disable the movement of prices? 09 A: Not that I recall.
40. PAGE 82:10 TO 82:11 (RUNNING 00:00:04.069)
10 Q: Would that have been an important piece of 11 information for you to know in rendering your opinions?
41. PAGE 82:13 TO 82:14 (RUNNING 00:00:05.618)
13 A: Depending how that interacts with everything I 14 did know at the time about the products.
42. PAGE 82:15 TO 82:22 (RUNNING 00:00:26.308)
15 Q: Let's take a look at your sentence, "The 16 CQGTrader does not include a common static price axis 17 wherein the prices do not move in response to a change in 18 the inside market." 19 If the CQG products had a mode where a user 20 could disable price movement such that the prices didn't 21 move in response to a change in the inside market, then 22 that statement would no longer be correct?
43. PAGE 82:24 TO 83:04 (RUNNING 00:00:14.584)
24 A: Once again, I would want to look at maybe 25 there's something else within the claim that would I 00083:01 mean, I would look at the analysis in totality. 02 Q: Okay. You didn't look at any other parts of 03 the claim for purposes of this non-infringement opinion? 04 A: I looked at --
44. PAGE 83:06 TO 83:06 (RUNNING 00:00:02.212)
06 A: the entire claims.
45. PAGE 83:07 TO 83:10 (RUNNING 00:00:08.992)
07 Q: The only basis you provide in your
CONFIDENTIAL page 6
TT v. CQG (05-4811) PTX 2921.0006
Trading Tech v CQG
08 infringement non-infringement opinions for 09 non-infringement is the fact that the products are dynamic; 10 is that correct?
46. PAGE 83:12 TO 83:17 (RUNNING 00:00:12.477)
12 A: From what I can see here, that's the, yeah, 13 primary basis. 14 Q: Okay. When you say, "primary basis," can you 15 point me to any other basis in your opinion for 16 non-infringement? 17 A: Not in this opinion, no.
47. PAGE 87:19 TO 89:08 (RUNNING 00:01:45.595)
19 Q: Let's take a look at the at the applicable 20 patent law principles for infringement. 21 A: Okay. 22 Q: In the first paragraph there it says, "Before 23 comparing the claims of a patent to an allegedly infringing 24 device or method, the claims of the patent must be 25 interpreted to determine their meaning." 00088:01 Do you see that? 02 A: Yes. 03 Q: Do you agree that that was a correct statement 04 of the law in this time frame? 05 A: I believe so. 06 Q: And did you do that for purposes of this 07 opinion? 08 A: I believe so. 09 Q: Can you tell me what claim terms you construed 10 for purposes of your opinion? 11 A: All of them. 12 Q: All of the claim terms? 13 A: I read all of the claims, yes. 14 Q: Do you understand there's a difference between 15 reading all of the claims and construing the terms of the 16 claims? 17 A: Yes. 18 Q: And did you do any explicit claim 19 constructions for purposes of this opinion? 20 A: I don't recall. 21 Q: Can you identify for me any claim 22 constructions in your opinion? 23 A: I don't believe so. 24 Q: I'm sorry? 25 A: I don't believe so. 00089:01 Q: The terms "dynamic" and "static" that are 02 referred to throughout your analysis of infringement, did 03 you construe them at some point? 04 A: I don't recall if I specifically construed 05 them. 06 Q: Did you see any construction of them in the 07 opinion? 08 A: No.
48. PAGE 89:12 TO 89:14 (RUNNING 00:00:06.378)
12 Q: Do you know if anyone from CQG, when you first 13 started doing this process, said here's why we don't 14 infringe?
49. PAGE 89:16 TO 89:19 (RUNNING 00:00:05.700)
16 A: I don't believe so. 17 Q: Did they ever tell you their opinions about 18 why they didn't infringe? 19 A: I don't believe so.
CONFIDENTIAL page 7
TT v. CQG (05-4811) PTX 2921.0007
Trading Tech v CQG
50. PAGE 90:02 TO 91:11 (RUNNING 00:01:42.809)
02 Q: Okay. Let's look at the page that's labeled 03 3938 at the bottom, and I want to look at the first full 04 paragraph, which reads, "While there is a presumption that 05 the words of the claim have their ordinary meaning (e.g. as 06 described in a dictionary or encyclopedia) the 07 specification and prosecution history must always be 08 consulted to determine whether a purported ordinary meaning 09 is consistent with the use of the words by the inventor." 10 Do you see that? 11 A: I'm sorry, I was on the wrong page. Exhibit 12 -- 13 Q: The first full paragraph on 3938. 14 A: Yes. Okay, I see that. 15 Q: Do you agree that that was a correct statement 16 of the law at the time you issued your opinions? 17 A: I believe so. 18 Q: Did you consult the specification and 19 prosecution history with respect to the meaning of any 20 terms in the '132 patent? 21 A: I don't recall. 22 Q: Do you know if there is any analysis in your 23 opinion as to what the meanings of any of the claim terms 24 are based upon the specification or the prosecution 25 history? 00091:01 A: It doesn't appear to. 02 Q: You also have some discussion of the doctrine 03 of equivalence in your legal section. Do you see that? 04 A: Yes. 05 Q: And prosecution history estoppel? 06 A: Yes. 07 Q: Did you do any prosecution history estoppel 08 analysis for purposes of these opinions? 09 A: I don't recall. 10 Q: Did you see any in the opinion itself? 11 A: No.
51. PAGE 91:12 TO 92:05 (RUNNING 00:00:47.581)
12 Q: On page 3939, towards the bottom of the page 13 it says, "The prosecution history is thus critical to a 14 determination of infringement under the Doctrine of 15 Equivalence." 16 Do you see that? 17 A: Yes. 18 Q: Do you agree with that statement? 19 A: Yes. 20 Q: Do you agree it was correct at the time you 21 issued these opinions? 22 A: Yes. 23 Q: And does your opinion contain any explicit 24 prosecution history analysis with respect to your Doctrine 25 of Equivalence infringement opinion? 00092:01 A: It doesn't appear to, no. 02 Q: I want you to look now at 2233, which is the 03 '304 opinion. And if you could read Section D again, 04 Infringement Analysis, and let me know when you have 05 finished that.
52. PAGE 92:06 TO 92:17 (RUNNING 00:00:52.206)
06 A: Go ahead. 07 Q: And the analysis there appears to be the same 08 as it was for the '132 patent with the exception of some 09 differences in claim language; is that correct? 10 A: Correct. 11 Q: I would like to ask you a question in part D
CONFIDENTIAL page 8
TT v. CQG (05-4811) PTX 2921.0008
Trading Tech v CQG
12 on both of the opinions. With respect to the '132 patent, 13 which is 2232, in that third paragraph you say, "The 14 CQGTrader does not include a common static price axis"? 15 A: Yes. 16 Q: The claim language of the '132 patent actually 17 doesn't include that language, does it?
53. PAGE 92:18 TO 92:21 (RUNNING 00:00:07.992)
18 A: It appears that way from what's in the 19 paragraph above, yes. 20 Q: So '132 refers to a static display of prices? 21 A: Correct.
54. PAGE 104:25 TO 107:01 (RUNNING 00:02:19.674)
25 Q: Let's mark as Exhibit 2244 a document bearing 00105:01 Production Nos. CQG7703650 through '3651 and ask you if 02 recognize this document? 03 A: I don't recognize it. 04 Q: And again we've got a chain of e-mails here? 05 A: Yes. 06 Q: And the second e-mail in the chain is from you 07 to Mr. Schroeter on or about or on March 10th, 2005; is 08 that correct? 09 A: Yes. 10 Q: The subject is, "I still believe..."? 11 A: Correct. 12 Q: Do you have any reason to believe you didn't 13 send this e-mail to Mr. Schroeter on or about March 10th, 14 2005? 15 A: No. 16 Q: Now, your the text of your e-mail reads, 17 "We don't infringe. I just got done talking to Brian and 18 Ernie." 19 Does this refresh your recollection at all 20 about having discussions with Mr. Popke and Mr. Vancil? 21 A: No. 22 Q: It says, "They cleared up something that had 23 confused me: The focus aspect." 24 Do you know what that refers to? 25 A: No. 00106:01 Q: Do you have any understanding as to what the 02 focus means in terms of CQG's products to them? 03 A: No. 04 Q: Do you recall being confused about the 05 products? 06 A: No. 07 Q: And to finish that sentence out, it says, 08 "They cleared up something that had confused me (the focus 09 aspect) from my talk with Mike today." 10 Do you know why you were talking with 11 Mr. Glista in the March 2005 time frame about CQG's 12 products? 13 A: No. 14 Q: Was it related to the eSpeed decisions? 15 A: I don't know. 16 Q: Was it related to any potential updates to 17 your opinion? 18 A: I don't know. 19 Q: Let's continue. "I can see their points but I 20 still think we are different enough from eSpeed and do not 21 infringe the TT patents." 22 Do you see that? 23 A: Yes. 24 Q: Do you recall having discussions with 25 Mr. Vancil and Mr. Popke about their concerns based upon 00107:01 the eSpeed decision?
CONFIDENTIAL page 9
TT v. CQG (05-4811) PTX 2921.0009
Trading Tech v CQG
55. PAGE 107:04 TO 107:05 (RUNNING 00:00:02.045)
04 Q: On the preliminary injunction. 05 A: No.
56. PAGE 107:08 TO 107:09 (RUNNING 00:00:05.319)
08 Q: Would it surprise you to learn that they 09 documented their concerns about infringement?
57. PAGE 107:11 TO 107:22 (RUNNING 00:00:28.416)
11 A: No. I don't recall any of this. 12 Q: You then continue, "I'm going to write up a 13 more detailed analysis that will also address the eSpeed 14 issues in the next few days, for us all to look at, that 15 hopefully will help us all be on the same page." 16 Do you see that? 17 A: Yes. 18 Q: Do you recall actually completing that 19 analysis? 20 A: No. 21 Q: And to the extent that you had, would it be in 22 the file?
58. PAGE 107:24 TO 108:07 (RUNNING 00:00:25.279)
24 A: I would believe so, yes. 25 Q: And you do say, "for us all to look at." So 00108:01 you were referring to something you were intending to 02 provide to CQG? 03 A: That's what it appears, yes. 04 Q: You continue: "Then when" "then we are all 05 on the same page, I'll provide updated opinion letters." 06 Did you ever provide updated opinion letters? 07 A: Not that I recall, no.
59. PAGE 123:04 TO 123:06 (RUNNING 00:00:11.535)
04 Q: Let's mark as 2249 a document having 05 Production No. 7703744. Please take a look at that and 06 tell me if you recognize it.
60. PAGE 123:07 TO 123:21 (RUNNING 00:00:27.118)
07 A: I don't recognize it, but my name is on it. 08 Q: We have another e-mail chain? 09 A: Yes. 10 Q: The first e-mail at the top of the page is 11 from Mike Glista to Kevin LeMond and Josef Schroeter, 12 correct? 13 A: Correct. 14 Q: And that's you? 15 A: Yes. 16 Q: It's dated 11/17/2004; -- 17 A: Yes. 18 Q: correct? 19 And this says, "TT Patent Assessment," as the 20 subject line? 21 A: Yes.
61. PAGE 123:22 TO 124:16 (RUNNING 00:00:46.233)
22 Q: If you will read through the entire e-mail, 23 there's a reference to a demo. A WebEx demo that 24 Mr. Glista is being asked to do for you. Do you see that? 25 A: Yes. 00124:01 Q: And do you recall having a WebEx demo with 02 Mr. Glista? 03 A: That's probably the graphics I mentioned
CONFIDENTIAL page 10
TT v. CQG (05-4811) PTX 2921.0010
Trading Tech v CQG
04 earlier that I remembered seeing. 05 Q: Do you recall if anyone else was present for 06 the WebEx demo? 07 A: No. 08 Q: Do you recall how long the WebEx demo was? 09 A: No. 10 Q: Do you know if it was more than an hour? 11 A: Honestly, I don't know. 12 Q: Do you recall anything that Mr. Glista showed 13 you during that WebEx demo? 14 A: No. 15 Q: Do you know if Mr. Glista suggested to you he 16 was showing you all the functionality of the CQG products?
62. PAGE 124:18 TO 124:22 (RUNNING 00:00:11.755)
18 A: No, I don't know. I don't know if he said 19 anything like that, no. 20 Q: Do you know if there was more than one WebEx 21 with Mr. Glista? 22 A: I don't recall.
63. PAGE 125:11 TO 125:21 (RUNNING 00:00:40.747)
11 Q: In your opinion practice throughout your 12 career, have you ever attached materials related to the 13 product at issue to the opinion? 14 A: Yes. 15 Q: How frequently would you do that? 16 A: As frequently as it's available. 17 Q: And why do you do that? 18 A: Just as one more supporting document for the 19 opinion. 20 Q: Now, there are no such attachments in these 21 two opinions; is that correct?
64. PAGE 125:23 TO 126:09 (RUNNING 00:00:24.970)
23 A: I believe so, yes. If I remember correctly. 24 Q: And did you ask CQG for any documentation 25 relating to their products? 00126:01 A: I don't recall. 02 Q: Did you ever receive any, to your knowledge? 03 A: Not to my knowledge. 04 Q: So you didn't review any manuals, to your 05 knowledge? 06 A: I don't recall. 07 Q: And there aren't any specifically referenced 08 in your opinions? 09 A: Correct.
65. PAGE 126:16 TO 127:02 (RUNNING 00:00:32.366)
16 Q: Let me just make something clear. Could you 17 pull out the two opinions? 18 In those opening paragraphs it references 19 exhibits to the opinions? 20 A: Correct. 21 Q: And neither neither of the exhibits 22 referenced is CQG product material? 23 A: Correct. 24 Q: And if we go through the opinions in their 25 entirety, there's no reference to CQG product material 00127:01 being attached? 02 A: Correct.
66. PAGE 127:09 TO 127:14 (RUNNING 00:00:11.274)
09 Q: Did you get working samples?
CONFIDENTIAL page 11
TT v. CQG (05-4811) PTX 2921.0011
Trading Tech v CQG
10 A: No. 11 Q: Did you ask for them? 12 A: No. 13 Q: You thought the demo was sufficient? 14 A: Yes.
67. PAGE 127:19 TO 127:22 (RUNNING 00:00:09.778)
19 Q: Do you recall doing WebEx demos of the product 20 or participating in WebEx demos of the product with anyone 21 other than Mr. Glista? 22 A: I don't recall how often.
68. PAGE 128:02 TO 128:05 (RUNNING 00:00:09.856)
02 Q: Did you ever operate the product yourself? 03 Let me rephrase that. Did you ever operate any CQG product 04 yourself? 05 A: Not that I recall.
69. PAGE 128:06 TO 128:08 (RUNNING 00:00:06.076)
06 Q: Did you ask for the opportunity to do so? 07 A: I don't know. I can't remember that. 08 (EXHIBIT 2250, E-MAIL; BATES CQG7703793)
70. PAGE 128:09 TO 128:11 (RUNNING 00:00:17.281)
09 Q: Let me mark as Exhibit 2250 a document having 10 Production No. CQG7703793. Take a look at that document 11 and tell me if you recognize it.
71. PAGE 128:12 TO 128:12 (RUNNING 00:00:05.382)
12 A: I don't recognize it but my name's on it.
72. PAGE 128:13 TO 128:15 (RUNNING 00:00:04.034)
13 Q: And this is an e-mail from yourself to 14 Mr. Glista? 15 A: Yes.
73. PAGE 128:19 TO 129:03 (RUNNING 00:00:30.813)
19 Q: And the subject is Web View; Do you see that? 20 A: Yes. 21 Q: Do you know what Web View is with respect to 22 the CQG products? 23 A: I believe it's what you see when you're 24 viewing using their product to view on the Web. 25 Q: In this e-mail you ask if Mr. Glista if he 00129:01 has time to demonstrate the various price views of CQG's 02 products to refresh your memory. 03 Do you know why you needed a memory refresher?
74. PAGE 129:05 TO 129:09 (RUNNING 00:00:10.430)
05 A: No, I don't recall. 06 Q: Okay. Does this document refresh your 07 recollection as to whether you asked ever asked for 08 screen shots of the products? 09 A: It appears that I did, yes.
75. PAGE 131:11 TO 132:02 (RUNNING 00:00:45.289)
11 Q: And prior to becoming an attorney did you have 12 any particular experience with trading software of any 13 kind? 14 A: No. 15 Q: And after becoming an attorney did any of your 16 work, other than the CQG opinions, involve trading
CONFIDENTIAL page 12
TT v. CQG (05-4811) PTX 2921.0012
Trading Tech v CQG
17 software? 18 A: Not that I recall. 19 Q: The product demo you received, that was 20 controlled by CQG, correct? 21 A: I believe so. 22 Q: Okay. You weren't running the software? 23 A: Not that I recall. 24 Q: Mr. Glista was operating that software? 25 A: (NODS HEAD) 00132:01 Q: So they were picking picking what you saw 02 from the software?
76. PAGE 132:04 TO 132:04 (RUNNING 00:00:01.362)
04 A: I believe so.
77. PAGE 151:07 TO 151:18 (RUNNING 00:00:38.513)
07 Q: When did you obtain your registration for the 08 patent bar? 09 A: Let me think. I believe August of '91. So 10 either that or Sometime in '91. I just don't recall. 11 It's number 35933. 12 Q: Have you ever been subject to any disciplinary 13 proceedings before the Patent Office? 14 A: No. 15 Q: Have you ever been subject to any disciplinary 16 proceedings in any court that you are registered to 17 practice in front of? 18 A: No.
78. PAGE 151:24 TO 152:01 (RUNNING 00:00:07.322)
24 Q: It has Well, let's start with the specific. 25 Has any opinion you have ever authored been criticized by 00152:01 any court?
79. PAGE 152:03 TO 152:03 (RUNNING 00:00:02.180)
03 A: No, not that I'm aware of.
80. PAGE 152:13 TO 152:14 (RUNNING 00:00:03.969)
13 Q: What was your official bachelor's degree in? 14 A: Industrial engineering.
81. PAGE 153:22 TO 155:12 (RUNNING 00:02:32.826)
22 Q: And how many of your clients over the years 23 have had technology that relates to software? 24 A: I'm going to guess at least seven to ten 25 'cause there's been small ones that I can't recall. 00154:01 Q: Are there Can you describe for me just 02 general areas of or fields for those particular clients? 03 A: One is a large software development company. 04 Worked on stuff relating to personal computers, Internet- 05 Web-type things, graphical user interfaces; and then 06 smaller ones have related to computer security, healthcare 07 systems; and then other ones I'm just going to lump in with 08 Internet business but there may be other small ones here 09 and there that were just general software. 10 Q: For what clients have you done work related to 11 graphical interfaces? 12 A: I can't recall off the top of my head. I can 13 name one. I believe I've done some for Microsoft. 14 Q: And during what portion of your career was 15 that work done? 16 A: That's within the last year or two. 17 Q: Prior to the time that you worked on the 18 opinions in '04 and '05 had you done any work related to
CONFIDENTIAL page 13
TT v. CQG (05-4811) PTX 2921.0013
Trading Tech v CQG
19 software? 20 A: Yes. 21 Q: And do you have any idea Well, first of 22 all, was it patent prosecution? 23 A: Yes. 24 Q: And do you have any idea how many applications 25 you had done related to software? 00155:01 A: I'm just going to speculate 20 to 40. 02 Q: In what fields? 03 A: Once again, I believe, you know, definitely 04 Internet Web business methods and similar, and graphical 05 user interface. But I cannot recall the specific. 06 Q: When you say, "business methods," can you give 07 me an idea of what you mean by "business methods"? 08 A: More along the lines of Internet-related 09 businesses. 10 Q: Are they methods for using the Internet to 11 conduct business? -- 12 A: Some were, yes.
82. PAGE 156:23 TO 156:24 (RUNNING 00:00:02.990)
23 Q: Have you ever been accused of malpractice? 24 A: No.
83. PAGE 157:10 TO 157:13 (RUNNING 00:00:12.167)
10 Q: Do you know if any client for whom you have 11 rendered an opinion has been found to have willfully 12 infringed a patent? 13 A: Not that I know of.
84. PAGE 160:15 TO 160:16 (RUNNING 00:00:06.077)
15 Q: Would you say that the opinion letters we've 16 looked at today are typical opinions for you?
85. PAGE 160:18 TO 160:19 (RUNNING 00:00:06.679)
18 A: As far as? 19 Q: As far as how you address infringements.
86. PAGE 160:21 TO 160:24 (RUNNING 00:00:07.701)
21 A: I believe so. 22 Q: Do you think they're thorough compared with 23 other opinions you've authored? 24 A: I believe so.
87. PAGE 161:10 TO 161:12 (RUNNING 00:00:07.395)
10 Q: Do you believe there are any documents that 11 reflect updates to your opinions? 12 A: Not that I'm aware of.
88. PAGE 161:19 TO 161:20 (RUNNING 00:00:03.431)
19 Q: Have you ever seen an update to any of your 20 opinions?
89. PAGE 161:22 TO 161:22 (RUNNING 00:00:01.358)
22 A: No, I have not.
90. PAGE 164:25 TO 165:02 (RUNNING 00:00:09.216)
25 Q: How many invalidity opinions have you rendered 00165:01 throughout your career? 02 A: Eight to ten.
CONFIDENTIAL page 14
TT v. CQG (05-4811) PTX 2921.0014
Trading Tech v CQG
91. PAGE 166:16 TO 166:20 (RUNNING 00:00:12.065)
16 Q: So then in the CQG products your understanding 17 would be that there is a risk of those prices moving 18 outside of the control of the user? 19 A: Correct. I believe so. That's what it sounds 20 like.
92. PAGE 168:22 TO 169:22 (RUNNING 00:01:30.192)
22 Q: Okay. All right. So at the bottom of page 1. 23 "The CQGTrader always shows the best current bids and offer 24 volume within the screen. CQGTrader thus automatically 25 focuses the list of bids and offers to allow for this 00169:01 display and accordingly the CQGTrader provides a dynamic 02 display of price levels for a commodity." Do you see that? 03 A: Yes. 04 Q: When you describe the ChartTrader later on, 05 and this is towards the end of the background paragraph, it 06 says, "A third display is the Chart Trader view. This view 07 keeps the area of the most heavy trading for the desired 08 commodity in focus." 09 A: Yes. 10 Q: Do you have any understanding of what the 11 difference in those descriptions is? 12 A: It appears the CQGTrader keeps the list of 13 bids and offers in focus for the display and it's based on 14 current bids and offer volume within within the screen. 15 That's what it appears to me to say. 16 Q: And do you have any understanding as to if 17 that actually is different from the way you're describing 18 ChartTrader? 19 A: It doesn't appear to be different. It says, 20 "the area of the most heavy trading." But a desired 21 commodity. Whereas, it doesn't say desired commodity 22 within the CQGTrader.
93. PAGE 169:23 TO 169:25 (RUNNING 00:00:07.401)
23 Q: Did you ever tell CQG that it was important 24 that you had a complete and accurate understanding of how 25 their products worked?
94. PAGE 170:02 TO 170:05 (RUNNING 00:00:04.203)
02 A: I don't recall. 03 Q: Is that good practice to let clients know 04 that? 05 A: Yes.
95. PAGE 170:08 TO 170:08 (RUNNING 00:00:01.632)
08 Q: Do you believe you would have?
96. PAGE 170:10 TO 170:12 (RUNNING 00:00:08.414)
10 A: I would believe so, yes. 11 Q: And did you independently verify the 12 functionality of the CQG products?
97. PAGE 170:16 TO 170:17 (RUNNING 00:00:02.466)
16 Q: I'm sorry, I interrupted you. 17 A: That's okay. No.
98. PAGE 170:18 TO 170:20 (RUNNING 00:00:06.651)
18 Q: Did you verify that all versions worked as you 19 were told? 20 A: I don't recall.
CONFIDENTIAL page 15
TT v. CQG (05-4811) PTX 2921.0015
Trading Tech v CQG
99. PAGE 170:21 TO 171:01 (RUNNING 00:00:17.247)
21 Q: Do you know what version you were shown? 22 A: No. I believe it was the current version, but 23 I I don't I obviously cannot say. 24 Q: And CQG knew you were relying on what they 25 told you about the product operation for purposes of these 00171:01 opinions?
100. PAGE 171:03 TO 171:03 (RUNNING 00:00:00.742)
03 A: Correct.
101. PAGE 171:04 TO 171:09 (RUNNING 00:00:27.725)
04 Q: Now, in the opinions you addressed three 05 independent claims for Let's start with the '304 patent. 06 You address two independent claims; is that correct? 07 A: Yes. 08 Q: At any time did you provide CQG with any 09 opinions about elements of any dependent claim?
102. PAGE 171:11 TO 171:12 (RUNNING 00:00:04.165)
11 A: Not that I recall. 12 Q: And is the same true about the '132 patent?
103. PAGE 171:14 TO 171:14 (RUNNING 00:00:01.692)
14 A: Not that I recall.
TOTAL: 1 CLIP FROM 1 DEPOSITION (RUNNING 00:36:55.409)
CONFIDENTIAL page 16
TT v. CQG (05-4811) PTX 2921.0016
Exhibit 5
'1'0\X/N 5 END (/{/(!
'l'O\VI\5END I! lid
C R 1~\V
CQG, Inc. Attn: Josef F. Schroeter Independence Plaza
Invoice Number Invoice Date Joint Group ID
1050 17th Street, Suite 2000 Denver, CO 80265
025720 (KTL)
Remittance Page
TOTAL FOR PROFESSIONAL SERVICES
TOTAL FOR COSTS ADVANCED AND EXPENSES
TOTAL AMOUNT OF THIS INVOICE
TOTAL BALANCE DUE UPON RECEIPT
516933 01/20/05
$19,802.00
$627.77
$20,429.7'7
$20' 4 2 9. 77
Please send your remittance to the San Francisco office and indicate your client and invoice numbers.
lf you wish Lo remit payment v1a wire transfer, our w.ire instructions are: Beneficiary: Townsend and Townsend and Crew LLP f\c:ct.ll: 4l3--o:,J6?14 hank: Wells Farqo Bank, N.f\.
ABA Routing #:1?1000248; Swift Code: WFBIUS6S
Our Federal Tax ID No. is: 94-1222424
Highly Confidential - Attorneys' Eyes Only KTS 025
PTX 0970.0001TT v. CQG (05-4811)
'!'0\X/l\ SEN I) (/{/{{
'1. 0 \V !\ S F N D (/{/{ f
C' R E\V j i'
CQC;, Inc. Invoice Number ')] 6933 Attn: Josef f. Schroeter Tndcpcndence Pia/a
Invoice Date 01/20/05 ,JoinL Croup JD
1050 17th Street, Suite 2000 Denver, CO 80265
02S720 (KTL)
Page 1
Re: 02S720-000000US General Correspondence
F'OR PROl''ESSIONAL SSP. VICES FENDEP.ED:
Date
11/08/04
11/23/04
Aty
KTL Teleconference with Joe Schroeter, Justin and Jonathan re: TT patents.
KTL Teleconference with Mike Glista re: CQG products.
SUBTOTALS
CURFENT FE:F:S
TOTAL THIS MATTEF
Hours
0.50
0.50
1. 00
Value
207.50
20'1.50
$415.00
41S.OO
$41S.OO
Highly Confidential - Attorneys' Eyes Only KTS 026
PTX 0970.0002TT v. CQG (05-4811)
TOWNSEND AND TOWNSEND AND CREW LLP
025720 CQG, Inc.
0001000S Investigation of Patent No. 6,772,132
January 20, 2005
Invoice Number 516933
Page 2
----·-------------··-------·-·--·---···-------
Re: 025720-000100US Investigation of Patent No. 6,772,132
FOR PROFESSIONAL SERVICES RENDERED:
Date 1\l. y
11/07/0!J
11/11/04
11/17/04
11/22/04
11/30/04
12/26/04
1'\'l'L Ft-cvicw claims of '132 pa\:c:nt.
LLC 1\t.tent.ion to attaining patent file: history.
KTL Review file history of '132 patent.
KTL Begin drafting opinion letter for '132 patent.
KTL Complete draft of opinion letter for '132 patent.
KTL Edit draft of opinion letter.
SUBTOTALS
CUEI\ENT Fl'~ES
FOP. COSTS ADVANCED AND EXPENSES INCUERED:
!lours
1.30
0.20
4.70
5. 4 0
6.30
4.50
?.2.40
11/10/04 File History - Annette Masiello & Associates of USP 6,7"72,132
CUI\Rr:NT COSTS
TOT!\!, THJ S MATn;r:.;
TWO EMBARCADERO CENTFR, 8th FLOOR SAN FRANCISCO, CA 941 I 1-3834 ( 415) 576-0200
Va.l uc;
539.50
24.00
1,950.50
2,241.00
2,614.50
1,867.50
$9,2:37.00
9, 2 31. 00
350.00
3')0.00
Highly Confidential - Attorneys' Eyes Only KTS 027
PTX 0970.0003TT v. CQG (05-4811)
TOWNSEND AND TOWNSEND AND CREW LLP
025720 CQG, Inc.
000200US Investigation of Patent No. 6,766,304
January 20, 2005
Re: 025720-000200US Investigation of Patent No. 6,766,304
FOR PROFESSIONAL SERVICES RENDERED:
Date Aty
11/07/04
11/11/04
11/ll/04
1?/29/0•1
12/30/04
12/31/04
KTL Review claims of '304 patent.
LLC Attention to attaining patent file history.
KTL l~cv.icw file history of '304 patent.
K'I'L llcqin prcparinq draft of opinion I c' t Lc' r.
KTL Work on opinion letter.
KTL Complete opinion letter.
SUBTOTALS
CURRENT FEES
F'OR COSTS 7\DV/\NCF:D AND l;~XI'ENSF:S INCUI~PF:D;
Invoice Number 516933
Page 3
Hours Value
1. 30 539.50
0.20 24.00
4.')0 l,tl61.50
4. 7 0 1,9~)0.50
~). 6 0 2,324.00
tl.30 3,444.50
24.60 $10,150.00
10,150.00
11/10/04 r' i Lc II i.slory 6, 166,304
Annette Masiello & Associates of USI' 255.00
CUEPENT COSTS
TOTAL THIS MATTER
TWO EMBARCADERO CENTER, 8th FLOOR SAN FRANCISCO, CA 94111-3834 (415) 576-0200
255.00
$10,405.00
Highly Confidential - Attorneys' Eyes Only KTS 028
PTX 0970.0004TT v. CQG (05-4811)
TOWNSEND AND TOWNSEND AND CREW LLP
025720 CQG, Inc. 999999US Miscellaneous Disbursements January 20, 2005
Re: 0?5720-999999US Miscellaneous Disbursements
FOR COSTS ADVANCED AND EXPENSES INCURRED:
Telephone
CURRENT COSTS
TOTAL THIS MA'l"I'EP
TWO I'MBARCADERO CFNTFR, 8th FLOOR SAN FRANCISCO, CA 94111-3834 1415) 576-0200
Invoice Number 516933 Page 4
22.77
22.77
sn.n
Highly Confidential - Attorneys' Eyes Only KTS 029
PTX 0970.0005TT v. CQG (05-4811)
TOWNSEND AND TOWNSEND AND CREW LLP
CQG, Inc. Invoice Number 516933 Attn: Josef F. Schroeter Independence Plaz.a
Invoice Date 01/20/05
1050 17th Street, Suite ::>000 Denver, CO 80265
Joint Group TD 025720 (KTL)
Page 5
TOTAL FOR PROFESSIONAL SER/ICES
TOTAL FOR COSTS ADVANCED AND EXPENSES
TOTAL AMOUNT OF THIS INVOICE
TOTAL 13ALl\NCJ<: mm UPON FU:CET PT
$19,802.00
$627. n
$20,429.77
$20,429.77
Please send your remittance to the San Francisco office and indicate your client and invoice numbers.
If you wish to n'mit payment via wire transfc~r, our wire instrucUons are: Hcneficiary: Townsend and Townsend and Crew LLP Accl.#: 413-0516714 Bank: Wells Vargo Bank, N.A. ABA Routing #:121000248; Swift Code: WFBIUS6S
Our Federal Tax ID No. is: 94-1222424
TWO I:MBIIRCIIDERO CENTER. 8th FLOUR SIIN FRIINCISCO, C/194111-3834 (415)576-0200
Highly Confidential - Attorneys' Eyes Only KTS 030
PTX 0970.0006TT v. CQG (05-4811)
PROFORMA NO:
CLIENT NUMBER: 025720 CLIENT NAME: CQG, Inc.
JOINT GROUP: 025720
Proforma Notes:
*-----------CLIENT ADDRESS-----------* CQG, Inc. Attn: Josef F. Schroeter Independence Plaza 1050 17th Street, Suite 2000 Denver, CO 80265
INCEPTION TO DATE FEES BILLED
INCEPTION TO DATE COSTS BILLED
YEAR TO DATE FEES BILLED
YEAR TO DATE COSTS BILLED
TOWNSEND and TOWNSEND and CREW LLP CLIENT SUMMARY FOR CLIENT 025720
Page _.,.1 (1)
JTGRP: 025720
MATTER BILLING ATTORNEY: Kevin T. LeMond
LD *-------------------ON THESE PROFORMAS-------------------*
CURRENT FEES CURRENT COSTS
CURRENT TOTAL
BILL/~ITE OFF/APFROVED BY'
0.00
0.00
0.00
0.00
10,215.50 627.77
10,843.27
k;L-
Highly Confidential - Attorneys' Eyes Only KTS 031
PTX 0970.0007TT v. CQG (05-4811)
,_ ~-
DATE: i~t03/04 00:06:12 PRO FORMA STATEMENT AS OF 113004 FOR F~~~ (025720-000000US) 025720-000000US #151415(5002) • _ge 219 (1)
TTC PROFORMA NO. 151415 JTGRP: 025720
BILLING ATTY: CLIENT NAME: FILE NO: MATTER NAME: CLIENT REF #:
0303 Kevin T. LeMond CQG, Inc.
025720-000000US General Correspondence
*****TIME ENTRIES*****
DATE INDEX NO TASK ACT DESCRIPTION OF SERVICES RENDERED
11/08/04 2757400
11/23/04 2757401
Teleconference with Joe Schroeter, Justin and Jonathan re: TT patents.
Teleconference with Mike Glista re: CQG products.
*****DISBURSEMENTS*****
TKPR
KTL
KTL
TOTAL FEES
HOURS AMOUNT **ACTION**
0.50 207.50 HD WO TR --------
0.50 207.50 HD WO TR
415.00
DATE INDEX # DESCRIPTION OF DISBURSEMENTS CODE/UNITS VOUCHER NO. AMOUNT **ACTION**
TK BILL INITIALS TIMEKEEPER NAME
0303 KTL Kevin T. LeMond
WHITEHILL TEMPLATE SINGLE: 2N2NYNNN
MATTER BILLING ADDRESS: CQG, Inc.
TOTAL DISBURSEMENTS
TOTAL FEES & DISBURSEMENTS
BILL~WRITE OFF/APPROVED BY'
*****TIME AND FEE SUMMARY*****
TIMEKEEPER TITLE
Partner TOTALS
Matter Budget: Year to Date Fees Worked:
o.oo
415.00
~~L-
RATE
415.00
.00 0.00
HOURS
1.00 1. 00
FEES
415.00 415.00
Highly Confidential - Attorneys' Eyes Only KTS 032
PTX 0970.0008TT v. CQG (05-4811)
PROFOR~~ NO: 151415 FILE NO: 025720-000000US General Correspondence
TK BILL INITIALS TIMEKEEPER NAME
Attn: Josef F. Schroeter Independence Plaza 1050 17th Street, Suite 2000 Denver, CO 80265
*** MATTER NARRATIVE ***
General Correspondence
LAST BILLED: DATE- FEES-
TOWNSE~~ and TOWNSEND and CREW LLP Page 220 (2) JTGRP: --~5720 CLIENT NAME: CQG, Inc.
TIMEKEEPER TITLE RATE
Year to Date Fees Billed: Year to Date Costs Original Value: Year to Date Costs Billed: Year to Date Payments Received: Accounts Receivable Balance:
Life to Date Fees Billed: Life to Date Costs Billed: Life to Date Payments Received:
Matter Trust Balance:
DISBURSEMENTS- RATE 1
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00
HOURS
BILLING FREQUENCY: M
FEES
Highly Confidential - Attorneys' Eyes Only KTS 033
PTX 0970.0009TT v. CQG (05-4811)
DATE: l.,.r 03/04 00:06:12 PRO FORMA STATEMENT AS OF 113004 FOR L'.uE (025720-000100US) 025720-000Page 221 (1) 002) - ... ge <<<<< (<<)
TTC PROFORMA NO. 151416 JTGRP: 025720
BILLING ATTY: CLIENT NAME: FILE NO: MATTER NAME:
0303 Kevin T. LeMond CQG, Inc.
025720-000100US Investigation of Patent No. 6,772,132
CLIENT REF #:
*****TIME ENTRIES*****
DATE INDEX NO TASK ACT DESCRIPTION OF SERVICES RENDERED TKPR ------- ---------11/07/04 2757404 Review claims of '132 patent. KTL
11/11/04 2756314 Attention to attaining patent file history. LLC
11/17/04 2757403 Review file history of '132 patent. KTL
11/22/04 2757402 Begin drafting opinion letter for '132 patent. KTL
11/30/04 2752483 Complete draft of opinion letter for '132 KTL patent.
TOTAL FEES
*****DISBURSEMENTS*****
HOURS AMOUNT **ACTION** ---------- ------------ ----------
1. 30 539.50 HD wo TR
0.20 24.00 HD wo TR
4.70 1950.50 HD wo TR
5.40 2241.00 HD wo TR
6.30 2614.50 HD wo TR
7,369.50
DATE INDEX # DESCRIPTION OF DISBURSEMENTS CODE/UNITS VOUCHER NO. AMOUNT **ACTION**
11/10/04 3895701 File History - Annette Masiello & Associates of USP 6,772,132
064 1 611178
TK BILL INITIALS
0303 2660
KTL LLC
TIMEKEEPER NAME
Kevin T. LeMond Landon Clark
TOTAL DISBURSEMENTS
TOTAL FEES & DISBURSEMENTS
BILL~WRITE OFF/APPROVED BYo
*****TIME AND FEE SUMMARY*****
TIMEKEEPER TITLE
Partner Paralegal
TOTALS
350.00 HD WO TR ________ __
350.00
7,719.50
1<-TL .- ~- ~ -~ -c
RATE
415.00 120.00
HOURS
17.70 .20
17.90
FEES
7,345.50 24.00
7,369.50
Highly Confidential - Attorneys' Eyes Only KTS 034
PTX 0970.0010TT v. CQG (05-4811)
PROFOR~~ NO: 151416 TOWNSENu and TOWNSEND and CREW LLP Page 222 (2) JTGRP: "~::>"720 FILE NO: 025720-000lOOUS Investigation of Patent No. 6,772,132 CLIENT NAME: CQG, Inc.
TK BILL INITIALS TIMEKEEPER NAME TIMEKEEPER TITLE
*---------COST CODE SUMMARY----------------------------------* *---------COST CODE--------------------------------* AMOUNT 064 File History 350.00
COST TOTAL 350.00
WHITEHILL TEMPLATE SINGLE: 2N2NYNNN
MATTER BILLING ADDRESS: Matter Budget: CQG, Inc. Year to Date Fees Worked:
Year to Date Fees Billed: Attn: Josef F. Schroeter Independence Plaza Year to Date Costs Original Value: 1050 17th Street, Suite 2000 Denver, CO 80265
*** MATTER NARRATIVE ***
Investigation of Patent No. 6,772,132
LAST BILLED: DATE- FEES-
Year to Date Costs Billed: Year to Date Payments Received: Accounts Receivable Balance:
Life to Date Fees Billed: Life to Date Costs Billed: Life to Date Payments Received:
Matter Trust Balance:
DISBURSEMENTS- RATE
RATE
1
.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00
HOURS FEES
BILLING FREQUENCY: M
Highly Confidential - Attorneys' Eyes Only KTS 035
PTX 0970.0011TT v. CQG (05-4811)
DATE: i~r03/04 00:06:13 PRO FORMA STATEMENT AS OF 113004 FOR F~~B (025720-000200US) 025720-000Page 223 (1) 002) ~-::3'e <<<<< (<<)
TTC PROFORMA NO. 151417
BILLING ATTY: CLIENT NAME: FILE NO:
0303 Kevin T. LeMond CQG, Inc.
025720-000200US MATTER NAME: Investigation of Patent No. 6,766,304 CLIENT REF #:
*****TIME ENTRIES*****
DATE INDEX NO TASK ACT DESCRIPTION OF SERVICES RENDERED
11/07/04
11/11/04
11/17/04
2757405
2756315
2757406
Review claims of '304 patent.
Attention to attaining patent file history.
Review file history of '304 patent.
*****DISBURSEMENTS*****
JTGRP: 025720
TKPR HOURS AMOUNT **ACTION**
KTL 1. 30 539.50 HD WO TR
LLC 0.20 24.00 HD WO TR --------
KTL 4.50 1867.50 HD WO TR ______ __
TOTAL FEES 2,431.00
DATE INDEX # DESCRIPTION OF DISBURSEMENTS CODE/UNITS VOUCHER NO. AMOUNT **ACTION**
11/10/04 3895700 File History - Annette Masiello & Associates of USP 6,766,304
064 1
TOTAL DISBURSEMENTS
611178
TOTAL FEES & DISBURSEMENTS
BILL/~WRITE OFF/APPROVED BY:
*****TIME AND FEE SUMMARY*****
TK BILL INITIALS
0303 2660
KTL LLC
TIMEKEEPER NAME
Kevin T. LeMond Landon Clark
*---------COST CODE SUMMARY----------------------------------* *---------COST CODE--------------------------------* AMOUNT 064 File History 255.00
COST TOTAL 255.00
TIMEKEEPER TITLE
Partner Paralegal
TOTALS
255.00 HD WO TR ________ __
255.00
2,686.00
kTL .-----------~
RATE
415.00 120.00
HOURS
5.80 .20
6.00
FEES
2,407.00 24.00
2,431.00
Highly Confidential - Attorneys' Eyes Only KTS 036
PTX 0970.0012TT v. CQG (05-4811)
''',~
PROFORMA NO: 151417 TOWNSENu and TOWNSEND and CREW LLP Page 224 (2) JTGRP: '-~:!:)720 FILE NO: 025720-000200US Investigation of Patent No. 6,766,304 CLIENT NAME: CQG, Inc.
TK BILL INITIALS TIMEKEEPER NAME
WHITEHILL TEMPLATE SINGLE: 2N2NYNNN
MATTER BILLING ADDRESS: CQG, Inc. Attn: Josef F. Schroeter Independence Plaza 1050 17th Street, Suite 2000 Denver, co 80265
*** MATTER NARRATIVE ***
Investigation of Patent No. 6,766,304
LAST BILLED: DATE- FEES-
TIMEKEEPER TITLE RATE
Matter Budget: Year to Date Fees Worked: Year to Date Fees Billed: Year to Date Costs Original Value: Year to Date Costs Billed: Year to Date Payments Received: Accounts Receivable Balance:
Life to Date Fees Billed: Life to Date Costs Billed: Life to Date Payments Received:
Matter Trust Balance:
DISBURSEMENTS- RATE 1
.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00
HOURS FEES
BILLING FREQUENCY: M
Highly Confidential - Attorneys' Eyes Only KTS 037
PTX 0970.0013TT v. CQG (05-4811)
DATE: lGt03/04 00:06:14 PRO FORMA STATEMENT AS OF 113004 FOR ~~~E (025720-999999US) 025720-999Page 225 (1) 002) ~ ...:ge <<<<< ( <<l
TTC PROFORMA NO. 151418 JTGRP: 025720
BILLING ATTY: 0303 Kevin T. LeMond CLIENT NAME: CQG, Inc. FILE NO: 025720-999999US MATTER NAME: Miscellaneous Disbursements CLIENT REF #:
*****TIME ENTRIES*****
DATE INDEX NO TASK ACT DESCRIPTION OF SERVICES RENDERED TKPR HOURS AMOUNT **ACTION**
TOTAL FEES 0.00
*****DISBURSEMENTS*****
DATE INDEX # DESCRIPTION OF DISBURSEMENTS CODE/UNITS VOUCHER NO. AMOUNT **ACTION**
11/23/04 3889830 Telephone call from extension 0303 to 3129397476
11/23/04 3889831 Telephone call from extension 0303 to 3129397476
044
044
1
1
TOTAL DISBURSEMENTS
TOTAL FEES & DISBURSEMENTS
BILL/HOLD/WRITE OFF/APPROVED BY:
*****TIME AND FEE SUMMARY*****
TK BILL INITIALS TIMEKEEPER NAME TIMEKEEPER TITLE
TOTALS
*---------COST CODE SUMMARY----------------------------------* *---------COST CODE--------------------------------* AMOUNT 044 Telephone 22.77
COST TOTAL 22.77
WHITEHILL TEMPLATE SINGLE: 2N2NYNNN
0.99 HD WO TR ________ __
21.78 HD WO TR ________ __
22.77
22.77
RATE HOURS FEES
.00 .00
Highly Confidential - Attorneys' Eyes Only KTS 038
PTX 0970.0014TT v. CQG (05-4811)
PROFOR~~ NO: 151418 TOWNSE~u and TOWNSEND and CREW LLP Page 226 (2) JTGRP: ~"'S720 FILE NO: 025720-999999US Miscellaneous Disbursements CLIENT NAME: CQG, Inc.
TK BILL INITIALS TIMEKEEPER NAME
MATTER BILLING ADDRESS: CQG, Inc. Attn: Josef F. Schroeter Independence Plaza 1050 17th Street, Suite 2000 Denver, CO 80265
*** MATTER NARRATIVE ***
Miscellaneous Disbursements
LAST BILLED: DATE- FEES-
TIMEKEEPER TITLE RATE
Matter Budget: Year to Date Fees Worked: Year to Date Fees Billed: Year to Date Costs Original Value: Year to Date Costs Billed: Year to Date Payments Received: Accounts Receivable Balance:
Life to Date Fees Billed: Life to Date Costs Billed: Life to Date Payments Received:
Matter Trust Balance:
DISBURSEMENTS- RATE 1
.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00
HOURS
BILLING FREQUENCY: M
FEES
Highly Confidential - Attorneys' Eyes Only KTS 039
PTX 0970.0015TT v. CQG (05-4811)
PROFORMA NO:
CLIENT NUMBER: 025720 CLIENT NAME: CQG, Inc.
JOINT GROUP: 025720
Proforma Notes:
*-----------CLIENT ADDRESS-----------* CQG, Inc. Attn: Josef F. Schroeter Independence Plaza 1050 17th Street, Suite 2000 Denver, CO 80265
INCEPTION TO DATE FEES BILLED
INCEPTION TO DATE COSTS BILLED
YEAR TO DATE FEES BILLED
YEAR TO DATE COSTS BILLED
Page J6 "(1)
JTGRP: 025720 TOWNSEND and TOWNSEND and CREW LLP CLIENT SUMMARY FOR CLIENT 025720 REC'D JAN 2 0 2005
MATTER BILLING ATTORNEY:
I ~ ~ ~ ~
Kevin T. LeMond
:If 6 11/1 ~5 *-----~-------------ON THESE PROFORMAS-------------------*
CURRENT FEES CURRENT COSTS
CURRENT TOTAL
~HOLD/WRITE OFF/APPROVED
0.00
0.00
0.00
0.00
BY:
19,802.00 627.77
20,429.77
KTL
Highly Confidential - Attorneys' Eyes Only KTS 040
PTX 0970.0016TT v. CQG (05-4811)
DATE: v~/06/05 00:09:14 PRO FORMA STATEMENT AS OF 123104 FOR ·-~E (025720-000000US) 025720-000000US #164261(6131) ..tge 168 (1)
TTC PROFORMA NO. 164261 JTGRP: 025720
BILLING ATTY: CLIENT NAME: FILE NO: MATTER NAME: CLIENT REF #:
0303 Kevin T. LeMond CQG, Inc.
025720-000000US General Correspondence
*****TIME ENTRIES*****
DATE INDEX NO TASK ACT DESCRIPTION OF SERVICES RENDERED
11/08/04 2757400
11/23/04 2757401
Teleconference with Joe Schroeter, Justin and Jonathan re: TT patents.
Teleconference with Mike Glista re: CQG products.
*****DISBURSEMENTS*****
TKPR
KTL
KTL
TOTAL FEES
HOURS AMOUNT **ACTION**
0.50 207.50 HD WO TR ______ __
0.50 207.50 HD WO TR --------
415.00
DATE INDEX # DESCRIPTION OF DISBURSEMENTS CODE/UNITS VOUCHER NO. AMOUNT **ACTION**
TK BILL INITIALS TIMEKEEPER NAME
0303 KTL Kevin T. LeMond
WHITEHILL TEMPLATE SINGLE: 2N2NYNNN
MATTER BILLING ADDRESS: CQG, Inc.
TOTAL DISBURSEMENTS
TOTAL FEES & DISBURSEMENTS
BILL/HOLD/WRITE OFF/APPROVED BY:
*****TIME AND FEE SUMMARY*****
TIMEKEEPER TITLE
Partner TOTALS
Matter Budget: Year to Date Fees Worked:
RATE
415.00
0.00
415.00
.00 0.00
HOURS
1. 00 1.00
FEES
415.00 415.00
Highly Confidential - Attorneys' Eyes Only KTS 041
PTX 0970.0017TT v. CQG (05-4811)
IlROFOk,.'""' NO: 16 4 2 61 FILE NO: 025720-000000US General Correspondence
TK BILL INITIALS TIMEKEEPER NAME
Attn: Josef F. Schroeter Independence Plaza 1050 17th Street, Suite 2000 Denver, CO 80265
*** MATTER NARRATIVE *** General Correspondence
LAST BILLED: DATE- FEES-
TOWNSB,.~ and TOWNSEND and CREW LLP Page 169 (2) JTGRP: .:5720 CLIENT NAME: CQG, Inc.
TIMEKEEPER TITLE RATE
Year to Date Fees Billed: Year to Date Costs Original Value: Year to Date Costs Billed: Year to Date Payments Received: Accounts Receivable Balance:
Life to Date Fees Billed: Life to Date Costs Billed: Life to Date Payments Received:
Matter Trust Balance:
DISBURSEMENTS- RATE 1
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00
HOURS FEES
BILLING FREQUENCY: M
Highly Confidential - Attorneys' Eyes Only KTS 042
PTX 0970.0018TT v. CQG (05-4811)
DATE: v./06/05 00:09:15 PRO FORMA STATEMENT AS OF 123104 FOR ·-~E (025720-000100US) 025720-000Page 170 (1) 131) ...:ge <<<<< (<<)
BILLING ATTY: CLIENT NAME: FILE NO: MATTER NAME: CLIENT REF #:
0303 Kevin T. LeMond CQG, Inc.
025720-000100US Investigation of
TTC PROFORMA NO. 164262
Patent No. 6,772,132
*****TIME ENTRIES*****
DATE INDEX NO TASK ACT DESCRIPTION OF SERVICES RENDERED
JTGRP: 025720
TKPR ------- --------- ---- --- ------------------------------------------------- -----11/07/04 2757404 Review claims of '132 patent. KTL
11/11/04 2756314 Attention to attaining patent file history. LLC
11/17/04 2757403 Review file history of '132 patent. KTL
11/22/04 2757402 Begin drafting opinion letter for '132 patent. KTL
11/30/04 2752483 Complete draft of opinion letter for '132 KTL patent.
12/26/04 2775312 Edit draft of opinion letter. KTL
TOTAL FEES
*****DISBURSEMENTS*****
HOURS AMOUNT **ACTION**
---------- ------------ ----------1. 30 539.50 HD wo TR
0.20 24.00 HD wo TR
4.70 1950.50 HD wo TR
5.40 2241.00 HD wo TR
6.30 2614.50 HD wo TR
4.50 1867.50 HD wo TR
9,237.00
DATE INDEX # DESCRIPTION OF DISBURSEMENTS CODE/UNITS VOUCHER NO. AMOUNT **ACTION**
11/10/04 3895701 File History - Annette Masiello & Associates of USP 6,772,132
064 1 611178
TK BILL INITIALS
0303 2660
KTL LLC
TIMEKEEPER NAME
Kevin T. LeMond Landon Clark
TOTAL DISBURSEMENTS
TOTAL FEES & DISBURSEMENTS
BILL/HOLD/WRITE OFF/APPROVED BY:
*****TIME AND FEE SUMMARY*****
TIMEKEEPER TITLE
Partner Paralegal
TOTALS
350.00 HD WO TR. ________ __
350.00
9,587.00
RATE
415.00 120.00
HOURS
22.20 .20
22.40
FEES
9,213.00 24.00
9,237.00
Highly Confidential - Attorneys' Eyes Only KTS 043
PTX 0970.0019TT v. CQG (05-4811)
---""":..
b'ROFOh_. NO: 164262 TOWNSR.,_ and TOWNSEND and CREW LLP Page 171 (2) JTGRP: ""'5720 FILE NO: 025720-000lOOUS Investigation of Patent No. 6,772,132 CLIENT NAME: CQG, Inc.
TK BILL INITIALS TIMEKEEPER NAME TIMEKEEPER TITLE
*---------COST CODE SUMMARY----------------------------------* *---------COST CODE--------------------------------* AMOUNT 064 File History 350.00
COST TOTAL 350.00
WHITEHILL TEMPLATE SINGLE: 2N2NYNNN
MATTER BILLING ADDRESS: Matter Budget: CQG, Inc. Year to Date Fees Worked:
Year to Date Fees Billed: Attn: Josef F. Schroeter Independence Plaza Year to Date Costs Original Value: 1050 17th Street, Suite 2000 Denver, CO 80265
*** MATTER NARRATIVE *** Investigation of Patent No. 6,772,132
LAST BILLED: DATE- FEES-
Year to Date Costs Billed: Year to Date Payments Received: Accounts Receivable Balance:
Life to Date Fees Billed: Life to Date Costs Billed: Life to Date Payments Rec.eived:
Matter Trust Balance:
DISBURSEMENTS- RATE
RATE
1
.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00
HOURS FEES
BILLING FREQUENCY: M
Highly Confidential - Attorneys' Eyes Only KTS 044
PTX 0970.0020TT v. CQG (05-4811)
DATE: -~/06/05 00:09:16 PRO FORMA STATEMENT AS OF 123104 FOR ._i.E (025720-000200US) 025720-000Page 172 (1) 131) ige <<<<< (<<)
BILLING ATTY: CLIENT NAME: FILE NO: MATTER NAME: CLIENT REF #:
0303 Kevin T. LeMond CQG, Inc.
025720-000200US
TTC PROFORMA NO. 164263
Investigation o.f Patent No. 6, 766,304
*****TIME ENTRIES*****
DATE INDEX NO TASK ACT DESCRIPTION OF SERVICES RENDERED
JTGRP: 025720
TKPR ------- --------- ---- --- ------------------------------------------------- -----11/07/04 2757405 Review claims of '304 patent. KTL
11/11/04 2756315 Attention to attaining patent file history. LLC
11/17/04 2757406 Review file history of '304 patent. KTL
12/29/04 2775314 Begin preparing draft of opinion letter. KTL
12/30/04 2775313 Work on opinion letter. KTL
12/31/04 2775315 Complete opinion letter. KTL
TOTAL FEES
*****DISBURSEMENTS*****
HOURS AMOUNT **ACTION** ---------- ------------ ----------1.30 539.50 HD wo TR
0.20 24.00 HD wo TR
4.50 1867.50 HD wo TR
4.70 1950.50 HD wo TR
5.60 2324.00 HD wo TR
8.30 3444.50 HD wo TR
10,150.00
DATE INDEX # DESCRIPTION OF DISBURSEMENTS CODE/UNITS VOUCHER NO. AMOUNT **ACTION**
11/10/04 3895700 File History - Annette Masiello & Associates of USP 6,766,304
064 1 611178
TK BILL INITIALS
0303 2660
KTL LLC
TIMEKEEPER NAME
Kevin T. LeMond Landon Clark
TOTAL DISBURSEMENTS
TOTAL FEES & DISBURSEMENTS
BILL/HOLD/WRITE OFF/APPROVED BY:
*****TIME AND FEE SUMMARY*****
TIMEKEEPER TITLE
Partner· Paralegal
TOTALS
255.00 HD WO TR ________ __
255.00
10,405.00
RATE
415.00 120.00
HOURS
24.40 .20
24.60
FEES
10,126.00 24.00
10,150.00
Highly Confidential - Attorneys' Eyes Only KTS 045
PTX 0970.0021TT v. CQG (05-4811)
PROFOh.~-:.. NO: 164263 TOWNS!;.,_, and TOWNSEND and CREW LLP Page 173 (2) JTGRP: _,/5720 FILE NO: 025720-000200US Investigation of Patent No. 6,766,304 CLIENT NAME: CQG, Inc.
TK BILL INITIALS TIMEKEEPER NAME TIMEKEEPER TITLE
*---------COST CODE SUMMARY----------------------------------* *---------COST CODE--------------------------------* AMOUNT 064 File History 255.00
COST TOTAL 255.00
WHITEHILL TEMPLATE SINGLE: 2N2NYNNN
MATTER BILLING ADDRESS: Matter Budget: CQG, Inc. Year to Date Fees Worked:
Year to Date Fees Billed: Attn: Josef F. Schroeter Independence Plaza Year to Date Costs Original Value: 1050 17th Street, Suite 2000 Denver, CO 80265
*** MATTER NARRATIVE ***
Investigation of Patent No. 6,766,304
LAST BILLED: DATE- FEES-
Year to Date Costs Billed: Year to Date Payments Received: Accounts Receivable Balance:
Life to Date Fees Billed: Life to Date Costs Billed: Life to Date Payments Received:
Matter Trust Balance:
DISBURSEMENTS- RATE
RATE
1
.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00
HOURS FEES
BILLING FREQUENCY: M
Highly Confidential - Attorneys' Eyes Only KTS 046
PTX 0970.0022TT v. CQG (05-4811)
DATE: -~/06/05 00:09:17 PRO FORMA STATEMENT AS OF 123104 FOR ·-LE (025720-999999US) 025720-999Page 174 (1) 131) _ dge <<<<< ( <<)
BILLING ATTY: CLIENT NAME: FILE NO: MATTER NAME: CLIENT REF #:
TTC PROFORMA NO. 164264
0303 Kevin T. LeMond CQG, Inc.
025720-999999US Miscellaneous Disbursements
*****TIME ENTRIES*****
DATE INDEX NO TASK ACT DESCRIPTION OF SERVICES RENDERED
*****DISBURSEMENTS*****
JTGRP: 025720
TKPR HOURS AMOUNT **ACTION**
TOTAL FEES o.oo
DATE INDEX # DESCRIPTION OF DISBURSEMENTS CODE/UNITS VOUCHER NO. AMOUNT **ACTION**
11/23/04 3889830 Telephone call from extension 0303 to 3129397476
11/23/04 3889831 Telephone call from extension 0303 to 3129397476
044 1
044 1
TOTAL DISBURSEMENTS
TOTAL FEES & DISBURSEMENTS
BILL/HOLD/WRITE OFF/APPROVED BY:
*****TIME AND FEE SUMMARY*****
TK BILL INITIALS TIMEKEEPER NAME
*---------COST CODE SUMMARY------~---------------------------* *---------COST CODE--------------------------------* AMOUNT 044 Telephone 22.77
·COST TOTAL 22.77
WHITEHILL TEMPLATE SINGLE: 2N2NYNNN
TIMEKEEPER TITLE
TOTALS
0.99 HD WO TR. ________ __
21.78 HD WO TR. ________ __
22.77
22.77
RATE HOURS FEES
.00 .00
Highly Confidential - Attorneys' Eyes Only KTS 047
PTX 0970.0023TT v. CQG (05-4811)
l"ROFO:K, . ..-. NO: 164264 TOWNSEh~ and TOWNSEND and CREW LLP Page 175 (2) JTGRP: _ .l5 72 0 FILE NO: 025720-999999US Miscellaneous Disbursements CLIENT NAME: CQG, Inc.
TK BILL INITIALS TIMEKEEPER NAME
MATTER BILLING ADDRESS: CQG, Inc. Attn: Josef F. Schroeter Independence Plaza 1050 17th Street, Suite 2000 Denver, CO 80265
*** MATTER NARRATIVE ***
Miscellaneous Disbursements
LAST BILLED: DATE- FEES-
TIMEKEEPER TITLE RATE
Matter Budget: Year to Date Fees Worked: Year to Date Fees Billed: Year to Date Costs Original Value: Year to Date Costs Billed: Year to Date Payments Received: Accounts Receivable Balance:
Life to Date Fees Billed: Life to Date Costs Billed: Life to Date Payments Received:
Matter Trust Balance:
DISBURSEMENTS- RATE 1
.00 0.00 0.00 0.00 0.00 o.oo 0.00
0.00 0.00 0.00
o.oo
HOURS
BILLING FREQUENCY: M
FEES
Highly Confidential - Attorneys' Eyes Only KTS 048
PTX 0970.0024TT v. CQG (05-4811)
Exhibit 6
From:
Sent:
To: Subject:
Attach:
Joe:
Mark Fischer <[email protected]>
Thursday, May 5, 2011 6:12PM
Josef Schroeter <[email protected]> Settlement and Damages
Summary ofTT Damages and Settlement.docx; imageOOl.jpg
One page (plus two pages of tables and charts).
I :y-: Descriotion: I Mark Fischer
Celebrating 30 years of reliability, performance, and Innovation.
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY
EXHIBIT
?31) Sc~r~tf-t, '1/n/13·.
CQG5471945
PTX 0338.0001TT v. CQG (05-4811)
·c Memorandum Date: May 3, 2011
Re: TT License and Settlement
COG International, ltd. Independence Plaza
1050 17,. Street, SuHe 2000 Denver, CO 80265
Sales: 1-800-525-7082 Customer Support: 1·800-525-1 085
Fax: 720.904-2991
The following is some summary information regarding the economics associated with obtaining a license and settlement from TT.
License
In 2010, CQG processed 76,515.779 futures and options filled lots and 176,072 fixed income filled lots through its system.
Future growth in filled lots is difficult to predict based upon previous experience. Attached is a chart showing total filled lots by month from 2008 through March of 2011. (See Chart 1)
TT's term sheet indicates that they would provide CQG with a 3 year license based on 2 cents per filled futures order and 20 cents per side per filled fiXed income order. At those rates, a license for 2010 would have required a payment of $1,565,530.
Assuming a 2 cents per side royalty rate, CQG believes that it would be able collect most, if not all, of any future license fee from its customers.
2005 Case
CQG will argue that these patents are invalid and that, even if valid, it doesn't infringe these patents and therefore TT is entitled to zero damages.
If CQG is found to infringe, CQG will argue that damages should be minimal. CQG will argue that, at a maximum, damages should be no more than a reasonable percentage of CQG's profits.
CQG anticipates that TT will argued that it is entitled to damages based on a per filled lot rate. A jury could award any rate ranging from a fraction of a cent, or 2 cents or 9 cents or even more for each filled lot entered through an infringing interface. TT has admitted that only trades entered through CQG Responsive DOM Trader are at issue in this case.
From 2004 through March 2011, CQG had trade routing profits totaling -----
From 2004 through March 2011, CQG processed 122,646,285 orders through the Responsive DOM Trader interface. (See Table 1 attached.)
2010 Case
The arguments regarding damages will be the same in this case as those that will be argued in the 2005 case. In this case damages can be awarded for trades entered on both the Responsive and the Dynamic DOM interfaces. However, damages can only be awarded from trades from May, 2007, through the present.
Since May, 2007 through March 2011, CQG had trade routing profits totaling------
Since, May, 2007 through March 2011, CQG processed 100,556,701 orders from either the Responsive or the Dynamic DOM interfaces. (See Table 2 attached.)
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY CQG5471946
PTX 0338.0002TT v. CQG (05-4811)
t::illed LQts Per M()nlh
Memorandum { DATE \@ "Mid/yyyy" }
Page 2
12,000,000 ·-.-·-·-·--·-·---·-·-·--·-·-·--·-·-·-·-----------------------·-·---------------------------------------------------------·------·---------:
10,txlo;OOO r····················································································································································································································
:: r: i : :: :: : ::: : :••• -::~·········· :· ••• : .•. :: t. ~ 1 , . , , , : JUIU lll . ll -~" . , ~· _ . -~ . , . : .
lol:ru:U3:()il:o5!:::os:09iw!f1!12io!jo2io304!o5i::lilB!09!to:1ti12riio2fiBi!l4:o5f71:;:<is;oo:io!11i12101!:~o31 "IMfE%it!M.iMii!
Chart 1
. . . . !<>.tai_J=ji_!elf_l.()l~ by<:J~e.r: l:ll~ty_ll_lt~!~~l!. __ 2004 through March 2011
..... : .............................. ·.
- - ov~~;:;;i~ ···------------·-----····-·-·- .......................
'lear : API FIXe OrderTicket
2.004 ~9,SS2
2005 2.,166 1,246,601
2006 £4 4,517,313 2,1€4,4~9
UJ07 18,7!)2 25,618,199 9,696,372
2008 .Sfi6,038 34,866,456 1,512 12,94·V67
2009 442,51l1 21,161,861 368,643 11,194,176
other Responsive\ Grant! Total ~.2S!J, f!,707 91,549-:
23,904 2,112,958: 3,637,829:
739,~~1 5,387,003 17,81}7,900 '
841,6t\5- ~1,9:lil,255- 58,W5,283: 327,16:1 23,91f>,10S 72,<>22,843
351;414 23,295,-604 56,814,259'
2010 753,974 19,595,874 1,591,716 111,798,057 5ll1,792 ~5,5Jt!ASB 76,691,851
2011 142 .• 294 4,941S,OOll 5.2!>,23& 9,4715,226 434,1Sfi3 10,426,161 2.5,954,Gll0 .
~r#!@!~i:or······;;;;;:o::· • .---•.11~!i~ii···:i::-,~~~m~ffiii~-)::;:···i···~iig!iio!····I•.•••··-~~~~4AA··:;;::::··::M~?~;fiti·;-::::m~@:§li~~:•············@~;~!~.-rable 1
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY CQG5471947
PTX 0338.0003TT v. CQG (05-4811)
-c !.(Jtlii_Fille.~ l(}~~-bl' _()r()e.r ~~l~_l_n_te.r ~a_t:e. ... ·- _
Memorandum { DATE \@ "Mid/yyyy" }
Page 3
ttl;ll:2()()7~h.r~~~~ar:(~-~~~- · ; ~ ___ ; _____________________________ ;
¥ear IU'I Dynamid fiX omerTkl<et\ Responsive: Grand Total
05 ;B-,595 1.~.990 12.09(} BUJ5.177 ~.401 1,529,095 4,122,3.49
no 31,1!11 1,793,819 23,557 1,1J59,')75 26,077 2,011,4')') 4,946,028
07 28,496 1,B3S,656 23,901 1lS2,BZB 2(;,719 1,75:9>013 4,510,613
OS 28,881 1,741,915 20,966 :889,270 25,653 2,1~1,536 4,S~,22".l
{i9· 34,287 1,729-,446 20,6SS 1,{ill8,198 28,140 1,987,511 4,874,267
10 3.S,5:94 1,850,992 39,557 91S,293 33,657 2,196,3!;0 5,074,453
n 56,699 1,68:8:.552 38"~6 l,ll31,5l3 25,Zl'l 2_.4U,O!ll 5,251,691
12 36,289 1,51:'>,922 :';9,128 761,468 n,4n 2,117,757 4_491,041
'"'"2010 ----------------------------------------------------------------------------------------------------------------------------------------------------------·-·· H 44,667 1,453,244 37,301 t!01,S62 17,834 l,29fr,645 4,656,£:$53
02 41,005 1,417,795 38,726 1,n98 .. 332 34,159 2,595,517 5r2.2.7t334
03 5!<,210 1~514~332 39.317 1,C4:l,,Z71 46,276 2,746;381! 5,443,794
1J4 59,529 1,ii5R,773 35,100 1,2ii2,96o!. 3Sr334 2,!131,213 5,SS2,913
05 BS,564 2,126,044 62,1;34 l,c676,i196 42,863 3,251l,625 7,255,126 (ofi. 72,530 1,74&,752 152,207 1,614,461 4{;~531 3,146,105 6,772,589
G7 59,233 1,45fi,937 160,779 1,3~1,S4S 46,546 2,823,661 5,939,004
na. 66,715 1,701,838 176)i29 1,354 .. 1.:0 45,860 5,059/i40 6,404,8.22
ll9' 75,130 1,7(;3,695 1n,41o 1,731},719 4S,729 5,14ii,Sl.1 6,942_,567
1C Sl,C-93 1,550,590 17~,214 1,650,2.26 54,729 3,143,911 6,653,763
11 6ll,32{) 1,87&,730 183-r170 2,648,047 93,650 3,733>147 8_,595,064
12. 49,178 1,32S,.!.44 155 .. 16:9 2,526,291 65,281 2.,793>759 6,918,822 ;;::2{)11
lJl 49,292 1,684,5171 16/JiOS 2,57UA88 93,972 :>,401,469 7,967,8:00
02: 63,&18 1,614,566 :l9B,23ll 3J:1116,H4 162,71?. 3,51;6,5!!6 9,59:2,6%
03 29,384 1,54&,443
sl)l~irttlt~f ;? #Utt~tt r::: J~!HlM~-·. 165,398 ___ . 3,{)'.!.8,304 177,973 . 3,35&,206 &,394,214
·••••••••••••·•zi~s;4ili·••••••·•· ,--'·*~}'iiii-®t•••·•••···• ··•n•iliMltM :··:-•••::@W~k~i~- •::'•·••••ll*nili#)iM. Table 2
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY CQG5471948
PTX 0338.0004TT v. CQG (05-4811)
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY CQG5471949
PTX 0338.0005TT v. CQG (05-4811)
Exhibit 7
From: Brian Vancil To: [email protected] CC: BCC: Other Recipients: Subject: RE: Anyone hear about this? Date: 2005-03-10 23:49:04.000
Attachments: Tradestatioa [:orm 10Kodoc
It’s about Tradestation. I’ve moved the text to the attached Word document, so I hope you can read it.
Kevin, Ernie and I just got off the phone. Ernie explained why he thinks our case is weaker than Kevin states in his opinion. (I’m not going to attempt to summarize his arguments, because I’d butcher them.)
Kevin still thinks we have a strong argument, but is going to rewrite his opinion reflecting Ernie’s points and send it to us for review.
..... Original Message ..... From: Joe Schroeter [mailto:[email protected]] Sent: Thursday, March 10, 2005 2:50 PM To: Brian Vancil Subject: Re: Anyone hear about this?
Who is it about? Did Kevin call? ..... Original Message ..... From: "Brian Vancil" <[email protected]> Date: Thu, 10 Mar 2005 14:20:28 To:"Christina Fatsis" <[email protected]>, "Josef Schroeter" <[email protected]> Subject: RE: Anyone hear about this?
This is pretty interesting, too, as a description of their business model. http:i/biz.yahoo.com/e/050308/trad 10-k.html
Among other things, theyre filing for patents, too.
From: Christina Fatsis [mailto:[email protected]]
HIGHLY CONFIDENTIAL-ATTORNEYS’ EYES ONLY CQG7704714
PTX 0591.0001TT v. CQG (05-4811)
Sent: Thursday, March 10, 2005 1:54 PM To: [email protected] Subject: FW: Anyone hear about this?
..... Original Message ..... From: Sarvesh Dhandayutham [mailto:[email protected]] Sent: Thursday, March 10, 2005 1:30 PM To: All New York CQG Employees Subject: Anyone hear about this?
http:i/biz, yahoo.com/prnews/O50223/flwO01_1 .html
HIGHLY CONFIDENTIAL-ATTORNEYS’ EYES ONLY CQG7704715
PTX 0591.0002TT v. CQG (05-4811)
Exhibit 8
From: Josef Schroeter To: Tim Mather CC: BCC: Other Recipients: Subject: FW: I still believe ... Date: 2005-03-13 08:09:57.000
Attachments:
-----Original Message-----From: LeMond, Kevin T. [mailto:[email protected]] Sent: Thu 3/10/2005 5:36PM To: Josef Schroeter Cc: Subject: I still believe ...
CONFIDENTIAL--ATTORNEY /CLIENT PRIVILEGED
we don't infringe!! I just got done talking to Brian and Ernie. They cleared up something that had confused me (the focus aspect) from my talk with Mike today. I can see their points but I still think we are different enough from eSpeed and do not infringe the TT patents. I'm going to write up a more detailed analysis that will also address the eSpeed issues in the next few days for us all to look at that hopefully will help us all be on the same page. Then we are all on the same page, I'll provide updated opinion letters.
I hope your time in Moscow is going well!
Best regards, Kevin
Kevin LeMond Partner Townsend and Townsend and Crew LLP Two Embarcadero Center, 8th Floor San Francisco, CA 94111 Phone: 415.576.0200 FAX: 415.576.0300
www.townsend.com
HIGHLY CONFIDENTIALATTORNEYS' EYES ONLY
IT v. CQG (05-4811)
POX 2244 8/21/2013
1<>11.11 ....... u.
CQG7703650
PTX 0247.0001TT v. CQG (05-4811)
Offices in: Denver I Palo Alto I San Diego I San Francisco I Seattle I Walnut Creek
This message may contain confidential information. If you are not the intended recipient and have received this message in error, any use, or distribution of this message is strictly prohibited. Please also notify us immediately by return e-mail, and delete this message from your computer system. Thank you.
HIGHLY CONFIDENTIALATTORNEYS' EYES ONLY
CQG7703651
PTX 0247.0002TT v. CQG (05-4811)
Exhibit 9
From:
Sent:
To:
Subject:
Attach:
dpr20sharp
Wednesday, June 20, 2012 1:42 PM
Josef Schroeter <j [email protected]>
Scanned image from dpr20sharp
dpr20sharp 20120620_134136.pdf
Reply to: dpr20sharp <dpr20sharp> Device Name: Not Set Device Model: MX-4501N Location: Not Set
File Format: PDF MMR(G4) Resolution: 200dpi x 200dpi
Attached file is scanned image in PDF format. Use Acrobat(R)Reader4.0 or later version, or Adobe(R)Reader(TM) of Adobe Systems Incorporated to view the document. Acrobat(R)Reader4.0 or later version, or Adobe(R)Reader(TM) can be downloaded from the following URL: Adobe, the Adobe logo, Acrobat, the Adobe PDF logo, and Reader are registered trademarks or trademarks of Adobe Systems Incorporated in the United States and other countries.
!{£!.2!.p://v,/ww.adobe.com/
HIGHLY CONFIDENTIAL-ATTORNEYS’ EYES ONLY CQG013975756
TT v. CQG (05-4811) PTX 2924.0001
TT v. CQG (2005) - Case Mana.qement Schedule
Parties Exchange Updated Rule 26(a)(1) Disclosures and Initial Disclosures
TT Updated Initial Infringement Contentions
CQG Initial Non- infringement, Unenforceability, and Invalidity Contentions
Deadline to Amend Pleadings
TT Initial Response to Invalidity Contentions
6t25t12
7/12/12
7/23112
8t02112
8106/12
¯ Serve updated Rule 26(a)(1) disclosures
¯ Continue producing documents required from CQG under LPR 2.1(b)
Serve updated CQG Responses to Requests (1-84) and ROGS (1-14)
UpdatelPursue TT’s Responses to Requests (1-73) and ROGS (1- 2O)
Review and analyze TT Infringement Contentions for the purpose of beginning SJ preparations
Begin drafting Non-infringement Contentions
=, Serve Non-infringement Contentions ("static")-) No literal per eSpeed (SJ and Fed. Cir. decisions) No DOE per eSpeed (Fed. Cir.) and ’411 Decision
¯ Invalidity based on JDG and SunGard 2005 Litigation ("Piggy Back Defenses")
¯ Unenforceabi!ity: we presently have no theory
Consider deleting inequitable conduct claim.
Begin updating SJ of Non-infringement per TT Updated Preliminary Infringement Contentions
Begin framing Fact Declaration re IC DOMTrader version history (Le., Versions 6.9 to 8.7, then t2.1m12.4)
Begin framing Expert Declaration re all versions of IC DOMTrader
Being drafting Final Non,infringement/Invalidity Contentions
CH89329.1 2 t 8494-10002
HIGHLY CONFIDENTIAL-ATTORNEYS’ EYES ONLY CQG013975757
TT v. CQG (05-4811) PTX 2924.0002
CQG Final Unenforceability and Invalidity Contentions
9/14/12
TT Final Infringement, Enforceability and Validity Contentions
CQG to state whether it will assert advice of counsel defense to willful infringement and produce relevant documents
CQG Final Non- Infringement Contentions
9/28112
10/05/12
10/19/12
¯ Serve Final Invalidity Contentions
Question: Do we file MSJ before Final Infringement Contentions or after? Likely before.
¯ Question: Do we file MSJ before SunGard MSJ andtor SunGard Markman decision? Likely before.
¯ Question: How do we avoid Prima Tek and Ovadat situation re insufficient discovery re accused systems? Production must be complete.
¯ CQG has no advice of counsel defense per Joe Schroeter.
If not filed, then file MSJ of Non-infringement per Final Infringement Contentions
¯ Anticipated SunGard Markman order
Close of Fact 11/12112 Discovery ........
11116112 Exchange of Claim Terms Needing Construction and Proposed Constructions
Expert Reports of Parties with Burdens of Proof
11130/12
¯ Follow SunGard Markman order? If not, no collateral estoppel against CQG and we may propose our own claim constructions
Follow Federal Circuit and Judge Moran
¯ What additional terms do we need the Court to construe? Could be none.
¯ Tough holiday schedule; must be prepared in advance
Reports are due before claim construction
CH89329.1 218494-10002
2
HIGHLY CONFIDENTIAL-ATTORNEYS’ EYES ONLY CQG013975758
TT v. CQG (05-4811) PTX 2924.0003
CQG Opening Claim Construction Brief
Rebu~alExpert ,,,Reports
TT Responsive Claim Construction Brief
Completion of Expert Witness Depositions
CQG Reply Claim Construction Brief
Parties’ Joint Claim Construction Chart
Claim Construction Hearing
Case Ready for Trial
12t2!/12
1t11/13
2101113
2t01113
2/25/13
3/11113
TBD
TBD
SunGardtrial expected to begin in Q1 2013
Expert discovery concludes before supplemental claim construction briefing concludes
Potentially precludes experts’ reliance on Court’s supplemental claim construction
Court’s schedule indicates that if a hearing is held, it will be limited and held during a status hearing
Court’s schedule suggests a hearing may not be necessary
CH89329.1 218494-10002
HIGHLY CONFIDENTIAL-ATTORNEYS’ EYES ONLY CQG013975759
TT v. CQG (05-4811) PTX 2924.0004
Exhibit 10
HIGHLY CONFIDENTIAL - ATTORNEYS’ EYES ONLY
From: Josef Schroeter <j [email protected]>
Sent: Tuesday, June 19, 2012 12:58 PM
To: ~aol.com
Subject: FW: TT v. CQG (2005)
Attach: TT v. CQG 2005 Case Management Schedule.docx; Order (6-11 - 12).pdf
Hi Peter:
Would you have any time today or tomorrow morning to discuss what dates are relevant for analyzing on your side. Adam Kelly, the attorney, is in our offices in Denver. If you are not available, we can schedule something later in the week and we can join from Denver and Chicago.
Thanks,
Joe
From: Adam Kelly [mailto:[email protected] Sent: Monday, June 11, 2012 5:23 PM To: Josef Schroeter; Mark Fischer Cc: William J. ("Bill") Voller Subject: TT v. CQG (2005)
CQG014005616
TT v. CQG (05-4811) PTX 2925.0001
HIGHLY CONFIDENTIAL - ATTORNEYS’ EYES ONLY
CQG014005617
TT v. CQG (05-4811) PTX 2925.0002
HIGHLY CONFIDENTIAL - ATTORNEYS’ EYES ONLY
CQG014005618
TT v. CQG (05-4811) PTX 2925.0003
HIGHLY CONFIDENTIAL - ATTORNEYS’ EYES ONLY
CQG014005619
TT v. CQG (05-4811) PTX 2925.0004
HIGHLY CONFIDENTIAL - ATTORNEYS’ EYES ONLY
CQG014005620
TT v. CQG (05-4811) PTX 2925.0005
TT v. CQG (05-4811) PTX 2925.0006
CQG014005622
TT v. CQG (05-4811) PTX 2925.0007
Exhibit 11
From: Rod Giffen To: Josef Schroeter CC: BCC: Other Recipients: Subject: RE: Advatage Futures Date: 2005-06-24 14:25:42.000
Attachments:
Bartender, fll have what he's having. And a round for our attorneys too.
Due to Nina's presence I will be unable to read this aloud in the huddle, but it will be archived for the CQG History Book.
-----Original Message----From: Josef Schroeter Sent: Thursday, June 23,2005 5:24PM To: Rod Giffen Subject: SV: Advatage Futures
I met that pole smokin TT guy. He actually thinkgs that they route orders in nano seconds. I want to push the dom interface down Harris's throat the fact is that it is not likely patentable and at any rate perhaps Tim gave him the idea. I want to out innovate them. My take is that we are headed to a law suit if we want to have it in the market place: that is simply times idea.
We will thrive when this is through. I am not going anywhere. Harris can f suck my dick
-----Oprindelig meddelelse----Fra: Rod Giffen Sendt: to 6/23/2005 1: 18 Til: Josef Schroeter Cc: Emne: RE: Advatage Futures
We are not going to be able to convince the market place that we don't infringe without a conclusive legal battle/settlement. Why don't we let TT have their crusty old DOM ladder and
--~EX!I!HI!IB!!I~T-1\
~3)0(
HIGHLY CONFIDENTIAL-ATTORNEYS' EYES ONLY CQG00054640
PTX 0342.0001TT v. CQG (05-4811)
out-innovate them? DOM ladder may be the first predominant electronic trading tool but I doubt if it will prove to be the best over time.
One thing I wanted to mention. At the Cheiron board meeting the ex-TT guy made a comment about their DOM interface being so good, and popular, because it looks like the paper order ledger or something that traders use on the floor. I wondered if that establishes some sort of prior art that would impact the situation.
-----Original Message----From: Nina Justin Sent: Thursday, June 23,2005 11:01 AM To: Josef Schroeter; Rod Giffen Cc: Yuriy Shterk Subject: Advatage Futures Importance: High
We got this call today, June 23 at 10:30 am:
Hi, my name is Joe Guinan/ Advantage Futures and I was pausing to tell Joe Schroeter that your front end order trading system has some kind of a vertical ladder. And I do not want our company to continue to offer that ladder to clients after July.
So if you guys can either modify your system to have it so that that ladder is not there as an execution mechanism or find some other way to get it off that vertical static ladder.
I need to get that off because it looks to me too much like something that might infringe on another company's patents and I don't want to have volume to come to our FCM from a vertical ladder that might be possibly infringing.
Anyway, again my name is Joe Guinan, my number is 312-756-6309.
Thank you very much.
Bye
Regards,
Nina
Nina Justin CQG 720-904-2959 [email protected]
HIGHLY CONFIDENTIAL-ATTORNEYS' EYES ONLY CQG00054641
PTX 0342.0002TT v. CQG (05-4811)
HIGHLY CONFIDENTIAL-ATTORNEYS' EYES ONLY CQG00054642
PTX 0342.0003TT v. CQG (05-4811)
Exhibit 12
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY
From:
Sent:
To:
Cc:
Subject:
Josef:
Thursday, January 12, 2012 9:59AM
Josef Schroeter <[email protected]>
Tim Mather <[email protected]>
Peter can speak with you tomorrow and questions
OK to withdraw Nina Feb 2 or thereabouts.
It is definitely good idea to plan out the year in advance.
Let's talk early tomorrow (Friday) so I have time to do all the analysis and speak with you again before you have your meeting with Adam.
How about 8:30AM your time? Just call me at 212 599-7592.
Also, could you please find out the following -
As I understand it, Yuri or someone else at CQG go a call from a customer of yours who suggested CQG make "improvements"- then Yuri approved the "improvements" and TT found out and notified you guys claiming the changes infringed on their patents.
My questions are: When exactly did this happen and does that customer still subscribe to your services? Is it possible you were set up- was the customer really working for TT? If so, don't you have some kind of counter claim against TT?
Thanks,
Peter
TI v. CQG (05-4811)
PDX2406 1/t/201.$
u. .... , -· .--... ...
CQG014005811
PTX 0403.0001TT v. CQG (05-4811)
Exhibit 13
Case 1 :04-cv-05312 Document 529-2 Filed 04/18/2007 Page 1 of 4
EXHIBIT A
TI v. CQG (05-4811)
POX 2228 7/9/2013
PTX 0232.0001TT v. CQG (05-4811)
Case 1 :04-cv-05312 Document 529-2 Filed 04/18/2007 Page 2 of 4
IN THE UNITED STATES DISTRICT COURT NORTIIERN DISTRICT OF ILLINOIS
EASTERN DMSION
Trading Technologies International, Inc.,
Plaintiff,
v.
eSpeed, Inc., eSpeed International, Ltd., Ecco LLC, and Ecco Ware Ltd.,
Defendants.
Trading Technologies International, Inc.,
Plaintiff,
v.
CQG, Inc. and CQGT LLC,
Defendants.
Civil Action No. 04 C 5312
Judge James B. Moran
Magistrate Judge Cole
Civil Action No. 05 C 4811
Judge James B. Moran
Magistrate Judge Cole
DECLARATION OF JOSEF SCHROETER
1. This Declaration is submitted in connection with CQG's Motion for Summary
Judgment of Non-Infringement Pursuant to Fed. R. Civ. P. 56( c).
2. I am the President of CQG, and in that capacity, I have had an opportunity to
become educated about CQG's order entry graphical user interface history as well as its current
product offering ofDOMTrader.
3. CQG first unveiled Order View in November, 2000, at the Futures Industry
Association show. CQG's Order View allowed traders to place electronic trades directly into
fmancial markets.
/
PTX 0232.0002TT v. CQG (05-4811)
Case 1 : 04-cv-05312 Document 529-2 Filed 04/18/2007 Page 3 of 4
4. Order View included a vertical display of prices, which was derived from CQG' s
traditional analytics products. Aligned with that vertical display of prices was a display of the
depth of market, i.e., a number of bids and asks for a particular commodity existing witlrin the
market at a given time.
5. CQG's software designers created Order View, and its vertical display of prices,
independently of considering any other trading software, and did not (despite TT's unfounded
allegations to the contrary) copy any software, including 'IT's MDTrader product.
6. After the introduction of Order View, CQG continued innovating in the field of
graphical user interfaces for electronic trading, but never deviated from its traditional business of
providing data and analytic tools.
7. CQG considers its order entry graphical user interface as a compliment to its
traditional business offerings, rather than as its principal product.
8. In June, 2004, CQG introduced an application known as DOMTrader to its
existing platform, known as Integrated Client, which provided data and analytic tools.
9. Not all screens with futegrated Client received DOMfrader; rather, a CQG
customer would specifically have to enable it. Indeed, Integrated Client could, and still can.
function without DOMfrader.
10. Like Order View, DOMTrader featured a graphical user interface with a vertical
display ofprices. The vertical display of prices was not and is not fixed, i.e., static. Rather,
since DOMTrader's inception, the responsive scale ofDOMTrader features a display of prices
that automatically adjusts to keep the inside market on the screen at all times.
11. Starting in July 2004, CQG also offered its order entry interface as a stand-alone
platform, known as CQGTrader. The order entry Gill for CQGTrader is identical to that of
PTX 0232.0003TT v. CQG (05-4811)
Case 1 :04-cv-05312 Document 529-2 Filed 04/18/2007 Page 4 of 4
DOMTrader module of the futegrated Client. The responsive scale in CQGTrader was not and is
not fixed, t.e., static, but adjusts to keep the inside market on the screen at all times.
12. The frequency of automatic movement of the responsive scale depends primarily
on two factors: (1) the volatility ofthe market for the commodity at issue, which is entirely out
of the control of the user, and (2) the size of the window screen displaying DOMTrader.
13. DOMTrader- in both Integrated Client and as CQGTrader- also features a
dynamic scale of prices, which adjusts with every change of the inside market to maintain the
inside market in the center of the display of prices.
I hereby affirm and declare under penalty of perjury that the foregoing is true and correct
to the best of my recollection, knowledge and ability.
Dated this 17th day of April, 2007.
PTX 0232.0004TT v. CQG (05-4811)
Exhibit 14
DTX 2238_0001
2238
DTX 2238_0002
DTX 2238_0003
DTX 2238_0004
DTX 2238_0005
DTX 2238_0006
DTX 2238_0007
DTX 2238_0008
DTX 2238_0009
DTX 2238_0010
DTX 2238_0011
DTX 2238_0012
DTX 2238_0013
DTX 2238_0014
Exhibit 15
A I B c I 0 I E F I G I H I I r--2-- !YE.~----1 -~·~!11-~li)r __ ~~_r:i()ri!Y iAssigne~ To_[~~! Ma~~!~r- f?.l:!pendent_On_[ ()~currence __ i~.li)~~rl!Yflf!P_?!!~~~e 'R.:~?.C!t!li)~!\Y_. Status ___ 1
> "-"'" ! 102985207 •--""• i 1 .. _ l,u~;red ''-"'""'""'-'-""""""00' __ ,:rwooo___ lo.,, : ~~~~=-: ,:::I:-,,~,::: iSERGEYG---- lwmit•d l,~,ctmMIIm_.~,~ !MARCUS 1:: -~ 7 ::~~~:i~n--~ ~o-~~;6~-:~1-~~ -~----·r:::~:~~ ·1··-·~~-- - ................. . -1~-~~~it:-d ---~~~;:n=i~:a,-~~pai~~~:~--,~~~~~~---~~::~d
: ::: !;~:t;_r:=.JM-~K I ·:=t:==l:~~::::=:~=t== r--- -----------, I 1 ~~- ! I ... ',ld _____ ose ___ d __ _
7 Suggestion 108580509 3-When Possible AVAKHOV ................ !~:Limited_ 12-Functionallmpairment ;AlEKSEYK .. · .. .
~ s$. ~ugggJtese __ stt'itoonn 10181709645290011·•-123·~--w~;hDeunePDo•···s~stei·b···,··e '!_'. K[LIYSAHIKV I ·····---~--- 12-Umited .... ····l~~~~~ctionallmpairment :MARCUS I dosed " • r··- I ·:(not entered} [t-catastr;;-pt;iz·-----ToMirRv_M ___ TCiosect ___ _
l--l..;,.O+S-'ug,g'--ecs_t_io'-n _ _,__11503770112-By Due Date IILDAR I MMALISHK I I 12-Functionallmpairment !JAEHA I dosed
1~50377091 I I I It-Widespread 12-Functional Impairment ,JAEHA 'Open -+'-'-'------t
i II 1 I I I I ~ Suggestion_L ~~_?_E_4201 2-By Due Date lsERGEYG JOSEF L---------l !-Widespread 12-Functional Impairment iJ~~HA !ctosed
,---_!_3 Suggestt'on i 1151338011"lowPn'or·tty r. --~~-- I ! I I! i ... ,~ .
1
~~ ____ j1-Widespread 12-Functionallmp,_a_ir_m_e_n_t_--'--!J_A_E __ HA~---:'-O_,P __ e_n _________ __
~ ~u~~estiO_:l _ _l1
_ _!!~150201 14-Low Priority
11
i, I lt:::_-W:;_____id:::_e=s!:.p=re=a:::..d_+-12:_-F_u:...n=cti-=-·o:::_n.:.:a:_l.:_lm_,p'-'a,_ir-"m-'e'-n-'-t---'-J_A ___ .:;.E_HA:_ ______ i~e~_:1__ _____ _ I I
~ ~UMes~!~!l--r _11?22?1~~ 3-When Possibl~--- r~~T::J~---·-·--i MFISC!;!E~ -- ... ------- ........ - .. ;ii __ ,_-W_id~p.r~:!.. .• I!3_-_M_in_o_r E:_rr:::_or:_,_ _________ ,_·G~-~-- ----;Q~sed
16 Suggestion 117731306,1-lmmediately ioMtTRYN JIAN i1-Widespread 3-Minor Error NINA loosed r--- _c.:.?,,..:C:C:."---i.-''--'~-'-tl"'--___.;;.~~--+------+.------~-~----r-----'-~---+1----------:-----~-------~
....!Z_ ?~~~~:S_tio_n ~-11 __ 83_2_8_6_0_~1~,_.2_-B_,y_D_u_e_D_a_te __ _,I:-A_R_SE_N_S ___ ~,' HENDRICI<
1
11-Widespread !2-Functional Impairment 1sEDREEV Closed
I I I : i I 18 Sugge.stion 118396401,2-By Due Date IALEXK !MAXIM I ivSHTERK
11 Suggc.stion
aosed
lTv. CQG (05-4811)
POX 2187 HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00073993
PTX 0191.0001TT v. CQG (05-4811)
I L I M I N I 0
_.!_?f:ll1::~~~tls:......... ____ -t[.:..R_fz!q':l~rl:!I!'~~~~-~ee~e~--~Even~e~~i':I~!J.J:!S.:ripti()l) _____________ j.~lz!l1~il)~ .. l?~t~-j.F()lll)~_ve.~il)n ________________ 1
' i !
7.3856 -······ ...... :l'.ONioscus~----- II_ - -- ~---·· ·~-~-~-
_L f~I)CJ:!!~d-------1: ----· ___ j· -----------·---;,:,...... .. ... -~~---····· ----------·--?:.3~~ ! 1 i
]No i ----r----~---- --------~----------.. ---- ....... ___ ............................ _ ... _________ ... __________ -r ______ ...... ____ _
__ j ... ·······················---~~:~x_x I
5 Resolved r--- ...................... _____ _._, __
7.386
i r--2- Resolv~~--... --... ---... ---+1Y_e_s ________ ... ____ _l ___________________ ... _ ... ______ ___,__ __ ...... _ ...... ____ ....j _____ ......................... _____________ Z:~
ives I 7 Resolved -~Resolved
9 Canceled
j . 1 ______ ,_, .. ,, ........ _
........ JY~?:c........... _____ ~------------------------,
12 Fixed Later Version
13 New I Discuss
~Duplicate !No
7.4208
I ~---------
1
1
' 1:_:
17 R I d ly !,-unknown .....:::.;__ --~-~~y_e __________ .,...i _e_s ____________ r----------------------i------+----------------------1
18 Resolved iDiscuss j
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00073994
PTX 0191.0002TT v. CQG (05-4811)
p I Q I R Is IT u v ~ Che(:~i.f!.!<l¥~~------------[!<3~~~!-~i~.Yersio~.---- ----------,-Sr(3_nch _l _______ i Braf)c~ 2 -~~eprod~ci~l~__j Diff!cu}ty!~isk__
I I I I I
I I I
-----~ . -l- _ _! . 3 i
------------!7~1? ... ~~ta __ l, __ -?:§_8~~--------------
--------1·--·--·~-------····· ··--···-··--·----·------·---··-·-·········-····--···----+-------------+---L----·--_____ __j_ __ . ! I I 1 ,,..,.,~11-4/7/06 --;-- ~------+.·········---·-----.,.....------'-''----- _J_
I I ············································ ·················;·······- l ·-- ~ ]3-:~~:J~ ------------·------'------ ····-·--r-----~ 1 1
2
__§... ~arnygin=p32806 122111
7 avakhov 071106 190356 ~ ................. - .......... ,... .. i7x4 Beta 1
t
r7x4 Beta 1
I
10 ildar_063006_1553SO I i7x4 Beta 1
I ~------------------~'---------·----------- I I~
12 j_ ~-----------------4-----------------------------r----r-·-----r- I
~ --------------'------ ---------------~--------L_____.:__ ____ r----r--4
15
16
I I ---------+---............ - ......... _____ ..... ·····-----·---·--··---·---~-·-.. ····---- -~~---~-~- 1--
. l 17 arsens_OS2406_10-=-5_72..:_7 _________ ;'-In_te_rn_a_JR_e:_le-'-a-'-se_l..:_S ______________ ~--------+----~-----l-----+---l
18 alexk 041006 151501 7x3 Genera! 1-4/7/06
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00073995
PTX 0191.0003TT v. CQG (05-4811)
w X I y I z AA I AS
' ""-~~-~[£q~~~i~J1! _ _ ff~ade Routing r--"-
1 1 1 1CQG Client Trade Routing !C~~!!':t:.<!El.~r ·············-1···-- •...... ----~[- ·-········· ...... -L------i,L:: ------1
···---~--·-·t·····-··- ·--···---·--~------~COO a;'"' _ --l'!"d' Roo_tl"$ ___ ,i.::ch:::a:::.rt:::T~ra::.:d=e:::.r ______ _
!CQG Client I --------~~---- ---~--r------·-
:co.G Client !Trade Routing !ChartTrader
I
I I ,_z_ ·······--··· . , ...... !CQG Client [}r<!de Routing
~ ---·--···-·-----·-·····---------~---·---~~ -"- l~~~~H~nt lrrade Roo.!~~ i j Order Ticket .............. ..
!
s !Coi3Cli;;nt :oOMTrad::::e:r_ -----·-
lcQG CHent !Trade Routing 10
I . I !CO.G du~nt . ...;!~T.:.::ra:.:d:::e..:R:.::o:::ut::.;in~g~----:----------
1 I iCQG dient !Trade Routing I ~, ~=-==~~----~----
~, G 1' I d . 1CQ C rent jTra e:~R=o:::u:::tm~g~-------1---------1 I . !mo a;'"' ITrnd"o"';"'
12
I
i Data Factory Online i E)(tration -~····---·-····-"·-------'-------~--~------···--r·--------·-r-C::.::.:;~-------~
I Data Factory Online I Logging
15
16 !
I 17 )CQG New Client
I 18 jcQG Client
HIGHLY CONFIDENTIAL-PATENT PROSECUTION
I jParsers
I !Trade Routing
i !General
CQG00073996
PTX 0191.0004TT v. CQG (05-4811)
AC
~ ?~n.:!rrlary_
~ Have a Cancel all choice on the DOM instead of only on CQG when DOM is being used. ····· 1- . "' ................ -. ... ···- ······--~---~~-
_L s~~_<!y~~J.s.~~~ul_~-~~!s,_c~l~-~f.!_h_sjz~ .. ~f!~?.~l':!t~l
__i_ Wh.~.~£~~r:!~~er is turned onL~~'-~-~.h..C::~~E~.~ a ceo~!_ dropdown in.!_f:!..e..~~~~~E~!: of the window
2- Add abiHty to test formem<Hylea ks in DOM server
6 Horizontal line on buy/sell cell hover in CT
_]_ Implement <Tab> and <Shift+ Tab> shortcuts for • between contract tabs
s I change tick chart to TradeFiow in OOMTrader
9 DOM server- WrnDim testing
10 change DOM gridlines
11 Change table colors for DOM trader -'""~
4 Change all DOM values to red or gree
rB- _Change the A/B next t~.the price on DOM Trader to red/green _
~ ~hange up/down arrow in snake of DOM Trader to circle
15 P;~~~~~~n .. !D! con!!~~~!.!P!.~!Ii~scond~tion~~ DOM ext~~---~~-·--··-· ,____ ~---
16 We need to know what FTP files are accessed, how often and by whom
_£_ gps console shall be able to resend DOM book
1S DOMTrader and OrderTicked should be displayed in minimal font on first start.
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00073997
PTX 0191.0005TT v. CQG (05-4811)
AD
__..!__ f)~~9:i~~i?r'l . ----- ....... Have a Cancel all choice on the DOM instead of only on CQG when DOM is being used. One idea would be
when right clicking on the position we have the liquidate all function but don't have the tancel all. We could do
something similar. This allows the user to hide his buttons and still have access to the cancel all function. CSR
2 is linked. - -~-
Project: CHART TRADER
scaling the DOM window in ChartTrader, the study values, labels, and cursorbox foots get larger, but should
~ not. see attached screens hot. ~<0'"'"""'~~~,-~,~-M~< -~·A··-·~--~~-··"~~--''"' ""' '' '''" UU •"•o--•••·O•o'O-
When Chart Trader is turned oo, we need to show the trading account with the ability to right-click and change,
4 just like in DOMTrader. see attached screenshot.
We need to add an abflityto test for memory leaks in DOM server compiled in release mode •
r2- . The memoryf(!~k t(!S~ingmechanism should be consistel)t 1/Vit~ ()t~(!~~p_pJI~atiOI)S: .......
6 Un-parked horizor~tal line shall be displayed ~t CO.:.':_esponding price when buy/sell or DOM cells are hovered.
It should implement switching between contract tabs in Order Ticket and DOM Trader by using <Tab> and
~ <Shift+ Tab:> short<:uts like in all Windows application
Original intent for DOMTrader in dynamic mode was to replace tick chart with Tradeffow chart. Tickchart needs
+ to be replaced with Tradeflow. ~>>
We have to have possibility to test Win Dim connection in DOM server
Please change DOM gridlines to (255,255,255) for light themes and (39,39,39) for dark themes. Propagate to aU
10 relevant interfaces. See attached.
11 Please change theme wlors for DOM trader table. Propagate to all relevant interfaces. See attached.
Please change the color of the DOM values in DOM Trader to all red and green (no grey}. light themes:
~ (204,0,0), (0,128,0}. Dark themes: {255,0,0}, (0,200,0}. Propagate to all relevant interfaces. See attached.
Please change.theA!B next to the price in the DOM Trader to red for "A" and green for "B".lightthemes:
(204,0,0), (128,0,0) Increase the font size to .9x. Only one of the two should be present at any time. Propagate
13 to all relevant interfaces. See attached. ---Please change the up/down arrow in the snake of the DOM Trader to a red or green ctrcle. light themes:
~ E_Q~,O,Ol,J~~28,0}. Dark themes: (255,0,0},(0,200,0). Propagate to all relevant interfaces. See attached.
To make DOM and EOD consistent with each other, please add session ID, CID, and salescondltions to dompr. I
~ ,aE~~'::'~~s~~EtJt~o get th~-~~S~!nE~.9L~~~s~nsistent. ·----"'-"'"<-«'"'""""""~---~~----,~---~~
With addition of DOM data samples (and down the line, possibly other samples}, we need to know which files
16 on ftp are accessed, how often and (if possible) by whom. Tim's request.
Ops console shall be able to resend DOM book on those parsers where DOM book is available. The resend
should be done eitherfor all instruments maintained by parser of by instrument id. The resend should be
17 throttled. 1-- ---·--··-----
18 When first started, DOMTrader and OrderTitked should have minimal fonts.
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00073998
PTX 0191.0006TT v. CQG (05-4811)
AE AF AG
2 Would allow the user to hide the huttons and still access the cancel an. ~w~~-+--'<«~-~~"""
I _______ _,;_:;~?'~'~5}_4QJ?._ 3 oddbeh~a~v:i:~o_:r. ________________________________ ~-
4 no abitity to see which account or switch accounts to trade from I
I ._2_ fn()!E!~!~r~) _______________________________ -+ ! .....
6 Cle~rer indication of price
lzzz428D
N~~=nge:::_~N~ee::d:::e~::d. __ ··_·_-··_··_···_-··_···_~L-----·- ..... .
10 high i 'No Change Needed
12 high
13 high
14
16 We know him better
~ SuSt()~~-':_C:<!~Id have wrong DOM book picture when data was lost
1& Ut
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00073999
PTX 0191.0007TT v. CQG (05-4811)
Al-l I AI I AJ I AK I Al
____!__ Ili!.~~--~~a~-----··----_;_::c:ea~d By_:'"''""' BVl""''""'--1'"'''!'0!'.~~"'
I ,N I r---~~,--~----····-r,~---· ···--~- -----1 I
isERGEY_<! ___ ~i ~ I we believe it is intended behavior as it is.
1
MARCUS iN -r-·--------------- ···---· ----- -···---···--·-···--·---::__-------------------. --~------- +--' --------+i.::.::__-----~r -----·-···----~-------····-·-------~--~--- . ------1 ! -
________ ____;;!Y~HT~~~-~~ _ ........... ·····--' _ IN·················-]
l
_L .. -----------+~~~~~l}$
...2....1········
2 ...
6
!TWOOD
'SERGEVG
~ Or~~rf1cket ............................................. ..... :fi:LEKSEYK
g
9
10
12 !JAEHA !N I ~-----------L~~-~~----+, __ ,_N~----:I-,'---------
13 iJAEHA -_J=.::::~:.:__~-------+;___-----r-----------·----------------------
~
IN I 14 .JAEHA -j-·-----~-------------------------------·-"'····---------
1
'ALEXK
GU_;;_S __ ---'------------r-------l----· .................. -'"'-··----~-----·-··--- ---------·--·-----·---·-----------------·--·--1 I iN I
[!i-------------------------------------------------~
: I ~------------~~S~E=D~R=EEV~-+-----~~N~---+~---------------------------------------
11 I !N I
16
18
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074000
PTX 0191.0008TT v. CQG (05-4811)
AM I AN AO AP I AQ 1 Escalation Reason I Discovered By Group i Discovered During !r Fixed Versions ;Test Pending Server Time r-- .................. ·-.. ·'----·---r -~ ~ -- - ·-r.. ................... ~--~-~:········ .. --····-····~--········· .. ····-········-··"-
! ' !• '
] I !• !
i j<:'erl~~~~~~--... - .... r.Gc .. e .. n ... e .. ra .. l ... -~·~·-....... I
I
_____ ;~().~ ... ~111.El.f?Yel!..... ---J~~!'~~al
~ lcQG Employee I General ............................... -~~~--·r-··-······-···-................... ~····-.. 1--·----···-·
I Developers i ~-~-1 .. ··-··········~··--···
5 -·· . ·--l .......................................... ---1 ····---··-- ······················································--
lcaG Employee -------~~.~:
System Testing i
7.3198: 3/28/2006 2:48
!Testing !System Testing . , ........ -. 7 .. 41381 ............... -_7/11/200611:01 1 r··· i
_L I~£g~!f~x_C~~11 .. ~~ .. -----'i-'C..:.:Q:..:cG..cE:.c.m~.P,..;.;loy,c..;;.,ee;;;..__ .. ___ j§~ne!?J. ____ . _______ 2:~ .. ~I~J-.. _------9 I
i '
1--'-1-"-0+------------+-1 C:..c:Q::.:G~Employee
~1_1-+-------------+-~c_Q..:.......G E!l'lployee
l
I AI,.. ,Alpha
7.4134 6/30/2006 6:40
I
12 -----~!_cQ~G.:__E_m~p-'lo~ye..c;e~--rA~Ip-'h..c;a _______ 4 _________ ~---- -----I I
13 I CQG Employee Alpha -----;-..::..:::.::..::-=~...:.=--- -+, ~.;:;_ ____ ~--------~· .. , _____ _
I l
14 lcoG Employee I Alpha ~--~------------r-- , .. """-------~--· I
.. -----~-----f~:!~<?-... - ....... ---~~---~ .. - ~-~--··------........ , .. ,_ .. ~ ----1 I :
15
16 lca.G Employee I General 1
17 i Developers I !Integration Testing
18 • CQG Employee
HIGHLY CONFIDENTIAL-PATENT PROSECUTION
i
7.31991 4/10/2006 8:33
CQG00074001
PTX 0191.0009TT v. CQG (05-4811)
AR I AS I AT AU
3/21/2006 15:20 i """"'--- -----"'"'"""'---------m·--··-·r~C-<-~----
1
3
4
.......... ---··------------------------+; . _31~4/2006 9:~~ .... -~3[~QQ?. .. '
.............................. - .................................................. _________ _.._ ............................................ - ... ~~---·- 3/24gQ9 .. ?~.:.~---"'""'"''i----·"·'""""'~ I
7/6/200111:58; ····················~-~---~-----------~------:----·············-·:··'···='·' . I .
3/27/2006 0:38] 4/7/2006 ------------·---'c----'-'--'-'----·-iic---~-'--""""""""""---------l
7 '' ''' ...... :3/27/~()()§?:?;j ?/?1/~()()§ ,. -----.- - ... .. !
8 Tst- TF chart is added ~l~7J3Q.0_§11:071 7/14/_?()Q6 r-g ---"""~""'"""~"-·~~-~-·~·~=~•-•~•~-•"""""""m"--~--·~~~-·-~·---~-~~~~~~~~m·------;----7/13/200117~351 =+-----n"~--
_!2_ pom grid lines are white on light themes and black for dark themes i 4/3/200611:351 7/14/2006 '"'""""""''""'""'""""'-----...L...--~~::.::..::=.=..,_-~~=::..::.t--------1
11 4/3/2006 13:37!
15 ~ ................ - ... -..... ---······•"''"'"'"--"-···· 4/6/2006 15:011 ---·-······ .................... ·-·---.. -----····--·--·-·-~---· ... -·----- ···---···-··----
16 4/6/200612:45)
i 17 4/7/2006 0:59! 6/9/2006
18 DOM Trader and Order Ticket have minimal font size while CQG Client starts for first time 4/7/2006 2:43! 4/10/2006
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074002
PTX 0191.0010TT v. CQG (05-4811)
AV AW J AX AY l Work Around Oosed Server Time ilnitial Assign Server Time !Time of Defect
1- ······· - -------------------------- ...... ·····-··- -~~·-·-·· ···-··· ·-······················· ····- - --········----1
i I i -- -------------------r-··--------~ ----~-----1-~-~-------
--'--_ I 7/17/2oo71•~o! --~~'{l()6-'~'911 ....!.. ____ -_-_-_-_-_ -__ -_----------------------~- · :/;7~~:;;:r 3/24/200611"1~ __
, I 1:/200113,14! 7/5/2001115.! -=--- ---------------------------~· -. · · ··-··············-·······r·· · ---····-····-··-··········-···· · 1·····································-·-
6 4/12/2006 G:toi 3/27/2006 o:361 -; --=~~~-.. -.... ---.-...... -.. -.. -.-.................................................................................................................................................................................................................................................... l---...... -7."---/2= .. -t;:_;;/2::.;;_(}_;;_g6::....9::..:.:;:;;..~3:..;J.-... ---... -5_;;_J2:._c3:;.;__;/2c.::(}:..:..g::..:.~ .. :...:?l:..c:3:...:0+1-... -_ ------------~~-...... -.... -.... '
~ 3/12/20073:44: 3/27/100611:051 9 ···------·-···--··-----------·-·····-···--------------·········-------t----2/14/zooz s:39i ____ 7.'-:/t-3/2oott7:3si--
~ro~-------------------------------~n~oo6~ool ~m~~"l I I 11
~- ~~----~~~2~~-w_o_6_7:_41~~---~~-23~/2_o~o6_2_l_~_lrl _____ _ ,__-------------------------------r I I I I
~r----------------------------------1~--------'-·---""-5/.;;;;.23::../=.:200:..:...:..6 2::.::1~------l I I 14
4/6/2006 15:321
16 4/6/100612:451
--- -- -- --,~·--··
4/6/2006 10:081
18
I
.E.. _______ ., __________ -·---------------·-------t---6'-/2_2;;..._/1_0_06_4_:3_1...,_1 _____ 4...;:_/_;7/_1_00_6_8_:1_7+-l _____ ---l
4/28/2006 6:591 4/7/200614:251
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074003
PTX 0191.0011TT v. CQG (05-4811)
AZ BA SB BC so ___!_ Tirnes~eopened !Times Failed Testin& iTirnes_Pending~lnfo - ·········-·T . - -·· l Failed Tt'!Stl."~ ]'lalL __ : t.as!. Up~ated. By~
! !
r--3-- ... 0 0 lt>t ··-·-. ·- ..... ~- ... . .......... ····································
3 . ·--~ 0 [N
4 0 0 iN
5
~ .... 0 0 iN ..
7 0 0 ljN
8 5 0 tiN 9
10 0 0 1[111
11 0 0 iN
12 0 0 iN
13 0 0 !N
14 0 0 !N
I 15 0 0! iN
16 0 0 IN
17 0 0 ]N i
i
18 0 o: N
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG0007 4004
PTX 0191.0012TT v. CQG (05-4811)
BE
5 yshterk@cqg_com; [email protected]; [email protected]; [email protected] -················································· .. ···················•······•·············•···• ..
_!__ [email protected]; ser~':Y.~~~~-com; [email protected]; [email protected] alekseyk@cqg_com; [email protected]; [email protected]; [email protected]; [email protected];
7 [email protected]; -··························· ....................................................................................... , ................................... , ............ .
[email protected]; [email protected]; [email protected]; [email protected]; [email protected];
._L ~kis~h~~5g~com -·---~~~-............ -----~--~ 9 [email protected]; [email protected]; [email protected]
10 [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]
r-1!- [email protected]; [email protected]; [email protected]; [email protected] ·-
.._g_ [email protected]; [email protected]; [email protected]; [email protected]
13 [email protected]; [email protected]; [email protected]; [email protected]
14 [email protected]; [email protected]; [email protected]; [email protected],..:.m:..:. ____________ _
16 nina@cq~.com; [email protected]..~c..usc..:@=-.ccq_,g,_.c'-o'-m----------------------l
_E_ ""'p_do-'p,_s_c_on_@=-c...:.qg"'._co.:...m_..:_; d_m_itry_,_m_@::::....:.cq--'g,_._co_m_,_; s-'e'-d-'[email protected]; [email protected]; [email protected]
18 [email protected]; [email protected]; [email protected];
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG0007 4005
PTX 0191.0013TT v. CQG (05-4811)
A I c I D E F I G H
L'"-';'" 124116401,<1-BVOooO"" ISTEPANY 1_2._-l __ im_i_te_d __ ---+1_2-_Functionallmpairment lsTEPANY loosed
.2£... .s~~-es_t_io_n~t!~~,,~_.·-to:~w~P-!:l_o_r~-tv~~~~-~~~~~------------.--1+-r. -~----+------~'-'-"'" r-,,~~"!""Pa_ir_m-"e_nt'-----2YY-<?9.P ___ I~~~-·-·-
21 Suggestion ! 124732302112-By Due Date iTARASR J !_1-Widespread 12_:!'~nction~~pairment GASKOVD !dosed ...;;;;;;_ ---·------~~r-----~-------~ =.::=.:_:___:::...:::.:..:.::...::..::__+-=-=.:=---~
! I
~ 22 Suggestion 124815505 14-Low Priority
r------'~~------- I
I
23 Suggestion 127533927•4-Low Priority
! I I i NIKOLAY ___ j~_E!G_E_V_G ____ L___ ____ i-! 1_·W_id_e'""sp_re_a_d_+jz_._F_u_n_ct_i~nallmpairment
I !
I I I I 12-Functionallmpairment 1 k·Widespread
! TRUSO __ v_s _ __,.:__,o~_en __ ·-·--
' ' !ALEKSEYK \open
:: :::::::: l :::::::::I~:~YP~~p~~~ I::::::E ··!::: :::~:::::: ·!:~:::::::::::::::::: ......... ;:::::: r---'-'-- ---·-···-,---------l· I ---· i II
idosed T •
[dosed
~ ?':'[gestio_n __ 12_~~'!2~.P2l4::Low Prior~!'! ! MICHELLE j ROD 12-limited 2-Functionallmpairment
27 Suggestion ! 12920262012-By Due Date ! KARN~:~~1·· --~-~-;~~-~--~2~imit~~2-Functionallm~airment ~ .............•..................... ..................................... r·············································· ····-~···························· I ....................... ·············-·····-······- ·········r····················· ........ ····················-r·······--·········-··-·······--·--·-···············
129498506!4-Low Priority lsERGEYG !JOSEF 11-Widespread lz-Functional Impairment 28 Suggestion
HIGHLY CONFIDENTIAL-PATENT PROSECUTION
:SERGEYA, __ ,_ia_o~~-d ___ 1
'TIM
!PAULA
loosed
i [dosed
CQG00074006
PTX 0191.0014TT v. CQG (05-4811)
K l M N 0 ':
19 [R_es_ohl~d. Discuss i,
20 New Discuss 7.3863
I r2!- 1
Resofved "'""'"" -- [No ..... 1--
' l
rE- ft.Ssf.!!.~~? ...... -....... No 7.411S """""'"" . """""""""'""·-----~------· -··-···--- ·- ·-----"·-······"
!
i
i 23 New iYes ·: 7.3863
~ NotTested .......... No !
2S Fixed Later Version
26 I Not Tested No
27 I Resolved No
' 28 Canceled Discuss
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074007
PTX 0191.0015TT v. CQG (05-4811)
p Q R s T u v
I ~~epany_063006~~50~7~07~------------~l~ln=re~rn~a~IR~el~~=s~e1~7 __________________________ ~---------------+------L---------~------0---I
~ ~---------··---------------+-------------- __________ _:_ ________ +--
23 I I Yes
~ thartfe_061~g~,_9?25()? ................................................................................... . ~?~~ ,c;eneral2 !··········
25
I
26
27 lkarnygin. 051506 185014 l7x4 Alpha 1
28 ! iYes
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074008
PTX 0191.0016TT v. CQG (05-4811)
w X J y J z I M I AB
19 I I
------~-~t------··--+-----+I . ..:CO:=G-"N:c:~c;;w...:d::.:i.:::en,.:..:t:.___-ll-=G.::e_nc:.:~o.cra=cl _____ ,_-1----------l
r 1
t-..;;2..;..0+----------------'------'------LS=QG di~nt !Trade Routing f DOMTrader i I -~---~·---- -----1
lcQG New client icQG Basic --------~---····----····------------ ·--··+····"··- ····················--·········· --····- ..... ····-----+ ·····································--------~---
21 ········· .... L .... I
--------······----~ -----------""'" ·····-------~---··
22 '---!--··-----
i 1 Requirements , i CQGGW
·-----"""'"'""'""""'"'"""""""'"""'.,.-'" ............................. 1 .................. "'"'"'"'"""'"'-"·"""''
I [CA$~ ............................ ---lA~~_?~r_:l.~ ................ _, .. ___ , ......... . I
I I ICQG Client irrade Routing B I i'DOMTrader
,..1!. Pr()iE?~t:~qJ\~~()~trlentati()~ .. ..................................................... JS()de 't·· ..... jC:S~C:IiE?~!.. . I~E?IP '
, I coG Client . :t~~lp -----···-·------···---------------·····r ---------------------------------···········
i " . -- .. ~ ..
I ,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,j ..
i ......3?_ .. ,,,,,,,,,,,,, ,,, ' . . . ········ ................... ·················~ ·················~~--~--~~~-
27 iCQG Client !Trade ~outing - --... ,,-----------·-----+------,------+_;;_------+-----=-----"7"""'---------l
28 CQGTrader iDomTrader
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074009
PTX 0191.0017TT v. CQG (05-4811)
AC
~ Locks in PriceVolumelist PE!rhaps could be removed. This will speed up operations with it.
.2£.. Separate the Trade pref per replicated DOM . :.;:...:;~-~~~.~~-~.,.-_, _______ , ______
r-3!.. ~ol~!_extSutton shall allow to set a different font for ~ifferent substdngs ln text. __ .... , ..... ~····--
22 ~xists the possibility to cha.~ge the order, under forbid on trade data .EY goods. -
23 Market window with default size (5 rows) doesn't appear in OOM Trader with reduced height
24 DOMTradet: Trade Volumes In DOMTrader -
..12... g~MTrader: Cancelin~~!!_!.ct~~!': . .<?rd!:!~---- ---·
~ .D.~~T~~~er: Placin~~2:~!:!~!~1:1!Jl ~~~OMI:r~er win~ow usl_ng_!_l!e Mouse
27 I Right cllck on selected price shall deselect it and switch DOMTrader to the market mode.
28 CQG Trader, be able to remove the thermometer on DOM tabs
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG0007 401 0
PTX 0191.0018TT v. CQG (05-4811)
AD
locks in priteVolumeUst could be removed or SingleThreaded/MultiThreaded version could be implemented
and used. At least in parsers there is no need to use multithreaded version as the only place of it's usage are
DOM/DomBook and the only place they can be used from different threads is ParserDOM which is already
synchroni~ed too. Server side is under question. Proposed change wm speed up OOM operations approx by
~ 20%. ------~~--
Separate the Trade pref per replicated OOM. User suggesting this would like to have fast click on one OOM and
~ not the other. CSR linked. v<.;~-""~'-"''~-M,M,HN=h~=,-~,-A-~~---·• ,.,,........,...,,
ColorTextButton control shall allow to set a different font for different substrings in text. Now it doesn't allow
2!... ~set text in different font~_'!umber of ord~.!S (like in the DOM Trader) in cancel buttons forthe Order Ticket.
Exists the possibility to change the order(in Orders and Positions), under forbid on trade data by goods.
Reprodudng:
l. RunCQGCiient 7.4115, In DOM place LMT order on DD. ' 2. Open CAST/Accounts/Allowable Markets. For this account we forbid trade fo DD(on EUREX).
3. Try place Order for DD. We have PopUp about forbid trade.
4. Open Orders and Positions and change orders(QTY and price). Order is modify. In OOM we see the new
order.
r-E- -Market window with default size (S rows) doesn't appear in OOM Trader with reduced height.
Steps to reproduce:
1. Be sure that market window size in DOM Trader is set by default {S rows)
2. Open DOM Trader
3. Reduce height of OOM Trader so it shows less than S rows in Price/Data grid
4. Select price and scroll price scale wefl down or up
s. Market window doesn't appear (see attached screenshot)
In such case customer can lose tracking of market if he/she didn't customized market window height before.
23 The iguiry should be discussed
~ Trade Volu111es !n DOMTrader: ~()lloflt.'e:()~lys~()I/,(<J~li<JI(e:)(~~<J~!!~ly()ltJ!ll.e:~.. . . Canceling all Active Orders: it's also possible to cancel all or just buy or just sell orders directly from OOMTrader
22... lJ.~ing canc':!.J:'::l!!C>!"'~.at t~~.!:<>_ttolll_· ----------· -Placing an Order from the OOMTrader window using the Mouse:
1. We don't allow to place orders clicking on OOM or on volume columns.
2. There is no info on how to place STP /STPLMT orders using fast click.
_2§_ Rfght click.on selected price shall deselect it and switch OOMT~ader to the market mode. This applies to both
27 OTandOT. -·· .......................................................... __ ··········-·····-·····-··-·- ·················-······ ................................................ ·-··- ·········- ·········-... ··
rn CQG Trader, I suggest that we be able to view/not view the thermometer on the DOM tabs. tfwedon't
28 change this, then we. should provide an explanation as to what the thermometer is.
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074011
PTX 0191.0019TT v. CQG (05-4811)
AE AF AG I
19 faster processing. faster studies. •
I
22.. ~~~~~aJ~~~rs to .~t,~if!~~~-t.P!~!,e_er DOM_:. ____ ! I
,~--. ..... ~ ·---~
21 i
22 Confusion ' ·-
'
23 Customer can lose tracking of current market conditions
24 bad - ............••........
!'
25
26 !
27 No Change Needed - ...... .. .... 00000o00ooo0o0oooo0ooo0o00oo000oooo0oo0oooooo•Ooo•••o••H•OOH0000° 0
28 More customization ability i j
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG0007 4012
PTX 0191.0020TT v. CQG (05-4811)
AH I AI AJ I i
,.E_ ... ---~ j_.,vo_f ·- i"· I
AK I
iN I .... , ...... ~·-~--T---····--·--·
I
I
~ ~xploratory Testing [ALEKSEYK iN 1$ERGEYA 'N
r::::::: .2!.. .... ! re-assign or change TFV
.-, .... ~--~·~··············---···············-·········•»·····- ········~-------~--------
'N ·············[········
I
........ r .. I
N !suggestion triage- consider for basic?
HIGHLY CONFIDENTIAL-PATENT PROSECUTION
AL
CQG00074013
PTX 0191.0021TT v. CQG (05-4811)
AM AN AO AP I AQ
I I
_12_ Owner Chan_g"-e-------+I-De'----'-v--"-el__c.o"-pec__rs-=------+'-nt-'--'eg-"'r-'-a-'Cti-=-on-'-T_e::.cs-=-.ti_,ng"------t---------'-----...;_6:___13'---0-'-/2_00__;_6_4_;_:1~.
--~---~--!Gen!ral Cust -T~!_n!!!.:-1 -----,----------•··---------1 ! i
21 ·,1 Develope~ .. 1 -=- ----·--------------~---~'--~ l _______ _;__.__ _______________ 4/27/20_Q~~~:Q_~ 20
I
I _E_ ----------------··"l·..:..Te=s:.:.:ti.:..:;ng~-----ii;;;;..Sy""s-=-te:.cm__;_Tes=tlng
I ~--+------'-------1
23 I Testing System Testing
! i i
J
1
!·• .. '
0
oeevv ____ ee
1
t
0
o_pec ____ ee.:;__rsr __ ~------_--__ ..... _ ...... _ ..... _ ...... _ ..... _ ...... r_A/\-' __
1
,Pp,_ __ hh...;_ __ aa _____ -+-, _·· _ ... _ ...... _ ..... _ ...... _ ..... _ ...... _ ..... _ ...... _ ..... _ ...... _ ..... ...., ... ,_ ..... _ .. _ .. _ ... _ .... _ .... _ ... _------6-/2_2_12_o_o __ · s __ l_4-_=4~
26 !Develope:.:.:rs'------+APh~------'--------...,...------"'...:6/~4£29E~1~:39
-----~l~e~e:~~rs Alpha , 7.412! 5/15/2006 9:02 ................. .- .. .-. ._ ....................... 1 ......................... , ...................................................... , ........ , ......... ._._.......................................................... .. ........ , .................................................................. _, __ ........... ..
I I ICQG Employee ,General 28 Priority Change
27 ---------·
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074014
PTX 0191.0022TT v. CQG (05-4811)
AR
19 1---'-- ----·
20
21
AS I AT AU
i
1
4/13/2006 9:06 :,-----'7-'-'/2::.:1/::..:2::.:0..:.06+------l ' '
·-·------------+·--4£~~£?5J0610:3o!
I 1---'-- --·-·•"""-""'" 4/14/2006 1:3SJ 4/2"'8/_-:2::.:00:.c:6+--·-----l
'"" ................... -~- .. ~----·"''"'"'" ............................ ~--~-·~··-""""--·---------~ -
22
23 24
~ ····----·------------
I
I i
I 4/14}2006 7:02i 4}25/200811:4~ ..
I :
4/17/2006 8;12i
4}19(299§ 9=4~1 " §!~!?99§ ...
4/19}2006 0:441
I I
~26~-----------------------------------~---~19}20060::.::::.:56~: ____ , ___________ , --------.. I
~ .~~~~!~~~~~~~~~~~--P~.~~-~.~~~~.~-~.P!:i~.~ .. ~.~~.~.~i~.~~.~ .. ~~ .. ~.~~.~~.! .. ~.~~-~ ·····················································-············-·----········-- ...................... ; ....... ~!;.~(399§?_:~9t ....... ?!3_§(399§ .. .
28 4/19/200610:041
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074015
PTX 0191.0023TT v. CQG (05-4811)
AV AW I AX AY
20
I 9/26/2006 7:08[ 4/17/2006 8:32
I I 6/9/2006 14:061 ·-·--r ~-~·-···-~·-·--··--1~ .............. _ ............................................................................................. ___ ....................................................... _ ..... _ ................................. _!_ 9/22/2006 2..:_~-- 4/17/2006 8:361
22
23 24
-···
! 4/14/2006 9:17 i 4/14/2006 9:15
I 4/18/2006 8:33
I
I I I
-----------iii-_ ::::::! ~:~=~:l I : I I I I I I I
~-"26'-+------------------------------l __ 2l?J{~El01~49l s/2~£~~!1~~~~-----l 7/13/2006 20:241 4/19/2006 6:381 :::r ----::,: ,:J
27 f---········
28
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074016
PTX 0191.0024TT v. CQG (05-4811)
AZ BA SB BC so
19 0 0 1N
20 0 0 l,N
21 Oi o_ N """""'""-----·--- r· "'""''"""'····""'"'"'····
22 1 1 'y
23 0 0 N
~ o, 0 N i
25 0 0 ;N ······
26 0 0 I. 27 oi 0 IN
I i
I ' I
28 o! ol liN
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG0007 4017
PTX 0191.0025TT v. CQG (05-4811)
BE
[email protected]; [email protected]; [email protected]; [email protected]; [email protected];
..12._ !~~..!:[email protected] --::-------:-:---:--------:-----:---:--:::------[email protected]; [email protected]; [email protected]; [email protected];; [email protected];
..12.. y~;~~iy@cg~~~.Y_S,~!~!~~!l~~om __ ,"·---~------~------------·-~
2!... ~~~~~~-lW.!:.<i~~-m_;_d_e~i_so_@_~~:.:..co:...m_;;c...t..:a .. r_ac.:..sr_@,,_cq:;..; .. "'gc..:.c.:co_m _______________ . - .. - .... -
22 trusovs@cq_l1~!!1; shella@cq_g.com; nikolay@c~ • .:c·c:;:o.:..m-"-;-------------------1
23 [email protected]; [email protected]; [email protected] 24 [email protected];[email protected]; [email protected]; [email protected]
!----··············•············. ··•······· •·•·· ······•····················· "
26 michel!~sg>c:_q~c..c·'.:..om'--'------- --------------·------------!
27 [email protected];[email protected]; [email protected];[email protected] - ......................................................................................................................................................................................................................................................................... ..
[email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; 28 [email protected];[email protected]
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074018
PTX 0191.0026TT v. CQG (05-4811)
A I B c I D E F
408 Suggestion
HIGHLY CONFIDENTIAL-PATENT PROSECUTION
G H
·l~limih>d ]"'""""'~ I
f
mm~ ~J?:~tmi~d___ I 2-Functionallmpairment ••••••••••r ••••••••••m-m-~~•-mmw•w •
I
I !3-Minor Error PAVI:lCH
I
i
i i !dosed
I !dosed r-- ,
dosed
CQG00074669
PTX 0191.0027TT v. CQG (05-4811)
K l M N 0
i
402 Resolved I Discuss ~f'-'-'~--·~~~----;--~.~~---·~·-··!--~···----------·---------+----'~-------------=8.1-::2c=i33 I i
403 Created in Error i Discuss i 8.1233 ~ -~·-··--······-·-·----, :;___.-----+-------------------+-----;---------------===r
405 Resolved
406 Resolved !---'-'- ···································
~New
I ' i I
1 !Discuss
- ........................... r··········- .. ······ ... ..
' !
408 Fixed later Version
HIGHLY CONFIDENTIAL-PATENT PROSECUTION
8.1847
8.1234
i 8.1148
CQG0007 4670
PTX 0191.0028TT v. CQG (05-4811)
p Q I R s I T u v
402 mikhails 050409 143912 Project- DOM Trader Redesign I -= ------ --~~~------"-~~5'!~::_~0MTra~e_:~R.:::ed::;;;es::.:i;;;;gn~----·----~-------~-----t--------· -~---l~--
I ~
1":ikhails.,.033109_185604 I Project- DOM Trader Redesign
..................... ·····" .... ········-· ... i"""'" ,.,, ,.,- .. _, -····································~··················· ············ ......................•.•......................................................... ~ ..... .
I'
I
I _ ... j ~.l§l - DOM Trader Redesign
408
HIGHLY CONFIDENTIAL-PATENT PROSECUTION
I
I
1
···························-··········1
I t-:-----j---1-
: i I
I I I I
CQG00074671
PTX 0191.0029TT v. CQG (05-4811)
w X I y I z I M I AB
i 1402 -----+IC=Q~G~C=I~ie~M~----~~~~~=ut:i~n:~gL---------------------~---~
t
403 I icQG Client !Trade Routing r-~~------------------------------+·-·--------~--------j~~-C-- -------~~~~~------~---------
1
' I
iCQG Client !Trade Routing !DOMTrader ----r·c..;,.o ____________ _,_ ______ --"'--------;------------------1
l
f CQG Client ______ \Trade Routing _______ ~-----------------·-·
I
406 ''
1 I I CQG Client ______ Jy~~~~~!:l!~~g ____ ---+1 .. ~YI!!.~~!.i~.~p_t:~.<I~T~~f!.g __ ,, r-·----- ... I
I !Trade Routing I
I synthetic Spread Trading [CQGdieM 408
HlGHL Y CONFIDENTIAL-PATENT PROSECUTION CQG00074672
PTX 0191.0030TT v. CQG (05-4811)
AC
1 402 Cleanup Position Line when logging in
~ Ln~i_<!!~_arket.£Q_f\::l.~.~pp~a:::r::in~,g~~-~--------··-----------·-·------
1 405 Displaying Cornbil)ed l?~l'."lllP<?f\::1 S()l!Jrn11 f:I<~:S 1[1~<:)r~E!<:t Ba<:J<~ound Co lor.... ...... . ......................................................................................................... ,
408 Net change in DOMTrader becomes indistiguishable for some spread colors, and other U! problems
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG0007 4673
PTX 0191.0031TT v. CQG (05-4811)
AD
"' can we just skip or hide the state of No account selected? user doesn't need to see that state in this case ...
just go to the waiting state.
• after logged in, Position and OTE blink
402 http://cqgiki.denver.cqg/b!~f~iew/~~J.!'!cts/UXDesign/DomTraderCieanup#Oeanup_ Position_Une_when loggi http;//cqgiki.denver.cqg/bin/view/Projects/UXDesign/DomTraderCieanup#tnside_Market_DOM_disappearing_
I 403 D ---- ····-~~~------·
Beta tester requests ability to remove "Stop'' drop down menu if a user has set their default stop type and
doesn't wish to see the drop down any more. They'd like to still see the other aspects of that area of the
404 p.Q~'!~~.~~so hi~~~ that wh~!.~~~~ is no!._~r:!..?Y_!l~~~~~----~-·········-···~--~~--~~~~~~-4 In the CQG IC build 8x1Z34, when the user has set the trading preferences to display combined DOMin the
DOM column, the background color of the cells do not match the background color of the price column and volume column
http://cqgiki.denver.cqg/bin/view/Projects/UXDesign/DomTraderOeanup#Displaying_Combined_DOM_In_DO
~M_C
this is actually in 8.1234
• Only best bid or offer is showing for ET·QO and HOEK
* Market window should show BB or BA
http://cqgiki.denver.cqg/bin/view/Projects/UXDesign/DomTraderCieanup#BBA_not_showing_correctfy_Defect
405 !':l.E~~:!~i~~appens when ma~~~.tv.Jindo..v.is.~~~~~r.!.~at DOMTrader.ln this case market window is not shown.
actually in 8.1234
Set Up trading parameters dialog is silly: Suggestion 194620203
"'All controls are not resizing, checkboxes are still small, dropdown thumbs are still small
* Controls are bottom aligned which makes the table look bad •
.. redraw error around borders
*why was this prioritized over Suggestion 189650003 eliminating the empty/wasted space???
407 http://cqgikl.denver.cqg/bin/view/Projects/UXDesign/DomTraderCleanup#Set_Up_:trading_parameters_dialog 1----~ ................. ~ ............ - ..... ~ ................................. ---·--·-··---·-·-··--..... _, ............ ~---·-.-··---··-~· .. ·-~·-.. .
Net change in DOMTrader becomes almost indistiguishable with the background for some spread colors. See
attached image. Instead it shall be made of opposite color or something.
Other elements such as order size sometimes have same problems.
Also standard gray controls that were not affected by spread color in DT/OT look. really bad. So probably we
might need not a set of spread colors, but rather a set of spread themes with matching colors for all DT/OT
408 controls. So the impression of Spreader will be better.
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074674
PTX 0191.0032TT v. CQG (05-4811)
AE AF AG
I
402 I weird A1K23722S
403 I wrong : i
i 1
404 . 1
I I I
i 1
405 Displaying Combined DOM In DOM Column Has Incorrect Background Color IA1K23722S --------~~
406 broken
i
~ u!llY.
408 eyestrain :.
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG0007 4675
PTX 0191.0033TT v. CQG (05-4811)
AH AI AJ AK Al 1
I 1
402 :MARCUS I
N
403 MARCUS N
404 iKERRYG N
i
405 !)A)D IGORA ··~····· i reC!uires SD consideration and approval ......•..•..•... ·····
I
' I I
' I I I
' icooverted to suggestion because this functionality exists in 7~ and earlier. Needs BD approval to set TFV and '
406 'MARCUS MARCUS N .!Jl~O!i!Y.: ..... r--i I
...
I I I
! I
I I '
I
I I I I ' ' i I
i ' I I i
I
I '
I ' 407 l_tv.lARCUS ltGORA N I requires SO consideration and approval r--·
I ~~·--· .
---~·~---·--
!
" I
~ I ' ' I ' I I
I I
408 :PAVELCH N
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074676
PTX 0191.0034TT v. CQG (05-4811)
AM AN AO AP AQ
5/4/2009 3:46 I iux 402 System Testing 8.1169'
403
8.1236
8.1879! 6/3/2009 2:25 ~ ~ ·-rw·-~~~~~~-~~--"'~"""'""'"''"'---~~--
I 1407 .s>.tllt!r: m••··-·----- iux:.__ ______ ~rem_r_.,.,.,_g __ -i-----·~-~+----------1
·r-1
I
! i' Developers
I I Release Testing 408
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074677
PTX 0191.0035TT v. CQG (05-4811)
AS I AT AU i
I I
402 ~~~~]~~i~_d_on_e __________________________________________________________ +-!· ____ 3~/_20~/_20_0_9_1_6_:0_2+: ________ +--------------; I
-----------1----'3[7£'fl.00916:~-·-·-·-4----"'"' ___ "_
404 .. -----~·--------""''''''''''''''''~"--------~------------··---·---------------+-----3"'--/2"~/1_00_9_1_2:_0~-------·f--------
. " ... ·············· ........................................................•............... ~
405 Market window shows BB or BA, default height"' 2, can be resized .• size is maintained on DT reopening. -'-'-1 ''" ' '' '' '' •'' '' ' ''' ''' '' ""'''''"''''"''"''''
408
HIGHLY CONFIDENTIAL-PATENT PROSECUTION
i
j
3/23/2oosn:uti T
3/24/20091$:06!
3/25/200911:341
'''''''
CQG0007 4678
PTX 0191.0036TT v. CQG (05-4811)
AX I AY
402
403 3/20/2009 16:051 ----~~-----+--------~·
I :
405 ---i I
••••••••••••••••"••••••••••m~m••-·m-~-----;--~---'4'-'/7_,_/=c2009c:;_;;;_;;_6:~54.c;l--•- _._ __ 3/27/2009 5:271---~----~ I
; I 6/15/2009 6:33! 3/25/2009 6:441
.................................................•........ ······························· ·············"···"·······················~·····m~ ... ·•······ ·····························································r······· ·····································································~····· ······························································································~····
I !
408 10/2/200916:12[
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG0007 4679
PTX 0191.0037TT v. CQG (05-4811)
AZ I BA SB BC BD
I
402 0 0 N
403 0 0 N
404 0 o; N
! :
405 0 0 N
!
' i
I 406 .. ······························ .............. oL 0 2 N
407 0 o! N ··--W'~'"'"""-"''
i
i I I I
I ! ! 408 Oi o! N
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG0007 4680
PTX 0191.0038TT v. CQG (05-4811)
BE
[email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; 402 m ___ ik_h~ai_lcs~@~c~q~g.~co~m ____________________________________________________________ _, -·
405 [email protected]; [email protected]; [email protected]; [email protected];; [email protected] -················· .. ······· ................................................. . . ......... .
406 [email protected]; [email protected]; [email protected]; [email protected]; [email protected] -I······· . - ....... .. . -· ................ ~----·-·----·--·-·---··-·-·-···---··--· ... . . . . .................. ___ ............................. .
407 [email protected]; [email protected]; [email protected]; [email protected] - -···~--··---···--·--···-··---·--·--·--~--····--·--··--'-·-.:::._,,__ __________ ---------1
408 [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]
HIGHLY CONFIDENTIAL-PATENT PROSECUTION CQG00074681
PTX 0191.0039TT v. CQG (05-4811)
Exhibit 16
From: Josef Schroeter <[email protected]>
Friday, June 22,2012 3:59PM Sent:
To: magi soci ety@aol. com Subject: Re: Peter - probable good days for what you asked for and question
July 2 and 3 work for production dates. We will stand by for more information.
Thanks!
Joe
On Jun 22, 2012, at 9:45AM, "[email protected]" <[email protected]> wrote:
Good morning Josef:
With respect to the dates to deliver documents to TT and to allow them access to your computer system, I am thinking July 2 for the first and July 3 for the second - would that work for you and the court? If so, I will triple check the days themselves and then work out the precise timing during the day-
Thank you,
Peter
212 599 7592
TI v. CQG (05-4811)
PDX2432 1/6/2015
loll&I<O.;. .. o ........
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY CQG014213357
PTX 0429.0001TT v. CQG (05-4811)
Exhibit 17
From:
Sent:
To:
Cc: Subject:
Peter,
Adam Kelly <[email protected]>
Thursday, July 19, 2012 10:22 AM
magi soci ety@aol. com
Josef Schroeter <[email protected]>
TT v. CQG (2005)
We will be in a position to produce COG's source code for Versions 8.1, 8.2, and 8.3 next week, beginning on Monday.
Which day do you prefer that we produce this source code to TT?
Thank you, Adam
Adam Kelly Partner
321 North Clark Street, Suite 2300 1 Chicago, IL 60654 Direct Dial: 312.464.31381 Fax: 312.873.4187 1 Email: [email protected]
Los Angeles I New York I Chicago 1 Nashville 1 Washington, DC 1 Beijing 1 www.loeb.com
CONFIDENTIALITY NOTICE: This e-mail transmission, and any documents, files or previous e-mail messages attached to it may contain
confidential information that is legally privileged. If you are not the intended recipient, or a person responsible for delivering it to the
intended recipient, you are hereby notified that any disclosure, copying, distribution or use of any of the information contained in or attached
to this transmission is STRICTLY PROHIBITED. If you have received this transmission in error, please immediately notify the sender. Please
destroy the original transmission and its attachments without reading or saving in any manner. Thank you, Loeb & Loeb LLP.
n v. CQG (05-4811)
PDX2433 1/6/2015
.... . ... ""· ...
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY CQGO 14213358
PTX 0430.0001TT v. CQG (05-4811)
Exhibit 18
From:
Sent:
To: Cc:
Subject:
Adam Kelly <[email protected]>
Thursday, July 19,201212:11 PM
Magi soci ety@aol. com
Josef Schroeter <[email protected]>
RE: Peter recommendation on souce code submission
Duly noted. Thank you, Peter.
Best, Adam
From: [email protected] [mailto:[email protected]] Sent: Thursday, July 19, 2012 12:09 PM To: Adam Kelly Cc: [email protected] Subject: Peter recommendation on sauce code submission
Adam:
With respect to the best time next week to submit source code to TT, my recommendation is the earlier the better - Monday would be best or Tuesday in the morning as early as possible.
I am at your service for help with CQG at any time. I may not check my emals for spans of four or so hours so If there is an urgent need such that you requre answers immediately, please feel free to call me at 212 599 7592.
Peter
Adam Kelly Partner
321 North Clark Street, Suite 2300 I Chicago, IL 60654 Direct Dial: 312.464.31381 Fax: 312.873.41871 Email: [email protected]
Los Angeles I New York I Chicago I Nashville I Washington, DC I Beijing I www.loeb.com
CONFIDENTIALITY NOTICE: This e-mail transmission, and any documents, files or previous e-mail messages attached to it may contain confidential information that is legally privileged. If you are not the intended recipient, or a person responsible for delivering it to the intended recipient, you are hereby notified that any disclosure, copying, distribution or use of any of the information contained in or attached to this transmission is STRICTLY PROHIBITED. If you have received this transmission in error, please immediately notify the sender. Please destroy the original transmission and its attachments without reading or saving in any manner. Thank you, Loeb & Loeb LLP.
TT v. CQG (05-4811)
PDX2434 1/6/2615
u. .a.. ..
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY CQGO 1421 ::s::soo-
PTX 0431.0001TT v. CQG (05-4811)
Exhibit 19
From: Sent: To: Cc: Subject:
[email protected] Friday, May 9, 2008 5:10PM Josef Schroeter <[email protected]> Tim Mather <[email protected]>
Josef- from Peter- important change in Alpha testing date and confinn postpone
Hello again Josef:
With respect to the best date to begin Alpha testing of new trading program, I have additional thoughts and a change in advice.
When we first spoke, I advised May 13 as the best day to begin the Alpha testing, but I was not fully aware of the fact the new product is designed in large part to compete against TT. After we spoke and after analyzing TT and HB's stars, I have learned that the stars are incredibly favorable for TT and HB from now until after June 4.
I now suggest that we delay the Alpha testing until after June 4, Since you are competing with TT, and we want to avoid litigation over your new program, and use it to compete against TT, it is best to not natalize anything important to your new product while TT has great transits. This is a fundamental principle of Magi AstroWarfare.
I trust this delay is not a problem since you explained to me you could live with a delay and May 13 is tight anyway. I will email you early next week with my revised suggestions for the Alpha testing date.
With respect to my suggested postponement of the hearing at Judge Moran's court in the TT matter, I strongly confirm we must do our best to delay the hearing until at least after May 31 and preferably after June 4 (the very best of TT's stars end May 31 but HB still has great stars through June 4). We should suggest the week of June 9 for the hearing.
Please have your attorneys ask for the postponement Monday morning.
Best regards,
Peter
**************
Wondering what's for Dinner Tonight? Get new twists on family favorites at AOL Food. (http :1 /food .aol.com/d inner -tonight? NC I D=aolfod0003000000000 1)
Tt v. CQG (05-4811}
POX2397 1/6/1.015
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY CQG014213179
PTX 0394.0001TT v. CQG (05-4811)
Exhibit 20
From: Josef Schroeter <[email protected]>
Sent: Thursday, October 20, 2011 11:13 AM
To: Mark Fi scher <nail [email protected]>
Subject: RE: Peter’s analysis of the five attorneys
yup
From: Mark Fischer Sent: Thursday, October 20, 2011 9:45 AM To: Josef Schroeter Subject: RE: Peter’s analysis of the five attorneys
There will come a point ......
From: Josef Schroeter Sent: Thursday, October 20, 2011 9:39 AM To: Mark Fischer Subject: RE: Peter’s analysis of the five attorneys
Its worse. He told tim yesterday to firem Dmitw B.
And that Yuriy S. needs to go when the time is right as well.
Oh and he had already said Luebs cant be involved in Tim’s personal business.
Fucking Rasputin
From: Mark Fischer Sent: Thursday, October 20, 2011 9:28 AM To: Josef Schroeter Subject: RE: Peter’s analysis of the five attorneys
Unbelievable. The next thing that is going to happen is that Peter is going to sag that he knows of the right attorney for Tim and CQG to use. Thus putting Peter in charge of attorney selection instead of people who know something about quality attorneys.
From: Josef Schroeter Sent: Thursday, October 20, 2011 9:26 AM To: Mark Fischer Subject: FW: Peter’s analysis of the five attorneys
I am almost at wits end.
From: Tim Mather Sent: Thursday, October 20, 2011 8:14 AM To: Josef Schroeter Subject: RE: Peter’s analysis of the five attorneys
HIGHLY CONFIDENTIAL - ATTORNEYS’ EYES ONLY CQG014213125
PTX 2465.0001TT v. CQG (05-4811)
It’s a conspiracy orchestrated by the Universe!!
From: Josef Schroeter Sent: Thursday, October 20, 2011 5:07 PM To: Tim Mather Subject: Fwd: Peter’s analysis of the five attorneys
FYI
Begin forwarded message:
From: <[email protected]> Date: October 19, 2011 9:20:39 PM MDT
To: <[email protected]> Subject: Peter’s analysis of the five attorneys
Hello dosef:
You sent me birth dates for five attorneys so far - they are either bad for Tim or horrible for Tim.
I was wondering how you guys came up with these five?
Thank you and best to you,
Peter
HIGHLY CONFIDENTIAL - ATTORNEYS’ EYES ONLY CQG014213126
PTX 2465.0002TT v. CQG (05-4811)
Exhibit 21
From: Sent: To: Subject: Attach:
Yep
Mark Fischer <[email protected]>
Friday, May 27,201110:49 AM
Josef Schroeter <[email protected]> RE: Trading Interfaces
image001.jpg
From: Josef Schroeter Sent: Friday, May 27, 2011 9:48AM To: Mark Fischer Subject: RE: Trading Interfaces
Yep. But their price point for royalty incents us to litigate
From: Mark Fischer Sent: Friday, May 27, 2011 9:48AM To: Josef Schroeter Subject: RE: Trading Interfaces
Yep. I get it. But I agree with your assessment yesterday: "Their argument on past damages liability is stronger than we have thought."
From: Josef Schroeter Sent: Friday, May 27, 2011 9:45AM To: Mark Fischer Subject: RE: Trading Interfaces
Our story is that is it one ladder ... the line simply reflects hidden prices. It is not a separate formula or logic in the code that creates a window. It is a price hide function. Calling it a window is just a way to describe it. The question is whether you can have a portion of a price scale static.
From: Mark Fischer Sent: Friday, May 27, 2011 9:04AM To: Josef Schroeter Subject: Trading Interfaces
Joe:
Is the argument that we have a static ladder the following: 1) CQG argues that it's ladder is not static because the inside market always stays on the screen.
EXHIBIT
v~3-:3
2) However, what is really happening is that the inside market is just another ladder that overlays the static ladder in something CQG calls a "market window". The underlying ladder is, in fact, static. The prices in the underlying ladder only move when the user makes them move.
I have to say that I agree with you. That argument is fairly persuasive.
Here's another problem. On the Order Ticket, I've always thought that the ladder displayed is just a display of DOM and
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY CQG5493259
PTX 0336.0001TT v. CQG (05-4811)
a display of the user's working orders. However, once an order is placed, the user can actually use the icon representing his working order to modify that order. He can drag it up and down the scale to change the price and he can change the quantity for the working order in the same manner that you would on a DOM ladder.
I think that the ability to drag the icon representing your order up and down the scale infringes some patent claim.
j ;;;;: Description:
Mark Fischer
Celebrating 30 years of reliability, performance, and innovation.
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY CQG5493260
PTX 0336.0002TT v. CQG (05-4811)
HIGHLY CONFIDENTIAL- ATTORNEYS' EYES ONLY CQG5493261
PTX 0336.0003TT v. CQG (05-4811)
Exhibit 22
From: Sent: To:
Subject:
Yuriy Shterk <[email protected]>
Friday, May 8, 2009 5:26PM
Jai Dandekar <[email protected]>; Alexey Korepanov <[email protected]>; Marcus Kwan <[email protected]>; UX <[email protected]>
RE: Suggestion 194620201, displayed below, has been escalated.
It will guys, this is a good point, I just wonder how it behaves when the market window is smaller than the DT height.
Lets play with it on Monday and we'll have an answer for Alexey by Tuesday.
Frorn:Jai Dandekar Sent: Friday, May 08, 2009 3:28PM To: Yuriy Shterk; Alexey Korepanov; Marcus Kwan; UX Subject: Re: Suggestion 194620201, displayed below, has been escalated.
Hello Yuriy,
When I make the DOMTrader window smaller in height, there is a certain amount of scrolling time within the inside market split where I cannot see either the best bid or best ask. In this area, there is no split pane present either. Right clicking on the DOM Grid won't do anything either because the height of the window is shorter than the height of the inside market split.
As I increase the height of the DOMTrader window, depending on the height of the inside market split, will reveal either the best bid or best ask (depends on which direction I scroll in).
Question: When the window height of the DOMTrader is shorter than the height of the market split, would it make sense to have the right click on the DOMGrid show the user a split pane view with either the Best Bid or Best Ask revealed?
Thanks.
~ Jai ~
On 5/8/09 6:20AM, "Yuriy Shterk" <[email protected]> wrote:
So Jai, what will happen if you make market window small, will it solve the problem?
Thanks.
-----Original Message----From: Alexey Korepanov To: Yuriy Shterk; Marcus Kwan; UX Sent: Fri May 08 00:54:44 2009 Subject: RE: Suggestion 194620201, displayed below, has been escalated.
Fix should take 1-2 dev.days. -CQG lOS-4811) TfV.
pOX 2186 I chang~d suggestion priority.
Highly Confidential- Attorneys' Eyes Only CQG00812090
I
PTX 0190.0001TT v. CQG (05-4811)
I think the reason why market window is not shown here is because its height is higher than DOM grid height. So if you resize DOMTrader vertically (make it higher) then market window will appear.
I think we can set market window height to the half of DOM grid height in this case so market window will appear.
Thanks!
<http://www.cgg.com/> Alexey Korepanov I Software Developer p. +7-(846)-269-6815 ext. 7213 [email protected] <mailto:[email protected]>
From: Yuriy Shterk Sent: Friday, May 08, 2009 7:15 AM To: Marcus Kwan; Alexey Korepanov; UX Subject: RE: Suggestion 194620201, displayed below, has been escalated.
Agree, we need to correct it. Alexey, please set it as p2 for general1.
How difficult will it be to fix?
Thanks.
From: Marcus Kwan Sent: Thu 5/7/2009 2:54 PM To: Marcus Kwan; Yuriy Shterk; Alexey Korepanov; UX Subject: Suggestion 194620201, displayed below, has been escalated.
Yuriy, Shiela, I'm escalating this one. It was set to P4.
This is what I see: no best bid or offer. I think that's why we did the work for the market window ....
Highly Confidential- Attorneys' Eyes Only CQG00812091
PTX 0190.0002TT v. CQG (05-4811)
Comments:
Number: 194620201
Title: BBA not showing correctly; market window is not working
Date Opened: 3/24/2009 2:28:08 PM
Created By: MARCUS
Escalated By: MARCUS
Escalation Reason: BD Requesting Info
Escalation Comment: Converted to suggestion because this functionality exists in 7x9 and earlier. Needs BD approval to set TFV and priority.
Priority: 4-Low Priority
Difficulty:
Target Fix Version:
Assigned To:
Status: Open
Sub Status: New
Description:
this is actually in 8.1234
"' Only best bid or offer is showing for ET-QO and HOEK
"' Market window should show BB or BA
http://cqgiki.denver.cgg/bin/view/Projects/UXDesign/DomTraderCieanup#BBA not showing correctly Defect
ALEXK: This happens when market window is bigger that DOMTrader. In this case market window is not shown.
Highly Confidential- Attorneys' Eyes Only CQG00812092
PTX 0190.0003TT v. CQG (05-4811)
Exhibit 23
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
776 F.3d 837United States Court of Appeals,
Federal Circuit.
BARD PERIPHERAL VASCULAR, INC., andDavid Goldfarb, M.D., Plaintiffs–Appellees,
andC.R. Bard, Inc., Counterclaim Defendant–Appellee,
v.W.L. GORE & ASSOCIATES,INC., Defendant–Appellant.
No. 2014–1114. | Jan. 13, 2015.
SynopsisBackground: Licensee and patentee filed infringementaction against competitor alleging infringement of patentfor prosthetic vascular grafts made of highly-expandedpolytetrafluoroethylene (ePTFE), 2002 WL 1920033.Competitor counterclaimed alleging inequitable conduct andinvalidity. The United States District Court for the Districtof Arizona, Mary H. Murguia, J., 573 F.Supp.2d 1170,and 586 F.Supp.2d 1083, entered judgment in plaintiffs'favor and ruled that infringement was willful, 586 F.Supp.2d1083, and competitor appealed. The Court of Appeals,Gajarsa, Circuit Judge, 670 F.3d 1171, affirmed.The Court ofAppeals, 476 Fed.Appx. 747, denied review but granted panelrehearing. On rehearing, the Court of Appeals, 682 F.3d 1003,affirmed in part, vacated in part, and remanded.Certiorari wasdenied, ––– U.S. ––––, 133 S.Ct. 932, 184 L.Ed.2d 752. Onremand, the United States District Court for the District ofArizona, Mary H. Murguia, J., 2013 WL 5670909, ruled thatinfringement was willful, and competitor appealed.
Holdings: The Court of Appeals, Prost, Chief Judge, heldthat:
[1] licensee and patentee had standing to bring suit, and
[2] competitor willfully infringed patent.
Affirmed.
Hughes, Circuit Judge, concurred and filed opinion.
Newman, Circuit Judge, dissented and filed opinion.
West Headnotes (20)
[1] Federal Civil ProcedureIn general; injury or interest
Party invoking federal jurisdiction bears burdenof establishing standing at any stage of litigation.
Cases that cite this headnote
[2] Federal CourtsFormer decision as law of the case
There are exceptional circumstances in whichCourt of Appeals panel may not adhere todecision in prior appeal in same case, when(1) evidence in subsequent trial is substantiallydifferent; (2) controlling authority has sincemade contrary decision of law applicable toissues; or (3) earlier ruling was clearly erroneousand would work manifest injustice.
Cases that cite this headnote
[3] Federal CourtsStanding
Court of Appeals reviews de novo districtcourt's determination of party's standing, whilereviewing any factual findings relevant to thatdetermination for clear error.
Cases that cite this headnote
[4] PatentsPatent owner
PatentsAssignee or transferee
Inventor and original assignee of patent'sapplication and his licensee had standing to bringinfringement suit, despite alleged infringer'scontention that inventor had assigned his rightsto third party, and third party had not properlytransferred its rights, where third party neverclaimed that it had all substantial rights to patent,and there was memorialized transfer of exclusive
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
license from inventor and third party to licensee'spredecessor.
Cases that cite this headnote
[5] PatentsRequisites and Validity of Licenses
Grant of patent license does not need to be inwriting. 35 U.S.C.A. § 261.
Cases that cite this headnote
[6] PatentsParticipation, intent, and contributory
infringement
To establish willful infringement, patentee hasburden of showing by clear and convincingevidence that infringer acted despite objectivelyhigh likelihood that its actions constitutedinfringement of valid patent.
2 Cases that cite this headnote
[7] PatentsWillful infringement
Accused infringer's state of mind is not relevantin determining whether patent infringement waswillful.
2 Cases that cite this headnote
[8] PatentsQuestions of law or fact
In determining whether patent infringement waswillful, even when underlying factual issueswere sent to jury in first instance, judge remainsfinal arbiter of whether defense asserted byinfringer was reasonable.
Cases that cite this headnote
[9] PatentsInfringement or noninfringement
In determining whether patent infringement waswillful, Court of Appeals reviews de novodistrict court's determination whether infringer's
position is susceptible to reasonable conclusionof no infringement.
Cases that cite this headnote
[10] PatentsWillful infringement
In determining whether patent infringement waswillful, objective recklessness will not be foundwhere accused infringer has raised substantialquestion as to validity or noninfringement ofpatent.
2 Cases that cite this headnote
[11] PatentsWillful infringement
In determining whether patent infringement waswillful, mere fact that member of previous Courtof Appeals panel dissented on issue does notindicate that infringer's position was reasonable.
Cases that cite this headnote
[12] PatentsDegree of proof
PatentsInventorship and priority
Issued patents are presumed to correctlyname inventors; therefore, burden of showingmisjoinder or nonjoinder of inventors is heavyone and must be proved by clear and convincingevidence.
Cases that cite this headnote
[13] PatentsJoint Inventors
Because conception is touchstone ofinventorship, each joint inventor must generallycontribute to invention's conception. 35U.S.C.A. § 116(a).
Cases that cite this headnote
[14] PatentsConception of invention
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
“Conception” exists when definite andpermanent idea of operative invention, includingevery feature of subject matter sought to bepatented, is known.
Cases that cite this headnote
[15] PatentsReduction of Invention to Practice
Conception is only complete when idea is soclearly defined in inventor's mind that onlyordinary skill would be necessary to reduceinvention to practice, without extensive researchor experimentation.
Cases that cite this headnote
[16] PatentsJoint Inventors
If individual supplies component essentialto invention, that is insufficiently significantcontribution to warrant finding of jointinventorship if component and principles of itsuse were known in prior art. 35 U.S.C.A. §116(a).
Cases that cite this headnote
[17] PatentsJoint Inventors
To establish joint inventorship, inventors musthave some open line of communication during orin temporal proximity to their inventive efforts.35 U.S.C.A. § 116(a).
Cases that cite this headnote
[18] PatentsJoint Inventors
To establish joint inventorship, each inventormust contribute to joint arrival at definite andpermanent idea of invention as it will be used inpractice. 35 U.S.C.A. § 116(a).
Cases that cite this headnote
[19] Patents
Particular inventions
Competitor's employee was not joint inventorof prosthetic vascular grafts made of highly-expanded polytetrafluoroethylene (ePTFE), andthus competitor willfully infringed patent, eventhough its employee had identified ePTFE aspromising material for vascular grafts, andconceived of fibril length limitation, wheremany grafts that were made of ePTFE failed,patent included, as its key limitation, specifieddimensions of fibril length that were essential forsuccessful graft, employee and named inventordid not collaborate, communicate, nor in any wayjointly arrive at recognition that fibril length wassignificant for graft success, and competitor didnot raise new evidence or theories that were notconsidered in prior litigation regarding patent'svalidity. 35 U.S.C.A. § 116(a).
Cases that cite this headnote
[20] PatentsIn general; utility
US Patent 6,436,135. Infringed.
Cases that cite this headnote
Attorneys and Law Firms
*840 Michael W. McConnell, Kirkland & Ellis LLP,of Washington, DC, argued for plaintiffs-appellees andcounterclaim defendant-appellee. With him on the brief wereJohn C. O'Quinn, William H. Burgess, Dennis J. Abdelnourand Liam P. Hardy; Steven C. Cherny, of New York, NY; andJohn L. Strand, Wolf, Greenfield & Sacks, P.C., of Boston,MA.
James W. Poradek, Faegre Baker Daniels LLP, ofMinneapolis, MN, argued for defendant-appellant. With himon the brief were Timothy E. Grimsrud; Jared B. Briant andLeslie B. Prill, of Denver, CO; and Michael E. Florey andDeanna Reichel, Fish & Richardson P.C., of Minneapolis,MN.
Before PROST, Chief Judge, NEWMAN and HUGHES,Circuit Judges.
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
Opinion
Opinion for the court filed by Chief Judge PROST.Concurring opinion filed by Circuit Judge HUGHES.Dissenting opinion filed by Circuit Judge NEWMAN.
PROST, Chief Judge.
**1 W.L. Gore & Associates, Inc. (“Gore”) appeals from thejudgment of the United States District Court for the Districtof Arizona of willfulness in the infringement of U.S. PatentNo. 6,436,135 (“#135 patent”). For the reasons stated below,we affirm.
I
This dispute began with the filing of the 1974 patentapplication from which the ′135 patent eventually issued—twenty-eight years later. The technology and patent claimsthat have been at issue are thoroughly discussed in this court'sprevious decisions involving the ′135 patent and underlyingapplication. See Bard Peripheral Vascular, Inc. v. W.L. Gore& Assocs., Inc., 670 F.3d 1171 (Fed.Cir.2012) (“Bard I ”);Cooper v. Goldfarb, 240 F.3d 1378 (Fed.Cir.2001) (“CooperII ”); Cooper v. Goldfarb, 154 F.3d 1321 (Fed.Cir.1998)(“Cooper I ”).
Briefly, the ′135 patent relates to prosthetic vasculargrafts made of highly-expanded polytetrafluoroethylene(“ePTFE”). The ePTFE material is made of solid nodes ofPTFE connected by thin PTFE fibrils. It is sold by Gore underthe brand name “Gore–Tex.” The patent generally covers avascular graft formed by ePFTE that is thus homogeneouslyporous—a structure that allows uniform cell regrowth toestablish a firm integration of the graft into the body. Thedifferent claims of the patent are directed to grafts madeof ePTFE with varying internodal distances, which are alsocalled fibril lengths.
In 2003, Bard Peripheral Vascular, Inc. (“BPV”) and Dr.David Goldfarb filed suit against Gore for infringementof the ′135 patent. A jury found the ′ 135 patent validand that Gore willfully infringed, and, in December 2010,the district court denied Gore's motions for judgment as amatter of law (“JMOL”) reversing the verdict. Gore appealed,and, in February 2012, the panel affirmed. Bard I, 670F.3d at 1193. The en banc court denied review but granted
rehearing “for the limited purpose of authorizing the panelto revise the portion of its opinion addressing willfulness.”Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs.,Inc., 476 Fed.Appx. 747 (Fed.Cir.2012) (en banc). The panelaccordingly vacated the parts of its opinion discussing *841willfulness and allowing enhanced damages and attorneys'fees. Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs.,Inc., 682 F.3d 1003, 1005 (Fed.Cir.2012) (“Bard II ”). Itheld that as to the threshold determination of willfulness,“the objective determination of recklessness, even thoughpredicated on underlying mixed questions of law and fact, isbest decided by the judge as a question of law subject to denovo review.” Id. at 1007. The panel remanded “so that thetrial court may apply the correct standard to the question of
willfulness in the first instance.” Id. at 1008. 1
On remand, the district court again found that, in view ofBard II, it was “clear to this Court, just as it was to thejury, that Defendant, as a ‘reasonable litigant,’ could nothave ‘realistically expected’ its defenses to succeed.” BardPeripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., No.03–0597, 2013 WL 5670909, at *12 (D.Ariz. Oct. 17, 2013)(order denying JMOL on willful infringement) (“Bard III ”).Gore appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(1).
II
**2 Gore argues that at the time of suit, neither BPV norGoldfarb had standing to sue for infringement of the ′135patent. Gore thus seeks to vacate the district court's judgmentin its entirety and to have the case dismissed for lack ofjurisdiction. The crux of Gore's argument is that at the timethe suit was filed, only C.R. Bard, Inc. (“Bard Inc.”) couldhave possessed standing to sue. We reject that argument.
In 1980, Goldfarb—who was the inventor and originalassignee of the ′135 patent's application—entered into alicense agreement with Bard Inc. involving the applicationand any patents that might issue. Gore argues that in thatagreement, Goldfarb granted all substantial rights to thepatent—thereby resulting in a virtual assignment to Bard Inc.In 1996, Bard Inc. acquired IMPRA, which later becamea wholly owned subsidiary, BPV, and in September, BardInc. transferred its interest in the 1980 agreement to BPV.Gore argues that because there is no evidence of a writteninstrument effecting the transfer of the interest to BPV, BPVdid not in fact acquire standing to sue for infringement.
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5
In sum, Gore contends that both plaintiffs lacked standing:Goldfarb, because he had virtually assigned his rights to BardInc., and BPV, because Bard Inc. had not properly transferredits rights.
Gore raised this argument on standing twice before at thedistrict court—prior to its first appeal in this case. Gore firstfiled a pre-trial JMOL motion on standing, which the districtcourt denied. Gore again raised the issue as a post-trial JMOLmotion, which the district court again denied. The districtcourt's discussion of the standing issue and denial of Gore'smotion was contained in the same March 31, 2009 opinionand order denying Gore's various other JMOL motions thatGore appealed to this court. In that appeal, although the issuewas not raised in briefing, the panel confirmed that the districtcourt had jurisdiction under 28 U.S.C. § 1338(a). Bard I, 670F.3d at 1178.
Gore does not claim that there exists any material differencebetween the argument it raised before the district court thenand that it now raises on this appeal. Indeed, in its first appeal,Gore conceded that the district court had jurisdiction. *842Brief for Appellant at 1, Bard I, 670 F.3d 1171 (Fed.Cir.2012)(No. 10–1542), 2010 WL 4853331. Instead, Gore contendsthat we are not bound by the prior panel's determinationon standing, based on the fundamental principle that “[t]hequestion of standing is not subject to waiver” because “[t]hefederal courts are under an independent obligation to examinetheir own jurisdiction.” See United States v. Hays, 515 U.S.737, 742, 115 S.Ct. 2431, 132 L.Ed.2d 635 (1995).
[1] The “party invoking federal jurisdiction bears the burdenof establishing” standing at any stage of the litigation. Lujanv. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130,119 L.Ed.2d 351 (1992). In this case, Gore challenged theplaintiffs' standing at the district court. The district courtdetermined that the plaintiffs met their burden and hadestablished standing. On appeal, this court again confirmedthat the plaintiffs had standing. Gore argues that because itdid not brief the issue on appeal, and the prior panel did notdiscuss the issue of standing, the standing issue has yet to beresolved with finality.
**3 As an initial matter, however, we have no reason toassume that the prior panel did not weigh standing. This wasnot a case in which a standing issue remained dormant infacts buried deep in the record, or which was not recognizedby either party or the trial court. While Gore's briefs in thatappeal did not raise the standing issue, the district court's
opinion discussing Gore's standing challenge were attached tothe opening brief as required pursuant to Federal Circuit Rule28(a)(12). Had the prior panel seen merit in Gore's standingchallenge, it could have asked for additional briefing, as thiscourt has done in other cases. See, e.g., Consumer Watchdogv. Wis. Alumni Research Found., No. 13–1377 (Fed.Cir. Nov.14, 2013) (order requesting supplemental briefing on theissue of appellant's standing) ECF No. 29. We are bound,therefore, by the prior panel's determination that the plaintiffshad standing and that the district court had jurisdiction. SeeGould, Inc. v. United States, 67 F.3d 925, 930 (Fed.Cir.1995)(“The law of the case is a judicially created doctrine, thepurposes of which are to prevent the relitigation of issues thathave been decided and to ensure that trial courts follow thedecisions of appellate courts.”).
[2] To be sure, there are exceptional circumstances in whicha panel may not adhere to the decision in a prior appealin the same case, when “(1) the evidence in a subsequenttrial is substantially different; (2) controlling authority hassince made a contrary decision of the law applicable to theissues; or (3) the earlier ruling was clearly erroneous andwould work a manifest injustice.” Id. This is not such acase. Gore raises no new facts in this appeal and seeks onlyto relitigate the same standing theory that the district courtrejected before. Gore does not point to any change in therelevant law. This is also not a case in which the district courtmade findings on remand that “undermine” the prior appellateaffirmance of standing. Pub. Interest Research Grp. of N.J.,Inc. v. Magnesium Elektron, Inc., 123 F.3d 111, 117 (3dCir.1997). And, we see no clear error in the previous decisionon standing that would warrant an extraordinary review at thisstage.
[3] [4] [5] Indeed, on the merits, this is an easy question.We review de novo the district court's determination ofa party's standing, while reviewing any factual findingsrelevant to that determination for clear error. SanDiskCorp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1377(Fed.Cir.2007). Gore's argument hinges on the absence ofa written instrument transferring *843 to BPV what itcontends was the virtual assignment from Goldfarb to BardInc. See Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1250(Fed.Cir.2000) (holding that a written instrument was neededto document the “transfer of proprietary rights” to supportstanding to sue for patent infringement); 35 U.S.C. § 261(“Applications for patent, patents, or any interest therein,shall be assignable by law in an instrument in writing.”)(emphases added). However, BPV has never claimed that in
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 6
2003 it had all substantial rights to the ′135 patent. 2 BPV'sposition is only that it was an exclusive licensee with the rightto sue for infringement. It is well established that the grant ofa license does not need to be in writing. See Waymark Corp.v. Porta Sys. Corp., 334 F.3d 1358, 1364 (Fed.Cir.2003)( “Only assignments need be in writing under 35 U.S.C. §261. Licenses may be oral.”); Rite–Hite Corp. v. Kelley Co.,56 F.3d 1538, 1552 (Fed.Cir.1995) (en banc) (holding that tobe an exclusive licensee a party may rely on either an expressor implied promise of exclusivity). In any event, in 1997 therewas a memorialized transfer of the exclusive license fromGoldfarb and Bard Inc. to BPV's predecessor. We agree withthe district court that this 1997 agreement between the partiessettles BPV's right to sue at the time of the complaint asGoldfarb's exclusive licensee. Bard III, at 19–20.
**4 BPV and Goldfarb thus readily meet their burden toestablish standing. For Gore to prevail, it would have toestablish each of the following propositions: (1) the 1980agreement that was styled as an “exclusive license” betweenGoldfarb and Bard Inc. was in fact a virtual assignment,and (2) Bard Inc.'s transfer of its rights to BPV under theagreement failed because it was not in writing. We see noerror in the district court's well-reasoned analysis on the firstpoint—inter alia, Goldfarb retained significant reversionaryrights, there was a field of use restriction, and Goldfarbretained the right to share in damages. See id. at 15. There wasno basis, therefore, to conclude that Goldfarb had transferred“all substantial rights” to Bard. See Abbott Labs. v. DiamedixCorp., 47 F.3d 1128, 1132 (Fed.Cir.1995) (finding that evenlimited rights retained by the patentee made it a necessaryparty in any subsequent infringement suit). But even ifGore could get past those first shoals, it would founder atthe second. Gore argues that since Bard represents that ittransferred its entire interest in the 1980 agreement to BPV, ifthat interest were a virtual assignment, then the transfer wouldfail without a written agreement. But, there is no question thatin 1997, there was a written agreement between the partiesaffirming Bard's transfer of its rights to BPV. Gore arguesthat our case law prevents such a retroactive agreement—but for support of this proposition, all Gore cites is precedentin which we considered agreements that were executed afterthe suit was filed, such as Mars, Inc. v. Coin Acceptors, Inc.,527 F.3d 1359 (Fed.Cir.2008). Here, by contrast, the 1997memorialization occurred years before the suit was filed. The1997 agreement was not a nunc pro tunc written agreementthat occurred after the complaint. Compare, e.g., AbraxisBioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1366–67(Fed.Cir.2010); *844 Enzo APA & Son, Inc. v. Geapag
A.G., 134 F.3d 1090, 1093 (Fed.Cir.1998). Accordingly, theplaintiffs had standing at the time of the complaint, and thedistrict court had jurisdiction pursuant § 1338(a). We turn,then, to Gore's appeal on the merits.
III
[6] [7] [8] To establish willful infringement, the patenteehas the burden of showing “by clear and convincing evidencethat the infringer acted despite an objectively high likelihoodthat its actions constituted infringement of a valid patent.” Inre Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed.Cir.2007)(en banc) cert denied552 U.S. 1230, 128 S.Ct. 1445, 170L.Ed.2d 275 (2008). “The state of mind of the accusedinfringer is not relevant to this objective inquiry.” Id. Onlyif the patentee establishes this “threshold objective standard”does the inquiry then move on to whether “this objectively-defined risk (determined by the record developed in theinfringement proceeding) was either known or so obviousthat it should have been known to the accused infringer.” Id.While this second prong of Seagate may be an issue of fact,the threshold determination of objective recklessness requires“objective assessment” of the accused infringer's defenses.Bard II, 682 F.3d at 1006. In Bard II we held that objectiverecklessness, even though “predicated on underlying mixedquestions of law and fact, is best decided by the judge as a
question of law subject to de novo review.” Id. at 1007. 3 Evenwhen underlying factual issues were sent to the jury in thefirst instance—such as in this case—“the judge remains thefinal arbiter of whether the defense was reasonable.” Id. at1008 (emphasis added).
**5 [9] [10] Accordingly, under Bard II, we reviewde novo the district court's determination whether Gore's“position is susceptible to a reasonable conclusion of noinfringement.” Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d1292, 1310 (Fed.Cir.2011). Objective recklessness will not befound where the accused infringer has raised a “substantialquestion” as to the validity or noninfringement of the patent.Spine Solutions, Inc. v. Medtronic Sofamor Danek USA,Inc., 620 F.3d 1305, 1319 (Fed.Cir.2010); DePuy Spine, Inc.v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314, 1336(Fed.Cir.2009).
On remand, the district court evaluated several defensesraised by Gore and determined that none of them wereobjectively reasonable. On appeal, Gore appeals only itsdetermination with respect to Gore's inventorship defense.
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 7
This defense arises from the decades-long record, whichincludes parallel examination of Gore's and Goldfarb'spatent applications on vascular grafts made of ePTFE, aninterference declared in 1983 between the applications, whichwe reviewed in Cooper I and Cooper II, as well as theinfringement proceedings in this case that were finallyresolved—except as to the issue of willfulness—in Bard I.Gore's argument is based on the fact that its employee, PeterCooper, supplied the particular ePTFE tubing that Goldfarbused in making his successful *845 vascular graft (the “2–73 RF” graft). In Gore's view, Cooper furnished to Goldfarb“the embodiment of the invention before Goldfarb conceivedthe invention using that embodiment.” Bard III, at 7.
[11] As an initial matter, we reject Gore's argument thatthe mere fact a member of the previous panel dissentedon this issue indicates that its position was reasonable.Gore does not point to any previous case in which wefollowed this principle. To the contrary, in Paper ConvertingMachine Co. v. Magna–Graphics Corp., 785 F.2d 1013,1016 (Fed.Cir.1986), for example, we noted that despite theexistence of a dissenting opinion in a prior opinion affirminginfringement, the same panel could still affirm willfulness ina later appeal. Otherwise, we would be imposing a rule thatany single judge's dissent on the merits could preclude thedetermination of willful infringement.
Turning to the merits, Gore claimed that its employee, PeterCooper, was a joint inventor of the ′135 patent. Therefore,Gore argued that the patent is invalid for non-joinder ofCooper as a co-inventor. Gore now argues that even thoughit did not prevail, its argument was still reasonable in light ofthe facts in the record and the law of joint inventorship.
[12] [13] [14] [15] Issued patents are presumed tocorrectly name the inventors; therefore, “[t]he burden ofshowing misjoinder or nonjoinder of inventors is a heavy oneand must be proved by clear and convincing evidence.” Hessv. Advanced Cardiovascular Sys., Inc., 106 F.3d 976, 980(Fed.Cir.1997) (quoting Garrett Corp. v. United States, 190Ct.Cl. 858, 870, 422 F.2d 874 (1970)). By statute,
**6 [i]nventors may apply for apatent jointly even though (1) they didnot physically work together or at thesame time, (2) each did not make thesame type or amount of contribution,or (3) each did not make a contribution
to the subject matter of every claim ofthe patent.
35 U.S.C. § 116(a). “Because conception is the touchstoneof inventorship, each joint inventor must generally contributeto the conception of the invention.” Ethicon, Inc. v.U.S. Surgical Corp., 135 F.3d 1456, 1460 (Fed.Cir.1998).Conception is precisely defined as existing “when a definiteand permanent idea of an operative invention, including everyfeature of the subject matter sought to be patented, is known.”Sewall v. Walters, 21 F.3d 411, 415 (Fed.Cir.1994). In otherwords, conception is only complete when the “idea is soclearly defined in the inventor's mind that only ordinaryskill would be necessary to reduce the invention to practice,without extensive research or experimentation.”BurroughsWellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1228(Fed.Cir.1994).
[16] [17] [18] As to the required degree of contributionto conception, we have recognized that “[t]he determinationof whether a person is a joint inventor is fact specific, andno bright-line standard will suffice in every case.” Fina Oil& Chem. Co. v. Ewen, 123 F.3d 1466, 1473 (Fed.Cir.1997).The underlying principle from our case law is that a jointinventor's contribution must be “not insignificant in quality,when that contribution is measured against the dimension ofthe full invention.” Id. Of particular relevance to this case,we have held that if an individual supplies a componentessential to an invention, that is an insufficiently significantcontribution if the component and the principles of its usewere known in the prior art. Hess, 106 F.3d at 981; see alsoPannu v. Iolab Corp., 155 F.3d 1344, 1351 (Fed.Cir.1998)(explaining that a joint inventor is required to “do more thanmerely explain to the real inventors well-known conceptsand/or the current state of the art”). Moreover, *846 whilejoint inventors need not “physically” work together under §116, “the statutory word ‘jointly’ is not mere surplusage.”Kimberly–Clark Corp. v. Procter & Gamble Distrib. Co.,Inc., 973 F.2d 911, 917 (Fed.Cir.1992). We require that“inventors have some open line of communication during orin temporal proximity to their inventive efforts.” Eli Lilly &Co. v. Aradigm Corp., 376 F.3d 1352, 1359 (Fed.Cir.2004).Critically, “each inventor must contribute to the joint arrivalat a definite and permanent idea of the invention as itwill be used in practice.” Burroughs, 40 F.3d at 1229(emphasis added); see also Vanderbilt Univ. v. ICOS Corp.,601 F.3d 1297, 1308 (Fed.Cir.2010) (“[C]o-inventors mustcollaborate and work together to collectively have a definiteand permanent idea of the complete invention.”).
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 8
In sum, the two questions for objectively assessing Gore'sdefense are (1) what constitutes the “definite and permanentidea” of the invention at issue and (2) whether Cooper andGoldfarb acted in concert to jointly arrive at that idea. Withrespect to these questions, the factual record and inferencesfrom the record were raised in the interference proceeding thatpreceded the issuance of the ′135 patent and this litigation—and were reviewed by this court in Cooper I and Cooper II.
**7 [19] As to the first, we note that the invention at issuewas not merely the use of ePTFE in vascular grafts. Rather,each claim of the ′135 patent includes, as its key limitation,specified dimensions of fibril length that are essential for asuccessful graft. See Cooper II, 240 F.3d at 1380 (noting thatthe invention “relates to the fibril length of certain materialused for vascular grafts”). While Cooper identified ePTFEas a promising material for vascular grafts, many grafts thatwere made of ePTFE failed. Cooper I, 154 F.3d at 1325. Priorto the invention, Cooper and others in the art believed thatpore size was the key parameter for success. Id. at 1324. Weaffirmed the Board's finding that prior to Cooper's providingthe lot of ePTFE tubes that ultimately led to the successful2–73 RF graft, “he had not yet recognized the importanceof the fibril length required by the interference, i.e., he hadnot yet conceived the invention, and he was not aware of thefibril lengths of the material he was sending to Goldfarb.”Cooper II, 240 F.3d at 1381. What Cooper told Goldfarb was,more generally, that “he expected the material to be suitableas a vascular graft.” Id. at 1384. In other words, Cooper “hadnot conceived the fibril length limitation before he sent thematerial to Goldfarb.” Id. at 1385.
To be sure, in those prior appeals we held that Cooper“had conceived of the invention, including the fibril lengthlimitation” before Goldfarb evaluated the 2–73 RF graft andreduced the invention to practice. Id. at 1384–85 (citingCooper I, 154 F.3d at 1326). However, we agree with thedistrict court that the record—established in proceedings priorto the litigation—shows that Cooper had “minimal contact”with Goldfarb on the subject of the fibril length limitation:
Indeed, Cooper admits that, evenafter he conceived the importanceof fibril length, he did not conveythat information to Goldfarb. He alsoadmits that he did not ask Goldfarbto use grafts with fibril lengthsrequired by the interference count,or to determine the fibril lengthsof successful grafts. While Cooper
was not required to communicate hisconception to Goldfarb, Cooper I, 154F.3d at 1332, 47 U.S.P.Q.2d at 1905,his failure to convey any informationor requests regarding fibril lengthprevents Goldfarb's determination ofthe fibril lengths of the material frominuring to his benefit.
*847 Bard III, at 9 (quoting Cooper II, 240 F.3d at 1385).Based on the record established in Cooper I and II—that wereviewed—Cooper and Goldfarb independently conceived ofthe fibril length limitation. While Cooper I and II concernedinurement in the context of interference, they established that—barring Gore's introduction of new evidence or theories—Cooper and Goldfarb did not collaborate, communicate, norin any way jointly arrive at the recognition that fibril lengthwas significant for graft success. Even if Cooper had achievedconception prior to Goldfarb, Cooper II definitively held thatGoldfarb arrived at conception on his own, and, thus, hisreduction to practice did not inure to Cooper. 240 F.3d at1386.
**8 This is an unusual case. Forty years have passed sinceGoldfarb filed for the patent at issue in this case. Gore triedto get a patent on the subject matter of the patent on whichit was sued. The subsequent decades of prior proceedingsshaped what defenses Gore could raise once it was suedfor infringement. Once it failed and the ′135 patent issued,Gore was left with an exceptionally circumscribed scope ofreasonable defense.
In the current proceedings, Gore relied on those facts whichshowed that the invention was based on a material thatGore invented and that Cooper may have conceived of theinvention prior to Goldfarb (though Goldfarb won the patentbecause he was the first to reduce it to practice). But even if itcould have persuaded a jury—which it did not—Gore couldnot have evaded the legal requirements of joint inventorship.Ultimately, to have stood a reasonable chance of prevailingon this issue, Gore needed to raise new evidence or theoriesthat were not considered in Cooper I and II.However, asthe prior panel noted, “Gore's argument remains unchangedand there is still no evidence that Cooper either recognizedor appreciated the critical nature of the internodal distanceand communicated that key requirement to Goldfarb beforeGoldfarb reduced the invention to practice.” Bard I, 670 F.3d
at 1182. 4 Within the backdrop of the extensive proceedingsprior to this litigation, therefore, we agree with the district
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 9
court that Gore's position was not susceptible to a reasonableconclusion that the patent was invalid on inventorshipgrounds.
IV
For the aforementioned reasons, we affirm the district court'sdetermination that the plaintiffs established standing and thatthe ′135 patent was willfully infringed.
AFFIRMED
HUGHES, Circuit Judge, concurring.I agree that when reviewed de novo, the evidence in this caseshows that Gore's defenses were not objectively reasonable. Iwrite separately to reiterate my belief that the full court shouldreview our willfulness jurisprudence in light of the SupremeCourt's recent decisions in Highmark Inc. v. Allcare HealthManagement Sys., Inc., ––– U.S. ––––, 134 S.Ct. 1744, 188L.Ed.2d 829 (2014) and Octane Fitness, LLC v. ICON Health& Fitness, Inc., ––– U.S. ––––, 134 S.Ct. 1749, 188 L.Ed.2d816 (2014). Those decisions call into question *848 ourtwo-part test for determining willfulness, In re Seagate Tech.,LLC, 497 F.3d 1360 (Fed.Cir.2007) (en banc), and our denovo standard for reviewing the district court's willfulnessdetermination, Bard Peripheral Vascular, Inc. v. W.L. Gore &Assocs., Inc., 682 F.3d 1003, 1006–07 (Fed.Cir.2012) (BardII ).See Halo Elecs., Inc. v. Pulse Elecs., Inc., 769 F.3d 1371,1383 (Fed.Cir.2014) (O'Malley, J., concurring).
This case demonstrates why de novo review of willfulnessis problematic. The panel is divided over the strength ofGore's joint inventorship defense. Each side advances asound argument about whether the evidence in this caseraises a “substantial question” of joint inventorship. Andthe district court, likewise, provided a thorough and well-reasoned opinion. If one of these several reasonable opinionsmust ultimately govern, it should be the opinion of the districtjudge, whose assessment of litigation positions is informedby trial experience and who has “lived with the case over aprolonged period of time.” Highmark, 134 S.Ct. at 1748.
**9 A more deferential standard of review would beconsistent with the standards for reviewing mixed questionsof law and fact in other contexts. See, e.g., Highmark,134 S.Ct. at 1748–49 (holding abuse of discretion is theproper standard for reviewing award of attorney fees in
patent cases, “[a]lthough questions of law may in some casesbe relevant....”); Pierce v. Underwood, 487 U.S. 552, 558,108 S.Ct. 2541, 101 L.Ed.2d 490 (1988) (holding abuse ofdiscretion is the proper standard for reviewing determinationsof whether a litigant's position is “substantially justified” forpurposes of fee-shifting under the Equal Access to JusticeAct, although the determination frequently turns on a purelylegal issue). It would also be consistent with the standard forreviewing a finding of willful copyright infringement. SeeDolman v. Agee, 157 F.3d 708, 715 (9th Cir.1998) (“Thedistrict court's finding of willful [copyright] infringement isreviewed for clear error.”).
NEWMAN, Circuit Judge, dissenting.**9 This case returns to the Federal Circuit on appeal
of a district court decision on remand from an en bancdecision of this court. The issue is willful infringement andits consequences, which this en banc court remanded for denovo determination as a matter of law, vacating the judgmententered on the jury verdict.
The en banc court changed the standard and procedure fordetermination of willful infringement and its consequences inorder to bring reasonable national uniformity to application ofthis penalty. The court held that the objective reasonablenessof a defense to infringement is a legal question to bedetermined by the judge, and is decided de novo on appeal.The court held that willful infringement is not a jury question,and vacated the judgment of willful infringement and punitivedamages that the district court had entered on the jury verdict.
On remand, the district court re-entered its prior judgment inits entirety, reciting the evidence that in its view supportedthe judgment. Again here on appeal, my colleagues on thispanel repeat the district court's exercise, do not apply de novostandards of review, and do not apply the clear precedentwhich requires determination of whether Gore acted with“objective recklessness” In re Seagate Tech., LLC, 497 F.3d1360, 1371 (Fed.Cir.2007) (en banc). Nor do my colleaguesattempt to meet the court's responsibility to impart reasonableconsistency and objective standards to the penalty aspectof “willful” activity, although this was the reason whythe en banc court established a system of de novo *849determination of this question of law applied to the facts ofthe particular case.
Precedent establishes that the objective prong of willfulinfringement “tends not to be met where an accused infringerrelies on a reasonable defense to a charge of infringement.”
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 10
Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc.,620 F.3d 1305, 1319–20 (Fed.Cir.2010). When there is a“substantial question of invalidity or unenforceability” ofthe patent, willful infringement cannot arise, as a matter oflaw. Seagate, 497 F.3d at 1371. The panel majority does notreview the evidence and apply the law objectively; the courtmerely searches for and recites adverse evidence.
**10 The majority ignores that Gore's employee Cooperwas the first to conceive of the invention—by final ruling ofthe patent interference tribunal and this court; the majorityignores that the ′135 patent was pending for twenty-eightyears, while Gore developed this Gore–Tex® prostheticproduct; the majority ignores that the district court refusedto enjoin Gore's provision of these prosthetic products afterthis litigation, citing the “potentially devastating public health
consequences” 1 ; the court does not mention the inequitableconduct that pervades Dr. Gold-farb's actions in obtaining thepatent, including confessed perjury of a key witness; the courtdoes not mention the action for misappropriation of Gore'strade secrets by Gore ex-employees who now testify againstGore; the court does not mention the solid support for thetheory that there is at least joint invention.
I start with the history of this conflict, for it is relevant to bothwillful infringement and the award of punitive damages.
I. The Interference
The saga of Bard versus Gore started forty-one years ago,when Gore's employee Peter Cooper, manager of the Goreplant in Flagstaff, Arizona, invited Dr. David Goldfarb atthe Arizona Heart Institute to participate in an ongoingstudy of Gore's product, expanded polytetrafluoroethylene(“ePTFE”), for use as a vascular prosthesis, i.e., as a graft torepair and replace blood vessels.
Gore's ePTFE polymer, (brand name Gore–Tex®), hasunique properties based on its microporous and fibrousstructure, as well as the adaptability of that structureto various uses. Gore employees sought to develop newapplications for ePTFE, and continued to modify its structurein studying new uses. Beginning around 1970, Peter Cooperled the development of ePTFE vascular prosthetic grafts.
Cooper and other Gore employees collaborated withvascular surgeons in the United States and Japan, whosurgically inserted Gore's ePTFE vascular tubes of varying
porous and fibrous structure into the arteries of dogs andsheep. Compatibility of ePTFE with human tissue and itseffectiveness as mammalian grafts were demonstrated. Inaddition to scientific publications and the PTO interferencerecord, details of this history may be found in this court'sopinions in the interference appeals, reported at Cooper v.Goldfarb, 154 F.3d 1321 (Fed.Cir.1998) (“Cooper I ”) andCooper v. Goldfarb, 240 F.3d 1378 (Fed.Cir.2001) (“CooperII ”).
In 1973 Cooper, along with Gore employee RichardMendenhall, contacted Dr. Goldfarb, who had recentlyarrived at the Arizona Heart Institute, and invited him toparticipate in the ePTFE vascular study. Cooper gave Dr.Goldfarb the reports of *850 surgeons who had previouslyevaluated ePTFE tubes as vascular grafts, and gave himsamples of the most effective ePTFE tubes based on theprior evaluations. A letter from Cooper to Dr. Goldfarbaccompanying these samples stated that they “represent thelatest attempt to achieve satisfactory patency rates in smallartery prosthetics.” Cooper II, 240 F.3d at 1384.
**11 Dr. Goldfarb tested the Gore samples by insertingthem in blood vessels of dogs and inspecting their structureby microscope. On October 24, 1974 Dr. Goldfarb fileda patent application on the structure of the most effectiveof the samples he tested. Cooper had previously filed apatent application covering the same structure, and the PTOdeclared an interference between the Cooper and Goldfarbapplications.
In its interference decision, the PTO held that Cooper was thefirst to conceive the subject matter of the interference count,ruling that Cooper “had conceived all the limitations of thecount” and “had established conception as of June 5, 1973.”Cooper I, 154 F.3d at 1328. However, the PTO also heldthat Goldfarb was the first to reduce the count to practice,declining to credit Cooper with the prior reductions to practiceby the surgeons to whom Cooper had previously providedePTFE tubes and grafts for testing and evaluation. Althoughthe record contains extensive evidence of these tests, reports,and continued collaboration, the PTO tribunal also did notpermit Cooper to show diligence to his filing date, on theground that diligence had not been pleaded in the interference.Thus the PTO awarded priority to Goldfarb.
On appeal, this court affirmed the PTO ruling that Cooperwas the first to conceive the subject matter of the count. Thiscourt found error in the PTO's refusal to consider whether
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 11
Goldfarb's work “inured” to Cooper's benefit. The PTO hadstated that the issue of inurement had not been raised at finalhearing, but this court found that inurement had been raised“in several places in the final hearing brief,”Cooper I, 154F.3d at 1332, and remanded to the PTO to consider inurement.On remand the PTO held that Goldfarb's work did not inureto Cooper's benefit, relying on affidavits of a Gore employee,
Dan Detton, who later admitted to perjury. 2 Cooper II, 240F.3d at 1380–81.
The PTO awarded the patent to Dr. Goldfarb, and U.S. PatentNo. 6,436,135 (“the ′135 patent”) issued on August 20, 2002.Meanwhile, during the twenty-eight years of patent pendency,Gore developed ePTFE grafts for a variety of prosthetic uses,and achieved medical and commercial success.
II. The Infringement Litigation
On March 28, 2003, Dr. Goldfarb and exclusive licenseeBard sued Gore for infringement of the ′135 patent. AlthoughGore attempted to raise several defenses of invalidity andenforceability, at trial and by motion, the district court and thejury were told repeatedly that the Federal Circuit had finallyadjudged that Dr. Goldfarb was entitled to the patent.
The jury rendered a verdict of willful infringement, andassessed damages measured as Bard's lost profits on Gore'sproducts for which Bard had a competing product. *851 Thejury also awarded a royalty to Bard at rates ranging from10% to 18%, for Gore sales of ePTFE products for whichthere was no competing Bard product. These damages totaled$185,589,871.02. Then, based on the jury's finding of willfulinfringement, the district court doubled the damages, andawarded Goldfarb and Bard their attorneys' fees and costs.Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc.,586 F.Supp.2d 1083 (D.Ariz.2008) (“Bard I ”). A split panelof the court affirmed. Bard Peripheral Vascular, Inc. v. W.L.Gore & Assocs., Inc., 670 F.3d 1171 (Fed.Cir.2012) (“BardII ”). Gore requested rehearing.
III. Rehearing en banc
**12 The Federal Circuit granted rehearing en banc onthe issue of willful infringement and the award of punitivedamages and attorneys' fees. The en banc court vacated thesedistrict court rulings, stating that “the opinion of the courtaccompanying the judgment is modified, in accordance with
the panel opinion accompanying this order.” Bard PeripheralVascular, Inc. v. W.L. Gore & Assocs., Inc., 476 Fed.Appx.747, 748 (Fed.Cir.2012) (en banc) (“Bard III ”). The courtcited the need for consistency and reasonable predictabilityin resolving the pervasive issue of willful infringement, andruled that willful infringement is “a question of law based onunderlying mixed questions of law and fact and is subject tode novo review,”Bard Peripheral Vascular, Inc. v. W.L. Gore& Assocs., Inc., 682 F.3d 1003, 1005 (Fed.Cir.2012) (“BardIV ”).
The court remanded for de novo determination of willfulinfringement. The court explained that willful infringementcontains objective and subjective components, and that theobjective component requires proof of objective recklessnessin the face of a high likelihood of infringing a patent known tobe valid. Bard IV, 682 F.3d at 1006. This objective componentreceives de novo review, as a matter of law.
The objective prong of willful infringement is not met whenthere is a reasonable defense to the charge of infringement.Spine Solutions, 620 F.3d at 1320; see also Halo Elecs., Inc.v. Pulse Elecs., Inc., 769 F.3d 1371, 1382 (Fed.Cir.2014);Advanced Fiber Techs. (AFT) Trust v. J & L Fiber Servs., Inc.,674 F.3d 1365, 1377 (Fed.Cir.2012). Then, if a district courtholds the objective defenses to be objectively unreasonable,the jury's subjective findings can be reviewed. Bard IV, 682F.3d at 1008.
After clarifying the legal principles, this court remanded tothe district court for redetermination of willful infringement.The district court reviewed the issues and reinstated itsprior judgment of willful infringement, double damages, andattorneys' fees. The district court stated that the evidencesupported the prior judgment. Bard Peripheral Vascular,Inc. v. W.L. Gore & Assocs., Inc., No. 03–0597, 2013WL 5670909 (D.Ariz. Oct. 17, 2013) (“Bard V ”). Today'smajority now affirms.
IV. This Appeal
The panel majority, while mentioning that willfulinfringement is now a matter of law, does not undertake therequired de novo review. Determination of a matter of lawrequires consideration of the positions of both sides, with dueattention to the burdens and standards of proof. As statedin Seagate Tech., a ruling of willful infringement requires
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 12
objective recklessness in the face of a high likelihood ofinfringing a patent known to be valid and enforceable.
*852 The question for the reviewing court is not whetherthe district court's decision of law can be found supportedby substantial evidence. The question of willful infringementis whether the accused infringer raised a substantial questionof invalidity or unenforceability regarding the ′135 patent. Inre Seagate, 497 F.3d at 1371. Willful infringement cannotlie “when a reasonable defense is raised,”Advanced Fiber,674 F.3d at 1377, “[although] the record contains substantialevidence to support the jury's implicit finding” of validityand enforceability. Spine Solutions, 620 F.3d at 1319. Therequired showing of objective recklessness is not met, asa matter of law, when the patent is reasonably subject tochallenge.
**13 It cannot be disputed that Gore raisedseveral substantial questions challenging the validity andenforceability of the ′135 patent. I have previously outlinedsome of the grounds on which the ′135 patent was vulnerable:
(1) the ruling of the Patent andTrademark Office, affirmed by theFederal Circuit, that Gore's employeeCooper was the first to conceive ofthe invention that was patented byGoldfarb; (2) the fact that Cooperprovided Goldfarb with the Gore—Tex® tubes that Goldfarb patented; (3)the fact that Goldfarb tested the tubesin dogs at Cooper's request; (4) thefact that others had previously testedthe Gore—Tex® tubes in dogs andsheep, and had reported and publishedthe same results that Goldfarb laterpatented; (5) the fact that the Goldfarbapplication was pending for 28 years,leaving doubt as to the outcome inthe Patent Office. It is not irrelevantthat the eventual allowance of theGoldfarb application included theadmitted perjured affidavit of Detton,an affidavit that Detton asked Goldfarbto withdraw, and was refused.
Bard III, 682 F.3d at 1009 (Newman, J., dissenting inpart). These are all substantial questions of validity andenforceability of the ′135 patent, weighing against recklessdisregard.
Gore also presented by motion seven grounds ofunenforceability of the ′135 patent, quoted by the districtcourt as follows:
1. Plaintiffs and their attorneys failed to advise the PatentOffice of Dr. Volder's connections with Impra in his 1976affidavit in which he expressed his opinion on the issue ofobviousness as a presumably impartial person skilled in theart.
2. Plaintiffs and their attorneys failed to advise the PatentOffice at any time prior to withdrawal of the rejection ofClaims 1 to 10 of the Goldfarb patent application, thatin 1978 Lenox Baker, M.D., withdrew and repudiatedparagraph 6 of his 1976 affidavit filed with the PatentOffice.
3. The filing of and reliance on two 1976 affidavits fromD. Dan Detton, notwithstanding Mr. Detton's repudiationof those affidavits before they were filed, and Plaintiffs'subsequent failure to advise the Patent Office of Mr.Detton's 1978 repudiation of his 1976 affidavits.
4. Plaintiffs' reliance on an error that the Patent Office madein connection with the Matsumoto publication in Surgery,in which the Patent Office Examiner mistakenly interpretedthe wall thickness in that publication to be 1 millimeter(“mm”) rather than 0.5 mm.
5. Plaintiffs and their attorneys failed to provideinformation to the Patent Office about Dr. Volder's workand his possible role as an inventor or co-inventor,including the failure to disclose the existence of and thesubsequent destruction of the Volder notebook.
*853 6. Plaintiffs and their attorneys failed to comply withthe Patent Office order requiring production of materialinformation from the Goldfarb v. Impra litigation.
7. Plaintiffs and their attorneys failed to advise the PatentOffice Examiner of the existence of the Gore shippinglog, which contained information about prior art vasculargraft wall thicknesses that was inconsistent with the 1976affidavits of Harold Green and Mr. Detton, and inconsistentwith the argument made by Dr. Goldfarb and Mr. Suttonin persuading the Patent Office Examiner to withdraw theNovember 1975 rejection of Claims 1 to 10.
**14 Bard Peripheral Vascular, Inc. v. W.L. Gore &Assocs., Inc., 573 F.Supp.2d 1170, 1173–74 (D.Ariz.2008).
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 13
Each asserted ground of inequitable conduct was summarilydismissed by the district court, which stated that, evenif Dr. Goldfarb misrepresented or intentionally withheldinformation from the PTO and despite the admitted perjury,the false information was “not material to the prosecutionof the ′ 135 patent.” Id. at 1215. That reasoning cannot besustained.
In addition, Gore's argument of incorrect inventorship, or atleast joint invention, is quite viable, and raises a substantialquestion of validity, which requires correct inventorship.Given the PTO's findings that Cooper was the first toconceive the invention, and this court's prior affirmance thatCooper conceived of the invention including the fibril lengthlimitation before Goldfarb evaluated the 2–73 RF graft, seeCooper II, 240 F.3d at 1384–85 (citing Cooper I, 154 F.3dat 1326), Goldfarb's reduction to practice of the material thatCooper made and presented for patenting, at least raises asubstantial question of “joint inventorship.” The statute isclear, and surely presents enough of a question that jointinvention could be reasonably raised in defense:
Joint Inventors—... Inventors may apply for a patent jointlyeven though (1) they did not physically work together orat the same time, (2) each did not make the same typeor amount of contribution, or (3) each did not make acontribution to the subject matter of every claim of thepatent.
35 U.S.C. § 116(a) (2012).
The panel majority rules that Gore's joint invention defensefails because Gore cannot show “collaboration” betweenCooper and Goldfarb as to every limitation in the claims.Joint invention does not require collaboration as to everylimitation, as the statute makes clear. Moreover, whenthe PTO's interference procedures are removed from thedeferential review status they enjoyed in Cooper I andCooper II, the correctness of these rulings can reasonably bechallenged in the infringement context.
In all events, the question as it relates to willfulness is whetherthe defense of invalidity could reasonably be raised, notwhether it eventually succeeded. The flaws in the Goldfarbpatent and the way it was obtained provided sufficientlyreasonable defenses to both validity and enforceability. Onthe entirety of the premises and applying the correct legalstandards, the judgment of willful infringement cannot stand.
V. Damages
Even when willful infringement is found, it does not followthat punitive damages must be imposed, or that the damagesmust be doubled. The public benefit of Gore's product cannotbe ignored. Punitive damages are intended to discourage badbehavior, not life-saving medical devices. This en banc courtspecifically *854 asked for review of the damages awardas related to the willfulness determination. Such review getsshort shrift from my colleagues, who simply ignore the enbanc court's admonition that the premises and consequencesof “willful” action receive objective, nationally consistent,implementation.
**15 “Precedent holds that a finding of willfulnessauthorizes, but does not require, enhanced damages.” LaitramCorp. v. NEC Corp., 115 F.3d 947, 955 (Fed.Cir.1997);Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d1555, 1582 (Fed.Cir.1992) (refusal to enhance damagesdespite the jury's verdict of willful infringement); ModineMfg. Co. v. Allen Group, Inc., 917 F.2d 538, 543(Fed.Cir.1990) (same); Delta–X v. Baker Hughes Prod.Tools, Inc., 984 F.2d 410, 413 (Fed.Cir.1993) (consideringwhether the defendant made a substantial challenge toinfringement).
Extensive precedent supports judicial refusal to enhancedamages when the case is close and the equities counselmoderation, not punishment. The award of punitive damagesdepends on both the infringer's degree of culpability, andthe injury that the infringement imposed on the patentee.Bard was awarded full recovery for its loss of business tothe Gore product. The district court stated that “the Court issatisfied that a fair and full amount of compensatory moneydamages, when combined with a progressive compulsorylicense, will adequately compensate Plaintiffs' injuries, suchthat the harsh and extraordinary remedy of injunction-withits potentially devastating public health consequences-can beavoided.” Bard Peripheral Vascular, Inc. v. W.L. Gore &Assocs., Inc., No. 03–CV–0597, 2009 WL 920300, at *5(D.Ariz. Mar. 31, 2009).
The district court's recognition of the public's interest andmedical benefits imparted by Gore's product, and the court'srefusal to enjoin its provision, cannot be reconciled with thepunitive doubling of damages. There was no showing, oreven a charge, of intentional harm, as required for severe
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837 (2015)
2015 WL 151557, 113 U.S.P.Q.2d 1380
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 14
punishment as here meted out. See Restatement (Second) ofTorts § 500 (1965).
Thus, regardless of whether willfulness was a supportableruling, the doubling of the damages award is untenable. Frommy colleagues' contrary ruling, I respectfully dissent.
Parallel Citations
2015 WL 151557 (C.A.Fed. (Ariz.)), 113 U.S.P.Q.2d 1380
Footnotes
1 Gore sought to appeal the question of inventorship under 35 U.S.C. § 116 to the Supreme Court, which denied its petition for certiorari.
W.L. Gore & Assocs., Inc. v. C.R. Bard, Inc., –––U.S. ––––, 133 S.Ct. 932, 184 L.Ed.2d 752 (2013).
2 In 2007, Goldfarb assigned his remaining interests in the # 135 patent to BPV. Gore argues that this assignment was illusory since
Goldfarb had already granted all substantial rights to Bard Inc. in 1980. We note that at most this transfer corroborates BPV's position
that the parties clearly understood that BPV was Goldfarb's licensee at the time the suit was filed.
3 The district court's opinion suggests that it rejected Gore's argument because “substantial evidence” was contrary to a finding that
Gore had a reasonable expectation of success in its defense. Bard III, at 11. Gore argues that this suggests that the district court
inappropriately relied on findings of fact in determining the objective reasonableness of its defense. Gore's position overstates the
significance of the district court's reference to “substantial evidence.” Rather, the district court correctly followed Bard II, reviewing
the facts in the record produced in the litigation and evaluating whether, on the basis of those facts, Gore had raised a reasonable
defense. See id. at 19.
4 Indeed, if anything, the evidence presented in the litigation further bolstered the plaintiffs' position. For example, as the district court
noted, shortly after Goldfarb filed his patent application in October 1974, Cooper admitted to entering Goldfarb's laboratory without
permission and took his histological slides. Bard III, at 10. Other evidence suggested that Cooper did so because Cooper still did not
understand what parameters mattered for successful grafts. Id. at 10–11.
1 Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., No. 03–CV–0597–PHX–MHM, 2009 WL 920300, at *5 (D.Ariz. March
31, 2009).
2 Counsel: Is your testimony there knowingly false or truthful?
Mr. Detton: No, that was inaccurate testimony.
Counsel: Was it knowingly false?
Mr. Detton: Yes, it was.
Counsel: Perjury?
Mr. Detton: Yes, it was.
Trans.1915:5–15, Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., No. 03–CV–0579–PHX–MHM, (D.Ariz. Nov.
27, 2007), ECF No. 787.
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
Black & Decker Inc. v. Robert Bosch Tool Corp., Not Reported in F.Supp.2d (2006)
2006 WL 3783006
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
2006 WL 3783006Only the Westlaw citation is currently available.
United States District Court,N.D. Illinois,
Eastern Division.
BLACK & DECKER INC. and Black& Decker (U.S.) INC., Plaintiffs,
v.ROBERT BOSCH TOOL
CORPORATION, Defendant.
No. 04 C 7955. | Dec. 22, 2006.
Attorneys and Law Firms
Raymond P. Niro, Christopher J. Lee, David Joseph Mahalek,Dean D. Niro, Paul Christopher Gibbons, Niro, Scavone,Haller & Niro, LTD., Chicago, IL, for Plaintiffs.
Albert L. Underhill, Allen W. Hindcraker, Douglas J.Williams, Erik G. Swenson, Jon R. Trembath, Rachel C.Hughey, Rebecca A. Bortolotti, Merchant & Gould, P.C.,Minneapolis, MN, Elizabeth J. Reagan, Kirstin L. Stoll-Debell, Peter A. Gergely, Merchant & Gould, PC, Denver,CO, Thomas Edward Sarikas, Merlo Kanofsky Brinkmeier &Gregg Ltd., Chicago, IL, for Defendant.
MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Court Judge.
*1 Plaintiffs Black & Decker Inc. and Black & Decker(U.S.) Inc. (collectively “Black & Decker”) brought thepresent lawsuit against Defendant Robert Bosch ToolCorporation (“Bosch”) alleging infringement of variousclaims of U.S. Patent Nos. 6,308,059 (the “#059 patent”)and 6,788,925 (the “#925 patent”). Specifically, Black &Decker accused Bosch's Power Box radio of infringing eachof the patents-in-suit that relate to rugged jobsite radios. OnSeptember 22, 2006, a jury returned a verdict finding thatthe Bosch Power Box radio chargers infringed certain claimsof both patents-in-suit. The jury also found that Bosch'sinfringement was willful. Before the Court is Bosch's Motionfor Judgment as a Matter of Law or to Alter the Judgmentas to Willful Infringement and for a New Trial pursuant toFederal Rules of Civil Procedure 50(b), 59(a), and 59(e). Forthe following reasons, the Court denies Bosch's motion.
LEGAL STANDARDS
The law of the Seventh Circuit controls motions under FederalRules of Civil Procedure 50 and 59 because they involveprocedural issues not unique to patent law. See Primos, Inc. v.Hunter's Specialties, Inc., 451 F.3d 841, 847 (Fed.Cir.2006);NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1324(Fed.Cir.2005).
I. Motion for Judgment as a Matter of Law-Rule 50(b)When ruling on a motion for judgment as a matter oflaw following a jury verdict, the Court does not re-weigh the evidence presented at trial or make credibilitydeterminations. See Reeves v. Sanderson Plumbing Prods.,Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d105 (2000); seeFed.R.Civ.P. 50(b). Instead, the Court viewsthe evidence and all reasonable inferences in a light mostfavorable to the non-movant, in this instance, Black &Decker. See Reeves, 530 U.S. at 150-51; Byrd v. IllinoisDep't of Pub. Health, 423 F.3d 696, 712 (7th Cir.2005).“[T]hequestion is not whether the jury believed the right people,but only whether it was presented with a legally sufficientamount of evidence from which it could reasonably deriveits verdict.”Zelinski v. Columbia 300, Inc., 335 F.3d 633,638 (7th Cir.2003).“This is obviously a difficult standard tomeet.”Waite v. Board of Trs. of Ill. Cmty. Coll. Dist. 508, 408F.3d 339, 343 (7th Cir.2005).
II. Motion for a New Trial-Rule 59(a)“Rule 59(a), in a bit of a circular way, allows new trialsin cases where new trials have been traditionally allowed atlaw.”ABM Mktg., Inc. v. Zanasi Fratelli, S.R.L., 353 F.3d 541,543 (7th Cir.2003) (citing Fed.R.Civ.P. 59(a)). The SeventhCircuit has clarified this standard explaining that a “motionfor a new trial should succeed only if the verdict is againstthe manifest weight of the evidence.”Id. at 545 (quotationand citation omitted). To satisfy this standard, Bosch mustdemonstrate that no rational jury could have rendered averdict against it concerning the finding of willfulness. SeeKing v. Harrington, 447 F.3d 531, 534 (7th Cir.2006). Whenmaking this evaluation, the Court views the evidence in a lightmost favorable to Black & Decker and cannot re-weigh theevidence or make credibility determinations. Id. The Courtwill sustain the verdict where a reasonable basis exists inthe record to support the jury's finding. Id.“Because the trialjudge is uniquely situated to rule on such a motion, the district
Black & Decker Inc. v. Robert Bosch Tool Corp., Not Reported in F.Supp.2d (2006)
2006 WL 3783006
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
court has great discretion in determining whether to grant anew trial.”Kempner Mobile Elec., Inc. v. Southwestern BellMobile Sys., 428 F.3d 706, 716 (7th Cir.2005).
III. Motion to Alter or Amend the Judgment-Rule 59(e)*2 Rule 59(e) permits parties to file, within ten days of the
entry of judgment, a motion to alter or amend the judgment.SeeFed.R .Civ.P. 59(e). Motions under Rule 59(e) serve thelimited function of allowing the Court to correct manifesterrors of law or fact or consider newly discovered materialevidence. See County of McHenry v. Insurance Co. of theWest, 438 F.3d 813, 819 (7th Cir.2006).Rule 59(e)“does notprovide a vehicle for a party to undo its own proceduralfailures” or “introduce new or advance arguments that couldand should have been presented to the district court prior tothe judgment.”Moro v. Shell Oil Co., 91 F.3d 872, 876 (7thCir.1996); see also Estremera v. United States, 442 F.3d 580,587 (7th Cir.2006). Whether to grant a Rule 59(e) motion “isentrusted to the sound judgment of the district court.”Matterof Prince, 85 F.3d 314, 324 (7th Cir.1996); see also Andrewsv. E.I. Du Pont De Nemours & Co., 447 F.3d 510, 515(7th Cir.2006) (appellate court reviews denial of Rule 59(e)motion for abuse of discretion).
ANALYSIS
In the present post-trial motion, Bosch argues that Black& Decker failed to present clear and convincing trialevidence of Bosch's willful infringement. When makingwillfulness findings, the jury must consider the totality ofthe circumstances in weighing and evaluating the evidence.See Liquid Dynamics Corp. v. Vaughan Co., 449 F.3d 1209,1225 (Fed.Cir.2006) (citing Knorr-Bremse Systeme FuerNutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1342-43(Fed.Cir.2004) (en banc)).“The drawing of inferences,particularly in respect of an intent-implicating question suchas willfulness, is peculiarly within the province of the factfinder that observed the witnesses.”Liquid Dynamics, 449F.3d at 1225 (citation omitted). The patentee bears theburden of persuasion and must prove willful infringementby clear and convincing evidence. Golden Blount, Inc. v.Robert H. Peterson Co ., 438 F.3d 1354, 1368 (Fed.Cir.2006).Specifically, “the patentee must present threshold evidence ofculpable behavior before the burden of production shifts tothe accused to put on evidence that it acted with due care.”Id.(citation and internal quotations omitted). After the Knorr-Bremse decision, this “threshold showing cannot be satisfied
merely by proof that the accused is asserting the attorney-client privilege to withhold an opinion of counsel.”GoldenBlount, 438 F.3d at 1368. Instead, the “extent to which theinfringer disregarded the property rights of the patentee, thedeliberateness of the tortious acts, or other manifestationsof unethical or injurious commercial conduct, may providegrounds for a finding of willful infringement.”Id. at 1367-68(citation omitted).
Thus, a “jury verdict of willfulness requires a finding byclear and convincing evidence in view of the totality of thecircumstances that [the defendant] acted in disregard of the ...patent and lacked a reasonable basis for believing it had aright to do what it did.”nCube Corp. v. Seachange Int'l, Inc.,436 F.3d 1317, 1320 (Fed.Cir.2006) (citation and internalquotations omitted). As such, in addressing Bosch's post-trialmotion, the Court must determine whether-when viewed as awhole-there is substantial evidence upon which the jury couldfind willful infringement by clear and convincing evidence.Id.
I. Bosch's Knowledge of Black & Decker's Patent Rights*3 First, Bosch contends that there is no evidence indicating
that it willfully infringed the patents-in-suit after Black &Decker filed this lawsuit on December 8, 2004. On theother hand, Black & Decker asserts that Bosch's divisionof its infringement into different time periods is artificial.See nCube Corp., 436 F.3d at 1324 (“Actual notice ofanother's patent rights triggers an affirmative duty of duecare to avoid infringement.”). The Court agrees with Black& Decker because there is ample evidence that Bosch hadnotice of Black & Decker's patent rights before and afterBlack & Decker sent its notice letter and filed this lawsuit inNovember and December 2004, respectively. See id.(willfulinfringement inquiry hinges on when defendants had actualknowledge of plaintiff's patent rights and defendants' actionsthereafter).
A. Bosch's Knowledge Prior to Notice Letter & LawsuitAccording to Bosch's internal documents, Bosch had specificknowledge of Black & Decker's patent rights prior to theNovember 1, 2004 notice letter and the filing of this lawsuit.Specifically, Bosch created a document entitled ProductConcept-Project Greenlight, RPU-Radio Power Unit-beforeit launched the Bosch Power Box project. (See generallyPTX # 34.) In this document, Bosch admits that “Milwaukeedid not want to infringe on the Dewalt radio charger patent,therefore they provide mounting screws for the charger on
Black & Decker Inc. v. Robert Bosch Tool Corp., Not Reported in F.Supp.2d (2006)
2006 WL 3783006
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
the back of the radio to accommodate the charger.”(SeePTX # 34 at B001439). The document also identified that“Dewalt and Milwaukee are the only competitors withinthis $20 Mil. Product category.”(Id. at B001438.)In fact,this Product Concept document discusses the DeWalt radiochargers in detail. (Id. at B001438-B0011440.)Furthermore,trial testimony reveals that Bosch's witness, Richard Gray,heard about the DeWalt radio at a trade show beforeBosch launched the Power Box. (Trial Tr. at 1155 .) Graysubsequently talked to Bosch's engineers, Steven Cole andJohn DeCicco, about the DeWalt radio charger. (Id. at1161-62.)
Nevertheless, Bosch argues that this evidence does notsupport the conclusion that it knew of the Domes patents priorto the notice letter because this evidence speaks to the DeWaltradio chargers, not specifically to the ′059 and ′925 patents.Bosch, however, fails to any cite authority-controlling orotherwise-in support of its argument that it must haveknowledge of the actual patents. Indeed, the Federal Circuitinstructs that it is the infringer's knowledge of patent rightsthat is relevant. See nCube Corp., 436 F.3d at 1324; ImonexServs., Inc. v. W.H. Munzprufer Dietmar Trenner GMBH,408 F.3d 1374, 13787 (Fed.Cir.2005). Bosch's argument iswithout merit.
B. Bosch's Knowledge Pursuant to the Notice Letter andLawsuitThe notice letter addressed to Bosch's Chief Counsel, R.Warren Comstock, and November 1, 2004, explicitly statesthat the patents-in-suit are the ′059 and ′ 925 patents issuedto Joseph Domes, the inventor. (PTX # 12 at BD015664-BD015667.) Further, Black & Decker's Complaint alsoexplicitly identifies the patents-in-suit. (R. 1-1, Compl.¶ 2.)
II. Bosch's Willful Conduct & Copying
A. Willful Conduct*4 Not only is there clear and convincing evidence upon
which the jury could conclude that Bosch was aware of Black& Decker's patent rights before and after the notice letter,there is also clear and convincing trial evidence to support thejury's finding of Bosch's willfulness. More specifically, Black& Decker's witness, Christine Potter, testified as follows:
Q. This is a letter to a Warren Comstock dated November1, 2004, Chief Counsel, Intellectual Property, RobertBosch Corporation. And it was sent by Charles Yocum,
Senior Group Patent Counsel. And it indicates here thatyou got a copy. Do you recall receiving a copy of thisletter?
A.A. Yes, I do.
...
Q. What was the purpose of this letter, as you understand it?
A. As I understand it, it was to formally put Bosch on noticeof infringement.
...
Q. Now, did Bosch-as requested by Black & Decker on thisNovember 1, 2004, letter-discontinue its sales?
A. No, they did not.
(Trial Tr. at 243-45.)
Other trial evidence that supports the jury's willfulnessfinding is Cole's testimony that he was not aware of any stepsBlack & Decker took to avoid infringing the patents-in-suit:
Q. So, after the meeting with Mr. Comstock in Januaryor February of 2005, as you sit here today, you are notaware of any steps that Bosch Engineering took to avoidinfringement or potential infringement of any of Black& Decker's patents that are being asserted against Boschat that time?
A. I am not aware of any steps that were taken after theJanuary meeting.
(Trial Tr. at 864.) Cole further testified that he wasnot involved in any investigation of the possibility ofinfringement of the Domes patents:
Q. I see. But you personally have not been involved in anyof that type of project, is that right, with respect to thePower Box product?
A. With respect to the Power Box, no.
(Id. at 865.)
Moreover, there is trial testimony that Bosch unsuccessfullysought a license from the inventor, Joseph Domes, afterthe notice letter, which supports an inference that Boschwas explicitly aware of the possibility of infringement. SeeSpindelfabrik Suessen v. Schubert & Salzer Maschinenfabrik,
Black & Decker Inc. v. Robert Bosch Tool Corp., Not Reported in F.Supp.2d (2006)
2006 WL 3783006
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
829 F.2d 1075, 1084 (Fed.Cir.1987). Specifically, Domestestified to the following:
Q. I want to take you back to a time when you received acall from an attorney for Bosch. Do you recall that?
A. Yes.
Q. When was it?
A. It was November, ′04.
Q. And tell us what happened?
A. I got a phone call from Bosch. I think it was a Mr. Greer.
Q. Did he identify himself?
A. Yes, as Mr. Greer.
Q. What did he say?
A. He said, “I would like to know if we can license yourpatent,” and-
Q. Did he identify who he was representing?
A. He said he was representing Bosch.
Q. What did you tell him?
A. Well, I told him I couldn't at that time because I sold itto Black & Decker already.
*5 Q. Did he tell you where he was located?
A. He said Chicago.
Q. And tell us, as best you can recall, exactly what he saidto you?
A. Well, he said he had a new radio coming out for jobsites,that would be really nice for the job-you know, be a goodjobsite radio.
Q. And he asked for a license?
A. Yes, he did.
Q. And you said, what?
A. I said I couldn't sell it to him at this time; I wish I couldhave, but I couldn't, because I already sold it to Black& Decker.
Q. Did he tell you why they wanted a license?
A. Well, he said they want it for their radio.
Q. Did he identify the radio to you?
A. He just said it was a new type of radio coming out, thatwas going to be very good for jobsites.
(Trial Tr. at 407-09.)
B. Evidence of CopyingIn addition, there is clear and convincing evidence in the trialrecord that Bosch copied key features of Black & Decker'sradio charger based on trial testimony that in October 2002Bosch sent the DeWalt radio charger to its supplier, GloryHorse, before designing the Power Box. See AdvancedDisplay Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1285(Fed.Cir.2000) (evidence of copying relevant to willfulnessdetermination). Specifically, Bosch's lead engineer, Cole, andGlory Horse's principal, Thompson Cheung, testified thatGlory Horse engineers studied the DeWalt radio charger,disassembled the it, and examined the internal circuitry. Coletestified as follows:
Q. Now, Glory Horse studied the DeWalt unit, correct?
A. That was one of the units they studied, yes.
Q. Again, this was before they sent the prototype, correct?
A. Yes.
Q. They tested the unit?
A. They tested the audio of the unit, yes.
...
Q. They told you they took it apart?
A. Yes.
Q. And they looked at the internal components of the Black& Decker unit; isn't that correct?
A. Yes.
Q. Which would allow them access to the circuitry that'sinside, correct?
A. Yes.
Q. And they told you that they did that, correct?
Black & Decker Inc. v. Robert Bosch Tool Corp., Not Reported in F.Supp.2d (2006)
2006 WL 3783006
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5
A. Yes.
(Trial Tr. at 905-06.) At trial, Cheung testified:
Q. You did take this DeWalt unit apart, correct?
A. We first take the DeWalt-we first take the DeWalt-radioto compare for benchmark comparison for audio, forspeaker sound.
Q. Okay. And in doing that-
A. And, obviously-
Q. I'm sorry. Go ahead.
A. Sorry. Obviously, I don't-I don't-think that I can stop myengineer in taking it apart. There's no question about it.
Q. All right. You didn't stop your engineers from taking itapart?
A. No, I can't. I mean, the engineer do that.
Q. Okay. How many engineers took it apart; do you know?
A. Oh, I guess six-five, six-engineers that we have.
(Id. at 1327-28.)
Further, trial evidence supports the inference that Glory Horseand Bosch copied certain features of the DeWalt radio chargerand incorporated those features into the Power Box radio.Specifically, Black & Decker points to Bosch's preliminaryconcept specification sent to Glory Horse, in which it wantedthe following three features (1) the “capacity to be operatedfrom a Bosch battery,” (2) an “internal charger inside theradio housing,” and (3) “ruggedness.” (PTX # 66 at B002254-B002256.) There is also trial testimony that Bosch and GloryHorse copied the “protective roll cage,” the “speakers,” the“antenna,” the “cord wrap,” the “handle,” the “large knobs,”“AM/FM tuner,” ability to “be powered by an AC poweroutlet,” ability to “be powered by power tool batteries,”“integrated battery charger,” the ability to “be played frombatteries and charge multiple Bosch batteries,” the “circuitryinside the radio,” “trap door latches,” “roll bars,” “weatherresistant material” and “rubber linkage to provide shockabsorption.”(Trial Tr. at 216-22, 225-27, 915-917, 1331-33.)
III. Good Faith Belief
*6 Despite the clear and convincing evidence as discussedabove, Bosch contends that it acted in good faith. “Goodfaith may normally be shown by obtaining the advice oflegal counsel as to infringement or patent validity.”LiquidDynamics Corp., 449 F .3d at 1225;see also Read Corp. v.Portec, Inc., 970 F.2d 816, 828 (Fed.Cir.1992) (“affirmativeduty normally entails obtaining advice of legal counselalthough the absence of such advice does not mandate afinding of willfulness”). Although Bosch contends that itsought advice from its litigation counsel regarding invalidityand infringement, it does not set forth specific evidenceconcerning counsel's opinion. Instead, Bosch argues thatit decided not to waive the attorney-client privilege forthese opinions, and thus, under Federal Circuit law, itshould not be penalized for its actions. See Knorr-BremseSysteme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383F.3d 1337, 1351 (Fed.Cir.2004) (en banc) (“the failure toobtain an exculpatory opinion of counsel shall no longerprovide an adverse inference or evidentiary presumptionthat such an opinion would have been unfavorable”).Specifically, in Knorr-Bremse,“the affirmative duty of duecare to avoid infringement was reiterated, but it was foundno longer appropriate to draw an adverse inference withrespect to willful infringement from failure to obtain legaladvice.”Imonex Servs., Inc. v. W.H. Munzprufer DietmarTrenner GMBH, 408 F.3d 1374, 1378 (Fed.Cir.2005). Assuch, Bosch is allowed to invoke the attorney-client privilegewithout any adverse inference. See id.The Knorr-Bremsedecision, however, does not hold that a positive inference ofgood faith can be made if a party does seek legal advice. SeeThird Wave Tech. v.. Stratagene Corp., 405 F.Supp.2d 991,1016-17 (W.D.Wis.2005) (citing Knorr-Bremse, 383 F.3d at1345).
Bosch argues that Black & Decker's closing remarksconcerning Bosch's failure to set forth a legal opinion oninfringement warrants a new trial. Black & Decker's closingremarks, however, do not pertain to the Court's analysis ofwhether the jury had substantial evidence upon which to findwillful infringement by clear and convincing evidence. SeenCube Corp., 436 F.3d at 1320. Simply put, closing remarksare not evidence and the Court repeatedly instructed the juryas such. See Denius v. Dunlap, 330 F.3d 919, 928-29 (7thCir.2003) (“Statements made during closing argument are,of course, not evidence.”). Further, the parties agreed to thejury instruction regarding willful infringement, which did notdirect the jury to draw an inference from the absence ofcounsel's opinion on infringement. See United States v. White,
Black & Decker Inc. v. Robert Bosch Tool Corp., Not Reported in F.Supp.2d (2006)
2006 WL 3783006
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 6
443 F.3d 582, 588 (7th Cir.2006) (jury is presumed to follow
jury instructions). As such, Bosch's argument fails. 1
Meanwhile, there is clear and convincing evidence in the trialrecord-not pertaining to Bosch's legal advice-that supports thejury's conclusion that Bosch did not have a good faith basisfor its actions. For example, there is documentary evidencethat Bosch specifically targeted the DeWalt radio chargerand intended to get 24% of Black & Decker's market share.(PTX # 43 at B002258-B002259; PTX # 146 at B023023).Furthermore, as cited above, Bosch's lead engineer, Cole,testified that he was not aware of anyone in engineering whotook steps to avoid potential infringement of the patents-in-suit after Black & Decker sent Bosch the notice letterin November 2004 and initiated the lawsuit in December2004. Cole also testified that he was not involved in anyinvestigation into the possibility of infringement of theDomes patents.
*7 Bosch nonetheless argues that it acted in good faithbased on its legitimate defenses to Black & Decker'sclaims of infringement. Accepting Bosch's premise as true,Bosch's “defenses prepared for [ ] trial are not equivalentto the competent legal opinion of non-infringement orinvalidity which qualify as ‘due care’ before undertakingany potentially infringing activity.”Crystal SemiconductorCorp. v. Tritech Microelectronics Int'l, Inc., 246 F .3d 1336,1352 (Fed.Cir.2001). Put differently, “good faith defensesare not dispositive.”Advanced Cardiovascular Sys., Inc. v.Medtronic, Inc., 265 F.3d 1294, 1310 (Fed.Cir.2001). Inshort, under the circumstances, Bosch's legitimate defenseargument does not save the day.
Finally, Bosch's reliance on Gustafson, Inc. v. IntersystemsIndus. Prods., Inc., 897 F.2d 508 (Fed.Cir.1990), for theproposition that it could continue to manufacture the PowerBox radio after being put on notice is misplaced. TheGustafson court explained that “[e]xercising due care, a partymay continue to manufacture and may present what in goodfaith it believes to be a legitimate defense without risk ofbeing found on that basis alone a willful infringer.”Id. at511.The Gustafson court, however, “did not hold, as a matterof law, that a party that continues its accused infringingactivity after a patentee files suit cannot be guilty of willfulinfringement as long as that party presents a non-frivolousdefense to infringement.”Crystal Semiconductor Corp., 246F.3d at 1351-52. Indeed, the Gustafson court concluded thatan alleged infringer's continued manufacturing of an accusedproduct, alone, cannot be a basis for a finding of willful
infringement.Gustafson, 897 F.2d at 511;see also AdvancedCardiovascular Sys., 265 F.3d at 1310.
As discussed, there is substantial evidence beyond Bosch'scontinued manufacturing of the Power Box upon which thejury could conclude that Bosch did not exercise due care.There is also ample evidence in the trial record of Bosch'scopying. See Civix-DDI, LLC v. Cellco P'ship, 387 F.Supp.2d869, 903 n. 39 (N.D.Ill.2005) (citing Crystal SemiconductorCorp., 246 F.3d at 1352). Furthermore, the facts in Gustafsonare distinguishable because the Federal Circuit relied on thepatentee's filing of a lawsuit immediately after the patentissued and consequently the manufacturer had no warningof its infringing conduct. Id. at 511.Here, the trial recordevidences that Bosch had notice of Black & Decker's patentrights as early as 2002. Thus, Bosch's reliance on Gustafsonfails.
IV. ConclusionViewing the evidence and all reasonable inferences in alight most favorable to Black & Decker, there is clear andconvincing evidence supporting the jury's conclusion thatit was “highly probable” Bosch's infringing conduct waswillful. See Buildex Inc. v. Kason Indus., Inc., 849 F.2d1461, 1463 (Fed.Cir.1988) (“Although not susceptible toprecise definition, ‘clear and convincing’ evidence has beendescribed as evidence which produces in the mind of the trierof fact ‘an abiding conviction that the truth of [the] factualcontentions are ‘highly probable.”) (citation omitted); seealso United States v. Boos, 329 F.3d 907, 911 (7th Cir.2003)(“highly probable” is Supreme Court's definition of clear andconvincing standard of proof). In other words, there was alegally sufficient amount of evidence-under the clear andconvincing standard-from which the jury could reasonablyderive its willfulness finding. See nCube Corp., 436 F.3dat 1320; Zelinski, 335 F.3d at 638. As the Federal Circuitinstructs, “[t]he drawing of inferences, particularly in respectof an intent-implicating question such as willfulness, ispeculiarly within the province of the fact finder that observedthe witnesses.”Liquid Dynamics, 449 F.3d at 1225. Here,Black & Decker presented clear and convincing evidenceupon which the jury could draw reasonable inferencesand ultimately conclude that Bosch's conduct was willful.Therefore, the Court denies Bosch's motion for judgment asa matter of law under Rule 50(b).
*8 Moreover, Bosch has failed to demonstrate that norational jury could have rendered a verdict against it on thisissue, and thus the jury's willfulness finding was not against
Black & Decker Inc. v. Robert Bosch Tool Corp., Not Reported in F.Supp.2d (2006)
2006 WL 3783006
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 7
the manifest weight of the evidence. See King, 447 F.3d at534. Put another way, there was a reasonable basis to supportthe jury's finding of willfulness. See id.;nCube Corp., 436F.3d at 1320. Thus, the Court, in its discretion, denies Bosch'smotion for a new trial pursuant to Rule 59(a).
Finally, Bosch does not explain how the jury committeda “manifest error of law or fact” nor does Bosch pointto newly discovered material evidence for the Court toconsider. See Oto v. Metropolitan Life Ins. Co., 224 F.3d 601,606 (7th Cir.2000) (manifest error is wholesale disregard,misapplication, or failure to recognize controlling precedent).
Accordingly, the Court, in its discretion, also denies Bosch'sMotion to Alter or Amend the Judgment pursuant to Rule59(e).
CONCLUSION
For these reasons, the Court denies Bosch's Motion forJudgment as a Matter of Law or to Alter the Judgment as toWillful Infringement and for a New Trial.
Footnotes
1 The Court addressed Black & Decker's conduct during closing arguments when denying Black & Decker's motion for attorney's fees
pursuant to 35 U.S.C. § 285. (R. 569-1, November 20, 2006, Memorandum, Opinion, & Order at 8-9.)
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
Fujitsu Ltd. v. Tellabs Operations, Inc., Not Reported in F.Supp.2d (2013)
2013 WL 268607
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
2013 WL 268607Only the Westlaw citation is currently available.
United States District Court,N.D. Illinois,
Eastern Division.
FUJITSU LIMITED, Counter claimant,v.
TELLABS OPERATIONS, INC., Tellabs Inc., andTellabs North America, Inc., Counter defendants.
Nos. 08 C 3379, 09 C 4530. | Jan. 24, 2013.
Attorneys and Law Firms
David T. Pritikin, Richard A. Cederoth, Richard FrancisO'Malley, Robert Douglas Leighton, Sidley Austin LLP,Chicago, IL, Benjamin B. Kelly, James Patrick Bradley,Kelley A. Conaty, Kristoffer B. Leftwich, Mark Alan Dodd,Steven Charles Malin, Vijay D. Desai, Sidley Austin LLP,Dallas, TX, for Tellabs Operations, Inc.
David C. Van Dyke, Joseph W. Barber, Thomas JeffersonRamsdell, III, Howard and Howard, Kimberly MichelleHume, Lea Ann Chambers Fracasso, Trisha K. Tesmer,Cassiday Schade LLP, Chicago, IL, Alyssa Margaret Caridis,Christopher Allen Hivick, James Brooks, Michael DavidOwens, Orrick, Herrington & Sutcliffe LLP, Los Angeles,CA, David E. Wang, Orrick, Herrington & Sutcliffe LLP,Menlo Park, CA, Gino Cheng, Glen Liu, Orrick, Herrington& Sutcliffe LLP, Irvine, CA, Joseph A. Panatera, KennethJ. Allen & Associates PC, Valparaiso, IN, Mark JonathanShean, Mark Philip Wine, Thomas S. McConville, OrrickHerrington & Sutcliffe LLP, Irvine, CA, Robert M. Isackson,Orrick, Herrington & Sutcliffe, New York, NY, for FujitsuLimited.
MEMORANDUM OPINION AND ORDER DENYINGPARTIES' RESPECTIVE REQUESTS FOR
JUDGMENT AS A MATTER OF LAW AND DENYINGFUJITSU LIMITED'S REQUEST FOR A NEW TRIAL
REGARDING FUJITSU LIMITED'S #681 PATENT
JAMES F. HOLDERMAN, Chief Judge.
*1 Counterclaimant Fujitsu Limited alleged in this lawsuitthat Tellabs Operations, Inc., Tellabs, Inc., and Tellabs NorthAmerica, Inc. (collectively “Tellabs”) infringed Claims 6, 7,
and 8 of Fujitsu Limited's U.S. Patent No. 7,227,681 (the“ ′681 Patent”) by making or selling Tellabs' Metro InputAmplifier Module (the “MIAM module”) product. Tellabs inresponse asserted that the ′681 Patent was invalid by reasonof anticipation and obviousness. At the close of a nine-dayjury trial, the jury returned a verdict on September 7, 2012 ofnon-infringement for each of the asserted claims, and upheldthe′681 Patent as unanticipated and non-obvious.
Pending before the court are “Fujitsu's Renewed Motion forJudgment as a Matter of Law that Tellabs Infringes Claims 6,7, and 8 of U.S. Patent No. 7,228,681, Notwithstanding theJury Verdict of Non–Infringement; or, Alternatively Motionfor a New Trial” (Case No. 09 C 4530, Dkt. No. 962) and“Tellabs, Inc.'s, Tellabs Operations, Inc.'s, and Tellabs NorthAmerica, Inc.'s Renewed Motion for Judgment as a Matterof Law that U.S. Patent No. 7,227,681 Is Invalid” (Case No.08 C 3379, Dkt. No. 566). For the reasons that follow below,both motions are denied.
BACKGROUND
The ′681 Patent issued on June 5, 2007, and is titled“Controller Which Controls a Variable Optical Attenuatorto Control the Power Level of a Wavelength–MultiplexedOptical Signal When the Number of Channels AreVaried.”(#681 Patent (Joint Ex.2000) at (54).) YasushiSugaya and Susumu Kinoshita are the named inventors on the
′681 Patent, and Fujitsu Limited is the assignee. (′681 Patentat (75), (73).)
The ′681 Patent “relates to a fiber optic communicationsystem which uses wavelength division multiplexing totransmit a wavelength-multiplexed optical signal.”(#681Patent, col. 1:33–35.) “Wavelength division multiplexing”is method of combining multiple channels of informationhaving different individual wavelengths into one wavelength-multiplexed optical signal. (See generally ′681 Patent, col.1:44–65.) In fiber optic communication systems usingwavelength division multiplexing, an optical amplifier isused “to amplify the wavelengthmultiplexed optical signaltraveling through [the] optical fiber.”(#681 Patent, col. 1:66–67; col. 2:1–3.) This amplification or increase in poweris known as “gain.” (Case No. 08 C 3379, Dkt. No. 234(“9/23/09 Tech. Tutorial Tr.”) at 66:21–25; Case No. 08 C3379, Dkt. No. 287 (“2/23/10 Tech. Tutorial Tr.”) at 450:5–6.)
Fujitsu Ltd. v. Tellabs Operations, Inc., Not Reported in F.Supp.2d (2013)
2013 WL 268607
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
As this court explained in its September 29, 2011 claimconstruction opinion:
The ′681 Patent is directed to the ability to control thegain of the optical amplifier depending on the number ofwavelength division multiplexed channels that are inputinto the amplifier. (2/23/10 Tech. Tutorial Tr. 466:22–25.) As the number of wavelength channels entering theamplifier from the network changes, the required gain alsochanges. (Id. at 470:11–24.)For example, if the numberof channels entering the amplifier decreases, less gain isneeded, and the amplifier would decrease the amount ofpump power. (Id.)
*2 Relatedly, each wavelength amplified in the opticalamplifier receives a different amount of gain dependingon the wavelength. (Id. at 472:3–473:16.)The ′681 Patentdiscloses introducing a loss element, such as a filter, thatwould equalize the gain across the wavelengths. (Id.)
Fujitsu Ltd. v. Tellabs Operations, Inc., 821 F.Supp.2d 1009,1054 (N.D.Ill.2011).
Fujitsu Limited asserted three claims of the ′681 Patent attrial: Claim 6, Claim 7, and Claim 8. The asserted claimsof the′681 Patent read as follows, with the court's claiminterpretations of the italicized terms inserted in brackets:
6.An apparatus comprising:
an optical amplifier which amplifies a wavelength divisionmultiplexed (WDM) optical signal having a variablenumber of channels associated with different wavelengths[the number of channels can change and each channel isassociated with a different wavelength] with a gain andoutputs the amplified WDM optical signal, the opticalamplifier including:
an optical attenuator [a device having variable opticaltransmissivity] which controls a level of the amplifiedWDM optical signal,
an optical filter making [which makes] 1 the gainsubstantially even [largely but not wholly even] withrespect to said different wavelengths, and
a controller which controls the gain the be approximatelyconstant [nearly constant or constant].
7.An apparatus as in claim 6, wherein the controllercontrols the gain to be approximately constant [nearlyconstant or constant] during variation of the numberof channels in the WDM optical signal [while thenumber of channels in the WDM optical signalchanges].
8.An apparatus as in claim 6, wherein an attenuationlevel of the optical attenuator [a device havingvariable optical transmissivity] is changed to controla level of the amplified WDM optical signal.
As stated above, the accused device in this case isTellabs' MIAM module product. Specifically, Fujitsu Limitedalleged that Tellabs' MIAM module product is an apparatuscomprising an “optical amplifier” as described in Claims6, 7, and 8 of the ′681 Patent. Relevant to the controllerelement of all three asserted claims, it is undisputed thatthe MIAM module product incorporates an optical gainblock manufactured by a company named RED–C OpticalNetworks, Ltd. (“RED–C”), and that RED–C also designedthe gain-control algorithm used by the optical gain block.
Fujitsu Limited presented several witnesses in its case-in-chief, including: Mr. Yasushi Sugaya, one of the inventorsof the ′681 Patent; Dr. Uri Ghera, the head of researchand development at RED–C; and Dr. Alan Willner, FujitsuLimited's expert witness. Mr. Sugaya's testimony focusedon the amplifier technology described by the ′681 Patent;Dr. Ghera's testimony focused on the components usedin, and the operation of, the MIAM module product;and Dr. Willner's testimony focused on general opticalamplifier principles and Dr. Willner's expert opinion thatTellabs' MIAM module product infringed the assertedclaims of the ′681 Patent. Fujitsu Limited also offeredinto evidence, among other exhibits, a document titled“Hardware Requirements Specification TELLABS 7100 E–OGB for Amplifier Modules,” setting forth Tellabs' hardwarespecifications for its optical amplifier products. (FujitsuEx.2012.)
*3 Tellabs denied that its MIAM module product infringedthe asserted claims of the ′681 Patent and further alleged thatthe ′681 Patent was invalid as both anticipated and obvious.Tellabs relied primarily on its expert witness, Dr. A. BruceBuckman, to support its theories of non-infringement andinvalidity. Tellabs also offered into evidence three items ofadmitted prior art in support of its invalidity claim. Withrespect to anticipation, Tellabs presented U.S. Patent No.6,055,092 (the “ ′092 Patent”), titled “Multi–Wavelength
Fujitsu Ltd. v. Tellabs Operations, Inc., Not Reported in F.Supp.2d (2013)
2013 WL 268607
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
Light Amplifier.” (Tellabs Ex. DX–134.) The ′092 Patentwas filed on May 28, 1996, and lists Mr. Sugaya as anamed inventor. ('092 Patent at [22], [75].) Fujitsu Limitedis the assignee of the ′092 Patent. ('092 Patent at [73].)With respect to obviousness, Tellabs presented an articlepublished in July of 1995 by the Institute of Electronics,Information and Communication Engineers, ConfigurationDesign of Multi–Wavelength Er–Doped Fiber Amplifier forWDM Transmission System, Technical Report of IEICEOCS95–96 (1995–07), written in part by Mr. Sugaya (the“July 1995 Sugaya Article”) (Tellabs Ex. DX–031), as well asU.S. Patent No. 5,083,874 (the “ ′874 Patent”), titled “OpticalRepeater and Optical Network Using the Same” and filed onApril 10, 1990 (Tellabs Ex. DX029 at [22] ).
During Fujitsu Limited's rebuttal case, Dr. Willner providedhis expert opinion that the ′681 Patent was not anticipated bythe ′092 Patent or rendered obvious by the July 1995 SugayaArticle in combination with the ′ 874 Patent.
The jury deliberated for three days before returning its verdictthat the ′ 681 Patent was not invalid and was not infringed.
Notwithstanding the jury's verdict, Fujitsu Limited requeststhat this court enter judgment as a matter of law that the
′681 Patent was infringed by Tellabs and, in the alternative,requests a new trial on the merits. Tellabs requests that thiscourt enter judgment as a matter of law that the ′681 Patent isinvalid as anticipated or obvious.
LEGAL STANDARD
Judgment as a matter of law is appropriate as to a particularissue when “a reasonable jury would not have a legallysufficient evidentiary basis to find for the party on thatissue.”Fed.R.Civ.P. 50(a).“The district court may not resolveany conflicts in the testimony nor weigh the evidence, exceptto the extent of determining whether substantial evidencecould support a jury verdict: ‘[A] mere scintilla of evidencewill not suffice.’ “ Lane v. Hardee's Food Sys., Inc., 184F.3d 705, 707 (7th Cir.1999) (quoting La Montagne v.American Convenience Products, Inc., 750 F.2d 1405, 1410
(7th Cir.1984)). 2 In deciding a motion for judgment as amatter of law, “the court should review all of the evidencein the record” and “should give credence to the evidencefavoring the nonmovant as well as that evidence supportingthe moving party that is uncontradicted and unimpeached.”Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133,
151, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). A jury's verdictwill be overturned only if it is determined that no rationaljury could have found for the non-moving party.Waite v.Bd. of Trustees of Ill. Cmty. Coll. Dist. No. 508, 408 F.3d339, 343 (7th Cir.2005); see also Lebow v. Am. Trans Air,Inc., 86 F.3d 661, 664 (7th Cir.1996) (judgment as a matterof law appropriate “only if there can be but one conclusionfrom evidence and inferences reasonably drawn therefrom”)(internal quotation marks and citation omitted).
*4 Motions for new trials under Rule 59(a) are addressedto the discretion of the district court, and the “districtcourt must determine whether the verdict was against themanifest weight of the evidence, the damages are excessive,or if for other reasons the trial was not fair to the movingparty.”Frizzell v. Szabo, 647 F.3d 698, 702 (7th Cir.2011).The jury's verdict should be set aside as contrary to themanifest weight of the evidence only if “no rational jury”could have rendered the verdict. Moore v. Tuleja, 546 F.3d423, 427 (7th Cir.2008).
ANALYSIS
The first order of business is to determine whether FujitsuLimited has properly presented its motion. Tellabs argues thatFujitsu Limited's motion should not be considered by thiscourt because it is untimely. Fujitsu Limited made an oralRule 50(a) motion at the close of Tellabs' case-in-chief onSeptember 4, 2012. Fujitsu Limited also requested, withoutobjection by Tellabs, that it be allowed until September10, 2012 to file an accompanying written motion, and thisrequest was granted. On September 5, 2012, Tellabs was alsogiven until September 10, 2012 to file its written motion forjudgment as a matter of law. On September 7, 2012 the juryreturned its verdict. At that time Fujitsu Limited was granted,without objection, until October 5, 2012, to file its writtenmotion for judgment as a matter of law, along with its othermotions for post-trial relief. Fujitsu Limited therefore did notsubmit a written motion for judgment as a matter of law untilOctober 5, 2012, twenty-eight days after the jury returned itsverdict.
Although Fujitsu Limited's September 4, 2012 oral motiondid not “specify the judgment sought and the law and factsthat entitle the movant to the judgment,”Fed.R.Civ.P. 50(a)(2), and Fujitsu Limited's Octover 5, 2012 written motion wasnot filed “before the case [was] submitted to the jury,”id.,Tellabs made no objection at the time Fujitsu Limited sought
Fujitsu Ltd. v. Tellabs Operations, Inc., Not Reported in F.Supp.2d (2013)
2013 WL 268607
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
an extension, and is not prejudiced by Fujitsu Limited's latefiling. See Leader Tech, Inc. v. Facebook, Inc., 770 F.Supp.2d686, 715 (D.Del.2011) ( “to the extent there is any doubtas to whether Leader's oral pre-verdict Rule 50(a) motionwas sufficiently specific, those doubts are erased by Leader'ssubsequent filing of its written Rule 50(a) motion, whichwas filed consistent with the timing allowed by the Court”).Fujitsu Limited's renewed motion for judgment as a matter oflaw is properly before this court, and the court will addressthe merits of the parties' respective motions.
1. Fujitsu Limited's Renewed Motion for Judgment as aMatter of Law and Alternative Motion for a New TrialBoth parties agree that the success of Fujitsu Limited'sinfringement contentions at trial depended on whether FujitsuLimited proved by a preponderance of the evidence thatTellabs' MIAM module product includes “a controller whichcontrols the gain to be approximately constant.”(SeeCase No.09 C 4530, Dkt. No. 962 (“Fujitsu's JMOL”) at 3 (“Thesole missing claim element disputed by Dr. Buckman wasthe ‘controller which controls the gain to be approximatelyconstant.’ ”); see alsoCase No. 09 C 4530, Dkt. No. 974(“Tellabs' Resp.” at 9 (“Specifically, the Tellabs Defendantsand Dr. Buckman established that the accused MIAM moduledoes not include the controller required by each of theasserted claims....”)). In light of the substantial evidence ofnon-infringement presented to the jury in this case, FujitsuLimited's motion for judgment as a matter of law on thequestion of infringement is denied.
*5 As recognized by Fujitsu Limited, Dr. Buckman testifiedat trial that a person of ordinary skill in the art wouldunderstand Claim 6 to require an optical amplifier to holdthe gain approximately constant before, during, and after achange in the number of channels. (Fujitsu's JMOL at 10
(citing Trial Tr. 1049:23–1052:15)) . 3 Dr. Buckman furthertestified that the MIAM module product allowed for a ± 0.8dB “maximum excursion” in the gain during a change in thenumber of channels, which was “a little over three times”the “steady state gain error band” allowed when the numberof channels was not changing. (Trial Tr. at 834:13–19; seegenerally Trial Tr. 822–834.)
Dr. Buckman illustrated the MIAM module product'sresponse during a change in the number of channelsusing Fujitsu Exhibit 2012—a Tellabs-authored technicalspecification document originally introduced into evidenceat trial by Fujitsu Limited. (See Fujitsu Ex.2012 at 2012–14
(Fig.4) & 2012–15 (Table 1)). Dr. Buckman concluded fromthis evidence that “the gain is not kept constant” in the MIAMmodule product during a change in the number of channels.(Trial Tr. 836:7–17). No other evidence of the MIAM moduleproduct's response characteristics during an actual change inthe number of channels was introduced by either party at trial.
Fujitsu Limited argues that it is nevertheless entitled tojudgment as a matter of law on its infringement claims,because “Dr. Buckman's theory did not withstand cross-examination.”(Fujitsu's JMOL at 13.) Fujitsu Limited'sargument rests on (1) Dr. Buckman's testimony on crossexamination that the ± 0.8 dB maximum excursion in thegain during a change in the number of channels representsthe MIAM module product's reaction to a “fiber cut event”in which all channels but one are suddenly dropped, andDr. Buckman's follow-up testimony that he “would expectthat [the excursion] wouldn't be as high” if fewer channelswere dropped in the “normal” course of operation (Trial Tr.at 1088:4–1092:10; see also Fujitsu Ex.2012 at 2012–13 &2012–14); (2) Dr. Buckman's testimony on cross examinationthat the ± 0.8 dB maximum excursion in the gain during achange in the number of channels is only 1/15th the size of astandard 12 dB signal and lasts for only 1/5,000th of a second(Trial Tr. at 1092:11–1096:20; 1099:24–1102:3); and (3) Dr.Buckman's testimony on cross examination acknowledgingthat Tellabs' specifications state that the design function of theAutomatic Gain Control (“AGC”) circuit in Tellabs' opticalamplifiers is to “ensure[ ] constant gain of the amplifier duringquick change in the power level of the DWDM signal” (TrialTr. at 1102:17–1104–18; see also Fujitsu Ex.2012 at 2012–14 (Fig.4) & 2012–28 (Section 5.10.2)).
While Fujitsu Limited's cross examination of Dr. Buckman'stestimony may have been damaging, deciding what weightto give Dr. Buckman's testimony is a task for the jury. SeeE.E.O.C. v. Mgmt. Hospitality of Racine, Inc., 666 F.3d 422(7th Cir.2012) (“Credibility determinations, the weighing ofthe evidence, and the drawing of legitimate inferences fromthe facts are within the province of the jury.”) (quoting Boganv. City of Chicago, 644 F.3d 563, 572 (7th Cir.2011)). Thiscourt may not, and will not, substitute its own assessment ofDr. Buckman's testimony in place of the jury's.
*6 The court also rejects Fujitsu Limited's argument that Dr.Buckman's testimony was impermissibly based on “unusualconditions.” (Fujitsu's JMOL at 15 (citing Hilgraeve Corp.v. Symantec Corp., 265 F.3d 1336, 1343 (Fed.Cir.2001)).)Dr. Buckman's opinion was based on an anticipated “fiber
Fujitsu Ltd. v. Tellabs Operations, Inc., Not Reported in F.Supp.2d (2013)
2013 WL 268607
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5
cut event” specifically addressed in Tellabs' specifications,and was in that sense clearly “relevant to the infringementanalysis” regarding the MIAM module product's standardoperation under those anticipated conditions. HilgraeveCorp., 265 F.3d at 1343.
Fujitsu Limited further relies on Dr. Ghera's testimony thatthe RED–C optical gain block component was designedto react “fast enough” to “keep the gain constant” duringa change in the number of channels, (Fujitsu's JMOL,Ex. 2 (“Ghera Dep. Tr.”) at 162:1–17), arguing that this“uncontroverted factual testimony” demonstrates that theMIAM module product actually keeps the gain constantduring a change in the number of channels. (Fujitsu's JMOL at19.) A reasonable jury, however, could have rejected FujitsuLimited's interpretation of Dr. Ghera's testimony in favorof Dr. Buckman's interpretation of Dr. Ghera's testimony—that Dr. Ghera was addressing “the speed with which thecontroller corrects the gain when something happens, such asa change in the number of channels which wants to take it outof its range where it's supposed to be constant.”(Trial Tr. at1152:2–7 (emphasis added).)
The court need not address Fujitsu Limited's additionalarguments regarding Tellabs' alternative theories of non-infringement. Based on Dr. Buckman's testimony as to the± 0.8 dB maximum excursion in the gain during a changein the number of channels, the court finds that a legallysufficient evidentiary basis was presented at the trial fora reasonable jury to conclude that Tellabs' MIAM moduleproduct does not include “a controller which controls thegain to be approximately constant” during a change in thenumber of channels, as required by independent Claim 6 anddependent Claims 7 and 8. Fujitsu Limited's renewed motionfor judgment as a matter of law is therefore denied.
Fujitsu Limited argues, in the alternative, for a new trial on theissue of infringement. (Fujitsu's JMOL at 25.) This request fora new trial is denied. As discussed above, Tellabs introducedevidence at trail that, in response to a change in the numberof channels, the gain supplied by the MIAM module productwould deviate from the desired value, resulting in a ± 0.8 dB“maximum excursion” in the gain before the control systemsof the MIAM module product regulated the gain to the desiredsteady state value. This ± 0.8 dB excursion directly relates tothe patent element requiring that a controller control the gainto be approximately constant. A rational jury could have, inlight of this evidence and the other evidence presented at trial,determined that the MIAM module product did not maintain
an approximately constant gain as required in Claims 6, 7, and8 of the ′681 Patent. The jury's determination is not against themanifest weight of the evidence, and Fujitsu Limited's requestfor a new trial is denied.
2. Tellabs' Motion for Judgment as a Matter of Law*7 The court also rejects Tellabs' contention that a judgment
of invalidity is required as a matter of law for Claims 6, 7, and8 of the ′681 Patent. As noted above, Tellabs argued to thejury that the ′681 Patent is anticipated by the ′092 Patent. Insupport of its anticipation argument, in relevant part, Tellabsintroduced evidence that the ′092 Patent inherently discloseda variable channel count environment, as required by Claims6, 7, and 8 of the ′681 Patent. (See Claim 6 (′681 Patent,col. 22:36–39) (describing “an optical amplifier ... havinga variable number of channels associated with differentwavelengths [the number of channels can change and eachchannel is associated with a different wavelength]”) (asmodified by 9/29/2011 claim construction).) Specifically,Dr. Buckman testified, “[I]t's my opinion based on commonsense that the number of channels in a [wavelength divisionmultiplexed] optical system is going to inherently vary,”because the “laser source[s] somewhere in the system ...eventually and randomly, probably unexpected, are going todie. They're going to quit operating and when they do that, thatchannel's gone. The number of channels has changed.”(TrialTr. at 880:19–881:14.) Dr. Buckman further testified that aperson of ordinary skill in the art, as defined by the court,would understand that any component is “eventually goingto fail ... and, in the case of a laser, stop producing thelight it's supposed to produce which would cause the numberof channels on a particular communications line to changewhen that happens.”(Trial Tr. at 882:20–883:2.) ThroughDr. Buckman, Tellabs also introduced statements made byPTO examiner Deandra Hughes during the prosecution of apatent related to the ′ 681 Patent, in which Hughes statedin an official Office Action that with respect to the ′092Patent “the number of channels is inherently variable becausechannels are inherently dropped.”(DX–025–3; see generallyTrail Tr. 918:19–923:21.) Based on this evidence, Tellabsargues it proved at trial that “a person of ordinary skill inthe art would have known that an optical fiber transmissionsystem inherently adds and drops wavelength channels fromthe wavelength division multiplexed (WDM) optical signal ata node in the system.”(SeeDkt. No. 566 (“Tellabs' JMOL”)at 5 .)
In response, Fujitsu Limited argues that the trial testimonyof Mr. Sugaya, Dr. Willner, and Dr. Buckman suggests
Fujitsu Ltd. v. Tellabs Operations, Inc., Not Reported in F.Supp.2d (2013)
2013 WL 268607
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 6
“a consensus ... that the optical amplifier disclosed in the
′092 Patent... cannot work in a variable channel countenvironment.”(Dkt. No. 568 (“Fujitsu's Resp.”) at 21.) Asan inventor of both the ′681 Patent and the ′092 Patent,Mr. Sugaya testified that the optical amplifier disclosed inthe ′092 Patent “operates in an environment in which thenumber of channels doesn't change.”(Trial Tr. at 613:17–20.)Mr. Sugaya further testified that if the number of channelswere to change, “the amount of power per channel drops[with respect to the optical amplifier disclosed in the ′092Patent] ... mean[ing] that the quality of communicationswill be degraded, and so problems like not being ableto communicate will occur.”(Trial Tr. at 628:23–629:3(referring to Fujitsu Illustrative Ex. 2614).) Specifically,Mr. Sugaya testified that in a changing channel countenvironment, the attenuator in the ′092 Patent changes,causing “the amplifier overall gain to change.”(Trial Tr.at 625:8–11; 629:25–630:3.) Mr. Sugaya testified that theinvention disclosed in the ′681 Patent was designed to addressthese concerns. (Trial Tr. at 630:1–4.) Similarly, Dr. Willnertestified that “[a] fixed-channel count amplifier, such as the
′092 patent, would erroneously change the gain, adjust theattenuation of the variable optical attenuator when the numberof channels is changing.”(Trial Tr. at 1219:13–21.) On crossexamination, Dr. Buckman testified that there was “[n]oexplicit disclosure of variable channel count” in the ′092Patent, and he agreed with counsel's statement that the ′092Patent was “not designed to differentiate for input powerfluctuations caused by changes in channel count.”(Trial Tr. at1123:21–23; 1129:19–25.) Dr. Buckman further testified that“[t]he gain across the entire amplifier in the ′092 Patent willchange when the number of channels changes.”(Trial Tr. at1167:4–9.)
*8 As stated earlier in this memorandum opinion, it is not forthe court in ruling on post-trial motions to resolve conflictsin trial testimony or weigh the evidence. In accordancewith Rule 50(a), the court finds that a reasonable juryconsidering the testimony of Mr. Sugaya, Dr. Willner, andDr. Buckman had a legally sufficient evidentiary basis toconclude that the ′092 Patent did not anticipate the assertedclaims of the ′681 Patent, because the ′092 Patent did notdisclose an optical amplifier “having a variable number ofchannels associated with different wavelengths,” includinga component that “controls the gain to be approximatelyconstant,” as required by the asserted claims of the ′681Patent. In light of this finding, the court need not addressTellabs' additional arguments regarding anticipation by the ′092 Patent.
Finally, the court addresses Tellabs' request for judgmentthat the ′681 Patent is invalid as a matter of law dueto obviousness. As presented at trial, Tellabs' obviousnessargument focused on the combination of the July 1995 SugayaArticle and the ′874 Patent. Specifically, as summarizedin Tellabs' pending motion, Tellabs took the position that“[e]very element of [the asserted claims], other than theoptical filter which makes the gain substantially even withrespect to said different wavelengths, can be found in theJuly 1995 Sugaya Article” and that “one of skill in the artwould have been motivated to employ the gain-flatteningfilter from the ′874 Patent with the July 1995 SugayaArticle in order to achieve a gain that is flat with respect towavelength.”(Tellabs' JMOL at 21, 30.)
As with the ′092 Patent, the court's analysis of Tellabs'argument focuses on whether the July 1995 Sugaya Articledisclosed an optical amplifier “having a variable number ofchannels associated with different wavelengths,” includinga component that “controls the gain to be approximatelyconstant,” as required by the asserted claims of the ′681Patent. At trial, Tellabs primarily relied on three pieces ofevidence to demonstrate that the optical amplifier describedin the July 1995 Sugaya Article controls the gain tobe approximately constant in a changing channel countenvironment. First, Dr. Buckman identified Figures 1 and10 from the July 1995 Sugaya Article as “two differentfigures showing [a] different number of channels.”(TrialTr. at 940:17–18; see generally 940:7–942:22; see alsoDX–031 at TLIL_0003234 and TLIL_0003238 (English:TLIL_0003241 and TLIL_0003253).) In this context, Dr.Buckman further noted the authors' statement that the opticalamplifier disclosed in the July 1995 Sugaya Article “candeal with input changes” by “optimizing the amplificationconditions for the sixteen (16) wave amplification ... same asthe four (4) wave amplification.”(DX–031 at TLIL_0003238(English: TLIL_ 0003253); see also Trial Tr. at 942:19–22.) Second, Tellabs introduced Section 3.1 of the July1995 Sugaya Article, which refers to the optical amplifierbeing “used for a WDM network that includes opticalcross connect (OXC) systems.”(DX–031 at TLIL_0003236(English: TLIL_0003245)). Dr. Buckman testified that “[o]nepurpose of an optical cross-connect system is to switchchannels in and out of a particular optical fiber link, to changethe number of channels.”(Trial Tr. at 947:16–20.) Similarly,Mr. Sugaya testified that an optical cross-connect system isused “for switching the optical path of light,” and Mr. Sugayaagreed with counsel that the use of an optical cross-connect
Fujitsu Ltd. v. Tellabs Operations, Inc., Not Reported in F.Supp.2d (2013)
2013 WL 268607
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 7
system “can result in adding or dropping channels.”(Trial Tr.at 741:3–11.) Finally, Dr. Buckman testified that the numberof channels in the optical amplifier disclosed by the July 1995Sugaya Article could vary, because “the lasers which supplythese different wavelengths ... can die at any time and thenyou've got a change in the number of channels.”(Trial Tr. at943:21–944:3.)
*9 Fujitsu Limited takes the position that a reasonable jurycould have concluded from the evidence at trial that the July1995 Sugaya Article did not disclose an optical amplifierthat controls the gain to be approximately constant in achanging channel count environment. (See Fujitsu's Resp.at 29 (“[I]n the face of a varying number of channels, thecontroller disclosed in the July 1995 Sugaya Article suffersfrom the same shortcomings as does the ′ 092 Patent.”); seealso id. at 33 (“the consensus among the witnesses [was]that the controller in the July 1995 Sugaya Article changedthe gain rather than kept the gain constant with respect toa varying number of channels”).) As with the ′092 Patent,Mr. Sugaya testified that the optical amplifier disclosedin the July 1995 Sugaya Article was “directed at a fixednumber of channels” (Trial Tr. at 731:20–21) and Dr. Willnertestified that the optical amplifier disclosed in the July 1995Sugaya Article could be described as “[a] fixed-channel countamplifier” (Trial Tr. at 1210:12–14). Dr. Willner furtheropined that “[w]hen the number of channels changes, [theamplifier disclosed in the July 1995 Sugaya Article] would—erroneously would make a mistake and it would change thegain.”(Trial Tr. at 1210:18–20; see also Trial Tr. at 1217:1–3(“These amplifiers in the July 1995 article as well as the ′ 092patent, if there is a change in the number of channels, it willchange the gain erroneously.”).) Likewise, in response to aquestion regarding the optical amplifier disclosed in the July1995 Sugaya Article, Mr. Sugaya testified that “[w]hen theenvironment is one of which the number of channels changes,the gain changes.”(Trial Tr. at 739:12–13.) Dr. Buckmantestified that the optical amplifier disclosed in the July 1995Sugaya Article did not include circuitry that would keep thegain across the entire optical amplifier constant if there was achange in the channel count. (Trial Tr. at 1168:10–16 (“Q: ...there is no circuitry in the Sugaya July 1995 reference whichallows the gain across the entire optical amplifier to remainconstant if there's a change in channel count, is there? A: ...There's not circuitry provided that will keep that particularoverall gain constant.”).)
In response to Tellabs' reliance on Figures 1 and 10 ofthe July 1995 Sugaya Article, Fujitsu Limited notes Dr.
Buckman's concession that “[t]here was no attempt madein the Sugaya reference July 1995 marked as Exhibit DX31 to operate this system in an environment where channelcounts actually changed while the operational—while theamplifier was operating” and Dr. Buckman's understandingthat the authors instead physically “changed filters in orderto have one which would accommodate this wider range ofwavelengths corresponding to the use of 16 channels.”(TrialTr. at 1128:22–1129:1; 1128:13–16.) In response to Tellabs'reliance on Section 3.1's reference to optical cross connectsystems, Fujitsu Limited notes that Mr. Sugaya, Dr. Willner,and Dr. Buckman all testified that optical cross connectsystems do not necessarily indicate a change in the overallchannel count. (See Trial Tr. at 741:3–7 (Sugaya) (an opticalcross connect system is “for switching the optical path oflight”); Trial Tr. at 1214:7–8 (Willner) (“although an [opticalcross connect] might change the number of channels, manytimes it doesn't”); Trial Tr. at 1169:1–3 (Buckman) (“Q. Isn'tit true that cross-connects can be used to switch signals ratherthan drop or add them? A. They can be used for both.”).)
*10 After considering the testimony and evidence presentedat trial, a reasonable jury could have concluded that the July1995 Sugaya Article did not disclose an optical amplifier“having a variable number of channels associated withdifferent wavelengths,” including a component that “controlsthe gain to be approximately constant,” as required by theasserted claims of the ′681 Patent. Because Tellabs does notargue that this missing claim element is supplied by eitherthe ′874 Patent or by the general knowledge of a personof ordinary skill in the art, a reasonable jury could haveconcluded that Tellabs did not meet its burden of establishingby clear and convincing evidence that the July 1995 SugayaArticle and the ′874 Patent in combination rendered theasserted claims of the ′681 Patent obvious.
CONCLUSION
For the reasons set forth above, “Fujitsu's Renewed Motionfor Judgment as a Matter of Law that Tellabs Infringes Claims6, 7, and 8 of U.S. Patent No. 7,228,681, Notwithstanding theJury Verdict of Non–Infringement; or, Alternatively Motionfor a New Trial” (Case No. 09 C 4530, Dkt. No. 962) and“Tellabs, Inc.'s, Tellabs Operations, Inc.'s, and Tellabs NorthAmerica, Inc.'s Renewed Motion for Judgment as a Matter ofLaw that U.S. Patent No. 7,227,681 Is Invalid” (Case No. 08C 3379, Dkt. No. 566) are both denied in their entirety.
Fujitsu Ltd. v. Tellabs Operations, Inc., Not Reported in F.Supp.2d (2013)
2013 WL 268607
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 8
Tellabs' original “Motion for Judgment as a Matter of Lawthat U .S. Patent No. 7,227,681 Is Invalid” (Case No. 08 C3379, Dkt. No. 557) and Tellabs' “Motion for Judgment as aMatter of Law Based on Fujitsu Limited's Failure to Prove
Infringement of Claims 6–8” (Case No. 08 C 3379, Dkt. Nos.547, 552, 555 (renewed)) are denied as moot.
Footnotes
1 Pursuant to a Certificate of Correction issued by the PTO on October 13, 2007, the word “makes” in Claim 6 was changed to
“making.” (#681 Patent, col. 22:43.)
2 Although this is a patent case, Seventh Circuit law governs the court's analysis as to the parties' post-trial motions. See Pregis Corp.
v. Kappos, 700 F.3d 1348, 1353 (Fed.Cir.2012) (reviewing “the grant or denial of a motion for judgment as a matter of law under
regional circuit law”); Hewlett–Packard Co. v. Mustek Sys., Inc., 340 F.3d 1314, 1323 (Fed.Cir.2003) (“[o]n motions for a new trial
we apply the law of the regional circuit”).
3 Dr. Buckman also testified that dependent Claim 7 recited “a more limited time period or particular time period” than independent
Claim 6, but that “the time period where the controller is supposed to keep the gain constant always at least includes, and most of
the time surrounds on either side, the period of time where the number of channels is actually changing.”(Trial Tr. at 836:21–22;
839:11–14.) Fujitsu Limited appears to agree with Dr. Buckman's testimony on this point, asserting in its pending motion that the
gain in Claim 6 is held constant “for an interval related to a variation in the number of channels in the optical signal input to the
MIAM optical amplifier.”(Fujitsu's JMOL at 10 (citing Dr. Buckman's testimony in support).) Neither party distinguishes dependent
Claims 7 and 8 from independent Claim 6 in this regard, and the court's analysis therefore applies equally to all three asserted claims
of the #681 Patent.
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
McMillan v. Stoll, Not Reported in F.Supp.2d (2012)
2012 WL 707117
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
2012 WL 707117Only the Westlaw citation is currently available.
United States District Court,N.D. Illinois,
Eastern Division.
Antoine McMILLAN, Plaintiff,v.
Officer STOLL, Defendant.
No. 09 C 1622. | March 5, 2012.
Attorneys and Law Firms
Jonathan M. Boulahanis, Andrew M. Hale & Associates,Chicago, IL.
DEFENDANT STOLL'S MOTION TOBAR PLAINTIFF'S ILLEGAL SEARCH
AND SEIZURE CLAIM, OR IN THEALTERNATIVE, GRANT JUDGMENT ASA MATTER OF LAW ON THAT CLAIM
NORGLE, District Judge.
*1 Defendant Chicago Police Officer Kevin Stoll(“Defendant”), by his undersigned attorney, respectfullyrequests that this Honorable Court bar Plaintiff fromsubmitting his unlawful search/seizure claim to the jury, or,in the alternative, grant him judgment as a matter of law on
the claim 1 .
Legal Standard
The Federal Rules of Civil Procedure provide for a districtcourt to decide issues during a jury trial and grant judgmentas a matter of law. Under Rule 50 of the Federal Rules ofCivil Procedure, “[i]f a party has been fully heard on an issueduring a jury trial and the court finds that a reasonable jurywould not have a legally sufficient evidentiary basis to findfor the party on that issue, the court may: resolve the issueagainst the party ...”Fed.R.Civ.P. 50(A). The Seventh Circuithas held the standard to be as follows:
Rule 50(a) of the Federal Rules of Civil Procedure allowsa district court to enter judgment against a party whohas been fully heard on an issue during a jury trial if
“a reasonable jury would not have a legally sufficientevidentiary basis to find for the party on that issue.”Thestringent standard for a judgment as a matter of law underFederal Rule of Civil Procedure 50 is the same whether theverdict under review was for the plaintiff or the defendant,and regardless of the underlying legal issues of the case.Under Rule 50, both the district court and an appellatecourt must construe the facts strictly in favor of the partythat prevailed at trial. See Tart v. Illinois Power Co., 366F.3d 461, 464 (7th Cir.2004), citing Reeves v. SandersonPlumbing Products, Inc., 530 U.S. 133, 150–51, 120 S.Ct.2097, 147 L.Ed.2d 105 (2000).
Schandelmeier v. Bartels v. Chicago ParkDist., 634 F.3d 372,376 (7th Cir.2011).
1. Plaintiff Never Pled An Illegal Search and SeizureClaim.Prior to trial, Defendants filed a motion in limine seekingto bar Plaintiff's illegal search and seizure claim because itwas never pled. (See Dkt. No. 90, Nov. 30, 2011, Motion InLimine No. 5). Plaintiff's pro-se complaint was the operativepleading in this case. (See Dkt. No. 6, Apr. 6, 2009). Evenafter being appointed, Plaintiff's counsel never amendedthe complaint, and never attempted to add this claim. Thatclaim is time-barred, and Plaintiff should not be permitted toamend his pleading at this stage of litigation. SeeFed.R.Civ.P.15(a)(2). Defendant Stoll would be prejudiced if this claimis submitted to the jury because he was never given theopportunity to develop evidence such as whether Plaintiff hadany expectation of privacy, ownership, or residency interestin the premises. Therefore, this Court should not allow theillegal search and seizure claim to be presented to the jury.
2. Plaintiff Is Collaterally Estopped From Asserting AnIllegal Search and Seizure Claim.On August 27, 2008, Plaintiff brought a motion to quash hisarrest and to suppress evidence. (See Motion To SuppressTranscript of Aug. 27, 2008, Judge Marjorie Laws, attachedhereto as Exhibit A). Judge Laws specifically stated theissues she was determining at that motion, which includedthe legality of the alleged seizure of McMillan in his home.(See Ex. A at 26–28). Judge Laws determined at that motionthat McMillan voluntarily stepped outside of his apartment,and was placed under arrest. Id. Plaintiff, who was thecriminal defendant at the time, never challenged this finding,nor did he present any evidence to rebut that finding atthe motion hearing. Id. at 27.Judge Laws thereby denied
McMillan v. Stoll, Not Reported in F.Supp.2d (2012)
2012 WL 707117
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Plaintiff's motion to suppress. Id. at 28.After that motion tosuppress, Plaintiff pled guilty to the robbery for which he wascharged. (See Certified Statement of Conviction, attachedhereto as Exhibit B). Plaintiff never appealed his plea ofguilty.
*2 Collateral estoppel can be invoked against a § 1983claimant to bar relitigation of his Fourth Amendmentsearch and seizure claim decided against him in a criminalsuppression hearing. Allen v. McCurry, 449 U.S. 90, 104–05, 101 S.Ct. 411, 420, 66 L.Ed.2d 308 (1980).“[T]heapplication of the collateral estoppel doctrine to § 1983claims turns on whether the “traditional” four collateralestoppel requirements have been met: i.e., the issue soughtto be precluded must be the same as that involved in theprior judicial proceeding; the issue was litigated in the prioraction; the issue was in fact actually determined in the priorproceeding; and the determination of that issue was necessaryto support the judgment in the prior proceeding.”Guenther v.Homgreen, 738 F.2d 879, 883–84 (7th Cir.1984). The rulinghas preclusive effect when there is a final judgment on themerits, such as a judgment of conviction. Best v. City ofPortland, 554 F.3d 698, 701 (7th Cir.2009).
In this case, Plaintiff attacked the search and seizure whenhe brought a motion to quash the arrest and suppressevidence in August 2008. That motion was denied, andJudge Laws specifically ruled on the issue of McMillan'sseizure. McMillan thereafter pled guilty and never appealed.Therefore, he is collaterally estopped from bringing this issuein front of the jury.
3. The Evidence, As It Came In, Entitles Detective StollTo Judgment As A Matter of Law.The evidence, as it came in in a light most favorable toPlaintiff is as follows: (1) On April 6, 2008, DefendantStoll had reason to believe that McMillan was an activeparticipant in a robbery that occurred on March 18, 2008;(2) Detective Stoll has received information from McMillan'sco-offender that he might be armed; (3) Detective Stollfound information that McMillan might be located at 7247S. Union; (4) Detective Stoll entered the apartment buildingfrom the outside; (5) When Detective Stoll went upstairs, theMcMillan apartment door was open; (6) Detective Stoll askedfor Kevin McMillan and Antoine McMillan made himselfvisible; (7) Detective Stoll entered the McMillan residencein the dining room; (8) Detective Stoll put McMillan inhandcuffs and exited the apartment; (8) no search wasconducted on the premises.
A warrantless entry into a private home constitutes asearch and is presumptively unreasonable under the FourthAmendment. Payton v. New York, 445 U.S. 573, 585–86, 100S.Ct. 1371, 63 L.Ed.2d 639 (1980). However, a warrantlesssearch is permissible “when police have a reasonable beliefthat exigent circumstances require immediate action and thereis no time to secure a warrant.”United States v. Lenoir, 318F.3d 725, 730 (7th Cir.2003). Exigent circumstances exist“when the police reasonably fear for the safety of someoneinside the premises.”United States v. Jenkins, 329 F.3d 579,581 (7th Cir.2003).
Further, when a person knowingly exposes him or herselfto the public, even in his own home or office, he or she isnot entitled to Fourth Amendment protection. Katz v. UnitedStates, 389 U.S. 347, 351, 88 S.Ct. 507, 19 L.Ed.2d 576(1967); see United States v. Santana, 427 U.S. 38, 96 S.Ct.2406, 49 L.Ed.2d 300 (1976) (Santana, who exposed herselfto the police, was properly arrested upon probable cause); seealso United States v. Sewell, 942 F.2d 1209 (7th Cir.1991)(“A person has no expectation of privacy when he knowinglyexposes himself to the public, even in his own house oroffice ...”).
*3 In this case, as the evidence came in, Detective Stoll isentitled to judgment as a matter of law for two independentreasons. First, Detective Stoll was armed with exigentcircumstances to make a warrantless entry. Detective Stolltestified that he had reason to believe that McMillan was anoffender in a strong-arm robbery, a serious felony. DetectiveStoll testified that the co-offender, Timothy McClinton gavehim reason to believe that McMillan was armed. Once Stollverified that McMillan was in the home, a reasonable officerwould fear for his own safety and the safety of others in thehome. Therefore, entry (which is disputed) was proper.
Second, Plaintiff exposed himself to Detective Stoll andhad no expectation of privacy. Stoll testified that he sawMcMillan through the doorway. There was no testimonyto rebut that. McMillan testified that Stoll came throughthe door, directly towards him. McMillan testified thatStoll immediately handcuffed him and left. Therefore, underKatz and Sewell McMillan is not protected by the FourthAmendment.
WHEREFORE, Defendant Stoll respectfully requests thatthis Honorable Court enter an order barring Plaintiff's searchand seizure claim from going to the jury, or in the alternative,
McMillan v. Stoll, Not Reported in F.Supp.2d (2012)
2012 WL 707117
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
granting him judgment as a matter of law under Rule 50 ofthe Federal Rules of Civil Procedure.
Footnotes
1 Defendant Stoll will also be making an oral Rule 50 motion as to the excessive force claim.
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
