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8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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I
M ONTGOM ERY v. ETREPPID
,
DEPT OF DEFENSE
Case No. CV-N -06-056
SEA LED TRAN SCIUPT OF HEARING ON
PRELIM INARY LNJIJNCTION DATED 2-7-2006
(VOLUVIE 11 OF 11), IN 2ND JtyolctAl- DISTRICT COURT
OF NEVZYDA, COIJNTY OF W ASHOE
,
CASE NO. CV06-()0l 14
,
DEPT. 9
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'
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ï RONALD A. LOl'1CiTdi*1, JFi., CL 7RK ï g
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:W 2 '- SECOND JUDICIAL DISTRICT COURT O THE TATE OF NEVADA
W s'jz. (EN ANJI l?OR THE COIJNTY OF WASHOE
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== @ BEFORE THE HONORABLE ROBERT H
.
PERRY, DISTRICT JUDGE:
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ETREPPID TECH.7OLOG IES r t. . L .C . , a
Nevada Limitedï Liaëlili ty Company,
Plé1 irtt i f f #
Case No . CV0 6- 0 O l 14
V5 .
Dept. No . 9
DENNIS MONTGOMERY, an individual;
THE HONTGOMERY FAMILY TRUSX;
DENNIS MONTGOMERY and BRENDA
MONTGOMERY, a1s trustees for G'HE
MONTGOMERY FN 4ILY Z'RUST, and
DOEG 1 through 20,
Defendants .
/
S E A L E D
VOLUME 11 of 11
TRKNSCRIPT OF PROCEEDINGS
HEARING - PRELIM INARY INJUNCTION
Tuesday, February 7, 2006
RENO, NEVADA
Reported By: CECILIA VOHL: NV CCR #246, RPR, CRR, CCP
l
CECILIA Fa/l, NV CCR #246 (775) 827-0672
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l y/ P P E A R A N C E S
2
For the P kainti.f f : IIALEZ LANE, PEEK
,
DENNISON
3 AND HOWARD
E Y : STEPHEN J . PEEK, ESQUIRE
4 M d JERRY M
SNYDER, ESQU TRE
5441 Kietzke Lane; Second Floor
5 Reno
, Nevada 89511
M d
6 PILLSBURY WINTHROP SHAW PITTMAN
RY : DAVTD A . JAKOPIN, ESQUIRE
7 24 75 Hanover Street
Palo Alto, Calj
fornia 94 304- l 114
8
For the Def enl:iants : LAW OFFICES OF LOGAR & PULW R
,
APC
9 BY : RONM D J
.
LOGAR, ESQUIRE
M d ERIC A . PULVER, ESQUIRE
10 2 25 S;
Arlington Avenue r Sui te A
Reno, Nevada 89501
l 1 And
FLYNN & S T l L LM-RN
12 BY : M ICHAEL J
FLYNN, ESQUIRE
And PHILIP H . ST ILLMAN, ESQUIRE
13 22 4 Birmingham Drive
Suite lA4
14 Cardi f f , California 92007
15 -000-
1 6
17
18
19
2 0
2 1
2 2
2 3
2 4
2
CFCTJ/TJI %DIjL, NV CCR #24 6 (7 75) 827 -0672
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1 1
.
N D F )g
2 WITNES S FOR
qjr PLAI IjLEJ'j( PAGE
3 WARREN TREPP
Direct Examination (Continued) by Mr . Jakopin 5
4 Cross-Examination by Mr . F'lynn 36
Redirect Examinat kon by Mr . Jakopin 109
5
WITNESSES F()R THE EIJON NTIF
.
F PAGE
6
DENN IS L . MON 'PGOMERY
7 Di rect Examination by Mr . Flynn 111
Cros s-Examina t ion by M z- . Peek 2 0 3
8
E X 11 I B I T S;
9
DESIGNATTON MARKED ADM ITI'ED
10
Plainti f f f s Kxhibtt 8 27 30
1 1
Plaintif f 1 s Exhibit 9 31 33
12
Plaintif f ' s Kxhibit l 0 34 36
1 3
Plainti f f ï s Kxhibit 1 2
35 3 6
14
Plaintif f 1 s Zxhibit 12 35 36
1 5
Plainti f f ' s Zxhibi 1: 1 3 35 3 6
1 6
Plainti f f ' s 'Zxhibit 1 4 35 3 6
1-/
Plaintif f ' s Zxhibit 1 5 35 36
l 8
Plainti f f 1 s Exhibit 16 35 36
1 9
Plaintif f ' s Exhibit 17 35 36
2 0
De f endant ' s Exhibit 18 3 6 4 0
2 1
De f endant # s Exhibit 19 116 -
2 2
Def endant ' s Exhibit 20 116 120
2 3
Def endant ' s Exhibit 2 l l 17 ' 12 0
2 4
3
CLICILIA VOHL r NV CCR #24 6 ( 7 75) 82 7 -0672
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1 ; : D E X (CONTINURD)
2 4 X H I B I T 4
3 DES IGNATION MJGAKE D ADMITTE D
4 De fendant ' s Kxhib lt 22 156 156
5 Pl a int i f t 1 s Kxhib i. t 2 3 2 1 6 2 18
6 Pla int i f f 1 s 'Zxhib t t. 2 4 2 2 5 2 33
7 Plainti f f ' s 'Zxhib.t t 2 5 2 32 -
8
-
000-
9
l 0
11
12
13
14
1 5
1 6
17
18
19
2 0
2 1
2 2 '
2 3
2 4
4
CkICILIA V()Sf,, NV CCR #24 6 ( 7 75) 82 7 -6 672
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..
.
I
1 RENO, IAJEVADA, T'UFSDAY: FEBRUARY 7 , 2 O 0 6 , 3 : 2 5 P
M .
2 -000-
3
4 THE COURT : liltlase be seated . Go ahead .
5
6 DIREC'r EXAMINAT ION (CONTINUED)
7
8 BY MR . JAKOPIN :
9 Q . Thank you . Mr . Trepp, could you talk a l ittle bi t
10 about , f rom the f ormat:ion ot the business in 1998 w activities
11 that the company dtd t.o sort of grow the bus iness .
12 A . As I said berore : we basically s tarted out as an R&D
13 development company . 'E t. took us, 1 ' d say, at least a year and
14 a half to two years or developing bef ore we could actually get
15 into a quasi-zonmterciial mode where we could actually start
16 giving demons trations 01' putting together a Powerpoint or
17 something of Lhat ilk, but we started showing commercial
18 customers the type of business that we potentially were trying
19 to s e l 1 .
2 0 The f irst contract that we were able to secure af ter
21 an awf ul long time of negotiatkons was with General Ekectric
22 Company, and that was for a surveillance system which we built .
23 They were interested in it and asked us to do dramatic changes
24 or upgrades t.o the system that we origi nally builtw which they .
5
CECILIA VOHLr NV CCR #246 (775) 827-0672
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1 eventually licensed from us to use in Lheir lnterlogic company,
2 which was their surveitlance company.
3 Q. Other than GE , were there other companies to whom
4 presentations were made?
5 A. Absolutely. Quite a few. lntel was one, which we had
6 gone over a1l of the dtfrerent -- or some of the different
7 potential applications that we could offer to them for their
8 use. Kodak was ano ther. There was a company based out of
9 Los Angeles, Crest International, whlch was a company which
10 related to Hollywood post-production business, and others.
11 Q. Were there meetings that you had with people from each
12 of the companâes that you mentioned?
13 A . Absolutely .
14 Q. And Were b0th you and Mr. Montgomery involved in those
15 meetings?
16 A . Absolutely .
17 Q. During those D.eetings, did you give any of the
18 prototypes that you had talked about before to show these
19 companies what, you could do?
20 A . We would -- Dennis never wanted to leave any of what
.
21 we were doing with any of the companies . But what we would do
22 i.s , we would dtgree in advance to create a test protocol where
23 we could aqrei, to show exactly what we were trying to
24 demonstrate t() use as a tool to eventually sell the product to
6
CECILIA M5S=, NV CcR #246 (775) 827-0672
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4 mx w e
t whatever that company might have been .
2 Q . And iRt that meet ingz were test protocols shown?
3 A . i belg your pa rdon?
4 Q . At those meet i ngs z were those test protocols shown?
5 A . Yes . M d therL we would leave literaturez a Powerpoint
6 or something, relat ing to wha tever their speci f ic des ire would
7 be .
8 Q . So# then f'rom the GE deal that the company had, how
9 did the compally sor t of progress f rom there?
10 A . Durillg the GE processr we -- I had a relationship with
11 the managemenlr at MGM in Las Vegas, and we asked if we could
12 use the surve:.llance rooms in the MGM . Having abotlt 5, 000
13 cameras # obvitlusly: it would be a good demonstration place .
14 We pllt in -- I don ' t know the number of computers , but
15 it was a largi number of computers to do video capture . And at
16 the same time/ we tested and demonstrated to other entities our
17 ability to do pattern recognition while at the MGM .
18 Q . Whtcdl enti ties are you ref erring to?
19 A . DOD lleople ; also people f rom Compaq .
20 Q. Did l'here come a time when your relationship with the
21 DOD people werït to another level?
22 A . Yes . We had clone a nllmloer of dif f erent
23 demonstrationi; . The Ai r Force particularly was extremely
24 interested in doing work relating to our abi lity to capture and
7
CECILIA VOHL, NV CCR #246 (775) 827-0672
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1 deliver video transm Lssions from predator or unmanned vehicle
2 aircrafts down to wherever they needed to geL Lo .
3 Q. Did you have -- froa that interest to that -- did that
4 go anywhere?
5 A . Yes, we were able to show the DOD, as well, a number
6 of demonstratj-ons that would relate to our ability to do
7 pattern detection or ATR, automatic tracking and recognition.
8 Q . And ''DODH in your last few answers, you meant
9 Department of Defense?
10 MR. FLYNN : Your Honor: could we have some timelines?
11 I think it would be a little helpful.
12 THE COURT : Yes, it would be a little help ful if you
13 put this in context .
14 BY MR . JAKOPIN:
15 Q. The GE contract, do you remember when that was,
16 Mr . Trepp? '
17 A . I donlt remenâler exactly, but we clearly did a number
18 of demons trations for a number ot the other companies which I
19 mentioned to '-- prior to getting the GE contract . The GE
20 contract kzas at leas t a year in the making: so I would say we
2 l were in -- I would say we started doing demonstrations in 2000
22 f or sure . I believe we did a demonstration for Intel either at
23 the end of 20.30 or the beginning of 2001 and worked with Intel
24 f rw I would say, at 2 east a year .
8
CZCILIA VCISI,, NV CCR #24 6 (775) 82 7-0672
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:
1 Q. How élbout the demonstrations a t the MGM you were
2 re f erring to?
3 A . That would have been in the -- 1 believe, again, the
4 end of 2000-2()01 time frame .
5 Q. Okay . And so the heightened interest by the
6 A ir Force, wab; Lhat , thenr shortly thereaf te r?
7 A . Yeahp. that wotlld have been 1n: I would say, end o f
8 2 0 01-2 002 i1k ..
9 Q. Did lnhere come a time that you entered into a contract
10 with the Air Iporce?
11 A . Yes .
12 Q . When was t hat?
13 A . 1 dolà ' t remember exactly, but 1 believe it was the end
1 4 o f 2 0 0 2 .
15 Q . M d lfas that contract f or a certaj.n duration?
16 A . Yes . The contract we had with them was on what I
17 would call an intelhim basis . It was -- 1 don ' t remember i f it
l 8 was six monthl; or nine months . M d at that point , the
19 Air Force had asked us to work with another governmental agency
2 0 where that agency basically picked up that contract and went
21 f orward with (Lt for approximately another year to 15 months .
22 Q . What was the contract f or?
23 MR. LOCG R : Which one, Counsel? Air Force?
2 4 THE COIJRT : Y e ah .
9
CECILIA krffff s NV CCR #24 6 ( 7 75) 82 7-0 672
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J
1 MR. JAKOPCN: The contract with the Air Force .
2 THE WITNESS : This js going to get into what -- there
3 w111 be a debate as to what's classified and to what's not.
4 THE COURT: Well, here's my concern, is that
5 everything that's been submitted to me in terms of authority --
6 and my clerk and I did some zesearch on this issue too -- talks
7 about the government being the party that objects to thîngs
8 that are classified ancl not the persons that are involved .
9 And :50, unless somebody can convince me otherwisez il
10 there ls a question asked, and unless there's some statute or
11 some other procedure that precludes me from allowing that, I 'm
12 going to direct the witness to answer the question .
13 MR . FLYNN: The statute does involve agents, Your
14 Honor . Mr . Montgomery is, without question, as his examination
15 will show, an agent of the U.S. federal government . I doubt
16 Mr . Trepp is.
17 Whether eTreppid Technologies is under the contracts
18 that signed w tth this other department oK the government,
19 whether eTreppid Technologies is an agent, frankly, I have
20 nothing to ofrer, because these contracts are taken by the
21 agency and theybre not given to the individual.
22 But the contract -- in this instance particularly,
23 Mr. Montgomerg has the highest security clearance you can get.
24 He is under tNat contract, undoubtedly an agent, and
10
C,b;CILIA br()lf.L, NV CcR #24 6 ( 775) 8.2 7-0672
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?
1 Mr. Montgomer'g has spoken to an individual w ithin the
2 government who --
3 MR . LOGAR : Wait. Somebody walked in.
4 (Whereupon, a man is instructed to leave the
5 courtroom .)
6 THE COURT : G() aheacl -- as soon as this gentleman
7 leaves, go ahead and linlsh what you were golng to say, but 1
8 have a question. Maybe 1î11 just ask it now, if you don't
9 mind.
10 MR . FLYNN : Go ahead, Your Honor.
11 THE COURT: Assume he 's an agent, which is news -- I
12 mean, I don 't know about that. But assume that he is. Then I
13 need to see tae statute or the order or the rule that says, as
14 such an agent, thah issues like this cannot be discussed in
15 this courtroom . I haven 't seen that.
16 MR. FLYNN; J believe we gave you the Cheney case . We
17 gave you variaus cases from the Supreme Court which clearly
18 says he cannot.
19 THE WITNESS : Your Honor --
20 THE COURT: Well, these cases that I'm talking about
21 here are cases where the government -- the petitioner
22 government, the director of the Central Intelligence Agency,
23 who was a party defendant -- the statute that you gave me,
24 Title 18 U .S.C.S.: the United States may request the Court to
11
CECILIA 7OS=z NV CCR #246 (775) 827-0672
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re >-
l conduct a heazing to make determinations concerning the
2 relevant use c'r admisskbàlity of classified material . United
3 States ain 't here.
4 MR . FLYNN : You're right, Your Honor. And our ability
5 to bring in the United States in the next 48 hours is limited .
6 I w ill represent to the Court, because 1 was present with
7 Mr. Montgomery when he had the conversation with a ranking
8 United States government official who instructed him do not
9 teskify about any classified makerial or you will be in breach
10 of the agreement and it's treasonous. That ts the instruction
11 he was given. Now, what they choose to do -- because they are,
12 frankly, caught between Mr. Trepp and Mr . Montgomery. And what
13 they choose to do is up to them .
14 THE COURT : Do they know this hearing is being held
15 today?
16 MR . FLYNN : Yes, they know as of today.
17 THE COURT: Well, I mean: I1m assuming, being that it
18 was such an erlergency, they 'd be here.
19 MR. PEEK : Your Honor, this action was filed 19 days
20 aqo, January 19th. As this Court knows, Mr. Montgomery was
21 present with Judge Polaha . So theylve known about this, and
22 this was a ma'nter of some urgency to them.
23 THE COURT: I mean, we can get real silly. My
24 classmate and roommate at the Naval Academy is now the chairman
12
CECILIA vcsf's NV CCR #246 (775) 827-0672
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)
1 of the Joint Chiefs ot Staff, Peter Pace. 1 can call him on
2 the phone. You want me to do that?
3 MR . FLYNN : Sure . And 1 will represent to the Court
4 that I have contacted, prior to the TRO going in place, the
5 former Gecretary of Defense and others.
6 THE COURT : l 'm not trying to be difficult about this,
7 but I'm being placed jn a very uncomfortable situation because
8 1'm being asked to deal with an issue about which I have some
9 sensitivity. You might infer from my background that 1 do . At
10 the same time, we have a hearing here that's been scheduled for
11 a substantial period of time and don 't really see how, so far,
12 that webve taLked about anything thatls necessary to this
13 hearing in terms of whether or not this hearing can go forward
14 or whether or not 1 can qo ahead and make the decision I need
15 to make .
16 I was about to say we haven lt really gotten to the
17 pointz yet, ekther in terms of what thîs information is, and
18 I 'm hoping that we fre going to get there pretty quick.
19 MR. FLYNN : Your Honorz 1et me say this. If Mr. Trepp
20 wishes to vioLate his oath of secrecy on these matters, thatls
21 up to Mr . Trepp .
22 Mr. Montgomery, with a11 due respect -- and I think we
23 can avoid it on his direct so we can get to the core issues --
24 is going to assert the goverl= ental privilege .
13
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. eg w e
1 Now, if it rclquires the goverrr ent coming in within
2 the next 48 hours ho talk to the Court, we bll see what
3 develops. 1 Lhink at this level, what you 're dealing with,
4 Your Honor, you rre not dealing on the level of Mr . Hennessey .
5 You rre dealing on a level that is so compartmentalized, as I
6 understand itr that there are very few indivîduals --
7 Mr. Hennessey wouldn 't even know who to contact to dekermine
8 relevant issues on some of Lhese issues . Bu* if Mr
. Trepp --
9 THE COURT: Wabt a minute. Hold on. Sit down.
10 Sir, you need t.o sit down too. I can 't hear when
11 there's a11 this conversation.
12 Now, go ahead and fjnish what you were going to say,
13 and then 1111 1et Mr. Peek speak.
14 MR. FLYNN : Finey Your Honor. We want to go forward.
15 If Mr. Trepp wants to violate his oath, that 's up to him .
16 Mr. Montgomery, hopefully, wâll be able to give the Court
17 enough so that won 't be necessary.
18 If the defense wants to then ask questions about it,
19 if the goverm aental privilege has to be asserted, maybe weïll
20 do a little vo ir dire. The Way we do it, I suppose weVll -- it
21 could be procedurally done in chambers.
22 THE COURT: Yeah, what I'm saying is, the contents of
23 it don't need to be disclosed, as far as I'm concerned z to
24 understand whether or not there should be an injunction with
14
CECILIA VGHL, NV CCR #246 (775) 827-0672
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.
: ..-.z
)
-...-
1 regard to it. And if youtre concerned about the contents, I
2 donlt think 1 need to know about that.
3 But Leh 's go ahead. I'm with you . We'll go ahead
4 with this thing. We bll see when we get there if hels got a
5 privilege to invoke.
6 MR. PEEK : Your Honor, so there's no m isunderstanding
7 with the Courl: and at least the plaintiff, this source code has
8 no classificallion to it . Ih has no top secret classification
9 to it. It certainly was used in conjunction with classified
10 material that was provîded to eTreppid to run the source code
11 programs to identify objects, identify patterns, identify
12 anomalies . But I want to at least make it clear to this Court
13 that despike Mr. Flynn's continuous statements unsupported by
14 affidavit, notz even really presented in his oppositionz not
15 even part of any motion practice here, that this technology was
16 started out as, this is technology that emanates from public
17 filings that E had in the copyright office, to now something
18 that has some super-secret aspect to it. It keeps evolving: it
19 keeps morphintp it keeps changing every time we knock down the
20 straw man tha'z he puts up .
21 THE COURT: Al1 right.
22 . MR . FLYNN; So 1 want to go , too, but I want to at
23 least correct the record that there is no -- nothing behind
24 this . This is our source code.
15
CECILIA krff.L , NV CCR #24 6 (775) 827-0672
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'
/
1 THE COURT: 1 understand that's your position. I
2 just -- when you hear two thinqs from people that have
3 information, 1 don't know exactly how to balance it out until T
4 hear it all .
5 MR . PEEK : I Lhvnk you should hear it based upon sworn
6 declarations as opposed to anecdotal comments from counsel.
7 THE COURT : I understand .
8 MR . PEEK : And we have testimony. We have only
9 anecdotal remarks.
10 THE COURT : 1 understand .
11 MR . FLYNN : Your Honor, the evidence will be that it's
12 above the iighest security clearance called SAP. Not only is
13 it classified beyond -- it's the highest classification
14 existing in the United States, ''the source code.''
15 THE COURT: A1l right. Well, wedll see. Let's go
16 ahead . We'11 try to get through the process of figuring out
17 what it is and where it came from and where it is now.
18 BY MR . JAKOPIN:
19 Q. Strike the question. 1'11 try to start again.
20 The contract that we've been talking about, was that
21 contract with eTreppid or was with Dennis Montgomery?
22 A . With eTrepptd .
23 Q . Who was the contract for?
24 A . I don 't understand what you mean.
16
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1 Q. What were the services that eTreppid was providing
2 under the contract?
3 A. To p rocess video information and give outputs.
4 Q. And did e'I'reppâd fulfill that contract?
5 A. Yes.
6 Q. And ik was fulfillecl when?
7 A. I believe the Air Force contract was for six or nine
8 months, and then il. was given off to a different governmental
9 agency.
10 Q. And did it expire with respect to this different
11 governmental agency at any point in time?
12 A. Yes; about: a year and a half ago.
13 Q. Were there any other governmental contracts that
14 eTreppid has entered bnto as well?
15 A. Yesz there was another contract we got with Socom to
16 do testing for an ATR project.
17 Q . And when that was? '
18 A . 1 beLieve it was about a year ago .
19 Q. Does that contract continue today?
20 A . It's either expired or itfs about to expire.
21 Q. Other than that contractz any others?
22 A. Yes: there was one other project called -- another
23 Air Force project called Eagle Vision, which started about six
24 months ago and should end -- wellz we had ko put the contract
17
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1 on hold because, since we don ït have the source code, we can 't
2 do the work. So the ccntract, by definition, and our revenue
3 stream, by deflnition, is on hold until we can get it back.
4 Rut in theory, we were supposed to have another -- about seven
5 or eight months lelit on that contract .
6 Q. You refer to the source code being gone. When did you
7 first find out about the source code being removed at the
8 company?
9 A . It would either have been on Sundayp January 6th --
10 no, excuse me. That would be Sunday, January 8th, or Monday,
11 January 9th.
12 Q. How did you learn about it?
13 A . Sunday, I got a call from Jesse, one of our employees,
14 saying that he wanted to get together w ith me and discuss
15 something with me.
16 Q. And what happened next?
17 A . 1 got together with him that afternoon, and he
18 explained to rRe that there were -- either he knew spe ciftcally
19 or he knew other people that said over the last couple of weeks
20 Dennis had either taken their hard drives or they had noticed
21 something missing from their workstations.
22 MR. FLYNN: Objection. Move to strike. Hearsay, Your
23 Honor. .
24 THE COURT: I'm going to permit it . I<m going to
18
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1 listen to hearsay to a fairly large extent during this hearing
2 under the general exception to the hearsay rule .
3 BY MR . JAKOPIN:
4 Q. Mr. Trepp: before we continue with the source codez a
5 couple questions about the government contracts . Were those
6 government contracts fulfilled using a proprietary eTreppid
7 source code?
8 A . Yes .
9 Q . And how djd you fulfill them? Did you provide results
10 to the goverN aent?
11 A . Yes, in every case. Or, in one of the contracts, we
12 actually gave them -- 1 don't know the number -- a number of
13 laptops that had our executable source code on them so that the
14 Socom people could actklally operate them on their own .
15 Q. Thank you. Getting back again to the removal of the
16 source code, you talked about having an afternoon meeting with
17 Jesse. What did you dc) next?
18 A . I ca Lled Sloan thah night at home and satd what was he
19 -- was he aware of anything that was going on. And he either
20 alluded to the fact that while he was on his vacation, that he
21 wasn 't sure, but he eâther thought a substantial or all of the
22 source code was gone. I told him it was imperative he came in
23 early the nex'z morning to give me an update as to what was
24 going on relaLive to that .
19
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1 Q. Did he do that?
2 A . Yes.
3 Q. What did you do then?
4 A . 1 asked if he could give me a better assessment as to
5 what was going on, and 1 immediately went to Cind Dennis.
6 Q. Did you?
7 A . Yes .
8 Q. With respect -- when you found out what was going on,
9 what did you find out?
10 A . I basically said to Dennis, î'There 's obviously
11 something awry here . What's going on?''
12 Q. What did he say?
13 A . He said, ''1 don't know what you bre talking about .'' l
14 then had to ga back upstairs to my offbce. I had planned a
15 four-month vacation around the world with my family. I was
16 supposed to have left that day. And obviously, with a problem
17 brewing, I obviouszy figured out I shouldn't be leaving and
18 figure out exactly what was going on . So l did, in fact, go to
19 the airport to see off the people that we were supposed to be
20 traveling on this trip with.
21 When I came back in, I got a great deal more
22 information from the employees basically stating that the vast
23 majority of al1 of the workstations were deleted -- a1l of the
24 source code was deleted, the ISA server was deleted and maimedy
20
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1 and I was perplexed , to say the least.
2 Q. Did you direct the employees to do anything in finding
3 that out?
4 A . To fjnd otlt exactly: to the best of their knowledge,
5 exactly what happened. And I asked them a11 so that we cou ld
6 get together to cumulatively to come up w ith exactly where
7 everything stood . 1 asked Sloan to call Dennis and ask him to
8 come back into the office so that I could discuss with htm
9 again what was going on. And he said that he would come back
10 inr but he didnlt .
11 Q. Okay. That was on Monday, correct?
12 A . That is correct.
13 Q. Anything else happen on Monday with Mr. Montgomery?
14 A . Not that J can recall.
15 Q. How about on Tuesday?
16 A . Tuesday, l again put a call in to him , told him we had
17 to get together . 1 meL -- 1 don't remember if 1 met him
18 upstairs or downstairs initiallyy and saidr ''What on earth are
19 you doing? The people can't work. We've got 20 employees . If
20 we don lt have the source code, how can you have people work?
21 What did you do with it?''
22 And he said, ''I don lt know what you're talking abcut.''
23 And t saidy ''We11r what about a11 of the workstations
24 and the source server and the ISA serverz why did you delete
21
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l al1 of those?''
2 And he said, ''We11, I didn 't do it.''
3 So I said, ''Who on earth did?''
4 And he saîd to me, ''We11y Patty did it.''
5 Now, it was preposterousy that statement, because I
6 had found out from Sloan that morning that the only two people
7 that had access to be able to access either the source serverw
8 the 1SA serverz or aL1 of the individual workstations, were
9 Mr. Montgomery and Sloan .
10 1 said, ''Please 1et me help you get through this. I
11 donït understand whak you dre doing.''
12 And he just screamed and yelled and ranted and raved.
13 Half of the ellployees in the building certainly heard him
14 because he was in an absolute tirade. He went running out the
15 back, jumped into his truck. And once again, I appealed to 1et
16 me help you, and it went to no avail. He just drove away.
17 Q. There was reference earlier to backup disks. Are you
18 famillar with those?
19 A . Yes.
20 Q . Could you tell us about those.
21 A . Dennis had told Sloan to back up everything in the
22 building, with the exception of the source server stuff. I had
23 also said to Dennis from Day One, when we started the business,
24 that it was essential for what would be in my family's best
22
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l interest and his family's best interest for me ho personally
2 keep a copy orL a regular basis of the source code . I asked him
3 to do that at a minlmum. of annually, and certainly, anytime
4 Lhere was a major event that would have occurred, we would
5 eltber have a new project or new projectz that I would be able
6 to keep a copy outside of the building, outside of the -- what
7 was in control ot eTreppid.
8 And 7, over a seven-year period, kept getting -- they
9 were first CDs, they became E'VDS, and then they became hard
10 drives. I kept all of those in safe-deposit boxes. And the
11 only two people who hacl access to the safe-deposit boxes was my
12 wife and myself.
13 Q. After the events that youfve just talked about took
14 place, did you get those retrieved?
15 A . Yes. I asked -- I ctidn't want to leave the building
16 because there was obviously a great deal of turmoil, and people
17 were worried about any number of things, obviously. I was
18 trying to keep -- get some klnd of stability, at least on an
19 interim basis, until we coulcl figure out what was going on . I
20 asked my wife to go to the safe-deposit boxes, retrleve al1 of
21 the disks and bring them back into the office.
22 Q. And she did that?
23 A . She did it.
24 Q. And what did you do with the disks then?
23
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l A . 1 iv tediately brought them into Sloan's office . And
2 Sloan -- 1 said to him , Lhese are the disks that Dennis had
3 given me over Lhe years with al1 of the source codes for a11 of
4 the projects that weld been working on from Lhe beginning of
5 time, and that this will be the answer; please look on these,
6 and tell me exactly what's on there, hoping that, obviously,
7 a11 of the source code for a11 of the projects that weld been
8 working on over the years was there.
9 Q. Did he report back to you after he did that?
10 A. Yes. He just started to laugh. The first thing he
11 said to me was: ''Hc)w come there's so few of these? Dennis told
12 me he used to give them to you every two weeks.''
13 MR. FLYNN: Your Honor: Ilve got a continuing
14 objection on hearsay.
15 THE COURT: Al1 right. Objection is noted. Tt will
16 be continued .
17 BY MR. JAMOPIN:
18 Q. Anything else?
19 A . 1'm sorry, I dsdn't understand what -- I didn't know
20 what just happened.
21 Q. He objected, and the judge allowed you to answer.
22 A . Okay. You better ask me the question again.
23 Q. Was there anything else that you were told about what
24 was on those disks?
24
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1 A . Yes. Sloan then went through , disk by disk, and went
2 through the whole thinq and basically started to laugh and
3 said, ''Therels nothing here.'' He did say there was some
4 reference to one compression project, but that it was totally
5 worthless by vlrtue of the fact that there wasn't source code
6 there for it; it was just an EXE. He said the bulk of it --
7 the rest of the junk on it was a bunch of imagery, just bitmap
8 im ages of stuff.
9 Q. What has the effect of the loss of the source code
10 been on the company?
11 A . Wellj we have no ability to generate revenue. We bve
12 told the two governmental agencies that we have pending
13 contracts with that we can't perform on them . Webve asked for
14 an extension , if that would be a possibility.
15 Obviouslyy by not having the contracts: we don't have
16 revenue. I have to make a decision at some point in the near
17 future, how many months 1îm going to be able to sustain paying
18 the 20 families who are employees . That's goinq to have to
19 come out of m'g pocket at some point.
20 Q . How many employees are there?
21 A . Twenty .
22 Q. How many of those are engineering types?
23 A . Seventeen or eighteen.
24 Q. Does the company routinely have a11 of their employees
25
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$ -' ' ' * ' 3
1 sign agreements such that the work that they do is the
2 companybs?
3 A . Absolutely.
4 Q. Is the company currently in the process of trying to
5 negotlate new contracts?
6 A . Absolutely.
7 Q. Was llhe office software to be --
8 A . We were -- up until this evenk, we were on the verge
9 of getting a very substantial contract -- or multiple
10 substantial contracts.
11 Q . Up until these recent eventsr has there ever been any
12 conversation that you #ee had with Mr. Montgomery to the
13 effect -- 1 mean -- strike that.
14 Have there been conversations you#ve had with
15 Mr . Montgomery from time to time relating to pattern
16 recognition?
17 A . Yeah, for mang, many years.
18 Q. In any of those, did he say anything about his owning
19 it?
20 A . Owning what?
21 Q . Any of -- any software relating to pattern
22 recognition .
23 A . No, absolutely not.
24 MR . JAKOPIN: What 's our next number?
2 6
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1 MR. IPLYNN: 1 think we're dealing with 8 now . I think
2 it's 8.
3 (PlaLntiff's Exhibit 8 was marked for ldentification.)
4 BY MR . JAKOPIN :
5 Q . Handtng you a copy of a document that has been marked
6 as Exhibit 8, do you recognize this as a business record of the
7 company, Mr. Trepp?
8 A . Yes.
9 Q. And what is it?
10 A . It's an assiglwtent of a U .S. patent .
11 Q. And on the foilowing page, is a copy of that patent
12 attached?
13 A . Yes.
14 Q. Actually, a patent application.
15 A . Yes .
16 Q. Is this the patent application relating to an
17 invention that was macle by Dennis Montgomery at the company?
18 A . Yes.
19 Q . And does this assignment reflect that he assigned this
20 patent to the company on this assignment dated March 7th# 20022
21 A . Yes, it is.
22 MR. JAKOPTN; Thank you.
23 Can I get this offered into evidence?
24 THE COURT: Are you offering Exhibit 82
27
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1 MR . JAKOPTN: Yes.
2 MR . FLYNN : May 1 have one moment, Your Honor?
3 THE COURT: Yes. lsnft this attached to one of the
4 pleadings?
5 MR . JAKOPIN: There were three patent applications
6 attached to the pleadings, Your Honor . Wedve actually got more
7 patenk applications than the three that were aktached to the
8 reply.
9 Fran kly, if they would stipulate, 1 could get a11 of
10 these marked together and we could move thîs along more
11 quickly.
12 THE COURT : So the answer to my question is ''no,''
13 right? My question was, isn't this --
14 MR . JAKOPIN : This particular one?
15 THE COURT : Yes.
16 MR. JAKOPIN : 1:11 find out.
17 1 don't believe soz Your Honor.
18 THE COURT: A1l right. 1 just thought I'd seen it.
19 MR. FLYNN: Your Honor: we're going to oblect on
20 authentication grounds. Even though we think it's irrelevant,
21 the individual who allegedly witnessed it was fired five weeks
22 prior to March 7th. And there are other documents that have
23 been given to the Court where Mr . Montgomeryls signature was
24 obviously forged .
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1 MR. PEEK: Your Honor, will they just say or do
2 anything?
3 THE COURT: Waj.t, wait, waitz wait.
4 MR . PEEK ; You know --
5 THE COURT: Ilold on, hold onz hold on .
6 Well, I haven 't heard -- maybe I have, but it's been
7 lost in a11 of the conversation here. Has a foundational
8 question with regard to Exhibit 8 been asked of the witness?
9 MR. JAKOPEN: When 1 asked him if it was a buslness
10 record of the company, he said yes. He indicated that he was
11 aware that this was one of the inventions of Mr. Montgomery and
12 that this was the assâgnment that related to that invention .
13 THE COURT : And he 's seen it before? And it's a true
14 and correct capy of what hels seen before; is that right?
15 MR . JAKOPIN : Whether he has seen this particular -- I
16 meanr what is --
17 MR. PEEK: Eâther he has or he hasnît.
18 THE NITNESS: I don 't believe 1 ever havez Your Honor.
19 THE OOURT: Al1 right. And how does he determine that
20 it ïs a business record of th'e company, simply because of its
21 content?
22 MR. JAKOPIN : Correct: Your Honor . Further, the
23 published application is published by the U.S. Patent Office.
24 I mean; this is in a format that is published by the patent
29
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1 office . And 150, that 's a record of what has been filed from --
2 with the patent office and published by them .
3 MR . FLYNN : Your Honor, in order to authenticate and
4 admit into evidence in any courtroom that I know of in the
5 United Statesg you neecl a certified copy from the patent
6 office, number one; nunl er two, in order to prove it ds a
7 business record y heds got to go through the four elements of
8 business records.
9 He doesn ft even know what it is, 1et alone being able
10 to go through the four records -- four elements, 1et alone
11 knowing what :zhe four elements are, let alone knowing what the
12 business routLnes of the company are with regard to
13 recordkeeping . None o1' that has been established .
14 THE COURT : Well, there truly hasn't been any
15 testimony about who the custodian is; whether it's kept in the
16 ordinary counse, things like that. Why don't you see if you
17 can 1ay just a little bit more foundation. I want to give this
18 a little bit of thought too.
19 My inclination is to -- Mr. Trepp, does that appear to
20 be Mr. Montgomery's signature on the bottom?
21 THE W ITNESS : Yes.
22 THE COURT: I'm going to admit it . It's admitted.
23 (Plaintiffls Exhibit 8 was admitted into evidence.)
24 MR . FLYNN : This will be 92
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l MR . JAKOPIN: This will be 9 .
2 (PlaC-ntiff's Exhibit 9 was marked for identification .)
3 BY MR . JAKOPIN :
4 Q . Handg.ng you a copy of a document that's been marked as
5 Exhibit 9, is this a business record of the company, Mr. Trepp?
.
6 A . It looks âike it .
7 Q. Is this a true and correct copy of an assignment
8 signed by Mr. Montgomery and the attached published patent
9 application entitled ''Method and Apparatus For Determining
10 Pattern Within Adjacent Blocks of Data''?
11 A . Yes.
12 MR. JAKOPIN : M ay I have Exhibit 9 marked into
13 evidence?
14 MR. FLYNN : Your Honor, same basis On authentication
15 for -- but as I understand it, this is a11 compression stuff.
16 THE COURT: Apparently, it is. You know, my thinking
17 was whether or not your client really contends that these are
18 not authentic and that these are not hâ.s signatures on these
19 documents, at least for the purpose of this hearing. The issue
20 about whether this person who witnessed it was there at the
21 time, I mean: that -- I mean, that's more -- almost more
22 James Bond type stuff, and I expect maybe helll be a witness in
23 this case before too long .
24 I think, for the purpose of authentication and for
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1 relevance and for allowing these documents to be admitted, that
2 by looking at the contents of the documents themselves,
3 Mr. Trepp 's testimony, his familiarity with Mr. Montgomery 's
4 signature, this appears to be his signature, is enough for me
5 to allow these to be admîtted.
6 So Exhibit 9 is admîtted. And then if you have
7 testimony down the roacl, I can certainly reverse my decision on
8 that . But I lhink, in terms of relevance and admissibility and
9 authentication, that there 's been enough to allow it for the
10 purpose of this hearing.
11 MR. FLYNN: 'm d, Your Honor, just so therels some
12 clarlty here, we don't necessarily agree that this is
13 Mr. Montgomeryîs signature. Thû issue with some documents that
14 have been given to the Court, which is so obviously -- pardon
15 me -- fraudulent that we have to be cautious with reqard to --
16 MR. PEEK : Your Honor --
17 THE COURT: Well, 1'm saying --
18 MR. PEEK; 1'm giving --
19 THE COURT: Stop , stop, stop . There will be a time .
20 when that can be addressed. L mean, you know, if you object to
21 the document as fraudulent, then thereïs got to be more than
22 that objecticn. Therels got to be some proof: therels got to
23 be some evidence, there's got to be more than that.
24 And so what I1m saying is, if you can produce that
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1 evidence at some polnt in time, 1'11 consider that evidence.
2 But just to say it's fzaudulent when we've got testimony to Lhe
3 contrary -- I'm goîng to admit the exhibit .
4 MR . FLYNN : Finey Your Honor.
5 MR . PEEK : And , respectfully, what troubles me is that
6 M r. Flynn can come here from Massachusetts and do and say
7 anything abou-- me# who has submltted these doeuments, and say
8 what I submitled was fraudulent. Thatfs outrageous to me. I
9 just think that is -- you don't just come in here one time,
10 one shotz and take cheaip shots at people.
11 MR . FLYNN : Stevep assume it has got nothing to do
12 with you.
13 %HE COURT : ilold on, gentlemen . Don't get your
14 feelings hurt about this.
15 MR. PEEK: But just --
16 THE COURT: l've been around the block a couple times.
17 T understand whatfs going on. r don't take any of these things
18 to be personal as to you, and I'm not reading them that way .
19 So let 's get back to what we were talking about.
20 Exhibit 9 is admitted. lf you have some other similar
21 documentsz go ahead and offer themz and we:ll go from there .
22 (Plaintiff's Exhibit 9 was admitted into evidence.)
23 BY MR. JAKOPIN:
24 Q. Mr. Trepp , with respect to Exhibit 9, do you see in
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1 the abstract -- it's the seccnd page -- the first sentence
2 talks about f'ëahe present invention describes methods and
3 apparatus for providing pahtern recognition between adjacent
4 sequential fritmes of data''?
5 A . Yes.
6 Q. Were those activities that were going on at eTreppid
7 in the 2001 t:Lme frame when this application was filed?
8 A . Yes .
9 (Plakntiff's Exhtbit 10 was marked for
10 identification.)
11 MR. FLYNN : This is 10?
12 THE CLERK : Yes .
13 THE COURT: How many more of these do you have?
14 MR . PEEK : Five, Your Honor.
15 THE COURT : Why don 't you take -- well, I don 't want
16 t/ tell you how to do this --
17 MR . JAKOPIN: Welll look at them all and save a few
18 minutesz that 's fine, Your Honor .
19 THE COURT: Yotl read my mind.
20 MR. LOGAR : Counsel: for the record, will you identify
21 what you handed the clerk.
22 MR. FLYNN : And are these going Lo be in order?
23 MR. JAKOPIN : These are going to be in order.
24 THE CLERK : Top one is 11.
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1 MR. JAKOPjN: Top one is 11.
2 MR. FLYNN: Maybe you could just --
3 THE COURT : You marked Exhibits 11 through what?
4 MR. JAKOPEN : This is 11, 12r 13 and 14 and 15.
5 THE CLERK : Yes, Your Honor, that ts what I have.
6 THE COURT : A11 right.
7 MR . PEEK : Oh, therers one more.
8 THE COURT : So 11 through 16# then? ls that rîght:
9 sir?
10 MR . JAKOPIN : Actually, it will be two more, 11
11 through 17z Your Honor.
12 THE COURT : Al1 right.
13 (Plaintiff's Exhibits t1 through 17 were marked for
14 identification.)
15 MR . FLYNN : ls 16 the one --
16 MR. JAKOP IN: Exhibit 16 is ''System and Method For
17 Generating Work Conditions in a Surveillance System.''
18 BY MR . JAKOPIN:
19 Q. Mr. Trepp, I've handed you copies of documents that
20 have been marked as Exhibits 11 through 17. Are each of these
21 copies of the assignment and patent application for a different
22 invention filed by eTreppid?
23 A . Yes.
24 MR . JAKOPIN: T ask that each of these be admitted
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1 into evidence.
2 MR. FLYNN: Same objection, Your Honor.
3 THE COURT: A11 right. The objection with regard to
4 Exhibits 10 through 17 is noted. They lll be admithed .
5 (Plal.ntiff's Elxhibits 10 through 17 were admitted into
6 evidence.)
7 MR . JAKOPIN: That's al1 1 have of this witnessr Your
8 Honor .
9 THE COURT : A11 right. Mr . Flynn?
10 MR . FLYNN : Thank youz Your Honor .
11 The iast one was 17?
12 THE COURT : Yes, sir.
13 (Defendant's Exhibit 18 was marked for
14 identification.)
15
16 CROSS-EXAMINATION
17
18 BY MR . FLYNN :
19 Q . Mr. Trepp, before we get into the nuts and bolts of
20 what we're dealing with here, I've given you what -- a copy of
21 what has been identifâed thus far as Exhibit 18. Do you
22 recognize this document, sir?
23 A . Yes.
24 Q. Describe to the Court what it is.
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l A . It's an amendment to a loan which 1 gave to Dennis
2 starting in 1999 . And I think the last loan 1 gave to h1m was
3 on December loth.
4 Q . Of what year, sir?
5 A . 105 .
6 Q. And who prepared this document?
7 A . Doug Frye .
8 Q. He's your lawyer?
9 A . Yes .
10 Q . How Long has he been your lawyer?
11 A . Abou L 20, 25 years.
12 Q. And fn fact, when you went on your six-month cruise
13 right after the deal was made with Mr. Montgomery, Mr. Frye ran
14 the company?
15 A. 1 don't think that's correct. 1 believe Dennis was
16 the manager wnen I was gone: and then I think when I got back,
17 Doug was made the manager. I'm not a hundred percent sure. 1
18 don 't know.
19 Q. Who signed the checks and paid the employees?
20 A . I beg your pardon?
21 Q. When you were gonez who signed the checks and paid the
22 employees?
23 A . 1 have no idea.
24 Q. What was -- wa,s Mr. Fryew during that six-ronth
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1 period, being paid by eTreppid Technologies?
2 A . As cclrporate counsel or as an employee?
3 0. In any way.
4 A . lf he had a legal bill and he was corporate counsel,
5 I'm sure he was being paid.
6 Q. The date of this document is December 28th; is that
7 correct?
8 A . Well, thatts the date it was signed .
9 Q. Now, what date did you Sign it?
10 A . What date did 1 sign it? 1 signed it the same date he
11 did.
12 Q. And gour testimony is, what day is that, sir? ls that
13 the day that Ls recited on the front of the document?
14 A . Yeah .
15 Q. December 28th?
16 A . No . This -- wait. Regroup. I gave Dennis either two
17 or three of these where 1 told hîm I wanted -- he and Brenda
18 signed the notes . He came back to me after the 8th or Lhe
19 10th, whenever 1 gave him the original document, and he said
20 Brenda wouldn't algn it. And I sald, ''That 's preposterous. l
21 just gave you more money. You told me you were going to sign
22 1t. Why is this any different than the prior note that you had
23 where Dennis and Brenda signed them both?''
24 Go I got frustrated after two weeks -- or whatever the
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1 time frame was, and 1 saidr ''Dennis, sign this thing .''
2 Q . Or else?
3 A . Or e.'-se, what?
4 Q. Did he sign this in your presence?
5 A . Yes, of course.
6 Q. And so the two -- where did the two of you sign it?
7 A . He s.Lgned it at the front desk of our building, in the
8 reception area .
9 Q . And '/ou were right there too?
10 A . I handed it to him . He got the pen and he signed ît,
11 and then 1 had our receptlonist sign as a witness that he saw
12 him sign it.
13 Q. So tNis docr terft was signed out in the reception area
14 of the company; is that correct?
15 A . Correct.
16 Q. And eho was this indlvidual, Mr. Bora?
17 A . He's our receptioniat.
18 Q. And what relatîonship is he to you?
19 A . My brother-in-law.
20 Q. And this signature of Mr. Montgomery -- is it your
21 sworn testimony, sir, that this is Mr. Montgomery ïs signature?
22 A. Did I see him sign ît? Is that the question?
23 Q. Well, is it your testimony this is his signature?
24 A . Welq, the answer to that is, did I see him sign it?
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1 Yes, I saw htm sign ît.
2 Q . Have you compared thLs signature to any of
3 Mr . Montgomery 's prior szgnatures at eTreppid?
4 A . Itls irrelevant. 1 saW him sign it.
5 MR. FLYNN: Your Honor, 1 move to admit Exhiblt l8.
6 And I believe Exhibit 18 was given -- previousYy given to the
7 Court as part of the papers.
8 MR. PEEK: No objection, Your Honor.
9 THE COURT; 16 is admitted .
10 (Plaintiff's Exhibit 18 was admitted into evidence.)
11 BY MR . FLYNN :
12 Q. Now, Mr. Trepp, letîs take you back to September of
13 1998, okay? When did you first meet Mr. Montgomery, the dater
14 if you can recall the date?
15 A . I have no idea . f think --
16 Q . Was it September?
17 A . When was the first time I met him? I think I met him
18 in 1996, firs'z time.
19 Q. Where?
20 A . At the Eldorado .
21 Q. And did you talk to him then?
22 A . Yes .
23 Q . What did you talk about?
24 A . About what he was proposing .
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1 Q . I n 19 9 6 ?
2 A . Ye s .
3 Q . What was iïe propos j-ng to you î.n l 996?
4 A . He w.anted to :start a business .
5 Q . And 'Jhat dâ.d you say?
6 A . ''I donft know enough about it.''
7 Q. What did he tell you the business was?
8 A . That he had tkhe ability -- he thought he had the
9 ability over time to develop something that could have a major
10 impact on the compressLon and movie industries.
11 Q. Do you recall anything else in that conversation?
12 A . No.
13 Q. Okay. When bs the next time you meet Mr. Montgomery?
14 A. It was either nine months or a year later.
15 Q. Where did you meet him?
16 A . The same place .
17 Q. What were you doing there?
18 A . The person introduced me, asked me to come down and
19 see him again.
20 Q. Okayu Were you there on business?
21 A . I came down to meet him because the third party said
22 he was going to be there and wanted to talk to me again,
23 because I hacb 't spoken to him in so long .
24 Q. And again, where was this?
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1 A . The Eldorado.
2 Q. Were you there gambling?
3 A . I don 't know . Itïs possible. T cou ld have been .
4 Q. Okay. Now, what was sald in that conversation, as
5 much as you can currentiy recall?
6 A . I don 't remeyâler at this -- specific details, but it
7 was more of the same. He had said that he had continued to
8 make progress on the work that he was doing. And I saîdw
9 finally, I'd be interested in actually looking to see --
10 actually, give me a demonstration of what you have so I could
11 try to come up with some evaluation as to if 1'd be interested
12 in investing in it.
13 Q. What did you say?
14 A. 1 just told you what I said.
15 Q . That no --
16 A . What 's the question'?
17 Q . Did you give him money at that point to start a
18 busineas?
19 A . Well, of course not.
20 Q. Why not?
21 A . He didn 't do the demonstration yet.
22 Q. But this is a year later, so this is in :97?
23 A . Yes.
24 Q. A11 right. Did you ask him to do a demonstration?
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1 A . He said that he would like to put together a
2 demonstration and we could get together at some point and he
3 would give me a demonstration.
4 Q . Okay. Anci then when is the next time that you met
5 him?
6 A . Sometime in :98. Beginning of 798.
7 Q . Where?
8 A . I think it. was at my home . 1'm not a hundred percent
9 sure, but I think ât was at rty home.
10 Q . Who arranged that meeting?
11 A . The same perscm .
12 Q . Wbo was it?
13 A . Steve Sands.
14 Q. And Now l()ng did you meet with him in early 1982
15 A . For Lhe demonstration purpose?
16 Q . For any purpose.
17 A . If itls for the demonstration purpose, it was probably
18 about a half hour or 45 minutes.
19 Q . And what did you see?
20 A . He showed me a compression technology, and he showed
21 me the Gunga Din pattern recognition stuff that I alluded to
22 earlier .
23 Q. The Gunga Dïn pattern recognition?
24 A . Yes.
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1 Q. How cid he show you the Gunga Din pattern recognition'?
2 A . He played a C?), and it played on a monitor or a
3 laptop . I don 't remember exactlg what it was .
4 Q. A CD of what?
5 A . Of the demonstration of the conversion of a
6 black-and-white series of frames into a colored serles of
7 frames .
8 Q. So at this point, in your mind: what was your
9 understanding of what tbe technology was tbat Mr. Montgomery
10 was demonstrating to you?
11 A . A, he had an ability to compress what he said was
12 audiow vldeo: text, iaagery, and also having the ability to
13 recognize patterns in either a series of frames -- and I'm not
14 sure if it was either just video and audio as well and video --
15 and belng ablfa to convert the video pattern onto future frames.
16 Q. So at this point in early 1998, you, as the investor
17 in this company, 50/50 with Mr. Montgomery --
18 A. We didn't even start the company, just to make sure
19 weAre on track here .
20 Q. You have an understanding that there are two types of
21 technology: pattern recognitionw as you've described itr and
22 data compression; is that correct?
23 A . Well, to the point, that is correct. He also told me
24 about a11 these other wonderful things that potentially he
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1 would like to qrow and develop over time if he had the
2 engineers and the capital to do it.
3 Q- But at least, we're clear on those two?
4 A . Yeah.
5 Q . Thost) are demonstrated to you in early '98?
6 A . Yeah ,
7 Q . And what did you say to Mr. Montgomery at that time?
8 A . That it seemed like it was interesting .
9 Q . 1 beq your pardon?
10 A . It seemed like it was interesting and that I thought
11 uhat might be a good way to approach this was to agree, have
12 him contribute whatever he had going forward, and then we would
13 start a -- basically, a research and development project at
14 that time.
15 Q . Now: were there two separate demonstrations?
16 A . There could have been.
17 Q . But there clearly, j.n your memory, was one for pattern
18 recognition based on Gunga DinB
19 A . Yes .
20 Q. Unquestionably?
21 A . Unquestionably.
22 Q . And there clearly was one on data compression, but you
23 don 't recall how he showed you the data compression?
24 A . Well, it would have been the same thing. He would
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l have showed me a movie and said this is the size of a normal
2 movie: this is the size I made ét, or a section of the movie or
3 something to that effect .
4 Q. Okay, Was tt the same movie?
5 A . Was the movte Gunga Din that he compressed?
6 Q . Yes.
7 A . I don't really remember.
8 Q. Okay . You do remember, a1l these years later: there
9 were two?
10 A . Two what?
11 Q . Two demonstrations --
12 A . No --
13 THE COURT RRPOPTER: Excuse me . One person at a time,
14 please.
15 THE COURT: Hold on. Stop.
16 THE WITNESS: I apologize, Your Honorw but he keeps
17 asking --
18 THE COURT : l understand . Lîke I said earlier, this
19 is not like -- this is an unnatural setting for human beings to
20 be in. It's not like ordinary conversation. So just try to
21 exercise a little care, both of you, to make sure that youbre
22 not talking oeer qach other, because the court reporter can 't
23 get that down .
24 //// ////
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1 BY MR . FLYNN :
2 Q. Irl1 rephrase, Mr. R'repp. Youdre very sure, as you
3 sit here today under oath, there were two different things that
4 you talked about wâth Mr. Trepp (sic), that he demonstrated to
5 you, data compressjon and pattern recognltion?
6 A . Yes.
7 Q. When is the next tinte you meet Mr. Montgomery?
8 A . A t the end of '98 when we decided we were going to go
9 forward in a business.
10 Q. And where was that, sir?
11 A . I haqze no idea .
12 Q . Do you recall the month?
13 A . It was the end of the year. It was before I was going
14 to be leaving to go to get married and go on my honeymoon .
15 Q. When did you get married and go on your honeymoon?
16 A. We left -- well, I got married civilly on
17 October 30th: and 1 got marrted in the church on November 29th
18 of '98 .
19 Q. October -- what was it, sir?
20 A . 30th.
21 Q. 1998.
22 So how long before that is your best estimate that you
23 met with Mr. Hontgomery and made an agreement to form the
24 company?
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1 A . About a month, month and a half, something like that.
2 Q. So sometime in September?
3 A . Okay.
4 Q. Now, a1l these documents that your counsel,
5 Mr. Jakopinz showed you, did you review them before you come
6 into the courtroom?
7 A . Did : revjew these?
8 Q . Any of those.
9 A . No.
10 Q . How kong has Mr. Jakopin been your lawyer?
11 A . Whenever we started doing the -- I mean -- are you
12 saylng my lawver or eTreppidls lawyer?
13 Q. A11 right. Let me zephrase. After you -- before we
14 get into the conversation you had with Mr. Montgomery, after
15 you decided to form the company, did you call an attorney to
16 create paperwork?
17 A . Yes.
18 Q. Wbo -- whose attorney was that?
19 A. Whose attorney was it? Mine . Doug Frye.
20 Q. And -- and when you asked him to create the paperwork,
21 did you have any discussion with him -- just yes or no -- about
22 what type of paperwork he would create'?
23 A . Of course .
24 Q. Okay. Now, letls go back -- wedre going to go back
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l there, but let's go back to your conversation with
2 Mr. Montgomery. Describe to the Court, as best you can, what
3 you said to hl.m and what he said to you about forming a
4 company.
5 A . Who said t.o who and who said to who?
6 Q. What you said to Mr. Montgomery and what
7 Mr. Montgomery saicl Lo you .
8 A . I th tnk I've already said this before, but the best
9 that I can retzall js, Dennis was going to contribute everything
10 he had done, put it into the pot. I would contribute money
11 into the pot. We wouzd get a 50/50 lnterest. 1 would help him
12 get people to develop this research and develop the project to
13 make extensions of what he had done and continue to grow a
14 business together as partners .
15 Q . Well, let's fkrst take the part of your testimony
16 where you say Neverything he had done.''
17 A . Yes.
'
18 Q. What was your state of mindz your understanding, in
19 September 1998 as to what ''everything he had done'' meant, that
20 he was contributing to your company?
21 A . Well, clearly, the compression that he showed me,
22 clearly, the pattern recognition that he showed me, and any
23 other works that he said he had potentially in the hopper that
24 he was working on, that this would be part of the deal that we
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1 were going to be partners qoing forward with.
2 Q. Did you take notes?
3 A . Did l what?
4 Q . Did you take any notes of what he would be
5 contributing?
6 A . No .
7 Q . Did you ask hiD whether he had anv copyrights?
8 A . No.
9 Q. Did '/ou ask him if he had any patents?
10 A . I don 't believe 1 personally did.
11 Q. Did 'gou ask him if he had ever assigned any interest
12 in any of these things that you were getting to any other
13 company?
14 A . No .
15 Q. Did, at any time, you have a meeting with Mr. Frye, as
16 your attorney, and Mr. Montgomery over what Mr. Montgomery was
17 contributing And what you were contributing?
18 A . I -- 1 don 't recall having a meeting with the three of
19 us# but I certainly Would have told Douq what my impression of
20 the deal was and asked Doug t'o have a discussion either with
21 Dennis or his counsel or -- so that we could actually put
22 together a term sheet and actually conclude a deal.
23 Q. Now: you'd consider yourself a sophisticated
24 businessman?
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1 A. Yes.
2 Q. How many companîes do you own?
3 A. I don 't know. More than five.
4 Q. But you don't know?
5 A. No, q don 't know . I have a 1ot of different
6 investments . Would you kike me to think about it?
7 Q . Well, 1et me ask you this: As a sophisticated
8 businessman wjth a)l your different investments, you bre
9 familiar w ith legally binding contracts?
10 A . Yes.
11 Q. And Mr. Frye, who has been your lawyer for 20, 25
12 years, is someone you trust as being familiar with creating
13 fairly elaboratte intellectual property contracts?
14 A . Yes . And if he wasnlt satisfied with it: he 'd find
15 another attorney that could help him with it.
16 Q. Did Pillsbury Madison play any role in creating the
17 documents, the contribution aqreement or the operating
18 agreement, for eTreppid?
19 A . I donft know specifically, but I find it hard to
20 believe that that would be the case.
21 Q. So you reiied on Mr. Frye --
22 A . Correct.
23 Q. -- to create a sophisticated intellectual property
24 document where you were investing $1.3 millionz correct?
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1 A . lf you could deftne what -- is that a legal term?
2 Q . Well, you undfarstand a simple little contracL -- two,
3 three, four pages -- as opposed to something like this
4 contribution agreement here?
5 A . Well, 1 would say --
6 Q . ltls Exhibit 4.
7 A . 1 would say, typîcally, most of the contracts we do
8 are like that; not a two-, three-page, whatever you just
9 described.
10 Q . Typically, most of them are like this?
11 A . Yes.
12 Q. Nowz did you ânstruct Mr. Frye to go meet with
13 Mr. Montgomery?
14 A . 1 might have asked him to call him or call h is
15 counsel. l don rt think I ever -- 1 guess ''no'' is the answer to
16 that question . Did 1 ever tell Doug to go meet Dennis?
17 Q . Yes.
18 A . Not that I can recall.
19 Q. Well, obviously, it's a key issue to you, is -- you
20 know youlre putting ln 1.3 million, and you want some type of a
21 writing as to what Mr . Montgomery is putting in, correct?
22 A . Sure. Or I would like an understanding as to what
23 that would be.
24 Q. Now, 1 know this is an irrelevant question, but was
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l $1.3 million a 1ot of nloney to you?
2 MR . PEEK: If he 's going to say it's irrelevant, then
3 we know it's irrelevant, and 1'm going to object to it as being
4 irrelevant.
5 THE COURT : You know, I think it probably is relevant.
6 Let him answer the question .
7 BY MR. FLYNN :
8 Q. In SepteO ler 1998.
9 A . And Lhe question was?
10 Q. Was Lhat a lot of money to you then?
11 A . It's a lot of money to anybody anytime. lt certainly
12 is -- yes, it's a lot of money.
13 Q . So iL was a lot of money to you when you made your
14 deal with Mr. Montgomery because you knew you were putting in a
15 1öt of money and you wanted to know what he was putting in,
16 correct?
17 A . Sure .
18 Q. Now, you don 't remember where the conversation took
19 place?
20 A . No.
21 Q. You donlt remember when it took place?
22 A . I gave you a general idea.
23 Q. Sometime in September?
24 A . Yeah.
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1 Q. Do you know how long it lasted?
2 A . No.
3 Q. Was anyone present?
4 A . T don 't recall.
5 Q. Did you write out a check for $1.3 million on
6 September 28th --
7 A . I donlt know .
8 Q . -- 1998?
9 Was Lhere an escrow agreement?
10 A . I would assume sot but 1 don't know .
11 Q. In most of your deals, are there escrow agreementa
12 where one party puts ân whatever theyRre putting in and you put
13 up the 1.32
14 A . Et would seem ko be logical, but I truly don 't know.
15 Q. Did you wire or transfer any laonies into Doug Frye's
16 account?
17 A . It's very posskble .
18 Q . Did you write a check for $1.3 million? You don't
, 19 know, do you?
20 A . I donït know.
21 Q. But you knew that was your part of the deal, but as
22 you sit in the courtroom today, you don't know whether you know
23 you, as part of your deal, paid the money, correct?
24 A . Do 1 know the money got there? Yes .
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1 Q. HoW cLid it get there?
2 A . 1 have no idea.
3 Q. When did it get there?
4 A . f don't know.
S Q. Did it get there in dribs and drabs over the next year
6 or so?
7 A . 1 don 't know, but I doubt that strongly.
8 Q. Did J.t get. -- well, dribs and drabs. Did it get there
9 in more than one check or wlre transfer over the next year or
10 so?
11 A . 1 don't know. That would seem very unlikely to me.
12 Q. In that first year -- or, strlke that .
13 Shorlnly after the deal was made, you got married
14 sometime in late October, and then you went on a six-month
15 cruise?
16 A . Four months.
17 Q . Four months?
18 A . Yes .
19 Q. Were you gone to June 19992
20 A . 1 think I got back from the cruise in either the end
21 of April or the beginning of May. It could have been June.
22 I'm not sure.
23 Q. And who did you leave in charge of the money part of
24 the business between September 28th and the time you got back
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1 in May or June?
2 MR. PEEK: Is Lhere some relevance of this line of
3 examination that relates to Lhe issues Lhat llave been framed in
4 a preliminary injunction?
5 MR . FLYNN : Yes, Your Honor.
6 THE COURT : What is the relevance?
7 MR. FLYNN : He has the burden of proving that he will
8 prevail on the merlts. if there's a failure of consideration
9 under the contraet, if thereîs a breach of the contract, then
10 he canlt possg-bly prevail on the merits. '
11 THE COURT: Well, 1et me ask this question just
12 directly: Are you sayâng that Mr. Trepp didn't -- or eTreppid
13 didn 't pay the money?
14 MR. FLYNN : There are no books and records that my
15 client has ever been privy to. It's highly unlikelyr from what
16 I understand, the way the company was run: that the 1.3 ever
17 got in speciftcally on or about September 28th as his part of
18 the deal. Bu L the CD was put in for the data compression
19 technology as Mr. Montgomery 's part of the deal, and that goes
20 to the heart of the intent and understanding of the parties.
21 THE COURT: Well, I mean, it 's a little hard for me to
22 imagine that he gave him the CD and then waited how many years
23 now and said, ''By the way, you never paid me my 1.3 million.''
24 As the record stands right nowz there's testimony. in
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1 whatever form and under whatever circumstances, the money was
2 paid. If you have evâdence that it wasn't paid, then that can
3 be presented. And so, the objection to relevance is overruled.
4 But go ahead . I'm sorry 1 took so long to rule on
5 that. Go ahead .
6 BY MR . FLYNN :
7 Q. Mr. Trepp, but just to clarify this and then welll
8 move on, you don't know when the money or how much actually got
9 put in after September 28th, do you?
10 A . Now but I could make one phone call and tell you .
11 Q. Okay. Well, all right. Picking up on that point, you
12 could have totd Mr. Montgomery over the years and shown him
13 specifically how much you specifically put in and when, could
14 you not have?
15 A . I coald have done a 1ot of thingsw but what is the
16 point of showing hlm? Rf the money is there, it's there.
17 Q. Well, when you went on your cruise, did you know
18 whether the 1.3 was there or not?
19 A . At this moment, 1 donbt. But I promise you, in a
20 phone call, I could tell you.
21 Q. The CD -- let 's look at the contribution agreement.
22 Paragraph 1.2.1, Your Honor: which --
23 THE COURT: We're talking about Exhibit 3,
24 paragraph 1.2.12
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1 MR . FLYNN : Yes, Your Honor.
2 THE COURT: By the way, while we bre talking about that
3 exhibit, where is -- i:5 there -- there's reference to
4 Schedule 1.2.2, and then when 1 go back to that, it indicates
5 that it 's to be completed.
6 MR . FLYNN : Correct, Your Honor.
7 THE COURT : Is there a completed Sehedule 1 point --
8 I 'm sorry, 1.2.2?
9 MR. FLYNN : It's never been given to us, Your Honor.
10 THE COURT: Counsel for the Plaintiff, do you know?
11 MR. PEEK : Your Honor, it was to be provided by
12 Mr. Montgomery. If. you actually look at al1 of the
13 contributor's books and records related to the contributed
14 assets, it was a1l of contributed books and records related to
15 the contributed assets.
16 1.2.2 is certain contributors' tangible personal
17 property. Contributory, Your Honor, identified in this is
18 Montgomery .
19 THE COURT: 1 understand.
20 MR . PEEK J So he was to provide the 1.2.2. So, for
21 Mr. Flynn to aay, oh, my goshr they never provided it, it was
22 his obligation to provide the 1.2.2, and I guess now that we've
23 learned -- it looks like we got gamed a little bit by the way
24 this has gone on now eight years later.
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1 MR . I'LYNN : The lawyer drew up the document.
2 THE COURT : My question was simply, is there a
3 completed document? 1?m understanding, from uhat 's been said,
4 that there is not, so let's go ahead.
5 BY MR . FLYNN :
6 Q . Mr. Trepp'?
7 A . Yes?
8 Q. Would you look at paragraph 1.2.1.
9 A . Is this about the CD?
10 Q . Yes, CD 1.
11 A . I looked at it before.
12 Q. Youdre familjar with it?
13 A. Yes .
14 Q. You lre comfoltable with your familiarity with this
15 paragraph?
16 A . Yes.
17 Q. Now, that CD, clid you have any conversation with
18 Mr. Frye about how the intellectual property for data
19 compression would be described in Exhibit 32
20 A . No.
21 Q. Did you have any discussion with Mr. Montgomery as Lo
22 how it would be described?
23 A . No .
24 Q . Did you rely on Mr. Fryer as your attorney: to create
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1 a document whcrein the contribution by Mr. Montgomery would be
2 properly deseribed?
3 A . Yes.
4 Q . And where is CD Number 1, Mr. Trepp?
5 A . 1 have no idea.
6 Q. Have you asked Mr. Frye for CD Number 12
7 A . I think I asked him if he had it.
8 Q . When Lhe 1.3 million was puL 1n, did you kno- where
9 CD Number 1 was?
10 A . No .
11 Q . Do you see anyLhing in paragraph 1.2.1 about pattern
12 recognition?
13 A . Which one are we looking at now?
14 Q. The ane you just said you were familiar with.
15 MR. LOGAR: Rxhibit number?
16 THE COURT : 3 .
17 THE WITNESS: l think I said I was familiar with the
18 CD. I'm not familiar with the paragraph you were alluding to .
19 BY MR . FLYNN :
20 Q. I'm sorryz I thought you said you were famillar with
21 the paragraph.
22 A . No, 1 said I was familiar with the CD 1 -- which
23 exhibit?
24 MR. FLYNN: The record speaks for itself.
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1 THE WITNESS: Exhibit what?
2 MR. FLYNN : Exhibit 3, paragraph 1.2.1.
3 THE COURT : Pcage 1.
4 BY MR . FLYNN :
5 Q. It's actually the last two or three lines of page 1.
6 A . Okay . I'm sorry. Page what?
7 Q. Page 1: Exhibit 3.
8 A . Yep .
9 Q. Last few pages. LetAs, first of all, establish your
10 signature on this document: which is at the end, on page
11 number --
12 %HE COURT: 12?
13 MR . TLYNN : I believe ît's 12. I've got to eheck.
14 Page number 12 .
15 BY MR . FLYNN :
16 Q. Is that your signature?
17 A . Yes .
18 Q. And when you executed this document: did you ask to
19 see CD Number 12
20 A . T don lt recall.
21 Q. Now, going through Lhe paragraph 1.2.1, the bottom of
22 the page, paqe 1 --
23 A . Yes .
24 Q . -- srou see that line that says -- let's read it into
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1 the record . Follow me as I read it. Okay, sir?
2 A . Uh-huh .
3 Q. This is what Mr. Montgomery is contributing: f'A1l of
4 Contributorls know-how ; trade secrets; patent rights,
5 copyrights, Lrademarks, licenses and permits, registered or
6 unregistered, pendâng or approved; software programs and al1
7 programming and sotlrce codes used in connection therewith or
8 otherwise required to operaLe any component thereof; and a1l
9 programming documentation, designs, materials and other
10 information, a1l in whatever form and wherever located:
11 relating to or used in connection with, or otherwise describing
12 or consisting of any part of, the software compression
13 technology contained on that certain Software Compression
14 Engine Development Program contained on CD No. 1, a11 of which
15 is being contributed by contributor hereunder (collectively,
16 the ''Technology'f).
17 Did ( read that correct, sir?
18 A . Yes.
19 Q. Was that your understanding when you executed the
20 agreement as 1-0 what Mr. Montgomery was contributing?
21 A . Well, yes.
22 Q . Now, your understanding for the prior nine months,
23 howeverr was Lhat he was also contributing something youbre
24 calling today Hpattern recognition technology''; is that
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1 correct?
2 A . Yes.
3 Q. And you donft see the term ''paetern recognltlon
4 technology'' there: do you?
5 A . No, J do not.
6 Q. And it Was your lawyer who drew this up?
7 A . Yes .
8 Q . Now, let's go over to the next pager paragraph 1.3, .
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9 ''Excluded Assflts and Liabilities.'' Read wlth mez if you will.
10 ''Notwithstanding any of the foregoingy Contributor is
11 specifically not contributingz transferring or conveying to
12 INTREPID under this Agreement or by any other meansr nor is
13 eTreppid acquiring from Contributor, any other tangible or
14 intangible assets of Contributor not specified herein ...''
15 Did ( read that correctly?
16 A . Yes .
17 Q . Was Lhat your understanding when you executed this
18 document prepared by your lawyer?
19 A . Yes.
20 G. Nowy did you consider CD Number l an asset of
21 eTreppid, then Intreptd?
22 A . Yes .
23 Q . And going back to Mr. Frye again, Mr. Frye was signing
24 the checks fcr everybody?
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1 A . 1 have no idea.
2 Q . Do you know if Mr. Frye -- strike that. Did you ever
3 have a conversation with Mr. Frye about whether or not he ever
4 got CD Number 1?
5 A . Not that 1 can recalè.
6 Q . Nowz let's move forward. 1 believe your testimony was
7 on direct, and having bn mind Mr. Venable's testimony, that you
8 repeatedly: over the years, asked for CDs to bring you up to
9 date so you would possess the current technology being worked
10 on at eTreppid . Is that correct?
11 A . Copies of the source code that were generated by
12 eTreppid Technologâes at eTreppid Technologies' yes.
13 Q . How many times over the years did you ask for those?
14 A . Wellr at a minimum of once a year and at any tîm e we
15 had made any kind of new breakthrough on something thah we 'd
16 been working on through the research and development and over
17 the years we were j.n business .
18 Q . You filed a declaration in this case, did you not?
19 A . Yeah .
20 Q. Did you say that you repeatedly asked Mr. Montgomery
21 for the CDs so you'd have a copy of what the company was
22 working on?
23 A . Yes, to protect his family and mine in case there Was
24 a disaster.
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1 Q. And Lhen -- feeling the importance of this technology,
2 you then went and put them in how many different safes?
3 A . One .
4 Q. In a safe-deposit box?
5 A . Yes.
6 Q. And how many CDS, or whatever, did you put in this
7 safe-deposit box?
8 A . 1 don't know the exact number. It was probably around
9 a dozen .
10 Q. Because you hacl in mind the importance of you having
11 possession of the source code for this technology that you felt
12 you bought when you put in the l.3 million, correct?
13 A . That's totally incorrect . I wanted the source code
14 backup over the seven years we were in business to preserve it
15 for hia family, my family, and for the company's best
16 interests .
17 Q. But as you s1t here today, the number one source code
18 containing tbe guts of the deal --
19 A . Yeak-
20 Q. -- you don't know where it is?
21 A . No .
22 Q. And you /ve never asked anyone for it?
23 A . 1 don 't think there would be any reason to ask for it,
24 because when we started the business, I assGmed Dennis would
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1 have just put it onLo our workstations or servers: or whatever
7 it was. and that was the start of the business that we bad .
3 0. Oh, so -- buL then as the years went on, you wanted
4 a1l these other CDs, but the Number 1 CD, you just assumed --
5 you trusted Dennis that he put it înto the company?
6 A . Well, why wouldn't 12
7 Q . Well/ Mr. Trepp, webre going to determine that.
8 But xet me ask you thisz sir: Did you have any reason
9 to doubt, as the company went forward, that a11 of the
10 compression technology that you bought, as M r. Montgomeryls
11 50/50 partner., got put into eTreppid, or then Intrepid, was
12 then being -- actually then being used?
13 A . Can gou please say tThat again.
14 Q. Have in your mind what you bought from Mr. Montgomery
15 that was on CD NuH ner 1, compression technology. Is there any
16 doubt in your mindz as you sit here todayr that you got that
17 and it was then betng used in the company over the ensuing
18 years?
19 MR . PEEK: Your Honor, he didn't get it. Intrepid got
20 it, or eTreppid got it. He keeps referring to Mr. Trepp as
21 though he's buying it or Mr. Trepp is recekving it . It went
22 into the company.
23 THE COURT: I understand that.
24 MR. FLYNN : There are two principals.
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1 THE COURT : I understand .
2 BY MR . FLYNN :
3 Q. Did llou have any doubt that the company got -- when
4 you put the 1.3 in some form over some time in, and so the
5 company was using that technology that was on CD Number 12
6 A. Do i believe?
7 Can ( ask a question, Judge, because 1'm not sure I
8 understand .
9 THE COURT : Well, if you don dt understand the
10 question, Jus'n simply say ''I don't understand the questiony''
11 and hedll rephrase it.
12 THE WITNESS: Can you p lease reword it .
13 BY MR. FLYNN :
14 Q. Yeah. Sometimes as the day goes on, given my advanced
15 agee my questtons get worse, but Ib11 try to make it simple.
16 Is there any doubt in your mindz as you 3it here
17 today, that yau got and the company usedp for your l.3 miAlion,
18 the compression technology that was on CD Number 12
19 A . Yes. I believe we got -- if there was a CD 1, I
20 believe we got what we bargained for.
21 Q . Now, you do not have a security clearance equal to
22 Mr. Montgomery bs: do you?
23 A . At this time?
24 Q. Corlect.
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1 A . No .
2 Q . Do ytlu know wtka t h1s security clearance is?
3 A . Y e s r T S S C 1* .
4 Q . M d what securî ty clearance do you have?
5 A . TS , dRnd my SCf is pending .
6 Q . Have you ever had any conversations wi th
7 Mr. Montgomerg in the presence of any government official --
8 just yes or no --
9 A . Yes.
10 Q . -- about the governmentls attitude toward you as a
11 principal at eTreppid?
12 A . Not that I can recall.
13 Q. Have you ever had any attitude -- strike that.
14 Have you ever had any discussîon with Mr. Montgomery
15 in the presence of a government official -- just yes or no --
16 about your background aL Drexel vis-a-vis government contracts
17 at eTreppid?
18 A . Yes .
19 Q. Now, is Mr. Milliken -- strike that.
20 Did you tell Mr. Montgomery that Mr. Milliken was
21 putting $12 rlillion into eTreppid for 5 percent of the company?
22 A . No .
23 Q. Mr. Milliken âs a friend of yours?
24 A . I wouldn't ca1.l him a friend.
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. -
J >-'
1 Q. Well, you were b0th at Drexel together?
2 A . We worked toqether, thatts correct
.
3 Q. AL Drexel'?
4 A . Yes.
5 Q . Did you tell Mr. Montgomery that Mr
. Milliken gave you
6 $30 million to go on an extended -- a cruise to avoid being a
7 witness?
8 A . What?
9 Q. During the Drexel period.
10 MR. PEEK : Your Honor, this is way out of line and
11 way --
12 THE COURT: Well, I don rt understand the relevance of
13 this at all: '
'
.
really don 't .
14 MR. PEEK: -- time
, collateral -- collateral to this
15 case, Your Honor, as well, and nothing to do with this case at
16 all.
17 MR. FLYNN : The relevance is -- as I understand it
s
18 it's highly unlikely that the government will ever make a deal
19 exclusively with Mr. Trepp with regard to technology theylre
20 seeking an injunction on.
21 MR. PEEK : Your Honorr they will do and say anything
22 without evidence, and it -- frankly, it's getting to the point
23 now of how many times can you just say it and hope that maybe
24 some of it wizl stick, wîthout it really coming from the
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.. ..,
.
) c.
1 witness stand?
2 MR. FLYNN : Mr. Montgomery will so testify
.
3 MR. FEEK: This gentleman has done business with the
4 government. The contracks are with him. He's the majority
5 owner or has the most stock in it, and he has relationships
6 with General Bath, Conqressman Gibbonsy w ith John Hennessey and
7 others. So this is --
8 THE COURT : Will you trust me that I know the
9 difference between stattements of counsel and evidence?
10 MR. PEEK : 1 will, Your Honor. I apologize . I don't
11 mean to speechify: but it's getting a bit much, late in the
12 day.
13 THE COURT: ltfs late in the day . And 1 think the
14 more we can avoid this kind of stuff, the better wedre going to
15 be in moving the case along.
16 And 1 understand that therets a statement been mnde,
17 and 1111 consider it for what evidentiary value, if any, it
18 m ight have .
19 MR. PEEK: Againr I1m going to object to the same
20 thing.
21 THE COURT: I understand. I understand.
22 MR. PEEK: Is it overruled or sustained?
23 THE COURT: The objection is overruled. I think if
24 you use the standard for relevancez there might be some
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u -,
; .>..p' ;
1 relevance, but let's not spend too much more time on this
.
2 MR . FLYNN : I won 't, Your Honor
.
3 BY MR . FLYNN :
4 Q. Mr. Trepp, how many years has it been since the
5 governmentz Oa certain types of highly ckasskfied technology
,
6 has been dealing wtth you and Mr. Montgomery? How many years
,
7 sir? '
8 A . lt's been months .
9 Q. No# starting from the beginning, with the first
10 government contract. How far back does that go, from tbe
11 present, from January -- from now, February 20062
12 A . Okay. Can you ask the question again: please
.
13 THE COURT: You want to have ât read back?
14 MR. FLYNN : No, that's okay
. 1 think it would be
15 faster.
16 BY MR . FLYNN :
17 Q. Over how many years have you personally been dealing
18 with the United States Government, any department thereof, w ith
19 regard to highly classified software technology?
20 A . I believe it was December of 103.
21 Q. Okay , Let's take the December of :03. And it is now
22 February of 106: correct?
23 A. Uh-huh .
24 Q. During that time framer you never got the highest
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.
h >IF *
1 security clearance, but Mr
.
Montgomery did, correct?
2 A . Yes. There was a reason for t'hat
,
but yes.
3 Q. That entitled him, within eTreppid, to deal with the
4 government on these hbghly ckassùfked materiaks with thks
5 highly classified technology: but not you?
6 A . That's nonsense.
7 Q. What weren't 'gou entitled to deal with?
8 A . Anything Lhat was Scl-rated, until I got my SCI
9 clearance . '
10 Q. Wellz as we sit here today, dc) you have a clearance
11 equal to Mr. Montgomery's?
12 A . No .
13 Q. Okay. What can he deal with that you can't deal with?
14 A . Something that he's read into that 1 wouldn't be
.
15 Q. Okay. Now, do you know what heîs been read into that
16 you haven 't been read into?
17 A . Nothing.
18 Q. Nothlng?
19 A . Nothing.
20 Q. And how do you know that? Is this based on the
21 lunches with Mr. Montgomery every year for the last seven
22 years?
23 A . No: '
E -- Ilve dealt with the government on -- on a
24 contractual basis or on a day-to-day basis as to asking us
w
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w -.e ' * ''
1 meaning the company, what they would lkke to do for ther.
2 Q . A11 right. Let's take the time frame, September .04.
3 A . Yes .
4 Q . Just yes or no : Did a certain agency of the
5 government want to purchase certain technology that
6 Mr. Montgomery had been dealing with, with the government on?
7 A . Can 1 ask you a question: Your Honor: because it makes
8 a difference.
9 Are you saying the government was dealing with
10 Mr. Montgomery on a deal that had nothing to do with eTreppid?
11 Q. I1m saying thall Mr. Montgomery was working with the
12 government on the contents of the technology.
13 A . Yes .
14 Q. And did you speak with the government about how much
15 you wanted for the contenté'bf that technology?
16 A . Yes.
17 Q. You did tell the government how much you wanted for
18 the technologyz correct?
19 A . I told the government what we would be happy to sell
20 the technology for.
21 Q. How much?
22 A . A hundred million dollars.
23 Q . In connection with that conversation, did you tell
24 them the government would have to post a bond for $1 billlon?
. .
l
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1 A . There was a specific discussion relative to three
2 different pieces of this conversation. One was, we would
3 license the Lechnology to them for 10 laillion
.
We would sell
4 the technology to them for 100 million. And we wanted to have
5 a bond posted relative to having our technology secured in the
6 sense that it wouldn lt get out of the government 's hands
.
7 Q. How much was the bond?
8 A . Az they never offered us a penny; B, we got a
9 month-to-month license agreelaent to do the job; and C, they
10 laughed and said they wouldn't give us a nondisclosure
11 agreement for any price.
12 Q. How much pf a bond did you ask for?
13 A . How much of a bond? lt was elther 100 million or
14 500 million. I don 't remember .
15 Q . Was it one billion?
16 A . I highly doe lt it. I don't remembery though, exactly.
17 Q. You ïonït remenler. A11 right.
18 Now, in the context of this conversationr which yDu
19 say is 100 miklion to purchase --
20 A . Well, we offered to sell it.
21 Q. Let me finish, please, sir.
22 A . Yep .
23 Q. Would you say ât was 100 million to purchase --
24 forgetting for the moment the license thing, or whatever, in
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1 some bond somewhere -- behween 100 million or 500 million or
2 possibly a billion, at. some point, did you tell Mr. Montgomery
3 not to process any more of the things the government wanted him
4 to process?
5 A . Absolutely not .
6 Q. At same pointu did the government stop paying for what
7 Mr. Montgomerg was processing?
8 A . T don't understand what that question means. The
9 government was only payîng eTreppid. They were never paying
10 Mr. Montgomerg anything. Bul: I donrt understand . Did the
11 government terminate our contract, is that the question?
12 Q. Well, I1m asking yolb did you terminate the contract
13 because you wanted $500 milllon and you said to Mr. Montgomery,
14 ''Don't do any work for themer? Did you do that?
15 A. Did 1 ask for $500 million and terminate the contract?
16 Q. Yes.
17 A . Absolutely not .
18 Q . You are aware the government was -- that
19 Mr . Montgomerg was processing things for the government during
20 this time period?
21 A . I'm aware that eTreppid was processing things for the
22 government.
23 Q. Who <as doing the work?
24 A . Dennis -- Dennis wa3 doing the bulk of the processing.
'
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1 Q. How many hours a day was he working?
2 A . It depended upon what was the time frame and what they
3 were asking h tm to do . In the -- the beginning, a lot; in the
4 end, veryy very little .
.
5 Q. Did Ae generally work seven days a week at 18 hours a
6 day?
7 A . No .
8 Q. Now -- but you know that -- how often were you there?
9 A . In the beginning, we were b0th there an enormous
10 amount of time .
11 Q . In the first six months or four months until June
12 of 199 you were gone?
13 A . You pre talking about a contract that was dealing in
14 2002, not in 1999.
'
5 I understand that. And you were there a11 during that Q.
16 time frame in 2002?
17 A . What does that question mean?
18 Q . Were you there seven days a week at eTreppid with
19 Mr . Montgomeryz processing this classified informationz seven
20 days a week, 18 hours a day?
21 A . No .
22 Q. How much did the government pay during the year 2003
23 for the work Mr. Montgomery was doing?
24 A . The government paid eTreppid a contract of -- I think
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. .
I
1 it was a mill Lon eight .
2 Q. Was 'lhe ftrst check two and a half million from the
3 government?
4 A . There was no chance that the first check was two and a
5 half mîllion, no chance .
6 THE COURT: Excuse me . I need to make a phone call at
7 5 o'clock . I'z's now about one minute after that. How much
8 longer are we going to take to get done?
9 MR . PEEK: Your Honor, this is our last witness: so I
10 can't speak for Mr. Flynn.
11 MR . FLYNN : > àd l'm going to put Mr. Montgomery on .
12 M y direct is probably 30 to 40 minutes .
13 THE COURT : A1i right .
14 MR . PEEK : 1 w ill try to restrain myself on
15 cross-examinaLion.
16 MR. LOGAR : Which will be difficult.
17 MR. PEEK: Which is going to be difficult.
18 THE COURT: â was going to comment on that . 1'11 1et
19 Mr. Logar make that comment.
20 A11 right. Letls be in recess until 20 minutes after,
21 and then we 'll finish up for the night .
22 (A brief recess was taken at the hour of 5:03 p.m.)
23 THE COURT: A11 right. Please be seated. Al1 right.
24 Please continue.
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1 MR . FLYNN : Thank you, Your Honor .
2 BY MR . FLYNN :
3 Q. Agaia, Mr. Trepp, letls go back to September '04. Was
4 a certain government contract ending in September '04?
5 A . Yes.
6 Q. And 5id the government want to extend it?
7 A . They asked ij wè could do a small amount of additional
8 work relating to that contract.
9 Q. And :id they want to extend it for a minimum period of
10 three months?
11 A . I don't recall if that was exactly what it was, but
12 they did want to extend it for a limited period of time.
13 Q. Were you in the presence of Mr. Montgomery -- strike
14 that.
15 Did you and Mr. Montgomery have a discussion about
16 extending it? '
17 A. Probably.
18 Q. Do you recall anything about that discussion? Just
19 yes or no .
20 A. Not in detail.
21 Q . Did either one of you say no to the government, you
22 wouldn lt extend it?
23 A . At some point, we -- we both agreed we weren't going
24 to continue it.
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1 Q. You and the government or you and Mr. Montgomery?
2 A . Me and the government.
3 Q. Agreed you Wouldn't continue it; is that your
4 testimony?
5 A. They wanted to terminate the contract and said there
6 were -- were some other things that they would like us to do up
7 u'ntil some specific date, and I donlt remember what that
8 specific date was.
9 Q. Did Mr. Montgomery want to extend the contract?
10 A . I donlt think that option was available to us to
11 extend it.
12 Q. Just yes or no: Was this a national security current
13 issue in September 104'?
14 MR. PEEK: Objection. What is ''thisn?
15 BY MR . FLYNN :
16 Q. The nature of what the government wanted you to do.
17 A . It had to deal with potential national seeurity
18 interests.
19 Q. Can you imagine a higher priority than what these
20 interests involved?
21 A . Yes.
22 Q. Is this when you told the government 100 million?
23 A . Absolutely not.
24 Q. When did you tell the government 100 million?
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1 A. We had been negotiating for a protracted period of
2 time prior to September of 604
3 Q. Okay. When did you first tell the government
4 l00 million?
5 A. Either the end of 903 or the beginning of 104. And
6 when you say ''i00 milllonz'' that was the price we had offered
7 to sell a11 of our technology to them for.
8 Q. Under the oath that you signedy you cannot disclose
9 the contents of those negotiations, correct?
10 A . I'm not sure that that is correct.
11 Q. Do yau know whether, under the oath in the clearance
12 that Mr . Mont7omery had: he could discuss those negotiations?
13 A . He didn't sign for the company; I did.
14 Q. That wasnlt the question, Mr. Trepp . Could he discuss
15 them with the government?
16 A. He could discuss anything with the government.
17 Q. Nowf at this point in time, September 104, the two of
18 you started as 50/50 partners, founders in eTreppid
19 Technologies dealing with data compression on CD Nl3mher 17 is
20 that correct?
21 A. We started as 50/50 owners.
22 Q. In September 104, what is your testimony as to what
23 Mr. Montgomery then owns?
24 A . llm not exactly sure in September of '04 but I
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...w- - )
1 believe he owns approximately 30 percent right now. I believe
2 it was the salae thenz but I'ut not positive of that fact.
3 Q. He got somehow -- he somehow went from 50 to
4 3o-something percent?
5 A . Yes .
6 Q. Now, I1m not going to spend a 1ot of time on this
7 because I think, at some point, it 's going to become the core
8 of the case. But 1et me just ask you this: In the first stock
9 transaction, how djd Mr . Montgomery go from 50 percent to
10 40 percent?
11 A . I don rt know in the first transaction that he went
12 from 50 to 40 . I believe I have a Cairly good understanding of
13 how he was diluted over time.
14 Q. Was some of his stockr when it went from 50 to 4Oz
15 sold for l.5 million to one of your friends?
16 A . No .
17 Q. To someone that you know?
18 A . No .
19 Q. Whods Wayne Primm?
20 A . Wayne Primm is a good friend of mine.
21 Q. Was Mr. Montgomery's stock sold for $1.5 million to
22 Wayne Primm?
23 A . In one transactionz yesr that 's true.
24 Q. And Zhen Mr. Montgomery wrote a check back to you?
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1 A . Back to whom?
2 Q. Well, Friendly Capital.
3 A. To repay a èoan that he borrowed.
4 Q . Let me finish the question.
5 A . Okay .
6 Q. Friendly Caapital is you?
7 A . I am the president of the general corporate partner of
8 Friendly Capital LP.
9 Q . And when Mr. Primm, your friend, paid the 1.5 millionz
10 Mr. Montgomery paid back Friendly Capital $975,000.297 is that
11 correct?
12 A . I don 't know that that's the exact number, but I
13 believe thatfs very possible.
14 Q. And ït's your testimony that was for loans?
15 A . The repaFnent back to Friendly Capital?
16 Q . Yes.
17 A . Yesz that was to repay a loan and probably interest .
18 Q . So you didn't want to see Mr. Montgomery diluted,
19 according to your direct testimony?
20 A . That is correct.
21 Q . But you arranged the sale with one of your buddies for
22 him to sell 10 percent of the eTreppid stock?
23 A . He did not sell 10 percent of the eTreppid stock.
24 Q. Did he go from 50 to 40?
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J 1
l A . Yes, but you -- if you would like to ask me how he got
2 from where he was to where he is: 1'd be happy to go through
3 that, if 1 can. He did not go from 50 to 40 having to do
4 with -- anythkng to do with his sale to Wayne Primm.
5 Q. How many different alleged dilutions took place?
6 A . Thera weren rt any alleged dilutions. There were sales
7 or gifts or capitaL raises.
8 Q. 1'm not going to spend much more time on this, but
9 when you -- your company was originally 50/50, just the two of
10 you?
11 A . Yes.
12 Q. Over time, he gets down to 30, and a 1ot of your
13 friends, a11 of a suddero have stock interests. Is that
14 basically correct, according to Exhibit A to the amended
15 operating agreement that you put into evidence?
16 A . Yesr that is correct.
17 Q . And your partner, you didn't want to get diluted; is
18 that correct?
19 A . That is correctr at a point.
20 Q. Al1 right. Nowr did this -- just yes or no -- become
21 the subject of huge contention between you and Mr. Montgomeryz
22 of Mr. Montgomery saying that you werenît paying -- the company
23 wasnêt paying him what he deserved to be paid?
24 A . Absolutely not.
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1 Q. Okay' And did money become the subject of contention
2 between the two of you throughout 2004 and 2005?
3 A . Yes, it was a big issue for Dennis because he was
4 desperate for money .
5 Q. So it was an jssue of contention between the two of
6 you?
7 A . lt was no contention for me. He just kept asking me
8 for money.
9 Q. Okay. Noku itï the context of him asking you for
10 money s was there a discussion during these government contracts
11 about his ownership of the technology relating to the
12 government contracts aud your acknowledgement that he owned it?
13 A . Irm not sure I understand what you bre saying.
14 eTreppid owned a11 of the technology. Dennis owned none of the
15 technology.
16 Q. Was Lhere a discussion between you and Mr. Montgomery,
17 when this issue became very heated about him being owed moneyw
18 about who owned the technology that was underlying these
19 governmenk contracts?
20 MR. PEEK: Objection. Compound. There's two
21 questionsz abaut him bei.ng owed money or --
22 THE COURT: Agreed, agreed. Break the question down.
23 BY MR . FLYNN :
24 Q . In the context of any discussion between you and
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. .. . ... .
)
1 Mr. Montgomerll, were you fighting over money?
2 A . No .
3 Q. Was there a discussion about who owned the technology
4 that was fueling the government contracts?
5 A . AbsoLutely not.
6 Q. Never?
7 A . Never.
8 Q . Now, did Mr. Montgomery -- between 2004 and throughout
9 2005, was he making demands on you, eTxeppid or whatever, for
10 money in connection with moni.es paid by the government?
11 A. Absolutely not. He asked me for money because he
12 needed to borrow more money than he had borrowed in the past.
13 Q . I understand your testimony. Coming down to the end
14 of 2005, were you negotiating with the government on any
15 potential contracts that are classified?
16 A . No.
17 Q. Were you having discussions between September ï05 and
18 December 'O5 -- the end of December ï05, about government
19 contracts: sales ta the government of technology Mr. Montgomery
20 claimed that he owned?
21 MR. JAKOPIN: Objection. Foundation.
22 THE COURT: 1 think -- no, thatls a question. Were
23 you having discussions. I'm going to allow that.
24 THE WITNESS: eTreppid was having discussions with the
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1 government about four potential contracts that the government
2 was interested in pursuing.
3 BY MR . FLYNN :
4 Q. Okay. And I donbt mean to be contradictory: but
5 didn't you just say a mlnute ago that eTreppid was not having
6 discussions with -- w j.th the government about government
7 contracts in the fall or. 20052 Didn't you just say that in the
8 question before that?
9 THE COURT : 1 think thatls argumentative .
10 MR . FLYNN : lt is, Your Honor . It is adm ittedly
11 argumentative .
12 BY MR . FLYNN :
13 Q. Mr. Trepp, in the fall of 2005, you now acknowledge
14 there w ere discussions between eTreppid and the government
15 about four contracts that were basically related to technology
16 Mr. Montgomery was involved in; is that correct? '
17 A . That eTreppid was involved inz yes .
18 Q. Okay. Mr. Montgomery was the chief technical officer:
19 he was the then-30 percent partner, and he was the one
20 exclusively in charge of the highest security clearance at that
21 time?
22 MR . PEEK: Is there a question there, Your Honors or
23 lust a whole series of predicates?
24 THE COURT: I would like a question, if you couldz
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1 please.
2 BY MR . FLYNN :
3 Q. Okay. Mr. Trepp, did -- in the fall of 2005, did you
4 have the source codes that would have enabled you or
5 Mr. M ontgomerg to make a deal with the government?
6 A . Yes .
7 Q. You had them personally?
8 A . No.
9 Q. Who had them?
10 A . The company.
11 Q. Where were they?
12 A . 1 don't know exactly . I could tell you where I
13 believe they Jere.
14 Q. Were they on any of the CDs or DVDS or whatever you
15 had in your safes?
16 A . Of course not .
17 Q . Did you have discussion with Mr. Montgomery about that
18 technology that was needed for those government contracts and
19 how much he wanted -- Mr. Montgomery wanted?
20 A . Mr . Montgomery wanted for what?
21 Q . How much money he wanted, if you or whoever was going
22 to get 100 millionr 50 million, a licensing deal, whatever, how
23 those revenues would be split, did you have those conversations
24 with Mr. Montgomery? '
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1 A . Absolutely not.
2 Q. Now, before we get to whatever it was that broke you
3 two folks apart -- I take it from your testimony, it wasn 't
4 money?
5 A . It was -- it was greed .
6 Q. Or it was money? Greed: money? It was money?
7 Did those -- clid that greed arise during the fall of
8 20052
9 A . I think what Ilve learned in the last three weeks,
10 Dennis has had greed since the day I met him beyond belief.
11 Q. Itm talking about your discussions with him in the
12 fall of 2005. Did that, what youbre characterizing as greedw
13 take place during the fall of 2005?
14 A. Ilve said it before. We never had a discussion about
15 money relating to the government contracts and what he was
16 going to get. He got a salary . He had a 30 percent interest
17 in the business . And that was our deal. It didn't change.
18 Q. Yet, on December 28tb, you had hâm sign a -- just
19 before you spïit up, an agreement and modification of a
20 promissory note and security agreement for -- how much money?
21 A. It was a million three in principal that he owed me
22 and about a million five in interest on loans that started from
23 1999.
24 Q. And just before you broke up, coming to the end of
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1 2005, you had him sign bhis document; is that correct?
2 A . Yes, because he borrowed -- he borrowed an additional
3 150,000 on December 10th, and I said, ''You gonna sign a new
4 note for the monies you just borrowed?''
5 On December ilthz he had sent me an e-mail asking me
6 for $275,000. He saicl, ''I know I borrowed a 1ot of money from
7 you in the past. ltrs very, very important.''
8 Q . Now, sir, how much money, as of December 28th, 2005,
9 before you Gent on your cruiser had you taken out of eTreppid?
10 A . In what form'?
11 Q. Any form .
12 A. I was paid a salary in 2003, :4 and 65 of $400,000
13 each year. And the reason why I took any salary -- 1et me step
14 back.
15 In the years '99, 2000, 2001, 2002, I took zero salary
16 because the company wasn't making money and I wanted not to
17 have to go back and make more capital calls and dilute
18 ahareholders .
19 ln 2003, '4 and ï5, I was specifically asked by Patty
20 Gray to come up with a number that would be necessary so we
21 eould get our G&A number up on government contracts. You have
22 a cost-plus contract, meaning it's the cost and then you're
23 allowed to cbarge up to a certain percentage for G&A expenses.
24 By me not taking a salary, our company could not get the
.
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-> '> . )
1 benefit o f the value of up to 12 percent, which was a fair
2 market value. Without my salary, it was 8-point-som ething .
3 And it was suggested by the attorneys and by myself
4 that we should a1l get together, give me this money so we could
5 at least get the G&A out of it. The net effect of that G&A
6 payment of a grossed-up value was that, yes, 1 was getting a
7 $400,000 salary, but there was more money going to the company
8 because of that.
9 Q. During this period the company didn rt have any moneyz
10 how much were you chargâng off of the company on the Gulfstream
11 jet?
12 A. On the Gulfstream jet?
13 Q. How much in your favor on the Gulfstream was being
14 expensed against eTreppld and your partner, Mr. Montgomery?
15 A . There was no money charged for the use of the
16 Gulfstream jet other than when I used iL to go on busïness
17 trips either with Mr. Montgomery or other employees.
18 Q. In one year alone, was it approximately one million?
19 A . That sounds extraordinarily hkgh. We might have
20 signed a contractual agreement with a company for hundreds of
21 thousands of dollars for the use of the jet over a period of
22 time. There -- it's inconceivable to me that we paid a million
23 dollars in one year for the use of it.
24 Q. In 1.999: Was it 560,0002
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1 A . 1 have no idea. 1 could certainly look it up and give
2 you an answer to that.
3 Q. ln 2000, was it one million?
4 A . Itts inconceivable.
5 Q. Now, back to the fall of 2005, I understand from your
6 testimony that it was Mr . Montgomery's greed for money,
7 demanding money from you, that was the subjeet of discussion;
8 is that correct?
9 A . That is not what T said.
10 Q. I beLieve you said it wasnlt a discussion in the
11 context of the governaent contracts, but it was a subject of
12 discussion; is that. correct?
13 A . Noz it is not correct.
14 Q. How did Mr. Morltgomery 's greed manifest itself to you
15 in the fall of 2005?
16 A . I believe 1 found out the level of greed in the last
17 three weeks: not in the fall of 2005.
18 Q . Again: for time purposes, welre going to cut this
19 short for now. Let's go to the end of 2005. How much was in
20 the company bank accounts from government contracts?
21 A. How much was in the bank accounts? Around $5 million.
22 Q. Isn't closer to 9 million?
23 A . Absolutely impossible.
24 Q. Where is the 5 million today?
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1 A . In the bank account.
2 Q . How nuch did you take out in the last 60 days:
3 M r. Trepp?
4 A . Where?
5 Q. Out af eTreppid.
6 A . Nothing.
7 Q. ln the last 90 days?
8 A . Nothing.
9 Q. The last 120 days?
10 A . 1 mean, other than a salary, like everybody else .
11 Q. How Much have you taken out?
12 A . Did I get --
13 THE COURT: Other than a salary?
14 MR. FLYNN : Other than a salary .
15 THE NITNESS : Zero .
16 BY MR . FLYNN :
17 Q. Did you have a discussion with Mr. Montgomery about
18 this issue?
19 MR. PEEK: Objection. Which issue?
20 BY MR . FLYNN :
21 Q . The issue of how much was in the eTreppid bank
22 accounts from government contracts and where it was going to
23 go, who was going to get it.
24 A . Who was going to get what?
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1 Q. The money in the bank accounts.
2 A . Nobody was going to get it.
3 Q. Who Iaade that decision?
4 A . Me.
5 Q. Because then you were 50 percent owner with your
6 friends and Mr. Montgomery was only 30 percent?
7 A . I don ït know. Is that a question?
8 Q. Yeah .
9 A. But what was the questîon?
10 Q. Is that why you had the right to make the decision as
11 to what was going to be done with that money?
12 A . There is a management committee we have . The
13 management colnmittee has the right to determine what tc do with
14 the money in the company. I felt it was prudent to leave at
15 least two years' worth of operating expenses in the bank
16 account, not use it for other than that.
17 So, on a going-forward basis -- we only have $700,000
18 worth of contracts for the year 2006 in the company. I didn 't
19 want to be put into a position of making capital calls to
20 create more dilution for the shareholders, and I certainly
21 didn't want to start loaning millions of dollars back into the
22 company.
23 Q. Mr. Trepp, did you discuss with Mr. Montgomery what
24 was going to happen to uhat you say is the 5 million?
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1 A . Yeah, 1 told him we were going to leave it in the
2 bu siness until we have enough money where we can make a
3 distribution when it's substantial enough where we don't have
4 to worry about operatâng expenses going forward.
5 Q. And when did you have that discussion?
6 A . Novele er: December .
7 Q. What did Mr. Montgomery say to you?
8 A . I don't remeo ler him even coDrlenting.
9 Q. Did Qe say something like, ''Ibve been working l8-hour
10 days for seven days a week for years wâth technology that I
11 own, and 1 want my share of that money''?
12 A . Absolutely not.
13 Q. And so then the fight you got into that 1ed to him
14 being -- was Ne fired?
15 A . I didn 't get into a fight with him . 1 have never
16 gotten into a fight with Mr. Montgomery .
17 Q. Was he fired?
18 A . Yes, he was fired.
19 Q. Who fired him?
20 A . I did.
21 Q. Naw, when did you become concerned that
22 Mr. Montgomery, by some trick or artifice or thievery, was
23 going to steal eTreppid technology?
24 A . He had already stolen it by the time I found out about
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-<' xrz
l 1t .
2 Q. So when was that, Mr. Trepp?
3 A . January 10th or 11th.
4 Q. So yclu haci no fear before then that he was going to
5 steal eTreppîtl technology before January 10th; is that correct?
6 A . That 's correct.
7 Q . And l/ou had no discussion with him prior to
8 January 10th which you would characterize as a conflict in
9 wh ich he said . ''I own Lhe technology, I want my money, give it
10 to me''; is that your testimony?
11 A . Yeah. If thatrs what he said, it's a blatant lie.
12 Q. And yet, all of a sudden, after a1l these yearsw
13 Mr. Montgomerg is stea Ling the technology; is that your
14 testimony?
15 A . Yes .
16 Q. And his motive for doing it is what, sir?
17 A . Um, hels desperate for money. Hew on a number of
18 different transactions that lfve recently found out, defrauded
19 a number of different people on work that he had done in
20 conjunction wcith the company.
21 Q. So he --
22 A . He was covering up.
23 Q. So by doing it, he got himself fired, ended his --
24 whatever money he was getting from you and eTreppid and risked
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1 qetting whatever for allegedly stealing the technology: ts that
2 your testimonyp because he needed money?
3 A . Yes .
4 Q. Now, when did you first find out that he needed money?
5 A. We11,, he's needed money for a11 the years he 's been
6 borrowing it from me.
7 Q. When you had him sign the document: Exhibit 18 --
8 A . Yep .
9 Q. -- on December 28th: did he ask you for money?
10 A. No. lt was 011 December 8th he sent me an e-mail that
11 said he wanted to borrow $275,000. On December lothw I gave
12 him $150,000. I then said to him, ''1 want you to sign an
13 amended note like the plior two notes that you amended.''
14 Q. Now, this 150,000 that you gave him --
15 A . Yeah .
16 Q . -- did you say you wanted stock in return?
17 A . I wanted what?
18 Q. Stock in return.
19 A . The note that I had from the beginning of time always
20 had -- therels a legal word for it, but a secured interest in
21 his shares.
22 Q. Weren't you parceling out money to Mr. Montgomery to
23 keep him hapry because he was demanding his share of the
24 profits from eTreppid from the government contracts?
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-- t ' )
l A . Abso.kutely not .
2 Q . Mr. Irepp, dâd you have any control over
3 Mr. Montgomery in his doing his work in his workstation in
4 connection with these contracts?
5 A . I'm not sure 1 understand what that question means .
6 Q . Well, did you direct him in any way, did you supervise
7 him in any waxp as to how to do the work?
8 A . Supervise himy no.
9 Q . Did anyone supervise or control or direct him in terms
10 of how to do Lhe work?
11 A . No. He was the RCTO . It was his responsibility to do
12 the best job, you know. He had a fiduciary responsibility.
13 Everybody worked for him . He hiredz he fired, he delegated
14 people to do work. It was not my job.
15 Q. The source codes that youïre in court for that youïre
16 trying to get --
17 A . Yes.
18 Q. -- is it your testimony that only Mr. Montgomery has
19 those source codes?
20 A . With the exception of what welve been able to
21 re-create out of what's been deleted. Otherwise, I believe
22 Mr. Montgomely has those source codes.
23 Q. And he's the only one, is that correct, that you know
24 of?
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1 A . That I know of, yes.
2 Q. No one else on earth has them that you know of?
3 A . That I -- that 1 know of# yes, thatls true .
4 Q . No one at eTleppid Technologies has them that you know
5 of?
6 A . Correct.
7 Q. So those source codes that you want are a very
8 distinct set of codes that are required for a very specific and
9 distinet business purpose in connection with these classified
10 government contracts?
11 A. Well, not just them. They could be used for a very,
12 very vast groap of different contraets.
13 Q. Mr. Prepp, please.
14 THE COURT : Well --
15 BY MR. FLYNN:
16 Q. Thates what they've been used for in the past at
17 eTreppid; is that correct?
18 A . Theylve been used for them and other things for
19 eTreppld in the past, that 's correct .
20 Q . Now -- and only Mr. Montgomery, aacording to youz has
21 the codes. A11 of the work that's been -- belng done at
22 eTreppid and all of these doctors and sophisticated programmers
23 that you#ve çot employed, none of them have it; is that
21 correct?
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I .
. .
l
-- . > 1
1 A . I do not betjeve they have anything other than what's
2 been recovered through our recovery process: and I bekieve
3 M r. Montgomer'/ has it .
4 Q. So we could call him a specialist in these particular
5 source codes; is that crorrect?
6 A . T betieve there are plenty of people that would have
7 the ability to understand the analysis, to understand what the
8 source codes are.
9 Q . But ao one has in 30 years; is that correct?
10 A . Well, how would I know that?
11 Q. Do you know of any person: in eTreppid or not, who has
12 the sophistication, the knowledge in hj.s brain, about how these
13 source codes work to process the things that Mr. Montgomery was
14 processing?
15 A . To some degree, absolutely .
16 Q . Who?
17 A . Zehang.
18 Q . Then Zehang could go out tomorrow and do it; is that
19 correct?
20 A . I did not say that. He has -- I believe what you
21 asked me wasr does he have some knowledge of. And my response
22 to that is yes. Do I believe other employees have some
23 knowledge of it? I believe the answer to that is yes. Who
24 kept it undeE his Wing in his private cubbyhole, not on a
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... . ( .....J
1 source server? That was Mr. Montgomery.
2 Q. Than k you . Who else that you know of, other than
3 Mr. Montgomery, has the skill in the next year to put a11 these
4 source codes Logether so that these government contract items
5 can be processed?
6 MR. PEEK: Objection, Your Honor. Heîs assuming facts
7 not in evidence that Mr. Montgomery has the skill to actually
8 write the C++ code or the MET code that 's being described here.
9 MR . FLYNN : 'l3hatls absolutely correct, Your Honor.
10 Itls what he ;id for two-plus years.
11 MR. PEEK : That's maybe what his testimony is, but
12 that ls not what the testimony is so far.
13 THE COURT : Wellz I think -- go ahead and ask the
14 question, and we'll ti.e it up if we can .
15 BY MR . FLYNN :
16 Q. Who else has the skills to put the complete package of
17 source codes together so that these government contracts can be
18 done, other than Mr. Montgomery?
19 A . I don 't know .
20 Q . The instruments and tools that Mr. Montgomery used
21 while he was at eTreppid, do you know what they are, to do this
22 government ptocessing?
23 A . Is that a question about hardware, software? I don 't
24 understand the question.
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l Q. Do you have arty idea how he d1d 1t, how he would take
2 things and process them?
3 A . Well , T certainly can tell you what T believe that
4 he 's described to me. 1 also totally believe now that he's
5 lied to me .
6 Q. Wellr let's just take -- do you have any idea, as you
7 sit here under oath, how he did it?
8 THE COURT: How he dtd what?
9 BY MR . FLYNN :
10 Q. How ae would process -- see, how he would process
11 things in connection with these government contracts.
12 A . Just to the extent of what he told me he did.
13 Q. In terms of the source codes: the line coding, the
14 technology that was used, do you understand it?
15 A . No.
16 Q. And you woulcl agree with me that that was, in effect:
17 the tool by which these contracts were done?
18 A. I don't think 1 have the knowledge to be able to
19 answer that question.
20 Q. Up until the end of 2002, how was Mr. Montgomery
21 being -- even though he was a founder and principal, how was he
22 being treated in terms or being paid, as an independent
23 contractor? How was he being treated?
24 A. Thete was a period of time where he was being paidz T
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1 guess you would call bt as an independent contractor: because
2 he wasn lt getlling a W-Q from me; he was getting a 1099.
3 And 'zhere were various reasons for doing thatp one of
4 which was his attorney said, ''We11, this is what Dennis told
5 me.'' His accountant had told him that he had tax loss
6 carry-forwards front pri.or lawsuits where he had losses in them
7 and that he d kdn 't need to get the deductions because --
8 whatever the CPA said.
9 Q. Who was -- do you know when he got K-ls, when he got
10 1099s? Do you know?
11 A. Well, I know he got -- I know he got -- wait . K-ls --
12 he 'd get a K-1 every year, lj.ke every other owner in the
13 entity, and a 1099. That 's not a W-2. I believe that was in
14 neither the first year -- earlier years because of this tax
15 thing that he had told me.
16 But he's gottert a W-2 certainly in -- well, to the
17 best of my knowledge, in 103, 104, and ï05 . 1 don't know
18 about '01 and .02 .
19 Q. To bring this to a close, Mr. Trepp, there was no one
20 at eTreppid who instructed Mr. Montgomery what to do in the
21 regular course of the fulfillment of his work on these
22 government contracts; isn rt that correct?
23 A . Well, Iïm not sure that is correct. I mean, if I told
24 him to do somethinq relative to the government contract, I
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'
w J
u'
1 would cer'tainly expect he was going to do it
.
2 Q . Well; you don't even know what he was doing or how he
3 was doing it, do you?
4 A . That 's absolut:ely not true. I certainly knew the end
5 result. He knew exactly what he was doing. He established the
6 contract that our company received and we performed on .
7 Q . What you knew -- without gettîng into content, what
8 you knew, for example, was if a certain item was processed for
9 the governmenlo you would know the end result of whether the
10 information that was given to the government was accurate in
11 terms of what the government wanted. Thatîs what you knew , and
12 you were told that by Mr. Montgomery; isn't that correct?
13 A . No .
14 Q. Isn' it true that at a certaân time at eTreppid:
15 there was a certain governmental agency with certain employees
16 or agents who had nothinq to do with you, they only dealt with
17 Mr. Montgomery?
18 A . That 's absolutely ridiculous .
19 Q. Isn'L it true that you and Mr. Montgomery had a
20 discussion about what they told him and that you were not privy
21 to and he told you that he couldn 't tell you?
22 A . No. That 's absolutely ridiculous.
23 Q. Do yau know, as you sit here today, the end results of
24 the confirmations of the accuracy of the information that
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1 Mr. Montgomer'g procluced , the dates, the contentsz what they
2 related to, and how otten they were confirmed?
3 MR. PEEK: Youz Honor, could 1 have that question
4 back? 1 have no idea what was asked.
5 THE COURT : I think there were a 1ot of questions.
6 MR. FLYNN : 1111 try it again, Your Honor.
7 THE COURT: You might want to break it down a little
8 bit beeause it's a little confusing to me too.
9 BY MR . FLYNN :
10 Q. When Mr. Montgomery would process information for the
11 government --
12 A . Uh-huh .
13 Q . -- on one of these government contractsr first, do you
14 have any records: sir, of the end result of that processing?
15 A . Yes .
16 Q. Just in -- generically, what types of records do you
17 have?
18 A . I have spreadsheets that he gave me, starting from the
19 first processing frame we had through the end . I think I have
20 every record that he ever generated, both in electronical
21 format, and I certainly have it, reams of it, in paper format.
22 Q . Is this classified information that you claim you
23 have?
24 A . Is it classified information today? I believe it is
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1 not, although I:d like to check to see 1f, in fact, it was. 1
2 personally do not beljeve it is classified today .
3 Q. Letrs take 01162 aspect of one contract with the speeial
4 agency.
5 A . Uh-hah .
6 Q. In terms of confirmation of Mr. Montgomery's results,
7 is it your testimony you have eTreppid documents relating to
8 that conflrmation?
9 A . I don't understand the question, Your Honor .
10 Q. Welly you know that eTreppid, under the clearances
11 that they have, is not entitled to store any classified
12 informahion?
13 A . The înformation that eTreppid had was not classified.
14 The information -- the outputs of the information of that would
15 be classified as far as the government is concerned. We never
16 had that information classified for the simple reason, at the
17 time we were doing the work, we had no classifications
18 individually .
19 MR. FLYNN: May I have a moment, Your Honor?
20 THE COURT: Certainly.
21 BY MR. FLYNN:
22 Q. Who currently has the books and records of the
23 company?
24 A . TheyRre in the building.
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l Q. And who has custody of them? Is there a bookkeeper,
2 an accountant?
3 A . Yes.
4 Q . Who JLs the individual?
5 A . We have -- we have a bookkeeper . Her name is
6 Su Perez. We have a CPA firD, which is Ashley Quinn. 1
7 certainly have access to anything I want whenever I wank it.
8 0. And wbat books and records are there?
9 A . Whatever we need to do to create our K-ls at the end
10 of the year, Rnything relating to tax information . We
11 certainly have our checkbooks, our deposits, our withdrawalsz
12 our wires, all of the expenses. 1 mean, to create a tax
13 return, you have to have everything.
14 Q. Are there any E7 & Ls?
15 A . Well, we couLd certainly generate one. I don't know
16 if the accountant has qenerated a P & L. Well, he had to have
17 created a P & L to generate K-ls, so --
18 Q. And theypre in the company?
19 A . Well, they're either at the CPA'S or at the company
20 or -- I donRt. know, frankly, which.
21 Q. How many meetings of the board of directors have taken
22 place since 1.9982
23 MR. PEEK: Your Honor, this doesn't have a board of
24 directors. This j.s a limited llability company. Tt has member
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1 managers .
2 %HE COURT : You might want to rephrase thatl . But 1
3 just have a glàneral questton, and that is, I don ' t understand
4 the relevance o f a lot. of these questions z so you could maybe
5 try to tie thdltl in so tèhat 1 do .
6 MR. FLYNN : A l ot of it has to do with
7 r ir Montgomer g s test mony .
8 THE OOURT : A12 rj.ghtr . A11 right .
9 BY MR . F'LYNN ;
10 Q. Have there ever been any minutes kept of any meetings:
l 1 committee meetingsr shareholder meetings of eTreppid?
12 MR. PEEK: There aren' t shareholdersr Your Honor .
13 THE COIJRT : i tlnderstand that . Just s imply rephrase
14 it . This sounds more ïj.ke discovery than anything else to me#
15 but go ahead .
16 MR . FLYNN : E ' 11 move on, Your Honor .
17 THE COUIW : A1l right .
18 BY MR . FLYNN :
19 Q . Did you ever discuss with Mr . Montgomery the intrusion
' h had incorporated into certain parts0 detection sof tware that e
21 of the sof twetre?
22 MR . PEEK: Objedtion . Lacks f oundation, Your Honor,
23 that there wEts such a technology incorporated into the
24 sof tware . H() already asked Sloan if whether there was . We
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1 have Mr. Hennessey's evâ.dence that suggests that there was not.
2 THE COURT: I think he could ask the question did you
3 ever have a discussion about whether or not there was any
4 intrusion technology inserted into the software .
5 MR. PEEK: 1 don't have a problem with that kind of a
6 questionz Your Honor, and it would be a lot easier if he could
7 just ask it that way.
8 THE COURT: 2 understand your oblectîonz and if there
9 were a jury sitting herez Iîd sustain it. But 1 understand
10 what hefs askingr and I'm going to allow it.
11 BY MR. FLYNN :
12 Q. Did 'gou have those discussions?
13 A . No.
14 Q. Never?
15 A. I do not belâeve it ever existed.
16 Q. Was Uhere ever a discussion between you and
17 Mr. Montgomerg in a heated exchange wherein he told you that if
18 you or one of your people try to go access anything, the
19 software will melt down?
20 A . A, Ilve never had a heated exchange with him, with the
21 exception of the January 10th exit; and B, absolutely not.
22 MR. FLYNN: Thatls a11 I havez Your Honor.
23 THE COURT: Al1 right.
24 //// ////
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vi >.* '
.'- )
1 REDIRECT EXAMINAT 1ON
2
3 BY MR . JAKOP I.31 :
4 Q . One question . Was the source code used for processing
5 on the eTreppid goverlmtent contracts developed at e'Freppid?
6 A . M solutely .
7 MR . JAKOPIN: No further questions.
8 MR. FLYNN: J object. Move to strike. Lacks
9 foundation .
10 THE COURT: Wel.l, 1et me ask this question: Do you
11 know whether it was or not?
12 THE KITNESS: Well, I firmly believe a11 of the source
13 code at eTreppid was erfreppidts. And if it was eTreppid source
14 code that operated anything for any customer, I certainly
15 believe that it was ours and it was used.
16 THE COURT: A1l right. 1 understand that that's your
17 belief, but do you have any actual knowledge about that?
18 THE WITNESS : That there was a source code run to
19 operate the government equipment?
20 THE COURT: And that it was developed on eTreppid's
21 equipment.
22 THE WITNESS: Well, I don't see how it could be
23 developed anyplace else, Your Honor.
24 THE COURT : A1l right. A11 right. I understand .
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.. .,., ... -.
)
1 MR. FLYNN : That's a11 1 have, Your Honor.
2 THE OOURT : A L1 right.
3 THE HITNESS: Am I done?
4 THE COURT: J believe so.
5 THE WITNESS: Thank you.
6 THE COURT: You can step down .
7 (Witness excused.)
8 THE COURT: Ts that --
9 MR. JAKOPTN: That concludes our casey Your Honor .
10 THE COURT: A 1l right . Do you have one witness?
11 MR . FLYNN : ï do, Your Honor. I have one witness . 1
12 want to make a motion, but 1111 reserve on the motion, with the
13 Courtîs permission -- with regard to burden of proof, and 1'11
14 reserve on the motion .
15 THE COURT : A11 right. Go ahead.
16 MR. FLYNN : We would call Mr. Montgomery to the stand.
17 MR . PEEK : Your Honorz hoW late are you going to go?
18 THE COURT : Until we're done.
19
20 D E N N I S L. M O N T G O M E R Y,
21 called as a wj.tness, having been duly sworn,
22 testified as follows:
23
24 THE COURT: l mean, I should say within reason. But I
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1 can't imagine that welLl be going later than I would be willing
2 to go .
3 MR. PEEK; Wel1., I understand that Mr. Flynn said he
4 was going to have M r. Montgomery for 3O, 40 minutes. I
5 wouldn ît anticipate a lengthy, lengthy, lengthy cross .
6 THE COURT : 1 think you're safe.
7 MR . PEEK : Okay .
8
9 D (RECT EXAM INATION
l 0
11 BY MR . FLYNN :
12 Q . State your name , please, sir .
13 A . Dennis L . Montgomery .
14 Q . Your age?
15 A . Fif ty-three .
16 Q . Where do you live?
17 A . You want the address?
18 Q . Just --
19 A . Reno, Nevada .
20 Q . What ' s your occupation?
21 A . Well, I ' m unemployed right now .
22 Q . What was your occupation?
23 ' A . Chie f technology of f icer at e'freppid Technologies .
24 Q. What ' s your educational backgroundz Mr . Montgomery?
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l A . I got. a bachekor -- an associaLe of science in
2 cardiopulmonaly technotogy, and I did uot complete a bachelor's
3 degree in biology.
4 Q. And with regard to your career history, what type of
5 work have you done since college?
6 A . I went to work in a hospital for two years as a
7 perfusionist.
8 Q. What's a perfusionist?
9 A . If11 restate that . I went to work as a
10 cardiopulmonary technieian in a hospital, and as a
11 cardiopulmonary technâcian, I had duties regarding respiratory
12 therapy, EKG, blood gas analysis, so forth . That was from '73
13 to :75: I believe. And from '75 to around '8O I worked as a
14 consultant on medical equipment and medicine.
15 Q. Okay. What îs blood gas analysis?
16 A . It's a process by which you determine the gas levels
17 inside the blood.
18 Q. And what specifically was the nature of your work in
19 blood gas analysis when you were working at the hospital?
20 A . I was developing a series of programs that would allow
21 an automated method for calculating blood gas and several other
22 parameters .
23 Q. At that time, what was your background in computer
24 prograamlng?
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1 A. Um, i was just learning it as I was going along.
2 Q. And at some point, did you form a company?
3 A. Yes: in '81 or :82, called Coyputermate.
4 Q. And whatfs the business purpose ef Lhat company?
5 A . To do -- write medical software for medical
6 instrumentation .
7 Q. And did the company have clients?
8 A . Yes.
9 Q. Who were t:he clients?
10 A . Corn tng, (-'orning Medical, Kodak, Dupontz American
11 Hospital, so lorth.
12 Q. And at some point in connection with your work with
13 Corning and Computermate, did Corning enter into a licenslng
14 agreement with Computermate in connection with spectral
15 analysis of blood gasses?
16 A . Yes.
17 Q . And What was the nature of that agreement?
18 MR. PEEK : Your Honorz best evidence is the agreement
19 itself.
20 THE COURT : Oh, I think he can deacribe the nature of
21 it. This is al1 background, isn't it?
22 MR. FLYNN : Yes, Your Honor, but it 's the background
23 in regards tcI --
24 MR. PEEK : Itls background, Your Honor, related to
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1 what the claila is as lramed by the opposition of certain
2 copyrights in this time frame . So that's why I am very
3 cautious in mg objectjons more than -- itls not just
4 background . It goes to the substance of their defense that
5 they own -- there we go (being shown document).
6 THE COURT: 1 think he's just showed you the document,
7 has he not?
8 MR . PEEK : 1 donlt believe so. It ls an agreement, but
9 itïs certainlg the document.
10 BY MR. FLYNN :
11 Q . Mr. Montgomery, does this file basically contain the
12 agreement on the nature of the work that you were doing for
13 Corning in coanection with blood gas analysis?
14 A . That was the manual that described the software that
15 was used on tQe instrumentation.
16 Q. And let me show you several documents that have been
17 taken out of that manual. And I'd ask you --
18 MR . PEEK : Your Honorz if hefs going to offer this so
19 I can at least examine it --
20 THE COURT: Yeah.
21 BY MR . FLYNN :
22 Q. And I'd just ask you if those pages come out of the
23 manual.
24 A . Yes .
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l MR . PEEK : This is Exhibit 19:'
2 MR . FLYNN: i'.xhibih 19.
3 MR. PEEK : Has that even been offered yet?
4 THE CLERK : Hasn't been marked.
5 MR. PEEK : Hasn 't been marked?
6 MR . FLYNN : l 'nl going to offer it.
7 MR. PEEK : Youbve got bo mark it.
8 MR. FLYNN : And then 1'm qoing to offer it.
9 MR. PEEK : Can you mark it first. ls it Exhibit 19?
10 MR. FLYNN : Do you want him to look at it first or --
11 THE COURT; You guys Want to have a recess so you can
12 have a conversation?
13 MR. FLYNN : Do you want to read it first, or do you
14 want me to mark it?
15 THE COURT : Well, I think it might he up to me. Mark
16 it, and let's go from there.
17 MR. PEEK: What I ask -- Ys he going to mark this
18 document?
19 THE COURT : Yes.
20 MR. PEEK : That's what I didnrt know . I thought he
21 was just going to mark the pages out of it. Do we have a copy
22 of it so 1 can have a copy of it?
23 MR . FLYNN: I have a copy of the pages which are
24 relevant.
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1 THE CLERK : Jt's Exhibit 19.
2 (Defendant's Exhibit 19 was marked for
3 identification.)
4 MR . PEEK : Your Honor, respectfully, this is what we
5 asked for las week . And if he's known about it and he's going
6 to use it as an exhibît, it's lmportant that 1 have the entire
7 document to be able to cross-examine, as opposed to just
8 limited pages.
9 THE COURT: 'It appears that you have the document
10 itself right Lhere in front of you --
11 MR . PEEK: 1 do .
12 THE COURT: -- and you 're holcling it --
13 MR . PEEK: I dc).
14 THE COURT: -- and he 's letting you look at it . And
15 webll decide tater about getting you a copy.
16 MR. PEEK: lïve just now seen it: Your Honor.
17 THE COURT: ALl right. I understand .
18 MR. FLYNN : Let's mark for identification, first, the
19 pages that the witness is going to testify about.
20 THE COURT: Mark those 20.
21 MR. FLYNN: 2O, Your Honor .
22 (Defendant's Exhibit 20 marked for identification.)
23 MR. FLYNN : And the record will reflect I gave a copy
24 of those pages to Plaintiff's Counsel .
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1 THE COURT : A11 right. Let me see the exhibit.
2 MR . FLYNN : Whlle he 's looking at that, why don't we
3 mark the copyrights for identification .
4 THE COURT : How are we going to mark thoser 21 through
5 what?
6 THE CLERK: He just gave me one document.
7 THE COURT : Mark it 21, then.
8 MR. FLYNN : Yeah, just 21, I think.
9 (Defendant's Exhibit 21 was marked for
10 identification.)
11 MR. PEEK: Has this been identified as to what it is?
12 MR. FLYNN: It's just been marked.
13 MR . PEEK: Okay .
14 MR. FLYNN: Tell me when yourre ready.
15 MR. PEEK: I'm ready.
16 BY MR . FLYNN :
17 Q. With regard to Exhibit 20, Mr. --
18 A . Is this the manual?
19 Q. Yes, the pages from the manual.
20 A . Yes.
21 Q . Are those, in fact, pages that have been taken out of
22 Exhibit l9?
23 A . Yes.
24 Q. Theyrre copies thereof?
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1 A . Yes.
2 Q. Describe what they are.
3 A . It's a series of program s that patient identification
4 information was put inr or calibration data, and the system
5 analyzed the blood and then produced the results.
6 Q. Can you describe to me, from a computer programming
7 point of view, how these pages describe the technology used to
8 do things like gas analysis?
9 A . The column in the middle, which represenks the output
10 of the data, is spectral analysis output of data: and that data
11 has patterns ln it. And you generate --
12 MR. PEEK: Your Honor, before we testify from the
13 document: could we have the document at least offered so that
14 we can deterpine whether or not it is or is not into evidence?
15 MR . FLYNN : 1''L1 offer the document, Your Honor .
16 THE COURT: A1ë right.
17 MR. PEEK: Your Honor, I would Object to this as
18 irrelevant tc this proceeding and so remote in time as to have
19 no relevance to what is at issue here in terms of pattern
20 recognition and our source code . This doesn't define the
21 actual source code. Someone could compare what is being done
22 here with what is actually being performed by the source code
23 of eTreppid.
24 THE COURT: Well, it seems a little remote. It seems
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1 unrelated. But 1 belîeve that under their theory of the case,
2 that it's not . And T'm goinq to allow him to develop that, so
3 I'm going to allow the exhibit.
4 MR . PEEK : The other concern 1 have , Your Honor, is
5 that what we have, which is Exhibit 21 -- and îf the Court
6 would look at the seeond page of that, it relates, if you will,
7 Your Honor, to apparently who the owners are of the various
8 copyrights. Fou will see here that the owner is not
9 Dennis Montgonery or the Montgomery trust. It is, ln fact,
10 Computermate, Computermate, Computermate, Computermate in every
11 one o f these .
12 Where is the link as we go showing an assignment back,
13 if you will, to the Montgomery trust? The Montgomery trustr in
14 fact, owns them, if that's what the Library of Congress says
15 the ownership of the copyrights is today.
16 So again, getting back to relevance: I think we'd have
17 to start the thread of, I have the copyright, I own the
18 copyright, tkts is the copyright, as opposed to thYs is the
19 copyrlght, without at leash establishing the predicate of
20 ownership .
21 THE COURT: I remember the testimony with regard to
22 what Computermate is. I see Mr. Montgomery's name on it. I
23 think: in terms of relevancep the relevance has been at least
24 established enough to my satisfactionr I'm going to admit
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1 Exhibits 20 and 21. And then --
2 MR. PEEK ; He 's not the o-ner of the copyrightg,
3 though, Your Honor.
4 THE COURT: J admitted them . And whether he's hhe
5 owner or not wîll i)e developed in the testimony, and then Iï11
6 make a decision as to --
7 MR. PEEK : Whether to strike them or not?
8 THE COURT: I don't know about striking themz but
9 whether or noL they play into the decision 1'm going to make.
10 (Defendant's Exhibits 20 and 21 were admitted into
11 evidence.)
12 BY MR . FLYNN :
13 Q . With regard to Exhtbit 20z Mr. Montgomery --
14 A . Yes.
15 Q. -- would you describe to the Court how Exhibit 20
16 explains the nature of the software technology that was being
17 used for the spectral gas -- spectral analysis and how that
18 relates, first, to the copyrtghts in Exhibit 21 before we get
19 to the ownership issues.
20 A . The software that did the detection of the anomalies
21 and the patterns in the spectral analysis is that software that
22 was developed originally. That is the original work.
23 Q. That's being described in Exhibit 20?
24 A . Yes, that 's correct .
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..
--.1 , /
,
1 Q. And the copyrighting of that technology to do the work
2 that 's described ilt Exhibit 2O, which is the blood gas spectral
3 analysis, is based on the copyrights that are marked in
4 Exhibit 21; is that your testimony?
5 A. Yes.
6 Q. Now, today: who owns the copyrights that are reflected
7 on Exhibit 21?
8 MR. PEEK: Objection. The best evidence is the
9 document itself showinq ownership.
10 THE COURT: Overruled.
11 BY MR . FLYNN I
12 Q. Who owns them, sir?
13 A . The original copyrights were filed on behalf of
14 Computermate, which 1 was the owner.
15 Q. And subsequently, was Lhere an assignment from
16 Computermate to you?
17 A . Yes.
18 Q. And when did -- did -- at some polnt, did Computermate
19 close and cease doing business?
20 A . Yes .
21 Q . When did that take place?
22 A . I'm thinking around 185.
23 Q. In regard to what we will call the source codes --
24 MR . PEEK; Your Honorr againz move to strike. Where
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..- '- 1
1 is the assignment back to Computermate?
2 THE COURT: '( don 't know . Maybe wedre getting there.
3 Let's see. That was a question that I intended to ask myself,
4 but I'm not asking it right now: so let's let this go forward a
5 little bit.
6 Trust me that l'm going to give this evidence the
7 weight that 1 think ît deserves: but I need to hear it before I
8 can understand its relationship and its relevance. So as a
9 staring to these transactions, 1 need to get a11 the
10 înformation before I make a ruling that's going to be
11 prejudicial, or detrimental, to either side.
12 So, please, Mr. Flynnp go ahead.
13 MR. FLYNN : Thank you, Your Honor.
14 BY MR . FLYNN :
15 Q . Is there anything in Exhibit 20 that in some way shows
16 how the copyrights în Exhibit 21 work?
17 A . Well, I own Computermate, and the copyrights -- I was
18 the author, and I retained rights to those copyrights svnce the
19 beginning of time.
20 Q . And after Computermate ceased doing businessz did you
21 retain those rights?
22 A . Yes, I did. '
23 Q. Okay. Now, is there anything in Exhibit 20 that shows
24 how the copyrights are at play in the spectral analysis? Is
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.. ,
'
h
1 there anything the Court can look at?
2 A . Well, the source code was filed with the original
3 work. And I mean, otlèer than the names, there's nothing
4 directly on here. 1 mean, I know the work .
5 Q. If you look at these various diagrams or 1ab report
6 readouts --
7 A . Uh-huh.
8 Q. -- printouts, are those based on the copyrights that
9 are in Exhibit 21?
10 A . A11 of the software on that system reflects those
11 copyrights.
12 Q. Now, what is the terminology that you use to describe
13 those copyrights?
14 A . Well, they contain the anomaly and the pattern
15 detection work. That was the beginning of the work
.
16 Q. Now, those copyrights, 1 believer are dated in
17 May 1982, is it?
18 A . Correct, I thlnk up until February of 103.
19 Q. And between that timez May 182: February :03, to the
20 present, do you know any person on the planet who has the
21 anomaly detection software that is contained in these
22 copyrights?
23 A . No.
24 Q. Has it ever been duplicated?
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,.xe
'
w e )
1 A . Well, I -- I don 't know about Corning
,
because 1
2 didnft continue doing work for them at some point
.
We -- you
3 know, we had moved on to other things
: so 1 reakly wouldn lt
4 know whether that's the case or not.
5 Q. Al1 right. But kn terms of the anomaly detectkon
6 aspect of the software thatïs in these -- these copyrights?
7 A . Iîve never seen anything in the literature describing
8 it.
9 Q. And at some time after 1982, did you improve on the
10 technology that's în these copyrights?
11 A . Yesy I believe in '86 or 187
.
1 can 't remember
12 exactly, but somewhere in that time frame
.
13 Q. Describe to the Court what you did.
14 A. Well: these were originally written on a
15 Hewlett-packard computer, and I had translated them to work on
16 IBM computers . This was the beginning when the IBM PC was
17 first becoming available.
18 Q. And in what way did that improve or refine the anomaly
19 detection software that you had proprietary rights in?
20 A . 1 was able to add more anomakies. I was able to make
21 it run faster. And HP computers -- the IBM was -- it was
22 pretty obvious that the IBM computer was to going to become
23 pretty popular.
24 Q. And at some pointr did you form a company called
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1 Barrett Labs?
2 A . Yes.
3 Q. When was that, slr?
4 A . I think around '85 or :86. 1'm not certain of the
5 date.
6 Q. And did you us() the anomaly detection software that
7 you had developed between '82 and '87 in Barrett Labs?
8 A . Yes.
9 Q. And in what way did you use it?
10 A . Well, we had hooked up to more sophisticated
11 instruments. We did far more complicated spectral analysis
12 work and so forth.
13 Q. How was Computermate dissolved?
14 A . I think it was either sold -- 1 think it was sold.
15 Q. And who was ît sold to?
16 A . 1 don't reca) L the person.
17 Q . And how dtd you retain the rights in the company?
18 A . I have a letter retaining the rights to the original
19 work.
20 Q. Now, after 1980 to 1987 period, in connection with
21 Barrett Labs, did you do any further refining of the anomaly
22 detection software that's in Exhibit 21?
23 A . From then to when?
24 Q. Well, when was the next time you did any refining?
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N' o#r' t 1
1 A . I don't remerdaer if it was in 3Net or not . Surely
2 after 3Net I did.
3 Q . Okay. When was 3Net?
4 A . 180- -- 1 thjnk it was '87 to '92, '93.
5 Q. And what was 3hlet?
6 A . 3Net was a company that had built large-scale clinical
7 information systems in the hospital.
8 Q. And did any part of your anomaly detection software
9 play any role with reqpard to your involvement with 3Net?
10 A . Well, I'm sure that there was some small pieces inside
11 the 3Net software that. used anomaly detection, but that was not
12 their primary business.
13 Q. And what Ls the dlstinction between anomaly detection
14 and pattern recognition?
15 A . Anomaly detection is looking for anything out of the
16 normal, and pattern recognition is specifically looking for
17 patterns kn things.
18 Q. Are they two different technologies?
19 A . Yes.
20 Q. And does your prior testimony you just gave,
21 basically, in a simple way, in a layman 's way, describe the two
22 different technologies?
23 A . Yes.
24 Q . And Exhibit 21 containing the copyrights wasz in fact,
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1 used in connection with your company, Barrett Labs?
2 A . Yes.
3 Q. And in what way did you license that technology to
4 your clients?
5 MR. PEEK ; Best evidence is the license itself.
6 Everything here lacks iaîther an assignment document, a license
7. document or anything else. The best evidence are the documents
8 themselves to address the assignment or the licensing.
9 THE COURT: Objection ls overruled. Go ahead.
10 BY MR . FLYNN :
11 Q. In what way was the technology -- anomaly detection
12 software used, Mr. Montgomery?
13 A . In which company?
14 Q. In Barrett Labs.
15 A . Well, they had hooked up; I think I stated earlier,
16 far more sophisticated instruments and required far more
17 sophisticated anomaly detection or pattern recognition
18 software .
19 Q. And at that pointz to your knowledge, did anyone in
20 the world possess the sophistication, the software, to do that
21 type cf work of anomaly detection?
22 A . Since our work was in mediciner I did not know of
23 anyone.
24 Q. Now, when was the next time after 3Net that you had
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I.p-e '
.
.
1 occasion to use your copyrights for anomaly detection?
2 A . 1 did some cortsulting work for Kaiser in '94 I
3 believe . And I was building some instrumentation control
4 unit -- I don't remember specifically what it was, but I was
5 doing work for them.
6 Q. And so you d5d further work on anomaly detection?
7 A . Yes .
8 Q . Okay. Now, between '93 and î98, how were you -- what
9 was your occupation?
10 A . I was self-employed as a consultant .
11 Q. And was that with Pacific Consulting?
12 A . Yes.
13 Q. And what type of cortsulting were you doing?
14 A . I was doing both medical -- and 1 started doing work
15 in Los Angeles in motjon pictures.
16 Q. And did anomaly detection software -- was that
17 involved in any of your consulting work at that time?
18 A . Not anomaly detection .
19 Q. What was involved?
20 A . Pattern recognition.
21 Q . What type of pattern recognition?
22 A . 1 was working with a company that had an interest in
23 trying to database assets out of live -- video -- movies.
24 Q . And what type of pattern recognition -- how would you
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..->m 7* '
1 describe that type of pattern recognition?
2 A. Well, that was looking for a known object in a film
.
3 So if they were looking for a cup: they would try to tell the
4 computer, and they needed software to say in -- this cup
,
is it
5 in any of bhese frames, and it would go look for it
.
6 Q. Now, at some pcd nt, you met Mr
.
Trepp?
7 A . Yes.
8 0. When did you first meet Mr. Trepp?
9 A . It might have been j
n #96 or 697. I don 't recall
.
10 The time 1 do recall is when I met him at the Eldorado in 198
.
11 Q. Okay. And describe to the Court everything that you
12 can recall in connection wikh your meeting with Mr
.
Trepp at
13 the Eldorado in 1998.
14 A. I was just introduced to him by a gentleman named
15 Steve Sands. And l've known Steve, I don't know
,
maybe a year
16 or so forth. When I went there, he had heard some of the work
17 I was doing in Los Angeles and said that he might have somebody
18 that might be interested in 1t.
19 Q. Okay. Describe the conversation about what you and
20 Mr. Trepp discussed with regard to the work you were doing
.
'
21 A . I simply told him the work that I'd been doing in
22 compression, b0th video and data compression, and I described
23 that to him .
24 Q. Okay. As best you can recall: understanding you can't
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. - m
1 remember word for word, but as best you can recall
,
describe to
2 the Court what you were tellkng Mr
. Trepp about data
3 compression.
4 A . I was simply telling him that I had the ability to
5 shrink a mo'vie much smaller at the time than the common
video
6 compressors worked .
7 Q. Okay. What Ls that, Mr. Montgomery?
8 A . It 's a form (3f lossy data compression
, where you take
9 information and add a certain amount of loss into it and shrink
10 it.
11 Q. And how does that differ from data -- strike that --
12 from pattern recognitïon?
13 A . It's totally different. Pattern recognition is
14 actually looking for something in the video.
15 Q. Now, when you say 'fit's totally different'' -- I'm not
16 a computer programmer and 11m not experienced in the ways ef
17 computer programming. Is there some way you can describe to
18 the Court in a layman's way how they are two completely
19 different animals?
20 A . Well, video compression is looking to shrink a file
21 and trying to keep the file intact, mostly
.
Pattern
22 recognition is looking through the file and trying to find
23 things.
24 Q. Okay. Now, you obviously were in the courtroom during
'
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.
. -- v ;-
1 Mr. Trepp's testimony about Gunga Din and --
2 A . Right
.
3 Q. -- discussing 130th pattern recognition and data
4 compression before the deal was signed on September 28th
,
1998.
5 A . Yes, I heard
.
6 Q. And you heard it --
7 A . Yes .
8 Q. -- is that correct?
9 A . Yes .
10 Q. Was it truthful?
11 A . 1 don't recall anything to do with Gunga Din
.
12 Q . Do you recalà anything about pattern recognition?
13 A . No .
14 Q. Is it possible that you had that conversation?
15 A . No .
16 Q . What was j
n your mind -- what was your intent as a
17 contracting party when you signed the contribution agreement
18 and formed eTreppid, then Intrepid Technologies
, with Mr. Trepp
19 as to what you were putting into the company?
20 MR. PEEK : Your Honor -- I'm sorry
.
1 apologize.
21 THE COURT: Go ahead
.
22 MR. PEEK: My objection is to intent
. 1 think the
23 Court allowed ''understoodr'' but intent
, I thinkz definitely
24 would go to vary the terms and conditions of the contract
, as
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1 opposed to his understanding
.
2 THE COURT : WeLl, I think that there are some claims
3 here as to what the contract says and what it means and what
4 the parties intended . 2G d 1 know Mr
.
Trepp talked about what
5 his intent was, and I think it will aid me in understanding
6 exactly what we're dealing with. I#m going to overrule the
7 objection. I think ik%5 not necessarily to contradict the
8 terms of the contract, but to explain them
.
9 So, go ahead.
10 THE WITNESS : Daha compression
.
11 BY MR . FLYNN :
12 Q. And at this point in timez September 1998, how many
13 different technologies did you have sophisticated knowledge of
14 with regard to computer programming, other than data
15 compression?
16 A. Well, I had spentz you know, the last 10 or 15 years
17 working in medicine, so 1 had a 1ot of experience in building
18 medical-type devices and medical programming through a 1ot of
19 variety of areas, b0th in the ckinical laboratory and the
20 medical records and X-ray. And 3Net was building a large-scale
21 clinical information system to do that
.
22 Q . So you had a1l that sophkstication?
23 A. Yes.
24 Q. What other sophisticated knowledge did you have?
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l A . Well, obviousty: 1 had a 1ot of experience in pattern
2 and anomaly recognttion because it was used în those
3 technologies.
4 Q. So when you macle this deal with Mr. Trepp, again, what
5 was your understanding, understanding the differentiation
6 between these technologies, as to what you were putting in?
7 A . Data compression .
8 Q . At any time: tn any discussions with Mr. Trepp prior
9 to September 28th, do you recall any discussion about putting
10 in any other technology other than data compression?
11 A . No .
12 Q . In fact, you signed the 1998 contribution agreement,
13 sir?
14 A . Yes.
15 Q . And youîre aware of its provisions?
16 A . Yes.
17 Q . You're aware of that provision, 1.2.1, which says that
18 the only thing being given is the technology -- the software
19 compression engine development program contained on CD
20 Number 12 .
21 A . Yes.
22 Q . Did you, in factw prepare CD Number 12
23 A . Yes.
24 Q. When did you prepare it?
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*e- ..e
1 A . I don 't know the exact date, but in that time frame .
2 Q. Did you deliver it?
3 A . Yes.
4 Q. You wanted to form this company; isnît that correct,
5 sir?
6 A . Yes.
7 Q . You wanted to 7ut the data compression technology you
8 knew into that company; isn't that rightr sir?
9 A . Yes.
10 Q . What was the then-best form that you could utilize to
11 put that data compression technology into the company?
12 A . I put it on a CD. Is that your question?
13 Q. Yes.
14 A . Yeah, I put .t on a CD .
15 Q. And who did you give the CD to?
16 A . Doug Frye. '
17 Q. Where did you sign the documentsr the September 28th,
18 1998 contribution aqreement, which has been marked as
19 Exhibit 3?
20 A . I believe in my home in Lodi.
21 Q. And did Frye give it to you?
22 A . Yes.
23 Q. Did you have any discussion with Mr. Frye about the
24 provisions: the language, in the contribution agreement?
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-< *-#
1 A . Yes. 1 mean, they wanted the CD Number 1
,
which
2 contained the software for data compression
.
3 Q. lf you hadn dt clelivered CD Number 1, would the company
4 have started?
5 A . No .
6 Q. How could the company have started if it didn 't have
7 CD Number 12
8 A . Noz it did. That was the point.
9 Q. So, you gave the CD Number 1 to Mr. Frye?
10 A . Yes.
11 Q . Do you know what he did with ât?
12 A. No.
13 Q. And thereafter, after the deal was made, you gave
14 Mr. Frye CD Number 1. Shortly thereafter, did Mr
.
Trepp leave?
15 A . Yes. He teft, I believe, in November or December
16 of 198 .
17 Q. And who was running the company after he left?
18 A . Doug Frye.
19 Q. What did Mr. Frye do?
20 A . Well, he told me that Warren wasn't going to be back
21 until May or June and that he was the one that was in charge of
22 the company.
23 Q. Now, 1et me refer you to the contribution agreement,
24 which has been marked as Exhibit 3, to paragraph 1.3s ''Excluded
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,....
t .w.
.-- --
1--- - Asae t.s and- Liabi-l-i-t lre.s . iî Do you recall tha U prew i-s ionv .-s i-l=Z?- - - -
2 A . Yes.
3 Q. And does that provision accurately set forth the
4 agreement thaL you made w1th Mr. -- with Mr. Trepp?
5 A . Yes.
6 Q. And it was your understanding that you weren't giving
7 any technology other than data compression and the data
8 compression on CD Number 1; is that correct?
9 A . Yes .
10 Q . Did you and Mr. Frye have any discussion about that?
- -
11 A' Well I had to deliver the CD to him.
12 Q . So it was a given?
13 A . Yes .
14 Q . Now, what type of work did Mr. Trepp do in running
15 then Intrepid Technologies after Mr. Trepp left?
16 A . To be honest with you, I don 't know because 1
17 continued to do my workr and 1 was waiting for Warren,
18 obviously, to get back.
19 Q . What type of work were you doing?
20 A . Data compression, working on the data compression
21 model.
22 Q . Describe, if you can, in some detail -- see if you can
23 flesh that out a little bit. Were you working on a computer?
24 A . Yes.
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ï
.
'-- r-ç
- - -. - .
1- .-.- .-- .p.p... . Wha L webe #rt-yu doingF-..WeF& -Y(n1.-G&eGtY l+g- Q-i-l.le D-VJ.f--C-OVleW -.-
2 A . I mean, 1 was generating code and creating different
3 varieties of that particular technology.
4 Q. For different applications?
5 A . Yes.
6 Q. What types of different applications?
7 A . Well, data compressbon inside of Windows, and video
8 and audio requires a specific interface so you can hook to the
9 hardware devices in Windows. So, I was building those
10 interfaces for those different hardware devices.
11 Q. And what was ycur typical work routine during that
12 time frame, i.e., early October 1998 through the end of
13 December :98?
14 A . I worked eighlo ten hours a day on the software .
15 Q. During that time frame?
16 A . Yes.
17 Q. How many days a week?
18 A . Probably five or six.
19 Q. During that time frame?
20 A . Yes.
21 Q. And for how long did you continue developing different
22 applications with that data compression technology?
23 A . Continuously.
24 Q. Up until what time?
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x
.
h
2 Q . Until you were fired? Okay.
3 Now, between the time you were working exclusively in
4 building those models that you described, forgetting, for the
5 moment, any anomaly detection in connection with government
6 classified issues, did you do any other type of data
7 compression work al: e7'reppid Technologies?
8 A . Welly we were cleveloping an audio and a video and a
9 data Kodak in multiple forms .
10 Q . And how many tines of code were typically being
11 written per day in connection with these applications you were
12 preparing?
13 A . By me personaïly or collectively?
14 Q. Well, let's f'trst talk you personally.
15 A . That ïs very hard to determine. Thousands.
16 Q. And collectivelyy how many lines of code were being
17 written?
18 A . Five to ten thousand .
19 Q. Per day?
20 A . Yes .
21 Q. A11 in data compression?
22 A . Yes.
23 Q. At this -- and for -- and that continued a1l the way
24 up until the time you were fired?
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1 A . That's correct.
2 Q . Now, where isr today: a11 of those -- before we get to
3 the source codes -- all of the lines of. code tha: were created
4 over all of those years for the data compression?
5 A. In eTreppid .
6 Q. And youlve heazd this testimony saying this has been
7 deketed and that has been deketed . lf you walked over to
8 eTreppid tomorrow Inorning, could you find the source codes,
9 first, for a11 of those lines of code?
10 A . Assuming it hasnït been destroyed, yes.
11 Q. Okay . Now, let's talk a little bit about the -- what
12 you cally what, ''copy and destroyr'' when youêre doing a -- when
13 you're creating something on a server.
14 A . 1 think what you're asking is, when people are writing
'1$ computer programs, the computers are contihföùsly building and
16 destroying filesz 1 mean, hundreds of files, files that are
17 used in the process of making the source code. .
18 Q. So, at every workstation, every programmer is
19 continuously creating and destroying every timez virtuallyz he
20 writes code?
21 A . That ls correct.
22 Q . And that has always been the way at eTreppid
23 Technologies; is that correct?
24 A . The nature of building complex programs, that is an
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1 inherent -- you know, a task in it
.
2 Q. Okay-
3 A . Things are buiLt and taken apart
.
4 Q. Now, have you ever destroyed tn any way or taken any
5 data compression technology from eTreppid?
6 A . No
.
7 Q. On how many different computers a: eTreppid does data
8 compression technology appear?
9 A . Over a hundred.
10 Q. On how many different hard drives?
11 A . Hundreds. Three or four hundred
,
probably.
12 Q. And we heard a figure of about 150 million bytes of
13 information, was it?
14 A . Files.
15 Q . Files?
16 A . Yes .
17 Q. And Mr. Venable testified that there's still
18 80 percent or that that he's found there
. Have you heard that
19 testimony?
20 A . Yes .
21 Q. And with regard to the other 20 percent, have you done
22 or taken or deleted any of that 20 percent?
23 A . No.
24 Q. And if Mr. Venable cannot find this alleged purported
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1 20 percent, do you have any explanation as to where it might
2 be?
3 A . Well, ik was on the computers when I left the
4 bu ilding, um, so theydre obviously not looking in the right
5 spots, I presume.
6 Q. And as the chief technology officer, unless someone
7 else has destroyed it, if you went in there, could you find it?
8 A . If it hadu 't been destroyed: yes.
9 Q. Now: is there any reason it would have been destroyed
10 by other eTreppid Technologies employees?
11 A. The stuff 1 was working on downstairs had intrusion
12 detection.
13 Q. Nowr when you say ''downstairs,'' what do you mean?
14 A . ln the area of the warehouse.
15 Q. And describe ko the Court what that downstairs area --
16 or how it was configured.
17 A . There was abotlt l00 computers that were in cabinets
18 and about 20 computers that were not ln cabinets. And those
19 computers were a11 hooked together in what rs called one
20 cluster, and information was, obviously, on those computers.
21 MR. FLYNN : Your Honor, I have a chronology that will
22 simply aid the Court. 1 would just simply ask that it be
23 marked at this point in time . I don't know if 1:11 ever offer
24 it. I think it would help the Court to follow it.
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1 . THE COURT: Is this going to be for demonstrative
2 purposes?
3 MR . FLYNN : Yes, Your Honor.
4 THE COURT : 1 don 't think it needs to be marked,
5 unless somebody wants i.t to be marked. 1 mean, if it 's
6 something you can write on the board, if you wanted to take the
7 time to write it on the board --
8 MR. FLYNN : lt would be time-consuming .
9 MR. PEEK : It's only for demonstrative purposes, Your
10 Honor, and not a matter of evidence. And he could use anything
11 he wants. And like you said, he could write it on the board.
12 THE COURT : Thatls why 1 fm saying: let's use the
13 chronology.
14 MR . PEEK : But letfs not assume that every one of
15 these items are, in fact, evidentiary or proven .
16 THE COURT : Any more than if he wrote them on the
17 board or anybody wrote them on the board.
18 BY MR . FLYNN :
19 Q. Nowr at some point in time, sir, during 1998, did you
20 have occasion to work 18 hours and seven days a week?
21 A . In ,982
22 Q. Yes.
23 A . I lost my train of thought.
24 MR. PEEK: Objection. Asked and answered. He said he
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1 worked about five or sâx days a week.
2 THE WITNESS: That was at the very beginning. 1 had
3 not moved up here.
4 THE COURT : That was what he said.
5 BY MR . FLYNN:
6 Q. How were you being treated by eTreppid Technologies i.n
7 terms of your status?
8 A. I was an independent contractar.
9 Q. And how much were you being paid?
10 A . Well, 1 started outr I believtb at 12,000 a monthw I
11 thinky in '98 and '99 . In 2000, I believe I went to 192,000 .
12 I:m not certain of the date, but roughly around then . No,
13 actually, T went to one-sixty in 2000, and then I went to --
14 in '99 or 2000, l went 1lo one-ninety or 200,000, I believe.
15 Q. Now, at some tLme in the summer of 1999, did you begin
16 to question the expenses that eTreppid was incurring, when you
17 were 50 pereent owner, ror airfare?
18 A . Yes .
19 Q. And what happened?
20 A . T believe we needed money already. Um, and I was
21 somewhat shocked. And I think I actually inquired in to Doug ,
22 and he said we had a pretty big airfare bill.
23 Q. Did you ask him îf the 1.3 million had been paid in?
24 A. Yeah. He said wedre out of money.
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1 Q. And did he tell you whether the 1.3 million had been
2 paîd in?
3 A . 1 don ': believe he said it had been paid in, but he
4 said we were out of money .
5 Q . And did he tell you how much the airfare bill was
6 that -- that he described to you was the reason you were out of
7 money?
8 A . I believe it w'as around 500,000.
9 Q. Now, during that period of time, did you have a
10 conversation wkth Mr. Trepp, around the summer of 1999, about
11 your stock interest in eTreppid?
12 A . Yes.
13 Q. What was that conversation?
14 A . It was regardîng the initial dilution 1 had to give
15 the stock up for.
16 Q. How did that occurz Mr. Montgomery?
17 A . I donlt remember the exact date: but I was told --
18 Steve Sands approached me and told me that documents were
19 produced and f -- Lhat I was immediately to give up 10 percent
20 of my stock.
21 Q . This is the same Steve Sands who was the finder who
22 connected you to Mr. Montqomery (sic); is that correct?
23 A . îlTrepp,'' yes.
24 Q . Mr. Trepp .
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2 A . Yes.
2 Q. And did you have a conversation with either Mr. Sands
3 or Mr. Yrepp about why your 10 percent should be given to
4 Mr. Sands?
5 A . 1 -- I don't know the exact date, so my date may be
6 off. 1 thlnk Mr. Trepp was still out of the country wben I was
7 approached by Mr. Sands initially, and 1 couldn ft contact him
8 because he was on a ship.
9 Q . And -- but Mr. Sands wanted 10 percent of what you
10 owned?
11 A . Yes .
12 Q . And then did you subsequently meet with Mr. Trepp on
13 this issue?
14 A . We -- I know : -- I had to sign the documents that
15 day. I was given no choice.
16 Q. When you say you were given no choice, who gave you no
17 choice?
18 A . Mr. Sands.
19 Q. What did he say to you?
20 A . ''You will sign the documents today as they were
21 prepared.''
22 Q. Or what?
23 A . ''Or you won't have any deal with Warren Trepp.''
24 Q. And how much were you then being paid, 12,000 a month?
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1 A. Roughly, yes.
2 Q . And is it fair to say you were basically living hand
3 to mouth at that time with regard to that salary, supporting
4 your family?
5 A . Yes .
6 MR. PEEK: Objectionr Your Honor. ''Hand to mouthe'?
7 12,000 a month? 144,000?
8 THE COURT: 1 mean, youdre objecting as to whether or
9 not that's hand to mouth?
10 MR. PEEK: But that's also leading .
11 MR . FLYNN : T'1l withdraw it.
12 MR . PEEK; Alscu 1 was a little b1t slow on the gun
13 because I wasnft sure how Steve Sands did it, but I'm going to
14 move to strike al1 the statements of Steve Sands as hearsay.
15 I'm not sure he's identified -- 1 mean, other than the
16 finders -- so I thought, well, maybe thatfs the, mayber the
17 leap that he's somehow -- the testimony will be admissible.
18 But the whole testimony was that he had no choice,
19 sign or no deal with Warren Trepp. 1 move to strike a11 of
20 that as hearsay.
21 MR. FLYNN: I am just offering this as to the state of
22 mind, Your Honor.
23 THE COURT; A1l right. The motion is denied .
24 //// //Z/
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1 BY MR . FLYNN :
2 Q. Mr. Montgomery, did you sign the documents?
3 A . Yes.
4 Q . Now, are you marriecl, sir?
5 A . Yes .
6 Q. How long have you been marriecl?
7 A. Thirty-three years.
8 Q . And what documents did you sign?
9 A . 1 think it was a stock -- I donlt want to say a stock
10 transfer . It was sone document like that. 1 had this
11 document, but I had to transfer 10 percent of it to him .
12 Q. And then what happened with regard to this 10 percent?
13 A . At some point, 1 think Mr. Trepp came backz and I
14 explained the problem or situation I was in .
15 Q. And what did he say?
16 A . He would deal with it .
17 Q. Then what happened?
18 A . I went, at some point, back to the office of the
19 attorney that represented Mr. Sands with Mr. Sands there. And
20 they had come up with a new deal where, a11 of a sudden: I only
21 had to give him , 1 believez 5 percent of the stock.
22 Q . And what happened to the other 5 percent?
23 A . I believe -- I don't know if all 5 percent went to
24 Mr. Frye .
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1 0. Did you hand another assignment to Mr. Frye?
2 A . Yes .
3 Q . And do you know -- you don't recall the specific
4 percentagez but it was --
5 A . 1 think iI: might have been 4 percent. 1 don 't really
6 remember .
7 MR. PEEK: Your Honor, I'm going to object to this '
8 line of questioning as being irrelevant related to the
9 dilution. I donlt know where welre gojwng here, Your Honor.
10 THE COURT: Well, 1'm not sure .
11 MR. PEEK: I want to try to finishz as you did,
12 tonight. We lre already past 40 minutea.
13 THE COURT: 1 have a concern ikbout where itls going
14 too. But 1 would like to allow it to continue just for a
15 little bit, and werll see where it's going.
16 MR . FLYNN : 1:.L1 keep moving (7n, Your Honor . And it
17 goes to the parties conforming to the terms of the contract .
18 BY MR . FLYNN :
19 Q . Nowz at some pointy did youz in early 2000, request to
20 see the books and records of eTreppid Technologies after you
21 had just lost this stock to Mr. Sands and Mr. Frye?
22 MR. PEEK: Objectionp Your Honor. Characterized as
23 loss of stock.
24 THE COUR%': Yesz if you could just ask the question
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2 BY MR . FLYNN :
3 Q. After, the stock ended up in the hands of Frye and
4 Sands?
5 A . Yes .
6 Q . And were you given access to the records?
7 A NO . '
*
8 Q . Did you ask Mr . Trepp at that point how ntuch money had
9 been put into the company?
10 A . I believe so.
11 Q . What did he say?
12 A . Several mâ llion .
13 Q . Did you ask to see it to veri f y it?
14 A. 1 believe I wanted some f orm of proof .
15 Q . And were you glven any f orm of proof ?
16 A . No .
17 Q . Did you tàken have a discussion about the airfare
18 expenses of eTreppid Technologies when you were now: roughlyr a
19 40 percent okm er during the year 2000?
20 A . I had never been around anybcdy where the airf ares
21 were like this. This is unbelievable.
22 Q . And what were you told the airfares were in the year
23 20002
24 MR. PEEK: Do we have by Whom, Your Honor?
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1 BY MR . FLYNN :
2 Q. By whom?
3 A . By whom? I mean, it was obvious, because I had seen a
4 few of the billsy that, you know, they were high . Youfre
5 talking fj.ftyy sixty thousand a trip.
6 Q . And where were the trips, to your knowledge?
y A uew York, LA.
8 Q. On what type ()f airplane?
9 A . Gulfstream, usually I11 or IV.
10 Q. Privately chartered?
11 A . Yes .
12 Q. What was the purpose or the trips?
13 A . I can 't remember a11 of them . Did we ever go on
14 business? Yes. But 1 can 't vouch for every trip that that
15 plane was ever used for.
16 Q . Did you have an understanding in the year 2000 as to
17 how much, roughly, the expenses were for airfare at eTreppid
18 Technologies?
19 MR. PEEK: Objection: Your Honor. Could we have a
20 foundation as opposed to an understanding.
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.
21 BY MR. FLYNN :
22 Q. Where did you get the understanding from?
23 THE COURT: Well, first of all, did he have an
24 understanding.
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1 BY MR. FLYNN:
2 Q. Did you have an understanding, yes or no?
3 A . Yes .
4 THE COURT: Where did you get the understanding?
5 BY MR . FLYNN :
6 Q . Where did you get it?
V A . Zr' TrOPP '
8 THE COURT: A11 right. Go ahead.
9 BY MR . FLYNN ;
10 Q. And what was your understanding as to approximately
11 the expenses were in the year?
12 MR. PEEK: Your Honorr do we have a conversation
13 where, Mr. Trepp, time, place, who was present? Same
14 foundation that Mr. Flynn expected of us.
15 THE COURT: i understand . But I think -- what I think
16 he's asking is what did Mr. Trepp tell him about that.
17 So if you could just ask him that question, then we're
18 not talking about hâs understanding, but what he was told .
19 BY MR . FLYNN :
> 20 Q. What did he tell you?
21 A . That he had signed a contract for so many hours of
22 flight and that they had guaranteed those hours.
23 Q . Who did he tell you he signed the contract with?
24 A . Trans-Exec in Van Nuysr California.
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1 Q . And did he tell you how much it was costing the
2 company?
3 A . 1 believe he said it was a million dollars.
4 Q. Now, let's move forward into November of 2001. Prior
5 to November of 2001, was a11 your work still data compression?
6 A . Yes .
7 Q. And in November of 2001, did you have a conversation
8 with Mr . Trepp abotlt sharing the profits of eTreppid
9 Technologies?
10 A . Welly I was cortcerned how I was going to get profit
11 out of the company .
12 Q. And what did you say to him?
13 A . ''How am I gojng to get profit out of the company?'î
14 Q . What did he say?
15 A . ''We haven ' t made any money yet . ''
16 Q . M d did you bring up the airf are expenses?
17 A . Yes .
18 THE COIJRT : Excuse me . I just wanted to ask my court
19 reporter how she was holding up . I didnï t mean to -- 1et me
20 just interrupt f or a minute . How much longer are you going to
21 be with this witness?
22 MR. FLYIIN : What time did Your Honor want to try to --
23 MR . PEEK : Don ' t take all my timez Mr . Flynn .
24 MR. FLYNN : 1 îm thinking 20 minutes, Your Honor .
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l THE COURT: Well, perhaps this would be a good point
2 in time to take a break. We've been going since a little after
3 5:00. Would you antîcipate an equal amount of Lime on
4 cross-examination?
5 MR. PEEK : I would anticipate an equal amount of time
6 on cross-examlnatlon . So farr he ïs gone 40 minutes: almost 50.
7 THE COURT: I said a1l of it was irrelevant z so what
8 are you going to cross-examine him about? I'm just kidding.
9 MR. PEEK : I understand, Your Honor. Thatrs a nice
10 yank. I appreciate the yank. But by the same tokenz the Court
11 has considered it relevant: so I have to at least address the
12 points that were made by Mr. Flynn . If the Court had sustained
13 it, I wouldnlt have gone into it, Your Honor. But I appreciate
14 the yank.
15 THE COURT : A11 right. Let's be in recess for 15
16 minutes, so quarter after 7:00.
17 (A brief recess was taken at the bour of 7:00 p.m.)
18 THE COURT: Be seated.
19 BY MR . FLYNN :
'i 20 Q. November 2001, prior to November 2001, who paid for
21 your medical insurance?
22 A . I did.
23 Q. Did you qet any other employee benefits?
24 A . No.
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1 Q. In November 2001 -- or, strike that .
2 Prior to 2001, was anything other than data
3 compression work being done at eTreppid Technologies?
4 A . The video game -- the video game was.
5 Q. And are you -- youdre not making any claim of any
6 ownership of any aspect of khe video game; is that correct?
7 A. No.
8 Q. In November 2001, did you have a meeting with
9 Mr . Trepp regarding your stock?
10 A . Well, 1 was being -- they needed to raise money, and 1
11 was going to be diluted.
12 Q. ls that what Mr. Trepp told you?
13 A . Yes.
14 Q. Did you have a conversation at that time about
15 Doug Fryels legal expenses being charged off against the
16 company?
17 A . Yes. They were enormous, I thought.
18 Q. And what range per year were they?
19 A . 200,000.
' 20 Q. And did you ask him if Mr. Frye was then doing
21 $2000,000 a year of work for eTreppid Technologies?
22 A . He said he would look into it.
23 Q. Did you ask to see the books and records of the
24 company to see what else was being expensed against the
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1 company?
2 A . Yes.
3 Q. Were you given access?
4 A . No .
5 Q . And what happened in connection with -- with the stock
6 transaction in November 20012
7 A . I don't remeH ler the exact datey but I had to borrow
8 250:000 so I would not be diluted.
9 Q . And at that times did you also sell 2 percent of your
10 stock to someone named Wayne Primm?
11 A . Yes .
12 Q . And how did that transaction take place?
13 A . Warren made an arrangement with Wayne, and Wayne and
14 Doug -- I don't know who -- they carrâed out the logistics of
15 it.
16 Q. Were you paid $1.5 million?
17 A . I believe so, yes.
18 Q. And what did you do with the $1.5 million?
19 A . T wrote Mr. Trepp back two checksz one for
' 20 g8o-some-thousand and one for 100,000.
21 Q. And, in fact, wa3 the cheek in the amount of
22 $975,000.29:
23 A. Yes.
24 Q. And is that a copy of the check?
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2 MR. FLYNN : l1d offer this: Your Honor.
3 MR. PEEK: No cbjection, Your Honor.
4 THE COURT : lt's admitted.
5 (Defendant's Exhibit 22 was marked and admitted into
6 evidence.)
7 MR . PEEK; Is this 22?
8 THE CLERK : Yes, Exhibit 22 .
9 THE COURT: J'nt still not sure how this is al1 tied
10 into the issue welre trying to decide here today. It might be
11 tied into some potential counterclaimsr I suppose, but T don lt
12 see --
13 MR. FLYNN : It has to do with the breach of the
14 contract and the ultimate fight that takes place . And
15 notwithstanding Mr. Trepp ls testimony in the fall of 2005, this
16 was the foundation for the -- an accumulation.
17 MR. PEEK: I haven't heard what the breach of contract
18 was yet, though, Your Honor. He received $975,000: he paid
19 back $975,000.
20 %HE COURT: T understand.
21 MR . PEEK : Or, was it Doug Fryels legal fees?
22 THE COURT: %ry not tö spend a whole 1ot of time on
23 this.
24 MR. FLYNN: T won't Your Honor.
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2 Q . And then did you have to pay taxes?
3 A . Yes.
4 Q . How much did you pay in taxes?
5 A . I believe 282,000.
6 Q . How much did you net?
7 A . 1 believe a hundred grand.
8 Q. Nowr in February 2002, where did you go?
9 A . To a location in Florida.
10 Q. And was that a government location?
11 A . Yes.
12 Q. And who went wLth you?
13 A . I think, the first dayz I went by myself.
14 Q. And for what purpose did you go?
15 A . We went to demonstrate video compression.
16 MR. PEEK: Couïd we have the ''wey'' Your Honor?
17 THE WITNESS: 1'm sorry. I went to demonstrate video
18 compression.
19 BY MR . FLYNN ;
20 Q. At some point, did someone else show up from eTreppid?
21 A . Yes.
22 Q. Who?
23 A . Patty Gray.
24 Q. And hoW long were you there?
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1 A . I believe five daysr four or five days .
2 Q. What type of video compression did you demonstrate?
3 A . 1 took data off of an aircraft, and 1 streamed it at a
4 very 1ow kilobit rate.
5 Q . Are we getting into classified information?
6 A . Yes.
7 Q. After you dicl this, did you go back and bave a
8 discussion with Mr. Trepp?
9 A . Yes.
10 Q. And what was the nature of that discussion in terms of
11 whether or not eTreppid was going to get involved in
12 object-tracking?
13 A . When 1 -- when 1 was out there, I did one
14 demonstration of object-trackingw and I came back and told him
15 the results of the object-tracking and the results of the video
16 compression.
17 Q. 5o there were Lwo different technologies being '
18 demonstrated out there?
19 A . Yes .
20 Q. And what did Mr. Trepp say?
21 A . He was very interested in the data compression.
22 Q. The video compression/data compression?
23 A . Yes.
24 Q. Was he interested 5.n the object-tracking?
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1 A . Not really.
2 Q. What did he say?
3 A. He was very ârïterest.ed in the data compression .
4 Q. And thereafter, during the year 2002, what were you
5 working on, as the chii?f technology officer?
6 A. Video compressâon.
7 Q. And during the year 2002, who was paying your medical
8 insurance?
9 A . I was .
10 Q. And what type of documents were you getting from
11 eTreppid with regard to your status?
12 A . A 1099.
13 Q. And were you getting a K-1?
14 A . Yes.
15 Q. A1l right- Now: in November 2002, did something
16 happen with your stock?
17 A . Well, I believe I was diluted again, if that's your
18 question.
19 Q. And dtd you have to, again, pay back money to
20 Mr. Trepp?
21 A . l don't believe at that time -- I'm -- Ifm not
22 certain.
23 Q. At some point, did you pay back money for --
24 A . Yes, yes.
.
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1 Q. And in 2002, did you have occasion to see Mr. Trepp
2 and Mr. Milliken on the premises of eTreppid Technologies?
3 A. Yes . They came to our building. 1 don l: remember if
4 it was December, but they had come to our building.
5 Q. And did you have a conversation with Mr. Trepp about
6 it?
7 A . Yes .
8 Q. And what was that conversation?
9 A . I was surprised that that was going to happen.
10 Q. And what did you say to him about Mr. Milliken?
11 A . I don't know how we would ever get clearance in the
12 government with him as an investor .
13 Q. Did he tell you what Mr. Milliken was going to invest?
14 A . I thought he said 10 or 12 million .
15 Q. For how much of the company?
16 A . Five percent.
17 Q . NoWz ln December oc 2002, did you complete certain
18 tests?
19 A . 2002 or ï3?
20 Q. December 2002.
21 A . Yes.
22 Q . What tests did you complete? Without describing the
23 contents, just what, generically, was the nature of the test?
24 A . We, once again, did some tests on aircraft with the
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2 Q. And did any of those -- aspects of those tests involve
3 anomaly detection?
4 A . Yesy I believe it was pattern recognition.
5 Q. And without getting into the contents of or what you
6 were actually doingy can you differentïate for the Court?
7 MR . PEEK: Your Honor, could 1 ask if the witness is
8 just reading from his tîmeline or actually is testlfying from
9 memory?
10 THE WITNESS: Testifying from memory.
11 MR. PEEK : Okay . Could we have the Limeline removed
12 from the witness stand?
13 THE COURT: 1 don 't know that that's necessary .
14 MR . LOGAR : I clon't think he has a right to do that.
15 THE COURT: I don't either .
16 MR. PEEK: Your Honor, I think I1m --
17 MR. LOGAR: If the witness is using a document to
18 refresh his recollection, and Counsel has a right to see it,
19 but he has no right to --
20 MR. PEEK: But who prepared this, Your Honor? Did he
21 prepare it? Did it come contemporaneous from notes? Where did
22 it come from? I tùink I do have a right to know, and 1 don't
23 think the witness should be using it to testify from . It's not
24 going to come into evidence, Your Honor. It's not his notes,
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1 it's not contemporaneous, and I don 'h think he should be ustng
2 ît, respectfully, Your Honor.
3 THE COURT: Jt looks kind of like a script to me.
4 MR. PEEK : It does look like a script.
5 THE COURT : 4 hhink perhaps it's a good idea not to
6 refer to it, at least râght now. If you have something that
7 you cantt remember or want to refresh your recollectionz werll
8 see about it.
9 MR. PEEK : We dll put it aside, then, Your Honor?
10 MR. FLYNN : Turn it over, Mr . Montgomery.
11 BY MR . FLYNN :
12 0 . At some point, d1d y&u complete these tests?
13 A . Yes .
14 Q . Okay. And how would you differentiate the technology
15 that was being used on the testing with other types of
16 technology that you owned or eTreppid was -- or eTreppid owned?
17 A . This is what time frame? I believe December of 2002?
18 Q . Correct.
19 A . Is that the time frame?
20 Q . Right.
21 A . I believe Zehang, which had teskified earlier, had
22 just been hired, and he was beginning to do some work in
23 object-tracking. 1, on the other hand, was continuing to do --
24 had my anomaly and pattern detection software that I had made
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1 earlier. I had used that on occasion to test with also, and
2 video and data compression continued.
3 Q. And was e'rreppid paid for these tests?
4 A . Yes, yes.
5 Q. How much?
6 A . I believe 280,000.
7 Q. And after these teshs were completed -- strike that.
8 At the end of 2002, when these teats were complete -- and as 1
9 understand your testimony, based in part on your anomaly
10 detection and pattern recognition software; is that correct:
11 sir?
12 A . Yes.
13 Q. Were you still an independent contractor?
14 A . Yes.
15 Q. Was that technology complete?
16 A . Yes.
17 Q . Did you own .t?
18 A . Yes.
19 Q. And were you still an independent contraetor?
20 A . In 20022
21 Q. Yes.
22 A . Yes.
23 Q. In January 2003, did -- did you have a conversation
24 with Mr. Trepp about the change of your status?
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1 A . Yes. They told me I was qoing Lo become an employee .
2 Q. He told your you weze now going to be an employee?
3 A . That's correct .
4 Q. Nowy with regard to your routine work in the company,
5 after you were supposecily designated ''employee,t' did anything
6 change with regard to how you supervised yourself, conducted
7 yourself, and did your work?
8 A . No .
9 Q. Was there any change of any nature or description
10 between when you were classified as an independent contractor
11 and the way you worked and when you were now classified as an
12 employee?
13 A . No .
14 Q. And the technology, the anomaly detection and pattern
15 recognition software, as of December :92, was complete?
16 A . Yes .
17 Q . And did that result, in early :03, of a government
18 contract?
19 A . I think it was sometime around March or April.
20 Q. And now, was that for an agency within the government
21 different than the Air Force?
22 A . Yes.
23 Q. And did you sign an agreement in connection with that
24 project --
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1 A . Yes .
2 Q. -- with that department of the government?
3 A . Yes .
4 Q. And just generically, under that agreement --
5 MR . PEEK : Your Honor, could we have the agreement, âf
6 this is separate and apart from eTreppid, and maybe -- may 1
7 have the witness a little bit on voir dire?
8 THE COURT : Hold on a second .
9 MR. PEEK: I'm trying to understand, is this a
10 separate contract with eTreppid?
11 THE COURT: Hold on. Let me just ask Counsel, is this
12 a separate contract between Mr. Montgomery and this other
13 government agency?
14 MR. FLYNN: This is the oath of secrecyz Your Honor.
15 We 're not into the --
16 THE COURT : A11 right.
17 MR. FLYNN : But --
18 MR . PEEK : Well, I didn't hear the answer.
19 THE COURT; He sald an oath of secrecy.
20 MR. PEEK : Your Honor, hiding behind the so-called
21 national security --
22 THE COURT: Welly he hasnït -- a11 he said is, did you
23 sign --
24 MR. PEEK: Wellr this is the oath of secrecy. That's
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2 THE COURT: Did he sign iL? That's fine. I think he
3 can answer that .
4 MR . PEEK: 1 apologize, Your Honor. 1 thought he was
5 talking about a separate contract for work.
6 BY MR . FLYNN :
7 Q. Did you stgn a document, you personally, with the
8 government with regarcl to your seeurity clearance in connection
9 with what you could disclose and not disclose ever to anybody?
10 A . Yes .
11 Q. And did an indJLvidual from this department give you
12 that contract?
13 A . Yes .
14 Q. Did you execute lt?
15 A . Yes.
16 Q. Did you give it back to him?
17 A . Yes .
18 Q. Did you read it?
19 A . Yes.
20 Q. And did he give you a copy of it?
21 A . No .
22 Q. Under the terms of that contract, what is your
23 understanding today as to whether you can disclose anything
24 about the identity of anybody or the work you did in connection
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2 A . Well, we -- we signed -- the agreement states that 1
3 cannot divulge the nature of the work or who the clients are.
4 Q. And can you imagine any higher governmental security
5 or classified project at that time frame than what you were
6 doing?
7 MR. PEEK: Your Honor, 1 would object to that
8 because --
9 THE COURT: Yeahr if we're not going to get to know
10 what it is, the testimony about something higher than that
11 can't be cross-examined about. So since that cross-examination
12 is foreclosedr Idm not qoing to allow that question.
13 MR . FLYNN : Fine. Thank you: Your Honor.
14 BY MR . FLYNN :
15 Q. Did you use source codes to do this project?
16 A . Yes .
17 Q. Where did you get them?
18 A. There were multiple facets to the project. The video
19 and the face recognition was eTreppidAs, and the anomaly and
20 pattern detection was mine.
21 Q. And in connection with this particular project, did
22 you have dîscussions -- just yes or no -- with governmental
23 agents with regard to the anomaly detection aspect of the
24 software?
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1 A . At that time, no .
2 Q. At some point, did you have these discussions?
3 A . Yes.
4 Q. And when?
5 A . September of '03.
6 Q. And did you complete the project to the satisfaction
7 of the government?
8 A . Yes.
9 Q. And the source codes that you used ln terms of
10 governmental classtfication, what are they called,
11 Mr . Montgomery, the anomaly detection source codes?
12 A . Well, it was catlled the anomaly detection or pattern
13 recognition source codes .
14 Q. What the does the term ''SAP'' mean?
15 A . Special access program .
16 Q. Does anyone else have an eTreppid -- have any dealing
17 wikh any governmental agency about special access programs?
18 A . Ever?
19 Q . During this time frame.
20 A. Not that I know of.
21 Q. Were the source codes classified?
22 A. I believe, yes.
23 Q . And were they called SAP?
24 A. No. Well, it was just called source codes under that
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2 Q . Under the umbrella of SAP?
3 A . Yes .
4 Q . How much was being paid by the government -- this
5 governmental agency for the work you were doing during this
6 time frame?
7 A . Roughly, 350,000 a month.
8 Q . And for how long did you do it?
9 A . I think about a year.
10 Q. Up until what time?
11 A . September, October of 2004.
12 Q . Now, in SepteMner -- strike that. ln February of 103,
13 did you have a discuasion with Mr. Trepp about the ownership of
14 anomaly detection?
15 A . Yes .
16 Q. What was that discussion?
17 A . I wanted to know how l was going to be compensated for
18 it .
19 Q. And this was during the period where this governmental
20 contract was developing?
21 A . Yes.
22 Q . And what did he say?
23 A . He would work it out .
24 Q. Did you -- did you tell him who owned the technology
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2 A . He knew who did .
3 Q . M d What did 116, S ay?
4 MR . PEEK : Ob'j ection, Your Honor . Nonresponsive .
5 THE COURT : Did you tell him?
6 THE W ITNESS: :'m sorry . Yes .
7 THE COURT : What did you tell him ?
8 BY MR . FLYNN ;
9 Q. What did you say to him?
10 A . I owned it.
11 Q. And what did he say?
12 A. I think, initially, nothing. He just kept saying he
13 would work it out.
14 Q. And then at some point, did the -- did he acknowledge
15 your ownership?
16 A . Yes .
17 Q. When?
18 A . Middle -- middle of 2004 .
19 Q. Now, in July 2003, did this particular department of
20 the government state that they wanted security clearances for
21 five people?
22 A . I think -- yes . Wellp the way that workedz actually,
23 was after December of 2002, the Air Force applied for the
24 government because we needed access to those programs. And
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2 the other group .
3 Q. Okay. Ancl what is an interim clearance?
4 A. Well, you apply for a clearance, and within 90 days,
5 they usually give you a temporary clearance .
6 Q. And how many plogranr ers got a temporary clearance?
7 A. One .
8 Q. And who was that?
9 A. Barjinder.
10 Q. And when did you get your clearance?
11 A . Interim or final?
12 Q. Interim.
13 A . March or April of 2004.
14 Q. 2003?
15 A . '3. Excuse me .
16 Q. And when did you get your final?
17 A . I believe it was sometime in the summer of 2004.
18 Q. Okay. In August of 2003, were you given certain tapes
19 by the government?
20 A . Yes, yes.
21 Q. And did those tapes and what was on them precipitate a
22 1ot of discussion with Mr. Trepp?
23 MR. PEEK: Objection, Your Honor. Again, it's leading
24 and, I think, lacks foundation.
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1 THE COURT : Well --
2 MR. PEEK : Assumes facts not ân evidence.
3 THE COURT: He asked him did it precipitate a
4 conversation. That may be a little bit. leading.
5 MR . PEEK: ftls also speculative as to whether the
6 tapes themselves --
7 THE COURT: Did you give him the tapes: and was there
8 a conversation about the tapes after you gave him the tapes?
9 THE W ITNESS : I received tapea, and there was
10 something on the tapes that was of interest.
11 THE COURT: A11 right. And did you have a
12 conversation with Mr. Trepp about that?
13 THE WITNESS: Yes.
14 THE COURT: A l1 right. Go ahead.
15 BY MR . FLYNN :
16 Q. And did the nature of the tapes and what was of
17 interest to this agency relate to the conversation you had with
18 Mr . Trepp?
19 MR. PEEK : Again r Your Honor, this goes back to not
20 being allowed to cross-examine because this is -- again, you're
21 going to say this is top secret, national secret' I canlt talk
22 about it, talk about it# so --
23 THE COURT: Wellr we don't know if hels going to say
24 that . I want to see what he says, and then we'll see where we
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2 1 mean, one of the things that occurs ko me is that
3 where one side of a case or the other relies upon a privilegez
4 then I can take that into consideration with regard to whether
5 or not the other side has been provided with the information
6 theyfre entitled to be provided with.
7 BY MR . FLYNN :
8 Q . Having that jn mind, Your Honor -- did you share what
9 was on the tapes with Mr. Trepp?
10 A . Yes .
11 Q. And then did you have a conversation about money or
12 your ownership or interest in eTreppid Technologies with
13 Mr. Trepp?
14 A . And what time frame is this, again?
15 Q. At the time the tapes were given.
16 A . Yes.
17 Q. And what was that conversation?
18 A. I wanted to know how I was going to be eompensated.
19 Q. If you did the work on the tapes?
20 A . Thatls correct .
21 Q . And what did he say?
22 A . He would work it out .
23 Q. D1d you go ahead and do the work on the tapes?
24 A . Yes.
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1 Q. And whose technology was used to do the work on the
2 tapes?
3 A. Well, there were two pieces. The plece of facial
4 recognition and video recognition was eTrepp id's. The anomaly
5 detection was mine.
6 Q. And how much was being paid during that time frame?
7 A . Wellz f think t.hey -- f think that was close to
8 2O0w000.
9 Q. After doing the work on the tapes, did you, aa the
10 chief technology officer and then as the owner of the anomaly
11 detection software, make any conclusions about the reliability
12 of your software?
13 A . I thought lt was very reliable .
14 MR. PEEK: I'm sorry . What?
15 THE WITNESS: .Lt was very reliable.
16 BY MR . FLYNN :
17 Q. Did you have any conversation with Mr. Trepp about
18 that reliability?
19 A . I don't think initially at that exact time frame.
20 Later onr I think we did.
21 Q. And what was that conversation?
22 A . He wanted to know how confident 1 was that the data
23 was correctz and 1 told him that 1 believed it was .very
24 accurate.
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l Q. And did you ever have a conversation about :he value
2 of your technology at that point?
3 A . Sometime in 2004, is that --
4 Q . Yes.
5 A . Yeah. Wekl, he told me he asked for a billion dollar
6 bond from the U.S. Government .
7 Q. And did you have a discussion with him about how mueh
8 he wanted to sell the tecbnology for?
9 A . I believe inttially it was 500 million .
10 Q. And did you have a discussion with him about what part
11 of the 5O0 million would belong to you and what part would
12 belong to him?
13 A . Yes.
14 Q . And what was that conversation?
15 A . T was concerned that I wBs qoknq to get my fair share
16 of that .
17 Q. A11 right. Nowp in September of 2004, was the
18 government contract -- that phase of the government contract
19 coming to an end?
20 A . I believe at September 31str that -- the next phase
21 was going to be completed.
22 Q. And did you have a conversation with Mr. Trepp abouh
23 extending the contract for another three months?
24 A. The people that were here from the governmenk stated
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l they wanted to extend it.
2 Q. And did you have a conversation with Mr. Trepp about
3 extending it?
4 A . Yes .
5 Q . What was that conversation?
6 A . He wasn't goâng to .
7 Q. And did you have a conversation with him as to why he
8 wouldn 't?
9 A . At the time -- the initial time is that we wanted more
10 money . We, meaning eTreppid, had wanted more money and
11 Mr . Trepp wanted to move on to some other work.
12 Q . And so did you go forward and do -- continue -- did
13 you continue processing work for this particular department of
14 the government?
15 A . We continued processing, I believe, until after
16 Thanksgiving of 2004.
17 Q. And were you using your anomaly detection software?
18 A . Yes .
.
19 Q. And did you a conversation with Mr. Trepp in the fall
20 of 2004 about the fact that it was your software that you
21 owned?
22 A . Yes.
23 Q. Nowz at some time, did you have a conversation with '
24 the government from this particular department about protecting
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1 the software with jntrusion devices?
2 A . Well, early oru they told us --
3 MR. PEEK: Objection, Your Honor. Hearsay.
4 THE COURT : Well, I1m going to allow it. Iîve allowed
5 quite a bit of hearsay in this case anyway. 1ï1l determine
6 whether or not itls been being offered for the truth of it or
7 not, or whether it's being orfered to explain the question that
8 was asked.
9 Go ahead .
10 THE WITNESJS: 2 belleve, in early 2004, they suggested
11 what they wanted to do to protect the systems.
12 MR. PEEK: Could We have who the ''they'' is.
13 THE W ITNESS : The government.
14 MR . PEEK : Can we have Air Force, person, individualz
15 name .
16 THE WITNESS : Not the Air Force, the other group .
17 MR. PEEK : What was the name of the other group?
18 THE W ITNESS : I1m not going to say.
19 MR. PEES ; That's my problem agaln, Your Honorr hiding
20 behind the privilege.
21 THE COURT : I understand .
22 MR. FLYNN : We're not hiding behind anything, Your
23 Honor. W elll allow Mr. -- we'll enable a number of procedures.
24 Either it goes to a judge who has a security clearance on this
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1 level, which is called for under tbe act, or we lll enable
2 Mr. Montgomeryz Mr. Trc3pp to go into chambers so the Court can
3 verify it, or we bll enable -- we All allow it ho go over to
4 federal court. Your Honor, werre not Kidlng behlnd anything.
5 THE COURT: l don't know how jt's going to go over to
6 federal court. It's already been bumped out once. Al1 I1m
7 saying al1 day is cite me the statute that says that he can
8 say, HIîm not going to answer the question.'' I 'm perfectly
9 happy with the idea that if he possesses information that 's
10 classified, he probably shouldn't, and has probably been told
11 not to say it. But I need some authority so that I can make a
12 reasonable, decent decision on this issue without speculating
13 about it. Now --
14 BY MR . FLYNN :
15 Q. Under the contract you signed with the government,
16 were you made an agent of the government in connection with
17 this software technology?
18 A . I believe so.
19 MR . PEEK: Your Honors again, 1 move to strike that.
20 He saidz ''I believe so,'' ''I don't have the contracty'' ''I don't
21 know what it says .'' 1 can't cross-examine him on that. He
22 says, ''I didn't get a eopy of it.'' Everybody else had it.
23 THE COURT : 1#m not even sure that this relates to any
24 of the issues in the case. And 1dm not -- you know, I'm not
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1 going to tell you how to try your case. But to me, I'm not
2 concerned about what it says or what it doesn't say. I don't
3 even care what agency it is.
4 MR . PEEK : I care, Your Honor, because of the
5 inference here that 1 was directed to put intrusion software,
6 and it is the intrusion software that, if there was any
7 deletion, that deleted a11 of tbis. When we and get an
8 affidavit from the Air Torce, who is managing this, a 1ot of
9 these contracts --
10 BY MR . FLYNN :
11 Q. Mr. Montgomery, in connection with this particular
12 work and the intrusion deviees, did the Air Force manage this
13 aspect of it?
14 A . No.
15 Q . And did you put the intrusion devices on?
16 A . Yes .
17 MR. PEEK: Same objection, Your Honor.
18 BY MR . FLYNN :
19 Q . When did you put the intrusion devlces on?
20 A . I believe it was February of 2003.
21 Q. And what are the intrusion devices? Explain to the
22 Court how they work. ls that classified?
23 A . I don't really know whether it is or not, to be honest
24 with you.
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1 Q. Well, generically, can you describe to the Court what
2 happens if someone trîes to access it?
3 A . The government group was very concerned that someone
4 would walk in and take a computer out of the building,
5 physically take it out. And since the room that we had in the
6 building was not big enough to hold a1l the computers, they
7 wanted some form of protection so that those computers coulz
8 not be taken out of the building and accessed.
9 Q. And how -- and did you load these devices onto these
10 computers?
11 A . Yes. It's software .
12 Q . And how does the software, basically, work? Does
13 it -- what does it do?
14 A . Well, itls deskgned to get a response over some period
15 of time, and if the response hasn't been given to it or the
16 responses are incorrect, it will purge itself.
17 Q. And did anyone at eTreppid know that thatfs how this
18 system worked?
19 A . I don't think so.
20 Q. I mean, in terms of the details of the technology.
21 A . No, no .
22 Q . In terms of the generic nature of the fact thak it
23 existed, did Mr. Trepp know?
24 A . 1 don't know if he did or not. I suspect he talked to
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1 the same government people that I did: that he might have
2 known .
3 Q. Now --
4 THE COURT: Let me just stop and ask a question.
5 Do the lawyers know what agency we're talklng about?
6 MR . FLYNN : Yes .
7 THE COURT : Do you know?
8 MR. PEEK : No, 1 donft.
9 THE COURT: Your client has not told you? You don 't
10 know? You don't know?
11 MR. PEEK: 1 -- I don't know. I will ask Mr . Trepp.
12 MR. FLYNN : f doz Your Honor.
13 (Whereupon, Mr. Peek has a conversation with Mr. Trepp
14 off the record.)
15 MR . PEEK ; Yes: I do know.
16 THE COURT: Al1 right. Approach.
17 (A discussion was held at the bench out of the hearing
18 of the reporter.)
19 THE COURT : A11 right. Go ahead. I'm sorry for the
20 interruption.
21 MR. FLYNN : Thank you, Your Honor.
22 BY MR . FLYNN :
23 Q. Let's fast-forward a little bit. The work ended with
24 this particular agency at some point in time; is that correct?
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1 A . Yes.
2 Q . And that was after Thanksgiving of 2004?
3 A . Yes.
4 Q . And were there conttnued negotkations with that
5 departm ent thereafter?
6 A . My undersLanding was that that group wanted the
7 Air Force to get involved.
8 Q. And during 2004 -- just yes or no -- were there
9 individuals in the U.S. Government at the highest levels at
10 eTreppid Technologies?
11 A . Yes.
12 THE COURT: What is ''the highest levels''? Does that
13 mean was President Bush there? That doesn't mean anything to
14 me.
15 BY MR . FLYNN :
16 Q. Was Warren Trepp there?
17 A . Yes .
18 Q . So he knows who these individuals are?
19 A . Yes .
20 Q. Now, at the end of 2004, did you and Mr. Trepp begin
21 to have discussions -- heated discussions about who owned --
22 strike that -- about how you were going to be paid going
23 forward if there were fklture governmental contracts?
24 MR. PEEK: Objection. Leading, Your Honor: as to
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1 ''heated.'' They had dâscussions .
2 BY MR . FLYNN :
3 Q. Okay. Did you have discussions?
4 THE COURT : A ll right. Yeah.
5 THE WITNESS : Yes .
6 BY MR . FLYNN :
7 Q . And how would you characterize the development of the
8 relationship towards the end of 2004 and going into 2005, with
9 M r. Trepp?
10 A . It was getting stra tned.
11 Q. And what was the nature of the conflict?
12 A . Well: 1 had been promisedz um, to get this worked out,
13 and ît never gets worked out.
14 Q. And did Mr. Trepp ever dispute that you owned the
15 anomaly detection software?
16 A . No .
17 Q. Tn late November of 2005, did you have a conversation
18 with M r. Trepp about how much had been paid by the government
19 in connection with these various top secret projects?
20 A . Yes.
21 Q. And how much did Mr. Trepp say had been paid?
22 A . 1 think he said around 10 to 12 million .
23 Q. What was your -- your understanding of how much had
24 been paid?
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l A . In the two years?
2 Q. Yes.
3 A . I think more closer to 18 mil Lion.
4 Q . And in early December of 2005, did you have a
5 conversation of how much was in the bank and you wanted to see
6 the bank statements?
7 A Ye5
8 Q . What did you say to him?
9 A . ''l want to see the bank statements.''
10 Q . And what did he say?
11 A . He never showed it. He didn't say anything . He never
12 showed it .
13 Q. And after this conversation in early Deeember of 2005,
14 did he say anything about giving you any money?
15 A . Well, T told him I needed a couple hundred grand . Is
16 that the question?
17 Q. Yeah .
18 A . Yes.
19 Q. So what did he do?
20 A . In Decembere I don't remember the exact date. It must
21 have been around -- I think around the 10th or something, he
22 gave me either 125 or l50 thousand .
23 Q . And what was your understanding as to what that was
24 for?
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1 A . Once again, he said he 'll work it out.
2 Q . And 1et me show you Exhibit 18. Did you have a
3 conversation about Exhibit 18 with Mr. Trepp ln the end of
4 December of 1052
5 A . He brought me two documents, this being one of them --
6 1 don 't remember the other one -- and told me that he wanted me
7 to sign it.
8 Q . And what did you saAg?
9 A . HI wonlt sign it.''
10 Q. And is that your sâ.gnature on Exhibit 18?
11 A . No .
12 Q. Did you ever sign any document like that in front of
13 this individual, Mr. Bora?
14 A . No.
15 Q. Who is Mr. Bora?
16 A. Gellay's (phonetic): which is Warrenls wife's brother.
17 Q . And based on your knowledge of your own signature, is
18 that signature forged?
19 A . Tt's not mine. I didn't sign it.
20 MR. FLYNN: And at some pointr Your Honorz I1d ask the
21 Court to compare that signature to the signatures on al1 the
22 other documents with Mr. Montgomeryls handwriting that have
23 been introduced.
24 MR. PEEK: Your Honorr I think that --
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1 THE COURT : I've already done that . But my question
2 is, where is the original?
3 MR. PEEK : We have the original, Your Honor . I guess
4 wedre going to have to submit it to forensics now, questioned
5 document examiner, now that Mr. Flynn 's client denies, contrary
6 to the testimony of Mr. Treppz signing it and that of the
7 witness who witnessed it.
8 THE COURT : Weàl, I can 't tell you what to do.
9 MR. PEEK : I'm not going to dc) it today. l donït
10 think I need to do it for this purpose.
11 THE COURT : J know what I would do .
12 MR. PEEK: 1 certainly wouldn't ask the Court to
13 compare it to others.
14 THE COURT : i think it's within the laypersonls
15 ability to compare signatures and make judgments, but not --
16 I'm not really going to engage in that exercise for that
17 purpose. I was just curious.
18 MR. PEEK ; Are we about done here?
19 BY MR . FLYNN :
20 Q . Mr. Montgomery, youbve heard al1 of this testimony
21 about the various deletions during the January period in 2006,
22 files missingz et cetera, raid boxes gone.
23 Would you describe to the Court what you did in your
24 relationship with eTreppid Technologies in January of 2006 in
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1 connection w ith any of the software that was presen: in the
2 company.
3 A . I got called -- Mr. Trepp was getting ready to leave
4 on a cruise . I don't zemember which week that wasr if itrs the
5 week of the 8tb. And J planned on taklng the week off because
6 he was going to be gone also.
7 And 1 got a call on, 1 think, Monday morning from
8 Mr. Trepp saying that I need to come down to the building.
9 Q. And what was the nature of that discussion other than
10 that? Was there anything else?
11 A. No, he just sasd, ''You need to come down here right
12 now.''
13 Q. And what happened?
14 A . I had another commitment, and I couldn't come down
15 that day.
16 Q. So then what happened?
17 A. He called me either -- he left a message on my phone
18 that night, saying I needed to come down there tomorrow
19 morning.
20 Q. Did he tell you why?
21 A. No, he just said it was important, I needed to come
22 down.
23 Q. Did you go down the next day?
24 A . Yes .
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l Q . And then what happened?
2 A. 1 entered thrtlugh the warehouse, and I saw a11 of
3 these people going through a11 the hard drkves.
4 Q. Okay. What date was Lhat?
5 A . It's the -- it would be the Tuesday. 1 don't know --
6 I don 't know which day lt is . January.
7 Q. The Tuesday -- the second week in January?
8 A . Yes, the second week in January.
9 Q . And did you have any foreknowledge that these people
10 would be going through the hard drives?
11 A. No.
12 Q. Were they going through the hard drives in this area
13 here (indicating), this area near --
14 A Yes yes. '
15 Q. -- on Exhibit l --
16 A . Yep . Yes .
17 Q. -- which webve called Dennisrs, Mr. Montgomery's, work
18 area?
19 A . Work area, yes.
20 Q. And were those a11 government computers?
21 A . Yes .
22 Q. What was the value of those computers?
23 A . My guess, 350,000-plus .
24 Q. And when were those computers brought in to eTreppid?
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1 MR . PEEK : Counselx I can't see the witness answer the
2 question .
3 THE WITNEE;S: December 2003, I believe, or
4 January 2004.
5 BY MR . FLYNN :
6 Q . And did a particular braneh of the government bring
7 those in?
8 A . T -- we ptlrchased them on behalf of the government.
9 They were government computersr and we purchased tbemw one from
10 each group . So 1 don 't know which group belonged to wh ich one.
11 Q . Did -- at some point, did the government bring in
12 computers that you didnlt purchase?
13 A . Yes .
14 Q. When did they bring those computers in?
15 A . I believe January of 2004.
16 Q . And what was the value of those computers?
17 A . Three million.
18 Q. And --
19 MR. PEEK: Objection. Move to strike. There's no
20 foundation for thts testimony that the value of the camputers
21 was $3 million.
22 MR. LOGkR: What difference does it make? That's not
23 an oblection.
24 THE COURT: Hold on. Hold on. Hey, guys: listen to
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1 me. Hey, no, listen . Wefre getttng late here tonight. lt's
2 easy to get carried away and have exchanges, but I want to
3 maintain reasonable order in here. So if you have something to
4 say, say it to me.
5 And likewise to you, if you have something to say, say
6 lt to me .
7 So wbat we 'll do -- '
8 MR. PEEK: My objection, Your Honor, was lack of
9 foundation and qualification as to what the value is, as well
10 as the relevance here.
11 THE COURT: A1l right. Well, first of all, what is
12 the basis for your knowledge of the value of the computers?
13 THE WITNEGS: You bre asking me, Your Honor?
14 THE COURT : Yes .
15 THE WITNESS; I Gas told that was the price by the
16 government.
17 MR. PEEK: Objection. Hearsayr Your Honor.
18 THE COURT: I don't know that I see the relevance .
19 Whatês the relevance?
20 MR. FLYNN : The relevance, Your Honor, is that the
21 government brought those computers in because of
22 Mr. Montgomery's ownership of the anomaly detection software.
23 THE COURT: Well, that's your conclusion . But 1 meanz
24 I don't know that there's any evidence here from which we can
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1 conclude thaL that's noL hearsay.
2 BY MR. FLYNN :
3 Q. Mr. Montgomery, why did the qovernment bring the
4 computers in?
5 A . They wanted us to run the anomaly detection software
6 on a11 the computers.
7 MR. PEEK: Again, Your Honor, objection. That's
8 hearsay. That calls for hearsay from the government as to why
9 they were there. lt had to have come from a hearsay statement
10 from a government official, as opposed to pursuant to a
11 contract.
12 THE COURT ; 1 understand that, but why they brought
13 them is pretty apparent to mez to run the programs. But the
14 question 1 was concerned about was: why is it -- the cost of
15 those programs, why is that relevant? That was the question I
16 had.
17 BY MR . FLYNN :
18 Q. The magnitude of the work that was being done with
19 regard to anomaly detection that warranked the contract price
20 had to do with how quickly you could process the information;
21 is that correct?
22 A . Yes.
23 Q. Now, continue with your -- you had no forewarning of
24 the fact that the people in eTreppid would be trying to access
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1 the hard drives?
2 A . No .
3 Q. And were they also in this area called the private
4 room (indicating)?
5 A . Not that 1 know of. I only walked in through the
6 warehouse up the back stairs to Mr. Trepp's office.
-1 Q. And did you have a conversation with Mr. Trepp about
8 what these people are doing w'ith these hard drivesz would do
9 with the software?
10 A . Yes .
11 Q. What did you tell them?
12 A . 1 was surprised that he was letting people with no
13 classification dismantle disk drives.
14 Q. And what did he aay?
15 A . He ïs looking for the software .
16 Q. And who did you see working on this -- on these hard
17 drives?
18 A . Michael Salvetek, Jim Bauder, Jesse Anderson,
19 Venkata Kalluri.
20 Q. Did any of these people have government clearances?
21 A. Jim, I believe -- orz Jesse, I believe, did; the
22 others, no .
23 Q. And when you confronted them with the fact that they
24 weren't allowed or permitted under the contract with the
l92
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1 government to do that, what did he say?
2 A . That he 's orderLng them to do it, Mr. Trepp is.
3 Q. And did he tell you why?
4 A . No .
5 MR . PEEK: Your Honorw can We move on? 11m going to
6 object. This is just dragging on and dragging on to be a
7 filibuster, and denying me the opportunity to eross-examine.
8 It 's now 8 o 'clock .
9 MR. LOGAR: Is there an objection, Counselr to your
10 statement?
11 THE COURT : Again, conversation -- 1 want conversation
12 direct to Lhe bench.
13 MR. LOGAR: It's just speaking objections.
14 THE COURT: I understand that. But 1 really am having
15 a lot of difficulty seelng how this ties into the issue here .
16 Werre almost at an hour now for your zo-minute examinationz so
17 please hurry up .
18 BY MR. FLYNN ;
19 Q . Did what they do destroy any of the softuare in any of
20 the source codes?
21 A . Possibly, yes.
22 Q. The source codes with regard to anomaly detection
23 software, where are they?
24 A . In the building.
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1 Q. And how many lines of code do they -- exist,
2 Mr. Montgomery?
3 A . Half a miltion-plus .
4 Q. And do you know whether, when they tried to access the
5 software, any of those lines of code were destroyed?
6 A . It could have been.
7 Q. And are those lines -- are the source cddes to access
8 those lines of code also in your head?
9 A . Yes.
10 Q. And are those the same -- is that the same anomaly
11 detection software that you copyrightecl back in 1982?
12 A . Yes.
13 Q. And explain to the Court why that is the case, namely,
14 that theyere identical.
15 A . Wellr I meanr Tfm the one that did a1l the original
16 work on the anomaly detection software.
17 Q. Did you destroy or take any files or hard drives or
18 anything from eTreppid Technologies?
19 A . No.
20 Q. And is there anyone at eTreppid Technologies today, to
21 your knowledge, that has the capability to determine what's
22 there and what isnft there in connection with the government
23 contract on anomaly detection?
24 A . I don't think so.
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r
1 0. So they wouldn't even know how to do it?
2 A . That's correct.
3 Q. Have you heard any testimony from Mr. Venable or
4 Dr. Sun or anyone else that would indicate they have any
5 knowledge or expertise whatsoever, or the expert that was
6 calledz as to how to access the anomaly detection codes inside
7 eTreppid today? '
8 A. No .
9 Q. Are you the only one?
10 A . I don't know that for a fact, but I would suspect
11 thatîs probably the ease.
12 Q. In connection with your conversations with Mr. Trepp
13 in the presence of governmental agents, d1d some of those
14 conversations relate to the fact that you were the only person
15 on the planet that could do this anomaly detection?
16 A. They just want -- I don't know if they said it exactly
17 like that, but up until that pointz We were the only ones that
18 were able to get out these kinds of results.
19 Q . Do you know of anyone else that, you knowz deleted
20 files at eTreppid Technologies?
21 A . Well, a11 the programmers, from time to time, did that
22 on their own.
23 Q. But do you know of anyone Who deleted files who
24 shouldn't have been deleting files?
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l A . No .
2 Q. Did anyone contcol your work, ever, at eTreppid
3 Technologies?
4 A . What do you meaa by that? Thatls --
5 Q . With regard to Bour -- first, your data compression
6 type of work, did, say, anyone instruct you or supervise you on
7 how to do that type of work?
8 A . No, no .
9 Q . With regard to your anomaly detection workz did anyone
10 ever instruct you or supervise you in any way on how to do that
11 work?
12 A . No .
13 Q. And in regard to the anomaly cietection workz that was
14 work that you distinctly understood as far back as 1982; is
15 that correct?
16 A . Yes .
17 Q . Did anyone else have the skill at eTreppld
18 Technologies to do the --
19 MR. PEEK: Objection. Lacks foundation as to how he
20 can evaluate somebody else's skill, given the fact he only has
21 an associate's science degree.
22 THE COURT: Well, I think you could evaluate it based
23 upon your experience, education, training, et cetera. Dut the
24 better questkon, 1 think, is how does he know what their level
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1 was? Thates the thing f?m concerned about.
2 BY MR . FLYNN :
3 Q . Based on al1 your years in working with all these
4 peoplez are you aware what skill levels these various
5 individuals had that were computer programmers at eTreppid?
6 A . Yes .
7 Q. Did anyone have the sklll level other than you to do
8 anomaly detection?
9 A . Probably not.
10 Q . And the instruntents and the tools that were used by
11 you to do the anomaly detection, was that based on the
12 copyrights that you --
13 A . Yes .
14 Q. -- filed back in 1982?
15 A . Sorry . Yes.
16 Q. With regard to the intrusion technology,
17 Mr. Montgomery --
18 A . Yes.
19 Q. -- was there some type of a system set up by you that
20 required a response, and if it didn 't get a response, it would
21 start self-destructing?
22 A . Yes.
23 Q . How did that work?
24 A . You set the time frame, and you had to respond within
l97
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1 that period of time frame. And if you didnrt, it would purge
2 itself.
3 Q. And as you sit here today, do you have any
4 understanding as tc) whether that may have occurred at eTreppid
5 Technologies?
6 A . Well, since I was locked out of the building and 1
7 could never go into it, 1 suspect it probably happened.
8 MR. FLYNN: That's all 1 have, Your Honor .
9 THE COURT: Al1 right. Let me just stop and ask a
10 question, which is probably going to not make any sense. But
11 therels been an amended eomplaint filed on the 1st of February.
12 Obviously, time to answer it hasn 't expired, but there hasnrt
13 been an Answer filed, at least as far as I can see.
14 MR . PEEK : There's an Answer to the earlier, but not
15 to the amended one, that's correct.
16 THE COURT : 1 didnlt find that in my file, but was --
17 were there any counterclaims'?
18 MR. PEEK : There is a counterclaim, Your Honor, for
19 copyright infringement contained within the counterclaim.
20 THE COURT: A11 right. Let me ask you a question.
21 During the time that eTreppid was being paid for
22 this -- for the use of this copyrighted material by the
23 governmentz which you claim belongs to you, did you ever object
24 to the government and say, wait a minute, that's my material,
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l thatls not eTreppid's material?
2 THE WITNESS: L don't recall, Your Honor, if 1 did or
3 not.
4 THE COURT : Well, go ahead, Mr . Peek. f was going to
5 open my big mouth abou: something.
6 MR. PEEK : 1'> happy to hear from the Court. If ih
7 will shorten the proceeding, 1fm happy 'to hear from the Court.
8 THE COURT; Wetl, 1et me tell you, counsel for both
9 sides, kind of how I thknk 1îm seeing this: but 1'm prepared to
10 be persuaded otherwtse. But maybe that will be helpful . 1
11 know , when I was a practicing lawyerz I kind of lîked to know
12 sometimes what that judge was thinking about. Not always happy
13 to know, but I kind of wanted to.
14 And it seems to me that the agreement that was
15 originally enterect may or may not cover the technology that
16 we're talking about. But certainly, at some point in time, by
17 conduct or agreement, oral or by conduct and by performance, it
18 was agreed that eTreppid could market this technology and
19 didn 't market this technology to this agency of government and
20 that a11 the parties acknowledged that it was eTreppid's to
21 market .
22 %he problem arises with regard to a further agreement
23 or further compensation or other issues that may be the subject
24 of a very meritorious counterclaim. Whether it's meritorious
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1 or not, 1 have no idea. But I don't -- at this point in time,
2 I1m not -- it would appear to me that the technology was indeed
3 conveyed to eTreppâd to market and sell to the government and
4 that the government paid eTreppid for that.
5 Now, if there was an agreement that there would be
6 compensation for it later and that agreement wasnft honored,
7 that's part of the counterclaim. If therels an agreement that
8 copyrights were infringed, that's part of the counterclaim .
9 But as to the ownership of it, it would seem to me:
10 like I said, by conduet, by oral understandingz that it was
11 agreed: yeah, this belongs to eTreppid and I'm going to get
12 compensated for it later . That's where the counterclaims come
13 in. So tell me where I m wrong about that.
14 MR. FLYNN; Your Honor: w1th a1l due respect, black
15 letter law -- and we have a brief on it -- says Lhat no
16 copyright --
17 THE COURT: Title 17, right?
18 MR . FLYNN : -- no copyright can be given under these
19 circumstances without a written assignment.
20 The closest they can qet is the Work For Hire
21 Doctrine. We have -- a atate court is absolutely preempted,
22 under case 1aw statuter from using trade secret, from using
23 conduct, from using lmplied agreement, to breach the provisions
24 of the copyright act. The most that they could qet is a
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1 nonexclusive, oral license under the conduct.
2 And as I say, Your Honor: we have the brief. We 're
3 ready to submit the brj-ef to the Court.
4 THE COURT: Olu it hasn't been subm itted to me yet?
5 I'm familiar with Title 17.
6 MR . FLVN-N : TL hasn't been submitted.
7 THE COURT: And 1 think l knov' the section that you rre
8 talking about. But 1 mean, if that's the case, what the heck
9 are we doing in state court? Why aren't you guys in federal
10 court?
11 MR. FLYNN : The only reason welre here is the Court
12 simply said: you can't remove it based on the counterclaim.
13 But wefve already filed over in the federal court.
14 Sor no matter what this Court does --
15 THE COURT: I'm wasting my time?
16 MR . PEEK : You dre not wasting your timez Your Honor.
17 THE COURT: Well, why don't you just let me do it, and
18 then you can go to federal court and do whatever federal court
19 does.
20 MR. FLYNN: Your Honor, because it's just so
21 flagrantly incorrect: under the copyright law, for a state
22 court to -- in effect, eo give away a copyright, which is the
23 clear basls of the record at this point in time, with no
24 reputation, with no meeting of any burden of proof to the
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1 contrary . Based on a11 the case 1a< and the brief welve got
2 for the Court, it siutpky cannot be done .
3 THE CGURT: A11 right. See, 1'11 have to consider
4 that. I meanz 1lm aware of Title 17. I'm aware, 1 thtnk, of
5 the section you're talklng about.
6 1'm just zooking at this from the standpoint of
7 regular contract . If it can't be done, then we go back to the
8 issuez and I determine whether or not, in fact, it was in
9 writing and Ghether the writing ks sufficient to convey that
10 and whether conduct can supplement it or expand upon that
11 agreement. Those are the things that 1'11 have to take into
12 consideration. And I'm not necessarily going to decide it now;
13 11m just telling you the contents ln my head.
14 MR. FLYNN: YeE;, Your Honor. See, on that point r
15 webre -- the contract clearly says only CD Number 1 has been
16 given. I do not see how you can possibly get outside of that
17 where youlre not dealing with an employee, you're dealing with
18 a founder and a principal and an independent contractor.
19 THE COURT: Well, that's something 1:11 have to decide
20 when I take that into consideration.
21 MR. PEEK: And a fiduciary duty as a membûr of the
22 LLC, Your Honor, with partnership fidueiary responsibilities.
23 May I go ahead and cross-examine?
24 THE COURT: Yeah, go ahead.
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1 MR . PEEK; I unclerstand where the Court is . I may be
2 able to shed some liqht c)n this , as well .
3 THE COURT REPORTER : May I say, for the recordz I ' m
4 getting really tired.
5 MR. PEEK : l ' Ll be s low , Ms . Vohl . 1 don ' t agree wit.h
6 that , but -- T don ' t bel ieve that .
7
8 CROSS '-EXAMINAT I()N
9
10 BY MR . PEEK :
11 Q . Let ' s talk a llttle bit , Mr . Montgomeryr about , as you
12 say, the anomaly detection, which you say you copyrighted as
13 part of your work at Computermate ; ia that correct?
14 A. Yes .
15 Q . And that was related to blood gas analysis?
16 A . Nell, it related to blood gas analysis .
l 7 Q . M d the blood gas -- the blood is being drawn f rom
18 time to tkme by techs and teshed as to what its gases are?
l 9 A . Yes .
20 Q . M d those gases have to be within a certain range, do
21 they not, have a certain medical range where they might show
22 that there ' s something wrong wîth the patient?
23 A . Is that a question?
24 Q . Yes . Is that correct?
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1 A . Yes.
2 Q. And your anomals' detection portion of the blood gas
3 was, you said that lqhe range for certain levels of blood gases
4 would be a percentage for hydrogen, oxygen, nitrogen, carbon
5 dioxide, things of that nature?
6 A. 1 don 't understand your questlon.
7 Q. Well, you tre determiningr are you not, whether or not
8 a person's blood gases contain more hydrogen, carbon dioxide,
9 or oxygen than they are supposed to?
10 A . No .
11 Q. What are you testing for, then? What is the anomaly?
12 A. I've never tested for hydrogen. You lust used
13 hydrogen as an example.
14 Q. Okay. But you were testing for other blood gasesr are
15 you not?
16 A . Yes.
17 Q . And there are medical ranges Eor blocd gases, are
18 there not?
19 A . Yes.
20 Q. And if those blood gases fall outside of those ranges,
21 that would be an anomaly; is that correct?
22 A . No. That would be abnormal.
23 Q . Well, whatfs the anomalyr Lhen, that is being tested,
24 the anomaly detectlon that you 're determining with your blood
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1 gas analysis?
2 A . Youlme shooting light through bloodz and a spectrum is
3 being produced . Am d that spectrum, depending on which value
4 youfre lookinq for, determines the spec- -- you look for each
5 of the variables in a different range in the spectrum .
6 Q. Youdre looking for, as 1 understand it, certain gases?
7 A . Patherns .
8 Q. Patterns?
9 A . Patterns .
10 Q . What are the patterns?
11 A . Well, a gas shows up at a certain spectrum and has a
12 certain appearance.
13 Q. Can you show me within Exhibit 19 where it talks about
14 anomaly detection?
15 A . You want me to read this whole thing?
16 Q. I want you to -- it's your book, is it not?
17 A . lt's been 20 years .
18 Q. Ohz so you haven't looked at this book for 20 years,
19 Mr. Montgomery; is that correct?
20 A . No .
21 Q. Well, what -- when was the last time you looked at
22 this book, sir?
23 A . Two weeks ago.
24 Q. When you looked at it two weeks ago, did you find the
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l phrase ''anomaly detection'' anywhere within 1t?
2 A . I donlt recall if 1 did or not .
3 Q. Is there anything in there that you would characterize
4 as anomaly detection? 1(E it is, point us to it.
5 A . The software.
6 Q. Well, point us to someplace in that book that
7 describes anomaly detection.
8 A . I'm not sure this book describes anomaly detection.
9 Q . Well, what about Expzibit 21, which is part of -- came
10 out of that -- or Exhibit 20, I thinkr that came out of that?
11 A . The copyrightsE
12 Q . No, no. The Exhibit 2Oz which was the excerpts from
13 that: where in those documents that are excerpts from
14 Exhibit 19 does it describez as you sayz anomaly detection?
15 A . The center screen is the output of the determination
16 of that anomaly.
17 Q . Okay. Can you then tell me -- point me, thenz to that
18 exhibit.
19 A . Am I done with this book?
20 Q. Pardon?
21 A . Page 22 in the middle.
22 Q. Page 22?
23 A . Yep .
24 Q. Okay. So this is what you describe as being anomaly
2 0 6 -
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2 A . Excuse me . 32 .
3 Q. Okay. I apologlze. 32. Well, what's on 22?
4 A. Wellz the hlood hadn't been ejected yet.
5 Q . Oh: okay. So on 32z there is something there that you
6 say relates to anomaly detection. Where do we see that?
7 A . You -- you see the value that is displayed, tells you
8 the peak of the detection of the anomaly, and that peak has a
9 qualifying amount.
10 Q. Where am 1 reading that?
11 A . Welly see: a number like 29z as an examplez for
12 bicarbonate.
13 Q. For what?
14 A. For HCOa.
15 Q. Is it in the middle column?
16 A . Yes, 29.1.
17 Q. 29.12
18 A . Yeah .
19 Q. That's a detection of an anomaly?
20 A . That gives you the size of the anomaly, that's
21 correct.
22 Q . How do I know that's the stze of an anomaly?
23 A. I Just told you it Was.
24 Q. Oh: just beeause you tell me it was.
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1 It saysz over herer if 1 read across the column on
2 Exhibit 20 -- the middle column has no heading; iL just says
3 ''Corning 178-3 1/1/-j6 '' Is ,'1/1/76'1 Lhe date? Is hhat a date?
4 A . 1 believe jt looks like a date .
5 Q. Okay. And then HCO -- what does HCO stand for?
2 3
6 A. Blcarbonate.
7 Q. And then it says ''29.1.N How do we know that's an
8 anomaly?
9 A . Well, weîre looking for --
10 Q. Tell me this --
11 A . Do 1 geL to answer?
12 Q. Yeah.
13 A. Wedre looking for the pattern in the spectral analysis
14 that relates Lo bicarbonate.
15 Q. Where do we see that in this that shows --
16 A . You see the result of it.
17 Q. What's that?
18 A . You see the end result of it .
19 Q. How do T know that that was part of the spectral
20 analysis and was an anomaly detection from this document, or
21 are you reading from the book?
22 A. I don't remember from the book. We put the
23 original -- what the original patterns looked like.
24 Q . So how is the Court going to tell from -- without aid
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1 of this exhibik, that there was a spectral analysis taken on
2 thls patlent's blood gas showâng an anomaly of apparently a
3 bicarbonate 29.12
4 MR. LOGAR; Other than Lhe witness's testimony?
5 THE COURT : Mr. Logar, please. If you have an
6 objection, direct it to rcte, would you, please.
7 W1l1 you?
8 MR . LOGAR : I w21l.
9 THE COURT: A11 right. Mr. Peek, where are you going
10 with this? Is your point that the stuff that was patented and
11 what was --
12 MR. PEEK: The copyright is noh anomaly detection.
13 It's just more stuff --
14 THE COURT: I get it.
15 BY MR . PEEK :
16 Q . Is there anything in there?
17 A . The end result.
18 Q. The end result. But we don't know what the -- was the
19 original to be able to look at the spectral analysis, as you
20 described it, to say this <as a detection of an anomaly, other
21' than your testimony?
22 A . Correct .
23 Q . And Lhere's ncthing in the book that talks about that?
24 A . 1111 look again .
>
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1 Q . Okay .
2 THE COURT : Wùli Le we ' re taking thi.s little break,
3 according to my review o E the f ile, 1 do not have an Answer to
4 the complaint . Do you have a copy of the Answer?
5 MR. LOGAR J Your Honorz did you not get the documents
6 that were f iled in f edera 1 court Dn remittitur?
7 THE COURT : ''C?n removal '' ?
8 MR. PEEK: ''C)n rem i Lti tur . ''
9 'I'HE COURT : 091, ''on remittitur . '' Yeah, when they sent
10 them back?
11 MR. LOGAR: Yes.
12 THE COURT : Perhaps not, but do you have a copy of
13 the --
14 MR. LOGAR: We do .
15 MR. PEEK : And, Your Honor, they were filed and
16 captioned the United States District Court in the District of
17 Nevada.
18 THE COURT : Do you have a copy 1 could look at?
19 MR. PEEK: I've got oner Your Honor .
20 MR. LOGAR: It was unclear, when we were in federal,
21 when the remittitur would occur. 1 assumed that the fike had
22 been sent back by now.
23 THE COURT: It may have. Who knows.
24 MR . LOGAR: But you don't have it?
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1 THE COURT: 1 donît have itz no .
2 MR . PEEK : We a1l assume tha: because Judge McKibben
3 ordered it that way.
4 THE COURT: Let me just see a copy. A11 I?m saying,
5 Mr. Peek, is, 1 thjnk 1 know where youdre going with this . And
6 ultimatelyy if we don't get finished: then 1fm going to have to
7 ultimately declare some kind of a recess, and God knows when
8 welre going to come back. So I encourage you to use your
9 Uime --
10 MR . PEEK : Wisely? Ifkl move onr Your Honor.
11 BY MR. PEEK :
12 Q . ln the brief moment youfve had to look, you find
13 nothing in there about anomaly detection, do you?
14 A . No .
15 Q. And you were not the only founder of Computermate,
16 were you?
17 A . Yes, I was the original founder.
18 Q. Were you the only founder, sir?
19 A . Yes: I was the original founder.
20 Q. Were there any other individuals who -- wellz for
.
21 example, who is Robert West?
22 A . I actually don 't remember.
23 Q. And who is William Mannak?
24 A. He joined Computermate -- I don't remember the exact
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2 date.
2 Q. And was it in 1982?
3 A. It was like a year after -- I1m just --
4 Q. A year afher you had what?
5 A . Started Computermate .
6 Q. When did you start Computermate?
7 A . I thought it was '81 .
8 Q. So about a year laterz he joined you.
9 And the source code that you wrote for blood gas
10 analysis, that was written in what language?
11 A . I believe RPN.
12 Q. RPN . And in what language were you wrîting anomaly
13 detection at eTreppid?
14 A . The anomaly detection at eTreppid already existed.
15 Q. It already existed?
16 A . Yes.
17 Q. Because you put it on the computers?
18 A . Yes.
19 Q. Okay. And what language <as 1t that you put it on?
20 A. I think it was Visual C.
21 Q. Visual C. Not C++?
22 A . Not originallyz that's correct.
23 Q. Now: were there engineers who wrote code onto the
24 anomaly detection that you had, at some timeg put on the
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1 servers at eTreppid?
2 A. No .
3 Q. So, there were no -- none of :he engineers in Zehang's
4 group, as he is directcr of engineering, did any additions
5 whatsoever in writjng source code or writing code, either in
6 MET 1ab or C++, to the anomaly detection ; is that right?
7 A . To my anomaly detection?
8 Q . That's right.
9 A . No .
10 Q. Was your anomaly detection on the source server?
11 A. No .
12 Q. Was it on the ESA server?
13 A . No.
14 Q. Was it in a raid box?
15 A . Had it ever been on a raid box?
16 Q . Uh-huh.
17 A . Possibly.
18 Q. Possibly. So -- and d1d you -- from time to times as
19 the government was asking you to make additions or deletions or
20 improvements to the -- as you call your source code, did you
21 have to write additional code?
22 A . To the anomaly detectioh software?
23 Q. Yes.
24 A . No.
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1 Q . Okay. And when did you put it on -- when did you put
2 the anomaly detectâon software onto the computers at eTreppid?
3 A . Which computers?
4 Q . The computers at eTreppid.
5 A . July or August of 2003, I believe.
6 Q. And which computer -- on which computer did you put
7 it? '
8 A . The one in my office.
9 Q. Okay. On this diagram here where we showed
10 Dennis Montgomery in sort of the lower right, is that where --
11 that's your desk statjon?
12 A . Where?
13 Q. ls that your desk? Show us -- actually: why don't you
14 do it in green . Do it in green, pleasib sir.
15 A . (Witness complles.)
16 Q . So it's not in the warehouse?
17 A . Thatïs correct.
18 Q . Okay. And do you have any other identîfying
19 'characteristics of that, other than that computer that was in
20 your office?
21 A . I don 't understand what you mean.
22 Q . Is there anything, if 1 were to -- I want to make sure
23 that I could go to the right computer. Is there just one
24 computer in your office?
2l4
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1 A . And what time frame was that?
2 Q. Letîs say in Deeember of 2005.
3 A . 1 thought you said originally --
4 Q . No, I wanted to know --
5 A . You said originally 2003.
6 Q. You put it there. You put it there, in 2003, on your
7 computer in your office?
8 A . That's correct.
9 Q . Did it go anyp'Lace after that?
10 A . Yes.
11 Q. Where did it go after that?
12 A . Downstairs .
13 Q. Thatîs into the warehouse area?
14 A . Yes .
15 Q. D1d you just take the entire box and put it -- take it
16 down to the warehouse, or did you just take portions of it?
17 A. I made just a copy of it.
18 Q. And did you leave the original on your desktop or your
19 computer in your office?
20 A . No .
21 Q. So you deleted that?
22 A. Yes.
23 Q. Okay. And then where did you put it after 2003, which
24 computer?
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1 A . (Witness draws on diagram.)
2 Q. Is there any identifying characteristic of that
3 computer, location, type: manufacturer'?
4 A . Well, when I saw it last, it was still sitting there .
5 Q . What's the manufacturer of 1t?
6 A . It was a clone . There was no manufacturer of it .
7 Q. It was a clone built by --
8 A . eTreppid.
9 Q. eTreppid. Is it the first computer as you walk into
10 the warehouse on the left-hand side?
11 A . From which direction?
12 Q. As you rre walking into it from the -- I don ît know the
13 directions here, but from the offices into the warehouse: would
14 it be on the left-hand side?
15 A . Yes .
16 Q . That's where it's drawn on this drawing, isnlt it?
17 A . Welly that drawing didn't actually represent the way
18 the computers were set up in the warehouse .
19 Q. Okay.
20 (Plaintiff's Exhibit 23 was marked for
21 identification.)
22 BY MR. PEEK :
23 Q. Now, again with respect to Computermate, 1 think you
24 said that that company, at some timez went out of business?
216
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1 A . I don't remember if it did or not or we sold it .
2 Q. And did it merge into Barrett Laboratories?
3 A . I don': think so.
4 Q . And did Barrett Laboratories merge into 3Net?
5 A . That is a possibility. 11m not certain.
6 Q. Let me hand you what has been marked as Exhibit 23 and
7 ask you to tell me whether or not you can idenkify whether or
8 not that 's anything you have seen before today.
9 A . 1 can't read a11 of them, but I think I get the gist .
10 Q. The gist is, these are the original documents filed by
11 Computermate with the United states Copyright Officez are they
12 not?
13 A. I don't know if they are or not.
14 Q. Well, you recognize your name there as
15 Dennis Montgomery, do you not, as the author?
16 A . Yes.
17 Q. You recognize the TXu as corresponding to the claim
18 that you made?
19 A. I could look -- 1'11 trust you. Yes.
20 MR. PEEK: You recognize Mr. Mannak as being somebody
21 who was -- 1:11 offer itz thenz Your Honor.
22 THE COURT : What's the number?
23 THE CLERK : 23.
24 MR . PEEK : It's 23 .
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l THE COURT: Any objectlon?
2 MR . FLYNN : He has no foundatîon, Your Honor, for
3 authentication purposes.
4 THE COURT : 1 Uhink it has enough that 1ïm going to
5 admit it . lt's admitted .
6 (Plaintiff's Exhibit 23 was admitted into evidence.)
7 THE COURT: Where are we going with this? Are we back
8 to wKo really owned it?
9 MR . PEEK : Yes, Your Honor.
10 THE COURT: If he didn't own itz how could he sell it
11 to your clients? He shouldn't even be here.
12 MR. PEEK ; That may very well be# Your Honor, as to
13 who should be here. What we maintain is, whatever he did with
14 blood gas has nothing to do with what happened -- or what was
15 actually developed at eTreppid.
16 THE COURT: Well, that, 1 understand.
17 MR . PEEK : There's two prongs.
18 THE COURT: Ownership has got a back side to it.
19 MR. PEEK : I understand it may be that I'm dealing
20 with Computermate or Barrett Laboratories or somebody else who
21 can come in and actually show us that their source code is the
22 same as ours and written in the same language.
23 MR. FLYNN: Your Honor, if that's the positionr there
24 isn't an iota of evidence so far that they have presented that
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1 this anomaly detection software was developed, produced, worked
2 on, anythingr by eTreppkd Technologies other than
3 Mr. Montgomery. And the only state of the record is it derives
4 from the copyrights . There is nothing to the contrary.
5 MR . PEEK : Your Honor, that 's untrue . Mr. Zehang
6 testified that he did anomaly detections in MET lab --
7 THE COURT : He did. He did.
8 MR . FLYNN : Nop Your Honor -- well --
9 THE COURT : Itls my recollection -- if I'm wrong, 1
10 suspect that what 1'm going to do is, tIm going to want to hake
11 a look at the transcript. Maybe not. But ï m ade some notesr
12 and I can tell you thab, according to my notes -- hold on --
13 according to my notes, Dr . Gun -- well, I don't see it right
14 here, but that was my recollection . 1'11 look back at my
15 notes . I1m not going to take the time --
16 MR . FLYNN : Your Honor, I specifically asked --
17 THE COURT : Hold on right here.
18 Dr. Gun, according to my notes, he created software
19 for pattern recognition, motion detectionz face recognition,
20 tracking the vehicles, and anomaly detection. I wrote it down .
21 MR. FLYNN : Yes, Your Honor . And then on cross, I
t 22 asked him if the anomaly detection work that he did had
23 anything to do with the anomaly detection work that
24 Mr. Montgomery did on the government contracts, and he said no.
2l9
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1 And I asked Mr. Montgomery, and he said what Dr. Sun did had
2 noth ing to do with what he did on the government contract .
3 THE COURT: That could be. A11 right. Let's go ahead
4 and try to get through this.
5 MR . PEEK: Thank you: Your Honor. 1'11 try to move
6 on .
7 BY MR . PEEK:
8 Q. You then went to -- I think you said Barrett did
9 addltional work -- wellr first of allz let me sort of
10 backtrack. Is there a written assignment to you from
11 Computermate of these copyrights?
12 A . Yes .
13 Q. Where is that?
14 A . 1 believe I have it.
15 Q . Okay. So you could produce it to this Court at our
16 next hearing or durinq discovery?
17 A . I will surely look for it.
18 Q. Okay. And would that be -- would Mt. Mannak be the
19 one who assigned it?
20 A . I don't recall if it was or not.
21 Q. And where do you believe it exists today? Where is
22 it?
23 A . I don't know. I'd have to look for it .
24 Q. Now, you said you went to Barrett Laboratories. Did
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1 you, then, convey this same anomaly -- what you claim to be
2 your anomaly detection technology -- orr excuse mey copyright
3 to Barrett?
4 A . I don 't know if' it was -- I believe it was a
5 derivative and that work had continued on.
6 Q. Okay. And so you did additional work whtle you were
7 at Barreth?
8 A . Yes .
9 Q . And you had additional copyrights?
10 A . Yes .
11 Q. And those copies also were for this same derivative
12 work or blood gas analyais?
13 A . No, it covered many other areas.
14 Q . Covered other areas, but it was also anomaly
15 detection?
16 A . Yes. .
17 0. And did -- soz is there a written transfer of that --
18 a11 that work, the copyright for blood gas analysis, to
19 Barrett?
20 A . I believe so .
21 Q. You would have that as well?
22 A . I will sure look for it.
23 Q. And so then Barrett owned it after you joined Barrett
24 sometime in '85 you said?
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1 A . I believe 1 retained the rights out of Computermate to
2 do with it what I chose, whether Barrett had it or noh.
3 Q. Wellz the copyrights that you did -- that you actually
4 copyrighted at Barretto were they for the blood gas analysis or
5 derlvahives thereof?
6 A . Would it contai.n that? Yes.
7 Q. Okay. So the (ropyrtghts that you did while you were
8 at Barrett, who owns those?
9 A . I do .
10 Q. And how did you get them from Barrett?
'
11 A They were assigned to me.
12 Q. And is there another wrltten assignment of that?
13 A. I believe there is.
14 Q. You believe there is.
15 Now, are you aware that in order to make an assignment
16 effective, it has to be at the copyright office?
17 A . I don't recall kf it was or not.
18 Q . Have you transmitted these assignments to the
19 copyright office?
20 A . I don't recall.
21 MR. FLYNN: Your Honor, that calls for a legal
22 conclusion.
23 THE COURT: Well, he's asking if he's transmitted it
24 to the copyright office. Are you talking about the question
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l before that?
2 MR . FLYNN : g'm asking him if he is aware that that's
3 what has to be done to make tt legally effective.
4 THE COURT: And he said no, he's not, so he's answered
5 that question. And then you asked himz had he transferred it#
6 and I would assume --
7 MR . PEEK : Transmitted it in an assignment form to the
8 copyright office.
9 THE COURT I Yeah, yeah . I would assume the answer is
10 no, because he didn't know --
11 THE WITNESS : E don lh know.
12 THE COURT : -- if that is the law or isn 't the law . I
13 don 't know .
14 BY MR . PEEK :
15 Q. Would you agree with me# though, the copyrights, while
16 you were at Barrett, on whatever you claim to be an anomaly
17 detection that you devetoped at Barrett, were in the name of
18 Barrett?
19 A . I don 't recall if they were or not.
20 Q. Did the copyrights that you undertook to copyright
21 while at Barrett get copyrighted in the name of Barrett or in
22 your name ?
23 A . T believe Barrett.
24 Q. And Barrett still exists in some other iteration of an
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1 entity todayr does it not?
p A. I don 't know if it does or not .
3 Q. You left it after a certain ttme?
4 A . Yes.
5 Q. Now, I think you also say that your -- you claim to
6 have the right to the source code for pattern recognitionz as
7 well; is that correct?
8 A . Yes.
9 Q. Something that you developed while you were in
10 Hollywood, acting as a consultant?
11 A. No .
12 Q. Okay. From '93 to '98 you worked as an consultant,
13 and you said during that period of time, you did some work in
14 Hollywood .
15 A. Yes .
16 Q. And it's while -- it's while doing that work in
17 Hollywood that you then wrote pattern recognition source code?
18 A . No.
19 Q. When did you write that?
20 A . That was derivative work from the original work that 1
21 had done on the copyrights.
22 Q. Okay. Same thing with the blood gas analysis?
23 MR. FLYNN: Objection. I don't understand.
24 //// ////
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1 BY MR . PEEK :
2 Q . What copyright was it that covered pattern
3 recognition? Was it the blood gas analysis one?
4 A. I believe it was the one in Barrett Laboratories.
5 Q. And uhat's the name of it?
6 A. I -- 1 think j.t was the one for microbiology.
7 Q. The one for microbiology? Okay.
8 (Plaintifrîs Exhibit 24 was marked for
9 identification.)
10 BY MR . PEEK :
11 Q. Let me have you take a look aty again, a document from
12 the United Statea Copyright Office. 1'11 represent to the
13 Court and counsel thatls where this came from .
14 It's Exhibit 24?
15 THE CLERK : Thatls correct .
16 BY MR. PEEK :
17 0. Let me switch with you and give you the -- these
18 are -- I <ïll represent to your these are the copyright numbers
19 for the copyriqhts whose numbers correspond to the allegations
20 in your counterclain and in your federal court complaint. '
21 A . Okay.
22 Q. Can you tell me which of these relate to pattern
23 recognltionz if any?
24 A . T did pattern recognition orlginally in the original
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i
l HP computers. It was expanded greatly when T got into the
2 Barrett Laboratories.
3 Q. Okay. Then let's gc back -- you still have the
4 Computermate. Which one of those is related to pattern
5 recognition?
6 A . The one dated -- the one -- 117-868, titled
7 ''Evapotranspiration Software.''
8 Q. And this is ent.itled -- and you say 'fcomputermate
9 Source Code for Hewlett-paekard Model 86z Evapotranspiration
10 Irrigahion Softwaren; is; that correct?
11 A . Yes.
12 Q. And the Hewlett:-packard Model 86# was that a computers
13 or was that one of those hand-held --
14 A . No .
15 Q. What was it?
16 A . I believe they were a1l computersw the 85z 86r and 87.
17 Q. They were before the IBM XTs?
18 A . PCs.
19 Q. The XTs that ran on the 88 -- or 8800 chip?
20 A . Yes.
21 Q . And you believe that this is an HP computer, the 86?
22 A . I believe it's a computer, yes .
23 Q . And certainly not what we know today or even
24 comparable to the IBM that started a11 this, with the 8800 chip
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-- 2 x.e
1 back in the mid-d8()s?
2 A . Are you askinq me --
3 Q. Tbat's not the same tbingz is it?
4 A . What do you meiln: ''the same thinge'?
5 Q. Well, it's not with the motherboardy the hard drives,
6 the chip?
7 A . It had a motherboard and a hard drive and a chip.
8 Q. And in what language did you write this code?
9 A. I think it was RPN. I'm not certain .
10 Q. Youbre not certain. Okay.
11 So then we have the blood gas analysis for anomaly
12 detection and the Evapotranspiration Irrigation for pattern
13 recognition; is that correct?
14 A . Yes.
15 Q . So the so-called copyrights at Barrett had nothing to
16 do with either anomaly detection or pattern recognition; is
17 that correct?
18 A . No .
19 Q. Okay. So which of those relates -- of the Barrett
20 relate to pattern detection and anomaly detection -- pattern
21 recognition and anomaly detection?
22 I'm trying, Your Honor.
23 A . The one that ends in 750 that speaks of microbiology
24 and the one that ends ân 009 that relates to anatomic
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J
1 pathology.
2 Q. Have you -- is there some record of what this source
3 code would look like at the copyright office, and do you have
4 an original copy of your filing showing the source code that
5 you copyrighted?
6 A . I believe the source code is included with the
7 copyright.
8 Q . Sor at least those two anomaly detection copyrights
9 that were in some -- excuse me . The anomaly and the pattern
10 recognition were transferred to Barrett, and you continued to
11 work on them and devetoped additional -- well, developed more
12 work in pattern recognition and anomaly detection at Barrett;
13 is that correct?
14 A. Yes .
15 Q. And is the pattern recognition source eode -- was it
16 also located first -- or loaded first on your office computer?
17 A . Um, I'm not certain.
18 Q. And when did you load it on that office -- your
'
19 computer at the eTreppid office?
20 A . î03, I believe .
21 Q. What month in $032
22 A . I'm thinking sometime in August, July, August.
23 Q. July and August of :03.
24 A . I'm tired. I think that was Lhe tlme frame.
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1 Q. Okay. And then did you, after July, August of 103,
2 write any additional source coder lines of code, to add to that
3 original source code of pattern recognltion that you loaded on
4 your office computer jn July and August?
5 A . For the detection?
6 Q . Yes.
7 A . No.
8 Q . And a1l your techs wrote pattern recognition. Did you
9 write any code on that'?
10 A . For Lhe actual detection?
11 Q. The pattern recognition that you say is yours and the
12 anomaly detection which you say ls yours -- nowr am I getting
13 the phrases wrong?
14 A . What you 're asking is, has the technology thatîs
15 detecting the pattern or the anomaly been changed since it was
16 at eTreppid? I think -- is that --
17 Q. Yes.
18 A . No .
19 Q. Thank you. 5o you haven't written any additional
20 code, is that correct, to that?
21 A . For the actual detection?
22 Q. That's correct.
23 A . No .
24 Q. And are you telling this Court that the only software
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l which was used to complete the government contracts was your
2 anomaly detection atnd your pattern recognition software?
3 A. I'm just looklng at something.
4 Q. Please answer my question, sir.
5 A. lem sorry. Go ahead .
6 Q . Are you telling this Court that the contracts that
7 were fulfilled by eTreppid were done -- were fulfilled solely
8 by your pattern recognition and your anomaly detection
9 software?
10 MR . FLYNN: Objection. Which contracts, Your Honor?
11 MR. PEEK: N 1y of the contracts.
12 THE COURT : Any of the contracts.
13 THE WITNESS ; You mean ever?
14 BY MR . PEEK :
15 Q. Yesr solely by your source code for anomaly deteetion
16 and pattern recognition.
17 A . Yes .
18 Q. Okay. And which contract -- tell this Court which
19 contract was fulfilled using just your anomaly detection and
20 your pattern reeognition.
21 A . The government agency that we --
22 Q . Oh: the government agency that we don't want to talk
23 about, is that the only one?
24 A . No.
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1 Q . Okay. Whieh other one where it was the sole produet
2 or sole source code software used to fuLfill the contract?
3 A . We had a conhraet with the Department of the Navy.
4 Q. Okay. And what was the nature of that contract?
5 A . Searching for an anomaly.
6 Q. Searching for an anomaly.
7 And was your software the only software used?
8 A . The one for detection?
9 Q . To Culfill that contract.
10 A . Yes .
11 Q. So none of the other eTreppid softwares were used
12 whatsoever?
13 A . Thatïs correct.
14 Q. And did you tell this unnamed agency that lt was
15 only -- that it was your software that was being usedz as
16 opposed to eTreppâd ?s?
17 A . I don't recall if 1 did or not.
18 Q. Was the contract with this unknown agency between you
19 or between eTreppid and the others?
20 A . eTreppid.
21 Q . Was the work runninq the software for detection
22 undertaken while you were at eTreppid?
23 A . Yes.
24 Q. And Was the contract with the Navy, the contract with
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:
1 eTreppid?
2 A . Yes.
3 Q. And was it a ccntract and the work undertaken on that
4 contract a11 performed at eTreppid?
5 MR. FLYNN: Objection. Lacks foundation.
6 THE WITNESS; You have to ask the question again.
7 THE COURT: Ask the question . I mean, I understand
8 the question .
9 BY MR. PEEK :
10 Q. Was the performance under the contract with the Navy
11 a11 undertaken by eTreppid on eTreppid premises?
12 A . Yes .
13 Q . Now, is pattern recognition a part of digital
14 compression product?
15 A . No.
16 (Plaintiff's Exhibit 25 was marked for
17 identification .)
18 BY MR . PEEK :
19 Q . Did you, from time to timez prepare Powerpoint
20 presentations?
21 A . Yes.
22 Q. Let me have you take a look at what has been marked as
23 Exhibit 25 and ask you to take a moment and examine it and tell
24 me whetherr after doing so, you can identify it as something
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wm. ? .-.<
1 youeve seen before today.
2 THE CLERK: J 1st for the recordz Your Honor,
3 Exhibit 24 was not offered.
4 MR. PEEK: I'k1 orfer Exhibit 24.
5 Thank youz Mr. Clerk.
6 MR. FLYNN: No objection.
7 THE COURT : It's ae ïitted.
8 This is 25?
9 MR . PREK: Yes, Your Honor.
10 (Plaintifr's Rxhibit 24 was admitted into evidence.)
11 THE WITNESS : Okay. Irve looked at it.
12 BY MR . PEEK :
13 Q. And did you prepare it?
14 A . No .
15 Q. Who prepared this?
16 A . I don't know.
17 Q . Have you seen it before?
18 A . It looks familiar.
19 Q. So whoy in March of 2001, would have been preparing a
20 Powerpoint presentation?
21 A . I can't recall.
22 Q. But you say this was not prepared by you?
23 A . I don 't -- you asked me if I recall preparing it.
24 Q. Was it prepared be you?
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1
1 A . 1 donft recall preparing it.
2 Q . Okay. But you prepared Powerpoint presentations very
3 similar to Lhiss did you not, sir?
4 A . 1 prepareci Powerpoint presentations .
5 Q. And do you know ITvimage Xpress?
6 A. I th knk it was the name that the company was coming up
7 with to name their products.
8 Q . But you're the chief technology officer at this time,
9 were you not?
10 A . Yes .
11 Q. And it was your data compression that the company was
12 using pursuant to vour contribution: was it not?
13 A . Yes.
14 Q. Okay. And you would have known what the business --
15 the technology business of the company was, would you not?
16 A . Yes.
17 Q. So you would have known about ITvdata Xpress, would
18 you not?
19 A . I donît recall seeing that particular --
20 Q. Okay. Well, ket me --
21 A . -- acronym .
22 Q. Let me have you -- let's see. One: two -- these are
23 not numbered -- two, three, four, five, six -- on page 7 of
24 this --
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1 A . What is - -
2 Q . The seventh page in.
3 A . What does it start wi/h?
4 Q. lt starts with ''TTvdata Xpress; ITvdataz' and it says
5 ''supports SAN-solutions based systems.''
6 A . Okay. 1 can't tell you .
7 Q . Okay. Thts is talking about digital compression
8 products, is it not?
9 A . Yes.
10 Q. And it's talking, on at least that seventh page, about
11 pattern-matching features, is it not?
12 A . f don /t see that .
13 THE COURT : Third down .
14 BY MR . PEEK :
15 Q. Third one down.
16 A . I must be on the wrong page, then .
17 MR . FLYNN : Itïs page 8.
18 THE WITNESS : I was on the sixth page.
19 MR . PEEK : Is it page 8, Counsel?
20 THE WITNESS: Okay. 1 got it. What's your question?
21 BY MR. PEEK :
22 Q . Pattern-matching features, that's pattern recoqnition,
23 is it not?
24 A . No.
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(
q
'
mee ' --
1 Q. It's not. Okay.
2 Now , 7 -- go t.o 8, 9, and then page 10 .
3 A . Got it.
4 Q. Now, does it say there ''lTvvideo has advanced features
5 like pattern and bj.t recognition''?
6 A . Yes .
7 Q. 5o eTreppido; technology: as of March 29, 2001, under
8 digital compression products, was at least saying that it had
9 pattern and bit recognttion as far as digital compressionr did
10 it not?
11 A . I see that there .
12 Q . And do you have any reason to --
13 A . I'm sorry .
14 Q. You don't agree with that, though: I would take it?
15 A . I don't recall at that time if it did or not.
16 Q. Wells you said you didn't put it on your computer
17 until sometime in 2003. This is 2001.
18 A . What ls the question?
19 Q. So: the pattern recognition addreased here came out of
20 the digital compression productx did it not?
21 A . No.
22 Q. Oh, it did not. Okay.
23 But at least it was represented or part of this
24 Powerpoint presentation as a product that eTreppid had in March
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. 1
1 of 2001?
2 A . I don rt recal L if it did or not.
3 Q. Well, you see j.t here, do you not?
4 A. 1 just said 1 didnbt make this document.
5 Q. I understand that. You don't have any reason to
6 believe that this fs not a true and correct --
7 A . I don't know if. it was true or incorrect.
8 MR. FLYNN : Your Honor, we need a correction on the
9 record. Mr. Peek pointed towards the green box and said that
10 what he ls now discussing was put on Mr. Montgomerybs computer
11 back at the time. The question was with regard to the green
12 box with regard to anomaly detection?
13 THE COURT: i l:hink it was . I think it was.
14 MR . PEEK: He also said, Your Honorr that he put his
15 pattern recognition on the same computer on the same time frame
16 in 2003 . Iïl1 go back.
17 THE COURT : 1 don't remember that. Why don't you ask
18 him. I really don ît remember.
19 MR . PEEK : I understandr Your Honor . Itîs late.
20 BY MR. PEEK :
21 Q. When did you put the pattern recognition source code
22 onto your computer?
23 A . T don 't recall the exact time frame. I'm tired.
24 Q. Would it have been similar to the time you put the
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i
. .
.,
I
l anomaly on?
2 A . lt could have been.
3 Q. Would ik have been any earlier than that?
4 A . 1 don't think so.
5 Q . Okay. So whenever you put -- whenever you testified
6 you puL the anomaly detection on would have been about the same
7 time you put the pattern recognition source code technology on,
8 again, in that little otfice, in that green block on Exhibit 1?
9 A . I'm not certain.
10 THE COURT: How much longer, Mr. Peek, do you think?
11 MR. PEEK: 1911 try to move this along: Your Honor.
12 THE COURT : 1 know, but 1'd like to have some idea how
13 much longer.
14 HR. PEEK: I'1L try to finish up, Your Honor, in a
15 half an bour.
16 THE COURT: Then there's going to be redirect: I would
17 assume?
18 MR . FLYNN : Yes, Your Honor.
19 THE COURT: So eeere looking at 10 o'clock, maybe?
20 It's getting kind of late. Let me just interrupt here because
21 I want to ask a question, because I don't want to be sitting
22 here, spending a11 this time and energy on this case -- wexre
23 looking at a case that actually is preempted by federal law .
24 And what T'm trying to understand -- I haven't seen the order
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. .
'
i .'
1 of remand. It's not in my fîle, anyway. And was hhis issue
2 presented to u'fudge McKibhen, and did Judge McKibben -- why did
3 Judge McKibben send tt back to state court if, in fact, it was
4 preempted?
5 MR. PEEK : That was the argument thah was made by
6 Mr. Logarz Your Honor.
7 MR. FLYNN : T wasnît there . Mr. Logar will have to
8 address it.
9 THE COURT: l direcked the question to them , so 1et
10 him answer itz and you can reply to it if you want to.
11 But do you have the order of remand? I don't.
12 THE CLERK: I don't have it.
13 THE COURT : A1t right. Mr. Logar?
14 MR. LOGAR: %he case was originally filed by the
15 plaintiffs in state court. We did a removal based on two
16 issues: One was the diversity of citizenship parties, and
17 subject matter jurisdiction. The federal court found that
18 neither applied and remanded it back to the state court.
19 THE COURT: Well, are you telling me that McKibb en
20 found that the subjeet matter, i.e., the issue of copyright,
21 was not preempted?
22 MR. LOGAR: No.
23 MR. PEEK : That's exactly what he found.
24 MR . LOGAR: N(b that is not What he found.
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l MR. PEEK: Your Honor --
2 MR. LOGAR: He followed the well-crafted complaint
3 rule, okay?
4 MR . FLYNN ; Your Honor, the issue that arose over in
5 federal court was real simple. When they puL in their original
6 complaint Lhat eTreppid Technologies was the California corp.,
7 we removed it on that basis that they pled it was a California
8 corp. They didn't reatâze they made a mistake . They told
9 Judge McKibben we made a mlstake, itls not a California corpw
10 it's a Nevada corp. Judge McKkbben said 1 have no choicer
11 therels no diversity.
12 In the interimr we filed a copyright claim --
13 counterclaim. So the issue of preemptkon or nonpreemption has
14 never been brought up or discussed or declded upon over in the
15 federal court.
16 MR . PEEK ; Your Honors I was there --
17 THE COURT: Hold on. What I want to know is -- I
18 mean, you know, I enjoy thts job. I get paid to do thia job.
19 But on the other hand, it troubles me that this issue that
20 where you're coming here and telling me: on February the 7th,
21 that a11 of this stuff is preempted, that the flrst time T hear
22 about that is when I'm handed this brief this evening. I don ft
23 think that 's a very diplomatic way to handle this issue with
24 this Court.
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1 MR . FLYNN : Your Honor, I agree with the Court.
2 THE COURT: I lteanr we have -- if you are correct, if
3 you are correct -- and 1 thînk the issue that really is whether
4 or not the material we're talking about was copyrighted back in
5 the e80s sometime. RtH: if youdre correct, then weeve just
6 wasted a whole 1ot of ti.me, and frankly, I would think that if
7 that was your position from way back when, 1 would have heard
8 about this before now.
9 MR. FLYNN: Your Honorr Mr. Logar and Mr. Pulver are
10 not copyright lawyers. We were just brought in. We only filed
11 our appearancesy Your Honor. You knowy we had to do all of
12 that by Federal Express. We literally have been doing this
13 research in the last aeveral days. Webve been brought in at
14 the 11th bour. An enormous amount of material is being dumped
15 in the Court's lap, and it is --
16 MR. PEEK : Your Honor, could 1 address this?
17 THE COURT: You can if you want. I mean, I've already
18 pretty much decided that what I'm going to do is, I m goinq to
19 go ahead and finish this matter. And Iïm going to hear this
20 matter and 1ïm going to make a decision in this matter, and
21 then if the federal court says I1n preempted, that's fine.
22 MR. PEEK : 1 could address why they did what they did,
23 but 1 won bt .
24 THE COURT: TL' doesn't matter.
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(.-,
) ... '
1 MR. PZEK; Okay. Thank you.
2 THE COURT REPORTER: Your Honor, 1 just want to say,
3 for khe record, T cannot go to 10 o'clock. Sorry .
4 THE COURT : You can 't or you wonlt?
5 THE COURT REPOBTER; I cannot.
6 THE COURT : How much longer do you Lhink you can go?
7 1 mean, if webre not going to go to the end, we might as well
8 stop right now .
9 THE COURT REPORTER : I'm very sorry, but the record
10 w1l1 suffer, and we 've got a criminal calendar, as you know, at
11 8:30.
12 THE COURT: 1 15ort of think I have to be here for
13 that: don't 1?
14 THE COURT REPORTER: Yes, Your Honor .
15 MR. PEEK : Your Honor, could I a5k Ms. Vohl to indulge
16 us just for a few more queations, because I want to make sure
17 that, one, the order that's currently there remains. And I
18 think the Court will do that . But 1 also want to ask for some
19 expansion of that. But may I have the Court's indulgence?
20 MR . FLYNN: I'm going Lo need to be heard on that,
21 Your Honor.
22 THE COURT: Well, T means we got a situation where
23 webve got a court reporter thatîs telling us she can lt really
24 go much further. You know' there's not much -- I can 't get out
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.w.. ) ... :
1 my whip and make her do that.
2 THK COURT RKPORTER; You have a Whip?
3 THE COURT : Yeah, I do.
4 MR. PEEK : Thanks, Cecilia.
S MR . FLYNN : You seem way too kind, Judge.
6 MR. PEEK: 1 would just ùsk some indulgence, Your
7 Honor , for fkv: minutes.
8 THE COURT: Can you hang in there for five?
9 THE COURT REPORTER: Yes.
10 THE COURT: A L) right . Let 's go flve-
11 BY MR . PEEK :
12 Q- Mr. Montgomeryv you've heard Sloanbs testimony about
13 conversations he had with you on January 3rd about why does it
14 appear that there are operations on the source server and the
15 ESA server, and you said he was cleaning up files.
16 A . I heard hiG testimony.
17 Q. Did you have that conversation with him?
18 A . No.
SA
19 Q. That never oceurred?
20 A . That's correct .
21 Q. So you were never cleaning up files on either the
22 source server or the ESA server?
' 23 A . Ever?
24 Q. In this time frame, from December through January --
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.
1
l A . I might have.
2 Q. -- of 605.
3 So you might have cleaned them up?
4 A . Yeah .
5 Q . So when Mr. Venable was askinq you questions about
6 what you were doing, you said you were cleaning up files .
7 A . No, no, I've never had a conversation with Mr. Venable
8 regarding this.
9 Q. And then you read the affidavit of Mr. Balls have you
10 not?
11 A . Yes.
12 Q. And Mr . Ball talks about the fact that you took his
13 hard drive and his workstation on or around December 19th or
14 20th?
15 A . Youfd have to show it to me.
16 Q. Wellz 1et me Just ask this question: Did you, on or
17 around December 19:h or 20tb, begin deleting certain eTreppid
18 source code files located on Barjinder Ball's hard drive?
19 A . No.
20 Q. Did you tell Barjinder Ball that you were deleting the
21 files on your -- his workstation for security reasons?
22 A . No.
23 Q. And did you tell Barjinder Ball that there remained
21 copies of those files that you were deleting on h1s server --
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1 or, excuse me, on his hard drive, on the source server, Lhat he
2 would still be able to access?
3 A . He has a direct connection to the source server.
4 Q. Did you tell him that, sir --
5 A . No .
6 Q . -- that you were deletinq files, that he could have
7 copies from the source server?
8 A . No .
9 Q. Okay. Did you delete any eTreppid source code files
10 on Venkata Kalluri's workstation tn or about December of 2005?
11 A . No .
12 Q. Did you have a conversation with Mr. Kalluri about the
13 fact -- in December of 2005, about the fact that source codes
14 on his workstation had been deleted?
15 A . No.
16 Q. Did Mr. Kalluri ever ask you or did you ever explain
17 to Mr. Kalluri that you were backinq up the source code at
18 eTreppid in or about late December of 20052
19 A . I don lt believe so.
20 Q. Well, did you or did you notz or you Just don't
21 believe you did?
22 A . No: I didnbt.
23 Q. Now, during the period of time between Christmas and
24 New Year's, if Mr. Kalluri needed an eTreppid source code filez
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1 that he would request it from you and then you would make a
2 copy of it?
3 A . Noh Lhat J recall.
4 Q. So i.t could have happened?
5 A . He didn't make a request of me. No .
6 Q. So a11 of these lndividuals who gave affidavitsz and
7 Mr. Zehang who testified and Mr. Venable who testified , are
8 lying about the fact that you deleted source code off of their
9 workstations and off of the source server?
10 MR. FLYNN; Objection, Your Honor.
11 THE COURT : Thatls argumentative. That's right out of
12 Law & Order.
13 MR. FLYNN: At that pointy 1 think an objection would
14 be best.
15 MR. PEER; That objection, Your Honors is that out oc
16 Law & Order ?
17 THE COURT : No, the question is, the one where the
18 guy -- I can't think of h1s name -- he asks that a1l the time.
19 MR . PEEK : Jack.
20 THE COURT: A11 riqht. Welre -- that was --
21 MR. PEEK: That was the end of my five minutes. I
' 22 have more questions, Your Honor. Let me ask one more . .
23 BY MR . PEEK :
24 Q. If the Court were to reconvene wiLh you at eTreppid's
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1 offices, would you be able to then show the Court and everybody
2 else where a1l this code is that eTreppid says has been
3 deleted?
4 MR. FLYNN: Objection. Your Honor, the Court cannot
5 order that.
6 MR . PEEK : T think the Court can order that .
7 THE COURT: I donft know if I could order that we
8 convene there, but 1 mkght be able to order that -- something
9 that would accomplish the same result. I 'm not sure.
10 MR. FLYNN; Objection. J do not believe, under the
11 13th Amendment, since this person has been fired, you ean make
12 him go back and do anything.
13 MR . PEEK : The Court can convene and show us where --
14 THE COURT: We dll see, when that day comes' whether I
15 can or not. I don lt know, franklyz if I can or if I canrt.
16 But I think I can order him to produce information that he may
17 have: and whether that is easier accomplished in another forumz
18 wefll just see, because I don't know the answer to that. And
19 so the questlon was that if that were a possibility: could you
20 do that?
21 BY MR . PEEK:
22 Q. Could you do that?
23 THE COURT: And 1111 let him answer that question .
24 THE WITNESS: It might be possible, but considering
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1 the fact that they took all the drives out of the machines and
2 moved them around, 1 would have no idea.
3 MR. PEEK: Your Honor, f still have the time tbat I
4 said T would take on cross in terms of things like promissory
5 notes and dilutions and the ltke, but 1111 reserve that for
6 another day.
7 THE COURT: 1 think what weAre going to have to do,
8 Counsel , is you're goâng to have to speak with Sheila, my
9 administrative assistantz and set this mahter for the first
10 earliest time that we làave availabler which I don't really know
11 myselfy because I don't keep my own calendar, what that is .
12 T've got a hearing that's similar to this on Thursday and
13 Friday involving similar kssues that 1 can't bump . Tomorrowr I
14 have a criminal calendar in the morning , and I have a scheduled
15 a1l afternoon tomorrow, don't I -- yeah, I'm told that I have a
16 week-long jury trial on Monday. Is that right?
17 THE CLERK: : believe -- I spoke with t&e attorneys .
18 They sald three or four days.
19 THE COURT: Aàl right. Wellz the only thing I can say
20 is the best thing to do is to talk to Sheila bright and early
21 in the mornîng and find out what welve got available . 1 '11
22 give you my earliest available time.
23 MR . PEEK : Can 1 tell the Court T have a horse show
24 with my daughter that Ifm attending on the 16th. 1 would ask
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1 the Court not to order me to continue this and miss my
2 daughterls horse show.
3 THE COURT: WC?LL, alL I'm saying is, youlre the people
4 that want this thtnq done expeditiously. And 11m aaying f'm
5 willing to accommodate that, and I'm wilYing -- you know, in
6 consideratkon of other counsel's calendars, as well, f'm
7 willing to schedule it after hours. Iem willing to schedule
8 it --
9 MR. PERK: This Saturday?
10 THE COURT: This Saturday? I got my kids, but I could
11 work around that if everybody else can work around 1t. Thatbrl
12 the problem. And that xncludes staffr and it includes the
13 court reporter. ft includes a11 of the attorneys --
14 MR. PKEK: Could we qo off the recordr Your Honor, for
15 Ms. Vohl, to have thls discussion, or not?
16 THE COURT: Well, al1 right. Let's do this. Letls go
17 ahead -- welll be in the recesa now until this hearing
18 reconvenes.
19 MR. PEEK: The order is contknued?
20 THE COURT; It is continued until such time as we can
21 reset it.
22 And, Cecilias you can go off the record right now,
23 unless counsel wants to put something on record, and we can
24 talk about schedultng and that sort of stuff.
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1 MR . FLYNN : 1 hate to impose on the court reporter:
2 but T have an argumenh a:s to why the order cannot continue.
3 lt's not leqally possible for this Court --
4 THE COURT : T haven 't even gotten to that.
5 MR. FLYNN : -- to continue the current TRO.
6 THE COURT : Because of the 15 days?
7 MR. FLYNN: Because of the 15 daysr because there ia
8 no record that has been created where a burden of proof has
9 been met under a11 of the elements to sustain a temporary
10 restraining order. There isn't even close to a record, as the
11 original judge found, that would warrant the kind of language
12 prepared by Counsel that is in the existing order.
13 Perhaps, Your Honor, there is some type of an order
14 about data compression technology, but the Court, under the
15 current state of the record, cannot possibly fashion an order
16 on anomaly detection when tbere is absolutely no testimony that
IR they even own it, 1et alone irreparable harm .
18 THE COURT: You said a couple of thïngs. T don't
19 think he was talking about the oriqinal ludge. I talked to the
20 original judge. He said, ''1 didn't decide anything.'' He said:
21 ''I just decided T wasn't going to hear it. I'm going to send
22 it to somebody else.'' And he decided nothing on the merits. I
23 talked to him today at noon.
24 MR. FLYNN : Your Honor, there is absolutely no showing
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1 in the record of irreparable harn. There's -- the worst that
2 could possibly happen if this order were vacated, under the
3 worst-case scenarloz is Lhat Mr. Montgomery would make a deal
4 with the government or somebody, money would be created, and
5 theyld have a claim for money . That's the worst-case scenario .
6 Sor how could equity and relief for irreparable harm on this
7 record possibly exist?
8 THE COURT: Are you asking me a question?
9 MR . FLYNN : Your Honor, 1'm saying that there is
10 simply no record here. The Court cannoty on hhis record: issue
11 a temporary restraiminq order for anomaly detection software
12 that these lawyers incorporated into the order thah this Court
13 has signed, let alone the issue of restraining him from talking
14 to anyone, talking to the United state:s Government: talking to
15 the individuals he regularly communicates with on this sublect.
16 He communicated with one of them today.
17 MR. PEEK: Thatïs in violation of the order: Your
18 Honor.
19 MR. FLYNN: Your Honor specifically asked us, if the
20 government comes in here and asserts the privilege, so We
21 immediately called an individual who basically said on the
22 telephone today, he'll have an attorney in this courtroom . Soz
23 whether it's a violation of the order --
24 THE COURT: I don't see the -- 1.11 also share with
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1 youw I talked with the United states Attorney today. And 1 was
2 told that they would get back to me, they hatAl't heard a word
3 about it, don 't know anything about it, didnlt seem to be
4 concerned about it. I gave them al1 the information that I
5 had. And like I'vf) been sayîng a11 day longr if theybre going
6 to show up, they show up, but they haven't shown up .
7 MR . FLYNN : In liqht: of what Jlve heard today: I'm
8 very confident thaï: someone is going Lo show up very shortly.
9 I doubt the U .S . Attorney's Office -- this would be an attorney
10 who normally represents this agency on confidential
11 information, from wllat we were told today.
12 THE COURT : Then 1et him show up .
13 MR. FLYNN : He'd probably be from Washington.
14 THE COURT: When we continue thls hhing, too, he can
15 show up .
16 MR. FLYNN: Well, the original order, Your Honor,
17 simply said theybve not met their shandard of proof. Of
18 course, they had al1 these declarations, all these affidavits,
19 most of which have now been shown to be extremely --
20 THE COURT: What original order? Judge Polaha's
21 original order?
22 MR. FLYNN: Yes, the original order. ''Plaintiff
23 eTreppid's application for temporary restraining order is
24 hereby denied without prejudice, and Plaintiff has not met the
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1 standard of proof as reguired by NRCP 65B and C at the meeting
2 with the Court:.'f
3 THE COURT : Well --
4 MR. FLYNN : And, if anything, Your Honor, not only has
5 there been nothing more added: what has been brought into the
6 court today has been completely brought into question .
7 %HE COURT: A11 right . Here's what 1'm going to do .
8 Weêre going to continue this hearing until the time that will
9 be set by counsel and my administrative assistant. I am going
10 to make a determination on whether or not the TRO will
11 continue. I will get you a written order no later than
12 5 o'clock tomorrowr and 1'11 fax it to a11 the parties .
13 MR. FLYNN : And then weRll be able to comment on it,
14 Your Honor, or submit --
15 MR. PEEK: Your Honor: until you make that decision,
16 could the order that exists today remain in place?
17 THE COURT; Until 5 olclock tomorrow.
18 MR . PEEK: Yes.
19 THE COURT: Thatês the order, until 5 o'clock
20 tomorrow. so kf I can 't do ite I can 't do itz but I think I
21 can.
22 MR . PEEK: Your Honor, can the order remain in place
23 until such time as the Court --
24 THE COURT: Well, 1'11 get the order done tomorrow.
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l 1'11 get it done if l've got to stay up tonight to do it# but
2 1'11 get it done .
3 And 1 do think that -- as f said, I had a conversation
4 with the judge. He told me he did not reach the merits on this
5 thing. And in my review of the material, I felt, when the TRO
6 was presented to me, that there was sufficient evidence to
7 support the TRO for the short period of time that we talked
8 about.
9 MR. FLYNN; Would Your Honor like a copy of this
10 order? If the clerk is willing, 1311 make a copy so you'll
11 have it.
12 THE COURT : Ifve got Judge Potahafs order. T've qo%
13 the order. It was not clear to me when he said ''without
14 prejudicezî' and so I suspected that there might be something
15 more to that, and I asked him .
16 So like 4 saidz I felt that when f reviewed itr after
17 he declined to do it, perhaps without prejudicez perhaps On the
18 merltsg perhaps not -- but when I reviewed it, I felt there was
19 enough for the TRO, and 1 granted it.
'
20 MR. FLYNN : Your Honor, I'd ask the Court, while I was
21 thinking, to seriously consider whether money damages uould be
22 adequate and whether irreparable harm has been met on these
23 facts.
24 THE COURT: If your client can't afford to feed his
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1 family, how is he going to afford to pay damages?
2 MR. FLYNN: 1 don't Lhink thatfs relevant in
3 determining whether or not a judgment uëtimately could be
4 awarded against --
5 THE CQURT: Youbre rlght. It's probably not relevant .
6 MR . FLYNN : -- Mr . M ontgomery .
7 MR. PEEK : This is a trade secret, too, in terms of
8 irreparable harm.
9 MR . FLYNN: Jt's a trade secret only in terms of
10 Mr. Montgomery; otherwiser he wouldnlt be here .
11 THE COURT: And this order is in effect unttl
12 5:00 p.m. tomorrows February 8th. That 's my decision.
13 MR. PEEK; And then youlll give us another one at that
14 time?
15 THE COURT: 1111 qive you another one at that time .
16 1111 tell you whether it's extended or whether it's not
17 extended, to what exLent.
18 We're in recess.
19 MR. PEEK: Thank you, Your Honor.
20 (Proeeedings concluded.)
21 -000-
22
23
24
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1 STATE OF NEVADA )
) ss.
2 COUNTY OF WASHOE )
3
4 I # CECILIA VOHL, Of f icial Reporter of the Second
5 Judicial District Cotlrt of the State of N'evada , in and f or
6 the County of Washoe, tjtl hereby certi f y;
7 That as such repozter, I was present in Department
8 No. 9 of the above court on satd date, time and houry and I
9 then and there took verbatim stenotype notes of the
10 proceedings had and testkmony given therein .
11 That the foregoing transcript is a fullr true and
12 correct hranscription of my said stenotype notes' so taken
13 as aforesaid. That the foregoing transcript was taken down
14 under my direction and control, and to the besh of my
15 knowledge: skill and ability.
16 DATED: At Renoy Nevada, this day of
17 , 2006.
18 %
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19 CECILIA VOHL, NV CCR #246
20
21
22
23
24
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 52 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
http://slidepdf.com/reader/full/et-v-dm-state-644-21-22-feb-7-2006-transcript-vol-2 260/294
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CECILIA VOHL NV CCR //246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 53 of 87
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CECILIA VOHL, NV CCR //246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 54 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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CECILIA VOHL, NV CCR //246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 55 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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CECILJA VoHL, NV CCR #246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 56 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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CECILIA VOHL, NV CCR. #246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 57 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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CECILIA VOHL, NV CCR#246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 58 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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CECEM VOHL, 'NV CCR #246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 59 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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decision l3: 14 96:23 deposits 1 06:1 1 194:5 determinations
25: 16 32:7 93:3 demazld: 85:9 Deqt 1:8 destroyilzg 139:16 12: 1
93:10 120:6.9 demonstrate 6:24 denvative221:5 139: 19 determine 14:7
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253: 15 255: 12 demtmstrated 7: 1 6 derivatives 222:5 136:22 1 l2: 16 l l 8: 14
declaration 64:18 45:5 47:4 158: 1B derives 21923 details 42:6 180:20 138:15 177:5
declarati/rl: 16:6 demonstrating describe 36:24 detecting229:l5 194:21 202:8
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5 107:20 120:20 determining 31:9
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declined 254:17 7:13 8:22 42: 10 12321
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156:5 142: 1,9 l 14:14 120:23 168:12 169:14 223:17 224:9
defense B:9 13:5 denied 146:23 l2l :2 129:22 174:5,11 176:17 228:11,11
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define 52:1 1 18:20 denies 186:5 209:20 191:5,19 193:22 112:20 137:21
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defrauded 95:18 20:5,10 21:7 describing 62:1 1 196:13 197:8,1 1 45:13 62:14
degree 99:15 1 12:3 22:21,23 24:2,1 1 124:7 160:22 203:12 204:2,24 64:16 133:19
196:21 27:17 37:1,1 5 description 164:9 205:14 206:1,4,7 183:7
delegated 97:13 38:16,23 39: 1 desenred 83:23 206:8,14 207:1,6 develops 14:3
delete 21 :24 245:9 49:9 50:21 52:16 desenes 122:7 207:8.19 208:20 devices 132:18
CECILIA VOHL. NV CCR #246 (775) 827-0672 .
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 60 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 61 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 62 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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CECILIA VOl1L NV CCR //246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 63 of 87
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CECILIA VOIIL NV CCR#246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 64 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 65 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 66 of 87
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 67 of 87
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 68 of 87
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 69 of 87
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CECILIA VOHL, NV CCR //246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 70 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
http://slidepdf.com/reader/full/et-v-dm-state-644-21-22-feb-7-2006-transcript-vol-2 278/294
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CECILIA VOl11o NV CCR#246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 71 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
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CECR,IA VOilL, NV CCR#246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 72 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
http://slidepdf.com/reader/full/et-v-dm-state-644-21-22-feb-7-2006-transcript-vol-2 280/294
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CECILIA VoHL. NV CCR //246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 73 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
http://slidepdf.com/reader/full/et-v-dm-state-644-21-22-feb-7-2006-transcript-vol-2 281/294
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 74 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
http://slidepdf.com/reader/full/et-v-dm-state-644-21-22-feb-7-2006-transcript-vol-2 282/294
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 75 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
http://slidepdf.com/reader/full/et-v-dm-state-644-21-22-feb-7-2006-transcript-vol-2 283/294
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CECILIA VOHL, NV CCR //246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 76 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
http://slidepdf.com/reader/full/et-v-dm-state-644-21-22-feb-7-2006-transcript-vol-2 284/294
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CECE.IA VOl1t,, NV CCR #246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 77 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
http://slidepdf.com/reader/full/et-v-dm-state-644-21-22-feb-7-2006-transcript-vol-2 285/294
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 78 of 87
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CECILIA VOHLs NV CCR#246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 79 of 87
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CECILIA VOHL, NV CCR#246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 80 of 87
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CECILIA VOHL, NV CCR #246 (775) 227-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 81 of 87
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CECILIA VoIm NV CCR #246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 82 of 87
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 83 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
http://slidepdf.com/reader/full/et-v-dm-state-644-21-22-feb-7-2006-transcript-vol-2 291/294
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 84 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
http://slidepdf.com/reader/full/et-v-dm-state-644-21-22-feb-7-2006-transcript-vol-2 292/294
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 85 of 87
8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2
http://slidepdf.com/reader/full/et-v-dm-state-644-21-22-feb-7-2006-transcript-vol-2 293/294
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Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed 05/28/08 Page 86 of 87