Case Clip(s) Detailed Report

Qualcomm

Saturday, January 05, 2019, 10:22:48 PM

Case 5:17-cv-00220-LHK Document 1161-2 Filed 01/07/19 Page 1 of 19
Case Clip(s) Detailed Report

Saturday, January 05, 2019, 10:22:48 PM

Qualcomm

Blumberg, Ira (Vol. 01) - 04/20/2018 1 CLIP (RUNNING 00:54:55.293)

ATTORNEYS' EYES ONLY*** ...

IB 38 SEGMENTS (RUNNING 00:54:55.293)

1. PAGE 13:06 TO 13:13 (RUNNING 00:00:15.459)

 06 BY MR. HOLTZ: 

 07 Q. Good morning. We met briefly before the 

 08 deposition started. So first of all, could you just 

 09 state your name for the record. 

 10 A. Ira Blumberg. 

 11 Q. And you're an attorney, correct, 

 12 Mr. Blumberg? 

 13 A. I am. 

2. PAGE 15:23 TO 16:17 (RUNNING 00:01:12.315)

 23 Q. Could you briefly describe your job 

 24 functions and responsibilities with Lenovo? 

 25 A. Sure. When I was hired, and up until 

 00016:01 about six months ago, I was the vice president of 

 02 intellectual property, which included responsibility 

 03 for patents, copyrights, trade secrets. At some 

 04 points during my tenure, trademarks as well; at other 

 05 points we had other attorneys responsible for 

 06 trademarks. 

 07 But putting trademarks aside, I was 

 08 responsible for overseeing prosecution, maintenance, 

 09 and -- and management of our patent portfolio, of 

 10 copyrights, of trade secrets, and also for all 

 11 licensing engagements around those forms of 

 12 intellectual property, as well as giving advice to 

 13 both business clients and business attorneys on 

 14 intellectual property matters. 

 15 About six months ago, in addition to those 

 16 responsibilities, I took over responsibility for 

 17 intellectual property litigation as well. 

3. PAGE 29:14 TO 30:07 (RUNNING 00:01:14.250)

 14 Q. And what do you recall discussing at this 

 15 meeting with the FTC regarding pricing, as it relates 

 16 to Qualcomm's patent licensing? 

 17 A. I don't remember anything specifically, 

 18 other than talking about the -- the pricing that -- 

 19 that we had been negotiating. 

 20 Q. When you use the term "pricing," are you 

 21 talking about royalty rates? 

 22 A. Yes. 

 23 Q. Okay. Did you offer any views or opinions 

 24 about the pricing or the royalty rates that Qualcomm 

 25 was requesting? 

 00030:01 A. I don't recall specifically, but I may 

 02 have expressed the view that I thought they were -- 

 03 the rates were high. 

 04 Q. Why did you think the rates were high? 

 05 A. Probably because of my experience in the 

 06 industry and various judicial decisions that had been 

 07 handed down over the -- the last several years. 

4. PAGE 30:18 TO 31:12 (RUNNING 00:01:05.618)

 18 Q. And regarding your experience in the 

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 19 industry, what is it about that experience that led 

 20 you to let the FTC know you thought Qualcomm's 

 21 royalty rates were high? 

 22 A. Various aspects of the -- the licenses 

 23 that Qualcomm negotiates, including long-term 

 24 licenses that don't take into account changes in the 

 25 size of their portfolio but fix the royalty rates, 

 00031:01 and fix those royalty rates at a level higher than 

 02 most of the other licensors in -- in the field. 

 03 Q. So do you believe that Qualcomm's royalty 

 04 rates are higher than other licensors in the field? 

 05 A. Yes, I do. 

 06 Q. Are they higher than all other licensors 

 07 in the field? 

 08 A. I don't know what all other licensors in 

 09 the field charge, but the ones that I do know of 

 10 are -- are lower. 

 11 Q. Which ones do you know of that are lower? 

 12 A. Nokia, Ericsson, InterDigital. 

5. PAGE 42:06 TO 42:12 (RUNNING 00:00:17.971)

 06 Do you know if Qualcomm's portfolio of 

 07 2G and 3G patents has either grown or gotten smaller 

 08 since the time the agreement you have in mind was 

 09 signed? 

 10 A. Since I'm not even sure when that 

 11 agreement was signed, no, I don't have a -- a good 

 12 sense of it. 

6. PAGE 44:07 TO 45:16 (RUNNING 00:01:50.728)

 07 Q. Okay. Has -- has Lenovo claimed in 

 08 negotiations with Qualcomm that this agreement 

 09 constitutes patent misuse? 

 10 A. I don't have a specific recollection, but 

 11 I would guess probably so. 

 12 Q. But -- but you don't know with any 

 13 certainty? 

 14 A. Again, I can't pinpoint the meeting, but I 

 15 believe I probably have expressed that view to at 

 16 least one of Qualcomm's representatives over time. 

 17 Q. Do you recall what the response of 

 18 Qualcomm's representative to your expressing that 

 19 view was? 

 20 A. Not specifically, but my recollection is 

 21 that they did not express a lot of concern that we 

 22 were going to challenge them. 

 23 Q. If you believe that this license 

 24 constitutes patent misuse, why have you not brought a 

 25 legal challenge? 

 00045:01 A. My understanding is that Qualcomm has in 

 02 the past retaliated against customers who have 

 03 attempted to challenge its legal terms, by either 

 04 delaying or cutting off supply of chips. 

 05 Q. What's the basis for that understanding? 

 06 A. Two things. One, when we acquired 

 07 Motorola, I had conversations with the Motorola legal 

 08 team where they described having that experience 

 09 directly. And the second is when we objected to some 

 10 of the other terms in this license and suggested we 

 11 were contemplating terminating it, the response we 

 12 got from Qualcomm was, "Feel free, but then we won't 

 13 sell you any more chips." 

 14 Q. So Qualcomm told you if you terminated the 

 15 license, it wouldn't sell Lenovo any more chips? 

 16 A. That's correct. 

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7. PAGE 45:17 TO 45:21 (RUNNING 00:00:14.637)

 17 Q. Did Qualcomm ever say, if Lenovo brings a 

 18 challenge to the license, claiming patent misuse, it 

 19 would terminate -- or it would refuse to sell Lenovo 

 20 any chips? 

 21 A. I don't recall that specifically. 

8. PAGE 70:24 TO 72:08 (RUNNING 00:02:01.745)

 24 Q. Sure. So you mentioned that there were 

 25 some negotiations that resulted in an amendment to 

 00071:01 the licensing agreement between Lenovo and Qualcomm, 

 02 correct? 

 03 A. Yes. 

 04 Q. When was that amendment, or whatever form 

 05 it took, signed? 

 06 A. There were a series of amendments that 

 07 were negotiated between 2013 and 2016. I don't 

 08 recall the date that the last one was signed. 

 09 Q. During those negotiations, did Lenovo ever 

 10 say or propose that it would just go buy its chips 

 11 somewhere else unless Qualcomm agreed to lower its 

 12 licensing rates? 

 13 A. Not to the best of my knowledge, but I 

 14 wasn't involved in all of the negotiations. 

 15 Q. Okay. Did you ever make that point known 

 16 to Qualcomm? 

 17 A. Not that I recall. 

 18 Q. Why not? 

 19 A. My understanding from our business 

 20 colleagues was that at least with respect to high-end 

 21 phones, at the time that we're talking about, 

 22 Qualcomm had the best chipset available and that it 

 23 would be difficult to convince consumers and carriers 

 24 to spend for a high-end phone if it did not have 

 25 the -- the features, functions, and -- and 

 00072:01 performance that the Qualcomm chip provided. 

 02 Q. Did the business personnel who told you 

 03 this tell you that there was absolutely no 

 04 alternative? If we didn't use Qualcomm's chip, we 

 05 couldn't market a phone? 

 06 A. I believe at least on one occasion I did 

 07 have that impression from the business people, at 

 08 least with respect to the high end of the market. 

9. PAGE 83:08 TO 84:03 (RUNNING 00:01:17.609)

 08 Q. Sure. Has anybody within Lenovo or 

 09 Motorola ever said to you, since the signing of this 

 10 amendment, "You can't terminate that agreement 

 11 because we need Qualcomm's chips"? 

 12 A. Yes. 

 13 Q. Who? Who said that to you? 

 14 A. Two individuals that I can recall 

 15 specifically. One is Christian Eigen, who is CFO of 

 16 one of our subsidiaries, Medion, and also for Lenovo, 

 17 the head of strategic alliances. 

 18 The other individual was Amar -- I can 

 19 never pronounce his last name. He was the previous 

 20 head of the mobile business group, and he served in 

 21 that role until the -- the end of last year. 

 22 Q. Do you recall what Motorola chips either 

 23 Mr. Eigen or Amar told you Lenovo or Motorola needed 

 24 from Qualcomm? 

 25 A. They didn't mention specific chips. They 

 00084:01 simply said they could not risk the supply disruption 

 02 that would result very likely from terminating the 

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 03 agreement. 

10. PAGE 92:08 TO 92:19 (RUNNING 00:00:44.070)

 08 Let me ask you this: During any of your 

 09 negotiations with Qualcomm -- by "your," I mean 

 10 Lenovo's and Motorola's -- has Qualcomm ever said, to 

 11 your knowledge, "You either need to buy all your 

 12 chips from us or we're not selling you any chips"? 

 13 A. No, I don't have a knowledge of such a 

 14 communication. 

 15 I will say that in the course of 

 16 negotiating some of these amendments, Qualcomm 

 17 offered what appeared to be substantial financial 

 18 incentives for either exclusivity or near 

 19 exclusivity. 

11. PAGE 92:20 TO 93:01 (RUNNING 00:00:16.771)

 20 Q. But no agreement was ever signed that 

 21 included such a term, correct? 

 22 A. No. 

 23 Q. Sorry. Just to make sure, because I got a 

 24 double negative in there: Was any agreement ever 

 25 signed that included such a term? 

 00093:01 A. Not to my knowledge. 

12. PAGE 130:23 TO 132:07 (RUNNING 00:01:43.340)

 23 Q. Now, you mentioned earlier when we were 

 24 discussing that at least in your view, the proper 

 25 royalty base for standard-essential patents would be 

 00131:01 the cost of the modem chip; did I get that right? 

 02 A. Or the smallest saleable patent practicing 

 03 unit, as the case may be. 

 04 Q. Understood. And in your view, in a cell 

 05 phone, what is the smallest saleable practice -- 

 06 patent practicing unit? 

 07 A. With respect to standard-essential 

 08 patents, I believe it is either the modem chip or the 

 09 modem and the CPU together. 

 10 Q. Which one? 

 11 A. Depends on the patent. 

 12 Q. Now, in your view, is there anything 

 13 improper -- improper or inappropriate or contrary to 

 14 a FRAND obligation for a standard-essential patent 

 15 holder to only license its patents to cellular device 

 16 makers, rather than to chip makers? 

 17 MR. KEHL: Object to the form of the 

 18 question. 

 19 THE WITNESS: My interpretation of FRAND 

 20 obligations does suggest that the licensor has 

 21 an obligation to license any company that 

 22 requests a license, whether it is a chip 

 23 company, an end device company, or anything in 

 24 between. 

 25 

 00132:01 BY MR. HOLTZ: 

 02 Q. What's that understanding based on? 

 03 A. My experience in the industry and my 

 04 reading of the rules. 

 05 Q. Which rules? 

 06 A. The various organizations like ETSI, IEEE, 

 07 and so on. 

13. PAGE 132:08 TO 132:10 (RUNNING 00:00:06.579)

 08 Q. All right. Do IEEE and ETSI have 

 09 identical rules with respect to that? 

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 10 A. No, they don't. 

14. PAGE 145:23 TO 146:08 (RUNNING 00:00:23.592)

 23 If we could just start by circling back to 

 24 some of your background information. Would it be 

 25 fair to say that you've been involved in -- in 

 00146:01 licensing negotiations for at least the past 20 years 

 02 of your career? 

 03 A. Yes. 

 04 Q. And approximately how many licensing 

 05 negotiations would you estimate that you've been 

 06 involved in? 

 07 A. I've lost count, but certainly more 

 08 than 100. 

15. PAGE 148:25 TO 149:13 (RUNNING 00:00:37.759)

 25 Do you think the running royalty rate that 

 00149:01 Lenovo pays to Qualcomm is compliant with Qualcomm's 

 02 FRAND obligations? 

 03 MR. HOLTZ: Objection. Calls for a legal 

 04 conclusion. 

 05 THE WITNESS: I -- I don't, based on -- as 

 06 I mentioned this morning -- just the royalty 

 07 demands, not even accounting for the actual 

 08 royalty deals that other patent holders in the 

 09 space have. Based on the negotiations I've had 

 10 with companies like Nokia, Ericsson, 

 11 InterDigital, and other significant patent 

 12 holders, Qualcomm's rates are substantially 

 13 higher. 

16. PAGE 150:13 TO 150:19 (RUNNING 00:00:15.413)

 13 Q. Was there ever a time during your 

 14 employment at Lenovo that you did not hold the view 

 15 that the running royalty rate that Lenovo pays to 

 16 Qualcomm was inappropriate? 

 17 A. No. As far as I can remember, from the 

 18 moment I discovered what it was through today, I felt 

 19 it was excessive. 

17. PAGE 155:12 TO 156:11 (RUNNING 00:01:30.639)

 12 Q. Earlier today you discussed your 

 13 understanding that Lenovo requires Qualcomm modem 

 14 chips for Lenovo's high-end phones; is that correct? 

 15 A. Yes. 

 16 Q. Has there ever been a time, since you've 

 17 been employed at Lenovo, when you had a different 

 18 understanding? 

 19 A. Not that I can recall. 

 20 Q. Mr. Blumberg, sitting here today, can you 

 21 think of any options for Lenovo to negotiate a 

 22 royalty with Qualcomm that Lenovo feels is -- is 

 23 appropriate, while Lenovo requires Qualcomm's modem 

 24 chips? 

 25 MR. HOLTZ: Objection. Calls for expert 

 00156:01 opinion. 

 02 THE WITNESS: Not offhand. Again, it's my 

 03 understanding that at this point, Motorola is -- 

 04 is focused on high-end phones, and that Motorola 

 05 continues to believe that the only viable path 

 06 to a high-end phone is a Qualcomm chipset. 

 07 And while that's the case, we do not feel 

 08 comfortable terminating the license. In the 

 09 absence of the ability to terminate the license, 

 10 we don't feel we have much negotiating power to 

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 11 set new terms with Qualcomm. 

18. PAGE 156:13 TO 156:14 (RUNNING 00:00:06.454)

 13 Q. Mr. Blumberg, if I could refer you back 

 14 to QX3655. 

19. PAGE 156:16 TO 158:09 (RUNNING 00:02:25.537)

 16 Q. And this is the June 28th, 2013, amendment 

 17 to the subscriber unit license agreement between 

 18 Qualcomm and Lenovo; is that right? 

 19 A. Yes. 

 20 Q. And I believe you testified earlier today 

 21 that this agreement was signed in the context of the 

 22 negotiation in which you were told that if Lenovo did 

 23 not have a license, it would be unable to purchase 

 24 modem chips from Qualcomm; is that correct? 

 25 A. Yes. 

 00157:01 Q. Could you please tell me everything you 

 02 recall about what you were told regarding Lenovo's 

 03 ability to purchase Qualcomm modem chips without a 

 04 license? 

 05 A. My direct involvement in the negotiation 

 06 was an initial meeting with Eric Reifschneider, who 

 07 at that time Qualcomm's head of licensing. At that 

 08 initial meeting, we explained that we were 

 09 contemplating terminating the license through 

 10 whatever mechanism we thought was applicable. And 

 11 Mr. Reifschneider was very calm about it, and said 

 12 that we should feel free to do that, but if we did, 

 13 we would no longer be able to purchase Qualcomm 

 14 chips. 

 15 I don't remember the exact conversation 

 16 that followed, but I did -- because I was so 

 17 surprised by that assertion, I did ask some follow-up 

 18 questions and -- and was assured that he really meant 

 19 it, and that it was Qualcomm's policy not to sell 

 20 chips unless you had a then-in-force patent license. 

 21 Subsequent to that meeting, my colleague, 

 22 Ms. Tsirigotis, engaged in much more substantive 

 23 negotiations, which I believe led to this amendment 

 24 and the subsequent amendments. And she engaged with 

 25 members of Mr. Reifschneider's licensing department. 

 00158:01 And it's my understanding from Ms. Tsirigotis that 

 02 that same assertion was repeated numerous times 

 03 during the negotiation of these amendments by the 

 04 licensing staff at Qualcomm. 

 05 Q. And so this meeting with Mr. Reifschneider 

 06 would have taken place sometime before June 28th, 

 07 2013? 

 08 A. It was in the spring of 2013, but I don't 

 09 remember the exact date. 

20. PAGE 158:21 TO 161:21 (RUNNING 00:04:12.571)

 21 Q. And how did Mr. Reifschneider's statement, 

 22 that Lenovo would be unable to purchase Qualcomm 

 23 modem chips without a license, impact your assessment 

 24 of Lenovo's options in the licensing negotiation? 

 25 A. After checking with our business people 

 00159:01 and confirming that they definitely needed access to 

 02 Qualcomm chips, it was clear that terminating the 

 03 agreement and risking lack of supply was not an 

 04 option. And so we had to negotiate basically with 

 05 one hand tied behind our back, because we did not 

 06 have the option to walk away from the deal, which is 

 07 why we were unable to get any movement on pricing, 

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 08 and we felt reasonably lucky to be able to at least 

 09 hold the line on which patents got licensed back to 

 10 Qualcomm. 

 11 Q. And when you say much movement on pricing, 

 12 you're referring to the running royalty rate to 

 13 Qualcomm? 

 14 A. That's correct. 

 15 Q. Is it your experience in licensing 

 16 negotiations with licensors other than Qualcomm that 

 17 there is movement on pricing in licensing 

 18 negotiations? 

 19 A. Absolutely. In the absence of the 

 20 exercise of extralegal market power, when you're in a 

 21 patent licensing negotiation, if one of the parties 

 22 disagrees on a major term, like pricing, the parties 

 23 have the ability to walk away and settle the matter 

 24 in any number of other ways, including agreeing to 

 25 disagree and -- and not engaging further, mediation, 

 00160:01 arbitration, or litigation, all of which may result 

 02 in significant changes to the terms the parties are 

 03 entitled to. 

 04 But in the absence of any reasonable 

 05 dispute resolution alternatives, you can't negotiate 

 06 very effectively, because the alternatives are agree 

 07 or you're out of that business. 

 08 Q. To be clear, when you -- when you just 

 09 said agree or you're out of the business, are you 

 10 referring to -- 

 11 A. I'm referring to the fact that in the 

 12 Qualcomm situation, if we couldn't have access to the 

 13 Qualcomm chips, then the market segment that required 

 14 high-end phone chips for high-end phones would be 

 15 foreclosed. 

 16 Q. And referring back to QX3655, on page 2, 

 17 there's a section titled "Termination," at 13.5.1. 

 18 Do you see that? 

 19 A. I do. 

 20 Q. And is this the -- the termination for 

 21 provision convenience that you've referred to in your 

 22 testimony throughout the day? 

 23 A. It is. 

 24 Q. And you've testified that Lenovo has never 

 25 exercised the termination for convenience provision 

 00161:01 in its license with Qualcomm; is that correct? 

 02 A. That is correct. 

 03 Q. And why has Lenovo never exercised the 

 04 termination for convenience provision in its license 

 05 with Qualcomm? 

 06 A. As I mentioned, I think earlier today, on 

 07 those occasions when it was discussed or considered, 

 08 the response from our business was always, we can't 

 09 risk the supply. So it's not a viable option, 

 10 because we don't know whether Qualcomm would follow 

 11 through on their threat to cut off supply, but we 

 12 can't take that risk. 

 13 Q. And sitting here today, can you think of 

 14 any point when it would have been a viable option to 

 15 take the risk to terminate the Qualcomm license? 

 16 MR. HOLTZ: Objection. Lacks foundation. 

 17 THE WITNESS: Not to the best of my 

 18 recollection. I believe that either Lenovo or 

 19 Motorola, or both, were sufficiently dependent 

 20 on Qualcomm chips that it was not a viable 

 21 alternative. 

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21. PAGE 166:15 TO 167:01 (RUNNING 00:00:48.942)

 15 Q. And CX2093 bears Bates 

 16 MOTO-QUALSUB-01102003. And I'd like to refer you to 

 17 the first e-mail in the -- in the chain, so the last 

 18 e-mail as it appears in the document, which is from 

 19 Mr. Offer, dated December 16th, 2015. Do you see 

 20 that? 

 21 A. Yes, it looks like it spans from the first 

 22 page to the -- or does it? I'm trying to see where 

 23 it starts. 

 24 Ah. The very beginning is just at the 

 25 bottom of page 1, and then it continues on page 2. 

 00167:01 Yes. 

22. PAGE 169:07 TO 170:16 (RUNNING 00:01:48.851)

 07 Q. And so CX2093 reflects discussion of a 

 08 call involving you, Ms. Tsirigotis, Mr. Offer, and an 

 09 Eric, regarding the CPLA; is that right? 

 10 A. And that would have been Eric 

 11 Reifschneider. 

 12 Q. That's my next question. Thank you. 

 13 And in -- in item 3, the -- the text goes 

 14 on to read: "On that call, Mr. Reifschneider once 

 15 more made another threat about continued chip supply 

 16 if we do not have a license." 

 17 Do you see that? 

 18 A. I do. 

 19 Q. Do you recall Mr. Reifschneider making a 

 20 threat about continued chip supply if Lenovo does not 

 21 have a license in the December 2015 time frame? 

 22 A. I can't say specifically that I do 

 23 remember it. He -- he certainly made that threat to 

 24 me more than once, so this could have been one of 

 25 those occasions, but I don't recall. 

 00170:01 Q. And on how many occasions are -- withdraw 

 02 the question. 

 03 About how many occasions do you recall 

 04 Mr. Reifschneider making a threat about continued 

 05 chip supply if Lenovo did not have a license? 

 06 A. I'd say at least two or three. 

 07 And -- and just a little bit more on this 

 08 point, I think, again -- it's a little bit hazy, but 

 09 I think this may have been specifically in the 

 10 context of pressuring us to sign the China license. 

 11 We were one of the last Qualcomm customers 

 12 to sign the China license, because we had additional 

 13 terms that we were insisting on. And I think, again, 

 14 this threat to supply was used to -- to push us 

 15 towards caving on some terms and signing the China 

 16 license. 

23. PAGE 171:12 TO 175:03 (RUNNING 00:04:54.129)

 12 (Exhibit CX2079 was marked for identification.) 

 13 BY MR. KEHL: 

 14 Q. And CX2079 bears Bates 

 15 LENOVO-QUALSUB-00013373. 

 16 And I'd like to refer you to an e-mail 

 17 from you, that begins on the bottom of page 4 of the 

 18 exhibit and carries over to page 5. Do you see that? 

 19 A. I do. 

 20 Q. And in this e-mail, you write that -- in 

 21 the second sentence -- "Lenovo's strongest leverage 

 22 in discussions with Qualcomm is Lenovo's threat to 

 23 terminate the license with Qualcomm and cease paying 

 24 Qualcomm any royalties." 

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 25 Do you see that? 

 00172:01 A. Yes. 

 02 Q. And your e-mail goes on to say, "However, 

 03 there is a concern. Qualcomm has threatened to stop 

 04 selling its chips to Lenovo if Lenovo terminates the 

 05 license." 

 06 Do you see that? 

 07 A. Yes. 

 08 Q. Do you understand that to be a reference 

 09 to the threat that Mr. Reifschneider has made that 

 10 you discussed earlier today? 

 11 A. I do. 

 12 Q. And then the last sentence of your 

 13 e-mail -- last sentence of this paragraph in your 

 14 e-mail reads: "Thus, before Lenovo terminates its 

 15 license with Qualcomm, we must ensure that Lenovo has 

 16 a safe supply of chips necessary for its ongoing 

 17 phone production." 

 18 Do you see that? 

 19 A. Yes. 

 20 Q. Do you recall advising Mr. Eigen and 

 21 others at Lenovo of the need for assurance of safe 

 22 supply of modem chips before terminating the license 

 23 with Qualcomm? 

 24 A. This e-mail certainly refreshes my 

 25 recollection on that point, yes. 

 00173:01 Q. And -- and were you giving that advice for 

 02 the same reasons you've testified to earlier today? 

 03 A. Yes. I -- I believe that Qualcomm would 

 04 make good on their threat, and therefore, I didn't 

 05 want to be in a position of -- of advocating a 

 06 position that would ultimately leave our business 

 07 without necessary supply. 

 08 Q. And then I'd like to refer you to another 

 09 e-mail from you, Mr. Blumberg, on page 2 of this 

 10 e-mail. 

 11 A. Yes. 

 12 Q. And in the last paragraph, you have a 

 13 sentence that begins, "In particular, what would 

 14 Lenovo do if Qualcomm and/or MediaTek experienced a 

 15 natural disaster that prevented it from delivering 

 16 chips for three-plus months? The legal situation 

 17 Lenovo is facing is quite similar, as there is a risk 

 18 Lenovo could lose its supply of chips for a 

 19 substantial period of time." 

 20 Do you see that? 

 21 A. I do. 

 22 Q. Could you please just describe what you 

 23 meant by that? 

 24 A. I think, in this context, I was trying to 

 25 communicate to our procurement department the risk of 

 00174:01 losing our supply, and the fact that even if we took 

 02 the most drastic legal action possible, and were 

 03 successful, it could be at least three months before 

 04 we could legally force Qualcomm or another supplier 

 05 to continue supplying chips to us. 

 06 And so I was trying to put it in the 

 07 context of a similar situation with a natural 

 08 disaster, like an earthquake, that would shut down a 

 09 supplier's factory. 

 10 Q. You also reference MediaTek in your 

 11 e-mail. Do you see that? 

 12 A. I do. 

 13 Q. Do you recall how MediaTek factored into 

 14 these discussions in -- in the 2013 time frame? 

 15 A. I believe it was my understanding at the 

 16 time that Qualcomm had actually provided a patent 

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 17 license to MediaTek. I don't remember what the 

 18 financial terms were, but one of the more interesting 

 19 terms of that license that Qualcomm -- patent license 

 20 that Qualcomm had granted to MediaTek was the 

 21 requirement that MediaTek was only authorized to sell 

 22 chips to those companies that had a license with 

 23 Qualcomm. 

 24 And I believe it was our expectation that 

 25 if we terminated our license with Qualcomm, not only 

 00175:01 would Qualcomm cut off our supply, but Qualcomm would 

 02 also exercise its right basically to enjoin MediaTek 

 03 from supplying us as well. 

24. PAGE 175:23 TO 177:07 (RUNNING 00:01:58.949)

 23 Q. And just with respect to MediaTek 

 24 generally, as a supplier, did you ever hear from the 

 25 business people with whom you've interfaced that 

 00176:01 MediaTek would be an option for Lenovo to replace 

 02 Qualcomm for modem chips in high-end phones? 

 03 A. No. And -- and clearly the issue here 

 04 was, we were worried not only about losing access to 

 05 Qualcomm chips for high end, we were also worried 

 06 about losing access to MediaTek for midrange and 

 07 low-end phones. 

 08 Q. And to be clear, the -- the concern about 

 09 losing access to MediaTek chips for low-end phones 

 10 was animated by your understanding of an agreement 

 11 between Qualcomm and MediaTek. Is that right? 

 12 A. That's correct. 

 13 Q. And then -- I'm just referring back to 

 14 your e-mail that begins on page 4 of CX2079. 

 15 A. Yes. 

 16 Q. And your sentence that reads: "Further, 

 17 Qualcomm has threatened to force its chip licensees, 

 18 including MediaTek, to stop selling mobile phone 

 19 chips to Lenovo if Lenovo terminates its license." 

 20 Do you see that? 

 21 A. I do. 

 22 Q. Could you please tell me everything that 

 23 you recall about that threat? 

 24 A. I believe it was in the same conversation 

 25 with -- with Eric Reifschneider, where he said not 

 00177:01 only would -- would Qualcomm no longer sell us chips, 

 02 but none of Qualcomm's chip licensees would sell us 

 03 chips, either, and that included MediaTek. 

 04 Q. And are -- are you referring to the -- the 

 05 conversation that would have taken place in the 

 06 spring of 2013? 

 07 A. Yes. 

25. PAGE 177:20 TO 179:18 (RUNNING 00:02:42.976)

 20 Q. And Mr. Reifschneider provides a summary 

 21 of a -- a proposal for a strategic fund agreement in 

 22 his e-mail in CX2079. Do you see that? 

 23 A. Yes. 

 24 Q. And do you understand that proposed 

 25 strategic fund agreement to be the same proposal that 

 00178:01 we -- we were discussing earlier, in the context of 

 02 Mr. Offer's December 2015 meeting summary? 

 03 A. It's the same concept. The -- the 

 04 specifics evolve quite substantially over the -- the 

 05 several years that this discussion went along. 

 06 Q. And what's your high-level understanding 

 07 of the -- the concept embodied in the proposed 

 08 strategic fund agreement? 

 09 A. Basically it was an incentive to use 

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 10 exclusively, or nearly exclusively, Qualcomm chips, 

 11 by providing discounts, either on the royalties or on 

 12 the price of the chips themselves, in relation to 

 13 the -- the percentage of Qualcomm parts as 

 14 presented -- overall parts in our mobile phones. 

 15 Q. And on page 7 of CX2079, at the bottom of 

 16 the e-mail, Mr. Reifschneider identifies certain 

 17 conditions for Qualcomm to enter into the strategic 

 18 fund agreement. Do you see that section? 

 19 A. I do. 

 20 Q. And so the -- the first condition is that 

 21 Lenovo would need to enter into a 4G SULA covering 

 22 both the FDD and TDD modes of LTE with Qualcomm that 

 23 is generally on Qualcomm standard terms, including 

 24 royalties of 4 percent of the net selling price of 

 25 the license subscriber devices, and accept that the 

 00179:01 royalty rates in effect under the current 3G SULA 

 02 will not be changed. Do you see that? 

 03 A. Yes. 

 04 Q. What do you understand a "4G SULA" to be 

 05 in reference to? 

 06 A. I don't remember what the "SU" stands for, 

 07 but it's the license agreement of -- of some -- 

 08 patent license agreement of some flavor. 

 09 Q. Covering LTE cellular patents? 

 10 A. Yes. And -- and specifically what he's 

 11 saying is for phones that don't have 3G, the royalty 

 12 rate would be 4 percent; for phones that have 3G 

 13 and 4G, then the 3G rates, which are 5 percent, would 

 14 apply. 

 15 Q. And did you understand Lenovo's entering 

 16 into a 4G SULA with Qualcomm to be a condition on 

 17 Qualcomm's strategic fund offer? 

 18 A. At this point, yes, I did. 

26. PAGE 179:19 TO 179:23 (RUNNING 00:00:13.096)

 19 Q. And was there ever a time when that was 

 20 not a condition on the strategic fund offer? 

 21 A. I don't remember how the strategic fund 

 22 negotiations went, so I can't say whether it was or 

 23 was not always a requirement. 

27. PAGE 180:09 TO 180:14 (RUNNING 00:00:19.279)

 09 Q. And what is your understanding of how 

 10 accepting Qualcomm's offered strategic fund would 

 11 impact Lenovo's modem chip selection? 

 12 A. Would have given very strong financial 

 13 incentive to increase the use of Qualcomm chips 

 14 versus competing chips. 

28. PAGE 187:23 TO 189:24 (RUNNING 00:02:54.538)

 23 Q. And in your experience, do parties to 

 24 licensing negotiations assess the anticipated outcome 

 25 of any litigation when evaluating their position in 

 00188:01 the -- in the negotiation? 

 02 A. I can't speak to everyone, but certainly 

 03 that's the number one thing I use to assess whether I 

 04 want to sign a license, is a careful analysis of 

 05 whether litigation and the likely outcome of 

 06 litigation, plus the expense, taking into account the 

 07 time value of money and so on, is ultimately greater 

 08 than or less than the negotiated alternative. 

 09 And I'm very pragmatic; when the 

 10 negotiated alternative is clearly less expensive, I'm 

 11 happy to take a license. When the negotiated 

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 12 alternative is equal to or greater than the likely 

 13 litigation outcome, I'm not ready to sign, and I'm 

 14 ready to keep negotiating and/or litigating as 

 15 necessary. That's certainly been my -- my 

 16 experience, not only for myself, but at least for the 

 17 more successful licensing folks that I've dealt with 

 18 over the years. 

 19 Q. And how, if at all, does that assessment 

 20 differ vis-a-vis Qualcomm? 

 21 A. Well, as I've said, when the dispute 

 22 resolution is either keep talking or use some legal 

 23 means like going to court and letting a judge decide 

 24 for you, it's relatively easy to assess and figure 

 25 out where you stand. 

 00189:01 But unless you're facing someone who's got 

 02 100 patents, all of which have been just been 

 03 litigated 12 times successfully, the odds are 

 04 litigation is not that sure an outcome, so you -- you 

 05 have some basis to negotiate. 

 06 When you're facing, as we've discussed, a 

 07 dispute resolution that says either you agree or you 

 08 can't get any more key supplies, it certainly changes 

 09 the balance of negotiating capabilities, and 

 10 basically makes you say, "Do I still want to be in 

 11 this business? Because I'm taking the risk that I 

 12 will be shut out immediately if I don't agree." 

 13 And realistically, as I said before, even 

 14 if you were wildly successful, the quickest legal 

 15 resolution to that -- at least in the US -- you're 

 16 looking at months and months, if not a year or more, 

 17 without supply, which would be, if not fatal, then 

 18 nearly fatal to almost any company in this business. 

 19 Q. And just to be clear for the record, when 

 20 you're referring to negotiating with a -- with a 

 21 counterparty that could remove supply, you're 

 22 referring to Qualcomm; is that right? 

 23 A. In this case, that was our -- that was the 

 24 threat we received, and one we took seriously, yes. 

29. PAGE 190:03 TO 191:12 (RUNNING 00:01:48.131)

 03 Have you noticed any differences in the 

 04 level of technical information provided by licensors 

 05 other than Qualcomm, as compared to Qualcomm? 

 06 A. Yes and no. We were in sort of an unusual 

 07 situation with Qualcomm, as I said, because the 

 08 license already existed at the time that I got 

 09 involved with the engagement. 

 10 Typically, you'll see technical engagement 

 11 in a licensing scenario before there is a license, as 

 12 part of the licensor's practice to convince the 

 13 licensee why they need a license. 

 14 So in circumstances like that, you 

 15 typically have lots of claim charts outlining the 

 16 licensor's best patents, how they cover the 

 17 licensee's products, arguments, or at least 

 18 presentations about how there's no alternative, and 

 19 so on. 

 20 But of course if you already have a 

 21 license, at least arguably there's no point in going 

 22 through that, because you're already past that point. 

 23 In this case where we -- we're 

 24 contemplating termination, in the absence of the 

 25 ability to cut off supply, we might have gone through 

 00191:01 that same kind of arrangement where Qualcomm would 

 02 have been incented to give us technical and legal 

 03 presentations to explain why it would be a bad idea 

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 04 to terminate, why litigation might result in a worse 

 05 outcome than the license we already had. 

 06 But we never got to those discussions, 

 07 because Qualcomm didn't feel they needed to. They 

 08 basically said, "If you don't need our chips 

 09 anymore" -- and like the earlier e-mail said, "if you 

 10 don't need MediaTek's chips anymore, go ahead and 

 11 terminate. But if you do, then, you know, why would 

 12 we waste our time with a technical discussion?" 

30. PAGE 197:02 TO 199:11 (RUNNING 00:02:51.208)

 02 (Exhibit Apple Blumberg 1 was marked for 

 03 identification.) 

 04 BY MR. RENNER: 

 05 Q. Apple Exhibit 1, for the record, bears the 

 06 Bates stamp LENOVO-QUALSUB-00013080. 

 07 Can you identify this exhibit for me, sir, 

 08 as an e-mail chain, copying yourself and others at 

 09 Lenovo, in November of 2013? 

 10 A. That's what it appears to be. 

 11 Q. And I'd like to ask you a few questions 

 12 about the e-mail from a Jay Clemens; that's at the 

 13 bottom of the first page of the exhibit. 

 14 A. Yes. 

 15 Q. In the first paragraph of the e-mail, 

 16 Mr. Clemens writes, at the third sentence, quote: 

 17 "YY expressed frustration over the fact that we have 

 18 been paying too much (particularly in China) and 

 19 questioned why we have not yet concluded a better 

 20 deal with Qualcomm." 

 21 Do you see that? 

 22 A. I do. 

 23 Q. Do you have any understanding as to what 

 24 that means? 

 25 A. Generally. Is there any particular thing 

 00198:01 you'd like me to talk about? 

 02 Q. Who is YY? 

 03 A. Our CEO. 

 04 Q. And then at the bottom of this e-mail -- 

 05 still on the first page, at the bottom of the first 

 06 page -- paragraph begins, quote, "By the way, I think 

 07 the team should be commended for putting us in the 

 08 position to negotiate a new deal. We had a horrible 

 09 contract of indefinite duration, but now we have the 

 10 opportunity to significantly improve the company's 

 11 financial position." 

 12 Do you have any understanding as to which 

 13 contract of indefinite duration is being referred to 

 14 here? 

 15 A. I believe it was the original underlying 

 16 rest-of-world license agreement that came out of 

 17 Legend. 

 18 Q. And did you have discussions with others 

 19 at Lenovo about the fact that that agreement was, in 

 20 sum or substance, a horrible deal for Lenovo? 

 21 A. Yes. 

 22 Q. And Mr. Clemens expresses the view that 

 23 Lenovo now has, quote, "the opportunity to 

 24 significantly improve the company's financial 

 25 position." 

 00199:01 Do you see that? 

 02 A. Yes. 

 03 Q. Did that ever happen with respect to this 

 04 horrible original SULA with Qualcomm? 

 05 A. Basically my -- my recollection is that he 

 06 was talking about the fact that we had negotiated a 

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 07 termination right as giving us some leverage. But as 

 08 I've discussed earlier, we -- we never seriously 

 09 contemplated using that, and we never threatened to 

 10 use it in any meaningful way, once we learned of 

 11 Qualcomm's intent to cut off our supply if we did. 

31. PAGE 213:06 TO 214:01 (RUNNING 00:01:11.598)

 06 (Exhibit Apple Blumberg 4 was marked for 

 07 identification.) 

 08 BY MR. RENNER: 

 09 Q. Showing you a document that I've marked as 

 10 Apple Blumberg Exhibit 4. Apple Blumberg Exhibit 4 

 11 is, I believe, a PowerPoint that bears the Bates 

 12 stamp MOTO-QUAL-01830543. 

 13 A. Yes. 

 14 Q. And it's captioned "Qualcomm Update." Do 

 15 you see that? 

 16 A. I do. 

 17 Q. I understand that this document was 

 18 produced from your custodial files. Taking a look at 

 19 the contents of the slide, can you tell me if you 

 20 believe you would have seen this document before? 

 21 A. Probably. Yes, it's likely that I did see 

 22 it. 

 23 Q. Do you have any understanding as to the 

 24 context in which the document was created? 

 25 A. I'm going to need a couple minutes, just 

 00214:01 to read through it. 

32. PAGE 214:03 TO 215:05 (RUNNING 00:01:14.198)

 03 A. I have refreshed my recollection probably 

 04 about as far as it's going to get. 

 05 Q. So what, if anything, can you recall, 

 06 sitting here today, sir, about the context in which 

 07 the document was created? 

 08 A. I think it was probably created by one of 

 09 the Motorola attorneys for at least internal 

 10 discussion within the legal department, possibly 

 11 presentation to some of the senior execs, to talk 

 12 about possible strategies to use in our dealings with 

 13 Qualcomm. 

 14 Q. In looking at slide 3, again navigating by 

 15 the slides -- by the numbers embedded on the bottom 

 16 left -- 

 17 A. Yes. 

 18 Q. -- slide captioned "Negotiation Progress"? 

 19 A. Yes. 

 20 Q. Third bullet reads, quote, "QC says they 

 21 want to be partners, but we see no sign of reducing 

 22 royalties without a fight, due to QC monopoly power." 

 23 Do you see that? 

 24 A. Yes. 

 25 Q. Do you recall any discussions about 

 00215:01 Qualcomm's monopoly power at Lenovo? 

 02 A. I believe this comes out of the same 

 03 notion, particularly on the Motorola side, that there 

 04 were no viable alternatives for high-end phones 

 05 beyond the Qualcomm chipset. 

33. PAGE 215:12 TO 218:24 (RUNNING 00:04:09.559)

 12 (Exhibit Apple Blumberg 5 was marked for 

 13 identification.) 

 14 BY MR. RENNER: 

 15 Q. Apple Exhibit 5 bears the Bates stamp 

 16 MOTO-QUAL-01935722. Can you identify this document 

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 17 for me, sir, as notes of a meeting between on the one 

 18 hand Lenovo and Motorola, and on the other hand 

 19 representatives of Qualcomm? 

 20 A. It's what the -- the top couple of lines 

 21 would certainly indicate. 

 22 Q. And you're identified as an attendee on 

 23 the Lenovo side of the ledger; is that right? 

 24 A. Yes. 

 25 Q. Take as much time as you need to refresh 

 00216:01 your recollection, or orient yourself in -- in the 

 02 document, and I'll tell you that the document looks 

 03 as if one of the things that's being discussed is the 

 04 China license. But you can take the time you need. 

 05 I'm going to ask you a set of questions 

 06 about the last paragraph on the first page. So I can 

 07 get started with that, and you can tell me if you 

 08 need to read more, or you can read the document and 

 09 then let me know we you're ready to talk. Whatever 

 10 is best for you. 

 11 A. Why don't you start with your questions, 

 12 and I'll see how much more I need to review. 

 13 Q. Fair enough, sir. 

 14 Last paragraph on the first page of Apple 

 15 Exhibit 5 reads, quote, "When asked for feedback on 

 16 considerations to achieve a competitive rate, they 

 17 responded that QTL has sums of money available for a 

 18 strategic fund." 

 19 Do you see that? 

 20 A. Yes. 

 21 Q. First question -- well, first, can you 

 22 tell me how -- what you understand this sentence to 

 23 mean? 

 24 A. As we discussed earlier today, Qualcomm, 

 25 as part of the negotiations, had suggested the idea 

 00217:01 of what they called a strategic fund that would be 

 02 money Qualcomm would pay back to Lenovo to be used 

 03 for marketing, product development, and other related 

 04 activities, as an incentive to use Qualcomm chips, 

 05 and also as an incentive to sign up for some of these 

 06 licensing deals. 

 07 Q. Was there a gap between the rate that 

 08 Qualcomm was interested in charging in this 

 09 negotiation and the royalty that Motorola was -- that 

 10 Motorola and Lenovo were seeking? 

 11 A. Yes. There was -- in fact to this day -- 

 12 a gap between what we feel would be reasonable and 

 13 what Qualcomm is charging. 

 14 Q. And did Qualcomm propose in this meeting a 

 15 strategic fund to help close that gap? 

 16 A. Yes. Not only in this meeting, but 

 17 through many of the discussions that we had over the 

 18 years. 

 19 Q. In many of the discussions that you've had 

 20 over the years with Qualcomm, Qualcomm has proposed 

 21 strategic funds to help close the gap between Lenovo 

 22 on the one hand and Qualcomm on the other with 

 23 respect to the royalty rate? 

 24 MR. HOLTZ: Objection. Calls for 

 25 speculation. 

 00218:01 THE WITNESS: Yes. In -- in general, the 

 02 way that Christian, who is typically the 

 03 negotiator on the financial terms, would discuss 

 04 it with Qualcomm was effectively a total cost of 

 05 using Qualcomm: Cost of chips, cost of 

 06 royalties, and so on. 

 07 And so Qualcomm was basically saying, 

 08 "Well, we can address the total cost through 

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 09 this strategic fund by doing things that will 

 10 make it effectively less expensive." 

 11 BY MR. RENNER: 

 12 Q. And counsel for Qualcomm suggested that 

 13 we're speculating. Are we speculating here, or is 

 14 this something that Qualcomm actually said in 

 15 meetings, that this was a way to close the gap 

 16 between Lenovo and Qualcomm with respect to the 

 17 royalty rate? 

 18 MR. HOLTZ: Objection. Vague. Calls for 

 19 speculation. 

 20 THE WITNESS: In meetings that I attended, 

 21 Qualcomm did discuss the strategic fund as a way 

 22 to make the deal more economically palatable to 

 23 Lenovo, both for the license and for use of 

 24 Qualcomm chips overall. 

34. PAGE 228:20 TO 230:07 (RUNNING 00:01:36.469)

 20 Q. Is it correct that you used to work at 

 21 Intellectual Ventures? 

 22 A. Yes. 

 23 Q. Is Intellectual Ventures a patent 

 24 licensing company? 

 25 A. It is. 

 00229:01 Q. Did you negotiate patent licensing 

 02 agreements on behalf of Intellectual Ventures as the 

 03 licensor? 

 04 A. Yes. 

 05 Q. Based on your experience, could you 

 06 compare the relative leverages that Intellectual 

 07 Ventures had in licensing negotiations with the 

 08 leverage that Qualcomm has in licensing negotiations? 

 09 A. IV had far less leverage, because their 

 10 only recourse in case of a -- an uncooperative or a 

 11 resistant licensee was ultimately the threat of 

 12 litigation. Whereas, as I've said repeatedly, 

 13 Qualcomm not only had that, but also the threat of 

 14 cutting off vital supply. 

 15 Q. Is it your -- do you think that it is this 

 16 additional leverage that Qualcomm has that is a 

 17 primary source of the royalties that Qualcomm is able 

 18 to negotiate, rather than the underlying strength of 

 19 Qualcomm's patent portfolio? 

 20 MR. HOLTZ: Objection. Calls for 

 21 speculation and also calls for expert opinion. 

 22 THE WITNESS: Unquestionably. In my 

 23 experience, not only was I responsible for 

 24 patent licensing at Intellectual Ventures, but I 

 25 spent more than five years at Rambus, where I 

 00230:01 was the VP of licensing, and signed agreements 

 02 totaling in excess of more than $1.5 billion. 

 03 And I will tell you that Qualcomm has a 

 04 much easier time of negotiating very high 

 05 royalties because they have this extralegal 

 06 remedy that was never available to me in any of 

 07 my licensing capacities. 

35. PAGE 271:23 TO 273:17 (RUNNING 00:02:24.509)

 23 Q. Here's what I'm trying to get at: You've 

 24 testified that you think Lenovo has agreed to higher 

 25 rates than it -- higher royalty rates in its patent 

 00272:01 licenses with Qualcomm than it otherwise would agree 

 02 to, because of the chip supply threat; is that fair 

 03 to say? 

 04 A. Yes. 

 05 Q. So how could Qualcomm -- let me just ask 

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 06 it open-ended: What could Qualcomm provide to you, 

 07 as much or as little as you think would suffice, to 

 08 demonstrate what a true FRAND royalty rate would be? 

 09 A. If I understand one of the underlying 

 10 premises of this question and the preceding question, 

 11 you seem to be suggesting that if Qualcomm 

 12 demonstrated that everybody else had signed up to 

 13 similar terms, then that would demonstrate that 

 14 Qualcomm had not used market power in the chipset 

 15 arena to achieve these high royalty rates. I'd argue 

 16 just the opposite, that they had been wildly 

 17 successful in their illegal activity, because they 

 18 had gotten everyone to submit to this threat. 

 19 But putting that interpretation aside, 

 20 what would it take, an ironclad guarantee from 

 21 Qualcomm that whether we have a license or not, they 

 22 will continue to sell us chips at prices no less 

 23 favorable than they sell to their most favored 

 24 customers. 

 25 Q. If Qualcomm were to show you a licensing 

 00273:01 agreement that it had entered into with a cell phone 

 02 manufacturer who never once bought Qualcomm's chips, 

 03 would that at least be relevant to you, that the 

 04 terms under that agreement probably have nothing to 

 05 do with any chip supply threat? 

 06 MR. KEHL: Object to the form of the 

 07 question. 

 08 THE WITNESS: No, for the following 

 09 reason. One of the things that courts will look 

 10 to in assessing the reasonableness of a license 

 11 is other licenses. Because I believe Qualcomm's 

 12 licensing results are so thoroughly tainted by 

 13 its improper behavior, threatening supply, it 

 14 has established a very good track record of 

 15 excessive royalty rates the court might 

 16 otherwise take to be an indication of the true 

 17 value of that portfolio. 

36. PAGE 275:18 TO 276:12 (RUNNING 00:00:54.422)

 18 Q. Do you know why Lenovo has not gone to the 

 19 contract manufacturing model, if it appears that it 

 20 results in a pretty substantial reduction in the 

 21 royalty rate? 

 22 A. Until we acquired Motorola, we hadn't 

 23 realized that was a possibility. Also, until around 

 24 the time we were acquiring Motorola, we didn't have 

 25 the ability to terminate the Qualcomm license, and 

 00276:01 the Qualcomm license in place with Lenovo does not 

 02 permit the contract manufacturing alternative. 

 03 So unless we terminated the license with 

 04 Qualcomm, went to the contract manufacturing route, 

 05 and risked our entire relationship with Qualcomm, we 

 06 couldn't get there. 

 07 Q. What do you mean, risked your entire 

 08 relationship with Qualcomm? 

 09 A. Qualcomm at various points during the 

 10 negotiation made it clear they would take our 

 11 termination as a hostile act and would not receive 

 12 that kindly. 

37. PAGE 276:13 TO 277:01 (RUNNING 00:00:35.964)

 13 Q. All right. But Qualcomm has not insisted 

 14 that Motorola take out a direct license, correct? 

 15 A. That's correct, to the best of my 

 16 knowledge. They did threaten repeatedly, as I 

 17 mentioned, to close the ability to continue using 

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 18 contract manufacturing. 

 19 Q. But they've never done that, correct? 

 20 A. Not as far as I know. 

 21 Q. And I think you testified earlier -- but 

 22 let's just make sure it's in the record -- that to 

 23 your knowledge, Qualcomm has never told Lenovo or 

 24 Motorola, "Motorola, either sign a direct license or 

 25 we're cutting off your chips," correct? 

 00277:01 A. I don't recall such a conversation. 

38. PAGE 280:06 TO 280:19 (RUNNING 00:00:35.418)

 06 Q. Do you think that licensing agreements 

 07 that Qualcomm entered into in the early '90s are a 

 08 relevant comparison for the -- the reasonableness of 

 09 licensing terms that Qualcomm demands between 2013 

 10 and 2018? 

 11 A. No. 

 12 Q. Why not? 

 13 A. The patent landscape as well as the 

 14 technology landscape has evolved immensely since 

 15 then, and my -- my impression, though I haven't 

 16 looked at this extensively recently, is that 

 17 Qualcomm's holdings relative to other participants in 

 18 the industry of relevant patents has decreased on a 

 19 percentage basis rather dramatically. 

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