1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

1

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

WACO DIVISION

APPLIANCE COMPUTING III, INC. D/B/A SUREFIELD

*

VS. * March 29, 2022

*

REDFIN CORPORATION * CAUSE NO. W-20-CV-376

BEFORE THE HONORABLE ALAN D ALBRIGHT

PRETRIAL PROCEEDINGS

APPEARANCES:

For the Plaintiff: Andrew DiNovo, Esq.

Christopher V. Goodpastor, Esq.

Nicole E. Glauser, Esq.

DiNovo Price LLP

7000 N MoPac Expressway, Suite 350

Austin, TX 78731

For the Defendant: Ryan J. Marton, Esq.

Hector Ribera, Esq.

Carolyn Chang, Esq.

Marton Ribera Schumann & Chang LLP

548 Market St., Suite 36117

San Francisco, CA 94104

Darryl Adams, Esq.

Slayden Grubert Beard PLLC

401 Congress Ave., Ste. 1650

Austin, TX 78701

Deron R Dacus, Esq.

The Dacus Firm, P.C.

821 ESE Loop 323, Suite 430

Tyler, TX 75701

Matthew Scott Stevens, Esq.

Karlee Nicole Wroblewski, Esq.

Nicholas Christopher Marais, Esq.

Alston & Bird LLP

101 South Tryon St, Suite 4000

Charlotte, NC 28280

Court Reporter: Kristie M. Davis, CRR, RMR

PO Box 20994

Waco, Texas 76702-0994

(254) 340-6114

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 1 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:33

01:33

09:06

09:06

09:06

09:06

09:06

09:06

09:06

09:06

09:06

09:06

09:06

09:06

09:06

09:06

09:06

09:06

09:07

09:07

09:07

09:07

09:07

09:07

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

2

Proceedings recorded by mechanical stenography, transcript

produced by computer-aided transcription.

(March 29, 2022, 9:05 a.m.)

DEPUTY CLERK: Civil Action 6:20-CV-376, Appliance

Computing d/b/a Surefield versus Redfin Corporation. Case

calls for pretrial conference.

THE COURT: Good morning, everyone. If I could have

announcements from counsel, please.

MR. DiNOVO: Yes. Good morning, Your Honor. This is Drew

DiNovo. I have with me my partners, Chris Goodpastor and Nicki

Glauser.

MR. ADAMS: Good morning, Your Honor. We're happy to be

live in Waco this morning. I have with me Darryl Adams for

Redfin Incorporated. I have with me today Mr. Deron Dacus.

MR. DACUS: Good morning.

MR. ADAMS: Ryan Marton, Hector Ribera and Carolyn Chang

of the Marton Ribera Chang firm. And also Scott Stevens,

Karlee Wroblewski and Nick Marais of Alston & Bird.

THE COURT: Okay. Other judges -- not me, other judges

would make a comment on how many lawyers there are, but...

MR. STEVENS: We knew we were safe here, Your Honor.

(Laughter.)

THE COURT: I've gone through, and here are the -- I've

reviewed all of the motions in limine, and here are the rulings

I have.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 2 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:07

09:07

09:07

09:07

09:07

09:07

09:07

09:07

09:07

09:07

09:07

09:08

09:08

09:08

09:08

09:08

09:08

09:08

09:08

09:08

09:08

09:08

09:08

09:08

09:08

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

3

There are a couple we're going to take up first, but with

regard to plaintiff's Motion in Limine No. 3 -- and by the way,

y'all keep track. If I miss one that you think you have not

agreed to, if that makes sense, I'm going to skip the ones I

think are agreed to.

If I don't give you a ruling on something and you don't

think it's agreed to, let me know. That's my mistake. For

example, my understanding is 1 and 2 are agreed to. So I --

but No. 3 is granted.

On No. 4 what my ruling is, it's granted, but essentially

what I wanted to point out was that it speaks about a specific

example, but at the end that was not disclosed in discovery.

Nothing is going to come in that was not disclosed in

discovery.

So I'm granting this motion in limine, but nothing is

coming in about anybody that was not produced during discovery.

So it's not limited to this.

If I understood the motion correctly, it was --

something's excluded, blah, blah, blah, blah, that was not

disclosed in discovery. And I think that's just generally the

way I treat everything.

Motion in Limine No. 5 is granted.

6 was -- and 7 were agreed to.

No. 8 is denied.

No. 9 is granted.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 3 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:08

09:08

09:08

09:08

09:09

09:09

09:09

09:09

09:09

09:09

09:09

09:09

09:09

09:09

09:09

09:09

09:09

09:10

09:10

09:10

09:10

09:10

09:10

09:10

09:10

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

4

No. 10 is granted.

No. 11 is granted.

No. 12 is granted.

No. 13, again, it begins with undisclosed/unelected and

goes from there. Frankly, anything that was undisclosed or

unelected is not coming in.

So as I understand this motion in limine, it is prior art

indefiniteness and NIA allegations that were undisclosed and

unelected. That's granted, but it would be granted whatever we

were talking about if it has not been disclosed properly during

discovery.

No. 14, again, undisclosed opinion testimony. That's not

a motion in limine for me, that's a rule of my court. And so,

now, if I haven't -- let me stop there.

If I haven't told you all, I know Mr. Dacus, for sure, has

been in my court in trial. I'm not sure who else has. If I

haven't explained to you how I anticipate you all will handle

putting on expert witnesses in terms of what is and what's not

in the report, what I anticipate the person on direct will do

is he'll ask a question or she'll ask a question and, if the

lawyer on the other side stands up and says, objection, Your

Honor. That's not in his expert report, the person who asks

the question, because he will have put a footnote next to his

question, will be able to say, yes. It is, Judge. It's on

Page 13, Paragraph 2.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 4 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:10

09:10

09:10

09:10

09:10

09:10

09:11

09:11

09:11

09:11

09:11

09:11

09:11

09:11

09:11

09:11

09:11

09:11

09:11

09:11

09:11

09:12

09:12

09:12

09:12

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

5

Because you should know when you ask the question that it

is -- I'm not telling you it has to be quoted in the report,

but you have to be able to come up to me and say, Judge, this

is where it was disclosed in the report.

Now, where it's a little squishier is if -- and this came

up yesterday in a pretrial hearing -- I think if there is

something that was directly questioned about in the deposition

where the questioner fully explored an expert's opinion on

something and for some reason that exact thing is not in the

report but you could persuade me that at the deposition the

person was fully able to explore the opinion, I probably would

allow that in as well, if that makes sense.

And what I'm saying is this, I'll give you an example,

maybe it'll help you put it more in context.

Yesterday one party was unhappy because the other party --

other parties' damages expert had said in his report, statement

of opinion, footnote technical expert. Turns out, it was

omitted from the technical expert's report, which is

unfortunate. I know none of the lawyers here would have

allowed that to happen.

But everyone agreed that at the deposition, because it had

been disclosed in that manner, that the party had been able to

both question the damages expert about what he'd been told and

asked the expert -- technical expert what he had told the

damages expert. So I told them that was okay with me to the

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 5 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:12

09:12

09:12

09:12

09:12

09:12

09:12

09:12

09:12

09:12

09:12

09:12

09:13

09:13

09:13

09:13

09:13

09:13

09:13

09:13

09:13

09:13

09:13

09:13

09:13

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

6

extent it had been -- because that gave the other side notice.

So that's what I'm talking about with regard to what comes

in. Otherwise, it's not -- to me, it's not a motion in limine

about undisclosed opinion testimony. That's just not going to

be -- that's not a motion in limine because it's not going to

be admitted at all.

On No. 15, No. 15 is essentially the same thing. The

motion in limine itself says NIAs not addressed, relied by

Redfin's damages expert. It's essentially the same ruling.

If it wasn't relied on in the report and it wasn't

discussed in the manner I just said during the deposition --

this is true with any expert -- it's not going to come in.

On No. 16 I'm granting it, but I want to make very clear

that this is one where I think it is question-dependent. So it

is a true motion in limine, meaning the plaintiff whose motion

it is should not go away thinking I have excluded it. It's

just that if there's something in this area, either party can

approach the bench and tell me what they want to get into. And

there's a chance information in 16 will come in, but I want you

to approach the bench first.

No. 17 is granted.

No. 18 is denied.

No. 19 is denied.

No. 20 is denied.

No. 21 was agreed to.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 6 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:14

09:14

09:14

09:14

09:14

09:14

09:14

09:14

09:14

09:14

09:14

09:14

09:15

09:15

09:15

09:15

09:15

09:15

09:15

09:15

09:15

09:15

09:15

09:15

09:15

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

7

No. 22 is granted.

No. 23 is granted.

24 was agreed to.

Give me one second here. I had some notes. Let me -- I

understand that you all have agreed to 25 and 26 and 27 and 28.

But let me make a comment, couple comments.

On 25, I -- there are always problems here in this sense.

Mr. DiNovo, is the plaintiff a nonpracticing entity?

MR. DiNOVO: No, Your Honor. I think it's fair to say

that he practices the invention, but in a comparatively minor

way.

THE COURT: Okay. It doesn't matter to me what it is.

All I -- you be can be seated. All I care about is this: That

your inventor practices the invention in a small way is okay

for you to get into and them to get into. I mean, that's just

the way it is.

Redfin's success is what it is. And it's okay. I mean,

Redfin's been very successful in their company. And that --

what I fully anticipate you all avoiding is anything that I

might perceive to be pejorative in either direction about

either Redfin's success, the plaintiff's lack of success.

I mean, to the extent it is factual, to the extent it's

necessary, for example, in the damages expert's opinion, to

discuss in hypothetical negotiation, all that's fair. But I

would certainly anticipate neither side being pejorative to the

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 7 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:15

09:15

09:16

09:16

09:16

09:16

09:16

09:16

09:16

09:16

09:16

09:16

09:17

09:17

09:17

09:17

09:17

09:17

09:17

09:17

09:17

09:17

09:18

09:18

09:18

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

8

other.

Okay. Now, with respect to defendant's motions in limine,

No. 1 is granted.

No. 2, my understanding is agreed to.

We are going to take up No. 3. We'll have argument on

No. 3.

No. 4 is granted.

No. 5 we're going to have arguments on.

No. 6 I'm going to take up arguments on.

So I'm happy to hear from counsel for defendant with

respect to Motion in Limine No. 3 which is an inducement theory

based on alleged direct infringement of Redfin and users.

I know I probably took -- y'all probably were not prepared

to do it in exactly the order that I am doing it in, and so

but...

MR. RIBERA: Good morning, Your Honor. My name is Hector

Ribera, and I'm counsel for Redfin.

With respect to Redfin's Motion in Limine No. 3, I think

the main issue here is that we do not dispute the fact that

they do have statements in their expert reports on their pay

periods mentioning an inducement theory with respect to end

users. However, the underlying requirement of showing

infringement, direct infringement by the end users is missing.

So that's really the main point here.

And so to the extent that they have not shown through

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 8 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:18

09:18

09:18

09:18

09:18

09:18

09:18

09:18

09:18

09:18

09:19

09:19

09:19

09:19

09:19

09:19

09:19

09:19

09:19

09:19

09:19

09:19

09:19

09:19

09:19

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

9

discovery or in their expert report any theory under which an

end user directly infringes any single claim of any of the four

patents, then we are requesting that they're not allowed to

bring up in front of the jury the theories of infringement of

inducing those users to infringe.

I guess this is basically the main controlling case here,

we think is Centillion Data Systems where the Court there

provided -- I think it's blackletter law, but basically there's

got to be a theory where there's a direct infringer that

actually uses all portions of the claimed invention.

Here, all the claims that are asserted have different

portions. And some of those portions may be used by the end

users, but there's no coherent, single theory where an end user

practices every single step of a method claim or uses every

single component of a computer system claim.

THE COURT: Counsel, here's my problem. Here's why I

asked for argument. This doesn't really strike me as a motion

in limine. This strikes me as a summary judgment motion.

I mean, what you're -- I understand what you're arguing.

I mean, I -- I've made this argument myself in other trials,

but when I made it, it was -- it was a motion for summary

judgment arguing this as a matter of law.

So help me out here. Did you all file a motion for

summary judgment on this? Am I going to take that up?

MR. RIBERA: We did not file on this issue. No, Your

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 9 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:19

09:19

09:20

09:20

09:20

09:20

09:20

09:20

09:20

09:20

09:20

09:20

09:20

09:20

09:20

09:21

09:21

09:21

09:21

09:21

09:21

09:21

09:21

09:21

09:21

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

10

Honor.

THE COURT: Okay. I mean, I'm going to assume,

Mr. DiNovo, you can correct me if I'm wrong, you all

strenuously disagree with their position, I take it?

MR. DiNOVO: Yes, Your Honor. So I agree that it's more

appropriately taken up as a matter of summary judgment.

We've consistently throughout the case alleged inducement.

It's never been -- there's never been a motion to dismiss, a

motion to strike of Dr. Melendez' report.

We've included lengthy descriptions of inducement in our

interrogatory responses to them and explained those theories.

So this MIL, frankly, comes as something of a surprise.

THE COURT: I agree. I'm going to deny this motion in

limine.

(Off-the-record bench conference.)

THE COURT: The next motion in limine we need to take up

is No. 6.

Yes, ma'am.

MS. WROBLEWSKI: Good morning, Your Honor. Karlee

Wroblewski on behalf of Redfin.

THE COURT: You might pull that microphone a little closer

to you.

That's better. I'm trying to keep Kristie from yelling at

you.

MS. WROBLEWSKI: Yeah. I appreciate that as well.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 10 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:21

09:22

09:22

09:22

09:22

09:22

09:22

09:22

09:22

09:22

09:22

09:22

09:22

09:22

09:23

09:23

09:23

09:23

09:23

09:23

09:23

09:23

09:23

09:23

09:23

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

11

So what we're seeking here is, as you know, the asserted

patents didn't issue until December of 2017. And so with

respect to any evidence that is from before that time as it

relates to inducement or willfulness, we ask that that evidence

be excluded.

Specifically with respect to -- so as one example in

Dr. Melendez' report at Paragraphs 72 through 81, there's

several references to evidence that relate to inducement of --

Redfin's inducement of Matterport, the company that developed

the technology in this case to develop their technology in a

particular way. Or examples of Redfin inducing a customer that

to practice the -- or practice the technology in a particular

way.

And what we're interested in is under -- making sure that

evidence that is from 2014 is not brought in because there's no

explicit tie between that evidence and the evidence as it

relates to infringement after the issuance of the patents.

THE COURT: Here is the problem I have -- and I'll hear

from the plaintiff -- is I don't know -- I don't know that I

will know when the plaintiff is asking questions about what

predated the issuance of the patent, why they're asking those

questions.

And it seems to me there may be relevant reasons. There

may be -- and so how do I distinguish -- how do I distinguish a

question that's being asked about activities that predate

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 11 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:23

09:24

09:24

09:24

09:24

09:24

09:24

09:24

09:24

09:24

09:24

09:24

09:24

09:24

09:24

09:24

09:25

09:25

09:25

09:25

09:25

09:25

09:25

09:25

09:25

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

12

December 5, 2017 from what is okay and what's not?

Because you're asking me -- what I don't think would be

efficient is every time that Mr. DiNovo or team wants to ask a

question about something that happened prior to that date, they

have to come up to the bench to ask my permission which is what

a motion in limine would do.

But how do I know when -- two questions: How do I know

when what they're asking about is -- relates to something

that's inappropriate in your opinion?

And number two, given how hard it seems to me it would be

for me to understand that, why would it be the kind of thing

that was so prejudicial to your client that I would have to --

I would have to grant a motion in limine as opposed to you all

just standing up and objecting to its relevance when the

question is asked?

MS. WROBLEWSKI: So with respect to appropriateness of --

or how you would deem whether or not it was appropriate, we

would expect that when that evidence was brought forth, that

the counsel for plaintiff would indicate as to why that links

to the activity post 2017. Either through pointing to evidence

that indicates that the same was true or testimony that

indicates that the same practicing was true post 2017.

THE COURT: Okay. I'm not going to do that. So how

might -- why don't you answer my second question? Mr. DiNovo

asks your -- something of your client, what his job was prior

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 12 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:25

09:25

09:25

09:25

09:25

09:26

09:26

09:26

09:26

09:26

09:26

09:26

09:26

09:26

09:26

09:26

09:26

09:26

09:26

09:26

09:26

09:27

09:27

09:27

09:27

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

13

to December 5th of 2017. Okay or not okay?

MS. WROBLEWSKI: That would be fine to ask what his job

was.

THE COURT: That's my point. And so I -- okay. I'm going

to overrule this, if you -- as a motion in limine. If you -- I

get what you're saying. And if you feel that either a fact

witness or, more likely, an expert is going down a path of --

not you, you, but if the defendant believes that, just object,

and if at some point you, the defendant, believes that it is

becoming prejudicial because a jury might be confused about

what someone is talking about, just approach the bench and I'll

address it that way.

But I see no way to -- I see no way to police No. 6. I

get there are reasons that things will not be admissible for,

and so it's going to be question-dependent, I think.

MS. WROBLEWSKI: Thank you, Your Honor.

THE COURT: Have I covered everything? I feel like I

skipped something.

MR. DACUS: I had in my notes, Your Honor, you said we

would take up Redfin's MIL No. 5.

THE COURT: That's it. I knew I had three, so I skipped

over one. Okay. Give me one second.

Okay. Very good. And finally, yes. And this is probably

the one I most wanted to hear about. So Redfin's Motion in

Limine No. 5 is alleged copying of the products, and I'm happy

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 13 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:27

09:27

09:27

09:27

09:27

09:27

09:27

09:27

09:27

09:27

09:27

09:27

09:27

09:28

09:28

09:28

09:28

09:28

09:28

09:28

09:28

09:28

09:28

09:28

09:28

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

14

to hear argument.

MR. MARTON: My name is Ryan Marton. I'm here on behalf

of Redfin. So Motion in Limine 5 actually ties into our

motion -- it's basically a Daubert motion on 150, Docket 154.

THE COURT: Then let me ask you this: Would it make more

sense to you -- and I'm happy to do it whichever you think is

more efficient. Would it be more efficient to take up the

Daubert?

MR. MARTON: I actually think it's efficient to address it

right now. It's an isolated issue.

THE COURT: Okay.

MR. MARTON: Surefield in its operative complaint and in

its expert report from Dr. Melendez asserts that Matterport

and/or Redfin copied Surefield's 2014 virtual tour product.

But -- and their argument is -- for relevance is that it

relates to objective indicia of nonobviousness, something that

copying does relate to. That's not in dispute.

But in order to be relevant, that copying has to be of a

commercial embodiment of the asserted patents, can't just be

some product that has no relation to the case.

And here they have not established that that commercial

embodiment is, in fact -- well, that product is a commercial

embodiment of the patents in this case.

That requires expert testimony. Their expert would have

to opine and map the claims of their own patents to their own

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 14 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:28

09:28

09:29

09:29

09:29

09:29

09:29

09:29

09:29

09:29

09:29

09:29

09:29

09:29

09:29

09:29

09:29

09:30

09:30

09:30

09:30

09:30

09:30

09:30

09:30

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

15

product and say, this is a commercial embodiment.

And we asked with interrogatories that they do such a

mapping as well. They did not provide such a mapping.

Dr. Melendez, Surefield's technical expert in this case, gave

no opinion whatsoever about whether or not the Surefield 2014

product was a commercial embodiment of any claim of the

patents.

Now, there was one interrogatory response where they did

allege in a conclusory fashion that the 2014 product was a

commercial embodiment, but they didn't explain why. And one of

the inventors during deposition did allege that the 2014

product was a commercial embodiment, but he could not explain

why.

So without the mapping of the 2014 commercial product to

the claims, we can't actually assert that it's a commercial

embodiment, and any alleged copying of such product is

irrelevant.

And we would like that the Court exclude any testimony,

argument, evidence suggesting that either Redfin or Matterport

copied the 2014 Surefield product.

THE COURT: So it seems -- I'm sorry. It seems to me that

this is more of a Daubert issue.

MR. MARTON: It is.

THE COURT: And so let's take it up in that -- I mean,

again, because -- it seems to me that there may be questions

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 15 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:30

09:30

09:30

09:30

09:30

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

09:31

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

16

about this that would not be objectionable. I mean, they might

be relevant for reasons that you're not concerned about, but

what you really care about is the opinion, I think.

MR. MARTON: Well, it is the opinion. I actually will

concede that the Daubert's probably a little more narrow than

the motion in limine.

THE COURT: And here's why it seems to me that if you're

successful on your Daubert motion, then it would be very

difficult for the plaintiff to establish why.

MR. MARTON: Absolutely.

THE COURT: It seems to me to give me the ability to have

a much brighter line on what is and what is not -- and

plaintiff a brighter line of what is and is not admissible --

MR. MARTON: Okay.

THE COURT: -- of what they can go into which is, you

know, I was worried when I was in your shoes that I would

violate a motion when I was thinking about something coming in

for one reason. And this would be a pretty bright line.

So why don't we -- who --

Regan, which -- do you know which Daubert motion this is?

MR. MARTON: I can give you the docket number.

THE COURT: This is just a test for my clerk to see if he

was awake.

(Laughter.)

MR. MARTON: Don't mean to be interrupt.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 16 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:31

09:32

09:32

09:32

09:32

09:32

09:32

09:32

09:32

09:33

09:33

09:33

09:33

09:33

09:33

09:33

09:33

09:33

09:33

09:33

09:33

09:33

09:33

09:33

09:33

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

17

(Off-the-record discussion.)

MR. MARTON: Should we address it with the Daubert or do

we --

THE COURT: Yeah. Let me make sure we have --

(Brief off-the-record discussion.)

MR. DACUS: Your Honor, also along the lines of what the

Court just said of not wanting to violate limines

inadvertently, I do have one question with respect to one of

the ones that was granted if I could ask the Court for some

clarification.

THE COURT: Sure.

MR. DACUS: Thank you, Your Honor.

So specifically, Your Honor, we're talking about

Surefield's Motion in Limine No. 5.

THE COURT: Okay.

MR. DACUS: Which relates to alleged copying by the

plaintiff of Matterport which is a third party's technology.

And I think it's probably helpful to give you two minutes of

background on just the high-level facts of the case.

So the accused technology in the cases is this 3D virtual

tours on real estate websites. Redfin is an online real estate

company, the defendant Redfin's an online real estate company.

They buy the accused technology from Matterport.

THE COURT: I think you are -- let me say this, and let me

see if you still have a problem.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 17 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:33

09:33

09:34

09:34

09:34

09:34

09:34

09:34

09:34

09:34

09:34

09:34

09:34

09:34

09:34

09:34

09:34

09:34

09:34

09:34

09:35

09:35

09:35

09:35

09:35

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

18

MR. DACUS: Yes, sir.

THE COURT: This is -- this kind of motion for me, it's

just a motion in limine. I'm not excluding this evidence. But

when I read this, I have too hard a time figuring out exactly

whether or not I would admit it at trial.

This is a motion in limine. If you all want to put on

this evidence, you just have to approach bench. And I find

that when I'm -- when I've heard the opening arguments, when

I'm hearing the evidence and you come up and say, Judge, we are

going to get into this issue and here's why it's relevant, then

Mr. DiNovo argues why it's not, then I can decide whether or

not it'll be admitted.

This is just 5 and most of these are just motions in

limine.

MR. DACUS: Okay.

THE COURT: Meaning you can't bring it up during opening

argument, but I'm not excluding anything about this.

MR. DACUS: Understood, Your Honor. And I wanted to be

clear with the Court that we had no intention of using any

pejorative terms like "copyist" or "espionage." I think that's

referenced in the motion.

We do think the evidence itself is absolutely relevant and

critical. And that's what I was trying to understand, is the

Court saying, don't call them bad names, which we agree, we

would never do in the first place; or is the Court saying, this

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 18 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:35

09:36

09:36

09:36

09:36

09:36

09:36

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

19

evidence -- and I could explain to the Court why it's relevant.

Are you saying that relevant -- that --

THE COURT: I'll decide that once you try to put it in and

tell me --

MR. DACUS: Understood.

THE COURT: -- exactly through the specific witness why

you think it's admissible.

Mr. DiNovo?

MR. DiNOVO: Yes, Your Honor. I have a quick

clarification question as well.

THE COURT: Okay.

MR. DiNOVO: This relates to MIL No. 4 and --

THE COURT: Whose MIL?

MR. DiNOVO: Redfin's MIL, that we can't use undisclosed

3D models.

And I know it has that word you don't like, "undisclosed,"

but let me -- if I could just give you 30 seconds of

explanation here.

So let me see if I can get our -- so the situation here --

and I think we were actually reasonably close to an agreement

with the other side is -- did this publish?

(Clarification by the reporter.)

MR. DiNOVO: So the situation here is, in our expert

report, we used a number of their models from their website,

and we intend to show the jury sort of how it works and to run

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 19 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:36

09:36

09:36

09:36

09:36

09:36

09:36

09:36

09:36

09:36

09:37

09:37

09:37

09:37

09:37

09:37

09:37

09:37

09:37

09:37

09:37

09:37

09:37

09:37

09:37

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

20

through one of the models.

Well, these models have been disabled on Redfin's website.

And so we told them, well, look. We either want the models in

our expert report or to pick some that are active now. And

they told us, effectively, I think, either one of those two is

fine with us. And what they told us was, go use the Matterport

link.

Well, one of the things in their trial is that -- I think,

that we should have sued Matterport, even though Redfin scans

everything and presents it to the users and all that stuff, but

we don't want to use the Matterport link, we want to use the

Redfin link and they've disabled it.

So we just want to be able to use a Redfin model, which

we've got five of them that have been disabled, or an

alternative model that's current.

THE COURT: Let me hear a response from counsel. Yes,

sir.

MR. RIBERA: If I may, Your Honor. Hector Ribera --

THE COURT: And, Mr. DiNovo, you want to use them simply

as demonstratives, or do you want them to -- I'm not sure --

are they capable of -- are they the kind of physical exhibits

that could be even admitted? So I'm not sure...

MR. DiNOVO: No. I think it would be as a demonstrative,

Your Honor.

THE COURT: Okay. Thank you.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 20 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:37

09:37

09:37

09:37

09:38

09:38

09:38

09:38

09:38

09:38

09:38

09:38

09:38

09:38

09:38

09:38

09:38

09:38

09:38

09:39

09:39

09:39

09:39

09:39

09:39

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

21

MR. RIBERA: Your Honor, Hector Ribera.

So the issue here is that these models are not Redfin's

models. They characterize them as Redfin models, but

Matterport is the provider of these models. Matterport is a

company that keeps these models and access to the models is

always through the Matterport link.

THE COURT: So I don't know how to resolve this.

Mr. DiNovo just said he wants to use Redfin models, and you're

saying they're not Redfin models. And I don't know what either

side wants me to do.

MR. RIBERA: If I can just clarify, Your Honor. The model

they use in their expert report, it's online, it's on your

screen right now, and it's active. So that's the same model.

THE COURT: Well, I thought I understood the Internet, and

I may not. So what I heard Mr. DiNovo say is that these models

were on the Redfin website. And in other words, if I went to

Redfin, I don't really know what Redfin is, but if I went to

Redfin and figure out how to use it, if I have one of my law

clerks go to Redfin for me and use it, they would have been

able to find the models on Redfin that -- that the plaintiffs

want to use. And what Mr. DiNovo said was the models that were

on Redfin.com have been disabled and those are the ones they

want to be able to use to show the jury that Redfin, you guys,

the defendant in the case, had these models on there -- on

their website.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 21 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:39

09:39

09:39

09:39

09:39

09:39

09:39

09:39

09:39

09:39

09:39

09:39

09:39

09:39

09:40

09:40

09:40

09:40

09:40

09:40

09:40

09:40

09:40

09:40

09:40

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

22

So my question to you is: Did you all -- did Redfin have

these models on the -- if I went to Redfin.com, would they be

on Redfin's --

MR. RIBERA: The models would never be on Redfin website,

there would be a link from the -- it's kind of like if you go

to go Google and you search and you get a link, and then it

takes you to another website. It's the same thing.

On Redfin, you would search, you would find a particular

house, and there would be a link to the model, which is held by

Matterport.

THE COURT: So I don't have any idea how you guys want me

to rule because --

MR. DiNOVO: Well, Your Honor, if I could respond.

You never leave Redfin's website. This is false. So

there's two ways to do this on Redfin.

You go to Redfin.com with a browser, any normal browser,

you stay on Redfin.com, see their main listing page. It has

all the information about the house, some of which is not

related to the 3D model, some of which is the 3D model. They

paint an iframe on their main listing page where you run

through the tour on Redfin.com.

The alternative is that you use the Redfin app, which is

specially designed to present the 3D model along with all this

information. So they want to force us to go to -- because it's

consistent with their trial theme, they want to disable the

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 22 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:40

09:40

09:40

09:40

09:40

09:40

09:40

09:40

09:40

09:41

09:41

09:41

09:41

09:41

09:41

09:41

09:41

09:41

09:41

09:41

09:41

09:41

09:41

09:41

09:41

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

23

evidence and force us to go to Matterport.com.

MR. RIBERA: Not at all. That's just not the way it

works. There's only a link -- the models are always in

Matterport and Redfin never has these models. They always have

to go through the link to Matterport in order to see the model.

But the fact that there's an iframe doesn't mean anything.

It's just a link to the Matterport model.

The issue here also is we're willing to work with them on

we've been talking about finding an alternative model that's

active to go through the link on the Redfin website. But they

also want to get models for third parties that are not even

Redfin.

THE COURT: Mr. DiNovo, did you have someone -- did your

expert go through this exercise?

MR. DiNOVO: Yes. He took screenshots in his expert

report of Redfin.com. There's probably 50 of them. Those

links, even during his deposition when they were asking him to

point out things in the model, they had been disabled by

Redfin.

THE COURT: I will allow your expert to -- Mr. DiNovo,

since I don't know how to solve this, I will allow your expert

to go through his methodology and say what he did. And if the

defendant wants to cross-examine him about what he did and say

it's not Redfin, you can do it that way.

MR. DiNOVO: Okay. Very good, Your Honor.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 23 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:41

09:41

09:41

09:41

09:41

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

09:42

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

24

THE COURT: So I'm going to reverse myself on Motion in

Limine No. 4. Plaintiff's expert can certainly go through and

explain what he did. And you all can fight in front of the

jury whether or not that's Redfin or somebody else.

MR. DiNOVO: I'm sure that'll happen. Thank you, Your

Honor.

THE COURT: Okay. Now, I think we were about to take

up --

MR. GOODPASTOR: Your Honor, if we could have one more

clarification on defendant's MIL No. 1, I'll make it very

quick.

THE COURT: Okay.

MR. GOODPASTOR: Defendants -- Chris Goodpastor for

plaintiff Surefield.

Defendant's MIL No. 1 related to the PTAB decisions.

The only issue that we wanted to get clarification on is

the issue of impeachment and credibility of Dr. Furukawa.

Dr. Furukawa is a former Google employee that Redfin intends to

present, according to their disclosures, to testify on the

prior art. Although we don't think that's allowed.

Nonetheless, Dr. Furukawa was also the expert hired by

Redfin's counsel in the IPRs and was a paid expert, gave an

opinion that was summarily rejected by the PTAB. We think we

should be able to impeach him with that information.

THE COURT: Say that last part again.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 24 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:42

09:42

09:42

09:42

09:43

09:43

09:43

09:43

09:43

09:43

09:43

09:43

09:43

09:43

09:43

09:43

09:43

09:43

09:43

09:43

09:44

09:44

09:44

09:44

09:44

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

25

MR. GOODPASTOR: We believe we should be able to impeach.

THE COURT: No. I heard that part.

MR. GOODPASTOR: He delivered a declaration -- he was paid

to deliver a declaration in the IPRs on references and

combinations that are asserted by Redfin here. And that

PTAB --

THE COURT: Now, that's something -- let me -- okay. That

was not my understanding. My understanding was that the --

that the -- my understanding there was no direct overlap. And

so if I'm wrong, we do need to take this up.

My understanding was that the defendant's expert is not

going to present to the jury any identical bit of --

invalidating art that they presented during the PTAB.

MR. GOODPASTOR: Respectfully, we think that's incorrect,

Your Honor.

THE COURT: Okay. So here's what we're going to do on

this, because I can't -- again, I can't fix this.

Obviously the defendant's going to put their expert on.

That's the order of it. After -- we'll hear what he tells to

the jury. If there's anything that he discusses in front of

the jury that you can show me would be impeached by what he

said in his -- whatever. I don't know what it is that they

give to the PTAB.

But if there's something where there's the same art that

was considered by the PTAB -- the exact same art that was

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 25 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:44

09:44

09:44

09:44

09:44

09:44

09:44

09:44

09:44

09:44

09:44

09:44

09:44

09:44

09:44

09:44

09:45

09:45

09:45

09:45

09:45

09:45

09:45

09:45

09:45

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

26

considered by the PTAB and rejected, I'll take it up at that

time, after I hear what the defendant's expert puts on the

witness stand.

MR. GOODPASTOR: Understood.

MR. MARTON: May I approach?

THE COURT: Yes.

MR. MARTON: I think there may be a little different view

on this one point.

Matterport -- nonparty Matterport filed the IPRs. Their

expert was Dr. Furukawa in the IPRs. Dr. -- Matterport and

Dr. Furukawa over here, IPRs over here.

Dr. Furukawa will testify for Redfin in this trial, not as

an expert. He's not going to talk about invalidity. He's

going to talk about his experience as a developer at Google.

That's it.

So he's not going to talk about the IPRs, he's not going

to --

THE COURT: Then it's not going to come in.

MR. MARTON: Right. With respect to Redfin's expert, he

is not relying on the exact IPR grounds at all. He is relying

on a few of the references but in combination with the system.

So a different combination, so it shouldn't come up.

THE COURT: I think I just -- that's, I think --

MR. MARTON: I just wanted --

THE COURT: -- the exact way I just ruled. I'm following

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 26 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:45

09:45

09:45

09:45

09:45

09:45

09:45

09:45

09:45

09:45

09:45

09:45

09:45

09:45

09:46

09:46

09:46

09:46

09:46

09:46

09:47

09:47

09:47

09:47

09:47

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

27

what you all are saying. I'm -- yes.

MR. MARTON: Okay.

THE COURT: I won't know what -- I won't know whether or

not what the plaintiff wants to put on is admissible until we

hear from your expert.

MR. MARTON: Thank you.

THE COURT: After we hear from your expert, if they can

persuade me that there's something that is so identical between

what was at the PTAB and what he told the jury that it's fair

to be impeached by, you all can argue at that point. But we'll

have his testimony at that point.

And I'm also giving you all a roadmap of what to avoid

having your expert -- he should be very careful in what he says

because that's the trap you all could set.

MR. MARTON: Thank you.

THE COURT: Okay. Okay. Daubert motion?

(Off-the-record bench conference.)

THE COURT: Yes, sir.

MR. MARTON: So I believe we're talking about Docket 85,

Redfin's motion to exclude certain testimony of Dr. Melendez.

There are three areas of testimony that Dr. Melendez

proposes to provide at trial that Redfin has issue with. I'll

start with the one that was addressed in the motion in limine,

might as well begin there since I began the argument with that.

As I noted before, as purported evidence of secondary

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 27 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:47

09:47

09:47

09:47

09:47

09:47

09:47

09:48

09:48

09:48

09:48

09:48

09:48

09:48

09:48

09:48

09:48

09:48

09:48

09:48

09:48

09:48

09:48

09:48

09:49

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

28

indicia of nonobviousness, Dr. Melendez asserts that in 2014

Matterport, and maybe Redfin, copied Surefield's product, but

he comes to this conclusion without having ever established

that Surefield's product was an actual commercial embodiment of

any claim of any of the asserted patents.

He has no analysis whatsoever mapping any of the asserted

claims to the 2014 Surefield product or any Surefield product

for that matter. And therefore, any opinion that Redfin and/or

Matterport copied the 2014 Surefield product is irrelevant.

And this is established Federal Circuit law cited throughout

our brief that I don't think is worth going through.

And that's our position on that point.

If we want to take them point by point, we can, or if

you'd like me to move into the other arguments, I can.

THE COURT: I'm not sure what you mean by that exactly.

MR. MARTON: Oh, so there are three areas of testimony

we're challenging. They're independent, they're not

intertwined. So it might be easier to address them one by one.

THE COURT: Okay. No, no. I'll take them all up.

MR. MARTON: Oh. All of them at once.

So that's the first issue.

The second area of testimony that Dr. Melendez provides

that is improper is a series of legal conclusions about the

legal relationship between Redfin and Matterport.

THE COURT: This is the technical expert?

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 28 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:49

09:49

09:49

09:49

09:49

09:49

09:49

09:49

09:49

09:49

09:49

09:49

09:49

09:49

09:49

09:49

09:49

09:49

09:50

09:50

09:50

09:50

09:50

09:50

09:50

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

29

MR. MARTON: Yeah, the technical expert. And these are

very strong legal conclusions. In his infringement report

he -- actually, yeah. In his infringement report at Paragraph

105 he asserts that Redfin and Matterport are in a contractual

and/or agency relationship relating to the relationship --

relating to the implementation and use of 3D walkthrough by

Redfin on its website.

In Paragraph 106 he says Matterport's performance of any

step of the asserted method claim is pursuant to its

contractual agreements and/or agency relationship with Redfin.

He goes on --

THE COURT: I think I got that.

MR. MARTON: Yeah. The point is he asserts there's a

contractual relationship, the nature of the contractual

relationship, what is done pursuant to the contractual

relationship, that there is a joint --

THE COURT: And he has no law degree.

MR. MARTON: Yeah. He is not a lawyer.

THE COURT: What's your next issue?

MR. MARTON: The last issue is with respect to

Dr. Melendez' proposed testimony regarding the economic and

commercial impact and consumer demand for 3D virtual tour

technology. What he does is he parrots studies, third-party

studies about demand for virtual tours, and asserts that this

is -- the accused technology and the patented technology are

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 29 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:50

09:50

09:50

09:50

09:50

09:50

09:50

09:50

09:50

09:50

09:50

09:50

09:50

09:50

09:50

09:50

09:51

09:51

09:51

09:51

09:51

09:51

09:51

09:51

09:51

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

30

important for consumer demand. It's beyond the scope of his

expertise.

THE COURT: What is his background?

MR. MARTON: He has a background -- he's an electrical

engineer. And he is a expert in the areas -- purported expert

in the areas of imaging, computing and communications

technology.

THE COURT: What I'm saying is, does he have any

personal -- is his background such that he was in the business

himself and might --

MR. MARTON: Real estate business? No.

THE COURT: Okay.

MR. MARTON: He has sold his own home before.

THE COURT: Okay. Okay.

Anything else we need to take up?

MR. MARTON: That's it.

THE COURT: I'll hear a response.

MR. GOODPASTOR: Chris Goodpastor. I'll address them in

order.

The first one concerns the copying opinion. Dr. Melendez

gives an opinion that Redfin and Matterport copied Surefield's

product. But this is a clear case of Redfin trying to attack

the sufficiency of an evidence through either a motion in

limine or a Daubert motion.

The case we cited out of the Northern District, Nortek

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 30 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:51

09:51

09:51

09:51

09:51

09:51

09:52

09:52

09:52

09:52

09:52

09:52

09:52

09:52

09:52

09:52

09:52

09:52

09:52

09:52

09:52

09:52

09:52

09:52

09:53

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

31

versus Energy Lab at 2016 Westlaw 3856250, addresses this issue

fairly head on. It says, look, there may be several elements

to the claim of copying as a nonobviousness factor. But the

expert doesn't have to testify upon all those elements. We can

rely on other evidence to satisfy other elements.

So Dr. Melendez testifies on Element B, but Element A,

which is what they're complaining about, whether the product

copied was actually an embodiment of the asserted claims, can

be established by other evidence. And that evidence can be the

testimony of the inventor, Mr. Eraker.

And they've actually deposed Mr. Eraker on this. And in

his deposition Mr. Eraker said, yes, I believe the Surefield

product did embody one of the claims.

And, in fact, they asked an interrogatory on this issue as

well, and asked him to outline how the products satisfy the

claims. And we provided a response to that.

So this idea that somehow Mr. Melendez -- or Dr. Melendez

has to provide all of the evidence on this claim is just

untrue. He can provide his opinion on a portion of the

evidence. And the fact that it's -- the other evidence is

coming from somewhere else doesn't affect the admissibility of

that opinion.

I want to next talk about the technical basis for the

direction and control over Matterport.

So Redfin attempts to characterize this as a legal one,

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 31 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:53

09:53

09:53

09:53

09:53

09:53

09:53

09:53

09:53

09:53

09:53

09:53

09:53

09:53

09:53

09:53

09:53

09:54

09:54

09:54

09:54

09:54

09:54

09:55

09:55

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

32

but it's really not a legal one. If you look at Paragraph 111

of Dr. Melendez' infringement report, he goes through and

details how Matterport is under the technical control of Redfin

when a person goes to the Redfin website and clicks on Redfin's

3D walkthrough tour.

That clicking sets in motion a process by which Redfin

controls the conduct by Matterport that is contributing to the

infringement here. And that's what Dr. Melendez lays out.

Now, does he announce that there are contracts? Does he

announce that there are relationships? Yes. Because that

technical testimony is relevant to those relationships.

But is he providing a contract interpretation? No. Is he

providing an opinion on the law? No. He's allowed to give

context to his technical opinions, and that's what he's doing,

Your Honor.

And I'll give you a little bit more background about

Dr. Melendez. He's not only a Ph.D. computer scientist and

electrical engineer from Stanford and MIT, he also has

significant business background. He started two different

companies --

THE COURT: Hold on one second.

(Off-the-record bench conference.)

THE COURT: Here's what I'm going to do with respect to

this expert: I'm going to deny the Daubert motions. But,

again, there is much of what use the defendant is concerned

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 32 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:55

09:55

09:55

09:55

09:55

09:55

09:55

09:55

09:55

09:55

09:56

09:56

09:56

09:56

09:56

09:56

09:56

09:56

09:56

09:56

09:56

09:56

09:56

09:57

09:57

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

33

about that I think would be objectionable. There's much that

you suggested he might say which I think would be fine.

And so you are -- the defendant is certainly free to

object -- for example, I'm certainly not going to allow him to

give a legal opinion. But if he wants to do as you suggest and

say, you know, how technically it works between the two

companies. And, you know, if he's simply giving -- if he's

giving a technical opinion or a factual opinion, he's free to

do that. If he goes beyond that and you want to object, it's

outside of his expertise of expertise, you'll object and I'll

sustain it if I think it's objectionable. So...

MR. GOODPASTOR: Understood. Thank you.

THE COURT: So now let me find my cheat sheet of what

we're here for. And so I have probably what you all

anticipated we would take up first.

Before I do that, let me -- did I go through all the

motions in limine? Have we resolved all those?

MR. DACUS: From our perspective we believe the answer's

yes, Your Honor.

MR. DiNOVO: Yes, Your Honor.

THE COURT: Okay. Redfin's motion for summary judgment

regarding noninfringement. I'm happy to hear argument on that.

MS. CHANG: Carolyn Chang for Redfin.

We have two simple discrete issues.

THE COURT: You might pull the microphone up closer.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 33 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:57

09:58

09:58

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

34

Thank you. It's a problem when we have short people and

tall people.

MS. CHANG: Yes. I'm always reminded of being short.

Thank you, Your Honor.

THE COURT: I didn't say you were short.

(Laughter.)

THE COURT: There are short people like I am, and tall

people like some other counsel on your team.

MS. CHANG: So...

THE COURT: I probably put Mr. DiNovo in that group too.

MR. DiNOVO: Thank you, Your Honor.

THE COURT: And Mr. Adams. So...

MS. CHANG: Makes it even. I feel so much better. Thank

you.

All right. So --

THE COURT: Some of my favorite lawyers are the same

height I am.

MS. CHANG: So there are two discrete issues we wanted to

address through our summary judgment motion.

The first is with respect to single-story properties. I

have in front of you a slide that shows each of the asserted

claims have a limitation that Surefield's expert's only

infringement theory will point to a floor label, that these are

either one or two or allow a user to click on this label to

move between floors.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 34 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:58

09:58

09:58

09:58

09:58

09:58

09:58

09:58

09:58

09:58

09:58

09:58

09:58

09:58

09:59

09:59

09:59

09:59

09:59

09:59

09:59

09:59

09:59

09:59

09:59

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

35

This label does not exist for single-story properties. If

you take a look at what they allege over on the left, you can

see that's the floor label that shows you how many floors. And

it'll have a number that indicates what floor you are on.

When you look at a single-story property, there is no

floor label. It simply does not exist.

And I don't think there's any dispute about that. The

picture on the right is from Surefield's briefing. So at that

point you can see they don't have any evidence to show that the

feature that they accuse is in the single-story property model.

So we just want clarification that those are not

infringing uses of this technology.

If you go on, I think. And you can skip over.

The second issue is related to the claim limitations.

Go all the way to the spatial boundaries.

So the other issue we wanted to get summary judgment on

relates to the asserted claims that have language in the claim

limitations. And I've reproduced them here. It's either "each

of the plurality of spatial boundaries defining a parcel

outline" and "corresponding to a parcel outline" or, again,

"spatial boundaries defining a parcel outline."

In the Court's claim construction order we have "parcel

outline" defined as the legal boundary of the land, so the

property lines.

So if we can go to the next one.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 35 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

09:59

09:59

09:59

09:59

10:00

10:00

10:00

10:00

10:00

10:00

10:00

10:00

10:00

10:00

10:00

10:00

10:00

10:00

10:00

10:00

10:00

10:01

10:01

10:01

10:01

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

36

The only thing that's been identified in Surefield's

expert's infringement theories that has anything to do with

property lines is a map that is shown on a Redfin page that

will have the outline drawn. Everyone agrees that that outline

is using data obtained from another third party not involved in

this litigation who specializes in getting county records about

what property lines are. And that's put on this map.

There's nothing shown in any of the theories put forth by

Surefield's expert that puts any connection, any relationship

between what they allege is the spatial boundaries. Now, the

spatial boundaries are the delineations of rooms or floors in

an actual 3D model. So there's no relationship between the 3D

model and the only property lines that are pointed out to in

any of Surefield's theories.

So this is really starkly shown --

If we can go to the next slide. Skip these.

On Slide 11 here, what you see is this is what a Redfin

page looks like. And you can see a listing of a property. And

usually if there is a 3D model associated with that, you can

click on a button that will give you a link to Matterport and

show you the model.

I picked here a listing that does not have a 3D model. So

there are no spatial boundaries here, but you can still see the

property lines.

So this shows that there is no -- there cannot be any

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 36 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:01

10:01

10:01

10:01

10:01

10:01

10:01

10:02

10:02

10:02

10:02

10:02

10:02

10:02

10:02

10:02

10:02

10:02

10:02

10:02

10:03

10:03

10:03

10:03

10:03

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

37

relationship between the accused 3D models and the only

property lines that have been shown or alleged in this case.

So those are the two issues. We think the claims that

have a spatial boundary defining or corresponding to a parcel

outline limitation. Those cannot be infringed.

THE COURT: Thank you, ma'am.

MR. DiNOVO: Drew DiNovo again for plaintiff, Your Honor.

So of the two issues, let's take them in turn. The

first -- and we didn't hear any response from Redfin's counsel

about this -- is they're missing the boat in terms of system

and CRM claims.

So with method claims, of course, the steps have to be

performed as claimed, either literally or under the Doctrine of

Equivalents. With system claims, what the Federal Circuit has

told us is that apparatus claims cover what a device is, not

what a device does.

And so there's two key cases -- and even in the reply

brief they don't cite a single case about the capability of

system claims. So there's the Core Wireless versus Apple

System Claim -- or excuse me -- System Case, and it was a

receiving -- it was a receiver for receiving information and

messages in a digital communications comprising.

And the Court basically held that -- well, let me just

actually read you the language -- that: An accused infringer's

argument that its device operated in alternative modes misses

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 37 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:03

10:03

10:03

10:03

10:03

10:03

10:03

10:03

10:04

10:04

10:04

10:04

10:04

10:04

10:04

10:04

10:04

10:04

10:04

10:04

10:04

10:04

10:04

10:05

10:05

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

38

the mark. Infringement is not avoided merely because of

noninfringing mode of operation is possible.

And they used an example, which I think is quite apt here,

where they talked about taking a simple example of an

automobile that's configured to operate in up to three gears.

And they said, even if it never hits the third gear, ever, it

still infringes every time because it has that capability.

And there's another case relating to the -- it's the --

excuse me -- the Finjan case relating to CRM claims, which it's

even stronger. In that case, there was code that was present

in the accused product that was actually disabled. And the

Federal Circuit said, we don't care if the code is disabled.

If it's present, there's infringement.

So there's no code here that's disabled. The way that

their system works is a -- it's a soup-to-nut system where a

Redfin agent goes in or a Redfin photographer goes in, scans

the entire house, they then send this data to Matterport for

processing. Matterport makes that available to Redfin on its

website or through its app, further processing is done and it's

presented to the user.

So if -- just doing a thought experiment, if someone

walked into -- if a Redfin agent walked into the house with

their scanning equipment and said -- and the person said, well,

you didn't scan the loft, they wouldn't have to go get a new

system. The system is already capable of scanning two floors.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 38 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:05

10:05

10:05

10:05

10:05

10:05

10:05

10:05

10:05

10:05

10:05

10:05

10:05

10:06

10:06

10:06

10:06

10:06

10:06

10:06

10:06

10:06

10:06

10:06

10:06

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

39

And there's no dispute in the record about that at all.

Dr. Melendez has testified repeatedly about the capability of

the system. Their experts agree that the system is capable of

doing two floors.

So these system claims -- and I'll just list them for

you -- Claim 1 of the '885, Claim 10 of the '673, and the two

CRM claims of the '973, Claim 1 and Claim 18, also a

computer-readable method claim, those are infringed based on

capability. And there's no case law or any significant

argument in the record from Redfin about that.

In terms of the method claims, we agree that these

labels -- there's one label shown in the '673 Claim 1 method.

And in the '111 Claim 18 there's explicitly two floors

required. And so in order to practice that method claim, two

floors are required. But the system claims that's not the law.

Now, to turn to their second argument, this requires a

little bit more detail. But we'll just start with the '111

patent, Claim 18.

So they sort of jumble all of these claims together and

say that they're all the same, and that's simply not true. So

here I believe it's visible to the Court, you see that there

are spatial boundaries disclosed, first and second spatial

boundaries. And those are further delineations within a third

spatial boundary.

So the third spatial boundary is the parcel outline which

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 39 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:06

10:06

10:06

10:06

10:06

10:07

10:07

10:07

10:07

10:07

10:07

10:07

10:07

10:07

10:07

10:07

10:07

10:07

10:07

10:07

10:07

10:07

10:08

10:08

10:08

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

40

the Court has construed to mean the legal boundary of the land.

The evidence is undisputed that Redfin obtains the legal

boundary of the land. It's not Matterport, it's Redfin that

goes out and gets it. It puts it on its website. That spatial

boundary defines a space in accordance with the Court's

construction.

The other two spatial boundaries, Dr. Melendez has

testified, can be either rooms or floors. And their software,

it delineates or it's called "separates" rooms and floors. And

so those spatial boundaries are within the third spatial

boundary, i.e., the legal property line, which of course can't

be generated or created by Redfin. That's created by a

governmental entity.

Similarly, with the '973 Claim 1, which this is not an

asserted claim but a dependent claim, is asserted from it. You

have at least one of the plurality of spatial boundaries

defining a parcel outline of the real property. So, again,

that is the spatial boundary that they obtain from -- it's a

quasi-governmental entity and they put it on their website as

they've themselves shown.

And then there's other spatial boundaries which are

generated which are rooms and floors. And, again, there's this

language that those are within the legal boundary of the land,

which is the case.

With respect to the '885 patent, what Dr. Melendez said is

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 40 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:08

10:08

10:08

10:08

10:08

10:08

10:08

10:08

10:08

10:08

10:08

10:08

10:08

10:09

10:09

10:09

10:09

10:09

10:09

10:09

10:09

10:09

10:09

10:09

10:09

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

41

because the -- and here it does use this rather more precise

language that the spatial boundary defines the legal boundary

of the land.

Because the legal entity is the one that defines it in

accordance with the Court's claim constructions, the way that

their system works is for each model that is generated there

are GPS coordinates -- and this is going to be relevant to

their orientation argument later. But the -- each floor and

room has GPS boundaries associated with it. And those GPS

boundaries are associated with and define the appropriate legal

boundary of the land.

So each of those asserted claims is different. The

definitional language in Claim 1 of the '885 patent is not even

present. In the '111 and '973 patent it's within. And the

'673 patent, the second patent in time, there's no reference to

parcel outlines at all -- parcel boundaries. Excuse me.

Thank you, Your Honor.

THE COURT: Response?

MS. CHANG: Carolyn Chang.

If I may just address the argument on the single-story

properties with respect to counsel's point about the

distinction between CRM and apparatus claims.

I think they pointed specifically to the core wireless

case and the Finjan case.

And those things are different. Because in those cases

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 41 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:09

10:09

10:09

10:10

10:10

10:10

10:10

10:10

10:10

10:10

10:10

10:10

10:10

10:10

10:10

10:10

10:10

10:11

10:11

10:11

10:11

10:11

10:11

10:11

10:11

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

42

the defendant is saying, because I have a mode of operation

that's noninfringing or because the device that I sell and make

has -- is primarily used for noninfringing purposes, that the

device that is capable of doing what is required by the claims

cannot infringe.

We're not making that argument here. What we're saying,

if you think about this case -- and Finjan makes this exact

point. When we talk about this idea of a device being capable

of infringement, you have to look very specifically at the

exact claims in the case and the exact allegations in the

accused device in this case.

And what we're talking about is a system that Redfin

doesn't make and doesn't sell. It is a user. So when we're

talking about a CRM or a apparatus claim, we're talking about

Redfin's use. Or their inducement of other people to use.

In that case we're very specifically talking about is this

thing capable of, when in use, putting a label on single-story

properties? And I think what you hear here is there's going to

be no dispute that building the single-story properties is

noninfringing under their theory, because there are no floor

labels.

THE COURT: There are no --

MS. CHANG: There are no floor labels, and that's a

required element, according to their expert, for every

infringement theory.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 42 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:11

10:11

10:11

10:11

10:11

10:11

10:11

10:11

10:11

10:11

10:11

10:11

10:12

10:12

10:12

10:12

10:12

10:12

10:12

10:12

10:13

10:13

10:13

10:13

10:13

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

43

So all we're asking for -- we're not asking for summary

judgment that there is no infringement across the board. We

are asking for clarity that there is -- there cannot be

infringement in the use specifically for making single-story

models.

And that is relevant because there are some disputes that

will be related to our -- their damages Daubert motions related

to whether it was proper to have a damages calculation that

excludes single-story properties. I think here there's going

to be no dispute that making single-story models is

noninfringing under their infringement theory.

So that's for the single-story property.

For the parcel outline, I do think it would be helpful --

let me go...

(Off-the-record discussion.)

MS. CHANG: Counsel was making some distinctions about the

different language in the claims, but I think the thing that's

important to take a look and I'll use the '111 patent here.

And this is the slide that counsel had shown, but I'm going to

point out that what it says is "defining a plurality of spatial

boundaries using the image data."

And there will be -- one of those plurality of spatial

boundaries is a third spatial boundary corresponding to a

parcel outline. And you'll see that in each of the claims,

right?

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 43 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:13

10:13

10:13

10:13

10:13

10:13

10:13

10:13

10:13

10:13

10:13

10:13

10:13

10:14

10:14

10:14

10:14

10:14

10:14

10:14

10:14

10:14

10:14

10:14

10:14

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

44

You have a plurality of spatial boundaries in the real

property, at least one of the plurality of spatial boundaries

defining a parcel outline.

I agree, there is -- this language doesn't exist in the

'673 patent. This is only for the other three asserted

patents. But for those three asserted patents, you have this

language that's talking about, in the model, you have to define

a plurality of spatial boundaries. One of those spatial

boundaries has to define a parcel outline or has to correspond

to a parcel outline.

So there is no claim limitation here where you talk about

a parcel outline and the spatial boundaries are only within,

but there's always a requirement that one of the spatial

boundaries, one of the things that are part of the model, will

define the property lines. And that's the evidence that's

completely missing.

Now, there was some discussion about orienting the models

that are built to GPS, and then counsel just concludes: And

then that corresponds or that defines the parcel outline.

Again, I think what's missing, even if we accept that

there's this orientation and GPS -- because I don't want to

bring a dispute of fact into our summary judgment motion, I'll

accept that for the purposes of this motion -- the piece, the

key important piece that's missing is how does any of that

information define the one property line that they show, right,

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 44 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:14

10:14

10:14

10:14

10:15

10:15

10:15

10:15

10:15

10:15

10:15

10:15

10:15

10:15

10:15

10:15

10:15

10:15

10:15

10:15

10:15

10:16

10:16

10:16

10:16

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

45

that green line on the Google map that we show that has no

relationship to the model?

So regardless of what we talk about orientation and GPS,

that piece of evidence is just missing.

(Off-the-record bench conference.)

MR. DiNOVO: Very briefly, Your Honor, to address the

first part about single-floor properties. So counsel, I think,

said a couple of times that we're not going to dispute that

there's infringement for single-floor properties. That's

incorrect.

The system is a system that they make and use. That

system was -- they announced to the world that it was Redfin's

3D home tour, although we hear from counsel telling us that

it's Matterport's. It was Redfin's 3D home tour announced in

2014, a year after our client filed their patent application.

That single unitary system is used for houses no matter

the floor. So they're trying to get a 70 percent cut here in

infringement when the case law -- and they haven't cited a

single case that supports their position -- says otherwise.

Now, it may be relevant to the damages analysis in some

sense, but 70 percent of homes are single floor. But from a

system utilization and CRM claim standpoint sense, it's --

there is infringement for the use of this system regardless of

whether it's a single floor or not.

Thank you.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 45 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:16

10:16

10:16

10:16

10:16

10:16

10:18

10:18

10:18

10:18

10:18

10:18

10:18

10:18

10:18

10:18

10:18

10:18

10:18

10:18

10:18

10:18

10:19

10:19

10:19

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

46

MS. CHANG: If I may, just one quick point on that.

To be clear, for the system claim and the CRM, there

exists no instructions. Even when not in use, just a computer

sitting there, there are no instructions in that system to ever

put a floor label on a single-story building. So...

(Off-the-record bench conference.)

THE COURT: The Court is going to deny this motion.

The next motion up is Redfin's motion to strike the

Melendez report.

MR. DACUS: Your Honor, as a matter of housekeeping, we're

going to take up another -- I know the Court has limited time

today. I know you have something this afternoon, at least from

looking at the schedule. So we're trying to be mindful of the

Court's time.

If you're going to take up another Redfin motion, can we

respectfully ask that you take up the motion to exclude the

plaintiff's damages expert?

THE COURT: What is his name?

MR. DACUS: Benoit. It's Docket No. 99, Your Honor.

THE COURT: Okay. Give me one second. Sure.

MR. DACUS: Thank you.

Thank you, Your Honor. Deron Dacus on behalf of Redfin on

a motion to exclude the plaintiff's damages expert, Mr. Benoit,

and his opinions.

I've said to the Court, and I think it's very important

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 46 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:19

10:20

10:20

10:20

10:20

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

47

for this particular motion, what the accused technology is.

It's this 3D virtual tour that is included within the broader

Redfin website for buying and selling real estate.

I'm sure the Court's bought and sold houses over time and

may have actually been on a website to look for that at times.

So we're talking about the 3D virtual --

THE COURT: You've got the wrong judge.

(Laughter.)

MR. DACUS: And you've got the wrong lawyer too.

THE COURT: No. I've never done any of this.

MR. DACUS: Then that lets me know, Your Honor -- I did

not want to bore the Court with some details if you had done

it. So that lets me know what level of detail I need to

provide.

THE COURT: I suspect that my wife has done it --

(Laughter.)

MR. DACUS: I understand.

THE COURT: -- a lot, but I have not.

MR. DACUS: I understand.

So that -- that's the technology we're talking about, Your

Honor.

As the Court knows, being an expert in this damages area,

damages law is not always the model of clarity; but

fortunately, in this particular instance, the issues that we're

talking about in this motion to strike I think are well-settled

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 47 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:20

10:20

10:20

10:20

10:20

10:20

10:20

10:20

10:20

10:20

10:20

10:20

10:20

10:20

10:20

10:21

10:21

10:21

10:21

10:21

10:21

10:21

10:21

10:21

10:21

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

48

principles in the law. And really, it's these three things

that form the basis of the motion to strike that I'll go into

detail on.

One is the hypothetical negotiation date and the fact that

you must -- the expert must use the correct date in his

analysis. That's the first basis for striking in this case.

The second is the expert's failure to apportion, and I'll

get into the details. And regrettably, it'll take me a little

bit of time to do that, as the Court can appreciate, but I will

say to the Court up front, having looked at a lot of these

cases over the years, I do think this may be the poster child

for lack of apportionment, and I want to spend some time on it

with the Court.

And then finally, there's a failure to use the proper

smallest salable practicing unit in this case.

And we believe Mr. Benoit has violated all three of those

principles, which I think are pretty well settled in the law at

this point.

Let me start with this hypothetical negotiation date.

So there are four patents at issue in the case, Your

Honor. I know the Court knows this law very well, that the

hypothetical negotiation date must correspond to the first date

of infringement. I know the Court knows this law well because

I've been at both of these tables at one time or another

arguing these and I've been the recipient of the Court telling

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 48 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:21

10:21

10:21

10:21

10:21

10:21

10:21

10:21

10:21

10:22

10:22

10:22

10:22

10:22

10:22

10:22

10:22

10:22

10:22

10:22

10:22

10:22

10:22

10:22

10:23

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

49

me that my expert did not use the proper hypothetical

negotiation date.

And my understanding from what I've heard the Court say in

hearings and from reviewing opinions is, for each patent and/or

each product there must be a separate analysis of the

hypothetical negotiation date, and that's where Mr. Benoit goes

awry here.

As I said, there are four patents at issue. The first of

the patents issued in December of 2017, and that is the only

and sole hypothetical negotiation date that the plaintiff's

expert used.

The three other patents were issued in 2018, '19 and '20.

And Mr. Benoit, the plaintiff's expert, did no analysis of the

Georgia-Pacific factors nor of the bargaining positions at all

with respect to those later dates.

And of course that's required. I mean, you -- the law

says you need to do a separate analysis because circumstances

may change in later dates. And we don't need to debate whether

or not they did in this case. They did actually change

significantly in this case. Plaintiff Surefield's business

deteriorated rapidly, and so circumstances did change.

That's not what we're arguing here. The fact is the

expert needed to do the analysis and he didn't.

The only thing, if you look in the plaintiff's response to

our motion to strike related to this hypothetical negotiation

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 49 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:23

10:23

10:23

10:23

10:23

10:23

10:23

10:23

10:23

10:23

10:23

10:23

10:23

10:23

10:23

10:23

10:24

10:24

10:24

10:24

10:24

10:24

10:24

10:24

10:24

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

50

date, they literally point to one single piece of evidence in

their report, and that piece of evidence is their damages

expert saying that the technical benefits, and I want to

emphasize those two words, the "technical benefits" of all four

of these patents are the same.

Well, that's a fact and that's interesting, but it's not

the question here. The question here is: Did the damages

expert analyze the bargaining positions of the parties in those

later dates?

He did not. There's nothing in his report, and they cite

nothing in their response to show that he did. Simply saying

that the patents had the same technical benefits is an

interesting fact, but one that's irrelevant to this question.

So from our perspective the damages opinions related to

the later three patents, and I'll read those into the record.

That's the '673, '111 and '973 patents should be stricken.

So with that, Your Honor, I can either turn to the second

basis related to apportionment, or I can allow the plaintiff to

address this hypothetical negotiation date issue, whatever the

Court pleases.

THE COURT: I would prefer that, please, that I hear a

response.

MR. DACUS: A response. Okay. I'll be happy to do that,

Your Honor. Thank you.

MS. GLAUSER: Good morning, Your Honor.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 50 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:24

10:24

10:24

10:24

10:24

10:25

10:25

10:25

10:25

10:25

10:25

10:25

10:25

10:25

10:25

10:25

10:25

10:25

10:25

10:25

10:26

10:26

10:26

10:26

10:26

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

51

In fact, the testimony that the technical benefits of the

four patents are substantially the same is not irrelevant. It

forms the basis of our damage expert's opinion, that the damage

award would be the same whether or not just the first patent,

meaning the '885 patent, was infringed. Or instead whether or

not all four patents were infringed.

And it's based on that expressly disclosed opinion that

Mr. Benoit relied on a hypothetical negotiation date of

December 5, 2017 which is the date of the first infringement of

the '885 patent.

And the case law is clear in cases such as Prism, which

we've cited in our brief, that the technical expert under such

circumstances isn't required to offer contingent theories of if

only one patent is -- if all four are infringed or if just

three of the four are infringed.

In this case so long as the '885 patent was infringed,

then the damage award did not increase with the subsequent

infringement that occurred upon the issuance of the three later

patents. And as a result, Mr. Benoit was correct or his

methodology was sound, in relying on the December 5, 2017 date

as his hypothetical negotiation date.

MR. DACUS: So I do appreciate the plaintiff admitting

that the only thing they've concluded is that the technical

benefits of the four patents are the same. But, of course,

that's the issue, Your Honor.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 51 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:26

10:26

10:26

10:26

10:26

10:26

10:26

10:26

10:26

10:27

10:27

10:27

10:28

10:28

10:28

10:28

10:28

10:28

10:28

10:28

10:28

10:28

10:29

10:29

10:29

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

52

Even if the technical benefits are the same, there are

many Georgia-Pacific factors. The expert is required to look

at the bargaining positions of the parties. Even for four

patents that have the same technical benefits, the royalty

could come out very different based on the differing bargaining

positions of the parties and the other Georgia-Pacific factors

that he must analyze at all those varying dates.

And that's really, by plaintiff's own admission at this

point, what they failed to do. And the remedy for that is to

exclude the opinions related to the later three patents.

That's what I have on that, Your Honor.

(Pause in proceedings.)

THE COURT: Counsel, here's what I'm going to do: I'm

going to deny the motion at this time. This is a motion that I

think might be revisited if the jury were to invalidate the

first -- the earlier patent that the hypothetical negotiation

was based on.

And I think there might be serious questions about whether

or not -- I think that says it all. I think it --

MR. DACUS: Understood.

THE COURT. You understand that if the first -- I think if

the first patent is not invalidated and is infringed, then I'm

not going to have a problem. But if the first one is

invalidated, we'll have to revisit this issue.

MR. DACUS: Understood, Your Honor. Thank you very much.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 52 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:29

10:29

10:29

10:29

10:29

10:29

10:29

10:29

10:29

10:29

10:29

10:29

10:29

10:29

10:29

10:29

10:29

10:30

10:30

10:30

10:30

10:30

10:30

10:30

10:30

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

53

I'll turn to the apportionment issue with the Court's

permission, Your Honor.

THE COURT: Yes, please.

MR. DACUS: That's the second basis for excluding the

plaintiff Benoit's testimony. And this applies to all four

patents, I've already said to the Court.

But just to reorient you, we're talking about a 3D virtual

tour in a much larger business that Redfin undertakes of buying

and selling homes.

And not only does Redfin act as sort of the equivalent of

a real estate agent in the buying and selling homes, Your

Honor, it's also important to note that Redfin also actually

buys and sells homes, as at least a part of their business. In

other words, at times they'll -- they will actually go purchase

a home, put it on their website and then resell it.

I say that because it's important to note that ultimately

what Mr. Benoit does is take the revenues and profits from the

entirety of Redfin's business, that's both gathering

commissions from the agent side and the buying of selling

homes, and use that as a basis for his calculation.

Now, when we're talking about -- the only accused

technology on the Redfin website is the 3D virtual tour, that

scenario in his use of the total revenues and profits, I think,

screams for apportionment. And that's basically an outline of

the situation that we find ourselves in.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 53 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:30

10:30

10:30

10:30

10:30

10:30

10:30

10:31

10:31

10:31

10:31

10:31

10:31

10:31

10:31

10:31

10:31

10:31

10:31

10:31

10:31

10:31

10:32

10:32

10:32

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

54

The only other fact that I want to talk about before we

dig into the law is, 3D virtual tours, by everyone's admission,

including the plaintiff, existed before the plaintiff.

To the extent the plaintiff has an invention here, it's an

incremental invention on a 3D virtual tour that existed long

before the Surefield patents that we're here about.

As the Court well knows -- and again, I've been on both

sides of this issue with the Court and heard the Court say what

it believes the law is, and I agree. In order to get to the

appropriate amount of royalty here, the plaintiff is required

to apportion its reasonable royalty as it relates to this 3D

virtual tour.

And to be more specific, what the plaintiff needs to do

is, the plaintiff needs to determine what the non-patented

features are in that 3D virtual tour, the plaintiff needs to

determine what the previously existing prior art was because

that's not part of the incremental advance that the plaintiff

made, and they also need to look to determine if there are

other patents that relate to the 3D virtual tour and, indeed,

Matterport, who's the creator here, actually has multiple

patents.

So that's the damages expert's job, to figure out what's

the incremental advance here. I know I'm repeating what the

Court knows, but Mr. Benoit, almost without remorse, did none

of that in this case. He didn't even attempt to do so.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 54 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:32

10:32

10:32

10:32

10:32

10:32

10:32

10:32

10:32

10:32

10:33

10:33

10:33

10:33

10:33

10:33

10:33

10:33

10:33

10:33

10:33

10:33

10:33

10:33

10:33

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

55

And I'm very reluctant and somewhat loathe to do this, but

I think the best way to demonstrate, rather than just have me

tell you that he did not do it, is to really look at his

deposition testimony.

I mean, we took his deposition, as the Court might expect,

on this matter of apportionment. If we look -- I'm showing

Page 39 from Mr. Benoit's deposition, and I asked him at the

bottom on Line 24: Did you make any attempt or analysis in

this case to identify the features or functions of the

Matterport 3D tour technology that were not covered by the

patents?

And of course that's the applicable question or at least

one of the applicable questions for apportionment, right? What

did you do to properly value only the patented technology?

And the Court can see, and I'm a little bit loathe to read

it all, but he completely failed to answer the question. I

mean, it's a very direct question. It's a question that any

damages expert should be able to answer very quickly because

it's an absolute requirement. And it's clear that what he did

is just value the entirety of the 3D technology.

And then on Line 14, I tried, as we do with these damages

experts, and I know the Court has experienced this in practice,

they're not always forthcoming with their opinions or direct

answers. So I asked him again: Did you attempt to analyze or

identify any features or functions within the Matterport 3D

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 55 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:33

10:33

10:34

10:34

10:34

10:34

10:34

10:34

10:34

10:34

10:34

10:34

10:34

10:34

10:34

10:34

10:34

10:34

10:35

10:35

10:35

10:35

10:35

10:35

10:35

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

56

tour technology that were not covered by the patents-in-suit?

And of course that's the question.

What he says is: What I'm saying is that I have

considered all the evidence, the importance of the features as

articulated by the defendants indicating that the importance is

providing the user experience of being able to go in and out of

a home to have the feeling of being in that photorealistic

environment, to take measurements of the space to see if it

fits their needs.

But the most important part is the part that I have

bracketed, he says: My value is derived or is articulated

relative to the benefits that I'm saying are enjoyed by use of

3D-walkthrough capability.

So he admits he's measuring the entirety. And I could

give you five or six cites from his deposition where he admits,

Your Honor, that what he measured was the entirety of this 3D

virtual tour without any apportionment. Five or six cites from

the deposition that say the same thing.

I think the important part for the Court, at least from my

perspective here, is this: I've heard the Court say, and I

certainly believe this is a proper recitation of the law, that

in order for the damages expert to properly apportion, the

technical expert has to do the job of apportionment.

The technical expert needs to be the one who looks at the

3D virtual tour in this instance and says, hey, this part of

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 56 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:35

10:35

10:35

10:35

10:35

10:35

10:36

10:36

10:36

10:36

10:36

10:36

10:36

10:36

10:36

10:36

10:36

10:36

10:36

10:36

10:36

10:36

10:36

10:37

10:37

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

57

the 3D virtual tour existed in the prior art. This part is

non-patented. This part is patented by Matterport. And here

I've identified the inventive aspect of the patents-in-suit.

And in this case you will find no evidence that the

technical expert did that in this case. Mr. Benoit, in his

deposition, admits as much. And this'll be the last time I

show a deposition excerpt, but I believe this is important. I

know the details matter on these. These are not easy

decisions, Your Honor.

So, again, I asked him in his deposition, "Are you aware

of or did you ask Dr. Melendez" -- that's the plaintiff's

technical expert -- "to identify for you the features, all of

the features of the Matterport 3D tour technology that are not

covered by the patents-in-suit?"

And of course that's the -- that's the question he should

be able to easily answer if he's doing apportionment. And he

said, "So as I have articulated several times, the focus of my

analysis has to be on what is the value that the defendants are

going to derive from use of the technology. What are the costs

they're going to incur to enjoy the benefit? The benefit is

the ones that I've articulated. I won't say it again."

Of course he was a little annoyed because I was asking him

the same question over an over without an answer. And he

identifies nothing that he relied on with respect to

Dr. Melendez.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 57 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:37

10:37

10:37

10:37

10:37

10:37

10:37

10:37

10:37

10:37

10:37

10:37

10:37

10:37

10:37

10:37

10:37

10:37

10:38

10:38

10:38

10:38

10:38

10:38

10:38

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

58

And so when he refers to the technology in his answer, we

know exactly what he's referring to. He's told us. He's

referring to the entirety of the 3D virtual tour walkthrough

capability.

That's exactly what he's not supposed to do. He's

supposed to apportion down to the inventive aspect of the

patent.

And in the end I think all of this is difficult work for

the Court. But in the end there's absolutely no expert

testimony, no technical expert testimony by which the technical

expert did this apportionment, and then the damages expert

relied on it.

And then at the end of the day, because there's no

apportionment, Your Honor, we believe that Mr. Benoit's

opinions should be stricken.

And that's all I have, Your Honor, unless you have any

questions. Thank you.

MS. GLAUSER: In his analysis Mr. Benoit conducted two

apportionments. First, he started by looking at the revenue

and incremental profit that was attributable to the patented

inventions, and we'll discuss that a bit more when we deal with

defendant's entire market value rule arguments. But that was

the first step of his apportionment.

After doing that, to break it down to only the value

attributable to the patents and the patented features,

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 58 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:38

10:38

10:38

10:38

10:39

10:39

10:39

10:39

10:39

10:39

10:39

10:39

10:39

10:39

10:39

10:39

10:39

10:40

10:40

10:40

10:40

10:40

10:40

10:40

10:40

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

59

Mr. Benoit did conduct a second apportionment to further

apportion his damage award to account for only the inventive

features of the patent or, said another way, to exclude the

non-inventive or conventional features.

And he did that by relying on Mr. -- I'm sorry --

Dr. Melendez' analysis of the inventive components. And if --

I don't know if you'd like me to show it, but in Mr. Benoit's

report, Paragraphs 27, 28 and 29 at least, are a recitation of

what Mr. Benoit learned from the technical expert,

Dr. Melendez. And it's an identification of the features

within this accused 3D tour that are inventive, in other words,

that are nonconventional.

And as a result, Mr. Benoit walks through what the

technical expert has identified as inventive elements, and he

then goes through his analysis to value then what the use is

from those nonconventional elements.

Now, in the end, what Mr. Benoit does is he apportions the

$2.4 million that Redfin paid to Matterport for use of its 3D

tour software or the scans, and that's the exact same

apportionment that Redfin's own damage expert did.

So Mr. Malackowski is Redfin's damage expert. And in his

report he says that the value of the inventive components

versus the conventional components is based on the fee that

Redfin paid to Matterport.

Now, Mr. Malackowski, Redfin's expert, determined that

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 59 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:40

10:40

10:40

10:40

10:40

10:40

10:41

10:41

10:41

10:41

10:41

10:41

10:41

10:41

10:41

10:41

10:41

10:41

10:41

10:41

10:41

10:42

10:42

10:42

10:42

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

60

only 50 percent of that $19 fee, so $9.50, should be allocated

to inventive and then the other 50 percent should be allocated

to conventional components.

What Mr. Benoit did instead was he took the 100 percent,

the entirety of that fee, and allocated it to account for

conventional components, and he takes that out of his damage

award in full.

Now, in their briefing Redfin has identified at most two

elements that it contends -- or features that it contends

constitute conventional features for which Mr. Benoit failed to

do an apportionment.

The first is what's called a "dollhouse view," which is

the ability when you're on Redfin.com's website to kind of scan

out and do a bird's eye view from the top. It almost looks

like a dollhouse, hence the name.

The second is a feature on the Redfin website where you

can measure the distance to between two points using, you know,

a ruler, an electronic ruler, between those two points within

the house. And Mr. Benoit discusses both of those features in

his report.

With regard to the dollhouse, he recites that he learned

from Dr. Melendez, our technical expert, that the value of the

dollhouse feature is imparted from the patents because the

patents claim an inventive component that is functionally

linking the 3D model and the dollhouse view.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 60 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:42

10:42

10:42

10:42

10:42

10:42

10:42

10:42

10:42

10:42

10:43

10:43

10:43

10:43

10:43

10:43

10:43

10:43

10:43

10:43

10:43

10:43

10:43

10:43

10:43

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

61

So while dollhouse views existed before Surefield's

patents, what didn't exist was the ability to move between a

spot in the 3D model and a spot within the dollhouse view.

And Mr. Benoit concludes, based on evidence from Redfin

and Matterport itself, that that is the value attributable to

the dollhouse for which he has determined the incremental

profit from use of the patent.

Likewise, with regard to the ruler, Mr. Benoit

acknowledges that the ruler is not a feature that is claimed

within Surefield's patents. However, the functionality of the

ruler is enabled by Surefield's patents.

It's not until you have the particular type of 3D model

that was invented in the patents that you're able to have the

precise depth and visual photorealistic views that would allow

you to, for instance, within the 3D model, measure from the

start of one wall to the end of another wall -- the start of

the wall to the end of the wall to determine whether or not a

sofa fit.

In all of the conventional or prior art 3D models, the

views were distorted or the depth data wasn't sufficient to

enable the functionality of the ruler in any meaningful way.

So what we're left with at the end of the day is really

Redfin's critiques about the way in which Mr. Benoit

apportioned, not whether or not he apportioned.

THE COURT: Mr. Dacus?

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 61 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:44

10:44

10:44

10:44

10:44

10:44

10:44

10:44

10:44

10:44

10:44

10:44

10:44

10:44

10:44

10:45

10:45

10:45

10:45

10:45

10:45

10:45

10:45

10:45

10:45

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

62

MR. DACUS: Thank you, Your Honor.

So I think what we're left here with, Your Honor, are

lawyers who know the law at the plaintiff's table and have

articulated things that they certainly want their expert

reports to say, but in no way do they.

At no point did anyone show you an opinion from the

technical expert apportioning, as the technical expert must,

between the alleged inventive concept of these patents and all

those things that they need to apportion out: Other people's

patents, non-patented technology. No one showed you that

information. That's the information that's required.

Nor did they show you the damage expert relying on that

technical expert's apportionment opinion. Nor could he,

because it doesn't exist.

And I think at the end of the day that's what's missing.

We just don't have apportionment here. And the proof is sort

of in the pudding. Not sort of. The proof is in the pudding.

We have a damages expert on the plaintiff's side. And as

counsel said, the total amount that was paid -- to give the

Court some sort of perspective of the magnitude of what we view

as being egregious here -- Redfin actually pays for this

technology that's accused. They paid $2.4 million over the

course of four years for it.

The damages claim in this case, once they supplement, is

likely to reach $100 million. So we're talking about a damages

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 62 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:45

10:45

10:45

10:45

10:45

10:46

10:46

10:46

10:46

10:46

10:46

10:46

10:46

10:46

10:46

10:46

10:46

10:46

10:46

10:46

10:46

10:47

10:47

10:47

10:47

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

63

claim that is some 50 times what's actually paid for the

accused technology.

And what Mr. Benoit, the plaintiff's expert, did is, he's

taking -- literally taking the revenues from sales of homes and

using that as a base to calculate his damages here. I think

that provides context at a large view to what the issues are

here.

And when you dig into the details, the fact is we just

don't have any technical expert opinions or, truthfully, damage

expert opinions walking us through the apportionment analysis.

And that's all I have, unless the Court has questions,

Your Honor.

MS. GLAUSER: Your Honor, if I may briefly respond.

Here's where I may need some help, but -- put it on there.

So I was faulted for not showing the Court places in

Mr. Benoit's report where, in fact, he relies on an

apportionment, an identification of the inventive features of

the patents.

But if you look at Paragraph 29 here, this is -- I cited

Paragraphs 27 and forward, but if you look at the bottom of

Paragraph 29 here, this is where he explicitly recites that

viewers are able to take meaningful measurements as a result of

the patented inventions using -- when using the 3D tour. And

he's citing there, in that footnote, to discussions with

Dr. Melendez.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 63 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:47

10:47

10:47

10:47

10:47

10:47

10:47

10:47

10:47

10:47

10:47

10:47

10:47

10:48

10:48

10:48

10:48

10:48

10:48

10:48

10:48

10:48

10:48

10:48

10:48

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

64

As a further example with regard to the dollhouse view,

which is the second feature that Redfin contends is a

conventional feature, Mr. Benoit explicitly states that as a

result of the patented inventions, dollhouse views can be

generated that are operationally linked to the model and

panoramic views such that a user can move from an outside

overhead view to an inside photorealistic view.

And again, he then cites a discussion with Dr. Melendez.

And so as a result, all we're left with here is a dispute

between Surefield and Redfin regarding what is the inventive

component or components, not an issue with Mr. Benoit's

methodology.

He clearly relied on the technical expert's identification

of the inventive features and he definitively deducted an

amount to account for anything that did not fall within those

inventive features and, in fact, deducted the entire amount

rather than the 50 percent amount that Redfin's own expert

allocated to an apportionment between inventive and

conventional features.

MR. DACUS: So just to address that point, Your Honor, and

I think actually this illustrates the point very well. What

the -- what counsel just told you is that this measurement

feature was included in Mr. Benoit's calculation.

Yet Mr. Benoit -- this is an excerpt from his deposition.

If we start at Line 19, I asked him, "So one thing you said in

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 64 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:48

10:49

10:49

10:49

10:49

10:49

10:49

10:49

10:49

10:49

10:49

10:49

10:49

10:49

10:49

10:49

10:50

10:50

10:51

10:51

10:51

10:51

10:51

10:51

10:51

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

65

your answer is there may be minor elements that are not" -- and

I put a square around that -- "covered by the patents-in-suit.

Did you make any attempt to identify what those are?"

And he said, "Again, I think one that we just talked about

is the potential to have maybe a ruler that shows up as a click

feature that enables you to take a measurement."

So Mr. Benoit in his deposition expressly and completely

says that taking a measurement is not covered by the patent.

And yet he included it in part of his overall calculation. And

the lawyers have admitted to you that he included it in his

calculation, when he says expressly it's not part of the

covered patents. That's exactly the reason we have

apportionment, Your Honor.

So that's all I have unless the Court has questions.

Thank you, Your Honor.

(Off-the-record bench conference.)

THE COURT: Mr. Dacus, if you could go ahead and do the

entire market value part of your argument as well. And I'll

take these two in context.

MR. DACUS: I think I've -- I won't belabor this point,

Your Honor. And I think I've touched on the facts that are

relevant to it, and that's why I won't belabor it.

THE COURT: Okay.

MR. DACUS: But just to highlight to make sure I'm at

least as clear as I possibly can be. I mean, what Mr. Benoit

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 65 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:51

10:51

10:51

10:51

10:51

10:51

10:51

10:51

10:51

10:52

10:52

10:52

10:52

10:52

10:52

10:52

10:52

10:52

10:52

10:52

10:52

10:52

10:52

10:52

10:53

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

66

did is he took the revenues and profits. Those revenues and

profits here are constituted of the commissions that Redfin has

paid when a home is bought and sold.

In addition, Mr. Benoit, the plaintiff's expert, took the

revenues from the actual selling of homes, homes that Redfin

bought. He took that and calculated the profits thereby,

rather than isolating on what should be the smallest salable

practicing unit which is the 3D virtual tour.

So the way I see it -- and I don't profess that it's

correct but I think it is, the way the analysis goes here is

the plaintiff's expert should look for the smallest salable

practicing unit. That's the 3D virtual tour. Rather than

isolating that, he focused on the revenues and the profits from

the entirety of the business.

THE COURT: But isn't the plaintiff's -- and I'm saying

it's the right methodology, but isn't he essentially saying I

want a percentage of the additional benefit Redfin gets from

the sales of these houses? And that's going to be a -- that's

going to be driven by the price of the house? Maybe I just

don't understand how that works.

MR. DACUS: No. That's right. But where he failed, I

think most egregiously, is he took the entirety of that price

increase which he attributes to the 3D virtual tour, and he did

not apportion the 3D virtual tour. A tour that everyone here

admits, 3D virtual tour --

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 66 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:53

10:54

10:54

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

67

THE COURT: I got it. So --

MR. DACUS: He didn't apportion at that point.

THE COURT: Got it.

MR. DACUS: So I don't -- I take a little exception with

the Court saying it's okay to take the total price --

THE COURT: I didn't say it was okay. I'm just saying --

I'm just trying to make sure I understand the methodology.

MR. DACUS: Understood.

THE COURT: And so because you're saying he used the

wrong -- he should use the 3D --

MR. DACUS: The virtual tour.

THE COURT: -- and they used -- I'm just saying, I

understand why they did that. I'm not saying it's right or

wrong, but --

MR. DACUS: They did it, just so we're clear, because when

you take the revenues from sales of homes, you get to very

large numbers very quickly.

But I will readily admit, I think there was a way for them

to do that that would have been proper. I don't think they did

here.

But to me the most glaring, egregious violation here is of

apportionment, because it is undisputed that what Mr. Benoit

did is he said the 3D virtual tour increased the price of this

home, regardless of whether there's merits to it, by X

percentage.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 67 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:54

10:54

10:54

10:54

10:54

10:54

10:54

10:54

10:54

10:54

10:54

10:54

10:54

10:54

10:54

10:54

10:54

10:55

10:55

10:55

10:55

10:55

10:55

10:55

10:55

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

68

Well, even if that's true, then you need to apportion for

the inventive aspect of that 3D virtual tour that comes from

these patents and that's where they totally failed, and that's

where they needed, candidly, Mr. Melendez' technical expertise

to help them.

THE COURT: I had a case where it had to do with an

allegedly infringing -- the hubs you put up in different --

like a Starbucks or whatever, and they wanted to use the value

of the Starbucks. In fact, when I cross-examined their expert,

I said, well, if this were on a plane, it would be the value of

the plane?

And he said, yeah. You would take a percentage of the

plane, which would be a pretty good number, actually.

MR. DACUS: Yes. And we have similar numbers here, maybe

not quite as costly as a plane, but rapidly approaching.

Thank you, Your Honor.

THE COURT: If I could have a response.

MS. GLAUSER: I think it's important as a starting point

to kind of anchor what it is that Mr. Benoit did.

And so while he did start by looking at Redfin's revenue

from listings with 3D tours, he didn't stop there. Instead,

his very next step was to apportion down to the incremental

profit that Redfin owns as a result of the patent.

And he relied on Matterport and Redfin's own statements

and own studies about what that incremental profit was. And so

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 68 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:55

10:55

10:55

10:55

10:56

10:56

10:56

10:56

10:56

10:56

10:56

10:56

10:56

10:56

10:56

10:56

10:56

10:56

10:56

10:57

10:57

10:57

10:57

10:57

10:57

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

69

it's Matterport and Redfin who have claimed that use of 3D

increases, for example, the sales price of the house.

And so Mr. Benoit started with Redfin's 3D listing revenue

and then apportioned down to three incremental profit benefits

that Redfin realizes. The first is this price premium on 3D

listing.

The second is increased listing conversions, meaning that

based on Redfin and Matterport's own documents, the evidence

indicates that Redfin owns listings -- meaning it becomes the

agent -- on more properties as a result of its use of 3D tours.

And then the third was a cost savings that Redfin enjoys

as a result of its use of 3D tours. Because based on evidence

that Matterport and Redfin have published, use of 3D tours in a

listing reduces the days on market for that listing. And

associated with each day are increased costs of in-person

tours. And so a reduction of days on the market due to 3D

tours being included with the listing equates to a reduction in

the cost of in-person tours.

And it's based on that that Mr. Benoit concluded that of

Redfin's 3D listing revenue, Redfin generated about 110, 111

additional million dollars from use of the patent. So that is

an apportionment down to that smallest salable patent

practicing unit of the 3D tour.

And it's okay that Mr. Benoit started with Redfin's entire

3D listing revenue. There's nothing wrong with doing so. And,

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 69 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:57

10:57

10:57

10:57

10:57

10:57

10:57

10:58

10:58

10:58

10:58

10:58

10:58

10:58

10:58

10:58

10:58

10:58

10:58

10:58

10:58

10:58

10:59

10:59

10:59

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

70

in fact, numerous cases have sanctioned the idea that starting

there is okay, as long as you ultimately apportion down to,

one, the patented features, which he did by identifying the

incremental profit associated just with the patent. So just

with the 3D tours.

And it's important to note here that our technical expert,

Dr. Melendez, concluded that the patents cover the entirety of

the 3D tour itself.

So as a result, this case is analogous to Exmark where the

patent covered the entire lawn mower. And as a result you

could look to the additional revenue or profit that the

defendant earns from sales of the lawn mower.

Now, of course the case law continues and says that a

second apportionment needs to be done to account not just for

the patented features but for the inventive elements of the

patent. And that's the apportionment that we previously

described Mr. Benoit conducted.

There are numerous cases in which the Court has sanctioned

the idea of using this income approach, using an analysis of

the Georgia-Pacific factors to start with the total revenue and

then apportion down to the patented features and the inventive

components. And Mr. Benoit's calculation of that comports with

those cases.

In fact, in the -- I don't know how to say it -- but it's

MiiC case which we've cited in our brief as 2017 Westlaw

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 70 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10:59

10:59

10:59

10:59

10:59

10:59

10:59

10:59

10:59

10:59

10:59

11:00

11:00

11:00

11:00

11:00

11:00

11:00

11:00

11:00

11:00

11:00

11:00

11:00

11:00

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

71

6268072, the Court specifically concluded that by calculating

cost savings, benefits from the patent that the expert had

apportioned between patented and unpatented features.

And that's what Mr. Benoit did here. He not only

calculated cost savings but also just incremental profit due to

the 3D tour. And as a result, Mr. Benoit conducted the

apportionment between the patented features and the

non-patented features.

Now, I think what Redfin's true complaint is is that while

Mr. Benoit's damage award calculations, so his $48.7 million

calculation, properly apportions down to the necessary

inventive footprint of the patent, they complain that he then

expresses that award in terms of a percent of the total

revenue.

And we didn't, in fact, do that to skew the damage award.

It wasn't chosen in order to present the jury with an overly

large number. It was done properly with approval from the case

law because, one, Redfin and Matterport have claimed that their

overall revenue is impacted; two, there is no additional

revenue data.

The 3D models are not separately sold by Redfin, and so

the only revenue data that existed was from sales of listings

with the 3D tour.

And under such circumstances, again, the law sanctions

Mr. Benoit starting with the revenue so long as his ultimate

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 71 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:00

11:00

11:00

11:01

11:01

11:01

11:01

11:01

11:01

11:01

11:01

11:01

11:01

11:01

11:01

11:02

11:02

11:02

11:02

11:02

11:02

11:02

11:02

11:02

11:02

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

72

award is limited to the inventive footprint, as it is here.

And in -- just in case I don't have an opportunity to get

back up, to the extent that Redfin's real worry is about an

evidentiary principle or the concern that presenting the jury

with a running royalty expressed as a percentage of total

revenue, Mr. Benoit's damage award, which is properly

apportioned, could be stated or re-expressed as a dollar-per-3D

listing running royalty. And that's the same base that Redfin

has used, and it could be a change that doesn't affect

Mr. Benoit's methodology. It doesn't affect his overall

calculation. It is quite literally just the expression of his

damage award, which is apportioned to the inventive footprint,

as a dollar-per-listing instead of a percent of 3D revenue.

MR. DACUS: Just very briefly, Your Honor. It is -- it's

always interesting to me how the issues sort of get crystalized

in these arguments at long last after having talked about this

stuff for months and months.

And so what counsel just said to you, as she must because

this is what her expert says, is -- and I wrote this in quotes

and I think she said it at least six or seven times -- that the

expert calculated the price premium, the conversions and the

reductions in days -- and this is the important part -- "as a

result of the use of 3D tours," and other times she said "due

to the use of 3D tours."

And that's exactly what their expert did. That's exactly

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 72 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:02

11:02

11:02

11:02

11:02

11:02

11:02

11:03

11:03

11:03

11:03

11:03

11:03

11:03

11:03

11:03

11:03

11:03

11:03

11:03

11:03

11:03

11:03

11:03

11:03

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

73

a true statement. The problem is the -- you must apportion the

inventive aspect out of the 3D tour.

The 3D tour includes Matterport-patented technology, it

includes non-patented technology, it includes loads of

technology that was in the prior art, and that's where they

failed. That's where no technical expert did the work for

them. They need one more step in their analysis and that's

exactly what they didn't do.

And we don't -- I've already showed the Court that they

admit -- that the expert admits that the measurement function

is not in the patents.

I could show the Court several examples, but on this

dollhouse view that we're talking about, where counsel has told

you that the plaintiff's expert included that in their

valuation, I asked him in his deposition: Are you aware of any

opinion from Dr. Melendez, the technical expert, as to whether

or not the dollhouse view is covered by the patents-in-suit?

And his answer was: The dollhouse view is not, in and of

itself, a patented concept. The idea of a dollhouse view

existed prior to the invention.

So here, again, they're admitting that what they included,

they didn't apportion out the unpatented features. And I think

that's really where this argument gets crystalized, is they

needed one more step in their apportionment analysis.

Thank you, Your Honor.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 73 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:03

11:04

11:04

11:04

11:04

11:04

11:04

11:04

11:04

11:04

11:04

11:04

11:04

11:04

11:04

11:05

11:05

11:05

11:05

11:05

11:05

11:05

11:05

11:05

11:05

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

74

MS. GLAUSER: May I briefly reply, Your Honor?

(Conference between counsel.)

MS. GLAUSER: Your Honor, I think what's important here is

that this, again, just reflects that there's a dispute about

the apportionment, which goes to the weight, not the

admissibility of Mr. Benoit's testimony.

The immediate paragraph following what Mr. Dacus just read

to you is, "The usefulness of the dollhouse view in enabling

the user of the website to be functionally linked from that

view into the rooms they may want to experience," that is

covered by the patent.

And so the idea that Mr. Benoit attributed some portion of

value related to the dollhouse to be included within the damage

award is appropriate. And that's because the technical expert

explained that the meaningful use of the dollhouse, based on

the inventive idea of functionally linking that dollhouse to

the 3D model, provided value.

And it's not the case that you extract out every

conventional element and are left then only with the patented

inventive element value. If you did so, then in any case in

which the patent itself is an inventive or a unique combination

of conventional components, you would be left with zero value.

We're not disputing that dollhouse existed before these

patents. What's disputed is that the value of the use of

dollhouse as functionally linked to the 3D model is an

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 74 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:05

11:05

11:05

11:05

11:05

11:06

11:06

11:06

11:19

11:19

11:19

11:20

11:20

11:20

11:20

11:20

11:20

11:20

11:20

11:20

11:20

11:20

11:20

11:20

11:20

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

75

inventive component. And that value is something that should

and can be captured in the damage award.

And that's why Mr. Benoit's analysis is proper. It

follows the case law. There's no basis to exclude it. This is

all about weight, not admissibility.

THE COURT: We'll take about a ten-minute break and I'll

come back.

(Recess taken from 11:06 to 11:19.)

THE COURT: Thank you. You may be seated.

The Court is going to deny the motion.

What is -- just because we are -- spent a lot of time on

that and I do want to get as many of these as I can get

reached.

I'll start with Mr. DiNovo. What motion do you think is

most critical that we take up next from your perspective?

MR. DiNOVO: Thank you, Your Honor -- I apologize.

THE COURT: No, no.

MR. DiNOVO: I'll defer to Mr. Goodpastor who I think is

quite anxious to have his --

MR. GOODPASTOR: Your Honor, the Court has had a dispute

over the prior art elections which we recently raised with the

Court. I'd like to take a moment to address that.

THE COURT: Okay.

MR. GOODPASTOR: But it'll affect our preparation for

trial.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 75 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:20

11:20

11:20

11:20

11:20

11:20

11:21

11:21

11:21

11:21

11:21

11:21

11:21

11:21

11:21

11:21

11:21

11:21

11:21

11:21

11:21

11:21

11:21

11:21

11:21

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

76

Chris Goodpastor for plaintiff Surefield.

So there are two issues on the final prior art elections,

Your Honor, or identifications as they call them.

The first is the grounds listed in the final

identifications are not the same as any of the grounds in the

preliminary identifications.

And then the second issue is some of the grounds in the

preliminary identifications are not in the invalidity

contentions.

So we issued a standard scheduling order for these types

of disclosures. You've done it a million times. The

preliminary identifications must identify prior art grounds

from the invalidity contentions. And then the final

identifications must select some of those prior art grounds

that were in the preliminaries.

And then to make everything clear and make sure nobody was

mistaken, we defined 'ground' very clearly in the order. It's

an agreed order. And it's consistent with what we understand

your rule to be, which is if you're going to present a ground

at trial, it's got to be in the invalidity contentions and the

preliminaries and in the finals. And if it's not in all three,

it's not coming in.

The problem we ran into, Your Honor, is -- at least the

first problem we ran into is that the grounds in the final

identification are not selected from the grounds in the

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 76 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:21

11:21

11:22

11:22

11:22

11:22

11:22

11:22

11:22

11:22

11:22

11:22

11:22

11:22

11:22

11:22

11:22

11:23

11:23

11:23

11:23

11:23

11:23

11:23

11:23

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

77

preliminary identification.

And we'll show you -- here's a section of the preliminary

identification relating to Google Street View 2013 System.

This is one of the system references that they've elected.

And I want to make sure it's published. Okay.

You can see in the preliminaries they elected for Claim 1

of the '885 patent two grounds. One was Google Street View

2013 as a 102 reference by itself. The other one was Google

Street View 2013 in combination with the Redfin.com website

reference.

And so we checked this out. We went back to the final

invalidity contentions. We looked at their charts, and there

it is in black and white. Google Street View 2013 System is

claimed as a 102 reference. And it says, "and we're also going

to claim the following in combination." And it gives you five

other references that they're going to -- that they're alleging

for their 103 obviousness combinations.

And we looked at it and it said Redfin.com there. We

said, okay, this one's okay.

Then we got their finals, Your Honor. And you can see

what's in the final bears no resemblance to what was in the

preliminary. The final identification for this claim adds 12

additional prior art references to the combination. They're

highlighted there.

This clearly wasn't disclosed in the preliminary. Yet

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 77 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:23

11:23

11:23

11:23

11:23

11:23

11:23

11:24

11:24

11:24

11:24

11:24

11:24

11:24

11:24

11:24

11:24

11:24

11:24

11:24

11:24

11:24

11:25

11:25

11:25

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

78

this is what they're contending is their -- now their final

prior art election for Claim 1 of the '885 patent.

None of these grounds were disclosed, and so these should

all be stricken. They do this for final grounds on 1 through

7, 9 through 18, 20 through 21 and 23 through 28. None of

these combinations are in the preliminaries.

So what does Redfin say in response? Well, to the best we

can understand the response, they're claiming that the term

Google Street View 2013 used in the preliminary identifications

doesn't mean the 102 reference that they put in their charts.

It's supposed be some sort of secret shorthand for the 13

reference combination that they've now put in their final

identification.

But this just doesn't make any sense. And if we look at

this on Slide 6, this is their final invalidity contentions.

It defines Google Street View 2013 System as a 102 reference

that is evidenced by several other materials. And we point

them out here, the three that are part of the dispute here.

And the charts show the same thing. If you go back to

Slide 4, it references Google Street View 2013 System as a 102

reference by itself. Doesn't say anywhere that we're supposed

to understand Google Street View 2013 System means a 13

reference combination.

So these final grounds just assert completely new theories

that weren't disclosed at all in the preliminary

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 78 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:25

11:25

11:25

11:25

11:25

11:25

11:25

11:25

11:25

11:25

11:25

11:25

11:25

11:25

11:26

11:26

11:26

11:26

11:26

11:26

11:26

11:26

11:26

11:26

11:26

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

79

identification.

The second problem we have is the preliminary

identifications themselves. There are some grounds in there

that aren't selected from the final invalidity contentions.

And we put this in a motion to strike we filed a couple weeks

ago at Document -- ECF Document 181.

I'll go to Slide 8 here, Your Honor.

You can see for the '973 patent, they identified Google

Street View 2013 system as a 102 reference, but they said that

this system is evidenced by a number of documents. And some of

the documents that they say the system is evidenced by is this

Xiao and Furukawa reference and patents -- and two patents by

Furukawa.

Now, they didn't disclose these as prior art. They're not

identified as prior art in the invalidity contentions or

anywhere else. But now when we get the preliminaries, what we

see is they're now claiming that the things that they told us

were only evidence, Xiao and Furukawa and these two Furukawa

patents, are now prior art and part of the prior art

combination.

And this is completely different from not only what

they've told us, but what they told the Court as well. When we

got Dr. Navratil's report, we were concerned that he was citing

some of these references that were only identified as evidence

as prior art. And so we included that in our motion to strike,

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 79 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:26

11:26

11:26

11:26

11:27

11:27

11:27

11:27

11:27

11:27

11:27

11:27

11:27

11:27

11:27

11:27

11:27

11:27

11:27

11:27

11:28

11:28

11:28

11:28

11:28

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

80

Your Honor.

And what did Redfin tell us and the Court in response?

They said, don't worry. We're not using those references as

prior art. They're only evidentiary support for the Google

Street View System that we've already alleged as prior art.

So now we're in a situation where our expert has responded

to these particular documents as if they were evidence of the

system, and not as if they were prior art. And the distinction

is critical, Your Honor. Because when you respond to

something -- when somebody claims that a document is evidence

of a system, well, they have the burden of proof to show that

the functionality described in that document was actually

incorporated into the system that they're claiming existed.

So our expert responded to their initial theory that,

look, we've looked at these documents and there's no evidence

that any of these documents you cite as evidence were ever

incorporated into the Google Street View System.

Now they completely switched their theory, realizing that

they can't prove that the functionality described in these

evidentiary documents was actually implemented in the system.

They said, well, you know what, we're going to switch theories.

And we're going to change these to prior art references. And

now we don't have to prove they were actually implemented into

the system. We can just rely on them as prior art references

and avoid that problem altogether.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 80 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:28

11:28

11:28

11:28

11:28

11:28

11:28

11:28

11:28

11:28

11:28

11:28

11:28

11:28

11:29

11:29

11:29

11:29

11:29

11:29

11:29

11:29

11:29

11:29

11:29

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

81

Well, that's a completely different response from our

perspective. Because if they allege them as prior art

references in the invalidity contentions, we would have

responded to them with arguments like, hey, there's no

motivation to combine in your report, Dr. Navratil, no

motivation to combine. And by the way, these secondary

references you've now named as prior art, they don't actually

disclose the claimed system.

But we don't have an opportunity to do that, because they

changed the theory on us after expert reports.

So this same problem exists with the Matterport prior art

systems. I'm not going to belabor the point, it's in our

briefing. And it's identified into the particular grounds.

But the problem with the preliminary grounds are all

stated in our proposed order Document 181-4. So in that

document you'll see how the grounds, the preliminary grounds,

need to be revised to comply with the invalidity contentions.

And so by repeatedly refusing to disclose the prior art

grounds in compliance with the Court's order, we're now here,

sitting ten days after the disclosures were due, with no idea

about what kind of prior art they're going to put on at trial.

We've lost at least ten, maybe more, days of our prep of our

expert because they failed to disclose their prior art

according to the rules.

And the rules are simple, Your Honor, we've all done it.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 81 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:29

11:29

11:29

11:29

11:29

11:29

11:30

11:30

11:30

11:30

11:30

11:30

11:30

11:30

11:30

11:30

11:30

11:30

11:30

11:30

11:30

11:30

11:30

11:30

11:30

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

82

You go to your invalidity contentions, you find out what you

disclosed there, what combinations are clearly disclosed there.

You put them in your preliminaries and then you take

preliminaries and you put them in your finals. It's pretty

straightforward.

But they haven't -- they've refused to do that. We've

been back and forth four different times with them on this.

And so we think you should strike all of the non-compliant

disclosures. Because we're not confident that if you give them

a chance to correct it, that we're not going to be in front of

the Court again, but now with even less time to prepare our

witnesses.

But if the Court is inclined to allow Redfin to correct

its disclosures, it should be limited to a single ground per

asserted claim selected expressly from the preliminary

identification or prior art as corrected by our proposed order

181-4. And they should provide the corrected final

identification within one business day.

And this is not going to remedy the prejudice we've

already suffered, but at least it's going to put a cap on it,

Your Honor.

But as we said, our first request is that all of these

non-complied grounds be completely stricken.

Unless there are any questions.

THE COURT: A response?

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 82 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:30

11:31

11:31

11:31

11:31

11:31

11:31

11:31

11:31

11:32

11:32

11:32

11:32

11:32

11:32

11:32

11:32

11:32

11:36

11:32

11:32

11:32

11:32

11:33

11:33

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

83

MS. CHANG: Carolyn Chang.

Your Honor, I will agree that there are -- there have been

some confusion over how we characterized disclosures. And what

it is, I think the two sides disagree on what was required to

be defined -- disclosed.

But I do want to make one thing very clear, that to the

extent that there is any claimed surprise, that's just not

true. Let me take Google Street View, for example, and some of

the specific combinations that Surefield is claiming has not

been disclosed before and that they never knew it was the

combination.

This is a passage from our technical expert's expert

report. And now, there were over 120 pages spent on the Google

Street View prior art system in that discussion. Dr. Navratil,

Redfin's expert, said Google Street View anticipates or in

combination with and in the body of the description discussed a

lot of references.

This is the page before, you'll see it's the Xiao and

Furukawa paper, a '761 patent and there's also an '862 patent.

And at the end -- those were all representing work of

Dr. Furukawa while he was at Google.

And at the end of that, it said it would have been obvious

to combine Dr. Furukawa's work for Google, which is all the

references we just discussed previously, the ones that

Surefield is now complaining that there were no disclosures of,

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 83 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:33

11:33

11:33

11:33

11:33

11:33

11:33

11:33

11:33

11:33

11:33

11:33

11:33

11:34

11:34

11:34

11:34

11:34

11:34

11:34

11:34

11:34

11:34

11:34

11:34

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

84

with Google Street View 2013, that would be the system, to

create synthesized views.

And we said Google did, in fact, combine with -- the work

with Google Street View as a separate project. So that was our

evidence of motivation to combine.

So there is a specific disclosure of combination. And

I'll submit to the Court that we did that with all the other

combinations they're complaining about now.

In addition, this fiction of these things not having been

disclosed in our invalidity contentions, I think there's being

an overly technical view of what's being considered and

discussed as what's disclosed in our invalidity contentions.

Our invalidity contentions had incorporated over 76 claim

charts identifying many different primary references in

combinations with different things. When we elected down to

our first initial, we focused on what would be four of those

things. So it would be the Google Street View, the Matterport

prior art system and a patent called Uittendaele.

And our intent in our initial was to sort of reduce it

down to say, hey, we're going to focus on what we disclosed in

these initial claim charts.

Now, I will own that there was unclarity on our part in

those initials. And that is what, as counsel said, we went

back and forth. And that's what led to the list in the final,

where I'm making clear when I identified that ground I intended

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 84 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:34

11:34

11:34

11:34

11:35

11:35

11:35

11:35

11:35

11:35

11:35

11:35

11:35

11:35

11:35

11:35

11:35

11:35

11:35

11:35

11:35

11:36

11:36

11:36

11:36

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

85

to identify the ground that was in that claim chart which

included citations to all these references. And that's what I

made clear.

So there is a bit of a not-quite-accurate optics issue

with the longer list in the final, but that was for

clarification of what was intended.

The idea that counsel has not been aware that Google

Street View and the things that we describe and cite and quote

in our invalidity contentions and in over the 120 pages of

further elucidation in Dr. Navratil's report which includes

citations to all the things listed that final identification is

just untrue.

That was -- these reports were served in September.

Counsel claims that they were not able to reply on motivation

to combine in their rebuttal expert report, but they did.

There were discussions of that in the rebuttal expert report.

So at this point I think we are all on the same page about

what we are going to go on trial. There are three primary

reference, that's the Google Street View 2013, that's the

Matterport 2013 and the this Uittendaele patent.

And I've made clear I intend to rely on the references

cited in those claim charts which I then proceeded to list out

at counsel's request. So they were clear on what we would be

looking at.

The secondary issue, this idea that some of those

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 85 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:36

11:36

11:36

11:36

11:36

11:36

11:36

11:36

11:36

11:36

11:36

11:36

11:37

11:37

11:37

11:37

11:37

11:37

11:37

11:37

11:38

11:42

11:42

11:42

11:42

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

86

references describe the primary system and some of them will be

used to be combined with it and that because I said let's take

Reference A evidence as Google Street View, well, there are

disclosures in Reference A and that's the Xiao and Furukawa

paper that describe the Google Street View System.

But there are also disclosures in that, and that's

Dr. Furukawa's work, where he took some stuff from the Google

Street View System and did something additional with it. And

we made very clear in Dr. Navratil's report, and that's in --

where I showed you here, in passages such as this where we've

extracted out the parts that are Dr. Furukawa's additional work

on top of what was in Google Street View as a system.

And we then concluded and made very clear that these are

going to be combined. We think that what was in Google Street

View System by itself disclosed. But Dr. Navratil went on, but

also look at the additional work of Dr. Furukawa, one of

ordinary skill in the art would have known to combine it.

And that is the type of disclosures we have throughout

Dr. Navratil's report and that we are intending to rely on on

our grounds.

(Off-the-record bench conference.)

THE COURT: So the Court is going to rule -- and part of

the reason for the long discussion is apparently we don't

have -- this hasn't been briefed. This is an issue that got

raised, and I understand why, and it's something that needs to

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 86 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:42

11:42

11:42

11:42

11:42

11:43

11:43

11:43

11:43

11:43

11:43

11:43

11:43

11:43

11:43

11:43

11:43

11:43

11:44

11:44

11:44

11:44

11:44

11:44

11:44

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

87

be taken up. So I'll do my best to make my ruling and make it

understandable.

But if -- I think that the final infringement contentions

and the final invalidity contentions are very important. The

way we do things in my court, you get the -- I'm less concerned

with the change between preliminary and final contentions in

either -- for either side. That's -- we do preliminary, then

we do the Markman and then we have final contentions.

In my court, I believe the appropriate step for a

plaintiff to take if they want to add something in their expert

report for infringement or if the defendant wants to add a

combination, a 103 combination, in their expert report from

what was in their final invalidity contentions, the appropriate

way to do that is to come to the Court and make sure that they

have permission to do that, absent some agreement to --

specific agreement to be allowed to do it by opposing counsel,

in either direction.

And so the Court is going to prohibit the defendant from

using -- if I understand this correctly, the Court is going to

prohibit the defendant from using any combination -- having the

invalidity expert testify as to any combination, 103

combination, that was not disclosed in the invalidity -- the

final invalidity contentions.

Mr. Goodpastor, does that accomplish what you were

seeking?

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 87 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:44

11:44

11:44

11:44

11:44

11:44

11:44

11:44

11:44

11:45

11:45

11:45

11:45

11:45

11:45

11:45

11:45

11:45

11:45

11:45

11:45

11:45

11:45

11:45

11:45

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

88

MR. GOODPASTOR: Your Honor, I believe it does, but I just

want to make clear so we don't hop back up here before you

again. What we believe was disclosed --

THE COURT: Well, you all discuss what you think is -- you

all can take that up of what -- you all can talk about --

because we got lots to do.

MR. GOODPASTOR: Okay.

THE COURT: But I think that -- I understand what I'm

saying. And what I mean by that is, if you object at trial --

if you all can't come to an agreement as to what's in and

what's out, if you object at trial, the defendant will have the

burden of showing that they disclosed as a 103 combination what

he's testifying in their invalidity contentions for it to be

admitted.

MR. GOODPASTOR: Understood, Your Honor. I think that

should do it.

THE COURT: Before we break for lunch, I'd asked the

plaintiffs to pick something. I'll switch to counsel for

defendant. Is there -- what would you all like to take up?

MR. DACUS: Your Honor, from our perspective, unless we

have miscalculated, we think the remainder of the motions are

plaintiff's motions.

THE COURT: Okay. Let me see.

MR. DACUS: But we may be wrong here.

THE COURT: I didn't think -- I thought there was

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 88 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:46

11:46

11:46

11:46

11:46

11:46

11:46

11:46

11:46

11:46

11:46

11:46

11:46

11:46

11:46

11:46

11:46

11:47

11:47

11:47

11:47

11:47

11:47

11:47

11:47

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

89

something else, though. Let me run through them. I thought

there was one more issue that you all had. Let me look.

So I assume and maybe I was -- so I -- was your motion for

summary judgment on infringement by a single-story property

subsumed in what was already argued?

MR. MARTON: Yes.

THE COURT: I had that broken out separately. Okay. So

then --

MR. MARTON: We have one motion, motion to strike. It's

Docket 150. It's motion to strike supplemental Melendez

report.

THE COURT: I thought that would have been resolved --

MR. MARTON: That's exactly -- I just wanted to confirm.

I think it's resolved.

THE COURT: Okay. Very good. Okay. Thank you all.

(Off-the-record bench conference.)

THE COURT: Okay. I'm told next I should take up Docket

No. 86. I say that trusting in my law clerk that there is a

Docket 86, the motion to strike the Melendez report.

(Conference between counsel.)

MS. CHANG: Your Honor, I believe this was subsumed in a

lot of the motions in limine. It was about an undisclosed

theory in his expert report.

So if our understanding of it was -- actually, forgive me.

This was a motion for -- there is a theory that was included in

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 89 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:48

11:48

11:48

11:48

11:48

11:48

11:48

11:48

11:48

11:48

11:48

11:48

11:48

11:48

11:48

11:48

11:49

11:49

11:49

11:49

11:49

11:49

11:49

11:49

11:49

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

90

Dr. Melendez' expert report that was not articulated in the

final infringement contentions. And so we were asking to have

Dr. Melendez' testimony and our opinions stricken with respect

to --

THE COURT: Special boundaries.

MS. CHANG: Yeah. So the issue is the spatial boundaries

being parcel outline. In Dr. Melendez' expert report he

disclosed a theory about the models being oriented having GPS

coordinates and orienting the models. And that is how he says

it's -- defines the parcel boundaries.

There's no such theory articulated anywhere in the final

infringement contentions. They point in the final --

THE COURT: Counsel, to save time, I think that's right

too. Unless the plaintiff can persuade me otherwise.

MS. CHANG: Okay.

MR. DiNOVO: So, Your Honor --

THE COURT: I'm sorry to interrupt you. And, again, I'm

dealing only here with the opinion about how Redfin's products

aligns special boundaries to geographical location and

geographical orientation. That's the only thing I'm dealing

with right now.

MR. DiNOVO: Okay. And so as the Court has expressed

concern about where these lines are, I just want to -- I think

what counsel for Redfin said is entirely accurate in terms of

how this works. So as I said, the boundaries of the -- the

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 90 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:49

11:49

11:49

11:49

11:50

11:50

11:50

11:50

11:50

11:50

11:50

11:50

11:50

11:50

11:50

11:50

11:50

11:50

11:50

11:50

11:51

11:51

11:51

11:51

11:51

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

91

spatial boundaries, the walls, for example, of the floor or the

rooms are -- have associated GPS coordinates.

And so what we said in our infringement contentions is

that the spatial boundaries of each space define a relative

position of adjacent spaces. And they are arranged and the

parcel outline is defined relative to the coordinates of the

legal boundaries.

So as I understood their motion, Dr. Melendez uses a term

"orientation," which our view is that orientation is subsumed

if you have -- I could draw it if I were an artist. But if you

have rooms and floors and you draw them relative to one

another, as this says in our infringement contentions, to

define a property, then the orientation of the property is

thereby defined as well by the GPS coordinates and the location

of each of those boundaries.

And so here's further evidence. I think it's undisputed

at this point, but all of this source code over on the right

column talks about the GPS coordinates and location data

associated with all of these spatial boundaries. So we agree

that the word "orientation" did not appear in our infringement

contentions. But he's simply expressing mathematically the

fact that when you align these, which was expressed, the

relative position of adjacent space is relative to another,

then that is contained.

So we didn't view this -- this is more of a semantic

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 91 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:51

11:51

11:51

11:51

11:51

11:51

11:51

11:52

11:52

11:52

11:53

11:53

11:53

11:53

11:53

11:53

11:53

11:53

11:53

11:53

11:53

11:53

11:53

11:53

11:53

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

92

distinction in our assessment than any sort of mathematical or

substantive distinction. Because orientation is clearly

encompassed within the infringement contentions.

THE COURT: Well, then here's what I'm going to do: I --

it's framed to me as a motion to strike Melendez report. Give

me one second with my law clerks.

(Off-the-record bench conference.)

THE COURT: The Court is not going to strike the report

because -- I'm not sure, but I may be doing, in essence, the

same thing here. I won't know until trial. So unlike what I

said earlier, the plaintiff can ask the questions you want of

your expert.

With regard to spatial boundaries and geographical

location and geographical orientation, where defendants are

concerned that it was not in the infringement contentions, I

think -- I'm 99 percent sure I agree with that, but I don't

know how to -- I don't know that striking -- I'm just

uncomfortable that I'm doing what I want to accomplish by

striking what's in the report because the jury's not going to

have the report.

So if when Mr. -- I don't know, Mr. DiNovo, who's going to

be putting your expert on, but whoever puts him on --

MR. DiNOVO: It'll be me, Your Honor.

THE COURT: Then when you're asking questions in this

area, if I receive an objection from counsel for defendant that

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 92 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:54

11:54

11:54

11:54

11:54

11:54

11:54

11:54

11:54

11:54

11:54

11:54

11:54

11:54

11:54

11:55

11:55

11:55

11:55

11:55

11:55

11:55

11:55

11:55

11:55

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

93

it's not in either -- it's not in the report, but if it's not

in the infringement contentions, you need to be prepared to

show me where it is in the infringement contentions.

Otherwise, I'll sustain the objection and I'll exclude it.

So I agree, generally speaking, with the defendants,

defendant, I don't believe it is sufficiently disclosed in the

infringement contention, but I don't -- I'm not comfortable

that it gives you adequate guidance to say it's stricken from

the report.

But I will take it up -- if you bring it in -- try to

bring it in through your expert, I'll take up -- now, I'm just

trying to think out loud here. If there's a more efficient way

to do this, I was going to say, you know, for example, before

your witness takes the stand, but that really won't help here.

I mean, you're going to have your witness on the stand for a

long time.

And so whenever this issue comes up, ordinarily I'll tell

lawyers, you know, if you have a specific witness who has some

issue you know is going to come up, we can take it up outside

the jury before that happens. But that's not going to happen

here because he's going to be on the stand, I would imagine,

for an hour or two.

MR. DiNOVO: We'll make an effort to direct the questions

to the infringement contention language.

THE COURT: Okay. Yeah. You have to show me in the final

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 93 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:55

11:55

11:55

11:55

11:55

11:55

11:55

11:55

11:56

11:56

11:56

11:56

11:56

11:56

11:56

11:56

11:56

11:56

11:56

11:56

11:56

11:56

11:56

11:56

11:56

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

94

infringement contentions what supports your witness -- and

again, it's not in the same way with invalidity -- well,

invalidity contentions are a little different because we know

what combinations are listed or not. But with your gentleman,

I'm going to need to be convinced that adequate disclosure was

given to the defendant.

And I will tell you on the record at the moment, I don't

think there was adequate disclosure in your final infringement

contentions.

So I'm going to take a break for lunch. Tell me this.

What issues do you have -- major issues do you -- have I ruled

on everything the defendants were concerned with, defendant was

concerned with?

MR. MARTON: Yes, Your Honor.

MR. DACUS: That covers it all.

THE COURT: So for plaintiff, what do we have left for

plaintiff?

MS. GLAUSER: Your Honor, I believe we have two

outstanding motions.

(Clarification by the reporter.)

MS. GLAUSER: I believe we have two outstanding motions.

The issues within those motions are somewhat -- a few of the

issues within them are subsumed within other rulings, but those

two would be Docket 88, which is Surefield's motion to strike

the Navratil expert report, and then --

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 94 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11:56

11:56

11:56

11:56

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:57

11:58

01:22

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

95

THE COURT: Give me one second.

MS. GLAUSER: Yep.

THE COURT: Thank you.

And Navratil is N-a-v-r-a-t-i-l.

MS. GLAUSER: Yes, Your Honor.

THE COURT: Okay. And -- okay. There's that. And?

MS. GLAUSER: The second is Surefield's motion to exclude

Malackowski which is Redfin's damages expert. That's Docket

100.

THE COURT: Okay. Okay. So why don't we do this? If we

can resume at 1:15 and then we'll -- I think I have a little

over -- about an hour and 15 minutes before my next pretrial

hearing. So let's make sure we get both of those done in that

time.

MS. GLAUSER: I think that will only leave outstanding,

just to note it for the Court, but Surefield's motion for

summary judgment of no invalidity which is Docket 89, we'll try

to do our best to be quick on the first two to see if we can

get it resolved to bring it up with Your Honor today. If not,

that would be the outstanding motion that exists after the

hearing today.

THE COURT: Okay. Okay. Very good.

MS. GLAUSER: Thank you, Your Honor.

(Recess taken from 11:57 to 1:22.)

THE BAILIFF: All rise.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 95 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:22

01:22

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:23

01:24

01:24

01:24

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

96

THE COURT: Thank you. You may be seated.

Okay. It's my understanding, if I recall from before the

break, it was suggested we take up what's at Docket 88 first;

is that correct?

MR. GOODPASTOR: Yes, Your Honor.

THE COURT: Okay. Happy to do that.

MR. GOODPASTOR: Thank you, Your Honor.

Chris Goodpastor for plaintiff Surefield.

THE COURT: Yes, sir.

MR. GOODPASTOR: The motion to strike the report of

Dr. Navratil actually had three sections. We're only going to

address one because the other two were, I think, informed by

your decisions on the motions in limine.

And the portion that we're going to address is the motion

to strike Attachment A to the report.

THE COURT: Yeah. I was talking to my clerks about that.

I don't understand why -- I'm not following -- I follow why

you're unhappy with -- I get attachment A, he didn't look at

it, he didn't really -- blah, blah, blah, blah. I get all

that.

Attachment A's not going to come into evidence. Are

you -- are you worried that he's going to say what's your basis

for that, and he's going to say Attachment A? I don't

understand why this is a fight. I don't get it.

MR. GOODPASTOR: We are worried about that. Because the

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 96 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:24

01:24

01:24

01:24

01:24

01:24

01:24

01:24

01:24

01:24

01:24

01:24

01:24

01:24

01:25

01:25

01:25

01:25

01:25

01:25

01:25

01:25

01:25

01:25

01:25

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

97

body of the report, Your Honor, doesn't address some of the

references that they've elected that are in Attachment A as --

THE COURT: So really what you're asking me to do is if

they ask him a question, how does the source code work or

how -- whatever -- how does this work? And you object and say,

Judge, that's not in his report. You don't want them to be

able to say it's in Attachment A in the original infringement

contentions. And the reason that you don't want that to happen

is because he didn't prepare those. All he did was look at

them. Is that a pretty fair summary?

MR. GOODPASTOR: That's exactly right, Your Honor.

THE COURT: Okay. So let me hear from counsel. Do you

intend to -- if you'll come to the podium.

Do you intend to ask any questions of your experts for

which the only basis would be what's in -- there's got to be a

reason you attached it at this point. So maybe their concern

is right.

Is there any question you're going to ask your expert

where the only basis he would have for giving that opinion is

the infringement contentions?

MR. STEVENS: Your Honor, Scott Stevens on behalf of

Redfin.

So it very well could be that the attachments provide

additional insight or cite to additional evidence in support of

arguments and positions taken in the body or the prose of the

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 97 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:25

01:25

01:25

01:25

01:25

01:25

01:26

01:26

01:26

01:26

01:26

01:26

01:26

01:26

01:26

01:26

01:26

01:26

01:26

01:26

01:26

01:26

01:26

01:26

01:26

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

98

report. So there's not some theory that will be found only in

the Appendix A. But it's entirely possible that there's a

piece of evidence or additional citations within prior art that

might be detailed in Attachment A for which we do intend to

solicit testimony at trial.

THE COURT: Well, why would attaching that -- attaching

those infringement contentions to the report allow your expert

to opine about what's in them?

Did he rely on them in his report? Does he cite to them

in his report?

Does -- I'm not -- I understand, I think, generally what's

going on, but I don't understand why we're having this fight at

this point. So help --

MR. STEVENS: Sure. To answer your question, yes, for

everything that we're actually going to be talking about at

trial, our expert did, in fact, cite to those sections.

THE COURT: Well, he's not going to be telling the jury

about infringement contentions.

MR. STEVENS: Invalidity. Sure.

THE COURT: I'm sorry. He's not going to be citing

invalidity contentions.

MR. STEVENS: Correct. And --

THE COURT: And so, again, I'm not certain why -- what the

fight is over.

MR. STEVENS: So let me just make up a hypothetical.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 98 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:26

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:27

01:28

01:28

01:28

01:28

01:28

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

99

THE COURT: Okay.

MR. STEVENS: Let's just say in the body of his report he

discussed a reference, talked through the critical parts of it,

you know, gave these overall theory, but Exhibit A had many

more cites to back up evidence or different ways of looking at

it. Just like a chart, you know, a pretty easy way to describe

obviously invalidity theories is in a chart.

And so it very well could be that in the body of his

report he explains why he believes the prior art shows

something in our theory of the invalidity argument and then

refers to the chart for there are five more examples of

disclosures.

THE COURT: How would he at trial refer to the chart?

MR. STEVENS: Oh, he won't refer to the chart, Your Honor.

I think the question would be, if I asked the expert a

question, then he says, I have two answers for you,

Mr. Stevens. One is such and such and, two, it's also shown in

Column 7, Lines 1 through 50, of this prior art reference.

It's possible that the first answer he gave comes right

from the body of his report and then the second answer was

additional evidence that was found within Attachment A, again,

for which he's adopted --

THE COURT: I guess where we're missing is it's not --

that's not a source of evidence that I would admit. The fact

that he is citing to infringement contentions that you all

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 99 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:28

01:28

01:28

01:28

01:28

01:28

01:28

01:28

01:28

01:28

01:28

01:28

01:28

01:28

01:28

01:28

01:29

01:29

01:29

01:29

01:29

01:29

01:29

01:29

01:29

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

100

prepared is not something I would allow into evidence.

MR. STEVENS: Correct. Let me try again.

THE COURT: Okay.

MR. STEVENS: My fault. Let me try again. The --

THE COURT: And it's probably me, and I'm just not

understanding, but I'm not understanding.

MR. STEVENS: So I think it's possible that we could

solicit a question from our expert where he points to a

particular line in a prior art reference. Not to our chart,

right? That's not going to happen. Where he points to a

particular section of a prior art reference.

THE COURT: Got it.

MR. STEVENS: That perhaps was only cited or quoted in the

chart in his report. So, again, on the stand of course he's

not going to speak at all to a chart or any of our invalidity

contentions. But he might say -- if I said, you know,

Dr. So-and-so, why do you say that this prior art reference

discloses such and such?

It's possible that he says, Mr. Stevens, there's two

answers to your question. The first answer is blah, blah,

blah, and the second answer, in addition, if you look three

pages further in the reference, it comes up again. It's

possible that the first part of his answer is in the prose of

his report and --

THE COURT: Okay. But the fact that it's in his report is

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 100 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:29

01:29

01:29

01:29

01:29

01:29

01:29

01:29

01:29

01:29

01:30

01:30

01:30

01:30

01:30

01:30

01:30

01:30

01:30

01:30

01:30

01:30

01:30

01:30

01:30

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

101

not going to come into --

MR. STEVENS: No.

THE COURT: I'm not following.

MR. STEVENS: Okay. I mean, so I'm talking about a prior

art reference. If an expert is speaking about a reference, not

about a chart, not about his report, right? What I think the

plaintiff's counsel intends to do is suggest that if I ask a

question that solicits an answer that refers to or quotes or

goes to a small little subset of a prior art reference where

that small subset of the prior art reference is included in

what was the chart to his report as opposed to being thoroughly

discussed in the body of the prose of his report, I'm assuming

that there's going to -- object to that. I think that's where

the fight lies, Your Honor.

THE COURT: And where in the report does your expert say

in the report -- my understanding is this was a late-attached

exhibit; is that right?

MR. STEVENS: I don't believe so, Your Honor.

THE COURT: So that may be part of my confusion as well.

Was the chart part of his expert report?

MR. MARTON: Yes.

THE COURT: And so it was like a glossary, like --

including this.

MR. MARTON: Yes.

MR. STEVENS: So that big old binder sitting next to

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 101 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:30

01:30

01:30

01:30

01:30

01:30

01:30

01:30

01:30

01:30

01:31

01:31

01:31

01:31

01:31

01:31

01:31

01:31

01:31

01:31

01:31

01:31

01:31

01:31

01:31

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

102

Ms. Wroblewski is only part of it, but it all came in at the

same time.

THE COURT: Now I understand. I'm overruling the

plaintiff's objection.

MR. STEVENS: Thank you, Your Honor.

THE COURT: I got it now.

MR. STEVENS: Your Honor, there was another aspect of this

that was not addressed by --

THE COURT: But so you know -- just so you'll know, when

you're on direct, the report is -- I can see no reason why the

report gets mentioned by an expert.

Now, on cross, if he says something different here than he

said in his report, I get that. But the report doesn't exist

on direct as far as I'm concerned, if that makes sense.

MR. DACUS: It does.

MR. STEVENS: I think it makes perfect sense, Your Honor.

THE COURT: Well, I thought so too, but --

(Laughter.)

THE COURT: -- I've been through a lot of trials now where

apparently there was confusion either on my part or the

lawyers, so I thought I'd say it in advance.

MR. STEVENS: If you see us putting Appendix A up at the

trial, you can remind me of what I just said, but it's not

going to happen.

THE COURT: It's like I tell the jury, for example, when I

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 102 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:31

01:31

01:31

01:31

01:31

01:31

01:32

01:32

01:32

01:32

01:32

01:32

01:32

01:32

01:32

01:32

01:32

01:32

01:32

01:32

01:32

01:32

01:32

01:32

01:33

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

103

tell them that they can't Google things or post things on

social media and they ask me why am I giving them that

instruction, and I tell them it's because people have Googled

things and posted things on social media during the trial.

That's why I have to tell them not to do that.

So okay. Now -- but thank you for that. It took longer

than it should have. Maybe I'm just slow after lunch, but I

understand what you're saying now.

What is the next issue we need to take up?

MR. STEVENS: There was another aspect of this motion that

I believe counsel indicated might have been subsumed by MILs.

That wasn't 100 percent clear to me.

And so if Your Honor would indulge me just for a moment, I

would like to seek clarification of that.

THE COURT: Sure.

MR. STEVENS: So in Dr. Navratil's report, there are

discussions about the Matterport system and its development

over time and how it existed at various points in time.

This is not in a section that relates to invalidity or

noninfringement. It's just in a section that is telling the

history of the Matterport system, what's happened over time and

then and now.

There were some objections to that in this particular

motion to strike. I don't believe that is subsumed within the

MIL, and I would seek some clarification with that, if I can,

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 103 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

01:33

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

104

from the Court.

THE COURT: Yeah. Help me out, which one you're talking

about.

MR. STEVENS: Yes, sir. So it's the same motion.

THE COURT: Yes.

MR. STEVENS: I believe it was THE second or third part in

the motion, the third part of the motion. It's under the sort

of heading of comparisons with the prior art.

THE COURT: Okay.

MR. STEVENS: But as we actually see it in the reports,

that's not exactly what's happening. And, again, that's why I

believe this to be a separate and distinct issue from the MIL

that you discussed earlier.

THE COURT: To the extent the plaintiff is asking me to

strike those comparisons, I'm going to deny that. I'm going to

overrule that motion.

MR. STEVENS: Thank you, Your Honor. Appreciate the

clarification.

THE COURT: Now, I have here that there was also an issue

about indefinite argument -- indefiniteness arguments that

contradict the Markman order. Is that an issue we need to take

up?

MR. STEVENS: It's the best type of issue because it's

moot, Your Honor.

THE COURT: Okay. Now, what motion next should we take

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 104 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:34

01:34

01:34

01:34

01:34

01:34

01:34

01:34

01:34

01:34

01:34

01:34

01:34

01:34

01:34

01:35

01:35

01:35

01:35

01:35

01:35

01:35

01:35

01:35

01:35

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

105

up?

MS. GLAUSER: With Your Honor's permission, I think we are

to Surefield's motion to exclude Malackowski's testimony which

is Docket 100.

THE COURT: Okay.

MS. GLAUSER: And I think as I foreshadowed before, a

number of the issues have already been addressed by Your

Honor's MIL rulings. So the two issues -- three issues that

I'd like to address from the Daubert motion are

Mr. Malackowski's economic comparability analysis with regard

to certain prior license agreements or license offers. And

then Mr. Malackowski's reliance on Matterport patents.

So turning to the first issue --

THE COURT: I think if I have this on my chart right, the

first issue's Part E. Is what I have down as Part E of the --

of the --

MS. GLAUSER: Your Honor, if I may grab the motion, I have

it written on my notes.

THE COURT: Okay. Yeah. It'd help me a lot if I can

track --

MS. GLAUSER: To the table of contents.

So the first would be Part B of the motion that

Malackowski's rate should be excluded because he performed no

comparability analysis regarding the 2014 Matterport agreement.

THE COURT: I don't have that on my chart at all, I don't

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 105 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:35

01:35

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

01:36

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

106

think. Let me see.

Okay. Got it. Okay.

MS. GLAUSER: The second is Part C which is that

Malackowski's rate should be excluded because he performed no

comparability analysis regarding Zillow's 2020 offer to

Surefield.

THE COURT: And do I -- and then with regards to the other

parts, you believe those have already been resolved by what

I've done in other -- on other issues?

MS. GLAUSER: Or at least that they'll be taken up at

trial when it comes up.

THE COURT: Okay. I got it.

MS. GLAUSER: Yes, Your Honor.

THE COURT: So let's take up Part C, Mr. -- it's

M-a-l-a-c-k-o-w-s-k-i -- Mr. Malackowski's --

MS. GLAUSER: Yes. I pronounce it "Malackowski," which I

think is correct.

MR. MARTON: That's correct.

THE COURT: Mr. Malackowski's testimony regarding Zillow's

2020 offer as corroborative. I'll hear from -- I'll hear from

you on that one.

MS. GLAUSER: Okay. Great. Your Honor, in

Mr. Malackowski's report, he performs no economic comparability

analysis between the Zillow 2020 offer and the hypothetical

license that would result here. I asked him at his deposition

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 106 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:37

01:37

01:37

01:37

01:37

01:37

01:37

01:37

01:37

01:37

01:37

01:37

01:37

01:37

01:37

01:37

01:38

01:38

01:38

01:38

01:38

01:38

01:38

01:38

01:38

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

107

what the basis was for his comparison between the two, and his

answer was simply that it's based on his years of experience

and the fact that a company like Zillow wouldn't make such an

offer if they didn't find that the patent lacked certain value

or at least that their offer would be reflective of the value.

And that kind of expert opinion with regard to a prior

license or prior license offer is routinely excluded as lacking

the required economic comparability.

There is zero evidence in Mr. Malackowski's report

attempting to analyze whether Zillow even used Surefield's

patents, whether it used it on one listing or a thousand

listings.

In addition, the Zillow offer was a lump-sum offer of

$300,000 to acquire the Surefield patents. And the Federal

Circuit has repeatedly ruled that when a hypothetical license

is to be structured as a running royalty, which both experts

agree here that the license in this case would be a running

royalty, that in order to rely on prior licenses that are

structured as a lump sum, the expert must provide some basis

for the jury to convert that lump-sum amount into a running

royalty.

And none of that economic analysis is set forth in

Mr. Malackowski's report and he confirmed at his deposition

that he, in fact, did not have any of that data.

And for that reason, in addition to the fact that it's

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 107 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:38

01:38

01:38

01:38

01:38

01:38

01:38

01:39

01:39

01:39

01:39

01:39

01:39

01:39

01:39

01:39

01:39

01:39

01:39

01:39

01:39

01:39

01:39

01:40

01:40

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

108

simply an offer and not actually an executed license, we

believe that Mr. Malackowski's testimony regarding this

particular Zillow offer should be excluded.

THE COURT: Response?

MR. DACUS: So at the outset, Your Honor, I think it's

important to make sure we have all the facts here. So Zillow

is a competitor to Redfin. Same business, they're in the

online real estate business.

Zillow made an offer that for the patents-in-suit, the

very patents that we're talking about here, to the patent owner

for 350,000. So we're not in a situation like a lot of the

cases they cite where we're talking about are the -- is the

technology similar? We're talking about an offer from someone

in the same shoes as Redfin for the very patents-in-suit here.

And what Mr. Malackowski says is that is a piece of

evidence, a relevant piece of evidence under the

Georgia-Pacific factors. Of course, under both 1 and 2 we're

supposed to look at licenses or other transactions that reflect

the value of the patents-in-suit. And so all Mr. Malackowski,

the expert, says is that is a piece of evidence that we should

look to to determine the value of the patents. It's no more

complicated than that. It's not determinative of his ultimate

royalty rate. But it is a piece of evidence to review.

Thank you, Your Honor.

THE COURT: I'm going to grant the motion on Part C.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 108 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:40

01:40

01:40

01:40

01:40

01:40

01:40

01:40

01:40

01:40

01:40

01:41

01:41

01:41

01:41

01:41

01:41

01:41

01:41

01:41

01:41

01:41

01:41

01:41

01:41

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

109

I'm going to deny the motion with regard to Part B.

And so what else do we have to take up?

MS. GLAUSER: The other portion, Your Honor, was Part G

which is Malackowski's testimony regarding Matterport's patent

portfolio.

And Your Honor has already ruled that third-party patents,

including the Matterport patents, aren't to come in unless the

parties first approach the bench. That's the ruling on

Surefield's Motion in Limine No. 16.

On this particular issue, though, we know how

Mr. Malackowski intends to use Matterport's patent portfolio.

Because in his expert report he states that Matterport has

40-plus patents and then further describes that many relate to

3D virtual tours and are --

THE COURT: Yeah. Let me hear from counsel -- I don't

know if it's Mr. Dacus or whoever -- on why these should be

allowed in.

MR. DACUS: So I'm sad to announce that this issue goes

directly to my recently-denied Daubert motion on apportionment,

Your Honor.

So as the Court knows, and we belabored this morning, for

apportionment, part of the thing that the plaintiff, from our

view, needs to apportion out is other people's patented

technology. So here this technology that Redfin purchases

comes from Matterport. Matterport has a number of its own

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 109 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:41

01:41

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:42

01:43

01:43

01:43

01:43

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

110

patents. And it's the plaintiff's burden to apportion that

patented technology out of the value of its reasonable royalty.

Which, of course, we believe it's not done.

So that would be the reason -- and I want to be clear. No

one is going to say -- and I know this is the Court's concern

that we do not infringe because Matterport has patents. This

is an issue that relates to apportionment.

THE COURT: Okay. I'm going to grant the motion with

respect to excluding that, the Matterport, M-a-t-t-e-r-p-o-r-t,

patent portfolio as well.

Are there any issues to take up?

MS. GLAUSER: It's a related issue to Malackowski's

testimony, but it's actually part of Docket 82 rather than

Docket 100.

And Docket 82 is Surefield's motion to exclude certain

expert opinion and testimony relating to noninfringing

alternatives.

THE COURT: I'm going to deny that.

Any other motions?

MR. GOODPASTOR: I don't believe so, Your Honor. We can

rest on the papers on Docket 89.

THE COURT: Okay. Give me one second and let me make sure

I have 89. Oh, here we go.

Court's going to deny that motion as well.

Is there anything else we need to take up?

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 110 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:43

01:43

01:43

01:43

01:43

01:43

01:43

01:43

01:43

01:43

01:43

01:43

01:45

01:45

01:45

01:45

01:45

01:46

01:46

01:46

01:46

01:46

01:46

01:46

01:46

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

111

MS. GLAUSER: Not from plaintiff, Your Honor. Thank you

very much.

MR. DACUS: Not from our perspective.

THE COURT: I have plaintiff's motion for leave to file a

motion for summary judgment on PTAB decisions. I'm going to

deny that as well.

I think that gets everything, correct?

MR. DiNOVO: I think that's right, Your Honor.

MR. DACUS: Yes, Your Honor.

THE COURT: Okay.

(Off-the-record bench conference.)

THE COURT: So my law clerks are much more worried about

your calendars than I am. I'm kidding. I'm very concerned

too.

Here's the problem we're having with my schedule. We

think that the trial the week before y'all's is going to go

over into y'all's trial week. And then that week, y'all's

trial week, I have to go on Thursday and Friday to the Fifth

Circuit conference. So what I would recommend we do is we set

this for May 9th, the following week. And you all would have

the whole week.

MR. DACUS: May I raise one issue, Your Honor?

THE COURT: Sure.

MR. DACUS: I apologize. My youngest child, my daughter,

is graduating from that maroon university about 90 miles down

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 111 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:46

01:46

01:46

01:46

01:46

01:46

01:46

01:47

01:47

01:47

01:47

01:47

01:47

01:47

01:47

01:47

01:47

01:47

01:47

01:47

01:47

01:47

01:47

01:47

01:47

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

112

the road on that Friday the 13th. And I would desperately like

to be there.

THE COURT: Well, I can --

MR. DACUS: I know you don't hold that institution in as

high a regard as you should, but my wife does.

THE COURT: Well, my wife is an Aggie and my stepson

starts at A&M in August. So I will take no position. However,

we will -- I can accommodate making sure you're -- what time is

it?

MR. DACUS: It's at 10:00 a.m. on Friday.

THE COURT: Oh. 10:00 a.m. on Friday. What do we have

the following week?

(Off-the-record bench conference.)

MR. DACUS: And I'm not suggesting that we can't do

anything that week, Your Honor. I want to be clear, I'm just

suggesting --

THE COURT: No, no, no. I understand.

MR. DACUS: -- I'd like to be in College Station at

10:00 a.m. on Friday morning.

THE COURT: I couldn't -- I fully understand that. How

many patents are in -- four patents in the case, right? One

plus three.

MR. DACUS: One thing we could --

(Off-the-record bench conference.)

THE COURT: Okay. Mr. Dacus, if you weren't my favorite,

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 112 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:48

01:48

01:48

01:48

01:48

01:48

01:48

01:48

01:48

01:48

01:48

01:48

01:48

01:48

01:48

01:48

01:49

01:49

01:49

01:49

01:49

01:49

01:49

01:49

01:49

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

113

I would -- no. I would do this for anyone who's at counsel

table. What we'll plan on doing is we'll start the 9th. We

will go as long as we need to through the 12th. And then we

will resume on Monday the 16th. Does that work?

MR. DACUS: It certainly does for me, Your Honor. I very

much appreciate the accommodation.

THE COURT: Okay. Now, what may happen, which I don't

think you'll necessarily need to be here for, is I might want

to do the jury charge on the 13th. But I assume one of the

assembled people on your team could help me with the jury

charge if necessary.

MR. DACUS: My impression of the jury charge is the smart

lawyers are required and that probably excludes me from the

room.

THE COURT: Unfortunately, for the smart lawyers, they

have to talk to me, and so -- which is where the real -- is the

real gap.

So we will start on the 9th and go through the 12th.

Who -- when are we picking the jury?

(Off-the-record bench conference.)

THE COURT: Okay. So it's clear, while I'm at the Fifth

Circuit conference on Thursday, the 5th, we'll be picking the

jury on Thursday. You all will be picking the jury on

Thursday, the 5th, with one of my two magistrate judges.

And so that means that on the 9th at 9:00 a.m., whatever

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 113 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:49

01:49

01:49

01:49

01:49

01:49

01:49

01:49

01:50

01:50

01:50

01:50

01:50

01:50

01:50

01:50

01:50

01:50

01:50

01:50

01:50

01:50

01:50

01:50

01:50

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

114

they do, look at the video, get the charge read, all that stuff

will happen. And on the 9th at 9:00 a.m., we'll be giving

opening arguments.

Yes, sir.

MR. MARTON: Your Honor, this schedule works fine with the

attorneys on this side; however, we have to confirm with our

experts and witnesses.

THE COURT: Well, I would tell them that they probably

need to be here.

MR. MARTON: All right.

(Laughter.)

THE COURT: So -- and by the way, I don't mean to be

cavalier. If we need to -- if they've made commitments where

we need to do something out of order or do something else, let

me know. I also have -- I also allow, if it's -- for any

witness, they can attend by Zoom as well. And so...

Anything else we need to take up?

MR. DiNOVO: Nothing from plaintiff.

MR. DACUS: No, Your Honor. Thank you.

THE COURT: If you don't know, we'll have -- you'll have

30 minutes per side for opening arguments.

When I started this job, one of the statements I made --

most of what I said before I started this job has not been long

lasting. I said I would never put time limits on the lawyers

during the trial. That lasted exactly one trial.

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 114 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:51

01:51

01:51

01:51

01:51

01:51

01:51

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

115

So I look forward to seeing you all. I look forward to

seeing you all on the 9th. And if anything comes up between

now and then --

Regan is this your -- ok.

If anything else between now and then, check with Regan

and we can help y'all out.

(Hearing adjourned at 1:51 p.m.)

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 115 of 116
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

KRISTIE M. DAVIS, OFFICIAL COURT REPORTER

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

116

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 30th day of March 2022.

/s/ Kristie M. Davis

KRISTIE M. DAVIS

Official Court Reporter

800-Franklin Avenue

Waco, Texas 76701

(254) 340-6114

kmdaviscsr@yahoo.com

Case 6:20-cv-00376-ADA Document 185 Filed 03/30/22 Page 116 of 116