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07:53

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1087

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

WACO DIVISION

CADDO SYSTEMS, INC., *

511 TECHNOLOGIES, INC. *

* June 9, 2022

VS. *

* CIVIL ACTION NO. W-20-CV-245

*

MICROCHIP TECHNOLOGY *

INCORPORATED *

BEFORE THE HONORABLE ALAN D ALBRIGHT

TRIAL PROCEEDINGS

Volume 4 of 5

APPEARANCES:

For the Plaintiffs: Timothy Devlin, Esq.

Alex Chan, Esq.

Veronica McCarty, Esq.

James Lennon, Esq.

Devlin Law Firm, LLC

1526 Gilpin Avenue

Wilmington, DE 19806

For the Defendant: Travis Jensen, Esq.

Jason K. Yu, Esq.

Evan Brewer, Esq.

Orrick, Herrington & Sutcliffe LLP

1000 Marsh Road

Menlo Park, CA 94025-1015

Claudia Wilson Frost, Esq.

Orrick, Herrington & Sutcliffe LLP

609 Main, 40th Floor

Houston, TX 77002

Jeff Quilici, Esq.

Orrick, Herrington & Sutcliffe LLP

300 West 6th Street, Suite 1850

Austin, TX 78701

Darryl Adams, Esq.

Brian Banner, Esq.

Slayden Grubert Beard PLLC

401 Congress Ave., Ste. 1650

Austin, TX 78701

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1088

Court Reporter: Kristie M. Davis, CRR, RMR

PO Box 20994

Waco, Texas 76702-0994

(254) 340-6114

Proceedings recorded by mechanical stenography;

transcript produced by computer-aided transcription.

(Hearing begins.)

THE BAILIFF: All rise.

THE COURT: Good morning, everyone. You

may be seated.

My understanding is we have one issue to

take up, which is the admissibility of a website. I'll

hear from whoever wants to take that up.

MR. DEVLIN: Good morning, Your Honor.

So we're talking about the Forum website.

And this was something that was listed on defendant's

exhibit list. It's something that both parties have

used. We -- in the course of the procedures that are

in the pretrial order in this case, we noticed it to

them before we used it. They did not object. We used

it in open court. They've used it in open court.

It is -- as this pretrial order is

written, as we have cleared with the Court here -- and

we understand the Court may have procedures that vary

in other cases. But in this case we have followed the

procedure to the letter.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1089

Now, we recognize that handing the jury a

computer that's connected to the Internet is not going

to work here. And so what we've done instead is

proposed to them -- well, we've actually given -- made

it an open question. We're happy to talk with you

about how to get this, something that reflects the

evidence, back into the jury room.

What we did last night, as a proposal

from our end, was we created a video, similar to the

other videos that are in evidence and that the jury has

seen, that captures what the jury has seen in this case

from our side and from their side. We did our best to

make it neutral, but said to them, if you have a video

or you want to make one or edit it, just let us know.

So this -- this -- this Forum website has

been used by both parties. It's not formally admitted,

but it is in evidence according to the procedures of

this case. And we are happy to try to figure out a way

to get a reasonable part of it, what's actually been

shown and used in court, in front of the jury.

The defendants have said, well, it's not

really an exhibit, it's a demonstrative, even though

the pretrial order says that demonstratives don't have

to be listed on the exhibit list. Anyway, they said

that they refuse at all to have anything with respect

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1090

to the Forum website go back to the jury.

It's a problem for multiple reasons. The

main one, Your Honor, is that it's there and been used

with the jury.

But there's another issue which is that

we did have screenshots of the Forum as a backup if we

needed them on the exhibit list. And we didn't use

those because we all agreed with the procedures here.

And we noticed it to them as an exhibit we were going

to use, and they didn't object. And now we've

presented a whole case using that evidence.

So we just want to get it back there with

the jury in some reasonable way that reflects the need

to have them have the information, but also doesn't

open up the world to them through Internet access.

THE COURT: Is this defendant -- is this

Defendant 478?

MR. DEVLIN: Yes, Your Honor. Thank you.

THE COURT: Yeah. I'm not going to

permit them to have this.

They've seen what they've seen during

trial. You can talk about it during closing arguments.

But I see no way of giving them access to this. And

it's -- to me it's like any other demonstrative that's

been used.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1091

So I'm not going to -- whatever you've

shown them during trial is what they'll have to take

back to the jury.

MR. DEVLIN: But you don't mean a video

of that; you just mean their memory.

THE COURT: Their memory.

MR. DEVLIN: Okay. Can we -- the only

procedural issue I have, and this may not matter, but

it may matter in the future whether the information was

formally in evidence or not.

And so if we can -- one thing I want to

do is not to have them be able to argue on some appeal

that somehow this wasn't evidence at all. I get that

it doesn't want to go back with them, but...

THE COURT: I don't understand how they

would be able to do it. I mean, it's -- you all, both,

as you said, both used it, talked about it, and treated

it like a demonstrative. And you're free to argue

about it in closing arguments and say whatever you

think the evidence supports about it.

MR. DEVLIN: Great. Thank you, Your

Honor.

THE COURT: I can't imagine how they

could --

Yes, ma'am?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1092

DEPUTY CLERK: I believe it was

officially admitted at one point.

THE COURT: I think what happened was

there was a -- there's a discrepancy. I think

Mr. Devlin thought -- and correct me. I think what

happened was Mr. Devlin said something like, I think we

have agreement on this, and then defendant said, well,

we have one exception, and this is it. And that's why

we're taking it up now.

MR. DEVLIN: Yes.

THE COURT: So it was not -- I think even

Mr. Devlin said everything's admitted, subject to us

resolving this issue.

MR. DEVLIN: That's right, Your Honor.

And we have no -- we certainly agree with that

procedure, and that's accurate.

Is there any issue -- we would like to

perhaps show some of the same stuff we've shown in the

closing arguments. And just make sure we can do that.

THE COURT: Well, and what I have no

problem with you all doing is putting into the

record -- well, no. It can't be an exhibit or they

wouldn't be -- but certainly it can be marked in some

way as a demonstrative exhibit just for your purposes

of showing on appeal that it actually was discussed

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1093

during trial.

MR. DEVLIN: Thank you, Your Honor.

We'll work with them on that. And then we'll treat it

that way during closings also.

THE COURT: Okay.

MR. DEVLIN: Thank you.

(Off-the-record discussion.)

THE COURT: Okay. Well, you can mark it

as a court exhibit, and it will stay in the file but it

won't go to the jury.

MR. DEVLIN: Great. Thank you. Thank

you. That's exactly what I would suggest also.

THE COURT: Anything else?

MR. DEVLIN: Nothing from plaintiff.

MR. ADAMS: Yes, Your Honor. I just want

to follow up, a clarification. I'm not sure what's

going to become a court exhibit.

THE COURT: Whatever you -- I think what

Mr. Devlin was telling me was whatever was marked as

that exhibit number.

MR. ADAMS: There is no DTX-478, Your

Honor. If you turn to -- if you turn to Jen right now

and said, enter DTX-478, there is no DTX-478. It was

marked purely as an identifier for demonstratives. It

wasn't submitted to jurors. There's no way -- there's

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1094

no record of what 478 is.

So I don't know what can be put in.

Caddo made a video last night and sent it to us and

wanted -- wants to get it into evidence. It's not a

video that was played to the jury. It's not a court

exhibit. It is just no -- this doesn't exist. 478 is

not an exhibit. It's never been submitted by an

exhibit to this Court.

THE COURT: Well, whatever -- however you

all discussed what it was during the course of trial is

in the record.

MR. ADAMS: I completely agree, Your

Honor. Whatever's in the record is in the record. And

it will -- not disputing that. But there's no exhibit

to create a court exhibit with this, as far as we're

concerned.

THE COURT: I got it. Anything else we

need to take up? Okay.

Once all the -- William, are the jurors

here?

(Off-the-record discussion.)

THE COURT: As soon as all seven jurors

are here, if you all will just stay put, we'll get

started.

Yes, sir.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1095

MR. ADAMS: Your Honor, I apologize. The

formality of reading in the Rule 50, we're not reading

in full motions, but reading --

THE COURT: Why don't we do that now?

MR. ADAMS: Thank you, Your Honor.

THE COURT: Yes, sir. Good morning.

MR. QUILICI: Good morning, Your Honor.

May it please the Court. Jeff Quilici on behalf of

Microchip.

As Your Honor may know, we filed on the

record a Rule 50(a) motion which Your Honor can peruse

at his convenience. I just want to read in a few

bullets onto the record at this point.

Microchip moves for judgment as a matter

of law after the close of Caddo's case-in-chief.

Caddo has presented its evidence on

liability and damages in the case, kept its case open

through Ms. Mahar's testimony only with respect to the

limited issue of willfulness. But the evidence

presented in that case confirms that there is no

reasonable basis for a jury to rule in Caddo's favor on

infringement, willfulness, or damages.

On literal infringement, each independent

claim recites an Active Path which this Court has

construed to mean: A sequence of links dynamically

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1096

created as a menu system is navigated.

But Mr. Sherwood did not apply that

construction in his analysis. Specifically, neither he

nor Caddo offered any substantial evidence that the

Forum website or the main website creates links in an

alleged Active Path, either dynamically or as a menu

system is navigated.

Caddo also has presented no evidence that

Microchip itself directly infringes. Specifically,

Microchip cannot directly infringe a method claim

unless it performs all the steps of the method.

Each independent claim recites a method

for navigating within either a website or a menu or an

information system which the parties have treated as

equivalent to one of those two.

Caddo has presented no evidence that

Microchip or its websites navigate anything, only that

users of those websites do so.

And as to specific limitations reciting

preselecting, rolling over, or provisional selection in

the '411, '517, '880, and '127 patents, Mr. Sherwood

testified that all of those limitations mean mousing

over an active link in an Active Path. But there has

been no evidence presented that Microchip or its

websites mouse over anything; again, only that users of

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1097

those websites do.

To the extent that Caddo seeks to rely on

a joint infringement theory, which I'll point out was

not pled or in any of the contentions in this case,

Caddo has not presented any evidence that Microchip

exercises direction and control over those users, that

it has formed a joint enterprise with those users, or

that it conditions the receipt of any benefit on the

performance of the -- for example, the navigating

within a website step.

For example, it is possible to reach any

of the web pages that have been discussed in the case

through a third-party search engine such as Google. It

would not require navigating within any of Microchip's

websites.

Moving on to indirect infringement. To

the extent that that is still in the case, and I'm not

sure where we stand on the jury instructions there.

We'll take that up later.

But indirect infringement requires proof

that a third party directly infringes. Caddo has

offered no proof that any third party performed each

and every step of any of the method claims asserted

here, nor could it.

Some of the claims -- excuse me. Each of

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1098

the claims recites at least steps of providing a

graphical menu and constructing an Active Path. And

there's no evidence that's been presented that any

third party performs those steps.

In addition, both contributory and

induced infringement require knowledge of the

patent-in-suit and knowledge of patent infringement.

Caddo has not introduced evidence in its

case-in-chief that would establish that intent on

behalf of -- on behalf of Microchip. At most it's

shown that Microchip was aware of the asserted patents,

and even then only after the filing of the lawsuit.

Similarly, on the subject of willfulness,

Caddo has provided no evidence from which a specific

intent to infringe could be inferred.

Indeed, the only theory they offered at

the pretrial conference in opposition to a motion for

summary judgment on this subject was that Caddo (sic)

had implemented infringing features in its redesigned

website post suit.

Caddo has dropped that infringement

theory from the case entirely, and the willfulness

claim should fall along with it.

Finally, on the subject of damages, just

a few points, Your Honor, because I know we want to

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1099

move on to the jury.

Mr. Blok's damages testimony is flawed in

several different ways. It's not supported by

substantial evidence. It fails to include an

apportionment analysis. It inappropriately bases

damages on the entire value of sales of certain

Microchip products. It includes damages based on sales

that are untethered to direct infringement in the

United States, but rather seeks to encompass worldwide

sales. And offers no damages calculation for direct or

indirect infringement in certain ways.

Very briefly, on the apportionment point,

neither of Caddo's experts attempted to apportion the

supposed value of website navigation between Caddo's

asserted patents and the unpatented features of Caddo's

websites (sic), or for that matter, the unpatented

features of the products on which they seek to base

their royalty calculations.

Yeah. Neither of the experts considered

whether Microchip's products have noninfringing aspects

or components, that Microchip made substantial

contributions to that technology, or that the Microchip

products contain technologies that are not covered by

the asserted patents or, indeed, by any value of the

websites, whatsoever.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1100

In addition, as I noted, Caddo also used

Microchip's worldwide sales as its royalty base, but

the jury may not award damages on sales where the act

of direct infringement takes place abroad or, in the

case of a method claim, where any of the steps of the

method take place abroad.

In addition, there has been no evidence

presented that the users who are buying products

outside the United States actually performed any method

steps within the United States.

And during Mr. Blok's testimony, he was

asked directly whether there was evidence that the

$215,000-per-day number that he used was limited to

U.S. sales, and he assured that there was no such

evidence.

Excuse me. He claimed that there was

evidence, but no such evidence has been presented to

the jury.

My apologies for that misstatement.

To the extent that Caddo attempts to rely

on testing or some other use of the Microchip websites

by Microchip employees, it has presented no damages

model that would tie any revenue to such use by

Microchip itself.

And to the extent, again, that Caddo

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1101

relies on indirect infringements, its damages model

would be limited to the period after the filing of this

lawsuit because that's the only period in which

knowledge has been alleged. But no damages presented

by Caddo during its case actually quantify the damages

during that period alone.

And I would like to make one

clarification on the no evidence points I made earlier.

In addition to the other point that I've

made, there's been no evidence of Microchip itself

browsing, which would cover the claims in the '301 and

the '836 patent.

Thank you, Your Honor.

THE COURT: Could I have a response from

the plaintiff just with the limited issue to evidence

of willfulness?

MR. DEVLIN: Thank you, Your Honor.

And I'll just note, voluntarily, that on

the indirect claims, we've actually -- and I think they

know this -- removed those from our proposed verdict

forms. So we're not going to proceed on indirect

infringement, just direct infringement to ease things

up.

So on the willfulness issue, we

understand that just continuing to do certain activity

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1102

after you've been accused in a lawsuit is not enough.

But here there are other factors, one of which is that

they were in the midst of a redesign and could have

easily removed all this functionality and they didn't.

And it wasn't just that they took a long

time. There's other evidence in the record that there

were pages of this website that were -- multiple pages,

hundred pages, Mr. Sherwood testified to, that even as

of December of this year, which is long after they were

supposedly done -- done their redesign, according to

Ms. Mahar, long after that there were multiple,

multiple pages that did infringe.

And these are ones -- not these PDFs, but

pages that actually had active links that he looked at.

And then we saw with Ms. Mahar that one of those pages

was -- that link was not -- page was not redesigned,

but it was stripped out sometime just before this

trial -- well, sometime between the last six months and

before this trial.

But done so in a way that I think is

suspicious and gets to their intent, because it was not

part of the normal redesign but looks to be an effort

to change the facts right as we're heading into a jury

trial.

And now, the jury -- there's a few

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1103

inferences there, Your Honor, obviously. The jury can

make those, though, and that's the issue. And that's

why we think willfulness can stay in. We think there's

evidence that's in here from which a reasonable jury

can draw reasonable inferences that there's something

more going on than just a planned redesign.

That's where we are, Your Honor. Thank

you.

MR. ADAMS: Your Honor, if I may respond.

THE COURT: Sure.

MR. ADAMS: First of all, Your Honor,

let's be clear, this is not a case where there was

presuit notice. So there's no -- there's no presuit.

So now we're dealing with potential

willful infringement during the pendency of the trial,

which requires some kind of egregious conduct.

Microchip has aggressively defended

itself. It's certainly its position, always has been,

that it doesn't infringe these patents.

It's not required to design around to

avoid willful infringement. There has been no

egregious misconduct by Microchip during this that

would justify post-trial willfulness. And they have

not pointed to any, simply redesigning the website

slower than they would have liked.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1104

Even if we hadn't redesigned the website

at all, Your Honor, there would be no basis for willful

infringement post trial.

THE COURT: Mr. Devlin?

MR. DEVLIN: I think everything that

Mr. Adams just said is a reasonable conclusion that

could be drawn from the evidence. But there's also a

reasonable conclusion that could be drawn from the

evidence that they intended to keep certain pages live,

using the infringing functionality, they kept it far

longer than they've testified, and it got removed in a

way that they say never happened, reasonably recently,

before this trial.

That is also a reasonable conclusion and

that's willfulness.

Thank you.

MR. ADAMS: Your Honor, just briefly.

Again, Mr. Devlin starts with the presumption that we

were required to redesign around their patent in order

to avoid willfulness. His only complaint is we didn't

redesign fast enough.

Again, if we had not redesigned at all --

and by the way, the redesign started before this --

there would be no basis for post trial willful

infringement.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1105

MR. DEVLIN: And, Your Honor, I hate to

stand up and make an argument a third time, but what we

just heard is not the argument I made. It's not just

about timing.

There's evidence that shows that there

was use going on outside this normal timing in ways

that are different than what we heard as testified and

in ways that have been disguised. That's the issue.

Thank you.

THE COURT: Okay. I'm going to overrule

all the defendant's motions.

Is the jury here?

(Off-the-record discussion.)

THE COURT: Okay. As soon as the jury's

here, we'll get started.

THE BAILIFF: All rise.

(Recess taken.)

THE BAILIFF: All rise.

THE COURT: Please remain standing for

the jury.

(Jury entered the courtroom.)

THE COURT: Thank you. You may be

seated.

Counsel, you may call your next witness.

MR. JENSEN: Thank you, Your Honor.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1106

Microchip calls Mr. Cody Miller of

Dynamic Range Labs, and we will be playing his

deposition testimony by video.

THE COURT: Very good.

MR. JENSEN: I'll mention for the Court

and the jurors that the video clip is about 22 minutes,

25 minutes, something in that range.

THE COURT: And say again who this

witness is.

MR. JENSEN: This is a video deposition

of Mr. Cody Miller from Dynamic Range Labs.

THE COURT: Okay. Thank you, sir.

(Video Deposition of Cody Miller played as follows.)

Q. Can I ask you to state your name and address

for the record?

A. Yeah. Cody Miller, and my address is 2657

South Andros, A-n-d-r-o-s, Way, Meridian, Idaho 83642.

Q. So who do you work for, Mr. Miller?

A. I'm the owner of Dynamic Range Labs.

Q. Great. For the rest of this deposition, I'm

going to refer to Dynamic Range Labs as "DRL."

A. Okay.

Q. What are your general responsibilities as

founder?

A. Run the company.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1107

Q. Okay. Mr. Miller, do you recognize this

document, what's been prelabeled as Exhibit 3?

A. I believe it's the Master Services Agreement

that Microchip may have sent me. I don't know for

sure. But -- I haven't reviewed that for a few years,

but I believe that's probably what this is.

Q. Okay. What was the scope of services that DRL

was providing to Microchip covered in this Master

Services Agreement?

A. We were -- the project that we implemented

with Microchip was to redesign their website and

implement a more stable website for them, and I think

it was over 18 months.

Q. When you say "redesign their website," are you

referring to www.microchip.com?

A. Yes.

Q. I'm going to move on to what's been premarked

as Exhibit 4.

Mr. Miller, do you recognize this document?

A. Yes.

Q. What is this document?

A. I believe this is the details around the

statement of work for the website redesign.

Q. Do you know what the total bill to Microchip

at the end of this project was?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1108

A. I would assume it's the 2.8 million,

2.85 million.

Q. Do you know how many hours of total labor this

project approximately represents?

A. A lot. I don't know what the number is, but

it was a lot.

Q. Over 50 hours?

A. Way more. You're talking the whole project?

Q. Yeah. The whole project.

A. Yeah. No. It was, you know, 18 months or --

I'm just looking here -- maybe longer than 18 months of

huge teams. So many hours.

Q. How many people were on these teams?

A. I don't know the exact number. I would -- it

probably depended on the phase, but it could be as many

as 20 at one time, could be 10, depending on what was

needing to be accomplished in the phase.

Q. Sure. How many of these hours would have been

dedicated to redesigning microchip.com's user

interface?

A. I don't know the specifics on how many but

some portion.

Q. A large portion?

A. I would say less than 25 percent, but this is

a guess. I'm actually speculating. I'm not sure what

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1109

it would have been.

Q. 25 percent or less. Is that a fair estimate?

A. Yes. There's usually a project manager and

one or two designers. Depends on the phase of the

project. So it might drop down to just one person part

time at some other phase of the project. So...

Q. So no more than, it sounds like, five people,

but no less than one depending on the phase?

A. There might be a phase where it's all complete

and there's no one on.

Q. Okay. But no more than five at any given

time?

A. Focused on user interface?

Q. Yes.

A. The UX design? Yeah. I would agree with

that.

Q. So it's a total website makeover?

A. I believe so. Yes.

Q. Do you know why -- scratch that.

Have you seen the Forum section of

microchip.com? So that would be the

microchip.com/forum section.

A. I have not.

Q. Do you remember if Microchip asked DRL not to

redesign that section of the website?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1110

A. I don't remember anything about the Forum.

Q. Do you remember working on it at all?

A. I don't remember if we worked on that.

Q. Do you have any reason to believe that DRL did

not work on the microchip.com Forum website?

A. Until you had mentioned it, I didn't realize

that there was a Forum on microchip.com. So I'm just

not aware.

Q. So I'm referring to the

www.microchip.com/forums section of the website.

Do you remember ever being --

A. No.

Q. -- asked?

A. No. I'm unfamiliar with this.

Q. When did DRL first hear about breadcrumbs in

connection with a Microchip redesign?

A. I'm not sure. You're asking when did we first

discuss it?

Q. Yes.

A. Yeah. I was never involved in any discussions

around breadcrumbs. But like you mentioned, through

the design process, we reviewed the design together.

And so I'm sure it came up when we were reviewing the

designs.

Q. So in the design phase of the project, it

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1111

would have come up?

A. Yeah.

Q. Have you ever heard of breadcrumbs with

drop-down menus embedded in them?

A. No.

Q. Do you remember the user interface of

microchip.com's website contributing to any of the

problems that were the basis for the redesign, the

bases that you previously described?

A. My impression was that it was the original

CMS. I think it was Sitefinity was the -- the tool

was -- had been modified a lot, and there was just

instability and buggy code in it.

That's what I remember. I don't know if it

was any particular function on the site, as it was more

like bugs had been introduced to the site. So...

Q. So you don't remember it being any particular

function, though, of the user interface?

A. Yeah. Not that I'm aware of.

Q. Does that include the breadcrumb

functionality? You're not aware of the breadcrumb

functionality causing any issues?

A. Yeah. Not that I'm aware of. I don't even

remember if it had a breadcrumb. So...

Q. Could you see the combination of the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1112

breadcrumb and the navigational elements we just

discussed, like the drop-down menu, being useful to a

user in navigating a website?

A. My preference on site navigation is I like

mega menus, bigger. I like clear, concise navigation

at the top. I'm not a fan of drop-downs in menus. I

would much rather have like a mega menu show up and you

can see everything than a drop-down.

My experience with drop-downs is unless

someone hovers over or clicks on a drop-down, they --

that's the only way they know the option exists there.

Where if it's -- if those selectable items aren't

hidden in a drop-down menu, they're more exposed.

So I would say my recommendation wouldn't

probably be to put any drop-downs in a breadcrumb.

So...

Q. Correct.

A. I don't think I've ever done that before, but

maybe there's some sites that do that. I'm just not

familiar with that. So...

Q. Wouldn't your preference, though, be that the

menu itself doesn't take up too much website real

estate?

A. Yeah. That's what's sweet about a mega menu.

So a mega menu, when you hover over the element at the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1113

top, it opens up a bigger view of more menu options.

And let me see. I don't know if we

implemented on Microchip. It depends on the -- yeah.

We have a mega menu on Microchip's website today.

So as you hover over, you see all the options

you might want to select in the site menu.

Q. Would a breadcrumb -- would a breadcrumb with

a drop-down menu that you had to hover over or click

over, would that also accomplish that goal?

A. You know, I normally think -- I normally don't

mix the two, right? To me a breadcrumb is like what

you said before, it's like where I am. It's like a

sign to tell you where you're at, where the navigation

up above is more around selecting where to go. So --

from my opinion.

Q. So you're not used to like combining the two

of a breadcrumb helping you select where to go?

A. Yeah. No.

Q. Could you see, though, that that would be

useful if the breadcrumb could help you select where to

go?

A. Yeah. I think you mentioned that before. I

don't think it would be my opinion. That wouldn't be

my recommendation.

Q. Have you ever heard of the patents-in-suit?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1114

A. The what?

Q. The patents in this case, in Caddo

v. Microchip.

A. I've never read them.

Q. Did you talk -- did the patents ever come up

during the redesign of Microchip's website?

A. No. Not that I'm aware of. In any of my

conversations, I never had a conversation about

patents.

Q. Did Microchip ever mention any noninfringement

defenses during the redesign process?

A. Not that I'm aware of.

Q. Did Microchip ever mention wanting to design

around any patents during the redesign?

A. Not that I was involved in. And not that I'm

aware of with my employees. So...

Q. If that conversation were to have been had,

who would have had it? Would that have been you?

A. I'm sure my team would have talked to me about

it if something like that came up. So...

Q. So I'm on Microchip.com/en-us-products. And

this is one of DRL's redesigned website pages; is that

fair?

A. Yeah.

Q. And if I hover my mouse over Education, I can

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1115

select the Microchip and Technical Learning Center, I

can select the Microchip Livestream Events; is that

fair?

A. That's fair.

Q. And if I select that, this is an old -- and

you're saying I'm taken to

https://www.microchip.com/training/microchip-live

stream/. And if I understand you correctly, this is

not a website that was redesigned by DRL; is that

correct?

A. Correct.

Q. But it is available currently through

Microchip's current website navigation?

A. Yes.

Q. We'll actually go now to Exhibit 10.

Which -- do you recognize this document,

Mr. Miller?

A. Yes.

Q. What is this document?

A. The Phase 1 deliverable document.

Q. And who prepared this document?

A. It would have been the team working on the

project. I'm guessing at the time it was maybe an

employee named Greg. I can't remember his last name.

And Ricky. I think both have left the company now.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1116

But they were probably some of the early people

involved in the Phase 1 deliverables.

Q. And was this document kept as part of DRL's

ordinary course of business?

A. Yes.

Q. I'm going to take you to Page 8 of this

document. It's been Bates labeled as 4029.

A. Okay.

Q. This diagram shows there's a first level, a

second level, a third level, and notes.

A. Uh-huh.

Q. What's your understanding of what these levels

are?

A. This would be the content hierarchy of the

website with categories of content. So...

Q. But in the -- do you remember the example from

one of the legacy pages we just went over?

A. Uh-huh.

Q. Was it possible to go forward using the

breadcrumb in that legacy page?

A. Yeah. In that example that you showed, it

looked like you could click other pages.

Q. Can you see that feature being valuable or

helping a user in their trackable journey?

A. You know, my opinion is that that's not a good

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1117

design element. You know, I would move towards more

common best practice site navigation techniques. And

if it's duplicative of what's already in the site

navigation, then I would see it as redundant.

Q. Do you recall earlier being shown a document

that had, I think it was a $2.85 million estimate for

the Microchip website redesign?

A. Yes.

Q. How much, if any, of that money was paid for

the breadcrumb feature?

A. I -- it's hard for me to say, but very little.

The breadcrumb implementation, I'm not even sure what

phase it was in, but it would have been a minor part of

the project.

Q. First, let me ask: Are you familiar with the

Google website?

A. With Google? Yes.

Q. Is it fair to say that that's one of the most

commonly frequented websites in the world?

A. Yes.

Q. I'm going to go to the google.com website.

Do you see that?

A. Yes.

Q. Do you see any breadcrumbs on this website?

A. Not yet.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1118

Q. What about if I search for your company,

Dynamic Range Labs?

Did I spell that correct?

A. Yes.

Q. And what appeared on the screen?

A. The search results for Dynamic Range Labs.

You have your site nav at the top, and you have the

search results.

Q. Would you consider anything shown on this web

page to be a breadcrumb?

A. No.

Q. Does Dynamic Range Labs have a website?

A. Yes.

Q. And what is the URL of that website?

A. Dynamicrangelabs.com.

Q. Do you think Dynamic Range Labs' website is a

good website?

A. It's -- it's an okay site.

Q. Fair enough.

I'm going to click on the link here. And tell

me if this is the Dynamic Range Labs website.

A. Yes.

Q. Do you see any breadcrumbs on the Dynamic

Range Labs website?

A. No.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1119

Q. And there's a top nav here up on the upper

right-hand side with a drop-down menu?

A. Uh-huh.

Q. Is that a breadcrumb?

A. No.

Q. So I'm just going to hover over the Services

item, and I'll click on Strategy.

What happened?

A. We went to a subsection of the website on

services and strategy.

Q. Is there a breadcrumb trail displayed on this

website?

A. No.

Q. Let me go to -- I'll just pick a site.

CNN.com. Is that a site you've ever visited before?

A. Yes.

Q. Okay. Is there a breadcrumb on this website?

A. I don't see a breadcrumb now.

Q. I'm going to click on the Business tab.

Did that take me to the Business web page of

CNN.com?

A. Yes.

Q. Do you see a breadcrumb on this website?

A. No. I don't see a breadcrumb.

Q. I'm going to go, to be fair and balanced, to

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1120

the foxnews.com website.

Do you see that on the screen?

A. Yes.

Q. Do you see a breadcrumb on this website?

A. No. I don't.

Q. I'll click on the Business tab of the Fox News

website.

Do you see a breadcrumb trail on the resulting

web page that was loaded?

A. No. I don't.

Q. I just wanted to make sure that I understand

your testimony, Mr. Miller.

Did you ever intend to say at any point during

your testimony today that the presence of a breadcrumb

is necessary to have a good website?

A. Yeah. I may have said that. And I think

there's some value in a breadcrumb, but maybe it's not

always necessary. And I would say it doesn't -- there

are great websites. I would say CNN's a great website,

and it doesn't have a breadcrumb. So yeah.

Q. Let me ask you even a more specific question.

Is it necessary, in your view, to have a drop-down

breadcrumb to have a good website?

A. No. I think I mentioned earlier that I prefer

navigation to be in the menu up above and that a

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1121

drop-down in a breadcrumb I would consider not the best

UI/UX sort of element there, design element.

Q. Has DRL ever performed any study or analysis

to try and determine the value of a drop-down

breadcrumb feature?

A. No.

Q. So this is the same Exhibit 10 that

Ms. McCarty asked you about earlier. I'm going to

direct your attention to Page 8, which bears the Bates

number ending in 4029.

A. Uh-huh.

Q. Do you see that page?

A. Yes.

Q. Do you recall being asked about this page

earlier today in your testimony?

A. Yes.

Q. To the best of your knowledge, do the various

levels shown on this page relate to the top navigation

menu of the microchip.com website?

A. Yes.

Q. Okay. To the best of your knowledge, are

these various headings or levels that are shown here

accessible via a drop-down menu as part of a breadcrumb

on the redesigned Microchip website?

A. No.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1122

Q. Mr. Miller, does DRL ascribe any particular

value to a drop-down breadcrumb feature?

A. No.

Q. Do you remember a line of questioning where

Mr. Jensen took you to Google?

A. Yeah.

Q. And the DRL web page?

A. Yeah.

Q. And the Fox and CNN web pages?

A. Yes.

Q. Now, Google is not -- google.com is not

microchip.com, right?

A. Right.

Q. And DRL is not Microchip; is that right?

A. Right.

Q. Do you know how many users visit DRL monthly?

A. A small amount. I can confidently say

probably less than a thousand a month.

Q. And Microchip has far more visitors than that

a month; is that fair?

A. Yes.

Q. And Fox and CNN, they're not microchip.com,

right?

A. Different companies. Yes.

Q. And Microchip isn't a news website; is that

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1123

right?

A. That's right.

Q. So would you agree that the use of breadcrumb

is dependent on the application or the design of the

website?

A. You know, I would say they are different types

of websites. I think an argument could be made that a

news site could have a breadcrumb, but maybe it's more

preference, right?

I think people look to navigate content on any

site, and -- and, you know, my personal preference

might be that a breadcrumb adds some value but maybe

it's not -- as was pointed out, there are plenty of

sites that could have a breadcrumb that probably don't.

So...

Q. No. That's fair.

So to follow that, is it fair to say that the

use of breadcrumb depends on who is applying it and who

is designing the website?

A. Yeah. Sure.

Q. And you talked briefly about DRL customers

asking you about breadcrumb.

Do you remember that line of questioning?

A. I think the question was if we'd ever been

asked about breadcrumb with a drop-down menu by a

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1124

customer, and I said no.

And to be honest, I don't recall really having

conversations around breadcrumbs with any of our

clients. I don't think it's a common -- it's a small

nuance in a web redesign that might come up during a

design, but it's not something I would have a

conversation with someone about. So...

Q. So you don't recall if Microchip ever asked

you to specifically implement breadcrumb in the

website?

A. I'm sure they did not. Like, I did not have

any conversations about that with them.

(End video.)

MS. FROST: Your Honor, Microchip calls

Dr. Mark Wolf as its next witness.

He's out in the hall. May we go get him,

please?

THE COURT: Of course.

(The witness was sworn.)

DIRECT EXAMINATION

BY MS. FROST:

Q. Good morning.

A. Good morning.

Q. Would you please state your name for the

record, and introduce yourself to the jury and the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1125

Judge?

A. Sure. My name's Mark Wolf.

Q. Please briefly describe for everyone your

educational background, starting with undergraduate

school.

A. Sure. I have a bachelor's degree in

psychology from George Washington University and a

master's and Ph.D. in industrial organizational

psychology from Georgia Tech.

Q. Where do you live, Dr. Wolf?

A. Tempe, Arizona.

Q. By whom are you employed?

A. Microchip Technology.

Q. How long have you worked for Microchip

Technology?

A. A little over four years.

Q. And what's your job title there, please?

A. Marketing analytics manager.

Q. What do you do as a marketing analytics

manager at Microchip?

A. I oversee two functions for corporate

marketing. One is analytics; the other is SEO.

Q. What does your marketing analytics function

consist of?

A. For our analytics, there are several aspects

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1126

to it in support of the business: Create and share

reports, analyze data, share data. Also get a lot of

requests for reports and data that I fulfill.

Q. In your marketing analytics function, why do

you analyze data and generate these sorts of reports?

A. To evaluate -- for the most part, it's to

evaluate how our marketing efforts are performing.

Q. You said you receive requests from folks in

the business, right?

A. That's correct. Yes.

Q. Can you give the Court and jury an example of

what such a request might be?

A. Sure. A common request is someone will ask

for a specific web page, how many people are visiting

that web page.

Q. And what's your understanding, at a high

level, as to how the business folks use those reports

and analytics that you provide?

A. Sure. They use it to evaluate how their

marketing efforts are performing. Could be other

reasons, but that's one of the primary reasons.

Q. Approximately how many requests like this do

you receive on a weekly basis?

A. 10 to 15.

Q. Do you have any people who work with you in

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1127

performing your marketing analytics function?

A. Yeah. I have two direct reports.

Q. Let's talk about your other corporate

function, SEO.

A. Yeah. That's search engine optimization.

Q. And I believe the jury has heard a little bit

about SEO during the trial. And I know you haven't

been in the courtroom, so...

But can you remind the jury and us briefly

about what SEO is and does?

A. Yeah. One of the common things for SEO is you

have a website and you look at the pages on the website

and you see if you can optimize those pages so they

rank higher in search engines like Google.

Q. And what do you do in your SEO function?

A. Sure. I look at microchip.com and see if

there are any pages that we can optimize for search

engines. We generally want our pages to rank as high

as possible in the search engines.

Q. So you want it to come up first in a Google

search?

A. Yes.

Q. How many folks work with you in carrying out

your SEO function?

A. I have four direct reports.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1128

Q. As a general matter, high level, what type of

information do you have available to you for performing

your data gathering and analytics?

A. Sure. I have access to -- one of the primary

sources is Google Analytics, although I do have other

tools and data sources available.

Q. What Microchip websites do you primarily work

with in performing your data analytics function?

A. Primarily, it's microchip.com and, to a lesser

extent, microchipdirect.com.

Q. And what's your level of familiarity with

those websites and their functionality?

A. Sure. Quite familiar with microchip.com, and

to a lesser extent, microchipdirect.com.

Q. If the jury's heard testimony that

microchip.com and microchipdirect.com are separate

websites with separate purposes, would that be

consistent with your understanding?

A. Yes. That's true.

Q. Dr. Wolf, did there come a time when you were

asked to provide some data analytics for this case?

A. Yes.

Q. What type of data analytics were you asked to

provide? Can you give us some examples?

A. Yeah. I can provide three examples. One is a

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1129

traffic source analysis of Microchip Direct. This was

looking at where traffic was coming from when going to

microchipdirect.com. Another one was a worldwide

versus U.S. revenue comparison analysis, and a third

one was a use case, the two-page visit analysis.

Q. Let's talk first about the microchipdirect.com

traffic source analysis, okay?

A. Okay.

Q. What was your objective in making that

analysis?

A. Sure. The objective was to associate -- was

to evaluate a revenue figure that I was given.

Q. Were you looking to determine where users to

Microchip Direct were coming from in your traffic

analysis?

A. Yes. So the way that that was done is we

looked at everyone that was coming from microchip.com

and went to microchipdirect.com and then looked at

the -- the overall revenue figure was the worldwide

figure. And then the -- then I also restricted it to

just users who had made purchases from the United

States, and that represented the United States revenue

figure.

Q. Okay. I think we're talking about your -- I

think we're out of order. I may have confused you.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1130

Let's talk about your traffic source analysis.

A. Okay.

Q. People coming to microchipdirect.com.

Can we talk about that first?

A. Yeah, yeah, yeah.

Q. All right. So let's go back and ask: What's

your objective in making the microchipdirect.com

traffic source analysis? Were you trying to determine

where users to Microchip Direct were coming from?

A. Yeah, yeah. We were looking for where users

who are going to Microchip Direct were coming from.

Q. And was your analysis focused on U.S. users?

A. Yes.

Q. And what did you find as a result of your

analysis?

A. We found that most people were going to

microchipdirect.com from a source other than

microchip.com.

Q. Since most users at microchipdirect.com were

not coming from microchip.com, as you just told us,

where were they coming from?

Can you please provide us some examples?

A. Yeah. Sure. Some common examples of how

people get to microchipdirect.com are: They could

conduct a Google search. They could type the URL into

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the browser. Or they could -- in their browser they

could create a shortcut when they're on a

microchipdirect.com page.

Q. How do you know that most users arrive at

microchipdirect.com from sources other than

microchip.com like the examples you just gave?

A. I analyzed it.

Q. How did you analyze it?

A. I used an analytics tool.

Q. Which one?

A. Google Analytics.

Q. Please turn in the binder -- I put before you

a binder of some documents.

Could you please turn to Exhibit D-465, which

is a tab in the binder.

A. Yes.

Q. What is D-465? Can you identify it briefly?

A. Yes. Yeah. This is a series of analyses that

I performed as part of this case.

Q. Does your traffic source analysis we've just

been talking about appear in Exhibit 465 at Pages 11

through 14?

A. Yes.

MS. FROST: We offer Exhibit D-465, Your

Honor.

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MR. CHAN: No objection, Your Honor.

THE COURT: It'll be admitted.

MS. FROST: Mr. Thompson, could you

please display Exhibit 465 at Page 11?

BY MS. FROST:

Q. What do we see on the screen, Dr. Wolf?

A. Sure. This is showing the number of users

that -- from -- who made purchases -- or, sorry.

Number of users from the United States on

microchip.com -- sorry, sorry.

The number of users who came from

microchip.com on their way to Microchip Direct.

Q. Okay. So this is --

A. This is the first one.

Q. This is the traffic analysis. So it's telling

you how many people came from microchip.com to

microchipdirect.com --

A. So the first --

Q. -- or other sources?

A. Yeah. The first one is the overall -- this

page, I believe, is the overall, the -- and then the

following page is those who came from microchip.com.

Q. All right. Let's look at just Page 11 for the

moment.

A. Okay.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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1133

Q. Okay. What time period does your traffic

source analysis cover?

A. Sure. It's from -- August 2018 through

October 2021.

Q. Stated as a percentage, if you can, what were

the results of your analysis of how people arrived at

microchipdirect.com?

A. It shows that most people came to

microchipdirect.com from a source other than

microchip.com.

Q. And can you state that as a percentage?

A. Yeah. 83 percent went to microchipdirect.com

from a source other than microchip.com.

Q. Would that include Google? What other

sources?

A. Yeah. That'll include some of the sources

that I listed before, among others. It could include

Google, people typing in the URL into their browser, or

people sharing a short -- saving a shortcut on their

browser and then later accessing that shortcut.

Q. What's a common way to get to

microchipdirect.com through Google?

A. Through Google? You could just type in

Microchip Direct into the Google search engine, and

then Microchip Direct would be the first search result.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1134

And then just click on it.

This would be for people that are already

familiar with Microchip Direct and are just using

Google to access the website.

Q. You told us that a user can go directly to

microchipdirect.com, didn't you?

A. Yes.

Q. Okay. Can you describe how a user could go

directly to microchipdirect.com?

A. Yes. So two methods. One is they could open

their browser and type in the URL. So

www.microchipdirect.com.

Another one is the shortcut method. They

could be on a Microchip Direct page, save a page as a

shortcut in their browser, and then later when they

access that shortcut, that would be a direct method.

Q. Okay. We've talked about the 83 percent that

come to microchipdirect.com through sources other than

microchip.com.

Let's talk about those who come to

microchipdirect.com from microchip.com. Okay?

A. Okay.

Q. All right. How many U.S. users get to

microchipdirect.com by way of microchip.com?

A. 17 percent.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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1135

Q. And how do you know that?

A. That's part of this analysis as well.

Q. How can users get from microchip.com to

microchipdirect.com?

A. A common method is that someone could land on

the homepage and then immediately click on the Order

Now link or one of the two shopping cart icons. All of

these appear at the top of the homepage.

Q. And if you click on any one of those, where do

you go?

A. You would immediately go to

microchipdirect.com.

Q. You weren't here when Ms. Mahar gave a

demonstration of how to use the shopping cart on the

new website, were you?

A. No. I was not.

Q. Okay. What version of the microchip.com

website would have been in use during 2019?

A. The old version.

Q. Could a user have gotten from microchip.com to

microchipdirect.com through clicking on a shopping cart

icon or link on the homepage on the old website?

A. There was a shopping cart icon on the homepage

of the old website.

Q. Okay. So the three ways to get to

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1136

microchipdirect.com that we've been discussing: Using

Google or a search engine, one way. Typing in the URL

or making a shortcut, going directly. Or using the

shopping cart icon on the microchip.com homepage.

Which one of those uses a breadcrumb?

A. None of them.

Q. All right. Separate from the user traffic

analysis -- we've concluded with that -- did you

receive a request for traffic analytics from an expert

for Microchip in this case?

A. I did.

Q. And who was the expert who made the request?

A. Mr. Jordan.

Q. Did you provide the information he requested?

A. Yes. I did.

Q. And what did you provide him?

A. The information requested was how much revenue

was generated from those who came from the Microchip

Forums website and went to microchipdirect.com and made

a purchase on microchipdirect.com.

Q. Was it for a particular period of time?

A. Yes. That was for 2021, the full calendar

year.

Q. All right. Previously you gave us three

examples of data analytics you were asked to provide in

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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1137

this case. We've talked about the first traffic source

example.

Let's now talk about the worldwide versus U.S.

sales revenue comparison that you did. Okay?

A. Okay.

Q. All right. First, what were you asked to do?

A. That was the one where I was asked to evaluate

a revenue figure.

Q. Okay. The jury's heard about a

$215,000-per-day revenue number taken from a slide in a

Microchip presentation. Is that the number that you

are referring to?

A. Yes.

Q. How did you become familiar with that number?

A. Through this lawsuit.

Q. Were you involved in creating the number?

A. No.

Q. Do you know who was?

A. No.

Q. Have you seen a Microchip presentation that

contains the $215,000-per-day revenue number?

A. Yes. I believe it was shared with me at my

deposition.

Q. What, if anything, can you tell about the date

of the presentation that you saw?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1138

A. Sure. Grace Ramon was listed as the presenter

of the presentation. She left Microchip in April 2019.

Therefore, we know that that $215-per-day (sic) revenue

figure was presented on or before April 2019.

Q. What significance, if any, did the data, the

presentation have in your analysis?

A. It informed what the dates or the most

relevant timeline of the data should be.

Q. Were you able to perform the worldwide versus

U.S. sales and revenue comparison?

A. Yes. I was.

Q. Are you in finance, Dr. Wolf?

A. I'm not in finance.

Q. Okay. So how are you able to perform a U.S.

versus worldwide sales and revenue comparison?

A. We added e-commerce tracking to Microchip

Direct.

Q. When did you do that?

A. I should say we added e-commerce tracking to

Google -- through Google Analytics to Microchip Direct.

That was done in August 2019.

Q. And what do the e-commerce analytics allow you

to do with respect to microchipdirect.com?

A. They allow me to see all revenue from product

purchases made on microchipdirect.com.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1139

Q. What more did you need to do to provide your

U.S. and worldwide sales analysis besides use the

e-commerce analytics?

A. Nothing.

Q. Okay. So what types of sales and revenue did

you compare in your analysis?

A. Sure. This is the one where -- so we looked

at for -- this is the one where people were coming from

microchip.com and went to Microchip Direct and made a

purchase. The overall figure was the worldwide revenue

figure.

And then I also restricted it to just the

United States. And for people who made their purchases

from the United States, that was -- those represented

the United States revenue figures.

Q. Okay. So you were able to discern a worldwide

figure, and then what part of that worldwide figure

would be attributable to the United States?

A. Yes.

Q. Okay. Who made the determination -- or who

makes the determination as to how a sale is classified

using these e-commerce analytics?

A. Sure. It's based on the IP address of the

person who makes the purchase. Google Analytics

processes the IP address and derives their location

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1140

based on their IP address.

Q. So it's classified "U.S." or "other" by Google

Analytics?

A. Yeah. Roughly.

Q. And Google Analytics -- well, you didn't make

the determination or classification yourself, did you?

A. That's correct. Yeah.

Google Analytics is the one that processes the

data and derives the location. I did not take part in

determining the location of the users that made the

purchase.

Q. Okay. So what form did the results of your

worldwide sales versus U.S. sales data comparison take?

A. An Excel spreadsheet.

Q. Please turn in your binder to --

MS. FROST: And we can show on the

screen, Mr. Thompson.

BY MS. FROST:

Q. -- Exhibit D-467, which has been previously

admitted.

Is that your worldwide and U.S. sales

analysis?

A. Yes.

Q. What period of time does your analysis cover?

A. It goes from September 2019 to December 2021.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1141

Q. Why did you choose September 2019 as the start

date?

A. So as I testified earlier, the e-commerce

tracking was set up in August of -- September 2019. So

the first full month of data that we had available was

September of 2019.

Q. Was the data, the presentation we've just been

talking about, important in your determination of a

start date?

A. Yes. So it was important because we know that

the revenue figure, as I testified earlier, would have

been presented in April 2019 or earlier. So it would

be best to have revenue figures as close as possible to

when that revenue figure was presented.

Q. All right. So just to be clear, the revenue

data in your analysis here comes from revenue generated

from sales on microchipdirect.com, right?

A. That's correct.

Q. And does the data in your analysis here cover

the revenue generated by that 17 percent of the people

who you told us before got to microchipdirect.com

through microchip.com?

A. That's correct.

Q. And did -- does this include those people who

got to microchipdirect.com by landing on the homepage

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1142

at microchip.com and then clicking on a shopping cart

or other icon on that page?

A. So yes. This includes people that landed on

microchip.com and then immediately clicked on the Order

Now or one of the shopping cart icons at the top and

then made a purchase on microchipdirect.com.

Q. And did any of those users who clicked on the

shopping cart icon like you described use a breadcrumb?

A. No.

Q. All right. Ms. Mahar testified yesterday that

implementation of the new website began in June 2020

and continued until completed.

Is that consistent with your understanding?

A. Yes.

Q. Accordingly, does your analysis here include

sales from -- or revenue from microchipdirect.com that

occurred while both the old and the new microchip.com

websites were in use?

A. Yes. That's included as well.

Q. What website would have been in use for the

period of your analysis from September 2019 to

June 2020?

A. That would have been the old website.

Q. Okay. When was the migration of the old to

the new website substantially completed?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1143

A. That would have been May 2021.

Q. Do you know what the website use would have

been like in the period after June 2020 and before

May 2021 of your analysis in that yellow highlighted

period?

A. Yeah. So between these two time periods, it

would have been a mixture of the old pages and the new

pages. As we approach May 2021, you would have -- they

would have been able to access less of the old pages as

they would have been replaced by the new pages.

Q. Okay. Just to summarize this. So below the

June 2020 line on Exhibit 467 is when the old website

was in place, right?

A. That's correct.

Q. And between the June 2020 line and the

May 2021 line was the transition period between the old

and the new websites that you just described, right?

A. That's correct.

Q. And after the May -- or on top of the May 2021

line is after substantial completion of the transition

to the new website had occurred.

Did I get it right?

A. That's correct.

Q. Okay. At a high level, what did your

worldwide sales versus U.S. sales revenue data

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1144

comparison show about microchipdirect.com sales in

general during the analysis period?

A. I mean, generally the data shows that a

substantial portion of the revenue generated on

microchipdirect.com from when the source is -- sorry --

revenue generated on microchipdirect.com when the

source is microchip.com is foreign.

Q. Okay. So a large component in the sales of --

revenue was foreign.

MS. FROST: Do you mind putting that

exhibit back up, please, Mr. Thompson?

BY MS. FROST:

Q. Stated as a percentage, if you can, what

percent of the sales revenue you analyzed was from

foreign non-U.S. sales? So what percentage of this

revenue?

A. 81 percent.

Q. What percent of the revenue, therefore, you

analyzed was U.S. sales revenue?

A. 19 percent.

Q. Was the 81 percent and 19 percent non-U.S. and

U.S. calculation made based on the entire amount of

revenue and for the entire time period covered in

Exhibit 467?

A. Yes. It's the entire timeline.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1145

Q. Okay. Now, let me ask you: What, if

anything, did the results of your worldwide analysis

signify to you with regard to the $215,000-per-day

revenue number you started with?

A. Sure. So for this, I just looked at the most

recent time frame, the 2019 data, that's shown in the

table here because it's closest in time to when that

other revenue figure would have been presented. And it

shows that that $215,000-per-day revenue figure is even

much higher than the worldwide revenue figure

percentage here.

The other thing that we can conclude is

that -- the other thing is that there's -- there's no

way that it can be a U.S.-only number. It has to be a

worldwide number. I mean, it's even higher than the

worldwide -- than what we would calculate here for the

2019. So it can't possibly be U.S. only.

Q. Okay. So let's unpack that just a minute.

So what you're saying is that the -- are you

saying that the $215,000-per-day revenue number had to

be a worldwide revenue number?

A. It has to be a worldwide. Can't possibly be

U.S. only.

Q. And looking at the data that you

specifically -- the actual data that you analyzed, are

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1146

you suggesting that the magnitude of that

$215,000-per-day revenue number was too high?

A. I think it's even higher than the 2019 data

here. So it -- it seems -- it does seem to be too

high.

Q. And why did you look at the 2019 data again?

A. So it's the closest in time. So I wanted to

use the data that was closest in time to when that

revenue figure would have been presented.

Q. Okay. All right. Let's --

MS. FROST: You can take that down,

Mr. Thompson. Thank you.

BY MS. FROST:

Q. Let's talk next about the use case that you

said you created in this case. Okay?

A. Okay.

Q. All right. This is the third example. We're

in the home stretch.

First, what were you asked to do?

A. So I was asked to identify all those who might

have made a purchase on microchipdirect.com using the

breadcrumb feature on microchip.com.

Q. Were you trying to provide an amount of

revenue that could have been generated by sales made at

Microchip --

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1147

A. Yeah. So we were looking --

Q. -- Direct -- sorry. Go ahead.

No. Go ahead.

A. Yes. So we were looking at the revenue to

determine the number of -- the sales, I guess outcome

you'd say, from microchipdirect.com.

Q. So how did you go about responding to the

request and providing the information about that?

A. I created a use case.

Q. What is a "use case," as you use that term?

A. Sure. Here we're defining use case as a

scenario in which users on the website perform specific

actions.

Q. Okay. You sometimes refer to a use case in

your parlance as a "segment"?

A. Yeah. In the past, it was referred to as a

segment.

Q. And what was the purpose of the use case that

you created?

A. The purpose of the use case was to identify --

was to associate the amount of revenue on

microchipdirect.com with all those who might have used

the breadcrumb feature on microchip.com.

Q. And what were these people who were using

the -- might have used the breadcrumb feature on

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1148

microchip.com doing? Were they going to make a

purchase on Microchip Direct or...

A. For all the people that were using -- so I was

attempting to identify anyone who might have used the

breadcrumb feature. After that -- I mean, the use case

then looked at the amount of revenue that could have

been generated from anyone who might have used the

breadcrumb feature.

I guess I'd add, you know, just because

someone uses the breadcrumb feature, I don't know what

they do afterwards. But the purpose of the analysis

was to identify any revenue that might have been

associated with the people who might have used the

breadcrumb feature.

Q. Okay. And so because you had to -- you were

looking at revenue, you had to see what those users did

on microchipdirect.com?

A. Yes. So the breadcrumb feature is on

microchip.com and the e-commerce -- or where you make

the purchases on microchipdirect.com. So I had to look

at data across two separate websites.

Q. Okay. So let me see if I understand what

you're saying -- telling us.

What you were trying to do is to determine all

who might have used the breadcrumb feature on

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1149

microchip.com on their way to make a purchase at

microchipdirect.com?

A. Yeah. On their way to make a purchase.

So yeah. I was looking at -- I was trying to

associate the amount of revenue for those who used the

breadcrumb feature on microchip.com with those on their

way to make a purchase at microchipdirect.com.

Q. All right. So why did you need to create a

use case in order to provide the requested data?

A. Sure. So we don't have functionality -- or we

don't have analytics set up that isolates use of the

breadcrumb feature.

Q. So why were you not able to isolate the

breadcrumb feature?

A. Sure. The way the analytics is set up is I

can only see the next page that someone goes to. So in

the case where a page has a link that goes -- has more

than one link that goes to the same next page, I'm not

able to tell if they clicked on that link from the top

level navigation, the breadcrumb feature, or the body

of the page.

Q. So you're able to track the next page someone

would go to but not the link they used to get there.

Do I get it?

A. That's correct. If the link appears more than

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1150

once on the page and it goes to the same next page, I

don't know which of those links they clicked.

Q. Why, if you know, does Microchip not maintain

analytics to track breadcrumb use on the websites?

A. It was --

Q. The website?

A. Oh, sorry.

It was never considered important. We never

received any requests for data from the breadcrumb

feature or a request to track the breadcrumb feature.

Q. Who decides what features to track at

Microchip? And on what basis do they decide?

A. So it's largely my team. And I guess I should

add we never received -- I never received any requests

from Microchip employees to track that feature.

So it's my team and it's based on the requests

we get.

Q. So let's talk about the use case that you

created.

First, can you please tell us how you are

going to refer to it so you and I are communicating and

jury understands what we're talking about?

What do you call it?

A. We'll just generally call the use case the

two-page visit analysis.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1151

Q. Okay. So what was your objective in using the

two-page visit use case?

A. Sure. Again, the purpose was to identify --

to associate the amount of revenue with anyone who

might have used their breadcrumb feature on

microchip.com on their way to making a purchase at

microchipdirect.com.

Q. Was your two-page use case analysis

over-inclusive or under-inclusive?

A. It was over-inclusive.

Q. Why do you say it was over-inclusive?

A. For the reasons that I've just described, I

can't tell whether or not -- when the link -- when

there's a link to the same next page more than once on

a page, I can't tell which one they clicked.

So it's possible that instead of the

breadcrumb, they could have clicked on the top-level

navigation or the -- a link in the body of the page.

So I'm not able to determine which of those links were

clicked on. So it could include any of those links.

Q. Okay. So you included all of those users

because you couldn't tell which one of the links they

actually used, right?

A. Yeah. Based on how the analytics is set up, I

had to use -- I used all the links.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1152

Q. Okay. So there could be people in your use

case who didn't use a breadcrumb at all, right?

A. That's correct.

Q. Did you reach any conclusions as a result of

your two-page visit use case analysis?

A. Yes.

Q. And what form did your conclusions take?

A. In an Excel spreadsheet.

Q. Okay. Is that Excel spreadsheet part of D-465

in front of you which we were talking about earlier?

And I'll turn your attention to Pages 19 through 23.

A. Yes.

MS. FROST: And, Mr. Thompson, if you

want to bring up Page 19, please, of that exhibit.

BY MS. FROST:

Q. What does your report show?

A. Sure. It shows, for people making purchases

in the United States, anyone who might have used the

breadcrumb feature on their way to making a purchase on

Microchip Direct. And then it shows revenue

figures for that.

Q. All right.

A. And e-commerce data.

Q. Great. Thanks.

Let's take a look at the results briefly.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1153

First, what parts of the Pages 19 to 23 that

contains your two-page use case analysis pertain to the

old website?

A. Sure. It's 19 and 20.

Q. Okay. Let's look at -- we're looking, I

believe, at 19 here; is that right?

A. Yes. This is 19.

Q. All right. First, where on the page here is

the two-page use case you'd been telling us about?

A. So it's the first part on the left side, under

the -- where it says: Two design center page visits.

Q. Okay. So the data on the right side of the

page --

MS. FROST: Which we can take down.

Highlight, Mr. Thompson.

BY MS. FROST:

Q. -- that's not part of the two-page use case,

is it?

A. That's not part of the two-page visit analysis

use case.

Q. Great. Is the data presented on the two-page

use case analysis on a per-month basis?

A. Yes.

Q. Let's run through the spreadsheet very

quickly, focusing on one month. Okay?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1154

A. Okay.

Q. And would October 2019 be a representative

month we could use?

A. Yes. That's the first row of data.

Q. Okay. So let's go from reading left to right

across the top. Tell us, please, what country the

first column Country signifies.

A. Sure. Country indicates that the person who

made the purchase made the purchase from the United

States. That's, again, based on their -- the IP

address of the person that made the purchase.

Q. Okay. And, again, is that a Google Analytics

determination?

A. Yes. So, again, Google Analytics processes

the IP address to determine the location of the user.

Q. Okay. Moving to the right. We have Date 1

and Date 2.

What is that?

A. Sure. I know it's not visible here. Date 1

is the first day of the month. Date 2 is the end date

of the month. So this is just representing that

there's a full month of data for each row. As we

discussed, it's broken out monthly.

Q. Okay. Next, moving over to the right, is

Product Revenue.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1155

What does Product Revenue signify or

represent?

A. Product Revenue is the overall total amount of

revenue from product purchases made on

microchipdirect.com.

Q. And is this revenue from all the products

purchased in your use case for that month that's being

shown there?

A. Yeah. This would be for the use case if we're

looking at the first row for October. This would be

all the product revenue from October for people that

met the conditions of the use case.

Q. Okay. So let's look at Unique Purchases.

What does that signify?

A. Unique purchases is the total number of

products. So you might think of it as product types.

So an example here is that if you have six

baseballs and two bats and that's the purchase, they're

two different product types, balls and bats. So that

would be two here for unique purchases.

Q. And the Quantity column? What does that

represent?

A. Quantity is the number of units purchased.

So going back to the example of six balls and

two bats, there would be -- that would result in a

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1156

quantity or a number of units of eight.

Q. Okay. Average Price, the next column. What

is that?

A. Average Price is the average price of the

units or quantity here.

Q. And finally on the Average Quantity, what does

that column represent?

A. Sure. Average Quantity is the average number

of units per product.

So going back to my example of six balls and

two bats, we have two products and eight units. So it

would be eight divided by two is four. So in this case

it would be an average quantity of four.

Q. Okay. Let's go back to Product Revenue for

just a minute. I just want to make sure we're clear

here. Is the product revenue of $353.46 shown under

Product Revenue for October 2019, is that the amount of

revenue that could have been generated by sales made at

microchipdirect.com from the use of the breadcrumb

feature on microchip.com?

A. It includes anyone who might have used the

breadcrumb feature. And just to be clear, anyone who

did use the breadcrumb feature is included here.

We just -- since it's over-inclusive, we're

not sure if they used a different link to get to -- to

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1157

satisfy the conditions of the use case and then make a

purchase.

Q. Okay. But that's the revenue number that you

isolated that was attributable to all the people who

might be using a breadcrumb feature on microchip.com in

the process of getting to microchipdirect.com to make a

purchase, right?

A. That's correct.

Q. Okay. How did you create this spreadsheet?

A. I used a default report from the e-commerce

tracking and Google Analytics for -- from -- when

looking at microchipdirect.com.

Q. Is the terminology used on this spreadsheet

like Unique Purchaser and so forth, is that your

terminology? Or is that from Google Analytics?

A. That comes from Google Analytics.

Q. I notice on Page 19 some fields that have no

data. Like I think February 2021, for example.

Do you see that?

A. Yes.

Q. Why do those fields not have any data?

A. These people did not meet the conditions for

the use case and, therefore, there's no revenue.

Q. So there's no revenue that was generated from

anyone who might have used the breadcrumb feature on

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1158

microchip.com on their way to make a purchase on

microchipdirect.com in that month or those months?

A. That's correct.

Q. Okay. Dr. Wolf, I think that's all I have for

you right now. Thank you.

MS. FROST: Pass the witness.

THE WITNESS: Thank you.

CROSS-EXAMINATION

BY MR. CHAN:

Q. Good afternoon, Dr. Wolf.

A. Hi, Mr. Chan.

Q. Have we met before?

A. Yes. You conducted my deposition, I'm going

to say, over -- a little over seven months ago.

Q. Good to see you again.

A. You too.

Q. I have a couple of questions. And let's start

with what you just testified to about the spreadsheets.

Now, these spreadsheets that you generated are

for Active Path, correct?

A. I don't know what you mean by "Active Path."

MS. FROST: Objection, Your Honor.

BY MR. CHAN:

Q. Are they for the breadcrumb?

MS. FROST: Objection, Your Honor.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1159

Calling for claim construction and --

THE COURT: Overruled.

BY MR. CHAN:

Q. You may answer.

A. Some of them are for the breadcrumb feature.

Q. Okay. So how often during your career have

you made spreadsheets for Active Path?

A. Again, I don't know what you mean by "Active

Path."

Q. Are you aware Active Path is part of this

case?

A. I am now.

Q. Okay. Are you aware of the term "breadcrumb"?

A. Yes.

Q. Okay. How often during your career have you

made spreadsheets for breadcrumb?

A. Outside of -- outside of this case, never.

Q. Okay. Now, let's talk about the timeline.

Before I took your deposition, you produced

some spreadsheets, correct?

Do you remember that?

A. Yes.

Q. To be clear, they're not the spreadsheets that

you testified to today; am I correct?

A. No.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1160

Q. No, as in they are the same? Or they're

different?

A. They're different.

Q. Okay. Now, I took your deposition. You never

made those available for your deposition. So now after

I took your deposition, you then produced them,

correct?

THE COURT: Counsel, when he produced

anything is of no concern to the jury. You need to

move on to something else.

MR. CHAN: Understood. Thank you, Your

Honor.

BY MR. CHAN:

Q. Now, these spreadsheets were not created in

Microchip's ordinary course of business; am I correct?

A. They were created from -- as I understand it,

many of these spreadsheets were created based on a

broad request of data made by the plaintiffs.

Q. Okay. So I understand.

But these spreadsheets are not kept in the

ordinary course of business at Microchip; am I correct?

A. I don't know whether I would classify that

work as ordinary course of business or not.

Q. Well, would it be safe to say that you

prepared them just for this litigation?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1161

A. Yes. Yeah. These -- these were prepared for

this case.

Q. Okay. Is my understanding correct that

Microchip uses Google Analytics, which I believe you

already testified to, to track web traffic on the

websites?

A. Yeah. We use Google Analytics to track

behaviors performed on our websites.

Q. Okay. So these analytics are provided by

Google?

A. I mean, some are.

Q. Okay. Which one is provided by Google?

A. You want me to go through them?

Q. Sure.

A. Okay. I think it's most.

So let's see. Looking at Exhibit D-465 --

Q. Okay.

A. -- Page 1, Google; Page 2, Google; Page 3,

Google; Page 4, Google --

Q. How about this? Let me make this easy. Which

one did you prepare that is not prepared or provided by

Google?

A. Okay. It's Page 9 and Page 10. That's it.

Page 9 and 10 of D-465.

Q. And 9 and 10 reflect the -- what do they

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1162

reflect?

A. Okay. These reflect file downloads from

microchip.com. So the number of times that files were

downloaded.

Q. So other than file downloads, everything is

provided by Google?

A. Yes. That's correct.

Q. Okay. Dr. Wolf, you don't track the analytics

such as what products are sold on microchip.com,

correct?

A. So we don't sell products on microchip.com. I

don't understand the question.

Q. I think you testified for a shopping cart,

right?

A. We have -- there is a shopping cart icon on

microchip.com. But I still don't follow the earlier

question where you're asking --

Q. What if I say you don't track any products,

you know, being clicked on or selected and then put in

the shopping cart?

A. Oh, I understand the question. No.

Q. Okay. Let's talk about these spreadsheets.

In generating these spreadsheets, you applied

certain methodologies, correct?

A. I don't know what you mean by methodology.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1163

Q. Well, I think earlier you testified to the

work constraint?

A. A constraint.

Q. Right? So you --

A. Yeah. It had to meet the constraints of the

use case? Or a segment, is what we've discussed in the

past.

Q. Okay. So you apply certain constraints to the

analytics in coming up with the data in these

spreadsheets?

A. For the use case. I guess all of them have

some kind of constraint. Yeah. Yeah. That's -- oh,

well, there might be some -- well, for Google

Analytics. I think it's true in all cases.

Q. Okay. You didn't approach anyone to confirm

whether your constraints were accurate; am I right?

A. Let me think about that. I mean, we did

discuss these during the deposition, but I did not --

otherwise I would hesitate to answer, because it would

call for privileged information.

Q. Okay. But outside of your lawyers, you

haven't confirmed with anyone that your constraints are

accurate?

A. Other than the questions that you asked me at

the deposition, no.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1164

Q. But we already established that the

spreadsheets that we talked about at your deposition

are not the same as these spreadsheets, correct?

A. They -- so what happened there is there was a

lot of spreadsheets provided before. And these are

just revisions of what was provided at the -- what was

available at the deposition, I believe, except for

maybe -- well, let's say for 465, the entirety of the

series of analyses from 465, this was all requested

by -- was part of a broad request from the plaintiffs.

So I'm not --

Q. Sir, I'm just looking for a yes or no. So

these are two different sets of spreadsheets, and you

didn't verify with anyone that the constraints applied

to the new spreadsheets are accurate; am I correct?

A. So they largely include the --

Q. You can qualify your answer when your

counsel --

THE COURT: Counsel, let him -- I'll

direct him. You don't tell the witness how to answer.

I'll take care of the courtroom.

MR. CHAN: Yes, Your Honor.

A. So these spreadsheets largely have -- are --

just include revisions, as I understand it, that were

requested by the plaintiffs. They're largely similar

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1165

to versions that were available before the deposition.

BY MR. CHAN:

Q. Okay. You didn't verify with anyone outside

of Microchip that the constraints that you used to

derive the spreadsheets are accepted practices; am I

correct?

A. So no. I didn't verify with another Microchip

employee that the -- about the constraints applied here

in these analyses.

Q. What about outside of Microchip?

A. Well, again, these were presented at the

deposition and they are largely -- they're revisions of

previous analyses. And the revisions were requested,

as I understand it, from the plaintiffs.

Q. Well, did you produce DTX-467 at your

deposition?

A. That's the exception. That was -- I don't

recall that we reviewed that during the deposition.

Q. Okay. At least for DTX-467 you didn't verify

with anyone that the constraints you applied were

accepted practices?

A. Let me think. If we're -- since I was

referring to the previous exhibit for this one, again,

I would hesitate to answer. Because you said anyone.

You know, because it would call for privileged

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1166

information.

Q. But you would agree with me that your choices

of data and the assumptions applied affects the results

in these spreadsheets, correct?

A. For -- we're talking about D-467 or all of

them?

Q. All the spreadsheets.

A. Yeah. I would say that these -- this data has

a bearing in this case.

Q. So I don't think I got the answer that I

wanted, but --

A. Oh. Sorry.

Q. So would you agree with me that the choices of

data and the assumptions applied to these spreadsheets

affect the results?

A. Yes. That is true.

Q. Now, Google didn't produce the results in

these spreadsheets, right?

A. The results in these spreadsheets come from

Google Analytics.

Q. You mean the raw data came from Google?

A. Yes.

Q. But the results, that is the results of the

constraint you applied, didn't come from Google; am I

right?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1167

A. I don't understand the distinction you're

drawing there.

Q. Okay. Would you agree with me how you choose

to analyze the raw data from Google affects the results

in these spreadsheets?

A. Yes.

Q. Okay. Now, earlier you testified to the

revenues in DTX-467. And I believe you said they

include sales for the old website; is that correct?

A. I'm sorry. I didn't catch that first part.

Q. Sure. Let me repeat myself.

So earlier you testified to Defendant

Exhibit 467, that it includes revenues from the old

website.

Do you remember that?

A. Oh, yes. Yes. I understand.

Q. Okay. When I took your deposition, isn't it

true that you said --

THE COURT: Counsel.

MR. CHAN: Let me rephrase.

BY MR. CHAN:

Q. Did you ever have access to the old websites?

A. Yes.

MR. CHAN: Mr. Gooden, can you pull up

PTX-44.045, Page 157, Lines 4 to 8 for the jury,

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1168

please?

Sure. PTX-44.045 at 157, Lines 4 to 8.

BY MR. CHAN:

Q. I asked you: So in connection with the

preparation of this spreadsheet, did you not analyze

the old website?

Your response: I don't have access to the old

website. It doesn't exist anymore.

Was that your testimony under oath?

A. Yes. That's correct.

MS. FROST: Your Honor, I don't think the

witness has a copy of his deposition at the bench.

THE COURT: Let's just keep going ahead.

That's fine.

Is there some other part of the

deposition you want to read in that you think needs to

complete --

MS. FROST: No, Your Honor. I was just

mentioning that.

THE COURT: Okay.

MR. CHAN: May I approach, Your Honor?

THE COURT: Yes.

MR. CHAN: Thank you.

BY MR. CHAN:

Q. Dr. Wolf, am I also correct that these

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1169

spreadsheets don't include any data for the Forum

section?

A. Yes. That's correct. Well -- yes. Yes.

That's correct.

Q. Thank you.

Now, Microchip deleted all its analytics in

December 2019 because of privacy concern; is that

correct?

A. No. That's not correct.

Q. Well, did you not test --

MR. CHAN: Mr. Gooden, can you pull up

PTX-44.074 at Page 273, Lines 8 to 12?

BY MR. CHAN:

Q. I asked you: Do you know of the approximate

time frame of when Microchip complied with Google's

requirement to remove certain data?

Your response: Yes. The data deletion was

performed on -- and I should say in December 2019.

MS. FROST: Your Honor, I object. That's

improper impeachment. It's hearsay.

THE COURT: Overruled.

BY MR. CHAN:

Q. That was your testimony, correct?

A. Yeah. So let me describe what happened.

So --

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1170

THE COURT: No.

THE WITNESS: No? I'm sorry.

THE COURT: Just -- your lawyers will be

able to -- if they feel like you need to give an

explanation, they'll be able to do that.

BY MR. CHAN:

Q. So would it be accurate to say these

spreadsheets don't capture all the data for the past

six years before the suit was filed?

A. So we could go through these spreadsheets.

The data deletion I don't believe impacted any of these

spreadsheets.

Q. So your testimony is even though there's

missing data, your spreadsheets were still accurate?

A. I believe you're taking the comment or the

testimony I made there out of context. There are other

constraints, one of which I've already testified to

regarding when we set up e-commerce tracking, that

prevented us from tracking that data.

We could go through each one, one by one, but

I don't believe that that data removal affected any of

the data in any of these spreadsheets.

Q. Okay. Let's talk about microchip.com. I

think you gave a lot of testimonies on that.

So let's talk about another way someone can go

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1171

from microchip.com to microchipdirect.com, fair?

A. Okay.

Q. A user can spend a lot of time navigating

around microchip.com.

Are we on the same page?

A. Theoretically.

Q. They can explore the websites, right?

A. Theoretically.

Q. They can follow the navigation, right?

A. When you say "follow the navigation," I'm not

sure which feature --

Q. They can follow top navigation, right, or the

Active Path?

A. Again, I'm not familiar with what "Active

Path" means. They can click on links from the

top-level navigation.

Q. Okay. Let's use this top navigation example.

They can follow the top navigation, correct?

A. I would say they'd be clicking on links from

the top-level navigation. I don't know what you mean

by "following" it.

Q. Okay. When they're clicking on the top

navigation, it generates links.

Is that your understanding?

A. I wouldn't characterize it as generating

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1172

links. You know, they can access a menu of available

links.

Q. Okay. Microchip would create those links for

the users?

A. Yes.

Q. Okay. For example, it could include drop-down

menus?

A. Yeah. The top-level navigation is a series of

drop-down menus.

Q. Okay. Now, they can spend a lot of time on

the website learning about products, right?

A. Theoretically. Yeah.

Q. And then they can set that aside, go get

coffee, right, go to bed, then write a report and then

share with a team, right?

All of which, you know, happens during part of

this navigation, fair?

Are we on the same page?

A. Yeah. I just find the characterization of

them leaving the website and then getting coffee and

coming back as part of the navigation as -- it's just

an odd way to state that. I don't really follow --

Q. You would agree with me that users can

actually do something else in the middle of navigating

the website?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1173

A. Yeah. Yeah.

Q. Okay. And sometime later that user or someone

else -- okay. Let's talk about that.

At that point in time, they can leave the

website, period, right? It's not part of the

navigation, correct?

MS. FROST: Your Honor, this is all

calling for speculation. Objection.

THE COURT: He's asking him whether he

knows or not. Overruled.

A. I'm having trouble following the

characterization of them leaving the website as part of

them navigating the website.

So the way I would describe it, someone can

access the website and then they can leave the website.

I mean, that's possible.

Q. And they can also use the website, navigate

around the website, and then leave the website, right?

A. Yes. Yeah. That's correct.

Q. And that would not be part of your navigation

data in your spreadsheets?

A. We can see the behaviors that they performed

on the website, and we can see the page that they

exited from the website. Once they're on another

website, we can't track what they do on that other

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1174

website.

Q. Okay. Let me make sure I understand.

Let's go back to the same scenario, a user can

browse around a website, navigate, right? We're all

clear of that.

And then sometime later, those users can go to

microchipdirect.com, fair?

A. Yes. Yeah. Yeah.

Q. And they can get there through Google, right?

A. I think it -- either they would navigate from

microchip.com to microchipdirect.com, or they would use

Google to go to microchipdirect.com.

Q. Okay.

A. I mean, it's possible they could do both, I

suppose. But that's -- it doesn't make sense to me

that someone would do both.

Q. Okay. But you're not disputing that they can,

you know, go to microchipdirect.com through Google then

at that point in time?

A. No. I mean, they would be -- it just -- it

would be an odd use case for someone to be on

microchip.com and then to decide to use Google to go to

microchipdirect.com to access microchipdirect.com. You

know, it's not something I've ever seen.

Q. Okay. And then at that point in time, they

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1175

can buy stuff on microchipdirect.com, right?

A. Once you're on microchipdirect.com, you can

buy stuff.

Q. And that user is not captured in these

spreadsheets; am I correct?

A. So the scenario that you're sharing is that

someone's on microchip.com and then they use Google to

go to microchipdirect.com to make a purchase, and then

is that included in these spreadsheets? No.

Q. Okay. And, again, if I'm on

microchipdirect.com, navigate, and then suddenly leave,

that data is also not part of the spreadsheets; am I

right?

A. If you're on microchipdirect.com and you

leave, we don't have -- I don't think we have something

specifically showing that.

Q. Okay. Now, you mentioned e-commerce tracking

software for microchipdirect.com.

Do you remember that?

A. Yes.

Q. There's -- no such software exists for

microchip.com, right?

A. So, I mean, you can add e-commerce tracking to

any -- it would be called property, but we'll call it

any website for -- through Google Analytics. It

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1176

wouldn't make sense to add e-commerce tracking for a

website that doesn't, you know, doesn't sell products.

So, I mean, it's certainly available, but it

doesn't make sense to set it up.

Q. Dr. Wolf, you don't know how revenues in

DTX-467 -- this is the second exhibit that you talked

about earlier -- relate to infringement in this case;

am I right?

A. The avenues, you said?

Q. The revenues.

A. Oh, the revenues.

Q. Right.

You don't know how the revenues in DTX-467

relate to infringement in this case, correct?

A. No.

Q. Okay. So you haven't considered that web

servers are located or maintained in the U.S. before

generating this data; am I right?

A. I don't know what you're referring to, so I

don't feel I can agree about the server part of this

statement.

Q. Okay. You haven't spoken with Ms. Mahar about

where the servers are located; am I right?

A. No.

Q. So when generating this data, you have no idea

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1177

how they relate to infringement in this case?

A. That's correct. Yes.

Q. Okay. Just to confirm, you're not a legal or

damages expert, correct?

A. No. I'm not an expert in legal or damages.

Q. You're not a patent expert either, right?

A. No.

Q. And it's safe to say that you don't really

understand the legal basis of the claims of patent

infringement in this litigation; am I right?

A. That is correct.

Q. Okay.

MR. CHAN: No further questions. I pass

the witness.

MS. FROST: I have just a few.

REDIRECT EXAMINATION

BY MS. FROST:

Q. Dr. Wolf, did you need to verify your

constraints that you were using in your analytics

function here with anybody?

A. No. Largely they were based on the requests I

received, as I understand it, requests from the

plaintiffs.

Q. And isn't the type of analysis that you

performed and analytics that you provided in response

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1178

to those requests what you do every day, all the time?

A. Yes.

Q. Okay.

A. I use Google Analytics a lot.

Q. And if there was some suggestion that you took

the data from Google Analytics and then manipulated it

or interpreted it for making these spreadsheets, that

wouldn't be accurate, would it?

A. That's not accurate. In fact, I tried to

minimize anything that I needed to do. And whenever

possible, I just tried to download the data from Google

Analytics so that it could be shared with as little

manipulation of the data that I had to perform. I

tried to minimize that as much as possible.

Q. And so did -- in, for example, your use case,

did you not just copy or cut and paste from Google

Analytics to create that analysis spreadsheet?

A. Yes. That was copy and paste.

Q. And Mr. Chan asked you something about whether

the spreadsheets that you were using today were the

same or different than the ones that you used in your

deposition.

Isn't it a fact that those spreadsheets that

you used today were updates of the spreadsheets you

used in the deposition?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1179

A. Yes. I mean, they were largely updates of

what had been provided. Yes.

Q. Okay. And do you recall at any time being

asked to update that information by Mr. Chan himself?

A. He did request that frequently during the

deposition.

Q. So let's talk about one more thing, and that

is your access to the website, the 2018 old website.

The questions you were asked today by Mr. Chan

and the deposition testimony he showed you dealt with

whether you had analyzed the old website, right?

A. Yes. That's correct.

Q. Okay. And the question here was whether you

had access to the old data.

It's a different question, isn't it?

A. That's correct. Yes.

Q. I think that's all I have. Thank you,

Dr. Wolf.

MS. FROST: Pass the witness, Your Honor.

MR. CHAN: No further questions.

THE COURT: You may step down, sir.

May he be released?

MS. FROST: Yes. He may.

THE COURT: They get to tell me.

MR. DEVLIN: Yes, Your Honor. Thank you.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1180

THE COURT: You're free to stay in the

courtroom now, or you're free to go about your

business, whatever you care to do.

THE WITNESS: Thank you, Your Honor.

THE COURT: Ladies and gentlemen of the

jury, we're going to take our morning recess of 10 or

15 minutes. And then we will resume.

Please remember my instructions not to

discuss the case amongst yourselves.

THE BAILIFF: All rise.

(Jury exited the courtroom.)

THE COURT: Thank you. You may be

seated.

Is there anything we need to take up?

The next witness will be the damages expert?

MR. JENSEN: We intend to play a short

video clip and call Mr. Moehrle. I think we have

something to discuss with the plaintiff about that.

THE COURT: About how long is the depo?

MR. JENSEN: It's six, seven minutes.

THE COURT: Okay.

MR. DEVLIN: There's a little

miscommunication we're going to talk about on the

break, Your Honor.

THE COURT: Okay. And after the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1181

deposition?

MR. JENSEN: Yes. Then our damages

expert.

THE COURT: Okay. And then that's your

last witness?

MR. JENSEN: That's correct.

THE COURT: Okay. And then what we'll do

this afternoon is we will --

So about how long will your damages

witness be?

MR. ADAMS: Hour, I believe, Your Honor.

THE COURT: Okay. I'm going to give the

jury probably two hours for lunch. And that way we can

work on the jury charge at lunch. And then we'll

finish up with your witness. I'll read the charge to

them, and then we'll dismiss them for the day.

And we'll do the closing arguments

tomorrow. I think that's probably the way it works out

best.

Mr. Adams?

MR. ADAMS: Your Honor, can I make one

inquiry? I don't propose to do Mr. Melsheimer's job,

but by our count, plaintiff has about 12 and a half

minutes left of their allotted time. And just guidance

about how to deal with that.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1182

THE COURT: It would be difficult for me

to say that either side has done a very good job in

terms of using their time wisely. I'll say that. Lot

of time wasted, in my opinion. Which isn't directly

responsive but is related.

I will permit the plaintiff to have --

you have a total of 30 minutes left --

MR. DEVLIN: Thank you, Your Honor.

THE COURT: -- to use.

Anything else?

MR. DEVLIN: Nothing from plaintiff.

Thank you.

THE BAILIFF: All rise.

(Recess taken.)

THE BAILIFF: All rise.

THE COURT: Please remain standing for

the jury.

(Jury entered the courtroom.)

THE COURT: Thank you. You may be

seated.

Counsel, you may call your next witness.

MR. JENSEN: Yes. Microchip calls

Mr. Armin Moehrle by video deposition.

And I believe this segment is ten minutes

or less.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1183

(Video Deposition of Armin Moehrle played as follows.)

Q. Who is Mr. Spark?

A. Mr. Spark is a software engineer.

Q. Do you know him?

A. Yes.

Q. When did you first come to know Mr. Spark?

A. He was a colleague at Motorola.

Q. And what time frame was that?

A. When I was at Motorola.

Q. So this is like roughly 20 years ago?

A. Yes.

Q. Is he a friend of yours?

A. I guess. Yes.

Q. Have you kept in touch --

A. I mean, it depends on how you define -- it

depends on how you define "friend."

Q. Have you kept in touch with Mr. Spark over the

years?

A. Yes.

Q. Is it your testimony that when this patent

application was filed, that a drop-down menu was new,

that you invented a drop-down menu and nobody else had

done it before?

A. No.

Q. Okay. So you agree with me that the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1184

functionality of a pull-down or a drop-down menu was

known in the prior art when you filed this patent

application?

A. Yes.

Q. So let me ask you: Are you familiar with the

term "breadcrumb"?

A. Yes.

Q. What is your understanding of the term

"breadcrumb" as that term was used in 2002?

A. A breadcrumb is a graphical means of

displaying the sequence of pages that a user has

visited previously.

Q. Was the concept of a breadcrumb known in the

prior art in 2002?

A. Yes.

Q. Let's do another example here. Let me just --

I'm going to reload a fresh version of the

microchip.com homepage. And this time I'll go to Tools

and Software, Embedded Software Center, and click on

the MPLab® Connect Configurator link. Okay.

All right. Do you see the resulting web page

that loaded, Mr. Moehrle?

A. Yep.

Q. Okay. And do you see that there's a new path

or menu that appears? I was trying to highlight it,

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1185

but it doesn't want to let me.

A. Yeah.

Q. And can you read -- what is the path that is

now displayed there, starting with Home?

A. It says Home, Interface and Connectivity, USB,

MPLab® Connect Configurator.

Q. Okay. Is that the same as the path that I

just navigated to load this page?

A. I don't actually remember the actual path, but

it probably is. I don't know.

Q. Well, let's take a look at that because I

think this is important.

But first let me ask: Do you see that

there -- for example, there's a USB link in this path?

A. Yep.

Q. Okay. Well, let me go back to the Microchip

homepage. And I want you to watch carefully and see if

at any point in the navigation I select something that

has USB in it.

A. Okay.

Q. So I'm going to go to Tools and Software.

Do you see that?

Embedded Software Center.

A. Yeah.

Q. And MPLab® Connect Configurator. And I just

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1186

clicked on that link.

A. Yeah.

Q. At any point did I navigate through something

called USB?

A. You did not.

Q. Would you consider the path that's shown here

Home, Interface and Connectivity, USB, MPLab® Connect

Configurator, to be a breadcrumb?

A. It really depends on the definition of the

breadcrumb. So I have to defer to the Court because --

and the specification, because it -- well, also, as we

discussed earlier, the breadcrumb is an aspect of the

invention, but it's not the entire invention, right?

So it's -- it's -- it's like the concept of -- well,

I -- what I'm trying to say, it really depends on the

definition of the breadcrumb.

Q. Yeah. Using your definition of breadcrumb, is

what's shown on -- on the screen right now a breadcrumb

trail?

A. No. So, for example, one definition of the

breadcrumb, as I mentioned earlier, is that it is a

sequence of -- it is a sequence of links to pages

previously visited by the user.

It's one definition of a breadcrumb. There

are many definitions of a breadcrumb trail.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1187

Q. Okay. Let's use the definition that you just

provided -- 

A. Yeah. 

Q. -- right? Which means it's -- it's a sequence

of links that the user visited. 

A. Yeah. 

Q. Did I visit a USB page or link? 

A. You did not visit a USB page. 

Q. Okay. So given that, and using your

definition of a breadcrumb, would you agree that the

path that is shown currently on the screen is not a 

breadcrumb? 

A. Given that example definition, this would not

be a breadcrumb. Yes. 

Q. Do you recall having approved Caddo entering

this license agreement with 

A. I would assume so, or else Alan would have not

probably executed it. 

Q. Do you know what entities were granted a 

license pursuant to this agreement for which

was paid? 

A. In one of the appendices I think there was a 

list. Exhibit A, initial licensees.

Q. And how many initial licensees are listed in

Exhibit A? 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1188

A.

Q. And we just went through the agreement, 

correct? 

A. Yes. 

Q. And do you remember how many entities in the

agreement? 

A. And I believe it was is that correct? 

Q. Is it your understanding that each one of

those entities has a license to your asserted patents? 

A. That is my understanding. 

(End video.) 

MR. BREWER: Your Honor, plaintiff calls

its next and -- Microchip calls its next and last

witness, Jared Jordan. 

(The witness was sworn.) 

DIRECT EXAMINATION

BY MR. BREWER:

Q. Good morning, Mr. Jordan. Before we get

going, can you please state your full name for the

record? 

A. Yes. It's Jared Clyde Jordan. 

Q. Have you prepared some materials to assist in

explaining your work in this case? 

A. I have. A slide deck. 

Q. Is that what's shown on the screen here? 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1189

A. It is.

Q. Mr. Jordan, can you please explain to the jury

your role in this case?

A. Sure. It's really twofold. One is to provide

my own expert opinion on damages, assuming, just like

Mr. Blok did, that the patents are found to be not

invalid and are infringed by Microchip.

And then two is to evaluate Mr. Blok's

analysis that he conducted as well.

Q. So just like Mr. Block, you're assuming

infringement here. What should the jury take that to

mean?

A. You shouldn't take anything from that

assumption. That is part of our job as the damages

experts, is to assume infringement.

Q. And if there is no infringement, there's no

damages?

A. That's correct.

Q. So to be totally clear, your assignment is not

to tell the jury whether or not Microchip or Caddo did

any wrong; is that right?

A. That's correct.

Q. Who do you work for?

A. I'm a partner at Weaver & Tidwell.

Q. What does Weaver & Tidwell do?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1190

A. Weaver & Tidwell's an accounting firm that's

been around for over 70 years. We provide traditional

audit or assurance and tax services as well as advisory

services, which include serving as expert witnesses in

litigation matters.

Q. How many years' experience do you have in this

field?

A. Personally, I have around 22 or 23 years.

Q. And how long have you been at Weaver?

A. I've been at Weaver for a little over three

years now.

Q. Where were you prior to that?

A. Prior to Weaver, I was at a small boutique

consulting firm called HSSK, which was based in Texas.

It had offices in Austin, Houston, and Dallas. And

approximately three years ago, we merged HSSK into

Weaver.

Q. And what's your educational background?

A. I graduated from the University of Texas at

Austin with a degree in finance.

Q. And do you hold any professional

certifications?

A. I do. I'm a certified fraud examiner.

Q. During the past 20, 22 years, what types of

cases have you worked on as an expert?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1191

A. A wide variety. I've worked in matters such

as this, where there's allegations of infringement of

intellectual property, including patent damages. I've

also worked on general breach of contract damage

matters.

In addition to those, I've worked in matters

involving forensic accounting or fraud investigations

for large cities, municipalities, government entities,

school districts around the state of Texas; also have

provided the services to large publicly traded

corporations as well as small privately held companies.

Q. So it sounds like not all of your work is

serving as an expert witness in litigation?

A. That's correct.

Q. Have you previously been retained to evaluate

and calculate damages resulting from allegations of

infringement, such as patent infringement?

A. Yes.

Q. Do you work only with law firms?

A. No. In a lot of my work, whether it's the

forensic accounting/corporate investigation-type work,

or also provide valuation services, those are often

done directly with clients such that I mentioned, like

cities or school districts, directly with the company

or individuals as well.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1192

Q. So both in and outside litigation, have your

matters required the assessment of intellectual

property and license -- licenses?

A. Yes. They have.

Q. And have you represented both plaintiffs and

defendants?

A. Yes.

Q. You're being compensated for your time in this

case, correct?

A. My firm is. Yes.

Q. And for how much?

A. $500 an hour.

Q. Does your fee depend in any way, at all, on

the outcome of this case or on the opinions you

reached?

A. No. It does not.

Q. So in the event that the jury finds that

Microchip does not infringe Caddo's patents, what would

be your opinion of damages?

A. There'd be no damages.

Q. In performing your analysis in this case, what

types of information did you rely on?

A. A variety of types, each of which is a type

that I've relied on for years, providing these types of

services in litigation matters and outside of

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1193

litigation as well. 

That information includes evidence such as: 

E-mails; financial reports, like Dr. Wolf was just

discussing; presentations; internal and external

correspondence; publicly available information about

Microchip and other companies involved in this matter, 

such as ; the patents themselves; the

various license agreements that you've heard about and

we'll be talking about more today; certain legal

standards or case law that provides guidance on how to

approach calculating patent damages; the witness

testimony that we've heard this week, as well as

previous witness testimony through depositions; the

technical reports of Mr. Tittel and Mr. Sherwood; and

then, of course, Mr. Blok's report and his analysis as

well. 

Q. And the opinions that you're going to provide

today, would you say that you have now considered all

of the testimony and evidence that you've heard from

both sides? 

A. Yes. 

Q. Are your opinions and conclusions based on

your independent and objective review and analysis of

all that information? 

A. Yes. They are. 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1194

MR. BREWER: Your Honor, at this time we

would proffer Mr. Jordan as an expert on patent

damages.

MR. DEVLIN: No objection.

THE COURT: He'll be admitted.

BY MR. BREWER:

Q. Can you please give us a summary of your

opinions?

A. Sure. And we'll be talking about these, you

know, throughout the day today, and I'll start with the

first one.

At the highest level, Mr. Blok's determination

of a reasonable royalty based on the two figures that

he highlighted during his testimony, the 5 percent and

the 215K or $215,000 per day, is flawed, and he failed

to follow many of the rules that you need to follow

when calculating patent damages.

Q. What was the result of Mr. Blok's use of

these -- just these two data points?

A. Well, those two data points are really the two

inputs that go into his calculation. If you recall

from his presentation, he had two numbers and you

multiplied them together and it equaled the damages.

The use of those two numbers results in a

significantly overstated damages amount, which we'll be

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1195

talking about in more detail.

Q. What's your opinion of the appropriate measure

of damages in this case if the jury is to find that

Microchip infringes?

A. Yes. At a very high level, and we'll also be

talking about this more, that in a hypothetical

negotiation in March of 2014, Mr. Moehrle and Microchip

would have agreed to a lump-sum damage -- royalty of

$20,000.

Q. We heard Mr. Blok talk a bit about this

hypothetical negotiation idea.

Can you give us a little bit of your

explanation of how that works?

A. Sure. The hypothetical negotiation is

something that you typically use in patent damages

matters. Mr. Blok's description of it was fairly

accurate.

You're trying to assess what Microchip would

pay and what Mr. Moehrle would accept for these patents

and, just like Mr. Blok talked about, with full

disclosure. All of the cards are on the table.

So pretend like you're playing blackjack or

poker. It'd be like playing those games with all of

the cards face up. Each party has information that

would be relevant to that negotiation.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1196

Q. In performing this hypothetical negotiation

analysis, are there established rules that a damages

expert needs to follow?

A. That's right. Rules or standards. Mr. Blok

discussed these as well. They're called the

Georgia-Pacific factors. I factored those into my

analysis also.

Q. And have you formed an opinion as to whether

Mr. Blok violated or followed those rules?

A. Mr. Blok failed to follow some of the rules

related to calculating patent damages.

Q. And what did Mr. Blok's failure to follow

those rules do to his damages opinion?

A. Again, it resulted in a significantly inflated

damages amount.

Q. What's the first rule that Mr. Blok did not

follow?

A. Mr. Blok failed to isolate the value of the

patents.

Q. Why is it important to isolate the value of

the patents?

A. Well, you heard Mr. Blok talk about it as

well. The -- identifying the incremental value of the

patents, or the accused breadcrumb in this case, is

fundamental to what you need to do to appropriately

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1197

calculate damages. That's called apportionment in the

patent damages world.

Q. Can you give us an example of why that's

important?

A. Yes. And this is a fairly simple example, but

it's a good, kind of level set for us as we're talking

through this today. And I'm going to use wheels on a

car as the example.

So if you're calculating damages and if you

have a patent on a new wheel design, you only get

damages on how much better that new wheel design is

over the existing design or an alternative design. And

you absolutely do not get damages on the entire car.

Q. How did Mr. Blok violate this rule?

A. He's basing his damage calculation on the

entire value of the car.

Q. What sorts of things did he include that

don't -- aren't attributable to the asserted patents?

A. Sure. And I was using car there instead of

the accused -- the breadcrumb.

But his analysis improperly includes the total

semiconductor value. It also includes the use of

nonaccused or noninfringing websites, as well as the

use of nonaccused or noninfringing features on those

websites.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1198

Q. I understand you prepared a demonstrative to

illustrate how Mr. Blok failed to apportion; is that

right?

A. That's right. Before we look at this, I'm

going to apologize. It's a little busy, but I think it

does help tell or communicate what I'm trying to

deliver today.

It's that simply the accused breadcrumb

feature, which I've identified it in the bottom center

of this screen, is just a small sliver of the overall

picture of what goes into the manufacturing and sale of

microchips. And those microchips are identified at the

top left.

Q. So how does Mr. Blok account for all of this?

A. He doesn't.

Q. Is his use of semiconductor sales revenue

consistent with the evidence?

A. No. It's not.

Q. So he -- by using semiconductor sales revenue,

he's claiming everything in this image, right? Is that

what you're saying?

A. Essentially, yes.

Q. And what's accused is just the breadcrumb

feature, which is a feature that's on only some of

Microchip's websites; is that right?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1199

A. That's right. That accused feature is only on

a couple of the websites, allegedly.

Q. So what about for the websites that actually

do have a breadcrumb?

A. I'm sorry. Can you repeat that?

Q. What about for the Microchip websites that

actually do have a breadcrumb? How does Mr. Blok

account for those?

A. He really doesn't. He assumes that the

breadcrumb on microchip.com is involved in all of the

Microchip Direct revenue when customers previously used

microchip.com.

Q. And so we heard a little earlier about -- from

Dr. Wolf. What proportion of users of Microchip's

websites actually use this breadcrumb feature?

A. It's a small, small portion. And we have to

keep in mind that the breadcrumb is not required to

purchase -- use of the accused breadcrumb is not

required to purchase a semiconductor that Microchip

makes.

Q. If customers aren't using the breadcrumb, what

are they doing?

A. Well, Dr. Wolf talked about some of the

different ways. You know, I've identified some here.

Customers can go to the homepage and order now, either

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1200

through the basket or the button that actually says

Order Now.

They can use internal search and then order.

They can use an external site such as Google and then

click Order Now.

They can also use top navigation to get there.

Q. Do any of those methods use the accused

breadcrumb?

A. It's my understanding they do not.

Q. What about the Forum?

A. Well, as we've heard testimony this week, and

my understanding based on my analysis before this week,

was that the Forum is simply a discussion board where

customers can discuss Microchip products.

We also know that Microchip Forum website

drives almost no revenue whatsoever. The information

that Dr. Wolf provided to me indicated that in the most

recent calendar year, 2021, that the -- only $70 could

be attributed to the Forum website.

Q. For the entire year?

A. For the entire year.

Q. So it's fair to say that very, very few people

go from the Microchip Forum website to go buy anything?

A. That's correct.

Q. So, Mr. Blok, we heard, suggests that we start

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1201

with this $600 million pot of gold, right? And then we

use that to determine damages?

A. That's right. That is his starting point.

That's a function of the $215,000 per day and the

length of the damage period. And if you recall, he has

two different damage periods. 2014 to 2021 and then

2018 to 2021, approximate dates.

Q. But that $600 million number doesn't isolate

the value of the patents, does it?

A. No. It does not isolate the incremental value

of the patents. Just like Mr. Blok said you should do,

he did not do it.

Q. So even if you were to accept Mr. Blok's

methodology, you would have to correct for those flaws,

right?

A. Yes. And I want to be clear here. As I

stated at the beginning in the summary of my opinions,

I've done an independent analysis of Mr. Blok's. And

we're going to talk more about that later and how I

arrived at the lump-sum royalty of $20,000.

But I have taken Mr. Blok's analysis using

those two data points and made, at a minimum, some

adjustments to those, so that you can see what would

need to be done if you started with those numbers.

Q. How did you determine the first way to adjust

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1202

this number, to isolate for the value of the patents?

A. I utilized the information that Dr. Wolf

provided, that he discussed this morning about the

two-click or the use case analysis that he discussed

based on information from Google Analytics.

Q. Did that use case analysis, let's call it,

indicate what proportion of customers actually used the

breadcrumb?

A. Yes. It was a very small portion.

Approximately .5 percent. It was actually less than

that.

Q. So if you take this .5 percent that's

attributable to users who use the breadcrumb and you

apply that and you, I guess, factor the rest of it out

of Mr. Blok's analysis, what's the result?

A. This is the apportionment part of what a

patent damages expert needs to do. You would -- again,

we're trying to isolate the value, or the incremental

value, of those patents.

So you would take the 604.6 million and

multiply it by the .5 percent which represents the

users that actually used that functionality or may have

used that functionality. That would result in a little

over $3 million.

Q. And did you perform this same adjustment for

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1203

Mr. Blok's second damages period?

A. I did. That's for the 2018 to 2021 period I

noted earlier.

Q. Did Mr. Blok consider the data that Mr. --

that Dr. Wolf discussed earlier today?

A. No.

Q. So after we factored out all of the use of

Microchip's websites and features that have nothing to

do with the breadcrumb, what do we have to do next?

A. Well, it's the second rule that Mr. Blok

failed to follow. You should only consider U.S. sales.

You must exclude the foreign sales.

Q. How did Mr. Blok violate this rule?

A. Well, as you can see from this demonstrative,

Microchip sells microchips and other products all over

the world: Europe, South America, Asian Pacific

region. And what you need to do is isolate just for

the United States sales.

Q. How much did Dr. Blok's number increase by

including all those foreign sales?

A. Well, as you heard Dr. Wolf testify to

earlier, it had an 81 percent impact. So you need to

adjust the numbers further for the two -- identify just

the U.S. sales.

Q. If you do that and you sort of apply it to the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1204

number that we've already reached, where we've isolated

the value of the patents, what's the result?

A. It's a much, much lower number. So we do the

same step that I did earlier and you get to the 3 --

little over $3 million.

And then you apply 19 percent to that amount

to get an isolated number that includes just the

incremental value associated with the patents, as well

as the U.S. sales only.

Q. And you can perform -- well, first, for the

first damages period, what's the result if you perform

both of those adjustments?

A. For the 2014 to 2021 period, it would be

$575,000 in revenue.

Q. And you can perform that same adjustment for

the second damages period, correct?

A. That's correct. I followed the same

methodology.

Q. And I want to make clear that these damages

periods are alternates, right?

A. Yes. These are Mr. Blok's two different

damage periods.

Q. And for the shorter damages period, what is

the result once you do those adjustments?

A. It's $243,000 of revenue.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1205

Q. What's the next rule that Mr. Blok did not

follow? 

A. He failed to fairly look at the licensing

history between the parties. 

Q. How did he violate this rule? 

A. Quite simply, he ignores the real-world

amounts that Caddo was willing to license these patents

to to other companies. And then he also didn't 

properly consider Microchip's license with a third

party, 

Q. So how many relevant licenses are there here? 

A. There's six, if you include the Microchip

license with 

Q. And how many did Mr. Blok consider? 

A. One -- part of one. 

Q. Why is this important? 

A. Well, comparable licenses is something you

always look at when calculating patent damages, if

they're available. They typically indicate -- or

provide a very good indication of the value of the

patents. 

And in this case it -- as I mentioned

previously, it gives you the amounts that Caddo has

been willing to license these patents for in the past

in the real world. 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1206

And then also it gives you the information

about what has been willing to pay for other

similar technology or patents. 

Q. You said But I just want to make sure

you meant Microchip? 

A. Thank you. Yes. 

Q. Why do you do this kind of comparison? 

A. Well, this is another example that we can talk

through. You know, if you're buying a home, you really

want to understand what is the market? What are the

comparables that are out there? You know, typically

you would pull comparables that were in the same

neighborhood, typically the same size, the same layout. 

And that will help you provide a range of

how -- what's historically happened associated with

sales in that area. It gives you good comparables. At

a minimum it gives you a range of the potential values.

Q. Are all comparable licenses equally relevant? 

A. No. They're not. 

Q. Can you give an example of what would make a 

comparable license more or less relevant? 

A. One example would be a non-litigation license. 

That's typically more relevant than a litigation

license. 

Q. Why is that? 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1207

A. Well, there's -- whenever you have a 

litigation license, there's costs that both parties may

be factoring into any type of settlement associated

with litigation. 

Q. Has Caddo ever licensed the patents at issue

in this case in a non-litigation context? 

A. Yes. 

Q. What was that context? 

A. That was in -- with a company called 

Q. Who is 

A. is an agent for companies that negotiate

license agreements on behalf of them. 

Q. And so licensed these patents from Caddo

for its customers? 

A. Yes. 

Q. The same patents at issue in this case? 

A. Yes. 

Q. How many companies did license these

patents for? 

A. This is just the first couple of pages, 

an Exhibit A to that license that totals around I 

believe. 

Q. Who are some of that got rights to

these patents from that license? 

A. Some of the largest companies and most

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1208

well-known companies in the world. 

 

 

A. That's correct. 

Q. How does that work? 

A. Well, the way you get to the $ number is

that this license agreement -- as you saw on a previous

slide, and we'll talk more about it -- was for $ 

to license these to companies. And so if you

do the math, it's a little bit more than $ per

company. 

Q. Do you know, based on just public information, 

about what yearly revenues were when they got

rights to these patents? 

A. Yes. I mean, during this period it was north

of in revenue per year. 

Q. Did obtain rights for any of Microchip's 

competitors? 

A. Yes. There's several semiconductors on this

demonstrative, . They

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1209

manufacture microchips as well. 

Q. And those were also effectively for $ 

each? 

A. Yes. 

Q. What conclusion do you draw from the 

license? 

A. Well, first, it's a comparable license. It's 

also a non-litigation license, so it gives you a better

indication of what Caddo would be willing to license

those patents for. 

In the real world, Caddo licensed those

payments for

 

Q. And in this case they're demanding

$30 million; is that right? 

A. For one company. Yes. 

Q. So that's effectively times that? 

A. That's right. 

Q. Did you consider any other comparable

licenses? 

A. I did. There were five others. 

Q. Let's just go through those real quick. 

The first is for How much was the

royalty payment for

lump-sum payment. 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1210

Q. And Mr. Blok excludes this license from his

consideration? 

A. He does. 

Q. The next license is for 

How much was the royalty payment for 

 

Q. Caddo also licensed these to

A. That's correct. 

Q. How much was the royalty payment for

Q. And Caddo also licensed these to

 We've heard a little bit about that already. 

How much was the royalty payment there? 

A.

Q. So even when there was litigation like here, 

what's the most that Caddo has charged for these

patents? 

A. . 

Q. Did you consider any comparable Microchip

licenses? 

A. Yes. That was the license that I 

mentioned earlier. 

Q. What was your conclusion regarding the 

license? 

A. It was a comparable license, as you heard

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1211

Mr. Tittel testify to yesterday. There was -- I can't 

remember the exact number of patents, but there were

three different patent families within that license. 

And it's his opinion that at least one of those

families is similar website-related technology. 

Q. Are there any other reasons why you thought

that the license was particularly relevant here? 

A. Yes. Because it is the only license where we

have a party, an actual party, to the hypothetical

negotiation. That would be Microchip. 

Q. None of the other licenses we've discussed

have a party to that hypothetical negotiation? 

A. That's correct. Because the hypothetical

negotiation that would have occurred in March of 2014

would have been between Mr. Moehrle, as an individual, 

and Microchip. 

Q. What do you conclude based on all of these

comparable licenses? 

A. Well, first, they are comparable licenses and

should be considered in any type of patent damages

analysis. 

The comparable license lump-sum royalties

range from license, 

which is the one that Mr. Blok relied upon, up to

license. 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1212

And then also the non-litigation license with

has an effective lump-sum royalty of a little over

$ per licensee. 

Q. And so what you have here is you're comparing

the $30 million that Caddo's asking from Microchip to

what it's charged others in the past? 

A. That's correct. Essentially, Caddo is seeking

times more than the license of

times more than the license of

the $ 

Q. So to sum up this point, what impact did

Mr. Blok's failure to fairly look at the licensing

history have on his analysis? 

A. It makes his analysis unreliable and

unreasonable. There are comparable licenses out there

that he simply ignored. While he did consider the

license, he picked one -- or at most

ignored the lump-sum royalty amount of $ 

Q. Let's talk a little bit more about that

license. 

What's the next rule that -- 

THE COURT: Counsel, I'm trying to find a 

place for you to break. I thought this might be a good

one because you just finished, but if you want to keep

going for a while. 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1213

MR. BREWER: That's perfectly fine, if

you want to break now.

THE COURT: Ladies and gentlemen of the

jury, we're going to take our afternoon -- afternoon --

our lunch break. That means y'all have to come back.

And so I believe that we've ordered lunch for you. But

we need to do a little bit of work.

At the end of the trial, before you do --

begin your deliberations, I'm going to have to read to

you a charge, which is the instructions on the law.

It's about 40 or 50 pages long. You'll each get a

copy. I have to read it to you.

We're going to need to do a little bit of

work on it ourselves here. So what I would suggest we

do is you all have lunch. It's here. If you all want

to leave the courthouse and wander, do whatever you'd

like to do, but we'll probably get started about 1:45.

We'll finish with this witness, who I

believe is the last witness, and then I'm going to read

you the charge. It takes me about an hour to read you

the charge. Then we'll be done for the day.

And we will start with closing arguments

tomorrow morning at 9 o'clock, and then you'll begin

your deliberations and take as much time as you care

to.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1214

So have lunch. Enjoy. If you're back

sooner than 1:45, that's fine too. We'll work as

quickly as we can. And if you don't mind waiting, in

fact, I'd say be back by 1:30 and that way we'll get

started just as soon as we can.

Thank you for the morning. Please

remember my instructions not to discuss the case

amongst yourselves. You are dismissed.

THE BAILIFF: All rise.

(Jury exited the courtroom.)

THE COURT: Thank you. You may be

seated.

Sir, you may step down if you want to, if

you can figure out how to get out of there.

And so is there anything that we need to

take up?

MR. DEVLIN: Not from the plaintiff, Your

Honor. Thank you.

MR. JENSEN: We just needed to move the

admission of one exhibit. It's Joint Exhibit 115.

THE COURT: It'll be admitted.

MR. DEVLIN: No objection.

THE COURT: I'll do my best to be back

right around 1 o'clock. We will take up the issues on

the jury charge. And then as soon as we're done with

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1215

that, we'll bring the jury back in.

So y'all have a good lunch.

MR. DEVLIN: Thank you, Your Honor.

THE BAILIFF: All rise.

(Recess taken.)

THE COURT: We're on the record.

We're taking up what is currently Jury

Instruction No. 22, license and release as defenses of

infringement. The defendant has proposed language

that -- it will be in the record because they've

submitted this to the Court.

I'll hear from defense counsel as to why

I should give this instruction, and then I'll hear from

plaintiffs' counsel as to why I should not.

Let me ask you this, Mr. Devlin: Is

your -- and it's fine if it's both, is your objection

both, A, it shouldn't be in there at all, and -- but if

it is in there, B, this isn't how it should be in

there?

MR. DEVLIN: Both, Your Honor. And as to

B, we -- just to catch up to where we are, we got their

thing last night, and then this morning we found one we

liked and we just kind of gave that to them.

So there may be some, you know, five

minutes of horse trading. We can narrow some of the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1216

issues if we get to B, but hopefully -- I don't think

we should get to B.

(Simultaneous speakers.)

THE COURT: Why don't you confer right

now, and I'll just sit here?

MR. DEVLIN: Well, I think if you decide

A in our favor, B's irrelevant.

THE COURT: Oh, I'm sorry. I got you.

Yeah.

Go ahead. If you'll go ahead and argue,

please.

MR. QUILICI: Yes, Your Honor.

And I don't want to put words into my

friend's-across-the-aisle's mouth, but the -- I believe

the issue here is whether or not the license defense is

in the case.

It was pled. It was in the contentions.

And it was -- there was a motion to exclude the license

defense, and my understanding was that Your Honor

denied that motion at the pretrial conference.

So as far as we're concerned, the license

defense is in the case.

THE COURT: Tell me this -- I don't think

Mr. Devlin's going to dispute that it was pled.

So tell me, generally speaking, if

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1217

someone put evidence in at trial --

MR. QUILICI: Uh-huh.

THE COURT: -- at this point I give an

instruction, if it was unobjected to -- and I didn't

hear objections about this during the trial.

So tell me what evidence you have that

would support me giving an instruction with regard to

the license.

MR. QUILICI: We've put into evidence the

Microsoft license. We put into evidence, I believe

through Ms. Mahar, that components of both of the --

the two accused websites that are at issue here are

combined with Microsoft software that is licensed under

that license and that the license, which speaks for

itself, expressly contemplates that software that is

combined with that is covered.

THE COURT: And remind me, were there any

objections to the admissibility of that during the

trial?

MR. QUILICI: I don't specifically recall

any objections.

THE COURT: I don't remember them. So

okay.

So, Mr. Devlin, there's evidence in the

record that supports this -- me giving this

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1218

instruction. Why shouldn't I?

I mean, let me put it this way. Maybe

this will help you. And I could be wrong; you can tell

me I'm wrong in the way I'm thinking.

But to me the way I see this is you're --

by fighting over this instruction, you're actually

asking me to give a directed verdict in your favor, and

which I --

MR. DEVLIN: That's exactly right.

THE COURT: So we're on the same page

there. So explain why you think you're entitled to a

directed verdict on this.

MR. DEVLIN: So in this case, obviously,

the defendant is raising a license defense. And as an

example of how complex this is, what you just heard

from defense counsel omitted the fact that there are

enumerated exceptions to the downstream effect of the

license in the Microsoft agreement itself.

These are complex terms that someone

should talk about, if they want to raise this defense,

address them, explain exactly how what the technology

they're using fits within the license is outside the

exceptions that are expressly related in the license.

This is a complex technology agreement.

THE COURT: Let me switch back to

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1219

opposing counsel for just a second.

I don't recall you -- I don't

specifically recall Microsoft coming in through your

corporate representative, but I'm going to assume it

did. That's fine.

Who on your side -- and it'd be even

better if it were an expert. Who on your side

articulated for the jury that the Microsoft license

gave them a release?

Who -- in other words, I got that the

Microsoft license may be in evidence and that you all

on closing argument might like to argue something that

was in the Microsoft license gives you a release, but

what evidence was admitted during the trial where

someone on the witness stand put into evidence for the

jury the reasons why they believed that the Microsoft

license released your client?

That's up to anyone.

MR. JENSEN: That would be Ms. Nanci

Mahar. She did not analyze the license --

THE COURT: No. I mean, she put the

license in. But I'm saying --

MR. JENSEN: The license came in through

their witnesses, the license itself. Ms. Mahar

testified as to the use of Microsoft products and

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1220

services for hosting the website, for implementing the

website. They're built on the .net platform.

And all of those things are encompassed,

I would submit, by not a convoluted complex license

agreement. You look at the definitions, it's all

entities worldwide, anywhere, any which way, in any

combination whatsoever.

THE COURT: So now let me flip back --

and thank you, sir.

Let me flip back to you, Mr. Devlin. I

do remember -- and I remember thinking that's why they

were putting the evidence in.

That evidence is in the record. Why

wouldn't the defendant be entitled -- and it was

unobjected to, I think. Why wouldn't the defendant be

able to tell the jury that, A, the license is in. And

that they heard testimony from a corporate

representative, exactly what we just heard. And

because of that there may be a release. The jury will

have the license and they can make that determination

based on the evidence -- the unobjected-to evidence

that was put in?

MR. DEVLIN: So just so we understand why

we did what we did here, the only disclosure of a

license defense in this case has been a bare assertion

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1221

that they're licensed through Microsoft, period.

It came in in an amended answer and it

came in a contention about a paragraph or two long.

THE COURT: And then did you send them

discovery saying, oh, I see you put this in. Please

articulate --

MR. DEVLIN: I can't remember if we did

that or not, but they never articulated it.

THE COURT: Well, they're not going to --

MR. JENSEN: I can provide you an

interrogatory response where we set this forward in our

supplemental response --

THE COURT: You actually did? That was

asked and you did provide this information?

MR. JENSEN: That's correct. Two times.

With respect to the main website during discovery,

after the --

(Simultaneous speakers.)

THE COURT: I got it. I got it.

MR. DEVLIN: So one other piece of --

THE COURT: I'm going to overrule. This

is -- I'm going to put this in.

You can go ahead and say whatever else

you want on the record.

MR. DEVLIN: Sure. Ms. Mahar, in her

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1222

deposition, said she was not aware of these licenses.

THE COURT: That doesn't matter.

MR. DEVLIN: Okay.

THE COURT: I mean, that might have been

interesting if you'd taken her on voir dire and gotten

her to admit that. And we might have had a different

outcome with it being in the record.

But that doesn't matter to me now.

MR. DEVLIN: Thank you.

THE COURT: Because that's -- there's no

evidence of that at trial. I don't think.

MR. DEVLIN: Excuse me?

THE COURT: There's no evidence of that

at trial. Did you ask her that at trial?

MR. DEVLIN: No. There's no evidence

that she even talked about the license, so I didn't ask

her about it.

So I understand Your Honor's point, and

we'll go forward.

THE COURT: Okay. So now having said --

now having said I'm going to allow something that looks

like Instruction No. 22 in, do you think that you all

can work out what --

And you're on the record -- actually,

Mr. Devlin, you can repeat it if you want to. But

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1223

you're on the record right now, and your objection to

this particular part of the charge will be in the

record already.

And so right now what if you all can come

up with language that you agree to while maintaining

your objection that any language go in. I'm happy for

you to do that, or I'm happy to hear you argue about

what I should do.

MR. DEVLIN: That sounds great, Your

Honor. If we could take a break and we'll talk for

five or ten minutes.

THE COURT: Sure. I'll tell you what.

If you all work that out, great. Let me know.

If you don't work it out, let Jeff know,

and I'll get it resolved. And then I'll come back in.

We will -- I'll bring the jury in. We will finish up

with your witness.

And then once you get the completed

charge in a clean fashion, at the end of the evidence

I'll send the jury out. I'll let you make all your

objections on the record for both sides. I'll bring

the jury back in. I'll read the charge and then we'll

be done.

Does that work for you, Mr. Devlin?

MR. DEVLIN: Absolutely, Your Honor.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1224

THE COURT: Does that work for you guys?

MR. QUILICI: Yes.

THE COURT: Okay. If you take -- try not

to take more than about ten minutes, just because we

have the jury waiting. But other than that, if you'd

just let Jeff know.

(Recess taken.)

THE BAILIFF: All rise.

THE COURT: Please remain standing for

the jury.

(Jury entered the courtroom.)

THE COURT: Thank you. You may be

seated.

Counsel?

BY MR. BREWER:

Q. Welcome back, Mr. Jordan. Before the lunch

break we were discussing Mr. Blok's failure to fairly

look at the licensing history, right?

A. That's correct.

MR. BREWER: Can we put back up the

slides that were on before lunch, please?

BY MR. BREWER:

Q. And we ran through the other licenses and

royalties, right?

A. That's right.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1225

Q. What impact did Mr. Blok's failure to fairly

look at the licensing history have on his analysis? 

A. It resulted in a significantly inflated damage

amount, especially when you look at it relative to the

comparable licenses that we discussed prior to lunch. 

Q. What's the next rule that Mr. Blok failed to

follow when he rendered his damages opinion? 

A. He failed to base the royalty on verified

facts. 

Q. How so? 

A. Well, we've talked a lot before lunch about

the two data inputs that flow into his calculation of

the $30 million. That's the 5 percent royalty rate and

the $215,000 per day. Those are the two drivers of his

analysis.

And we've talked a little bit about those so

far and we covered some of that. But I want to

highlight a few other areas where he ignored other

evidence that's probative. 

Q. What is problematic about his use of the

5 percent from

A. Well, he essentially cherry-picked that number

out of the license agreement and

ignored other -- or appears to have ignored other areas

within the agreement. 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1226

Q. And if you look at as a whole, 

what do you find? 

A. Well, simply when you look at the

license agreement, it was for an $ 

royalty. We talked about that a little bit earlier.

And the length of that license agreement was

for 12 years. So essentially those patents were being

licensed for less than $ per year. 

is a web services company. 

The website is the product. Microchip's product is not

the website. It's the microchips themselves. 

And it's my understanding that

can make unlimited use of those patents for that

$ lump-sum payment. 

Q. Did Mr. Blok compare as a 

company with Microchip as a company? 

A. Not really. 

Q. Did you? 

A. I did. And like I mentioned, they're two

different types of companies. is a web

services company and Microchip sells microchips. 

Q. What about the 215,000-a-day figure? What's 

problematic about that? 

A. Well, again, we talked about several things

earlier today about the issues with that and the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1227

apportionment that needs to be done, and then the

adjustment that would need to be made to isolate the

U.S. sales.

But beyond that, you know, Mr. Blok's analysis

takes that 2019 number, from April 2019, and applies it

all the way back to 2014 and then all the way forward

to 2021 as well.

Q. Why is that problematic?

A. Well, when you look at the historical period

first, we know from Ms. Mahar's testimony earlier this

week, when you look back to 2014 -- and what I've

highlighted on this demonstrative is that Microchip was

very acquisitive during this time period and acquired

multiple companies. She also noted that the revenues

tripled during that time period.

So looking retroactively, applying that

$215,000 retroactively all the way back to 2014 isn't

reasonable.

Q. And what about going forward to 2021? Was

there anything wrong with that?

A. Yes. A similar concept. Mr. Blok didn't

properly account for -- and it's illustrated here on

this burndown chart -- how Caddo is not accusing the

redesigned website of infringing.

And what we know is from, you know, late

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1228

October 2020 moving forward into 2021, the number of

web pages that had the accused breadcrumb was

decreasing significantly, as illustrated in this chart.

Failing to account for that is also another issue in

his analysis.

Q. So in other words, the old website, which is

what's accused on microchip.com, was disappearing over

this period. And yet he assumed that it was still --

that $215,000-a-day number was constant throughout the

period?

A. That's correct.

Q. What about the Forum?

A. We touched on this a little bit earlier. I've

identified no evidence that indicates the Microchip

Forum website drives any revenue. As we've talked

about, the Forums website is a discussion board, a

community discussion board for customers.

I've touched on Dr. Wolf's analysis that

indicated the previous calendar year of 2021, the

revenue attributed to the Forums through Microchip

Direct was $70. And the fact that Microchip paid only

$400 a year for the use of this technology.

Q. And yet Mr. Blok assumes that throughout the

period during which only the Forum website is accused,

somehow it was responsible for $215,000 a day of

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1229

revenues?

A. That's right. If you look at that 2014 to

2018 time period, which is when -- 2018 is when the

accused -- the old website was put in place, the only

accused website was the Forums during that period. So

he's attributing the $215,000 per day to the Forums for

that four- or five-year period.

Q. What's the last rule that Mr. Blok failed to

follow?

A. He failed to properly consider the

noninfringing alternatives that were available at the

time of the hypothetical negotiation and throughout the

time period of infringement -- alleged infringement.

Excuse me.

Q. How does the presence of noninfringing

alternatives affect the damages analysis?

A. Well, again, at the hypothetical negotiation,

you're trying to determine what each party -- well, in

this case, what Microchip would be willing to pay and

what Mr. Moehrle would be willing to accept, and you

need to factor in to both of their minds what

noninfringing available alternatives there were. And

that would include any websites that Microchip could

have used instead of the alleged infringed website.

Q. Can you give some examples of the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1230

noninfringing alternatives that you considered?

A. Yes. And these were ones that Mr. Tittel

identified and discussed yesterday during his

testimony.

The first would be a top navigation with the

breadcrumb but with no drop-down. That is what's on

the redesigned website that's not accused.

A top navigation menu without a breadcrumb --

that's what's on Microchip Direct, the e-commerce site,

right now. That website is also not accused.

Other established software platforms, like we

talked about Forumbee. That is an alternative for the

Forums website.

Search, I know we spent a lot of time with

Mr. Tittel on that. Google, as well as Amazon, employs

search functionality.

A tabbed approach is a functionality that

Amazon has used.

And then also the left navigation menu that

existed on microchip.com prior to September 2018,

that's also not accused.

Q. And you relied on Mr. Tittel's opinion that

these constitute noninfringing alternatives; isn't that

right?

A. That's right.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1231

Q. And you were here earlier this week for

Mr. Sherwood's testimony; isn't that right?

A. I was.

Q. Do you know whether Mr. Sherwood had any

specific opinions about these particular noninfringing

alternatives?

A. He essentially says that there are no

noninfringing alternatives available.

Q. Do you know why he says that?

A. I don't -- I don't completely understand it

from a technical perspective.

Q. And what about the Forum?

A. Well, the Forum, I touched on this a few

minutes ago. The Forumbee is a noninfringing

alternative that Mr. Tittel did identify in his

analysis.

And what we know about the Forumbee website

back in 2014, at the time of the hypothetical

negotiation, was that it could be licensed for $199 per

month. So over a 12-month period that would be

approximately $2,300.

And from March 2004 to the -- I'm sorry --

2014 to the expiration of the patents, which is about

nine and a half years, that would be approximately

$21,000.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1232

So at the time of the hypothetical

negotiation, Microchip would have had Forumbee as an

available alternative for approximately $21,000 that

they could have changed to instead of paying this

$30 million license amount or reasonable royalty that

Mr. Blok has calculated.

Q. And this Forumbee software was available in

2014?

A. Yes.

Q. Is that your understanding?

A. That's my understanding.

Q. Do you know if it's still available?

A. That's also my understanding. Yes.

Q. And in 2014, Microchip -- do you know what

company provided the software that Microchip used to

provide its Forum website?

A. Yes. It's a company called ASP Playground.

Q. Do you know whether that company's still

around?

A. My understanding from Ms. Mahar's testimony is

that that company is either going out of business or is

already out of business, and that they're no longer

going to be hosting or providing updates for that

software or website functionality.

Q. Can you tell us how the presence of these

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1233

noninfringing alternatives affected your analysis?

A. Yes. As I've talked about several times

today, that information is extremely probative and

highly relevant to the hypothetical negotiation.

It is an alternative that Microchip could have

turned to at that time for an alternate price instead

of paying this $30 million royalty that Mr. Blok has

calculated.

Q. What was your conclusion about what would have

happened -- or what would have been the case had

Mr. Blok followed all of these rules?

A. He would have come to a fundamentally

different answer in his analysis.

Q. And you did your own separate independent

analysis, correct?

A. I did. Yes.

Q. What was the result of that analysis?

A. Well, if you follow the rules and apply the

Georgia Pacific factors the way you're supposed to, we

would look at the hypothetical negotiation in March of

2014.

And the basic question is: What would

Mr. Moehrle and Microchip have agreed to from a royalty

perspective?

You should consider that the Forums was the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1234

only use or alleged infringement at that time in 2014

and consider that there may be future use on the main

or -- I'm sorry -- the old microchip.com website from

the 2018 to 2020 time period until the redesign began. 

Q. So in performing your own analysis of what a 

reasonable royalty would be in this case, what was your

starting point at the hypothetical negotiation? 

A. It goes back to what value do the patents

provide or the incremental value of the accused

functionality. 

Q. How do you figure that out? 

A. Well, we talked a lot earlier about looking at

the comparable licenses, which is something that I did

do and did consider in my analysis. I looked at all

of the comparable analyses. 

The agreement that included licenses

for -- or the right to use the patents for 

different companies, including

.

I looked at the other comparable licenses that

ranged on the high end with

all the way down to the

 

Then I also considered the agreement

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1235

between Microchip and for similar technology, as

Mr. Tittel explained yesterday. That amount was for

$ 

Using that information, just like we talked

about earlier, when you're trying to understand the

right price for a home to pay, you're looking at

comparables and trying to find a range of reasonable

values. That's how I used these comparable licenses. 

Q. What was the next step in your analysis? 

A. I also looked at the alternatives, like we

just talked about. 

For the Forum website at the hypothetical

negotiation, Mr. Tittel identified that as a 

noninfringing alternative. And like we just talked

about, at that time Microchip could have turned to

Forumbee for approximately $21,000 for the life of

the patents. That's consistent with the comparable

licenses that we just talked about. 

As far as microchip.com, we talked about the

available noninfringing alternatives there, the

redesigned website, microchip.com, the legacy website

that was in place in -- before the old website, and

then other noninfringing alternatives. 

Those were all alternatives that Microchip

could turn to as well. 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1236

Q. What was your conclusion regarding the

reasonable royalty that the parties would have agreed

to at the hypothetical negotiation in March 2014 when

you apply those Georgia-Pacific factors and follow the

rules?

A. Yeah. If you properly apply the

Georgia-Pacific factors, look at all the comparable

licenses, factor in apportionment properly, I

quantified a $20,000 lump-sum payment is the

appropriate reasonable royalty, should you find that

the patents infringed and were invalid.

Q. Now, yesterday Mr. Blok told me that if he was

wrong about his use of those -- of that 5 percent or

that $215,000 a day, we could fix his analysis.

Do you recall that?

A. I do. I was here for that. Yes.

Q. How would we fix what needs fixing?

A. Well, and I want to be clear. We just -- my

analysis is different than the way Mr. Blok approached

it. I don't believe using those two data points and

calculating the reasonable royalty the way he did is

the correct way to approach this.

But even if we were to assume that his

5 percent royalty rate is the correct royalty rate to

apply in a mathematical formula, you still must isolate

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1237

the incremental value of the patents to the website and

to Microchip.

Q. So what would be the first step?

A. This is the same apportionment adjustment and

then an adjustment for the U.S. sales that we discussed

this morning. You would need to make those adjustments

and then apply the 5 percent.

So you would start -- for the larger damage

period, from 2014 to 2021, look at the accused revenues

of 604 million and isolate the sales following the

breadcrumb use that Dr. Wolf talked about earlier. And

that would get you to the little bit over $3 million.

Q. And what was the next step?

A. You would then need to isolate just the U.S.

sales. And we did that -- and I did that by applying

the 19 percent. That gets you to $575,000 for the 2014

to 2021 time period.

Q. And the same analysis applies to his other

damages period; is that right?

A. That's correct. The 2018 to 2021 damage

period, you would apply the 5.5 percent to isolate the

incremental value; then you would apply the 19 percent

to isolate the U.S. sales. And that arrived -- you

arrive at a $243,000 number.

Q. So after you've done those two steps to

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1238

isolate the value of these patents and remove the

foreign sales, what next?

A. Well, then -- again, and I don't agree with

the 5 percent, but you could apply that 5 percent to

both the $575,000 amount, which again is after you've

apportioned that amount to isolate the value of the

patents and isolated it to be just U.S. sales, and then

that's for the larger damage period.

You'd apply the same adjustments for the

smaller damage period, or the shorter damage period,

and apply the 5 percent to those. And you get a

lump-sum royalty range of $28,750 to $12,150 for the

shorter damage period.

Q. How do these numbers compare with the result

that Mr. Blok reached?

A. They're significantly lower than what his

analysis results in.

Q. Are these numbers consistent with your

analysis?

A. They are.

Q. Do these numbers confirm the way that you

approached the problem?

A. Yes. If you look at these two numbers, my

$20,000 lump-sum royalty calculation falls pretty much

in the middle of these.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1239

When you look at these amounts relative to the

agreement that includes the $ license to the

companies; you look at the agreement that

Microchip entered into with them for similar website

technology, that was $ and then you also look at

the fact the other comparable licenses with

, they're all within this range of values, 

all significantly less than what Mr. Blok calculated

from $30 million in damages. 

Q. Mr. Jordan, what is your ultimate conclusion

regarding the appropriate reasonable royalty in this

case? 

A. Well, when you follow the rules, when you

appropriately apply the Georgia-Pacific factors, when

you properly consider all of the information, the

comparable licenses with Caddo, the comparable 

license, when you factor in the noninfringing

alternatives available like Forumbee and the other

available websites to Microchip, the correct answer is

a $20,000 lump-sum royalty payment. 

Q. Two last questions: First, if the jury finds

there's no infringement in this case, what's the

appropriate measure of damages? 

A. There are no damages. 

Q. And if Microchip was licensed to use these

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1240

patents for any part of the damages period, what's the

appropriate damages for that part?

A. For that part it'd also be zero.

MR. BREWER: Pass the witness.

CROSS-EXAMINATION

BY MR. DEVLIN:

Q. Good afternoon, Mr. Jordan.

A. Good afternoon.

Q. Good to see you.

So I want to talk about the two issues that

you were talking about with respect to Mr. Blok's

opinions. So we've got a royalty rate and we've got a

royalty base, right?

A. Yes. Those are both in his analysis.

Q. Right. And that's typical. You have a rate

and a base. You multiply those and then you get

damages when you're using a rate like that to calculate

what damages are, right?

A. I'm not sure I would agree with that.

Q. Okay. So in any event, that's what happened

here. He has a royalty base that he works from and

then a royalty rate that he applies to that base, okay?

A. It's a fair way to characterize his analysis.

Q. Thanks.

I want to talk about the base first, okay?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1241

MR. DEVLIN: And if we could look at

Plaintiffs' 96 at Page 36, Mr. Gooden, when you get

that up. Plaintiffs' 96.

And if we could pull up that block of

text right there. Thank you.

A. Mr. Devlin, is it in this binder?

BY MR. DEVLIN:

Q. Well, it's on the screen there if you don't

mind --

(Simultaneous speakers.)

A. Oh, okay. I'm sorry.

BY MR. DEVLIN:

Q. Thank you. And, yeah, you should be able to

see everything on the screen hopefully.

So this is the source of the royalty base

number that Mr. Blok uses. We all agree on that,

right?

A. That's correct.

Q. Okay. And here what it says is that

microchip.com drives $215,000 of revenue per day

through the e-commerce portal.

Do you see that?

A. Yes.

Q. So what that number drives, let's talk about

that word -- I mean "drives." People use that word

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1242

about driving revenue. You've heard that used

generally, right?

A. Yes.

Q. You could have an advertisement on TV that

would drive revenue for an automaker, right?

A. That's one way you could characterize it.

Q. A billboard can drive revenue, right?

A. It could.

Q. People doing research on a website could drive

revenue, right?

A. I could see a scenario where that might

happen.

Q. Let's talk about one. You heard Ms. Mahar say

that the purpose, the main purpose of the microchip.com

website was to provide information for people, right?

A. I believe that's one of the purposes of it.

Yes.

Q. Okay. She said the primary purpose.

Do you remember that?

A. I don't recall specifically.

Q. Okay. We'll look at -- maybe see that

sometime else.

But one of the things you also saw is you have

these various customers. You might have seen it during

Mr. Sherwood's testimony when we saw those sample

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1243

customers from Microchip. Remember that? People who

might go to the website, do some research. Remember

those?

A. Oh, the ones with the -- the fictitious ones

with --

Q. Exactly. Yeah. Okay. And you also heard

from Ms. Mahar that there are a lot of large sales that

Microchip has with different corporate customers,

right?

A. I believe those were the ones she identified

that came through outside the website channels.

Q. Okay. So -- and that's interesting that you

say that, because obviously people who are going to

make very large sales, millions of dollars, tens of

millions of dollars, even hundreds of thousands of

dollars, they're going to do some research before they

make those purchases, right?

A. Well, there's lots of different ways to

conduct research. Especially in situations where

you're bulk ordering.

Q. I totally agree with you. And there's one

huge repository of information about Microchip's

products that's available at anyone's fingerprints at

any time. And we know what that is, right? What's

that?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1244

A. Again, it's my understanding that the

microchip.com website does have information on it about

the products.

Q. Okay. Lots of products, thousands of

products, right?

A. I personally don't have knowledge about the

number of products on Microchip's website. I

understand that -- I believe Ms. Mahar did testify to

that. Yes.

Q. Great.

A. That there was a significant number of

products.

Q. It was 26,000 pages.

Do you remember that?

A. I'm sorry, Mr. Devlin. I don't recall that

number specifically.

Q. No problem.

Did you ever consider a use case where someone

is going to do a major purchase and they're going to

start researching that over the course of days or weeks

or months?

Ever think about that?

A. That's not a scenario that I considered as

part of my analysis.

Q. All right. And then having done that, they

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1245

can collect information, talk to people in their

industry, call up salespeople as well and get some more

information. And then, ultimately, make a purchase,

right? That could happen?

A. Of course that could happen.

Q. Thank you.

Sometimes they might make that purchase by

going to microchipdirect.com and making a purchase,

right?

A. That's not my understanding. Again, based on

information from Ms. Mahar, and I believe Mr. Wolf in

past conversations as well, is that if customers are

buying significant quantities of products or are repeat

customers, they have direct salespeople that they work

with primarily. And most of those sales are completed

in that way, not on microchipdirect.com, the e-commerce

website.

Q. Thanks for that. And I am going to come right

back to that, but I've got an interim question for you.

The interim question is: The kind of sales

you just described, they're not even in this damages

case at all. They're totally excluded and Microchip

keeps all of it, right?

A. Well --

Q. Right?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1246

A. I don't necessarily agree with that,

Mr. Devlin.

Q. So the damages case here is based on what

microchip.com -- sorry -- what Microchip said

microchip.com drives through the e-commerce portal,

right?

A. Mr. Blok's analysis is based on this one

document.

Q. That's my point. And so that's the damages

base here. The revenue base is stuff that went through

the e-commerce portal according to Microchip itself in

this business document, right?

A. Again, Mr. Blok's analysis is based almost

solely on this document. It doesn't factor in the

other items that we discussed earlier today.

Q. And what doesn't factor in is the major sale

that you just talked about, if someone calls up a

salesperson and orders something for $5 million.

Because that's not through the e-commerce portal. And

so Microchip keeps all that revenue, right?

A. Again, it's my understanding that there is a

direct sales channel where there are salespeople

working with these customers. That would not be part

of microchipdirect.com.

Q. And it's not part of the damages base here,

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1247

correct?

A. Again, I don't necessarily agree with that.

This $215,000 number, as we've talked about in great

detail, is not a reliable number. It is an amount that

was in one presentation-- or I'm sorry -- two different

versions of this presentation. It's inconsistent with

the other facts that are in evidence.

Q. Sir, I have limited time here, and so I'm

hoping you can answer my questions and we can get

there.

According to Microchip's own document, whether

you consider it reliable or not, according to this

document, the revenue that is being discussed in this

case is revenue driven from microchip.com through the

e-commerce portal. And that's it, right?

A. That is what this document states.

Q. And that's what the analysis is of Mr. Blok.

It's limited to that revenue. That's my point, right?

A. Well, and that's my point as well.

Q. Great. So then --

A. He focused solely on this one number in this

spreadsheet.

Q. Then it sounds like we agree, fair?

A. Fair.

Q. All right. Thank you.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1248

And what's excluded then are -- according to

Microchip's own document, what is excluded is revenue

that comes through a channel other than the e-commerce

portal. According to Microchip's own document that

we're staring at on the screen, right?

A. Again, if you're isolating it to this one

document, this document -- that is what this one

document says.

Q. All right. Thank you.

MR. DEVLIN: Let's go to Defendant's

Exhibit 465.

BY MR. DEVLIN:

Q. Let's look at the these spreadsheets that you

did rely on. Now, let me ask you a couple of questions

as we're getting there, and the screen's going to

change. But I'm just talking to you right now, sir.

So the spreadsheets that we were looking at

earlier, they were -- I thought they might have come

from discussions. Did you request those spreadsheets

from Dr. Wolf or no?

A. I don't believe that's correct.

Q. Did you have any input into the analysis, the

framework, the consideration that he took regarding

what would go into those spreadsheets and what would

not?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1249

A. I don't believe so.

Q. So you just relied totally on him?

A. That's correct.

Q. All right. We're looking at --

A. Well, I want to be clear. I relied on

Microchip.

Q. Thank you. May have been others that helped

Mr. -- or Dr. Wolf, but everyone -- from Microchip is

what you're saying?

A. Correct.

Q. Thanks. All right.

Now, keeping this document on here, when we --

and thinking a moment back at the document we were just

looking at where it talks about driving revenue,

remember that quote we just had there for a little bit?

A. Yes.

Q. Nothing in that quote said anything about "two

clicks," right?

A. That quote did not include that language. No.

Q. Okay. And I don't think anybody that we've

heard testify here has explained exactly how Microchip

came up with that $215,000 number, right?

A. It's my understanding that the person who

inserted that number into the presentation is no longer

with Microchip.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1250

Q. Did you try to reach out to her?

A. I did not.

Q. One of the pages we saw from this was, I

believe, Page 19.

MR. DEVLIN: If we could go to Page 019,

Mr. Gooden.

Thank you.

BY MR. DEVLIN:

Q. I think this was something that we saw earlier

with Dr. Wolf.

And you were here for that testimony, right?

A. Yes. I was.

Q. Okay. And the issue here, remember, there was

a bunch of data starting in February of '21 and going

down, where there's just -- there's nothing.

Do you see that?

A. That's correct.

Q. Okay. And the testimony was that there's just

no revenue then; is that right?

A. That was Dr. Wolf's testimony. Yes.

Q. Okay. So you -- and this is what you relied

on, the spreadsheet here and other information, not

that $215,000-a-day number, right?

A. This is one of the spreadsheets that I did

rely on. Yes.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1251

Q. And you didn't rely on the $215,000-a-day

number?

A. That's correct.

Q. Thanks. Okay.

So you relied on a spreadsheet made by an

employee of Microchip made for the purposes of this

litigation that you didn't guide whatsoever for

purposes of it fitting into the overall structure of a

damages case in a patent infringement lawsuit.

And then you rejected a document that was made

in the ordinary course of business in the -- in the

process of making important business decisions and had

a number in there.

That's what happened?

A. Well, that was a long question --

Q. It was, but that's what happened?

A. That's not how I would characterize it.

Q. I bet.

A. At all.

Q. Okay. But that's what happened?

A. I disagree with that.

Q. All right. We're going to agree to disagree

on that one for time purposes.

MR. DEVLIN: Let's look at Defendant's

Exhibit 467.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1252

BY MR. DEVLIN:

Q. This is the other spreadsheet, and I want to

talk about this one a little bit with you.

Okay. 467, here's this U.S. versus foreign,

right?

A. Yes.

Q. Okay. Now, you're not a patent expert or a

technical expert, right?

A. Fair. I'm not a technical patent expert.

Q. Okay. So you don't know -- well, I want to

say it differently.

You're assuming, I think, when you're breaking

out U.S. sales that if the sale was made in a foreign

country, then that doesn't count for infringement.

Do I have that right?

A. That's correct.

Q. Great. Thank you.

There was some testimony about the gradual

changeover from the original version, the main website

earlier version, versus the redesigned version.

Remember that?

A. Yes. The burndown chart.

Q. That was around -- from June 2020 to June 2021

or so.

Did I have that right?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1253

A. I think it was earlier than June of 2020.

Q. Maybe May or April?

A. Maybe even earlier.

Q. Okay. Well, let's look at it real quick.

MR. DEVLIN: Joint 115 at Page 2. Next

page, Mr. Gooden.

BY MR. DEVLIN:

Q. Okay. So they're sort of done here; it's

actually 4/1?

A. Yes.

Q. And then it goes kind of into May and they're

still finishing up.

Do you see that?

A. That's correct.

Q. And they're roughly halfway done by February,

give or take; is that fair?

A. Yeah. February of 2021.

Q. 2021. Okay.

MR. DEVLIN: Let's go back to 467,

please.

Thanks. Okay. So let's pull that up

again, Mr. Gooden.

BY MR. DEVLIN:

Q. And let's highlight maybe June 2020 to

May 2021; is that fair, sir?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1254

A. You can highlight --

Q. Well, I'm asking if that's a fair time range

given the document we just looked at?

MR. DEVLIN: Down to May, Mr. Gooden.

A. We can absolutely talk about that time range.

BY MR. DEVLIN:

Q. Okay. Great. Thank you.

All right. Now, I guess the issue -- the

premise is there's this gradual change and addition of

the redesigned pages replacing the older pages

throughout this time period, right?

A. That's correct.

Q. And then we heard testimony that when that

happened, the sales increased, right?

A. I believe that was part of Ms. Mahar's

testimony.

Q. Okay. And I guess the -- sorry -- the

implication being that the redesign is way better and

that that's causing all these sales to go up.

I guess that feels like the implication that's

being drawn there.

You don't feel that way?

A. I'm not sure if she was -- that was her

testimony.

Q. Okay. But what do you think? Do you think

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1255

there's an implication there?

A. I don't believe so. I think there is an

explanation based on my conversations with Microchip

regarding the increase in revenues, especially when you

get into the March '21 time period.

Q. Okay. Great. I just want to confirm some

numbers here for people.

So as we start in June, sure enough they go up

the next few months, 2 million, 3, 5, 7.

See that?

A. Well, the U.S. sales --

Q. No. I'm asking you, worldwide, just do you

see those numbers?

A. Oh, okay. On the second column?

Q. Yeah.

A. Those numbers do increase on these

spreadsheets.

Q. Okay. Great.

And then they go down for a few months. They

kind of dip for a little while.

Do you see that?

A. Yes. And then November to January --

November 2020 to January '21 time period, they do.

Q. And then they skyrocket in one month, four

times the increase, right, and go on from there?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1256

A. They do increase from February '21 to

March '21, yes.

Q. Okay. All right. And so we'll just leave it

at that.

MR. DEVLIN: Now, keeping this here,

Mr. Gooden.

BY MR. DEVLIN:

Q. Now, as of December '21, at that point and

time periods around that, so we got, you know, roughly

30 days in a month, $20 million. We've got 21, we've

got 16, so forth, around those time periods.

Now, you're looking at 500,000; 600,000;

$700,000 per month in revenue worldwide, right, just

division?

A. I don't believe it's -- that's the right

number per month.

Q. Okay. $20 million divided by 30 days?

A. Well, you said per month. I'm sorry.

Q. I'm sorry. Per day. Thank you so much, sir.

5, 6, $700,000 per day depending on the month,

right?

A. And, again, you're talking about the

worldwide --

Q. Exactly.

A. -- sales in that column?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1257

Q. Yes.

A. Yes. That math -- again, I'm trusting that

your math is right. Then yeah. That's correct.

Q. Okay. Thanks.

And then the last point on this document, we

heard from Dr. Wolf the way he did this, it had to do

with what people had in a shopping cart, and then they

would click in and it would go to Microchip Direct.

Did I get that right?

A. I don't think that accurately summarizes his

testimony.

Q. Okay. Thank you. I may have misheard him on

that. So we'll let that go.

Let's talk about the Forums for a second.

Without going to it, you had a Slide 56 that

had, say, $400 a year, and then they only make $75 a

year on the Forums?

A. That was the amount that could be attributed

to the Forums.

Q. Okay. So, I mean, if they're just losing the

325 a year, why don't they just shut the Forums down?

A. That's a question for Microchip.

Q. Okay. But you and I both know probably it's

because there's other value there.

A. Yes. There could be.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1258

Q. All right. Thanks.

You ever hear of somebody called a "super

user" for a company?

A. I think I've heard that term. Yes.

Q. That's someone who's really engaged, uses a

lot of the products and so forth, right?

That's what that means generally?

A. Could be. Yes.

Q. That's generally?

A. Generally.

Q. Those are the kind of people who go to Forums

and talk about things and engage, right?

A. I don't haven't any specialized knowledge

around that.

Q. Do you think -- okay. Fair enough.

Let's talk about the rate side.

A. Okay.

Q. All right. So we did that as the base. Now

we're going to talk about the rate, this 5 percent.

We're all here.

So you -- I think you said that Mr. Blok

ignored real-world results; is that right?

A. Correct.

Q. Tell me if you agree with this: If the jury

gets to the damages issue in this case, they'll be

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1259

the first group of people that sit around a table that

talk about what a reasonable royalty is for the patents

who have all collectively determined that the patents

are both valid and infringed; isn't that right? 

A. I think what you're pointing to is some of the

language in the license agreements about the -- no

acknowledgement of liability or anything like that. 

And if you can factor that into that question, 

that's fair. 

Q. All right. And that's a pretty big deal, 

right? 

A. Not in the context of all the rest of the

evidence, including the lump-sum amounts in each one of

these license agreements and the noninfringing

alternatives, like the Forumbee. 

Q. Well, let's just talk about the lump-sum

amounts. 

I mean, those lump-sum amounts reflect the

fact that the counterparty, the licensee, did not agree

that the patents were valid and did not agree that they

were infringed, right? 

A. Well, I don't recall the specific language in

the agreement, but what I do know about that is

that the vast majority of those companies had not been

accused of infringement. 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1260

Q. Thanks. 

And you know what, we can look at that

evidence about what the agreement says about that

question of liability. I can do that later so we can

move on from there. 

The deal, you were using this $ 

number per licensee. That's just the math, that's just

the division between the total amount and all of the

people, the members who got the license, right? 

A. That's right. As I explained earlier, it's 

the $ different licensees. 

Q. Okay. But you know that that license deal

resolved four litigations that were going on between

Caddo and , right? 

A. That's my understanding, is that

companies. 

Q. Okay. And you heard Mr. Loudermilk's 

testimony, that they did diligence and didn't see

anyone else that was using the technology.

You heard that, right? 

A. I know I was here, but I don't recall his

specific testimony around that. 

Q. Okay. Thanks. 

The license that -- you would agree that

that was entered into for purposes of settlement also, 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1261

right? 

A. My understanding is that that was not a 

litigation license. 

Q. Right. But it was entered into for purposes

of settlement though. You know that? 

A. I believe that's what it says. 

Q. It says purposes of settlement. 

And the notice -- you know, sometimes after an

agreement's signed, you usually have notice provisions. 

So if somebody has to provide some information to the

other party later on, they know who to send it to, 

right? 

A. Yes. I generally understand what you're

talking about. 

Q. Great. And the notice provision here goes to

the litigation department at Microchip, right? 

A. I don't recall what the notice section -- who

it was addressed to. I'm sorry. 

Q. Okay. No problem. We'll look at that

sometime else maybe also. 

Let's talk about the license.

MR. DEVLIN: And let's pull that up. 

That's Joint Exhibit 18, please. 

BY MR. DEVLIN: 

Q. While that's getting pulled up, I'll ask you a 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1262

couple of things. Now, you said that it's a big

company. They have a lot of stuff, fair? 

A. I wouldn't characterize it like that. But it

is a large company. We heard Mr. Blok talk about how

it acquired right around this time period or

shortly thereafter. 

Q. Let's talk about is

owned -- the website is owned by a subsidiary of

, right? 

A. I don't know that one way or the other.

Q. Why don't you look at your binder real quick

at Tab 12. I gave you a binder. There's something

called Tab 12. 

Let me know when you're there. 

A. I'm on Tab 12. 

Q. You see where it says "About It looks

like a printout of the web page. 

Does it look fair? 

A. It does appear to be a printout from a 

website. 

Q. And you know how, when you scroll down to the

bottom of a lot of web pages, there's a copyright

notice and it says who owns the copyright for the web

page, right? 

A. Generally. Yes. 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1263

Q. All right. Look at the one here. It's Page 3 

of 3 right in the middle. Tell me if I read this

right. 2005 to 2022, . All rights reserved. 

Do you see that? 

A. That's what it says. 

Q. That LLC's a company, correct? 

A. Yes. LLC stands for limited liability

company. 

Q. Great. And in our parlance here with respect

to sort of owns it, 

then it's an affiliate of , right? 

A. I don't know that one way or another. I'm not

an attorney. 

Q. Well, let me ask you this: The

license only goes to directly

and not anything that could be called affiliates.

You know that, right? 

A. Again, I'm not a patent license attorney. I'm 

a patent damages expert. That does require to analyze

license agreements, but I don't -- I'm not here to

render a legal opinion on what is in and what is out. 

Q. Well, you relied on this license, sir, right? 

A. Yes. Again, that's my understanding -- 

Q. Okay. 

A. -- that there's companies have the right

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1264

to use that patented technology. 

Q. I think you're talking about This is -- 

A. Oh, I'm sorry. I'm sorry. 

Q. This is . 

You relied on the license, 

right? 

A. That's correct. 

MR. DEVLIN: Let's pull up that top

paragraph, Mr. Gooden.

BY MR. DEVLIN: 

Q. And you see how it says in that top -- the

first paragraph, about five lines, around the third one

down, it says and then it says

licensee.

Do you see that? 

A. Yes. I do see that. 

Q. Did you look through this license to see if

any other company other than the actual thing called

. is licensed? 

A. Again, it's my understanding that

has a license -- 

Q. Right. 

A. -- to those patents. 

Q. Did you look in the license to see whether the

company that owns was licensed? 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1265

A. Again, I'm not the attorney in the room. I 

don't understand, nor do I have an opinion about the

corporate structure of whether or not this license

gives the right to use the patents.

Q. Yeah. Okay. So that's my point. 

But somehow we're hearing testimony about how

. But you don't 

actually know whether the website, is licensed? 

A. I know that

. 

Q. But you don't know whether the website, 

is licensed? 

A. I can't sit here today and tell you legally

one way or the other. No. 

Q. So you don't know? 

A. Again, I can't tell you, one way or the other, 

from a legal perspective. 

Q. Well, from any perspective, from the economic

perspective that we're talking about here. 

I'm not trying to talk legal niceties here. I 

want to ask you about your opinion. You don't know -- 

even though we've talked about a lot in this

trial -- you don't know, as the damages expert for

Microchip, whether is actually licensed? 

A. I don't know, one way or another, from a legal

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1266

perspective. No. 

Q. Okay. A few more things in this

license. 

MR. DEVLIN: Let's go to the next page, 

please. And the amount of payment. Settlement

payment. Thank you. 

BY MR. DEVLIN: 

Q. All right. Now, here, if we look on the

fourth line down, it says "gross revenues."

Do you see that? 

A. Yes. It does say "gross revenues."

Q. So the license -- and by the

way, do you know who was accused of -- I'm sorry. It

says "gross revenues." And what you were saying before

is that you have to do this all apportionment and stuff

like that.

Do you remember? 

A. Yes. You do need to apportion. 

Q. And you heard Mr. Blok talk about incremental

value and that being his way of dealing with this

apportionment issue, right? 

A. I don't believe Mr. Blok properly apportioned

his royalty base. 

Q. I get that. But you heard him talk about

incremental value. That's my point, right? 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1267

A. I did hear him tell -- say that you did need

to identify the incremental value of the accused

breadcrumb -- 

Q. Okay. And I just want to -- 

A. -- just for the patents, which is what -- I 

agree with that. 

Q. All right. And what he's saying is because

the license is on gross revenue, if

you're going to use that number, you can port it over

to here to revenue, to gross revenue, because it's 

apples to apples, right? 

A. I disagree with that. 

Q. You disagree that that's a good analysis, but

that's what he did. That's what I'm trying to say, 

right? 

A. Yes. That is what he is attempting to say

that he did. 

Q. Thank you. 

A. He did say that.

Q. Thank you. Okay. 

Now, it also says that -- down three or four

lines from the top, it says: Revenues for licensee's 

use as alleged by licensors in the litigation. 

Do you see that? 

MR. DEVLIN: It's the third line from the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1268

bottom, Mr. Gooden, starting on the left.

Thank you.

BY MR. DEVLIN:

Q. Do you see that, sir?

A. I do see that.

Q. Okay. And do you know what was accused in the

litigation?

A. Yes. I believe it was a website.

Q. Remember the name of it?

A. Something with travel -- it's a travel

website. I don't remember the exact name.

Q. Not a big well-known one though, fair?

A. That's fair.

Q. All right. Thank you.

THE COURT: Mr. Devlin, it's time to wrap

up.

MR. DEVLIN: Thank you, Your Honor.

Make sure, I may be complete.

No further questions. Thank you.

Thank you, Your Honor.

REDIRECT EXAMINATION

BY MR. BREWER:

Q. Mr. Jordan, you talked a little bit just a

moment ago with Mr. Devlin about how microchip.com has

extensive product information, right?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1269

A. Yes.

Q. Do you know whether Microchip Direct, the

e-commerce site, also has product information?

A. I believe it does.

Q. Do you recall earlier in this case some of the

witnesses testifying about all these PDF pages?

A. Yes.

Q. Do you know, what types of PDF pages were

those?

A. I believe they were product specification,

product details, information about the products and how

to integrate them with other types of devices.

Q. Do you know whether those PDFs are available

on Microchip Direct?

A. I believe that they are.

Q. You also talked a little bit -- or he also

talked a little bit about these -- Purchaser Penny, I

believe, was one of them --

A. The fictitious --

(Simultaneous speakers.)

BY MR. BREWER:

Q. -- Sam. Yeah. We talked about them. I think

some other witnesses talked about those.

Is it your understanding that engineers who

want to buy Microchip products can't use Google to do

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1270

their research?

A. They absolutely could.

MR. BREWER: Can we pull up Plaintiffs'

96, please?

And let's turn to Page -- I believe it's

36.

Right. And can you highlight that

language that we, I think, all have seen a lot of times

in this case?

BY MR. BREWER:

Q. That slide says that microchip.com drives

revenue through the e-commerce portal, correct?

A. Yes.

Q. That slide doesn't say a breadcrumb drives

revenue through the e-commerce portal, does it?

A. It does not.

Q. Your analysis was based on comparable

licenses, right?

A. Yes. That's one of the things I based my

analysis on.

Q. And those spreadsheets that Dr. Wolf prepared

and you discussed with Mr. Devlin, did you use those to

come up with your royalty -- reasonable royalty?

A. No.

Q. What did you use them for?

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1271

A. I used them, as we talked about earlier today, 

for adjustments that would need to be made to

Mr. Blok's analysis to properly apportion it to

identify the incremental value associated with the

patents or the accused breadcrumb. 

Q. And Mr. Devlin said that has been talked

a lot about in this case. I'm not quite sure I agree

with that. 

But setting aside

has got

to be a pretty big company, right? 

A. That's fair. 

Q. Do you know, generally speaking, how much

revenue has? 

A. I know it's more than $50 million. And if

you're purchasing companies of that size, it's likely

even higher. 

Q. And is licensed for these

patents, right? 

A. Correct. 

Q. And how much did they pay for that license? 

A. $ 

Q. You and Mr. Devlin talked about those recent

sales, right, the bigger numbers in basically, roughly, 

the last -- last year? 

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1272

A. Yes.

Q. Those big numbers were what, 2021, 2022?

A. Yeah.

Q. Recent.

The accused breadcrumb has been on the website

for how many years?

A. According to the plaintiff, since 2018 on the

microchip.com website.

Q. And on the Forum website since?

A. 2014.

Q. And by 2021, the breadcrumb was disappearing

on microchip.com, wasn't it?

A. Yes. That's what that burndown chart

indicates.

Q. Have you seen any evidence to indicate that

the breadcrumb was driving any of that revenue

increase?

A. No.

MR. BREWER: No further questions.

THE COURT: Thank you, sir.

MR. DEVLIN: Nothing further, Your Honor.

THE COURT: Thank you, sir.

You may step down.

Ladies and gentlemen of the jury -- once

you get down, I'll...

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1273

THE WITNESS: Thank you.

THE COURT: Who's your next witness?

MR. JENSEN: Your Honor, that concludes

Microchip's presentation of evidence.

THE COURT: Thank you, sir.

Do you rest?

MR. JENSEN: The defense rests its case.

THE COURT: Okay. Ladies and gentlemen

of the jury, that means all the evidence is in. We're

going to take a very short break and make sure that

there are no tiny snafus with the charge being prepared

for me.

As soon as we have that done, we'll bring

you back in, I will read you the jury charge, we'll be

done for the day, and then you will come back tomorrow

morning at 9:00 for closing arguments.

So we'll stand in recess for just a few

minutes.

THE BAILIFF: All rise.

(Jury exited the courtroom.)

THE COURT: Thank you. You may be

seated.

Do y'all have a copy for us?

MR. DEVLIN: Not yet, Your Honor.

We -- the agreement that we worked out on

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1274

that last thing is in my head, and my head also had my

cross of Mr. Jordan. So if -- I know Your Honor just

said a few minutes, if we could run back, we'll get

that typed up, double-check it with them and get that

to Your Honor with all the rest of the instructions,

which should be complete as well.

And then, Your Honor, we also have our

preverdict JMOLs to put on the record and so forth.

THE COURT: Why don't you go do that and

someone else can make whatever motions you have and put

on the record whatever objections you have to the

charge?

MR. DEVLIN: Thank you, Your Honor.

And, in fact, we're all set up to have

someone else do the rest of those.

THE COURT: Let's go ahead and get that

done.

MR. DEVLIN: Okay. Great.

THE COURT: At your office, can you --

when you finish, can you send by e-mail the copy to

Jeff so we can start, or are you all --

MR. DEVLIN: We should be able to get it

done here in our attorney room, so I'm hoping it won't

take that long, Your Honor. But it just, you know, if

it wasn't a couple of minutes, I wanted to mention it

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1275

to you.

Thank you.

THE COURT: Mr. Devlin, you need to send

it to Jeff so we can print it.

MR. DEVLIN: Absolutely. Yeah. Thank

you.

THE COURT: I'll hear first from the

plaintiff any motions they have. And then if you want

to take up any objections you have to the charge, you

can do that at the same time.

MS. MCCARTY: Thank you, Your Honor.

Plaintiffs have six motions for judgment

as a matter of law.

First is judgment as a matter of law to

preclude the defense of license and release as defenses

to infringement, judgment as a matter of law to

preclude the defense of noninfringement, judgment as a

matter of law to find willfulness, judgment as a matter

of law or motion to preclude the assertion that the

preamble is limiting -- is a limiting claim element in

the jury instructions, judgment as a matter of law to

drop the assertion of the invalidity defense, and

judgment as a matter of law on noninfringing

alternatives.

The first judgment as a matter of law to

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1276

preclude the license -- to preclude the defense of

license and release as defenses to infringement.

Defendant has not properly raised and has

not provided any evidence in support of its defense of

release from liability as the beneficiary of the

license agreement between plaintiffs and Microsoft.

In order to properly raise this defense,

defendants would need to, first, establish facts that

would support an argument that the accused method is

somehow interrelated with the use of a covered

Microsoft product; two, present expert testimony as to

what products of Microsoft are and are not covered

products; three, present testimony from a licensing

expert to opine that the accused activity is covered by

some release contained in the Microsoft license

settlement -- in the Microsoft settlement and license

agreement; and, four, provide evidence or testimony

that Microchip's accused activity does not fall within

the scope of the exceptions or exclusions set forth

within the Microsoft agreement.

Defendant has not presented substantial

fact evidence as to any relationship between the

accused method, i.e., a set of method steps performed

by defendant's website and any Microsoft product.

Defendant failed to identify to the trier

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1277

of fact which, if any, clause of the Microsoft

settlement and license agreement provides any release

to defendant.

Defendant has also never named any

licensing expert to provide testimony from which a

trier of fact could determine if the Microsoft

settlement and license extended to release defendant's

website from patent infringement, nor has Microchip

provided any evidence to show Microchip has the rights

it asserts under the Microsoft license are outside the

specific exceptions to such rights.

The fact that the jury has never even

seen a single substantive provision of the license is

telling. Any attempt to fill in the missing gaps in

evidence through lawyer argument, in closing or

otherwise, should be rejected.

The law requires expert testimony on at

least some of these points, and Microchip has presented

none.

And for that proposition, Your Honor,

we'd point to Genband U.S. LLC v. Metaswitch Networks,

221 F.Supp.3d 858, Eastern District of Texas,

September 29th, 2016 which found a technical expert

must opine that the accused technology --

THE COURT: I don't need the law.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1278

Just --

MS. MCCARTY: Thank you, Your Honor.

THE COURT: -- make your motion. Thank

you.

MS. MCCARTY: Plaintiff seeks a judgment

as a matter of law finding that defendants have failed

to establish defendant's accused activity is covered by

a licensed and released under the license agreement

between plaintiffs and Microsoft.

JMOL No. 2 to preclude the defense of

noninfringement.

Defendant's assertion of noninfringement

as expressed through its expert witness Dr. Tittel is

improper because Mr. Tittel makes two fundamental

mistakes. First, Mr. Tittel insisted on using his own

claim construction of the term "Active Path"; and, two,

Mr. Tittel insisted that the preamble is limiting

without establishing the basis for a limiting preamble

and without defendant raising this issue in the claim

construction proceedings.

For the "Active Path" term, defendant's

assertion of noninfringement is illustrated by the

demonstratives Mr. Tittel presented in court and

through his direct testimony.

In order to present infringement or

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1279

noninfringement, an opinion must be based on the claim

construction of the Court. However, Mr. Tittel based

his opinions on his own redefinition of the term

"Active Path," which differs significantly and

meaningfully from the Court's claim construction.

Mr. Tittel adds "active" to the links,

changes "as a menu system is navigated" to "as items

are selected" and adds in a new limitation, "one-to-one

correspondence."

Mr. Tittel confirmed this improper

construction during his testimony at trial. Defendant

was already on notice of its attempts to ignore the

Court's claim construction --

THE COURT: Counsel, I just need for you

to make the points of what you -- I don't need the

attorney argument. I just want you to make -- you can

submit all that in writing.

All I want you to do is give me the

headlines of what you want me to grant the motion on.

I'm going to deny it. And then I'm going to hear from

the defendant, and I'm going to deny what they want.

I just need you to get through this as

quickly as possible.

MS. MCCARTY: Thank you, Your Honor.

THE COURT: You can submit anything you

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1280

want in writing.

MS. MCCARTY: Thank you, Your Honor.

I'll speed up.

JMOL on willfulness. Plaintiffs have

established -- this is JMOL No. 3 on willfulness.

Plaintiffs have established that

Microchip's narrative of a global website redesign and

that the timing of the redesign are incomplete, at

best, and suspect, at worst.

According to the testimony, Microchip's

multiple witnesses, multiple pages of the accused

functionalities were retained up until at least

December 2021. Defendant has withdrawn the assertion

of invalidity and defendant has provided no evidence to

rebut this evidence to establish reasonableness.

JMOL No. 4, motion to preclude that the

preamble is a limiting claim element in the jury

instructions. Caddo moves for a partial JMOL as the

rule permits, rejecting defendant's noninfringement

defense based on the preambles.

I have further argument, but I'm assuming

Your Honor would like me to move on.

THE COURT: Correct.

MS. MCCARTY: JMOL No. 5, motion to

compel defendant to withdraw its invalidity defense.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1281

Defendant has withdrawn its invalidity -- its defense

of invalidity. And plaintiffs request that the

withdrawal be formalized on the record.

JMOL No. 6, noninfringing alternatives.

Caddo moves for a judgment as a matter of law that

defendant has failed to put on the evidence that any of

the purported noninfringing alternatives are, in fact,

noninfringing.

Thank you, Your Honor.

THE COURT: Your motions are overruled.

Do you also have the objections with

respect to the jury charge?

MR. LENNON: Your Honor?

THE COURT: Yes, sir.

MR. LENNON: I will also endeavor to be

brief as possible, Your Honor.

And just preservation for the record, as

I appreciate it's probably all you need us to do right

now. Your Honor, I'm only addressing the preamble

issue. And, specifically, that the question of the

preamble and whether a preamble is limiting is an issue

of claim construction.

Claim construction is a question of law.

The Court's to decide questions of law.

The Federal Circuit has recognized as a

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1282

general rule the preamble language is limiting and not

treated as -- that preamble language is generally not

treated as limiting. To the extent it's supposed to be

construed as limiting, it needs to be given a

construction.

And the Federal Circuit has also said

that where there's a disputed term, that the Court is

to guide the jury and not allow the jury to endeavor to

construe disputed claim terms themselves.

So I can give Your Honor case cites to

all the cases, but that's the preservation of our

argument for the preamble issue.

Thank you, Your Honor.

MS. MCCARTY: I'm sorry, Your Honor. I

just have one last question.

Would you like me to submit the JMOLs

through paper or file through the ECF?

THE COURT: I don't know. ECF?

MS. McCARTY: ECF? Thank you, Your

Honor.

THE COURT: Are there any other

objections to the Court's charge from the plaintiff?

MR. LENNON: No further objections, Your

Honor.

THE COURT: Thank you, sir.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1283

For defendants?

MR. QUILICI: Thank you, Your Honor. In

regard to the jury charge, we -- the defense objects to

Your Honor's ruling. I understand that we have been

instructed not to argue the issue of -- counsel has

been instructed generally not to argue the issue of the

limiting nature of the preamble.

We object to that ruling from the Court.

Do you want to hear objections to the

verdict form as well at this time?

THE COURT: I do. And also, if you have

a motion -- any motions to make --

MR. QUILICI: Yes. We would re-urge the

JMOLs we filed with the Court this morning, including

the JMOL regarding willfulness in particular.

And in connection with the verdict form,

defendants object to the inclusion of the question

regarding running royalty versus the lump sum.

THE COURT: Anything else?

MR. QUILICI: No, Your Honor.

THE COURT: Okay. We're all done with

everything you want on the record?

MR. LENNON: Yes, Your Honor.

THE COURT: Okay. Very good.

As soon as we get that and have it

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1284

printed, I'll come out, I'll read the charge, and then

we will be done for the day.

THE BAILIFF: All rise.

(Recess taken.)

THE BAILIFF: All rise.

THE COURT: Please remain standing for

the jury.

(Jury entered the courtroom.)

THE COURT: Thank you. You may be

seated.

Ladies and gentlemen of the jury, thank

you for your patience.

What you have in front of you are the

Court's final jury instructions. This is the law that

you must use and administer when you are applying the

facts to the case in doing your deliberations.

Members of the jury, it is my duty and

responsibility to instruct you on the law that you are

to apply in this case. The law contained in these

instructions is the only law that you may follow.

It is your duty to follow what I instruct

you the law is, regardless of any opinion that you

might have as to what the law ought to be.

Each of you is going to have your own

printed copy of these final jury instructions that I'm

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1285

giving now, so there's no need for you to take notes

unless you want to.

If I have given you the impression during

the trial that I favor either party, disregard that

impression. If I've given you the impression during

the trial that I have any opinion about the facts of

this case, disregard that impression. You are the sole

judges of the facts in this case.

Other than my instructions to you on the

law, you should disregard anything I may have said or

done during the trial in arriving at your verdict.

You should consider all of the

instructions about the law as a whole, and regard each

instruction in light of the others without isolating a

particular statement or paragraph.

The testimony of the witnesses and other

exhibits introduced by the parties constitutes the

evidence. The statements of counsel are not evidence.

They are only arguments. It is important for you to

distinguish between arguments of counsel and the

evidence upon which those arguments rest.

What the lawyers say or do is not

evidence. You may, however, consider their arguments

in light of the evidence that has been admitted and

determine whether the evidence submitted in this trial

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1286

supports their arguments.

You must determine the facts from the

testimony that you've heard and the other evidence that

I have admitted. You are the judges of the facts, but

in finding those facts, you must apply the law as I

instruct you.

You are required by law to decide the

case in a fair, impartial, and unbiased manner, based

entirely on the law and on the evidence presented to

you here in this courtroom. You may not be influenced

by passion, prejudice, or sympathy you might have

either for the plaintiff or defendant in arriving at

your verdict.

After the remainder of these

instructions -- actually, you'll hear the closing

arguments tomorrow, as I've told you. Tomorrow when

you hear the closing arguments, the statements and

arguments of the attorneys are not evidence, and they

are not instructions to you on the law. They are

intended only to assist you in understanding the

evidence and their contentions.

Tomorrow you will have a verdict form

that's been prepared for you. They'll be back in the

jury room for you. You are to take the verdict form,

and when you've reached a unanimous decision or

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1287

agreements as to the verdict, you are to have your

foreperson fill in the blanks in the verdict form, sign

it, and date it.

Answer each question in the verdict form

from the facts as you find them to be. Do not decide

who you think should win the case and answer the

questions to reach that result. Your answers and your

verdict must be unanimous.

Allow me to summarize the issues you must

decide now. You must decide the following three main

issues: Whether plaintiff has proven that defendant

infringed Claims 1 and 2 of the '411 patent;

1, 2, and 3 of the '301 patent;

1 and 4 of the '517 patent;

1, 2, 5, and 8 of the '836 patent;

1 and 8 of the '880 patent;

And 14, 16, 17, and 18 of the '127

patent.

If any asserted claims are infringed, you

will then have to decide what amount of damages, if

any, the plaintiff has proven.

The evidence you are to consider consists

of the testimony of witnesses, the documents, and any

exhibits admitted into evidence, any stipulations to

which the lawyers have agreed, and any fair inference

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1288

and reasonable conclusions that you can draw from the

facts and circumstances that you believe have been

proven. Nothing else is evidence.

Generally speaking, there are two types

of evidence. One is direct such as the testimony of an

eyewitness. The other is indirect or circumstantial

which is evidence that proves a fact from which you can

logically conclude another fact exists.

As a general rule, the law makes no

distinction between direct and circumstantial evidence,

but simply requires that you find the facts from a

preponderance of all of the evidence in the case,

whether direct, circumstantial, or a combination.

In judging the facts, you must consider

all the evidence, direct and circumstantial. It does

not mean you have to believe all the evidence. It is

entirely and exclusively up to you to give the evidence

you will receive in this case whatever weight you

individually believe it deserves.

It'll be up to you to decide which

witnesses to believe or not believe, the weight you

give any testimony that you've heard, and how much of

any witness' testimony you alone choose to accept or

reject.

You should never have been influenced by

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1289

my ruling on any objection. If I sustained an

objection, pretend it wasn't asked. If there was an

answer, ignore it.

If I overruled the objection, act like it

was never made.

If I gave you an instruction that some

item of evidence was received for a limited purpose,

follow it. If I gave any limiting instructions during

the trial, follow them.

Any testimony I tell you to exclude or

disregard or told you to is not evidence. You cannot

consider it. You must not conduct any independent

research or investigation. Make your decisions

exclusively on the evidence.

You alone are here to determine the

credibility and truthfulness of the witnesses. In

weighing the testimony of the witnesses, you may

consider their manner and demeanor, any feelings or

interest in the case, any prejudice or bias about the

case that he or she might have had, the consistency or

inconsistency of their testimony, considered in light

of all the circumstances.

Was the witness contradicted by credible

evidence? Has he or she made statements at other times

or places contrary to those given to you on the witness

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1290

stand?

You must give the testimony of each

witness the credibility that you alone believe it

deserves.

Even though a witness may be a party to

the action and therefore interested in its outcome, the

testimony may be accepted if it is not contradicted by

direct evidence or by any inference that may be drawn

from the evidence, if you believe the testimony.

In determining the weight to give the

testimony of the witness, consider whether there was

evidence at some other time the witness said or did

something or failed to say or do something that was

different from the testimony given by that witness at

trial.

A simple mistake by the witness does not

necessarily mean that that witness did not tell the

truth as he or she remembered it. We're people.

People forget things. They remember things

inaccurately.

If a witness made a misstatement,

consider whether it was an intentional falsehood or

just a mistake. The significance of that may depend on

whether it had to do with an important fact or an

unimportant detail.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1291

Regardless, it is exclusively in your

province as the judges to believe every word that any

witness said or to disregard anything said. You are

the exclusive judges of the facts in this case.

You are not to decide this case by

counting the number of witnesses who testified on each

side. Witness testimony is weighed; witnesses are not

counted. The test is not the relative number of

witnesses, but the relative convincing force of the

evidence.

The testimony of a single witness is

sufficient to prove any fact, even if a greater number

of witnesses testified to the contrary, if after

considering all the evidence, you believed a witness.

Certain testimony was presented to you

through a deposition, which is a sworn recorded set of

answers to questions a witness was asked in advance of

trial. Under some circumstances, if a witness cannot

be present to testify from the witness stand, that

witness' testimony may be presented under oath or in

the form of a deposition.

Sometime before this trial, attorneys

representing the party in this case questioned this

witness under oath. A court reporter was present. He

or she recorded the testimony. The questions and the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1292

answers have been shown to you. The testimony in the

deposition is entitled to the same consideration and

weighed and otherwise considered by you in the same way

as if that witness had been present and had testified

from the witness stand here in court.

In addition, certain testimony -- I'm

going to skip that. There was no live video in this

case.

Some of the video recordings and live

remote video of witnesses you have seen may have been

lower quality because witnesses had their depositions

taken from their home or office. Never hold the

quality of the video itself or the location of the

witness against them or any other circumstances arising

from travel restrictions against the witness or any

party in the case.

Regardless of whether presented by

deposition or live remote video, the testimony is

entitled to the same consideration and is to be weighed

and otherwise considered by you in the same way as if

the witness had been present and testified to you here

in court.

You heard testimony from experts. Expert

testimony is testimony from a person who has special

skill or knowledge in a science or profession or

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1293

business. The skill or knowledge is not common to the

average person but has been acquired by the expert

through special study and/or experience.

In weighing expert testimony, consider

the expert's qualifications, the reason for the

opinions, the reliability of the information supporting

the opinions, as well as the factors I already have

told you about with respect to weighing testimony of

the other witnesses.

Expert testimony should receive whatever

weight and credit you think it deserves, given all the

evidence in the case. You are not required to accept

opinions. Rather, you are free to accept or reject the

testimony of experts just like any witness.

When testimony or an exhibit is admitted

for a limited purpose, you may consider that testimony

or exhibit only for the specific limited purpose for

which it was admitted.

Certain charts and summaries were shown

to you solely to help explain or summarize the facts

disclosed by books, records, and other documents that

are in evidence. These charts and summaries are not

evidence or proof of any facts.

You must determine facts in this case

solely from the evidence. Certain exhibits shown to

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1294

you, such as PowerPoint presentations or posters or

models or illustrations of evidence, they're not

themselves evidence. It is a party's description,

picture, or model used to describe something involved

in this trial.

It is your -- if your recollection of the

evidence differs from the exhibit, rely on your

recollection.

Do not let bias or prejudice or sympathy

play any part in your deliberation.

A corporation and all persons, whether a

corporation or not, are equal before the law. They

must be treated as equals here in a court of justice.

The fact that a person brought a lawsuit

and is here in court seeking damages creates no

inference the person is entitled to a judgment in his

favor.

Anyone may make a claim. Anyone can file

a lawsuit. The act of making a claim in a lawsuit, by

itself, does not in any way tend to establish that that

claim is not evidence.

In any legal action, the facts must be --

let me start over. Sorry.

In any legal action, facts must be proved

by a required amount of evidence known as the burden of

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1295

proof. The plaintiff has the burden of proving patent

infringement and damages by a preponderance of the

evidence.

A preponderance of the evidence means

evidence that persuades you the claim is more probably

true than not true.

If you find that the plaintiff has failed

to prove any element of its claim by a preponderance of

the evidence, it may not recover on that claim.

As I did at the start of the case, I will

give you a summary of each side's contentions. I will

then provide you with detailed instructions on what

each side must do to win its contentions.

As I previously told you, the plaintiff

filed suit in this Court seeking money damages from the

defendant for allegedly infringing the six asserted

patents by using or performing methods that the

plaintiff argues are covered by Claims 1 and 2 of the

'411 patent; 1 through 3 of the '301; Claims 1 and 4 of

the '517; Claims 1, 2 and 5 and 8 of the '836; Claims 1

and 8 of the '880; and Claims 4, 16, 17, and 18 of the

'127 patent, known as the "Asserted Claims."

The plaintiff alleges that defendant

infringed the asserted claims when certain web pages of

Microchip's websites are used. Specifically, the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1296

plaintiff alleges that defendant infringed when certain

pages of www.microchip.com, the Microchip website, and

www.microchip.com/forums, the Forum website or the

Forum section, are used.

There are two versions of the Microchip

website. The first is known as the old website,

original version, or coat of paint version of the

Microchip website, released initially in September of

2018.

A second version is known as the

redesigned website or partially updated version. It

was first launched in 2020 to gradually replace web

pages of the old, original version of the Microchip

website.

The plaintiff accuses the old

website/original version of the Microchip website of

infringement and the Forum website/Forum section of

infringement.

The plaintiff does not accuse the

redesigned website or partially updated version of

infringement.

Microchip, the defendant, denies it has

infringed any of the asserted claims of any of the

asserted patents.

It's your job to be the judges and decide

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1297

whether or not any asserted claims have been infringed.

If you decide that any asserted claims have been

infringed, you will then need to decide the amount of

money damages to be awarded to plaintiff to compensate

it for infringement.

Before you can decide many of the issues

in this case, you will need to understand the role of

patent claims. Patent claims are the numbered

sentences at the end of each patent. The claims are

important because it is the words of the claim that

define what a patent covers.

The figures and text in the rest of the

patent provide a description and/or examples of the

invention and provide a context for the claims, but it

is the claims that define the breadth of the patent's

coverage. Therefore, what a patent covers depends, in

turn, on what the claim covers.

To know what a claim covers, a claim sets

forth in words a set of requirements. Each claim sets

forth its requirements in a single sentence. The

requirements of a claim are often referred to as claim

elements or limitations.

The coverage of a patent is assessed

claim by claim. When a thing such as a product or

process meets all of the requirements of a claim, it is

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1298

said to cover that thing. That thing is said to fall

within the scope of the claim.

In other words, a claim covers a product

or process when each of the claim elements or

limitations is present in that product or process. If

a system or method is missing even one limitation or

element of a claim, the system or method is not covered

by the claim.

You will first need to understand what

each claim covers in order to decide whether or not

there's infringement of the claim and decide whether or

not the claim is invalid.

The first step is to understand the

meaning of words used in the patent claim. The law

says that it is my role to define the terms of the

claim, and it is your role to apply my definitions of

the terms I've construed to the issues that you are

asked to decide in the case.

Therefore, as I explained to you at the

start of the case, I've determined the meaning of

certain claim terms. I've provided you my definition

of certain claim terms. You must accept my definitions

of these words or phrases in the claims as being

correct.

It is your job to take these definitions

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1299

and apply them to the issues you're deciding, including

issues of infringement and invalidity.

Could I have one counsel from each side

up here for a second?

(Bench conference.)

THE COURT: That's -- I thought that was

out.

(Off-the-record bench conference.)

THE COURT: Go back on the record.

Ladies and gentlemen, I made a mistake

when I was preparing this. As you can tell, it's a

long document and occasionally mistakes will be made.

I've told you twice now that the issue of

the validity of the patent is something that you will

have to decide. It is not.

The only questions that you will have

before you are whether the plaintiff established that

there was infringement of the asserted claims and, if

you find that there was infringement of any of the

claims, what the appropriate amount of damages will be.

This will be clear to you when you see

the verdict form because it only has those questions.

I didn't want you to be confused as to why I had

mentioned validity and there's nothing on the verdict

form about that.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1300

I apologize. That was my mistake.

I think I remember where I was. Y'all

can grade me. I'm going to start with "the beginning

portion of a claim." I think that's where I was.

Okay.

Beginning portion of a claim, also known

as the preamble of a claim, often uses the word

"comprising." The word "comprising," when used in the

preamble means including but not limited to or

contained but not limited to. When "comprising" is

used in the preamble, if you decide that an accused

product includes all the requirements of a claim, that

claim is infringed.

This is true even if the accused product

contains other elements not listed in the claim. For

any words in the claim for which I have not given you a

definition, simply apply the ordinary meaning of those

terms in the field of the patent.

Do not take my definition of the language

of the claims as an indication that I have a view

regarding how you should decide the issues you're being

asked to decide, such as infringement only. These

issues are yours to decide.

But with respect to certain claim terms,

my claim constructions are as follows:

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1301

First, Active Path. I construed it as a

matter of law to mean: A sequence of links dynamically

created as a menu system is navigated.

With respect to the claim term providing

a means for navigating the multilevel hierarchical

website, I construed it as a matter of law to mean:

Navigating the multilevel hierarchical website, and

their structure must be the graphical user menu system

as shown in Figure 6A and 6B of the '836 patent.

Ladies and gentlemen of the jury, Claim 8

of the '836 patent is what's known in patent law as a

means-plus-function claim. The '836 patent uses the

phrase: Providing a means for navigating the

multilevel hierarchical website.

This "means for" phrase has a special

meaning in patent law. It's called a

means-plus-function requirement. It does not cover all

the structures that could perform functions set forth

in the claim, namely, navigating the multilevel

hierarchical website.

Instead, it covers a structure that

performs that function and that is either identical to

or equivalent to the structure described in the patent

for performing a function.

The issue of whether two structures are

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1302

identical or equivalent is for you to decide. I will

explain to you later how to determine whether the two

structures or two sets of structures are equivalent to

each other.

But for purposes of this case, I've

identified the structure described in the '836 patent

that performs the function navigating the multilevel

hierarchical website.

As reflected by claim construction

documents, the structure is the graphical user menu

system as shown in Figure 6A and 6B. You must apply my

definition of the function and the structures described

in a patent for performing it as you would apply my

definition of any other claim term.

This case involves two types of patent

claims. One is independent and one is dependent.

Let's talk first about independent claims.

Independent claims set forth all the

requirements that must be met in order to be covered by

that independent claim. Thus, it is not necessary to

look at any other claim in the patents to determine

what an independent claim covers.

In this case the following asserted

claims are independent claims:

The '411 patent, Claim 1;

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1303

'301 patent, Claim 1;

'517 patent, Claim 1;

The '836 patent, Claims 1 and 8;

The '880 patent, Claim 1;

The '127 patent, Claim 14.

The remainder of the asserted claims in

this case from the asserted patents are what are known

as dependent claims. A dependent claim does not recite

within the claim itself all the requirements of the

claim. It refers to another different claim for some

of its requirements. In this way this claim depends on

a different or other claim.

A dependent claim incorporates all the

requirements of the claim to which it refers. The

dependent claim then adds its own additional

requirements. To determine what a dependent claim

covers, it is necessary to not only look at the

dependent claim, but also the other claim or claims to

which it refers.

A product or process that meets all the

requirements of both the dependent claim and the claims

to which it refers to is covered by that dependent

claim. If any requirement of a dependent claim is not

met, or if any requirement of a claim from which the

dependent claim depends is not met, then the product is

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1304

not covered by that asserted dependent claim.

Let me talk to you now about

infringement. Here's how you decide whether or not the

plaintiff has proven that the defendant has infringed

the asserted claims of the asserted patents.

Infringement is assessed one at a time on

a claim-by-claim basis. Therefore, there might or

might not be infringement as to one claim but no

infringement as to other claims.

In this case the plaintiff has alleged

defendant directly infringes the asserted patents. In

order to prove their case of infringement, plaintiffs

must prove that the requirements for infringement are

met by a preponderance of the evidence. That is, more

likely than not that all the requirements of

infringement have been proved.

In reaching your decision, keep in mind

that only the claims of a patent can be infringed. You

must compare the asserted patent claims as I've defined

each of them to the accused system or process and then

determine whether or not there's infringement.

Do not compare the accused system or

process with any specific example set out in the patent

itself or with prior art in reaching your decision on

the issue of infringement.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1305

The only correct comparison is between

the accused products on the one hand, and the language

of the claim itself on the other hand, as I've

explained them to you.

You must reach your decision as to each

assertion of infringement based on my instructions

about the meaning and scope of the claims, the legal

requirements for infringement, and the evidence that

you've heard in this courtroom.

To prove direct infringement, plaintiff

must prove by a preponderance of the evidence, i.e.,

more likely than not, that defendant used or performed

each and every step of the asserted method claims

within the United States and did so without the

permission of plaintiff during the time the asserted

patents were enforced.

You must compare the accused methods and

processes with each and every one of the requirements

of the claims to determine whether all the requirements

of that claim are met. A party can directly infringe a

patent without knowing of the patent or without knowing

that what the party is doing is infringement of that

patent.

You must determine separately for each

asserted claim whether or not there is infringement.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1306

For independent claim -- I'm sorry. For dependent

claims, if you find that a claim to which a dependent

claim refers is not infringed, there cannot be

infringement of the dependent claim.

So, again, think of it if there is an

independent claim and you find it is not infringed,

then any dependent claim that depends from the

independent claim cannot be infringed.

On the other hand, if you find that an

independent claim has been infringed, you must still

then separately decide and determine whether the

accused method or process meets the additional

requirements of any dependent claims or claims that

depend from the independent claim to determine whether

those dependent claims have also been infringed. This

is because a dependent claim includes not only the

requirements of any of the claims to which it refers;

it has additional requirements of its own.

Allow me to describe the separate rules

that apply to a means-plus-function requirement used in

one of the claims. Claim 8 in the '880 patent contains

means-plus-function requirements.

A means-plus-function requirement only

covers the specific structure disclosed in a patent

specification for performing the claimed function and

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1307

the equivalence of that specific structure that

performs the claimed function. A means-plus-function

requirement does not cover all possible structures that

could be used to perform the claimed function.

As an example, the term "means for

processing data" might be understood to encompass a

variety of different ways of making a calculation,

including not only a computer or calculator, but a

pencil and paper, or even the human brain. But because

the phrase is a means-plus-function requirement, we

interpret that phrase not to cover every possible means

for processing data, but instead to cover the actual

means disclosed in the patent or, in this case, in

the -- just in this one patent -- and for processing

data and other means that are equivalent to it.

For purposes of this trial, I've

interpreted each means-plus-function requirement for

you and identified the structure in the patent

specification that corresponds to the

means-plus-function requirements, specifically, the

graphical user menu system as shown in Figures 6A and B

in the structure that performed the function of

navigating the multilevel hierarchical website.

In deciding if plaintiff has proven the

defendant's accused instrumentality includes structure

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1308

covered by a means-plus-function requirement, first

decide whether the accused instrumentality has any

structure that performs the function I just described

to you. If not, the claim containing the

means-plus-function requirement is not infringed.

If you find that defendant's accused

instrumentality does have structure that performs claim

function, then you must determine whether that

structure is the same as or equivalent to the structure

I've identified in the specification. If they're the

same or equivalent, the means-plus-function requirement

is satisfied by that structure of the accused

instrumentality. If all the other requirements of the

claim are satisfied, the accused instrumentality

infringes the claim.

In order to prove that a structure in the

accused instrumentality is equivalent to the structure

in the '880 patent, Caddo must show that a person of

ordinary skill in the field would have considered that

the differences between the structure described in the

'880 patent and the structure in the accused

instrumentality are not substantial.

Plaintiff must also show the structure

was available on the date the '880 patent was granted.

In deciding what the level of ordinary

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1309

skill in the field of the invention is, you can

consider all the evidence introduced at trial,

including but not limited to: One, the level of

education, experience of the inventor, and other

persons actively working in the field; the types of

problems encountered in the field of prior art

solutions to those problems; the rapidity with which

the innovations are made; and the sophistication of the

technology.

The defendant asserts that the plaintiffs

cannot recover damages for defendant's old website or

Forum website, even if those websites infringe, because

the websites were built using Microsoft technology and

plaintiffs already granted a license to Microsoft.

A license or sublicense is a contractual

agreement that grants someone, other than the

patentholder -- called the licensee or sublicensee --

the right to make, use, or sell the claimed invention.

If Microsoft's license extends to

Microchip, there can be no liability for infringement.

On April 18, 2017 plaintiff entered into

a license agreement with Microsoft. Under the terms of

the agreement, plaintiff licensed the asserted patents

to Microsoft.

Microchip contends that its old website

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1310

and Forum website are therefore licensed, which means

they were within the scope of the Microsoft license and

not with any of the exceptions set forth within that

license.

You must determine whether plaintiff --

I'm sorry -- whether defendant has shown by a

preponderance of the evidence that defendant's Forum

website and old website are, in fact, licensed.

If you find that the old website is

licensed, then the plaintiff cannot recover damages for

the old website. If you find that the Forum website is

licensed, then, again, plaintiff cannot recover damages

for the Forum website.

Or that should be plaintiffs.

Let's turn to damages.

I'm now going to instruct you about the

measure of damages. Understanding that by instructing

you on damages, I am not suggesting which party should

win the case.

As on any issue, if you find that the

defendant infringed any asserted claim of any asserted

patent and you do not find the same claim is invalid --

you're not going to be asked that question -- you must

then consider what amount of damages to award to Caddo.

So let me start over and read it like

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1311

this: If you find that Microchip infringed any

asserted claim of the asserted patents, you must then

consider what amount of damages to award to Caddo.

If you find that Microchip has not

infringed any valid claim of a patent, then Caddo is

not entitled to any damages.

If you award damages, they must be

adequate to compensate the plaintiff for any

infringement you find. Remember, this is not meant to

punish an infringer.

Your damages award, if reached in this

issue -- if you reach the issue, should put plaintiff

in approximately the same financial position it would

have been had the infringement not occurred.

The plaintiff has the burden to establish

the amount of damages by a preponderance of the

evidence. In other words, you must award only those

damages that the plaintiff establishes more likely than

not they have suffered.

While Caddo is not required to prove the

amount of its damages with mathematical precision, it

must prove them with reasonable certainty. You may not

award damages that are speculative or only possible or

guesswork.

In this case, plaintiffs seek a

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1312

reasonable royalty. A reasonable royalty is defined as

the amount of money plaintiff and defendant would have

agreed to as a fee for use of the invention or, in this

case, inventions, at the time just prior to when

infringement began.

You must be careful to ensure that the

award is no more but no less than the value of the

patented invention. I'm about to give you more

detailed instructions, but note that the plaintiff is

entitled to recover no less than a reasonable royalty

for any act of infringement that you find.

A royalty is simply a payment made to a

patentholder in exchange for the right to make, use, or

sell the claimed invention.

A reasonable royalty is the amount of

royalty payment that a patentholder and the alleged

infringer would have agreed to in what we call a

hypothetical negotiation taking place at a time prior

to when the infringement first began.

In considering this hypothetical

negotiation, you should focus on the expectations of

both the plaintiff, the patentholder, and the

defendant, alleged infringer, would have been in had

they entered into an agreement at that time and had

they acted reasonably throughout their negotiations.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1313

To determine this, you must assume that

both parties believed the patent was valid, that it was

infringed, and that both parties were willing to enter

into an agreement.

The reasonable royalty you determine must

be one that would have resulted from the hypothetical

negotiation and not simply a royalty that either party

would have wanted or preferred.

Evidence of things that happened after

the infringement first began can be considered by you

in evaluating what the reasonable royalty should be,

but only to the extent that the evidence aids in

assessing what royalty would have resulted from the

hypothetical negotiation itself, which would've

occurred immediately prior to the first infringement.

In determining a reasonable royalty, you

may also consider evidence concerning the availability

and cost of an acceptable noninfringing substitute to

the patented invention. An acceptable substitute must

be a product or method that does not infringe the

patent and is equally acceptable to customers.

In determining the amount of a reasonable

royalty, consider all facts known and available to the

party at the time the infringement began.

Allow me to list a few of the factors to

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1314

consider:

The value the claimed invention

contributes to the accused product;

The value of that factor, other than the

claimed invention, contributes to the accused product;

Comparable license agreements or other

transactions, such as those covering the use of the

claimed invention or similar technology.

Remember, no one factor is dispositive.

You can and should consider the evidence that has been

presented to you in this case on each of these factors.

You may also consider any other factors which in your

mind might have increased or decreased the royalty the

alleged infringer would have been willing to pay on the

one hand, and the patentholder would have been willing

to accept on the other, acting, as they must, as

normally prudent business people.

Let's turn to the Georgia-Pacific

factors:

First, royalties received by the patentee

for the licensing of the asserted patents, proving or

tending to prove an established royalty;

The rates paid by the licensee for the

use of other patents comparable to the asserted

patents;

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1315

The nature and scope of the license, as

exclusive or nonexclusive, or restricted or

non-restricted in terms of territory or with respect to

whom the manufactured product may be sold;

The licensor's established policy and

marketing program to maintain his or her patent

monopoly by not licensing others to use the invention

or by granting licenses under special conditions

designed to preserve the monopoly;

The commercial relationship between the

licensor and the licensee: Are they competitors in the

same territory in the same line of business, or are

they inventor and promoter;

The effect of selling the patented

product and method in promoting sales of other products

of the licensee, the existing value of the invention to

the licensor as a generator of sales of non-patented

items, and the extent of such derivative or convoyed

sales;

Seven, the duration of the patent and the

term of the license;

Next, the established profitability of

the product made under the patents, its commercial

success, its current popularity;

Next, the utility and advantages of the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1316

patented property over the old modes or devices, if

any, that have been used for working out similar

results;

Next, the nature of the patented

invention, the character of the commercial embodiment

as it is owned and produced by the licensor, and the

benefits to those who have used the invention;

Next, the extent to which the infringer

has made use of the invention and any evidence

probative of the value of its use;

Next, the portion of the profit or the

selling price that may be customary in a particular

business or in comparable businesses to allow for the

use of the invention or an analogous invention;

Next, the portion of the realizable

profits that should be credited to the invention as

distinguished from non-patented elements, the

manufacturing process, business risks, or significant

features or improved (sic) added by the infringer;

Next, the opinion and testimony of

qualified experts;

Next, the amount that a licensor, such as

the patentee, and a licensee, such as the infringer,

would have agreed upon at the time the infringement

began if both had been reasonably and voluntarily

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1317

trying to reach an agreement; that is, the amount which

a prudent licensee, who desires as a business

proposition to obtain a license to manufacture and sell

a particular article embodying the patented invention,

would have been willing to pay as a royalty and yet be

able to make a reasonable profit, which amount would

have been acceptable by a prudent patentee who is

willing to grant a license.

Comparable license agreements are one

factor that may inform your decision as to the proper

amount and form of the reasonable royalty award.

Similar to the way in which the value of the house is

determined relative to comparable houses sold in a same

neighborhood, whether a license agreement is comparable

to the license under the hypothetical license scenario

depends on many factors, such as whether they involve

comparable technologies, comparable economic

circumstances, comparable structure, comparable scope.

If there are differences between a

license agreement and the hypothetical license, take

those into account when you make your reasonable

royalty determination.

The hypothetical license is deemed to be

a voluntary agreement. When determining if a license

agreement is comparable to the hypothetical license,

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1318

you may consider whether the license agreement is

between parties to a lawsuit and whether the license

agreement was a settlement influenced by the desire to

avoid further litigation.

According to the entire market value

rule, a royalty based on the total value of a

multicomponent product is only proper where the entire

value of the product comes from the patented feature.

Plaintiffs are not permitted to recover

damages based on the entire market value of the accused

products unless plaintiffs prove that the claimed

patent features are the sole driving factors for

customer demand.

It is not enough for plaintiffs to show

that the patented feature is viewed as valuable,

important, or even essential to the use of the accused

product. It is also not enough for the plaintiffs to

show the accused product is commercially unviable

without the patented feature.

Unless you find that the claimed

invention is the sole driving factor for the demand for

the accused product, plaintiff may not use the value of

the entire product to calculate its reasonable royalty.

If the claimed patented features are not

the sole driving factor for customer demand of the

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1319

accused infringing product, you must perform what is

called apportionment.

When damages must be apportioned, that

means the amount you find as damages must be based on

the value attributable to the patented invention as

distinct from unpatented features of the accused

product or other factors such as marketing or

advertising or the patentholder's size or market

position.

Put differently, when apportionment is

required, a royalty compensating the patentholder for

damages must reflect the value attributable to the

infringing features of the product and no more.

On the other hand, if demand for the

entire accused product depends only on the claimed

features, then apportionment is unnecessary, even

though the accused product includes non-patented

features.

Tomorrow after you hear the closing

arguments, it will be your duty to deliberate and

consult with one another in an effort to reach a

verdict. Each of you must decide the case for yourself

but only after an impartial consideration of the

evidence with your fellow jurors.

During your deliberations, don't hesitate

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1320

to reexamine your own opinions. Change your mind if

you are convinced that you're wrong. But don't give up

on your honest beliefs because other jurors disagree or

simply to finish the case.

At all times you are the judges of the

facts. You've been allowed to take notes during the

trial. Any notes that you took during the trial are

only aids to your memory. If your memory differs from

your notes, rely on your memory. Not the notes.

They're not evidence.

If you did not take notes, rely on your

independent recollection of the evidence. Don't be

unduly influenced by the fact other jurors did take

notes. Notes are not entitled to greater weight than

the recollection or impression that each jury has --

each juror has about the testimony.

When you go into the jury room to

deliberate, you'll take a copy of this charge. We will

provide you a copy of all the exhibits -- actually, I

think they're electronic now. And you will take your

notes.

The very first thing you do is -- I'm

going to go a little off script here. The very first

thing you're going to do is sit down and pick a jury

foreperson. You cannot start deliberating until you

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1321

pick a foreperson and fill out the note and hand it to

one of my favorite people wearing a blue jacket, who

will come out and let us know who the jury foreperson

is.

Once you have the exhibits, which I think

is now automated, and we know who the foreperson is,

you can then begin your deliberations.

If it hasn't been made clear to you yet,

your verdict will have to be unanimous. After you have

reached a unanimous verdict, your jury foreperson must

fill out the answers to all the written questions on

the verdict form that are necessary.

There are some -- I believe I'm right --

there's some answers that are contingent on answers to

prior questions. So when I say answers to all

questions, you must consider all the questions and

follow my instructions in the verdict form. And if you

follow those instructions, answer all the ones that you

believe are necessary.

After you have concluded your service and

I discharge you, you'll not be -- I'll go into this

after I get your verdict back.

Throughout the day, if you need to

communicate with me, it's easy. The foreperson will

write a note and sign it and hand it, again, to

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1322

whoever's sitting outside the door who will bring it to

me. I will then deliver the message and question to

the lawyers.

But I will make the decision about how to

respond to your question. And I will do so -- and we

usually do it very quickly.

This is very important. When you send me

a note, the question must be as pure as possible. What

I mean by that is, for example, you can't say, five of

us want to know this or three of us feel this way.

You're never to disclose to us any division. We don't

get anything from you until we get the verdict form

which is unanimous.

You should do nothing that indicates

where you're at -- I've had juries send something back

and say, we've decided X. How do we move forward on

this? Until we get your final verdict form, it just

has to be a question without any preface, if that's

clear.

Very important. Once you begin

deliberating tomorrow, I think we -- I don't know if we

collect your phones or not. I think we may. But you

may not communicate with anyone other than other jurors

while you are deliberating.

Now, occasionally -- I don't know if we

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1323

have smokers or vapers or whatever it is.

Occasionally, we have people who want to go outside and

take a short break by themselves. If that's one of

you, you'll have to go with one of the marshals and --

or CSOs. And there'll be no deliberations while that

person is missing from the group.

And so the entire purpose of this is, we

want 100 percent of your deliberations to take place

only among the seven of you within the four walls of

the jury room.

You may not access the Internet while

you're deliberating. You may not post anything. The

one exception -- I don't know if, again, this

applies -- occasionally, we have people who are driven

here by a spouse or a family member who need to

communicate with that person to make arrangements for

travel. Again, if that applies to any of you, let us

know, and we'll make those communications for you.

So that's all we have today. If you all

would be so kind as to be back here tomorrow morning by

8:45, we'll do the closing arguments at 9:00. When we

finish closing arguments, then we will turn it over to

you all.

And I've been telling you all week you're

the judges. Tomorrow you'll actually feel like judges.

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1324

So remembering my instructions, do not

discuss -- I know we're long into the case. Please

don't discuss the case with anyone or do any research

or post anything on social media. But we're almost

done.

So I very much appreciate the hard work

you all have put in this week, your patience on us when

we may not have gotten things done as quickly as I've

tried to. That's been my fault. But we look forward

to seeing you all tomorrow.

THE BAILIFF: All rise.

(Jury exited the courtroom.)

THE COURT: You may be seated.

I'll ask you all -- I do my best to read

it accurately, but in one charge I said invalid or

valid when I got it backwards. If I messed anything

up, let me know. I did my best, but if you heard me

say anything that I need to correct, please let me

know.

MR. DEVLIN: Nothing from plaintiff, Your

Honor.

THE COURT: Okay. Good.

MR. QUILICI: There may be one issue that

we should take up to avoid any delays in the morning.

If I could have 60 seconds to confer with opposing

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

1325

counsel?

THE COURT: Sure. Yes. Of course. No,

no. Let's wait till tomorrow.

(Laughter.)

(Conference between counsel.)

MR. DEVLIN: Your Honor, I think we've

agreed to try to keep working together. There may be

one final issue and we're going to keep working on it,

and we will let the Court know by the normal process of

sending an early e-mail, if that's okay?

THE COURT: Sure.

MR. DEVLIN: Thank you, Your Honor.

Your Honor, one other point of

housekeeping, if I may? I think when we preserved our

objections to the jury instructions, because of the

movement of myself in and out of the courtroom, I don't

know if we formally made our objection to reservation

of rights on willfulness. So I'll just note for the

record that we --

THE COURT: I don't think you did. But I

think it's not a surprise to defendant that you have

them. So please go ahead and make whatever you want

to.

MR. DEVLIN: Just straightforward, Your

Honor. We -- plaintiff objects to the directed verdict

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KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

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to the JMOL initial willfulness, and objects to the

exclusion of willfulness instructions in the jury

instructions, as were generally placed in the proposed

form that was submitted with the Court.

THE COURT: And I'll note for the

record -- I think I did earlier, that's why I did on

the record. I think, but just in case, I'll note that

plaintiff had submitted a jury -- both an instruction

and also something -- obviously in the verdict form.

And so -- that's in whatever -- just make

sure that we have a -- in the record a copy of the

final proposal that you had of your jury charge.

MR. DEVLIN: We will do that, Your Honor.

And if there's anything -- any issue, we'll confer with

them. And we may submit something that formalizes it.

Thank you, Your Honor.

THE COURT: Anything else?

MR. DEVLIN: Nothing from plaintiff.

THE COURT: I'll see you tomorrow morning

at 8:30.

THE BAILIFF: All rise.

(Hearing adjourned.)

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04:46

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (WACO)

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UNITED STATES DISTRICT COURT )

WESTERN DISTRICT OF TEXAS )

I, Kristie M. Davis, Official Court Reporter for the

United States District Court, Western District of

Texas, do certify that the foregoing is a correct

transcript from the record of proceedings in the

above-entitled matter.

I certify that the transcript fees and format comply

with those prescribed by the Court and Judicial

Conference of the United States.

Certified to by me this 2nd day of July 2022.

/s/ Kristie M. Davis

KRISTIE M. DAVIS

Official Court Reporter

800-Franklin Avenue

Waco, Texas 76701

(254) 340-6114

kmdaviscsr@yahoo.com

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