Free Transcript - District Court of Delaware - Delaware

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BEFORE:

IN THE UNITED STATES DISTRICT COURT IN AND FOR THE DISTRICT OF DELAWARE LINEAR TECHNOLOGY CORPORATION, : : Plaintiff, : : v. : : MONOLITHIC POWER SYSTEMS, : INC., : : Defendant. : -

Civil Action

No. 06-476-GMS

- - Wilmington, Delaware Friday, May 23, 2008 9:55 a.m. Conference - - HONORABLE GREGORY M. SLEET, Chief Judge

APPEARANCES: KAREN JACOBS LOUDEN, ESQ., and JAMES WALTER PARRETT, JR., ESQ. Morris, Nichols, Arsht & Tunnell -andJOEL M. FREED, ESQ., MATTHEW CUNNINGHAM, ESQ., and JIMMY SHIN, ESQ. McDermott Will & Emery LLP (Washington, D.C. and Silicon Valley, CA) Counsel for Plaintiff

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APPEARANCES: RICHARD L. HORWITZ, ESQ. Potter Anderson & Corroon LLP -andMARK A. FLAGEL, ESQ., DEAN G. DUNLAVEY, ESQ., and DAVID McKONE, ESQ. Latham & Watkins (Chicago, IL) -andCLAUDE M. STERN, ESQ., ALLISON E. MONAHAN, ESQ., and ALAN BLUM, ESQ. Quinn Emanuel (Silicon Valley, CA and New York, N.Y.) Counsel for Monolithic

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Good morning. -

(Counsel respond "Good morning.") THE COURT: Counsel, this is an office

conference, so, please, take your seats. I noticed that on the order, in the opinion just issued, it is titled "Memorandum," but we have changed that. Plaintiffs here? MS. JACOBS LOUDEN: Yes, Your Honor. Hello.

Karen Jacobs Louden from Morris Nichols. colleague James Parrett.

I am here with my

From McDermott, Will & Emery we

have Joel Freed, Matthew Cunningham and Jimmy Shin. MR. HORWITZ: Potter Anderson. Your Honor, Rich Horwitz from

With me today from Latham & Watkins are

Mark Flagel and Dean Dunlavey, And from Quinn Emanuel Claude

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Stern & Alan Blum. In the second table, Allison Monahan from Quinn Emanuel, and David McKone from Latham & Watkins. our client back behind the Court, Soria Chang. THE COURT: Good morning. And from

We are going to try to get them to turn the heat off. Sorry for the belated issuance of the opinion. I wanted to give you a chance, I hope you have had a chance to at least read it, if not digest it, at least read it and to at least give it some thought. If not, also, I don't

know if you had a chance to talk among yourselves, the parties, that is, because obviously, the ruling is going to affect significantly our discussion today. I am certainly

willing to give you some additional time to do that, if you think that that would be time well-spent. be, quite frankly. But we don't have to. I think it would But I think there

are some things that you can now agree on, whether you agree or not, there are some things that you can now agree on, given the Court's ruling. What is your pleasure? MR. FLAGEL: We have had a short discussion, Mr.

Freed and I have had a short discussion, so I am not sure that further discussion right now will be well-spent. Certainly, there will be discussion after today, I assume

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there will be, between now and four weeks from now. THE COURT: MR. FLAGEL: I would expect so. It probably makes sense to talk

about some of the other issues. THE COURT: proceed. Here is, then, how I would like to

Typically, I will talk about or have discussions

with you about your motions in limine at the outset, then go through the pretrial order, the proposed pretrial order. There didn't seem to me to be much there that was controversial. I would give the parties an opportunity to

point anything out to me that I have missed in my perusal of the proposed order. Not necessarily in the order of agenda, we will talk about preliminary instructions to some extent, because, again, I think the ruling is going to impact your positions on some things there. I would like to offer a suggestion on the preliminary instructions. That is, rather than having me

read through the various parts of the patent and explain that verbally, that you consider using the video in lieu of those sections of the preliminary instructions. willing to do it when the parties agree. I am always

It's not always I

the case that the parties agree on the video.

well-understand why at times a party may not want to use the video. I think it's pretty well-done. I don't think it's

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dated yet.

It gives, I think, a fairly objective overview

of the PTO and the process. I know, depending upon your point of view, you don't like seeing the examiner pushing around that cart that's laden with work. I know that some people feel that

is an editorialization that is unfortunate in the production. But it is sort of the way it is down there. I

actually had examiners on my staff as externs, examiners and in other ways. So I do have a pretty good sense, though I

am not a member of the Patent Bar and haven't visited the PTO, and I probably should do that, but I do have a pretty good sense of what things are like there and how they work and how they look. Nevertheless, we can talk about that. We can talk about the voir dire. anything controversial about the voir dire. I don't see There are a

couple of questions, I think three, that might merit a little bit of discussion, but not a lot. I am not planning to deal with the final jury instructions today. Typically, I understand that counsel

don't pay a lot of attention at this stage, haven't yet had a chance to really engage those issues. going to be differences of view. I know there are

Again, to some extent,

those instructions are going to be informed in how they ultimately look at the end of the day by the Court's ruling

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recently. Generally, we will talk about some of my nits and nudges, generally, do's and don'ts. And we will open the floor for any questions or items. MR. FREED: the ruling. Your Honor, I had one thought, given

That was, since the issue on validity is now

kind of a contingent one, whether it would make sense in this case to have a phased trial with the same jury and just have validity come after the jury came back with a verdict on the issue of the ZX circuitry. THE COURT: sense. I wouldn't say that it doesn't make I am not hidebound about

I have thought about it.

it at this point.

It's something that I am willing to talk Okay.

about at some point during this process. MR. FLAGEL:

Your Honor, the one motion in

limine that I would like to focus on, if you would indulge me for a minute, it's our Motion in limine No. 2, and it relates exactly to the ZX circuit issue. Mr. Freed's question. Basically, Your Honor, it is our motion to preclude them from arguing to the jury -THE COURT: That is a summary judgment motion, That is the It also plugs into

counsel, and I am not going to entertain it. long and short of it.

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Anything else before we get started ? I am denying MPS's Motion in Limine No. 2, which is styled -- it is docketed Item No. 142. It is Monolithic

Power Systems' Motion in Limine No. 2 To Preclude Linear Technology from Presenting any Evidence or making any Argument that the accused MP1543 part contains the ZX Circuitry Identified by Counsel for Linear in the ITC Proceeding. Again, that's what I classici ally view as a stealth motion for summary judgment. it. The motion I am really most interested in discussing is at 146. It's Plaintiff's Motion No. 1, And I won't entertain

Linear's Motion in Limine No. 1, To Preclude Monolithic from offering at Trial Evidence and/or Argument that the Asserted Claims are Limited to two States of Operation. reason I am most interested in discussing it: both parties are asking the Court to open claim construction. You go first. MR. FREED: our argument is this: Your Honor, I think the substance of We don't intend, in any way, shape or The only I believe

form, to preclude them from arguing that they don't have one of the circuits, either the first circuit, the second circuit, or the third circuit. But we do believe that they

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shouldn't be allowed to make the argument that they don't have one of these circuits because they have an additional circuit, because that really twists the claim from a "comprising" claim into a "consisting" claim. I don't want any different ruling on what these circuits are. I am not asking for any different ruling on If I asked for a different one I am not asking for a I am not asking for a new

what these circuits are. before, I asked for it. reconsideration of that. consideration.

I am just asking that they shouldn't be

allowed to present to the jury argument or evidence that the reason you can't find we have a third circuit or a second circuit is because we have this additional circuit, because that would, indeed, both change your claim construction and be inconsistent with your claim construction, and would, indeed, making a "consisting of" claim into a "comprising" claim. It would, indeed, be saying that I can't infringe a patent on a mechanical pencil because I put an eraser on the pencil even though the eraser is not mentioned anywhere in the claim. That's it. MR. McKONE: David McKone, Your Honor. However, the law,

This is a comprising claim.

the Federal Circuit has held that even if a claim is a

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comprising claim, that can't be used as a, quote, "weasel word" to get out of the every-day claim limitation. THE COURT: construction? MR. McKONE: We don't believe it is necessary to The plain language of the claims Are you asking me to reopen claim

reopen claim construction.

is written such that there is no intermediate state between the first state of circuit operation and the second state of circuit operation. THE COURT: It sure sounds like you are asking But make your argument.

me to open claim construction up. MR. McKONE:

Regarding whether we are asking you

to reopen claim construction based on changing our position, that certainly hasn't been the case here. Prior to the claim construction briefing, we raised the issue that the accused product does not have the second circuit -- I am sorry, the second state of circuit operation and the threshold fraction limitation. But at

that time Linear was contending that the accused product was, in fact, a two-state product, one where it transitioned from a continuous mode, which it was calling the first state, to a second state that consisted of both the discontinuous mode and the pulse-skip mode. That was the framework prior to the claim construction briefing that's been filed.

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After the claim construction briefs had been filed, Linear served its expert report, and for the first time there, Linear contended that the accused product was a three-stage product, at least, one where it transitioned from a continuous mode, which it seems to be calling the first state of circuit operation, to a discontinuous mode, and from there into a pulse-skip mode, and somewhere in the pulse-skip mode is where they are identifying the second state of circuit operation. Our expert report -THE COURT: seen this argument? MR. McKONE: Yes. Our expert report was merely That is the first time that we have

responding to that argument, pointing out that that was inconsistent with the claim language as well as the prosecution history and the specification. MR. FREED: Briefly, Your Honor. During claim

construction, we weren't talking about what infringes and what doesn't infringe at all. We were just talking about

construction of the claim, because construction of the claim isn't dictated by what infringes. Our position on

infringement was and always is that all you have to do is have what the claim calls for and whether you have anything else doesn't matter. So we have never changed our position on that.

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It has been continuous on that.

Nor did we ever take the

position that the claims were limited in some way to continuous stages without any intervening stages or anything like that. It's not a first-time argument. What is the first-time argument is that the claim should be construed in a way that would permit you to close the claim when it's an open claim. MR. McKONE: Your Honor knows that claim

construction is not supposed to be with respect to the accused product. But at the same time, you don't want us

bringing up arguments that are not pertinent to what they are alleging our accused product is doing. So it didn't make sense prior to the claim construction briefing to phrase our arguments in terms of a three-state product wouldn't infringe. Instead, what we did

is looked at what they identified as a second state, which included both what they are now identifying as a second state plus what they are now identifying as the intermediate state, and pointing out those two states together did not meet the claim language for second state of circuit operations. When they came up with the new analysis in the expert report, we had to respond to that new analysis. THE COURT: I am listening.

This is one I am going to have to take under

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advisement and think about a little bit and get back to you in some written form. All right. Item 147. Let's go to Linear's No.2, Docket

It's a Motion to Preclude Monolithic from Raising

Issues of Inequitable Conduct and Patent Misuse before the Jury. And, perhaps I should -- just bear with me one second. (Pause.) THE COURT: aside for this case. We had originally set eight days

Right? That's correct, Your Honor. It is not going to take eight days.

MR. FREED: THE COURT:

One of the reasons it is not going to take eight days for the jury to try this case is I am going to grant this motion, for purely prudential reasons, quite frankly. going to be very up front about that. We start the 23rd. MR. FREED: THE COURT: Correct, Your Honor. Here is the thing, counsel. I am I am

going to have to recess this trial for part of one day on the 26th and all of the 27th. Monday, the 28th. We will resume on that

I have a matter I have to attend on our

left coast for the Federal Circuit Bar Association. And then, I am not going to put the jury or you

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in a position of having the jury being focused more on the impending July 4th Holiday in its deliberations. I think a couple of rulings are going to impact the amount of time that we are going to discuss today, the amount of time that you are going to need. But this we are

not going to discuss, because I am going to grant it, for the reasons I have just outlined. I think that should cut down the amount of time that will be needed with the jury. Counsel well-know that I have handled inequitable conduct issues in each of the three ways that the Federal Circuit has endorsed. have let it go to the jury. If the parties agree, I

I have used the jury as an

advisory jury, and taken on the issues as the Court deciding the issue. In this instance it would be the Court that

would decide those issues. So that motion is granted. No. 3, this is at Docket Item No. 148, it's Linear's Motion to Preclude Monolithic from Referring to, or Offering Evidence relating to, the Amount of Sales of the Accused MP1543 Product or the Stipulated Amount of Patent Infringement Damages before the Jury. Counsel. MR. FREED: Your Honor, it is a simple motion.

Patent infringement damages is not an issue in this case

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because there has been a stipulation on damages.

To the

extent there is an infringement case here, the question is just simply infringement, and the amount of damages isn't before the jury. There is one reason and one reason only for the other side to put the issue of the amount of damages in front of the jury. And that is to have the jury be thinking

about, well, this isn't such a big deal because the damages are small, which is not relevant to the question of breach of contract or to the question of infringement. So it can

only be used for a purpose inappropriate, in our view. MR. FLAGEL: the amount of damages. sales. Your Honor, Mr. Freed talks about But he doesn't mention the amount of

They are asking that we be precluded from telling

the jury that only a hundred of these actual small circuits were ever delivered in the United States to customers. They have an indirect infringement argument. In

order to prove indirect infringement, they have to actually prove that a customer used these chips. They have no

evidence, by the way, that any customer used the chips. They want to say that we have sold products and therefore their customers must have used the chips in accordance with data sheets. Only a hundred were sold, and there is no

evidence that anybody used them. In this kind of business, you have to buy a lot

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of these things. used in devices.

These are tiny little circuits that are The fact that only a hundred were sold is

strong evidence that there was never any use by a customer of this product in any way, much less in an infringing way. So it is very relevant to that. It is also relevant because Linear is going to argue that commercial success is evidence of nonobviousness. This product didn't sell at all. are alleging it's infringing. If they are right about that -- we think they are not -- but if they are right, then it's strong evidence of obviousness, not nonobviousness, and it's really important to rebut their argument of indirect infringement. THE COURT: Counsel seems to concede the point Nobody bought it. They

as to the liquidated damages issue. MR. FREED: It appears that way, Your Honor.

The two issues on the indirect infringement, there is a false logic there, Your Honor. that -- let me put it this way: We don't have to prove If they sold one of them,

the issue of whether or not there was a direct infringement doesn't depend upon whether they sold two, three, or 3,000. Our evidence of direct infringement in that context, we have direct infringement by themselves. But the direct

infringement that supports our indirect infringement claim, i.e. direct infringement by customers, is a circumstantial

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case that is proved under the law by proof that there is no substantial use other than for the intended purpose. That

will be our proof, that there is no substantial use other than for the intended purpose. That is true for one, it's true for ten, it's true for 2000. If they only sold a hundred, that doesn't

change the fact that the only substantial use people buy those for is their intended purpose, and therefore the jury is allowed to conclude circumstantially that the direct infringement occurred. Customers didn't use these things for paperweights or ships' ballast. argument, that is fine. If they want to make that

But they shouldn't be able to make

the argument that, just because they sold a hundred of them, that customers didn't use them for the intended purpose. On the issue of obviousness, that is a very novel theory, Your Honor. The fact that there is commercial

success by our product and therefore that that is a secondary consideration of nonobviousness isn't negated by the fact that they only sold a hundred, especially when we have testimony that they pulled them from the market because of this case. There is no bearing on their having pulled this thing from the market on this being nonobvious. The

argument that somehow or other, that because they only sold

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a hundred is a circumstance of the obviousness of the invention is, frankly, silly, Your Honor. MR. FLAGEL: A couple of points. On liquidated Since you

damages, I might have made an unfair assumption.

had ruled inequitable conduct, you were going to hear it, given the jury constraints, I sort of assumed you were going to hear liquidated damages and whether that's enforceable. THE COURT: MR. FLAGEL: That is fine. If it goes to the jury, I think it

has to be denied, because if they are going to ask the jury for three million dollars in liquidated damages, I do think, in determining whether -THE COURT: MR. FREED: warp associated with it. What is your reaction to that? My reaction is that's got a time The issue of the viability of

liquid damages is the date of the contract, not what happened afterwards. Not what they did sell, but whether it

was reasonable under the circumstances of the envisioned activity -- and most of the liquid damages testimony we are going to put on doesn't have to do with sales as such, but has to do with the aggravation and the diversion of employment activity that occurs when somebody infringes a patent at a later point in time. But even as to damages, even as to damages, it is what is contemplated at the time, not what actually

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happened.

That is not a relevant factor of whether the

parties reasonably had in their contemplation what would be appropriate liquidated damages when they entered into the contract. The fact that they only sold a hundred after

there was a breach or alleged breach and a withdrawal from the market doesn't change the viability of that. what you did do. It's not

It's whether the parties were reasonable

at the time they entered into the agreement. MR. FLAGEL: I disagree. I think the law is

clear that the actual damages that somebody seeks is a relevant fact in determining whether the amount of liquidated damages is an unenforceable penalty. point, I think he is wrong. THE COURT: I think he is right. I am going to On that

hear the liquidated damages issue. that, not necessarily on the law. MR. FLAGEL:

I agree with you on

Responding on the hundred units,

again, he is asking you to just sort of assume that because we sold a hundred they were obviously used and that we can't tell the jury. He wants to preclude us from arguing to the

jury that there is no evidence of indirect infringement because only a handful of these are sold. These are They might

typically only used when lots of them are sold. have been put on the shelf. We don't know.

There is no evidence, and it is their burden to

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come forward with evidence.

And how can our hands be tied

from telling the jury, ladies and gentlemen, they have no evidence? There were only a very few of these sold before we stopped selling them. THE COURT: What is your reaction to his

observations regarding the alleged novelty of your theory, as it bears on the issue of secondary considerations and obviousness? MR. FLAGEL: To the extent that the jury finds

that these 100 pieces infringe, then the fact that nobody wanted them is directly relevant to the commercial success point. THE COURT: So your position is that there is at

least a material dispute of fact as to whether anybody wanted them and that is a jury issue. MR. FLAGEL: THE COURT: MR. FREED: all. Yes. Go ahead. Your Honor, I think I have said it

The evidence is they pulled them from the market. THE COURT: The jury can hear that. I will let

the jury hear that. The motion is granted in part, denied in part, however you want -MR. FREED: You are going to hear the liquidated

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damages. THE COURT: I am going to hear the liquidated

damages, and deny the motion as to the numbers of units. MR. FLAGEL: Thank you, Your Honor.

I think that's all of plaintiff's motions. So we are on MPS's No. 1. and B, I think. that. There is actually 1A

Correct me if you think I am wrong about

But there is the motion at 141, which seeks to

preclude Linear from presenting to the jury evidence and argument concerning the enforceability of the three million dollars liquidated damages provision in the settlement and license agreement. Then there is this 140, is the docket This is bifurcation. I

item, I think I have got it right. think they are together. MR. McKONE: THE COURT:

I think Your Honor has ruled. I think I have. This is at 143. This is a

So we are now on 3.

Motion to Preclude Linear from Presenting any evidence Concerning its Settlement and License Agreements with Third Parties, including Maxim Integrated Products. I think the central issue is whether the licenses are relevant to the question of nonobviousness. MR. FREED: MR. HORWITZ: I think so, Your Honor. Your Honor, we think this is a Frankly, we are surprised

cut-and-dried motion in limine.

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we had to bring it, based on Your Honor's rulings and other rulings from other Judges in this Court. If it is a litigation settlement license, it doesn't come in under Rule 408 and under Rule 403. what we are talking about here. And the comments that were made after by Maxim's CEO relate to the settlement of litigation license. is all part of the same package. They say that, well, his statements are different, they are not offered for the truth of the matter. They obviously are. It seems pretty cut and dried, Your Honor. THE COURT: Well, there seems to be a debate So it That's

about whether Telcordia is distinguishable. MR. HORWITZ: I really don't think there is any The

basis to distinguish either Telcordia or Pharmastem.

basic concept is, if it's a license agreement that arises out of settlement of litigation, it doesn't come in for this purpose, under both Rule 408 and Rule 403, for undue prejudice. MR. FREED: Again, Your Honor, the issues

involved in Telcordia are different from the issues involved here. This is specifically directed to this patent. There

is no question that it's a relationship to this patent. We also have the additional evidence where there

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is no secret about why the license was taken.

The man

stated, in a situation where he would have serious securities problems if he were not telling the truth, why he took the license. He said on the public record in one of

these securities deals where you have to be straightforward with your audience that he took it because there was no good prior art and because it was a broad patent. If there was

ever a secondary consideration of nonobviousness, that is it. MR. HORWITZ: Your Honor, on the first point, Telcordia may have had -But the concept in all

Pharmastem is just the same.

there may have been more patents. the cases is the same. other considerations.

It doesn't come in because of the

To suggest that the CEO who is talking about those license agreements, that somehow insulates them from the rule that otherwise applies, it just dissolves the rule. And clearly, it's hearsay. of the matter asserted. THE COURT: It's being offered for the truth

Plain and simple. I want to make sure that my ruling

is consistent with previous pronouncements of this Court. So I am going to reserve on this one. in writing. I will announce this

These are not going to be long pontifications.

They will just be short "Whereas" orders. I will let you try to tell me why this isn't

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another motion for summary judgment No. 4. MR. DUNLAVEY: Your Honor, this is sort of a

piece of the earlier Motion in Limine No. 3 of Linear's that you denied. This is a case where they have the burden of establishing infringement. They are now proceeding under

two theories of direct infringement and an indirect infringement theory. The indirect infringement theory is

that somehow one of these 100 chips, which itself doesn't infringe, must have been used by somebody. They didn't undertake any discovery of this. The chips went to two companies. They didn't go to either

one of those companies to find out whether those chips are gathering dust, whether those chips were subsequently sold to other companies. They haven't done -- they also have this contention that only appeared in their expert's report that the indirect infringement was induced by MPS supplying the chip and data sheets to these customers. There is no

evidence that MPS has provided a data sheet to any of these companies in the chain of command. complete absence of proof here. THE COURT: Can I handle this on JMOL? If there So there is just a

is a failure of proof, there is a failure of proof. MR. DUNLAVEY: That's one way to do it.

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THE COURT: am going to deny this. MR. FLAGEL:

That is the way I will do it.

So I

For the record, Your Honor, we are

hoping you are going to handle No. 2 that way, too, even though it has been denied. THE COURT: Sure. If there is an appropriate

basis on JMOL, Rule 50, Rule 52, whatever the relevant rules are. Finally, No. 5 is MPS's Motion to Preclude Linear from Presenting Hearsay Evidence to the Jury, Including any Evidence concerning the ITC Proceedings. To sort of short-circuit this, I thought we could address these objections to the extent they arise in realtime. Is that problematic from MPS's point of view? MR. DUNLAVEY: In theory, no. I think that in

practice it might be difficult in that I think that they will try to present a flood of evidence about the AATI case and about the Impala case through their expert witness, which I think is completely improper. And their expert

witness' report is just replete with references to those two litigations. I don't know. You have already told us, we are not having We are having something substantially shorter. Why we can't focus on the facts of this case,

The notion that we are going to have to try AATI's

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infringement and its invalidity claims and the Impala decision and the products that were at issue in this case, and intermittent statements by people in that case, I think it flies in the face of, number one, what we are entitled to under the rules of evidence, but also your Court's schedule. MR. FREED: We have no intention of retrying the I think the proper way to deal

AATI case or any other case.

with this is if we go out of bounds on what we are doing, we deal with it on a realtime basis, as you suggested. Our expert isn't going to get up there and talk about the other case. They want to hamstring him to make

sure that he can't even mention something in connection with the other case when it is directly relevant to testimony that he has given. He is not up there to tell everybody what happened in the other case. He is up there to tell In the course of

everybody about the issues in this case.

doing that, on occasion, on his opinions, there will be a reference to the other case, but that is not going to be terrible, and it's not going to be retrying. THE COURT: MR. FREED: What kind of reference? They assert that particular things

are very good evidence on invalidity -- we are on the invalidity theory -- these things are terrific evidence on invalidity and no one ever knew about these things before.

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And he says, no, in fact, these are the very issues that I dealt with before and they were wrong before and they are wrong now. It's not to prove the other case. THE COURT: MR. FREED: Why does he need to say that? Only because they are making believe

that this is all fresh evidence that has never surfaced before, when, in fact, this is really yesterday's dinner warmed over again and this guy is treating it as yesterday's dinner warmed over again. And it should be treated that

way, because that's what it is. MR. DUNLAVEY: Your Honor, the notion that Mr.

Blauschild can get up and say, Oh, I addressed this in another case and it was garbage in another case -THE COURT: That is not going to happen. And I

don't want to have to deal with that. I am going to grant this motion. To the extent

that you elicit from the witness testimony that is properly adduced, that doesn't improperly, in my view, reference other proceedings, I will permit it. But I have granted the motion. And I would

expect you to abide by its spirit, if not its letter. Please, we can still address issues in realtime. MR. FREED: I understand. There was a separate

part of this thing that looked like it was trying to

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preclude us from using Wilcox's testimony from that prior case. This is one of the inventors who has a very serious It is clearly within the rules -Let's talk about that. There is an issue there, yes. He was deposed in We were not They have

medical condition.

THE COURT:

MR. DUNLAVEY:

Mr. Wilcox was not deposed in this case. an earlier case that MPS was not party to. given notice of that.

This happened years ago.

made no showing, by the way, that Mr. Wilcox presently is unavailable. list. I understand that in the case that was before Your Honor up until recently, the Linear versus Analog Devices case, that Mr. Wilcox was noticed for deposition and, in fact, he showed up for his deposition. But the They simply didn't list him on their witness

parties had settled before his deposition actually took place. So, number one, under Rule 32, his deposition testimony should not come in. Number two, they haven't made any showing that he is unavailable at present. They have some doctor's note

from 2005 and another one from 2006, saying that his health is such that it might be difficult for him to travel to the trial. There is nothing from 2008. And certainly, we were

not informed at the time when we could undertake discovery

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on this issue that they were going to claim that Mr. Wilcox was unavailable. I understand that in the other litigations, people have found out that Mr. Wilcox is out taking hikes in the Sierras. He is out gazing at stars late at night. He

is engaged in all kinds of discussions with people. There is just no evidence before you that he is unavailable. So for all of those reasons, I think that Mr. Wilcox's testimony from the Impala case -- again, we never had a chance to question him -- is not admissible. THE COURT: The Analog Devices case, when was he

noticed and prepared to appear for that deposition, roughly speaking? MR. DUNLAVEY: check. THE COURT: Was it last year? Yes, it was 2007, or early part Your Honor, I would have to

MR. DUNLAVEY: of 2008. MR. FREED: whole story.

Your Honor, that's not quite the

Back when they were involved with the Linear

litigation, the doctor's certificate or note or whatever you want to call it was presented to them. And they agreed not They

to take his deposition under those circumstances. actually agreed to that.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 argument. fifties.

Analog re-raised the issue, including all the issues about the fact that the guy does go outside of his house. It is not that he is dead. It's that the doctor

thinks that this is just going to hurt him. THE COURT: MR. FREED: Arizona. THE COURT: MR. FREED: How old is the gentleman? Early sixties, I guess, late Where does he live? He is in California. I am not sure.

I don't know what the medical -THE COURT: Without putting his entire medical

history on the record, what is the condition from which he suffers? MR. FREED: wasn't involved. I was unclear about it, because I

I do know that when that issue was raised

in the Analog case, the Judge re-looked at the thing again in the Analog case, and said basically there is no -- you shouldn't be dragging this guy here. outdoors isn't the end of the story. The fact that he went He shouldn't be forced

to go through testimony and that kind of stress. THE COURT: All I have right now is attorney I don't have

I don't have any declaration.

anything from a doctor, a physician, or from the gentleman himself as to his condition. All I have is, admittedly, And I tend to

representations by officers of the Court.

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trust you guys, men and women. yes. MR. DUNLAVEY:

But these are competing --

That's exactly right, Your Honor. He

And it's their burden of showing that he is unavailable. is not on their witness list. before.

They never raised this issue So that should

They failed to meet their burden.

be the end of the matter. MR. FREED: Your Honor, at this point, if we

need to provide those things to the Court, we will. It may be that this person, we may want to use him only on validity issues. And if that's so and if we do

have this staged trial and it comes up at that point in time, this may all wash out. In the meantime, if we need to

get those doctor things and statements, we can get them. THE COURT: been raised by MPS. other that I recall. Okay. That's one complaint that has

But I think they have at least one That is, that you were not a

participant in the other proceeding. MR. DUNLAVEY: THE COURT: That is absolutely correct.

That is a part of the requirement of

the rule, it seems to me. MR. FREED: aligned interest. there. The rule requires that they have an

Clearly, there was an aligned interest

In fact, that was the secret proceeding that

involved all the warmed-over meals that I spoke about

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earlier.

They had an aligned interest. MR. DUNLAVEY: I don't believe that MPS had even

come into existence at the time that the initial lawsuit was filed, Your Honor. It was not a party to Impala. It had no

knowledge about the proceedings in Impala.

Rule 32

specifies that in such a condition, that his deposition is not admissible. And again, if they wanted to have raised

this issue, they should have raised it during the time that we had an opportunity to actually conduct some discovery. THE COURT: MR. FREED: I am constrained -Your Honor, on the issue of did they

have an opportunity to take discovery from this guy, I have to say this. I know it's a strong word. I have to say,

that is a little disingenuous.

We are talking about an

inventor on the face of the patent. To argue they had no opportunity or no knowledge, I mean, Rule 26 disclosures talk about disclosures are otherwise made known. Well, the patent on

its face otherwise makes known this guy's contact with the subject matter of this litigation. To say that he is a complete surprise to them, when, in fact, they were the ones who said give us everything involved in the AATI litigation, he is on the face of the patent, they had access completely to the files in the other litigation.

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To argue that they had no opportunity to take this guy's deposition I think is disingenuous, Your Honor. MR. DUNLAVEY: He wasn't on the witness list and

they didn't produce the information from the Impala case back in this case until sometime in 2007. For them to say,

oh, even though we don't have him listed on our witness list and he is not in our initial disclosures that you then have an obligation to go out or else we can use some depositions in a previous case that you didn't participate in, that, I think, is disingenuous. THE COURT: I won't get into characterizing one But I at this point am

party's view or the other.

constrained to conclude that the requirements of Rule 32 have not been met by the plaintiff. Should it come to I am going to

pass -- well, I am going to leave it there. grant that part of the motion. MR. FREED: THE COURT:

Your Honor, I don't want to -Here is -- look: I don't want to

have this Court or the parties have a material and potentially adverse impact on the health of a party or a nonparty. I am not going to allow, not that you intended this, but that issue, the individual's health, Mr. Wilcox -Doctor or Mister? MR. FREED: Mister, I think.

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THE COURT:

-- Mr. Wilcox's health and the

vagaries of his situation work to the detriment, to unfairly prejudice the other side. If it should come to pass that this is -- we would have to know this very soon -- that this is evidence that you deem critical and that he could be made available conveniently for a deposition, I might consider a request to revise my ruling. Right now, the ruling is what it is. Your Honor, I think it unlikely that Thank you

MR. FREED:

we are going to want to put him in that position. for that potential opportunity. to it.

I know you haven't agreed I think it's

You said it's a potential opportunity.

unlikely that we are going to want to put him in that position. And if it comes to that, all I would ask is that

we don't have some argument in front of the jury, Boy, this guy isn't here at trial and therefore -THE COURT: A, I think that would not be quite

MR. DUNLAVEY: THE COURT:

Of course not, Your Honor. It's not

I won't permit that.

MR. FREED:

That may be the way this washes out,

because we are not going to endanger this guy's health. THE COURT: All right. I am glad to hear that. I gather everyone agrees with me

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that we should defer discussion about the preliminary jury discussions? MR. FREED: I think they need to be looked at

again, Your Honor, given your rulings. THE COURT: MR. FREED: I think they do. I can't remember specifically which

ones, but I am guessing your rulings are going to impact some of those. THE COURT: I have some tabs. I will just

highlight the pages that I have tabbed. parties and their contentions at Page 4.

There is the It goes on, Linear

sets forth its objections specifically on the next page. Then the next one I see is at Page 8, the burden of proof, that begins a conversation. That is Linear's proposal as to

the burden of proof and the MPS objections on the following page. Then MPS offers a burden of proof instruction beginning at Page 10. The controversy or the disagreement

continues on over into Pages 11 and 12. Then, finally, the summary of the patent issues is contested. Let me offer this. To the extent that there

remains disagreement on this issue, these issues, we can convene a later teleconference to deal with it. MR. FLAGEL: That will be fine, Your Honor.

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MR. HORWITZ:

Your Honor, could we try to set a

deadline today by when we will be able to get back to you either in agreement or disagreement? THE COURT: It's up to you. MR. FREED: If they have a deadline in mind, I Well, do you want to set a deadline?

am sure I am going to probably agree with it. THE COURT: I don't think I have to micromanage We are

Here is what you need to keep in mind.

awfully busy, to say the least.

And I just came off trial We have

yesterday -- you don't need to hear my problems. all got problems.

The point is that time is at a premium.

So

sooner rather than later helps me position something for a teleconference or some other proceeding. point. Let's talk about the voir dire. see anything particularly controversial. I have first MPS's proposed voir dire, that is at Item 174, and actually, it was 171 that was -- Linear's was filed first. I assume you misplaced them. There is a But it's Again, I didn't That's really the

Question 21 that frankly I don't see the need for.

phrased, Some of the witnesses in this case were born outside the United States and speak with an accent. Is

there anything about that fact or the fact that a witness'

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first language is not English that would cause you to be less inclined to believe that witness or rely upon his testimony? This is MPS's proposed voir dire question. MR. STERN: Your Honor, there are four -- Linear

and MPS have submitted virtually identical -THE COURT: MR. STERN: questions. THE COURT: you picked up another. MR. STERN: and 25. In our voir dire it is 18, 21, 22 I went through these I counted three. I am glad to hear You have. There are only four differences in

I may be wrong about that.

last night.

I believe those were the ones. THE COURT: Let's talk about that one, then we

can go back to 18. MR. STERN: That's fine. Your Honor, overall,

what we want to make sure is we suffer no prejudice at all from the jury in this case. In this case it is very likely

that our witnesses will be testifying in a language other than English. We want to ferret it out in a way that is not

offensive and aligned with the jury as not being any problem. THE COURT: question. MR. FREED: I think it calls undue attention to You have no problem with the

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the issue.

That is my problem.

I don't have any problem

with the substance of these, of the idea that people aren't supposed to be looked at in any different way for these reasons. But when you call it out that way, it's almost an That's

attack that says that's what we are trying to do. what I don't like about it. THE COURT:

The thing that concerns me, that I

think it doesn't give our citizens who serve on these juries sufficient credit. And we are a pluralistic,

multi-cultural, multidenominational nation, and I am wondering if there is an underlying assumption that isn't fair to the jurors. It is phrased inoffensively. I don't

disagree with you on that. need. MR. STERN:

I am just wondering about the

Again, Your Honor, actually, I think

if Your Honor looks at voir dire Questions 21 and 22, they both have the same -THE COURT: MR. STERN: Yes. It is not actually -- we actually It is not necessary that we

view them as alternatives. obtain both.

We are prepared to limit what Your Honor feels But we want to make sure there is no

is most appropriate.

problem with respect to this in light of the nature of the witnesses that we are going to be presenting. THE COURT: I will give it some thought. As to

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21 and 22, I had, frankly, missed -MR. STERN: If Your Honor feels for any reason

they should be reformulated, we are happy to do it. THE COURT: Here is what I will do, what I

typically do, if I do feel that way, in other words, if I am not just going to strike them but some reformulation is necessary, I will do that. in advance of this. You will get an e-mail from me

It will actually come from Ms. Walker. Should there be comment, I

We will invite your comments.

will seriously consider it and either incorporate it or not. MR. STERN: THE COURT: That is fine. You will have the final -- how the

voir dire is finally going to look before you come over to pick the jury. Okay. 18. Let's see. Well, do any of you have

any views that because a patent is issued by the U.S. Government it must be valid? MR. STERN: all know that. Isn't it? We

It is certainly presumed valid.

This is trying to ferret something out from

the jury to see whether or not they feel it is more than just a presumption. THE COURT: I am going to tell them in the

preliminary instruction, and the video is certainly going to tell them that, that statutorily and constitutionally the patent is presumed valid. I know, depending upon which side

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of the table you guys are on in any given case, you either agree or disagree with that. Linear. MR. FREED: Your Honor, I think you are going to I understand that.

tell them, even if the video doesn't, and even if we don't use the video, they are going to be instructed on that point. I don't think there is going to be any -- half a

loaf just doesn't work here. THE COURT: I think this question could I am not going

potentially be a little confusing, as well. to ask this one. MR. STERN: THE COURT: MR. STERN:

Thank you, Your Honor. So then 25. Your Honor has granted our motion.

So that is really irrelevant at this point. I believe that's it, Your Honor. THE COURT: MR. FREED: THE COURT: MR. FREED: Okay. Linear agrees?

That 25 is out? Yes. Yes, I agree.

We had a different 18 that they dropped, actually the substance of theirs. THE COURT: Have you or anyone in your immediate

family or anyone close to you ever applied for or obtained a patent in the U.S. or abroad? I typically do ask that

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question.

Any objection? MR. STERN: MR. FREED: MR. STERN: THE COURT: I think we have that as 19. My mistake. No objection, Judge. Like the final jury instructions,

you will need to do some additional work on the verdict form, I think. You have competing proposals. Right? That

is typically the case, and I understand that to the extent -- and I know jury verdict forms are often hotly contested items. You will need to do what you can. We need to work on that given your

MR. FREED: rulings as well. MR. STERN: THE COURT: MR. FREED:

Absolutely. All right. We would have to have two verdict

forms if you are going to have this -THE COURT: interrogatories. MR. FREED: THE COURT: MR. FREED: I mean the sequential trial issue. Do you want to address that? I really do think, especially given Or some form of special

the time issues and the Court's observation that no one wants to be pressed about July 4th Weekend, you don't want to press us, we don't want to press the jury, and you do have a prior engagement during part of the time, I think

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that even makes more sense to do the contract stuff, get the jury out and done on that issue. Then we know where we are

on whether or not there is even going to be a need to have the invalidity stuff. THE COURT: Do you feel you would like some

additional time to think about this, in light of the Court's ruling, and revisit this during a planned teleconference? MR. FLAGEL: Honor. MR. FREED: THE COURT: date and time. in this regard? Makes sense. Why don't we set a teleconference I think that would be good, Your

What would you think, counsel, makes sense How far out? To take a page out of someone else's We already know

MR. FREED:

book, I think sooner is better than later. what our position is.

As soon as they are ready, we are

ready to talk to you about it. THE COURT: ready to talk. Why don't you notify us that you are

And we will let Ms. Tyer-Daly know, and we

will get you on the calendar. MS. JACOBS LOUDEN: technical question. If we can just ask a

When we do resubmit jury materials to

the Court, are you still using Word Perfect or is Word acceptable? THE COURT: We do have both. In spite of the

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fact that the rest of the world uses Word, the Federal Judiciary continues to use Word Perfect. have some deal with that. MR. FREED: THE COURT: I think I know the answer. Do you have Word Perfect capacity? We do. I have to say, in The problem is when I don't know if we

MS. JACOBS LOUDEN:

the private sector we always use Word.

we go to convert it to Word Perfect I think it always comes to you, as much as we try to clean up the mess, there is always some mess left in it. THE COURT: We are okay with Word. Thank you.

MS. JACOBS LOUDEN: THE COURT:

The young folks over here are much

more computer-literate than us old folks. So a few nits. Please, there will be a podium in the middle. It's over there. It has a mike. You don't have to

necessarily question from the podium, but you do have to rise. I don't permit questioning from the table. don't have to be planted. a little bit. You

Some lawyers like to walk around

I just suggest you keep your voices elevated. You must

This is a room that does not have great acoustics. keep a respectful distance from the jury. juries to be hovered over.

I don't want my

They don't like to be hovered

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over. When you want to approach a witness, oftentimes it is the case that you will need to approach the witness multiple times during the examination. once. freely. Please, just ask

You will automatically be given leave to approach With each witness, please ask for permission. I am pretty formal and pretty much a pain in the

neck when it comes to being here in the courtroom, particularly when our citizens are here serving. will see that. So you

I will sort of morph a little bit from the You need to be

more informal personality you see right now. mindful of that. And don't be offended.

I will try to be

formal but not unfriendly. When you need to move around the courtroom, you will, to get a better view of an exhibit or something like that, just ask permission and that kind of thing. Please, please, address your IT people by their surnames. It's not Ron or Jean. It's Mr., Ms. Everybody

deserves the same respect in the room.

Of course, you will

address witnesses by their appropriate titles and surnames as well. Objections, please just rise. rise and make your presence known to me. But please do Oftentimes, I will

be looking at the witness or at the jury or maybe even at my computer screen. Please do not misunderstand that when I am

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looking at that computer or maybe even typing, I am listening. I really am. I am hearing what's going on.

It took me a while to develop that facility. But it's almost ten years now, Mr. Horwitz, can you believe it? It does take some time for us to figure out how to do I have not figured out a lot of The one thing I have is how to

this thing called judging. it. But some of it I have.

pay attention. the room.

And I do pay attention to what's going on in

When I don't, there is an occasional lapse, I

will get you over to sidebar and we will have something read back and I will say, counsel, what did you say? hear it. it. What is the basis of the objection? I didn't I didn't hear

I will be frank to say that.

If you think I didn't

hear something, try to get me to sidebar. Sidebars. don't. I don't enjoy them because our jurors

They really don't enjoy the fact that we converse I talk to juries all the time, and I

out of their presence.

am sure you gentlemen and ladies do as well, because they feel we are hiding things from them and treating them like children, and we are not. I think our system could tolerate

juries to hear more than we permit them to hear. In any event, we have a white-noise machine. will turn it on. Get me to sidebar. If you think I have We

blown a ruling on an objection, or you really need to get an argument on the record, and obviously we don't want to do it

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in front of the jury necessarily, get me to sidebar. Sometimes I will be a little prickly about that. your job. That is Get

You have got to be as thick-skinned as I am. I will go.

me to sidebar.

Please, you know, counsel like to I find oftentimes refer to the number or the rule of evidence. It's not that I don't know the numbers. hear the substance of your objection. into what the issue is. to think of the number. quickly. But I would rather That keys me right

I will confess, for a moment I have What is that? And it comes pretty

But I just as soon you say, Hearsay, whatever you Don't argue the objection, again, in front of

want to say. the jury.

Juror books, we will need 12 -MS. WALKER: THE COURT: two binder issues here. 14. 14. Here is the thing. There are

I will urge you in the strongest

terms to each have binders of exhibits and only the exhibits that you think are important for the jury to have in its possession. I have had a couple of patent trials in the not-distant past where the lawyers for some reason in a patent case didn't prepare jury binders. And at some point

during both trials jurors let it be known that they were having a difficult time following things because things were

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flashing up on the screen and they couldn't really get a handle on the point. Even though your IT people and lawyers

do a good job with that, it's a wise thing, I think a necessary thing, for you to let the jurors have what you think you need to have. Don't overwhelm them. But I advise

you to have binders for each of the jurors. Ms. Walker we need 14 of those. MR. FREED:

I am told by

On the issue of jury binders, jury

books, sometimes it is also distracting to have all of that stuff in there when you are starting. Do you want that all

there from the start in the jury book or filled as the evidence comes in? THE COURT: there. I think you should have it all in

Again, this is going to require that counsel use

some judgment in terms of how much you put into a binder. That raises something else. things. I skipped past two

That is the subject of exhibits, because the

binders have to contain exhibits that are agreed upon, and that's important. All your objections to all of the exhibits are overruled, summarily, without prejudice to -- there is no way today or over the next week that we would be able to deal with all of the objections that have been interposed and the various reasons for them. Therefore, what we do around here is I will get

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together with you, either at the beginning of the day or the end of the trial day, and we will talk about exhibits that you really have a meaningful objection, an important objection to, and that you really want to advance, because otherwise, all exhibits are now in, as of this moment. Those that are not objected to -- let me rephrase. are now in. You will get another opportunity to address that to me. But it will be as we go along. Any questions about that. MR. FREED: I do have one question about it. Including those that have been objected to, they

I think I understand what you are saying, that they are in in the sense that no objections have been granted. THE COURT: MR. FREED: They have been overruled. They have been overruled. But do

you actually have to make a proffer with the witness? THE COURT: MR. FREED: THE COURT: are part of the record. No. They are in unless you object again. That's right. They are in. They

So you are going to want to, this

places a premium on you paying some attention to your evidence and what you feel is not proper evidence for the jury's consideration. And I will tell you that typically,

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Delaware counsel, I think, will confirm that we don't have more than we can handle in terms of the objections. We do

have, typically we have meetings in the morning at 8:30 and routinely I am available and Ms. Walker will stick her head out in the courtroom, Have you got any issues, counsel? Especially in a patent case, yes, they have issues. will deal with them. of some type. And we

Typically, they are evidentiary issues

It might have to do with demonstrative

exhibits or evidentiary exhibits, or whatever the case will be. MR. FREED: In giving that ruling, I think the I take it you will

next question is pretty self-evident.

have no problem with the witness books that have the witness -THE COURT: That is the second binder issue. You don't have

You should have binders for your witnesses. to.

To the extent that you would like to use binders -- and

I assume you will agree on a protocol for the exchange of exhibits, notification of witnesses, who is appearing on any given day, at any given hour and that kind of thing. MR. FREED: We have agreed actually on all those The only one that is

exchanges, I believe, except for one.

outstanding is the demonstratives that would be used with openings and closings. Our position was that, you are

always preparing your openings and closings until the last

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minute.

So that that exchange should occur, if at all, an

hour before you give an opening or closing, rather than days in advance or stuff like that. THE COURT: That's fine. But let me say this:

To the extent you plan extensive use of demonstratives, like deposition excerpts and that kind of thing, in your openings, I am going to caution you against this. This has

been an issue that has been of some -- we have been discussing this for some reason of late. MR. FLAGEL: MPS?

All we want, Your Honor, is we

would like to have -- typically what lawyers do is prepare PowerPoints or some kind of guide for the jury during opening. We think they ought to be at least in pretty good What we would like to

shape by 6:00 p.m. the night before.

do is exchange them by 6:00 p.m. the night before. THE COURT: MR. FREED: Any objection? Yes. Because you are always doing

an opening and closing after 6:00 p.m. the night before. That's why I said, how about an hour before the opening is given or the closing is given? THE COURT: That doesn't give you a chance to At some point the

meet with me to resolve any controversy.

evening before, I will leave it to you to discuss what that hour will be. But an hour before doesn't work. Thank you, Your Honor.

MR. FLAGEL:

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MR. FREED: THE COURT:

Thank you. I am fortunate to have