Haedicke Deposition Excerpt

7/28/2019 Haedicke Deposition Excerpt

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EXHIBIT 8

Case 2:10-cv-01823-JLR Document 725-8 Filed 07/03/13 Page 1 of 48


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In The Matter Of:

MICROSOFT CORPORATIONv.

MOTOROLA INC., et al.

___________________________________________________

MAXIMILIAN HAEDICKE - Vol. 1

June 14, 2013

___________________________________________________



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MAXIMILIAN HAEDICKE - 6/14/2013

(800) 869-9132 www.merrillcorp.com/law

Merrill Corporation - San Francisco

Page 21

1 09:21:5you expect that they would enter into a license and

2 09:21:5dismiss the case?

309:21:5

A Depends if they also agree on the other issues

4 09:21:5which are involved in License Agreement. The license

5 09:22:0fee is one of the important aspects, but there are other

6 09:22:0aspects which also have to be covered, and they will

7 09:22:1only have a full-fledged and valid contract if they

8 09:22:1agreed on all essential elements of the contract, and

9 09:22:1only then will they dismiss the case, or would they

10 09:22:2make -- would they render the case moot.

11 09:22:2Q Let's suppose that the parties do not agree on

12 09:22:2a license fee.

13 09:22:2Does the Orange Book decision say that the

14 09:22:3defendant must use the second alternative option of

15 09:22:3letting the patent holder set the royalty?

16 09:22:3A Please repeat the question.

17 09:22:3Q If the parties do not agree on a license fee --

18 09:22:4A Yes.

19 09:22:4Q -- does the Orange Book decision say that the

20 09:22:4defendant must use the second option of allowing the

21 09:22:4patent holder to set the royalty?

22 09:22:4A They have the option. They do not -- they

23 09:22:5must -- they have the option to do it.

24 09:22:5Q Let's talk about a proceeding in which the

25 09:22:5court -- a court exams the royalty that has been set by



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Page 22

1 09:23:0a patent holder through the alternative procedure.

2 09:23:0What evidence is considered in a proceeding

309:23:0

like that?

4 09:23:0MS. BERRY: Objection --

5 09:23:0THE WITNESS: This is --

6 09:23:1MS. BERRY: -- lack of foundation.

7 09:23:1THE WITNESS: -- this is speculative because

8 09:23:1I'm not aware of any rate setting procedures which have

9 09:23:1been brought to my attention. I have not taken part in

10 09:23:2any of those, so, of course, I cannot know the details,

11 09:23:2and I can only speculate, but my speculation would be

12 09:23:3that the parties will determine the rate according to

13 09:23:3the -- the standards which are used also when it comes

14 09:23:3to the determination of license fees; for example, when

15 09:23:4it's about damages or in cases like this. So I would

16 09:23:4assume that similar standards would be applied.

17 09:23:5BY MR. LOVE:

18 09:23:5Q And I think we discussed this earlier, so

19 09:23:5correct me if I'm wrong, but the standard used to

20 09:23:5evaluate the rate in that proceeding would be whether

21 09:23:5the rate was within the limits set by antitrust law; is

22 09:24:0that correct?

23 09:24:0A Yes.

24 09:24:0Q What happens if the rate set by the patent

25 09:24:0holder does not meet that standard?



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Page 23

1 09:24:0A In 315 procedure?

2 09:24:1Q Yes.

309:24:1

A What happens if --

4 09:24:1Q What happens if the court determines that the

5 09:24:1rate set by the patent holder is not within the limits

6 09:24:2of antitrust law; what will the court do?

7 09:24:2A Then a -- a lower rate will be set, which is

8 09:24:3still in the limits. The court will control the offer

9 09:24:3which has been given by the patent holder, if there is

10 09:24:4such an offer, and will determine whether this is within

11 09:24:4the boundaries of antitrust law, and if not, the rate

12 09:24:4will be set according to antitrust law and the other

13 09:24:5important laws which come into play.

14 09:24:5Q Does the license seeker have to pay the rate

15 09:25:0that was set by the patent holder until the court rules?

16 09:25:0A Payment means transfer of funds to the -- to

17 09:25:1the licensor? No. He has to escrow money, as much --

18 09:25:1as much money as he deems appropriate. If he wants to

19 09:25:2be on the absolutely safe side, he may depose estimate

20 09:25:2escrow as much money as the patent holder has demanded,

21 09:25:3but as I said before, of course, if he thinks this is

22 09:25:3too much, he has the option to go below the rate

23 09:25:4demanded by the patent holder and let this rate be

24 09:25:4reviewed, and, of course -- yeah, so.

25 09:25:4Q Do you know how long a proceeding -- a court



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Page 24

1 09:25:5proceeding under Section 315 to evaluate a patent

2 09:25:5holder's royalty rate takes?

309:25:5

A This is pure speculation because I'm not -- I'm

4 09:26:0not -- these have not taken place, as far as my

5 09:26:0knowledge is concerned. I could only guess.

6 09:26:0Q So have there been any reported German

7 09:26:0decisions that you are aware of that hold that the rate

8 09:26:1set by a patent holder under the alternative Orange Book

9 09:26:1process is acceptable?

10 09:26:1A As there are no reported 315 procedures, I'm

11 09:26:1not aware of that --

12 09:26:1(Telephonic interruption.)

13 09:26:2MR. LOVE: I'll -- I'll ask again just so we

14 09:26:2have a clear question and answer.

15 09:26:3Q As far as you are aware, there are no reported

16 09:26:3German decisions showing this second alternative Orange

17 09:26:3Book procedure?

18 09:26:3A The rate setting, the second -- the rate

19 09:26:3setting --

20 09:26:4Q Yes.

21 09:26:4A -- lawsuit? No, the rate has not been

22 09:26:4reported.

23 09:26:4Q So we believe -- you believe that the standard

24 09:26:4that a court would apply in that proceeding is

25 09:26:5whether -- is -- is to set a royalty within the limits



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Page 25

1 09:26:5of antitrust law; correct?

2 09:26:5A Yes.

309:26:5

Q But we don't know for sure because there are no

4 09:26:5decisions?

5 09:26:5MS. BERRY: Objection; form.

6 09:27:0THE WITNESS: Purely speculating. I wouldn't

7 09:27:0see any other standards which might be reasonable. I

8 09:27:0wouldn't see any of those standards could come into

9 09:27:1play, so it's not a -- yeah, I do not only believe it,

10 09:27:1there are strong arguments for that.

11 09:27:1BY MR. LOVE:

12 09:27:1Q Suppose that a patent holder rejected an Orange

13 09:27:2Book offer that a license seeker had made and that

14 09:27:2later --

15 09:27:2A Who was?

16 09:27:2Q Sure. Let me start again.

17 09:27:2So we are talking about the first Orange Book,

18 09:27:3not the alternative procedure, but the straightforward

19 09:27:3Orange Book offer.

20 09:27:3A Yes.

21 09:27:3Q So suppose a patent holder rejects an Orange

22 09:27:3Book offer and then a German court finds that the

23 09:27:4royalty offer was so high that that rejection was an

24 09:27:4abuse of antitrust law.

25 09:27:4A Yes.



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Page 27

1 09:28:5A Yes.

2 09:28:5Q What -- is -- let me ask it a different way.

309:28:5

Is there a reported decision of a German court

4 09:29:0that states that?

5 09:29:0A No.

6 09:29:0Q Has the European Commission made that claim?

7 09:29:0A No.

8 09:29:0Q Has the European Court of Justice made that

9 09:29:0claim?

10 09:29:1A No.

11 09:29:1Q Did you rely on Judge Robart's April 19th, 2013

12 09:29:2findings of fact and conclusions of law --

13 09:29:2A No.

14 09:29:2Q I'll just finish -- let me just finish the

15 09:29:2question.

16 09:29:2A Sorry.

17 09:29:2Q Did you -- that's okay.

18 09:29:2Did you rely on Judge Robart's April 19th

19 09:29:3findings of fact and conclusions of law in forming your

20 09:29:3opinions in this case?

21 09:29:3A No.

22 09:29:3Q Why not?

23 09:29:3A They haven't been produced to -- they haven't

24 09:29:4been given to me. I'm a expert on German law, and

25 09:29:4certainly not an expert on U.S. law, and it's not -- I



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Page 29

1 09:31:0issues are relevant for my opinion, because it's purely

2 09:31:0German law.

309:31:0

Q Are you familiar with the term "holdup" in the

4 09:31:1context of standard essential patents?

5 09:31:1A Yes.

6 09:31:1Q Do you agree that demanding excessive royalties

7 09:31:1from implementers of a standard is holdup?


9 09:31:2THE WITNESS: No.

10 09:31:2BY MR. LOVE:

11 09:31:2Q Do you agree that demanding royalties that

12 09:31:2exceed the value of the patented technology is holdup?

13 09:31:3A Maybe we have to come back to the definition of

14 09:31:3holdup. I don't know in which context you use the word

15 09:31:4"holdup" here.

16 09:31:4Q Well, I -- I guess my questions are part of

17 09:31:4understanding what you believe the definition of holdup

18 09:31:4is, so my first question was, "Do you agree that

19 09:31:4demanding excessive royalties from implementers of a

20 09:31:5standard is holdup?" And I believe that you said "No."

21 09:31:5My second question is: Do you agree that

22 09:31:5demanding royalties that exceed the value of patented

23 09:31:5technology is holdup?

24 09:32:0A It's pure -- it's negotiating a contract.

25 09:32:0People offer and people make counter-offers and then



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Page 39

1 09:43:0royalty, the Mannheim Court does not evaluate it as part

2 09:43:0of the infringement proceeding.

309:43:0

A This is very speculative because these -- these

4 09:43:0things have not -- such a case has not happened, but I

5 09:43:1assume that the same rules would apply; that because the

6 09:43:1test is -- if the objection offer of a license offer

7 09:43:2violates antitrust law and in order to determine whether

8 09:43:3or not there is a violation of antitrust law, you have

9 09:43:3to consider all relevant facts and specifics of the

10 09:43:3case, and all these specifics of the case together will

11 09:43:4bring the court to a evaluation whether or not an offer

12 09:43:4is -- an offer is in accordance with antitrust law.

13 09:43:5Q So Microsoft did make an Orange Book offer in

14 09:43:5Mannheim; correct?

15 09:44:0A That's what I understand.

16 09:44:0Q Did the Mannheim Court find that Microsoft did

17 09:44:0not offer a reasonable rate?

18 09:44:0A The Mannheim Court said that it was not a

19 09:44:1violation of antitrust law if Motorola did not accept

20 09:44:1this offer.

21 09:44:1Q Did the Mannheim Court find that Microsoft did

22 09:44:2not offer a reasonable rate?

23 09:44:2MS. BERRY: Objection; asked and answered.

24 09:44:2THE WITNESS: Reasonable? If you take the word

25 09:44:3"reasonable" and say that -- and as I said before,



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Page 40

1 09:44:3reasonable and antitrust are identical standards -- then

2 09:44:3the same standards apply, and then you can derive from

309:44:4

the decision that the -- the offer of Microsoft was not

4 09:44:4such that it would be in accordance -- the rejection of

5 09:44:5the offer would be in accordance with antitrust law.

6 09:45:0(Exhibit 1 was marked for identification by the

7 09:45:0Court Reporter.)

8 09:45:0MR. LOVE: So I'm going to hand you what's been

9 09:45:0marked as Exhibit 1. Exhibit 1 bears the Bates stamp

10 09:45:0MOTM_WASH1823_0602118.

11 09:45:1Q If you turn to the second page, you will see

12 09:45:1that this is a translation of the Mannheim Court's

13 09:45:2judgment on May 2nd, 2012?

14 09:45:2A Mm-hmm.

15 09:45:2Q Could you turn to page 43 of the English

16 09:45:2translation of the decision. Bears the Bates stamp

17 09:45:3ending in 161.

18 09:45:3On page 43 the last sentence before Section C

19 09:45:3says, "The taking of evidence on the issue of whether

20 09:45:4the offer is reasonable (in any event) is thus not

21 09:45:4required."

22 09:45:4Do you see that?

23 09:45:4A Yes.

24 09:45:4Q So the Mannheim Court did not evaluate whether

25 09:45:4Microsoft's offer was reasonable; correct?



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Page 41

1 09:45:5A No. You have to read it differently. The

2 09:45:5taking of evidence is not required. The taking of

309:45:5

evidence. So the idea is to have a swift and clear

4 09:46:0infringement action, and in this infringement -- this

5 09:46:0infringement action should not be overloaded by taking

6 09:46:0evidence in order to determine the reasonableness of the

7 09:46:1offer because then you would not have a swift and clear

8 09:46:1infringement action.

9 09:46:1The idea of the -- of the decision is to say if

10 09:46:2a rate has been set, then it's okay. Otherwise, if

11 09:46:2there's unclearness as to the rate -- we don't want to

12 09:46:2overfreight -- to overload this infringement proceeding

13 09:46:3with the -- with these issues -- then the parties should

14 09:46:3go the other way, should go to a Section 315 proceeding.

15 09:46:4And then in the rate setting proceeding of this -- this

16 09:46:5other alternative, all these issues would -- would be

17 09:46:5able -- would come up. So I read it differently.

18 09:46:5Q Did the Mannheim Court evaluate whether

19 09:46:5Microsoft's offer was RAND?

20 09:47:0A It evaluated whether the rejection of

21 09:47:0Microsoft's offer was a violation of antitrust law, and

22 09:47:1it came to the conclusion that there are serious doubts

23 09:47:1as to whether the -- the offer is -- is high enough

24 09:47:1under all circumstances, so the rejection of this offer

25 09:47:2was no violation of antitrust law, and, accordingly, you



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Page 42

1 09:47:2might say it was not RAND.

2 09:47:3Q So you believe the Mannheim Court says

309:47:3

Microsoft's offer was not RAND?

4 09:47:3MS. BERRY: Objection; form, misstates

5 09:47:4testimony.

6 09:47:4THE WITNESS: It says by -- the Mannheim Court

7 09:47:4said, Microsoft's offer is not such that the rejection

8 09:47:4of this offer is a violation of antitrust law.

9 09:47:5BY MR. LOVE:

10 09:47:5Q And you believe that standard is the same as

11 09:47:5RAND?

12 09:47:5A I believe that RAND and accordance with

13 09:48:0antitrust law is similar.

14 09:48:0Q So the "R" in RAND stands for reasonable;

15 09:48:0correct?

16 09:48:0A Yes.

17 09:48:0Q The Mannheim Court did not consider any

18 09:48:1evidence as to whether Microsoft's offer was reasonable;

19 09:48:1correct?

20 09:48:1A It made a high-level evaluation of the issues.

21 09:48:2Q But it did not take any evidence on whether

22 09:48:2Microsoft's offer was reasonable; correct?

23 09:48:2A That is correct, as it is not part of the this

24 09:48:2infringement procedure.

25 09:48:3Q Microsoft made an Orange Book offer 2 eurocents



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Page 43

1 09:48:3per unit, up to 10 million units per year, and

2 09:48:31 eurocent per unit for units beyond 10 million.

309:48:3

Is that your understanding?

4 09:48:4A This is my understanding.

5 09:48:4Q And Motorola rejected that offer; correct?

6 09:48:4A This is how I read the facts.

7 09:48:4Q And the Mannheim Court found that Motorola's

8 09:48:4rejection was acceptable because it was not an obvious

9 09:48:5antitrust violation; correct?

10 09:48:5A Yes.

11 09:48:5Q Did the Mannheim Court apply a version of the

12 09:49:0Orange Book procedure that is more favorable to a patent

13 09:49:0holder than the original Orange Book procedure?


15 09:49:1THE WITNESS: More favorable to the?

16 09:49:1MR. LOVE: Patent holder.

17 09:49:2THE WITNESS: I think you -- it's very

18 09:49:2difficult to say "yes" or "no" to that because the -- in

19 09:49:2the Orange Book decision, the general -- the general

20 09:49:3guidelines were set up, and then it's the -- the duty of

21 09:49:3the lower courts to further develop it, and it's -- the

22 09:49:3Mannheim Court is fully in the range of what the German

23 09:49:4Supreme Court has said, but, of course, what these --

24 09:49:4this general street, which has been shown by the German

25 09:49:5Federal Supreme Court, has to be defined more clearly



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Page 51

1 09:58:2BY MR. LOVE:

2 09:58:2Q The Mannheim Court thought Microsoft's offer

309:58:2

was too low; correct?

4 09:58:2A This is how I understand the decision, yes.

5 09:58:3Q Would you agree that Microsoft would have

6 09:58:3needed to make a higher Orange Book offer to avoid an

7 09:58:3injunction under the Orange Book procedure?

8 09:58:3A No. They could have easily taken the other

9 09:58:4road.

10 09:58:4Q If they were going to use the first

11 09:58:4alternative, the first alternative Orange Book

12 09:58:4procedure, and made a new offer to avoid an injunction,

13 09:58:5the offer would have had to be higher than its initial

14 09:58:5offer; correct?

15 09:58:5A Yes.

16 09:58:5Q What number would Microsoft have needed to

17 09:58:5offer to avoid an injunction?

18 09:59:0A I have no opinion on that because all very much

19 09:59:0depends on the specifics of the -- of the case, and I'm

20 09:59:0not aware of all these specifics, and as there is the

21 09:59:1risk, as it is difficult to assess that, this is why we

22 09:59:1have the other procedure, the 315 procedure, so I cannot

23 09:59:1comment on how much money would have been necessary to

24 09:59:2have a RAND rate. I can just say, if there's

25 09:59:2uncertainty as to this, then it's advisable to use the



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Page 52

1 09:59:2other road, the 315 road.

2 09:59:3Q Did you ask anyone at Motorola what number

309:59:3

Microsoft would have needed to offer to avoid an

4 09:59:3injunction?

5 09:59:3A No. No.

6 09:59:3Q Why not?

7 09:59:3A Because this is calculation. This is -- it's

8 09:59:4outside my expertise. This is economic and -- and

9 09:59:4business, and so it's not -- I'm not able to comment on

10 09:59:4this.

11 09:59:4Q I understood the conclusion of your expert

12 09:59:5report was that Microsoft could have avoided an

13 09:59:5injunction in Germany by following the Orange Book

14 09:59:5procedure; correct?

15 09:59:5A That's correct.

16 10:00:0Q But you don't know what Motorola would have

17 10:00:0done if Microsoft had made a higher offer under the

18 10:00:0first Orange Book procedure?

19 10:00:0A It's pure speculation, but if it's high enough,

20 10:00:0then I assume it would have been accepted. If they

21 10:00:1don't agree, the two parties, then it's advisable to go

22 10:00:1the other way, to use the other road.

23 10:00:1Q Would Microsoft have been able to avoid an

24 10:00:2injunction in Mannheim by offering to accept a license

25 10:00:2at the RAND rate set by Judge Robart of less than half a



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Page 53

1 10:00:2eurocent?


310:00:3

THE WITNESS: I'm not -- I'm not -- I have no

4 10:00:3opinion on that as I don't know the details.

5 10:00:3BY MR. LOVE:

6 10:00:3Q Microsoft's Orange Book offer that was rejected

7 10:00:3was 2 eurocents, so if Microsoft had offered half a

8 10:00:4eurocent, would it have been able to avoid an


10 10:00:4A If it's less than what has been given here,

11 10:00:4it's rather unlikely.

12 10:00:5Q Rather unlikely, or no?

13 10:00:5A If it's lower than what has been -- well, the

14 10:00:5court said -- the Mannheim Court said what has been

15 10:00:5offered is so low that the rejection is not -- is not a

16 10:01:0breach of antitrust law as it is conceivable that the

17 10:01:1rate has to be higher.

18 10:01:1So if the rate would have been lower, it is --

19 10:01:2I cannot second-guess what the court would have said,

20 10:01:2but it's -- it's pure logic that if it's lower, I assume

21 10:01:2that also the same standard would have been applied, and

22 10:01:2the same standard would have taught that the rejection

23 10:01:3of such an offer is a violation of European antitrust

24 10:01:3law.

25 10:01:3Q If Microsoft had escrowed a sufficient amount



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Page 56

1 10:22:5be license fee, the license product, a rendering of

2 10:22:5account, if the -- the -- the patent as been made use of

310:23:0

before, so these are the elements which have been --

4 10:23:0have been decided about by the court. If further issues

5 10:23:1have to be included in such a License Agreement or not

6 10:23:1is pure speculation, I have no opinion on that.

7 10:23:2Q Okay. Let's go back to what happened in

8 10:23:3Mannheim.

9 10:23:3If Microsoft had followed the second

10 10:23:3alternative of the Orange Book procedure, Motorola would

11 10:23:3have set a higher royalty than the 1 to 2 eurocents that

12 10:23:3Microsoft had offered; correct?


14 10:23:4THE WITNESS: I have no opinion on that.

15 10:23:4BY MR. LOVE:

16 10:23:4Q Why would Motorola have set a lower royalty?

17 10:23:4A I am not aware of -- the business evaluations,

18 10:23:5which are behind such an offer, are not -- have not come

19 10:23:5to my attention. I -- I can only speculate, but, of

20 10:23:5course, we can assume that.

21 10:24:0Q If Microsoft had challenged the rate set by

22 10:24:0Motorola by bringing a separate proceeding later and the

23 10:24:0court set the royalty, the royalty set by the court

24 10:24:1would also be higher than a -- than the 1 to 2 eurocents

25 10:24:1that Microsoft had offered; correct?



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Page 57


2 10:24:1THE WITNESS: This is -- this is speculation

310:24:2

because you apply a different standard of -- there of

4 10:24:2assessing the -- the license fee, and as you hear

5 10:24:3evidence and as further circumstances will be looked

6 10:24:3upon and be considered by the court, it -- it's just a

7 10:24:4different way of assessing. It can be that it's higher.

8 10:24:4It can even be -- if the evidence is such that points in

9 10:24:5this direction might even be lower. It's just a new

10 10:24:5story then, and it will be assessed independently, and

11 10:24:5the court will -- will find what is the adequate and --

12 10:25:0and FRAND and entered as conformed license fee. It can

13 10:25:0be higher. It could even be lower. It can be the same.

14 10:25:1I -- I cannot say. This is speculation. But, again,

15 10:25:1the -- the standards, which are used to determine the

16 10:25:1license fee, they are the relevant thing, and they take

17 10:25:2into account the standards. This might lead to one --

18 10:25:2to one result or to the other.

19 10:25:2BY MR. LOVE:

20 10:25:3Q When we talked earlier about the second

21 10:25:3alternative, I thought I understood your position to be

22 10:25:3that the same standard would be used to evaluate and

23 10:25:4determine a correct license fee. It's a license fee

24 10:25:4that is not objectionable --

25 10:25:4A Yes.



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Page 58

1 10:25:4Q -- under antitrust laws.

2 10:25:4A Yes.

310:25:4

Q So if the court is setting a royalty, it's

4 10:25:5going to set a royalty that is not objectionable under

5 10:25:5antitrust law; correct?

6 10:25:5A Yes.

7 10:25:5Q The Mannheim Court said that Motorola's

8 10:26:0rejection of the 1-to-2-eurocent offer was not

9 10:26:0objectionable under antitrust law; right?

10 10:26:1A Can you repeat, please.

11 10:26:1Q Sure.

12 10:26:1Microsoft offered 1 to 2 eurocents. Motorola

13 10:26:1rejected it, and the Mannheim Court said that rejection

14 10:26:2did not violate antitrust law.

15 10:26:2A Yes, that's correct.

16 10:26:2Q But you said just now that in a later

17 10:26:2proceeding, if a court is setting the rate, it might set

18 10:26:3a rate lower than what Microsoft offered.

19 10:26:3A It's -- it's speculation, and it also is a

20 10:26:3question of the German law of civil procedure and

21 10:26:4evidence. You know, in the -- in the first proceeding

22 10:26:4the courts will also assess what has been written in the

23 10:26:4briefs without taking evidence, and so they will make

24 10:26:5their -- they will form their opinion on what has been

25 10:26:5written and submitted by the parties.



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Page 59

1 10:26:5In a second -- the second case of the rate

2 10:27:0setting procedure, all evidence, all economic

310:27:0

specialists may or may not be presented to the court,

4 10:27:1and the court will just have a very different basis to

5 10:27:1found its -- its -- for founding its opinion -- for

6 10:27:2forming its opinion, and it's -- it is possible that

7 10:27:2it's higher. It is maybe, well, possible, but it's

8 10:27:2speculation, but as there is another -- different

9 10:27:3standard of how the facts are evaluated, it may even be

10 10:27:3lower, but, again, this is pure speculation.

11 10:27:3The only thing I want to say, this is a

12 10:27:4completely new story where all facts are assessed newly,

13 10:27:4and then the court will -- will find it -- will have its

14 10:27:5decision -- will render its decision on the basis of the

15 10:27:5facts which it has evaluated according to the law of

16 10:27:5civil procedure in this second proceeding.

17 10:28:0Q So the court, in the second proceeding, would

18 10:28:0apply the same standard, but it might reach a different

19 10:28:0result because it considers more evidence; is that

20 10:28:1correct?

21 10:28:1A It's just a different standard of review, a

22 10:28:1different standard of review of the first -- the review

23 10:28:1you have in your first -- in the first -- in the first

24 10:28:2road, that it's the -- the question whether or not it is

25 10:28:2obvious. So the idea is you have a -- you look into the



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1 10:28:3briefs, you evaluate what the parties have said, and you

2 10:28:3form your opinion by not going into -- especially by not

310:28:3

taking evidence, so this is maybe specific to German

4 10:28:4law.

5 10:28:4In the second proceeding, the proceeding will

6 10:28:4be a full-fledged proceeding, and the full-fledged

7 10:28:4proceeding will be more facts; more evidence will be

8 10:28:5assessed. For example, if you take a preliminary

9 10:28:5injunction, you also have a different standard of -- of

10 10:28:5evidence, which is lower than in -- in a full

11 10:29:0proceeding. And so it's just a different way of

12 10:29:0assessing facts and -- and hearing evidence or not

13 10:29:1hearing evidence.

14 10:29:1Q So I want to make sure I understand your

15 10:29:1position on what would have happened under the Orange

16 10:29:2Book. So this will be sort of a long question. I'll

17 10:29:2ask you a couple things, and just stop me if anything

18 10:29:2doesn't make sense.

19 10:29:2Under the Orange Book procedure, as I

20 10:29:2understand it, there are three paths for Microsoft to

21 10:29:3avoid an injunction by agreeing to pay a royalty.

22 10:29:3First, Microsoft could have made an Orange Book

23 10:29:3offer that Motorola accepted; correct?

24 10:29:4Second, Microsoft could have let Motorola set a

25 10:29:4royalty; correct?



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1 10:30:4royalty a court would set?

2 10:30:4A I can only say what the basis for a court

310:30:4

decision would be. But as I don't know all the relevant

4 10:30:5facts and as I didn't hear all the evidence, which would

5 10:30:5come into play, of course I cannot give a -- give you a

6 10:30:5number, certainly not.

7 10:30:5Q So in November of 2012, there was a trial, as

8 10:31:0part of this case, to determine a RAND royalty for

9 10:31:0Motorola's patents.

10 10:31:0Are you aware of that?

11 10:31:0A No.


13 10:31:0BY MR. LOVE:

14 10:31:1Q So I'll represent to you that at that trial,

15 10:31:1there was expert testimony from technical experts and

16 10:31:1economic experts about the appropriate RAND royalty, but

17 10:31:2you haven't reviewed the transcript of that trial;

18 10:31:2correct?

19 10:31:2A No, I haven't reviewed it.

20 10:31:2Q So you don't know whether the evidence

21 10:31:2presented in the November 2000 trial -- 2012 trial in

22 10:31:3this case was in any way comparable to the evidence that

23 10:31:3would be considered by a German court that was setting a

24 10:31:3royalty?

25 10:31:3A I have no opinion on that.



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Page 78

1 10:52:3THE WITNESS: Please repeat.

2 10:52:3BY MR. LOVE:

310:52:3

Q If Microsoft's Orange Book offer was higher

4 10:52:4than RAND, Motorola refused to enter a license on RAND

5 10:52:4terms; correct?

6 10:52:4MS. BERRY: Objection to form.

7 10:52:4THE WITNESS: It's speculation. I don't know

8 10:52:4if -- I cannot assess Microsoft's offer.

9 10:52:5BY MR. LOVE:

10 10:52:5Q For the purposes of this case, the RAND royalty

11 10:52:5for all of the patents is less than half a eurocent.

12 10:52:5Microsoft offered 2 eurocents for only two patents. So

13 10:53:0Microsoft's offer was higher than RAND. Let's assume

14 10:53:0that for my question.

15 10:53:0If that's true, Motorola refused to enter a

16 10:53:1license on RAND terms; correct?

17 10:53:1MS. BERRY: Objection; form, incomplete

18 10:53:1hypothetical.

19 10:53:1THE WITNESS: It depends -- it's -- it depends

20 10:53:1on all further -- on the further -- further circumstance

21 10:53:1of the case. I don't know the specifics of the case.

22 10:53:2I'm not able to -- to assess the business evaluations

23 10:53:2behind this, so I can't just not comment on that.

24 10:53:3BY MR. LOVE:

25 10:53:3Q Why are business evaluations relevant to my



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Page 79

1 10:53:3question?

2 10:53:3A I don't know the background of the offer. I

310:53:3

don't know the specific business interests of -- of

4 10:53:3Motorola and of Microsoft, the strategic ideas, how to

5 10:53:4make use of the technology. I just don't have enough

6 10:53:4background to answer this question.

7 10:53:4Q Is it your position that a standard essential

8 10:53:5patent holder can refuse to enter a license on RAND

9 10:53:5terms because it has other business interests?

10 10:53:5A No, but the -- in order to find what RAND is,

11 10:54:0you have to look into all specifics of the case,

12 10:54:0including the special interests of the parties in

13 10:54:1this -- in this case, and, of course, license fee is a

14 10:54:1very important issue, no -- no doubt about that, but

15 10:54:1there may be other surroundings. There may be other

16 10:54:1interests which may -- may alter the -- the assessment

17 10:54:2of interest.

18 10:54:2Q Let's presume for the purposes of my question

19 10:54:2that everything you just mentioned was already addressed

20 10:54:2in this case in a trial in November 2012 that determined

21 10:54:3the RAND royalty.

22 10:54:3Can you assume that that's correct? For the

23 10:54:3purposes of my next question, can you assume that all

24 10:54:4those business interests that you just mentioned were

25 10:54:4already tried in this case and that the judge has



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Page 80

1 10:54:4determined that, addressing all of those business

2 10:54:4interests, the RAND royalty is less than half a

310:54:5

eurocent.

4 10:54:5If that's true, then Motorola refused to enter

5 10:54:5a license on RAND terms; correct?

6 10:54:5MS. BERRY: Objection; form, asked and

7 10:55:0answered, outside the scope of his expert report.

8 10:55:0THE WITNESS: We -- I can only apply German

9 10:55:0law, and the findings of Justice Robart are -- are

10 10:55:1certainly not binding for the German court, and the

11 10:55:1German court will make -- will have to make its own

12 10:55:1evaluation, considering all the facts according to

13 10:55:2German law of civil procedure, and so it may be; it may

14 10:55:2not be, but I don't know what will come out, so it's

15 10:55:2just very speculative. I cannot give you a answer to

16 10:55:3that. I have no opinion.

17 10:55:3BY MR. LOVE:

18 10:55:3Q So a RAND royalty determined by a U.S. court

19 10:55:3and a RAND royalty in Germany are two different things;

20 10:55:3is that correct?

21 10:55:3A Not necessarily, but it's -- the German patent

22 10:55:4procedure is completely independent and has its

23 10:55:5different law of civil procedure, and all facts will be

24 10:55:5assessed by the German courts, and, of course, German

25 10:55:5judges will look what the American judges have done, but



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Page 81

1 10:55:5they are by no means bound by what has been done in

2 10:56:0the U.S. -- in the U.S., so it's completely different

310:56:0

and completely independent from each other.

4 10:56:0Q Is European antitrust law binding on German

5 10:56:1courts?

6 10:56:1A Yes.

7 10:56:1Q Are you aware that under European antitrust

8 10:56:2law, the European Commission has initiated proceedings

9 10:56:2against Motorola based on its assertion of standard

10 10:56:3essential patents against Apple?

11 10:56:3A I'm not familiar with the details, but I

12 10:56:3have --

13 10:56:3Q And the European Commission has also initiated

14 10:56:3proceedings against Samsung for its assertions of

15 10:56:4standard essential patents?

16 10:56:4A Sorry. I'm aware of the Samsung proceedings.

17 10:56:4I have --

18 10:56:5(Exhibit 2 was marked for identification by the


20 10:56:5MR. LOVE: I'm handing you what's been marked

21 10:56:5as Exhibit 2. This is a European Commission press

22 10:57:0release that's dated December 21st, 2012.

23 10:57:1Q Have you seen this document before?

24 10:57:1A Yes.

25 10:57:1MS. BERRY: Counsel, have you produced this



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Page 91

1 11:07:0A No, because the Orange Book procedure gives

2 11:07:2a -- the Orange Book procedure makes sure and clarifies

311:07:2

that only a person which is really willing to negotiate,

4 11:07:3which is sincere, is -- can -- can avoid an injunction.

5 11:07:4Only a mere willingness to negotiate is not -- is not

6 11:07:4sufficient.

7 11:07:5Q The European Commission's view in the document

8 11:07:5we just read is a patent holder cannot seek injunctive

9 11:07:5relief against a willing RAND licensee; correct?

10 11:08:0A Yes.

11 11:08:0Q Microsoft made an offer to Motorola; correct?

12 11:08:0A Yes.

13 11:08:0Q The Mannheim Court applied a version of the

14 11:08:1Orange Book procedure where Motorola could reject

15 11:08:1Microsoft's offer --

16 11:08:1A Yes.

17 11:08:1Q -- unless the rejection would be an obvious

18 11:08:1antitrust violation; correct?

19 11:08:2A Yes.

20 11:08:2Q Does that procedure satisfy European law as set

21 11:08:2out by the European Commission's preliminary view?


23 11:08:2THE WITNESS: The Commission's view that the

24 11:08:4acceptance of binding third-party determination for the

25 11:08:4terms of a FRAND license in the event that bilateral



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Page 92

1 11:08:4negotiations would come to -- to conclusion is a clear

2 11:08:4indication -- I don't see that the -- that Microsoft has

311:09:0

surrendered to a binding third-party determination

4 11:09:0because it didn't use a second road. It didn't use the

5 11:09:1315 road.

6 11:09:1BY MR. LOVE:

7 11:09:1Q Were you aware that, at least as of September

8 11:09:12011, Microsoft declared that it was willing to enter

9 11:09:1into a license on RAND terms for Motorola's H.264

10 11:09:2patents?

11 11:09:2A I'm familiar with the basics of the -- of this

12 11:09:2lawsuit.

13 11:09:2Q So you understand that Microsoft told the court

14 11:09:3and Motorola that Microsoft was seeking and was ready

15 11:09:3and willing to take a license to Motorola's H.264

16 11:09:3patents on RAND terms?

17 11:09:3A Yes.

18 11:09:3Q And you understand that, in this case,

19 11:09:4Microsoft seeks a judicial determination of a royalty

20 11:09:4rate for Motorola's H.264 patents?


22 11:09:4THE WITNESS: I don't see there is Microsoft

23 11:09:5seeks a judicial determination, but Microsoft proposed a

24 11:09:5certain license fee which was declined by Motorola, and

25 11:10:0then the court made a review, and Microsoft just did not



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Page 93

1 11:10:0seek a final evaluation of the license fee which would

2 11:10:1have only happened under the 315 procedure.

311:10:1

(Exhibit 5 was marked for identification by the


5 11:10:1MR. LOVE: Let's take a look at another

6 11:10:2exhibit. I've marked, as Exhibit 5, Microsoft's

7 11:10:2complaint in this case.

8 11:10:3Q Could you turn to paragraph 9, which you will

9 11:10:3find at the bottom of page 4. Paragraph 9 begins

10 11:10:4"Accordingly, Microsoft seeks," and I'm going to skip

11 11:10:4letter i there, and I'm going to go to the ii, Roman ii,

12 11:10:4"a judicial declaration" -- I apologize. I intend to go

13 11:10:5to Roman iii, "a judicial accounting of what constitutes

14 11:10:5a royalty rate in all respects" -- let me turn the

15 11:10:5page -- "consistent with Motorola's promises for WLAN

16 11:11:0patents identified as 'essential' by Motorola and for

17 11:11:0H.264 patents identified by Motorola."

18 11:11:0Do you see that?

19 11:11:0A Yes.

20 11:11:0Q So Microsoft asked Judge Robart in this case to

21 11:11:1determine a RAND royalty for Motorola's H.264 patents,

22 11:11:1and the trial in November 2012, I will represent to you,

23 11:11:2determined such a royalty rate.

24 11:11:2So Motorola's -- sorry. Microsoft's

25 11:11:2complaint -- as you can see from the date at the top,



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Page 94

1 11:11:2this was filed in November of 2010. By September 2011,

2 11:11:3Motorola knew Microsoft was willing to enter into a

311:11:3

license on RAND terms that would be determined by the

4 11:11:3U.S. court; correct?

5 11:11:3A Yeah.

6 11:11:3MS. BERRY: Objection; form, outside the scope

7 11:11:4of his expert report.

8 11:11:4BY MR. LOVE:

9 11:11:4Q Motorola continued to pursue an injunction in

10 11:11:4Germany after September 2011; correct?

11 11:11:4A Yes.

12 11:11:4Q So Motorola was abusing its dominant position

13 11:11:5by pursuing an injunction against Microsoft; correct?


15 11:11:5THE WITNESS: Yes. A preliminary? Please

16 11:12:0repeat.

17 11:12:0BY MR. LOVE:

18 11:12:0Q Motorola was abusing its dominant position by

19 11:12:0pursuing an injunction against Microsoft; correct?

20 11:12:0A Say it again. Motorola?

21 11:12:1Q Motorola was abusing its dominant position, in

22 11:12:1the meaning of European antitrust law, by pursuing an

23 11:12:1injunction against Microsoft; correct?


25 11:12:2THE WITNESS: I don't agree. I read -- I'm not



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Page 95

1 11:12:2sure if I read the commission statement in such a way

2 11:12:3that a assessment of authority outside of the European

311:12:4

Union would -- would suffice. I would rather think that

4 11:12:4an assessment only by a administrative agency or a court

5 11:12:5within the European Union, which is also subject to EU

6 11:12:5law, would suffice in order to -- to meet the

7 11:13:0requirements of -- of this -- of this commission

8 11:13:0statement as -- or the -- as the supremacy of European

9 11:13:1law, and I would not -- I would doubt that authorities,

10 11:13:1no matter how respect -- how well respected they are,

11 11:13:2which are beyond the reach of European Union law,

12 11:13:2could -- could meet the preconditions which have been

13 11:13:2set up.

14 11:13:2BY MR. LOVE:

15 11:13:3Q Do you think the court in Seattle is not

16 11:13:3capable of determining a RAND royalty?

17 11:13:3A I just said, with all due respect to the court,

18 11:13:3it's not bound by the European Union law, and I -- I'm

19 11:13:4not sure. I would -- I would have to go further into

20 11:13:4details, of course. I'm not sure whether an authority

21 11:13:4outside the use scope -- outside the reach of European

22 11:13:5Union law would be found to be sufficient under this

23 11:13:5declaration. But, again, this is speculation. I see

24 11:14:0this paper the first time. I'm not able to -- to

25 11:14:0comment in depth.



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Page 102

1 11:44:4in there.

2 11:44:4Q Did you review any communications between

311:44:5

Microsoft and Motorola concerning whether Motorola would

4 11:44:5agree not to enforce the German injunction?

5 11:45:0A No.

6 11:45:0Q Were you aware that Microsoft asked Motorola to

7 11:45:0agree not to enforce the German injunction and allow the

8 11:45:0proceedings in this case here in Seattle to go forward?


10 11:45:1THE WITNESS: I have very general knowledge of

11 11:45:1that.

12 11:45:1BY MR. LOVE:

13 11:45:1Q And Motorola refused; correct?

14 11:45:1A I have very general knowledge of that too.

15 11:45:2That's --

16 11:45:2Q Your understanding is that Motorola would not

17 11:45:2agree to -- to stay enforcement of the German



20 11:45:3THE WITNESS: This has not been produced to me.

21 11:45:3I just know the public available sources, which I read,

22 11:45:4but I have no further detailed knowledge of all these --

23 11:45:4these proceedings.

24 11:45:4BY MR. LOVE:

25 11:45:4Q Did you ask Motorola's counsel or anyone at



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Page 103

1 11:45:4Motorola whether Motorola planned to enforce the

2 11:45:4Mannheim judgment against Microsoft?

311:45:5

MS. BERRY: Objection; calls for

4 11:45:5attorney-client-privileged information. I instruct the

5 11:45:5witness not to an answer.

6 11:46:0BY MR. LOVE:

7 11:46:0Q Your report suggests that Microsoft could avoid

8 11:46:0an injunction because Motorola might not enforce the

9 11:46:1judgment; correct?

10 11:46:1A Say it again.

11 11:46:1Q Your report suggests that Microsoft might have

12 11:46:1avoided an injunction because Motorola would not enforce

13 11:46:2it; correct?

14 11:46:2A It is possible it would be -- of course, what I

15 11:46:2said is that it's not automatically -- the junction is

16 11:46:3not automatically enforced but that there have to be

17 11:46:3further steps being taken.

18 11:46:3Q Did you ask anyone at Motorola if Motorola

19 11:46:4planned to take those steps?

20 11:46:4MS. BERRY: Objection; calls for

21 11:46:4attorney-client communications. Instruct the witness

22 11:46:4not to answer.

23 11:46:4BY MR. LOVE:

24 11:46:4Q Are you going to follow your counsel's advice?

25 11:46:4A Yes.



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Page 104

1 11:46:4Q If Judge Robart had denied Microsoft's motion

2 11:46:5for a preliminary injunction here in Seattle, would

311:47:0

Motorola have enforced its German injunction?

4 11:47:0A I don't know.


6 11:47:0THE WITNESS: That's pure -- I no information

7 11:47:1about that.

8 11:47:1BY MR. LOVE:

9 11:47:1Q Did you ask anyone at Motorola?

10 11:47:1MS. BERRY: Same objections as before.

11 11:47:1Instruct the witness not to answer.

12 11:47:1BY MR. LOVE:

13 11:47:1Q Will you follow your counsel's advice?

14 11:47:1A Yes.

15 11:47:1Q If the Ninth Circuit had reversed

16 11:47:2Judge Robart's preliminary injunction, would Motorola

17 11:47:2have enforced the injunction in Mannheim?

18 11:47:2MS. BERRY: Objection; form, calls for

19 11:47:2speculation, outside the scope of his expert report.

20 11:47:2BY MR. LOVE:

21 11:47:2Q Did you ask anyone at Motorola, if the

22 11:47:3Ninth Circuit had reversed, did they plan to enforce the


24 11:47:3MS. BERRY: Objection; calls for

25 11:47:3attorney-client communications. Instruct the witness



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Page 105

1 11:47:3not to answer.

2 11:47:3BY MR. LOVE:

311:47:4

Q Will you follow your counsel's advice?

4 11:47:4A Yes.

5 11:47:4Q The European Commission's preliminary view is

6 11:47:4that enforcing injunctions on standard essential patents

7 11:47:4against a willing licensee is an abuse of antitrust law;

8 11:47:5is that correct?


10 11:47:5THE WITNESS: Please repeat.

11 11:47:5MR. LOVE: Sure.

12 11:47:5Q The European Commission's preliminary view is

13 11:48:0that enforcing injunctions on standard essential patents

14 11:48:0against a willing licensee is an abuse of antitrust law;

15 11:48:0correct?

16 11:48:0A These are the wordings used, yes.

17 11:48:0Q Would you agree that Judge Robart in the

18 11:48:1Ninth Circuit helped Motorola avoid exposing itself to

19 11:48:1additional antitrust liability?

20 11:48:1MS. BERRY: Objection to form, outside the

21 11:48:1scope of his expert report.

22 11:48:2THE WITNESS: I have no sufficient information.

23 11:48:2I have no opinion as it relates to the U.S. trial.

24 11:48:2BY MR. LOVE:

25 11:48:2Q Do you understand that the decision to relocate



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Page 106

1 11:48:2Microsoft's distribution center in Germany required

2 11:48:3considerable preparation beginning in January of 2012?

311:48:3

MS. BERRY: Objection; form, outside the scope


5 11:48:3THE WITNESS: I have no opinion on that.

6 11:48:4BY MR. LOVE:

7 11:48:4Q Are you aware of any of the details surrounding

8 11:48:4Microsoft's decision to relocate its German facility?

9 11:48:4A No.

10 11:48:4Q Did you review any documents associated with

11 11:48:4the move?

12 11:48:4A No.

13 11:48:4Q Did you review the deposition transcripts of

14 11:48:5the Microsoft employees who described that process?

15 11:48:5A No.

16 11:48:5Q Were you aware that Microsoft made its decision

17 11:48:5and had begun implementing the relocation out of Germany

18 11:49:0in March of 2012?

19 11:49:0A No.

20 11:49:0Q If Motorola had enforced the injunction in

21 11:49:1Mannheim, could Microsoft have continued to distribute

22 11:49:1H.264-compliant products in Germany?

23 11:49:1A If they fall under the patent and if there has

24 11:49:2been an injunction, no.

25 11:49:2Q If Motorola had enforced its injunction in



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Page 108

1 11:50:5If a party seeks an injunction on a standard

2 11:50:5essential patent against a willing licensee, is that

311:50:5

party acting in good faith under German law?

4 11:51:0A Yes.

5 11:51:0Q Are you an expert in the German procedural law

6 11:51:0concerning the recovery of fees and costs?

7 11:51:0A Attorney fees and costs?

8 11:51:1Q Yes.

9 11:51:1A Yes.

10 11:51:1Q Have you published any articles regarding the

11 11:51:1recovery of attorneys' fees and costs?

12 11:51:1A No.

13 11:51:1Q Have you published any articles on the German

14 11:51:1act on the remuneration of lawyers?

15 11:51:2A No.

16 11:51:2Q You reference Section 91 of the ZPO in your

17 11:51:2rebuttal report.

18 11:51:2Is the ZPO the German Code of Civil Procedure?

19 11:51:3A Yes.

20 11:51:3Q Have you ever published any articles on the

21 11:51:3German Code of Civil Procedure?

22 11:51:3A Yes.

23 11:51:3Q And what articles are those?

24 11:51:3A Articles about patent -- patent infringement

25 11:51:4lawsuits in this day of patent infringement lawsuits.



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Page 109

1 11:51:4Q So in discussing patent infringement lawsuits,

2 11:51:4those articles touch on the aspects of the German Code

311:51:5

of Civil Procedure?

4 11:51:5A Right.

5 11:51:5Q Okay. Exhibit D to your rebuttal report shows

6 11:51:5screen shots from software that's called

7 11:52:0ProzessKostenRechner; is that correct?

8 11:52:0A Yes.

9 11:52:0Q Was I close on the pronunciation?

10 11:52:0A Very good.

11 11:52:0Q This is software that is used to calculate

12 11:52:0statutory attorney fees in Germany; is that correct?

13 11:52:1A Yes.

14 11:52:1Q Have you used the software before?

15 11:52:1A Yes.

16 11:52:1Q So before your work -- prior to the work in

17 11:52:1your case, you have used the software?

18 11:52:1A I tried it once. I never --

19 11:52:2Q When did you try it?

20 11:52:2A Couple of -- before when I was assessing

21 11:52:2attorneys' fees in another case.

22 11:52:3Q Were you serving as an expert witness when you

23 11:52:3did that?

24 11:52:3A No. No, no.

25 11:52:3Q Were you a practicing attorney at that time?



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Page 110

1 11:52:3A No.

2 11:52:3Q So could you help me understand why you were

311:52:4

using the software previously?

4 11:52:4A Because, privately, I helped people who wanted

5 11:52:4to have an attorney, and I was given the information

6 11:52:4about the costs which they would run into.

7 11:52:5Q But other than that one instance, had you ever

8 11:52:5used the software prior to your work in this case?

9 11:52:5A No.

10 11:52:5Q Is it your opinion that the attorneys' fees

11 11:53:0Germany -- sorry. Start again.

12 11:53:0Is it your opinion that the attorneys' fees in

13 11:53:0Germany that Microsoft is seeking to recover are far in

14 11:53:0excess of what could be recovered under Germany's

15 11:53:1statutory fee scheme?

16 11:53:1A Yes.

17 11:53:1Q And that's because the statute provides a cap

18 11:53:1on how much can be recovered; correct?

19 11:53:2A Yes.

20 11:53:2Q So even if a party wins --

21 11:53:2A Maybe not a cap. I have to correct. Not a

22 11:53:2cap, but a special -- there's a special procedure how

23 11:53:2the costs are assessed as to cap, but the costs are

24 11:53:3calculated.

25 11:53:3Q And the process for calculating the costs in



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1 11:53:3many cases may be lower than the actual fees that a

2 11:53:3party paid; correct?

311:53:3

A It always depends. Cannot give a general

4 11:53:4answer to that.

5 11:53:4Q So even if a party prevails, the prevailing

6 11:53:4party will not necessarily recover all the fees it paid;

7 11:53:5correct?


9 11:53:5THE WITNESS: It's very much dependent on the

10 11:53:5specifics of the case.

11 11:53:5BY MR. LOVE:

12 11:53:5Q So the total that Microsoft seeks for fees paid

13 11:54:0to the Fresh Fields firm is about 2.119 million.

14 11:54:0Does that sound correct?

15 11:54:0A Yes.

16 11:54:0Q Is that amount typical for a patent case like

17 11:54:1the Mannheim actions?



20 11:54:1THE WITNESS: As I'm not an attorney -- can you

21 11:54:1ask the question again.

22 11:54:1MR. LOVE: Sure.

23 11:54:1Q Is -- is that amount -- the 2.119 million, is

24 11:54:2that amount typical for a patent case like the Mannheim

25 11:54:2actions?



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1 11:54:2A I can't say because all cases are different,

2 11:54:3and it -- the costs may be very different. I cannot

311:54:3

give you a clear -- I cannot say a statistical -- if

4 11:54:3it's typical or not. It just depends on the cases.

5 11:54:3Q For -- for what you know about this case, did

6 11:54:4that amount strike you as unusual?

7 11:54:4MS. BERRY: Objection to form.

8 11:54:4THE WITNESS: I have no opinion on this because

9 11:54:4I don't work as an attorney, so I don't see the bills

10 11:54:5all the time.

11 11:54:5BY MR. LOVE:

12 11:54:5Q Well, your report says this amount was far in

13 11:54:5excess of what could be recovered under the scheme.

14 11:54:5A Yes.

15 11:54:5Q And I'm asking whether you think that's typical

16 11:55:0or not?


18 11:55:0THE WITNESS: I answered the question, that

19 11:55:0it's the -- the scheme sets up a certain rate, and it --

20 11:55:1I don't know what -- what exactly law firms charge when

21 11:55:1they go -- when they charge on hourly basis, so I cannot

22 11:55:2give you any further information on that.

23 11:55:2BY MR. LOVE:

24 11:55:2Q So you're offering expert testimony on the

25 11:55:2recovery of fees and costs --



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1 11:55:2A Yes.

2 11:55:2Q -- in this case; correct?

311:55:3

A Yes.

4 11:55:3Q But you don't know what typical fees are

5 11:55:3actually charged in cases like this?

6 11:55:3A There are no typical fees for typical cases. I

7 11:55:3can only say what the statutory rates are, and then when

8 11:55:4it's about hourly rates -- hourly rates, these -- this

9 11:55:4is very different frequently.

10 11:55:4Q So when you say that Microsoft's fees are far

11 11:55:5in excess of what could be recovered, you don't know if

12 11:55:5that's unusual or not, do you?

13 11:55:5MS. BERRY: Objection to form; asked and

14 11:55:5answered.

15 11:55:5THE WITNESS: I answered already that I know

16 11:56:0the statutory fee, and I know that this is beyond

17 11:56:0this --

18 11:56:0BY MR. LOVE:

19 11:56:0Q Well, why did you say "far in excess"?

20 11:56:0A Because the statutory fee is lower.

21 11:56:0Q So you could have said that the fee is in

22 11:56:1excess of the statutory fee; right?

23 11:56:1A Yes.

24 11:56:1Q What is your basis for saying that it is far in

25 11:56:1excess?



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1 11:56:1A Because it's much more.

2 11:56:1Q But you don't know if that's unusual or not?

311:56:2

MS. BERRY: Objection to form; asked and

4 11:56:2answered.

5 11:56:2THE WITNESS: I answered the question already.

6 11:56:2BY MR. LOVE:

7 11:56:2Q Do you know how much Motorola spent on the

8 11:56:2Mannheim cases?

9 11:56:2A No.

10 11:56:2Q Did you ask?

11 11:56:2A No.

12 11:56:3Q Do you think it would be unusual to spend twice

13 11:56:3as much as Microsoft did?

14 11:56:3MS. BERRY: Objection; form, asked and

15 11:56:3answered.

16 11:56:3THE WITNESS: It's pure -- pure speculation.

17 11:56:3BY MR. LOVE:

18 11:56:3Q Would you be surprised to know that Motorola

19 11:56:4paid more than twice as much as Microsoft?


21 11:56:4THE WITNESS: It's very speculative.

22 11:56:5BY MR. LOVE:

23 11:56:5Q If I told you that Motorola spent more than

24 11:56:5twice as much on attorneys' fees in the Mannheim cases,

25 11:56:5would you find that surprising?



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Page 115



311:57:0

THE WITNESS: I have no opinion on that.

4 11:57:0BY MR. LOVE:

5 11:57:0Q In your expert report, you go through a

6 11:57:0calculation which determines the statutory fee that

7 11:57:1Microsoft could recover if it prevailed in Mannheim;

8 11:57:1correct?


10 11:57:1Q Would that calc- -- and that calculation is

11 11:57:1based on the value of the cases; is that correct?


13 11:57:1Q So assuming that Motorola prevails under the

14 11:57:2German scheme, Motorola can recover fees from Microsoft;

15 11:57:2correct?

16 11:57:2A Yes.

17 11:57:2Q Would it be the same amount that you calculated

18 11:57:2in your expert report?

19 11:57:2A Yes.

20 11:57:3Q So it would be the same for either party?

21 11:57:3A Yes.

22 11:57:3Q Do you have an understanding of why the German

23 11:57:4law concerning the recovery of attorneys' fees is

24 11:57:4relevant to the upcoming trial in this case?




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Page 116

1 11:57:5THE WITNESS: On a very, very general.

2 11:57:5BY MR. LOVE:

311:57:5

Q What is that understanding?

4 11:57:5A That it is under discussion in this case,

5 11:58:0that --

6 11:58:0Q Did anyone explain to you why it's under

7 11:58:0discussion?

8 11:58:0MS. BERRY: Objection to form, calls for

9 11:58:0attorney-client communications. I instruct the witness

10 11:58:1not to answer to the extent your answer would involve

11 11:58:1the communications with your attorneys.

12 11:58:2THE WITNESS: Then I'm not going to answer.

13 11:58:2BY MR. LOVE:

14 11:58:2Q If Motorola is correct that it's two German

15 11:58:2patents are actually essential to the H.264 standard,

16 11:58:3would you expect that they would prevail in any

17 11:58:3infringement case against an implementer of the

18 11:58:3standard?

19 11:58:4A Always depends on the -- on the circumstances

20 11:58:4of the case. If the person makes unauthorized use, then

21 11:58:5it would prevail. Just depends on the facts, but --

22 11:58:5Q Sure. Let's break that --

23 11:58:5A -- reasoning is very straightforward when you

24 11:58:5you prevail in the patent infringement lawsuit and when


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