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UNITED STATES COURT REPORTERS

637

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

FEDERAL TRADE COMMISSION, 

PLAINTIFF,

VS.

QUALCOMM INCORPORATED, A 

DELAWARE CORPORATION,

DEFENDANT.

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C-17-00220 LHK

SAN JOSE, CALIFORNIA

JANUARY 11, 2019

VOLUME 4 

PAGES 637-857

SEALED PAGES 739 - 740

TRANSCRIPT OF PROCEEDINGS

BEFORE THE HONORABLE LUCY H. KOH 

UNITED STATES DISTRICT JUDGE

A P P E A R A N C E S:

FOR THE PLAINTIFF: FEDERAL TRADE COMMISSION 

BY: JENNIFER MILICI

 DANIEL J. MATHESON 

 WESLEY G. CARSON

 KENT COX

 NATHANIEL M. HOPKIN

 PHILIP J. KEHL

 MIKA IKEDA

 JOSEPH BAKER 

600 PENNSYLVANIA AVENUE, NW 

WASHINGTON, D.C. 20580

APPEARANCES CONTINUED ON NEXT PAGE

OFFICIAL COURT REPORTERS: LEE-ANNE SHORTRIDGE, CSR, CRR

CERTIFICATE NUMBER 9595

IRENE RODRIGUEZ, CSR, CRR, RMR

CERTIFICATE NUMBER 8074

PROCEEDINGS RECORDED BY MECHANICAL STENOGRAPHY

TRANSCRIPT PRODUCED WITH COMPUTER

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UNITED STATES COURT REPORTERS

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APPEARANCES (CONTINUED)

FOR THE DEFENDANT: KEKER, VAN NEST & PETERS 

BY: ROBERT A. VAN NEST

 JUSTINA K. SESSIONS

 EUGENE M. PAIGE

 CHRISTINA BLAIS

 MATAN SHACHAM

 CODY HARRIS

 KRISTIN HUCEK 

633 BATTERY STREET

SAN FRANCISCO, CALIFORNIA 94111 

CRAVATH, SWAINE & MOORE 

 BY: GARY A. BORNSTEIN

 MICHAEL BRENT BYARS

 YONATAN EVEN

 JORDAN D. PETERSON

 MING-TOY TAYLOR

 DEREK SUTTON

 ANDREW HUYNH 

 ANTONY RYAN

825 EIGHTH AVENUE 

 NEW YORK, NEW YORK 10019

ALSO PRESENT: MARK SNYDER 

JEFF DAHM

KEN KOTARSKI 

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INDEX OF WITNESSES

PLAINTIFF'S

AICHATOU (AICHA) EVANS

CROSS-EXAM BY MR. RYAN (RES.) P. 654 

REDIRECT EXAM BY MR. CARSON P. 662

RECROSS-EXAM BY MR. RYAN P. 664

FURTHER REDIRECT BY MR. CARSON P. 665 

MARK DAVIS

VIDEOTAPED DEPOSITION P. 667

 

TONY BLEVINS

DIRECT EXAM BY MR. BAKER P. 669

CROSS-EXAM BY MS. SESSIONS P. 715

REDIRECT EXAM BY MR. BAKER P. 733

INJUNG LEE

VIDEOTAPED DEPOSITION P. 737 

TODD MADDEROM 

VIDEOTAPED DEPOSITION P. 746 

STEVE MOLLENKOPF

DIRECT EXAM BY MS. MILICI P. 755

CROSS-EXAM BY MR. VAN NEST P. 802 

REDIRECT EXAM BY MS. MILICI P. 842

RECROSS-EXAM BY MR. VAN NEST P. 845 

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INDEX OF EXHIBITS

MARKED ADMITTED

PLAINTIFF'S

8295, 1770, 1771, 6552 677

1774 & 1785 

0507 679

8261 686

0531 694

0853 699

0578 701

0856 702

0597 706

0534 710

2564A, 2568A, 2639A, 2641A, 737 

2642A & 2643A 

2018, 2060, 2065, 2123, 746 

2124, 2125 & 2168 

8287 756

5376 757

8190 758

8191 762

8198 765

8197 766

5913 767 

6439 768

7559 770

6381 773

5348 774

5357 776

5360 777

5425 784

7668 785

7592 786

5378 787

5381 789

5739 791

7910 792

5389 795

5391 796

5527 799

7257 800

7824 811

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INDEX OF EXHIBITS

MARKED ADMITTED

DEFENDANT'S

95 655

9097 723

JOINT

0007 667

0032 676

0040 681

0052 681

0057 682

0078 683

0074 690

0024 737

0055 779

0086 870

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SAN JOSE, CALIFORNIA JANUARY 11, 2019 

P R O C E E D I N G S

(COURT CONVENED AT 9:05 A.M.)

THE COURT: GOOD MORNING, WELCOME. 

MR. VAN NEST: GOOD MORNING, YOUR HONOR. 

THE COURT: PLEASE TAKE A SEAT. SO ON QUALCOMM'S 

ADMINISTRATIVE MOTION TO RECONCILE OVERLAPPING INTER PARTES 

COURT ORDERS, I HAD ASKED THE PARTIES TO FILE RESPONSES TO 

THIRD PARTY SEALING REQUESTS THAT'S WEEK. I HAVE NOT GOTTEN A 

SINGLE RESPONSE FROM EITHER PARTY TO ANY THIRD PARTY SEALING 

REQUEST. THAT WOULD TAKE CARE OF THIS ISSUE. 

WHY HAVEN'T I GOTTEN ANY RESPONSES FROM EITHER PARTY AS TO 

ANY THIRD PARTY SEALING REQUEST? I SPECIFICALLY MADE THAT 

REQUEST ON THE RECORD. 

MR. MATHESON: YOUR HONOR, IT'S -- DAN MATHESON FOR 

THE FTC. 

MY UNDERSTANDING IS WE HAVE EITHER OPPOSED THEM OR HAD THE 

THIRD PARTIES STATE OUR POSITION IN THE FILING. 

THE COURT: NOT IN ALL FILINGS. BUT GO AHEAD. LET 

ME HEAR FROM QUALCOMM. MOST OF THIS IS YOUR -- A LOT OF YOUR 

LICENSES WITH THESE THIRD PARTIES. I HAVEN'T GOTTEN QUALCOMM'S 

RESPONSES TO THESE REQUESTS. 

MR. VAN NEST: WHAT, WHAT I THOUGHT OUR PROTOCOL WAS 

IF WE DIDN'T HAVE AN OBJECTION, WE WOULDN'T STATE IT AND FILE 

MORE PAPERS. 

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ON THE MOTION WE FILED LAST NIGHT, WE'VE WORKED THAT OUT. 

WE'VE REACHED OUT TO APPLE, AND WE'VE ALL AGREED WE'LL FILE THE 

EXHIBITS ON THE PUBLIC RECORD WITH EVERYTHING SEALED THAT YOUR 

HONOR ORDERED SEALED. 

THERE WAS A LITTLE CONFUSION BECAUSE THERE WERE TWO 

MOTIONS, ONE FROM QUALCOMM, ONE FROM APPLE. YOU GRANTED THEM 

BOTH AND ADVISED US TO FILE WHAT HAD BEEN ALLOWED IN EACH OF 

OUR OWN SEALINGS. WE'VE REACHED OUT TO APPLE TO RESOLVE IT, 

AND WE'LL CONTINUE TO DO THAT SO YOUR HONOR WON'T HAVE TO 

WORRY. 

THE COURT: NO. BUT WHY DON'T YOU RESPOND TO THESE 

THIRD PARTY SEALING REQUESTS? THAT'S WHAT I ASKED FOR. 

MR. VAN NEST: WE UNDERSTOOD THAT -- WHAT I 

UNDERSTOOD WAS IF WE HAD AN OBJECTION TO IT, WE WOULD OPPOSE 

IT, BUT OTHERWISE -- 

THE COURT: NO. BUT IF YOU'RE ASKING FOR DIFFERENT 

INFORMATION OF THE SAME DOCUMENT TO BE SEALED, THAT WOULD BE 

HELPFUL TO KNOW, RIGHT? 

MR. VAN NEST: TO KNOW WHETHER WE OPPOSE -- 

THE COURT: YOU'RE SAYING TWO PARTIES, QUALCOMM AND 

APPLE, FILED SEALING REQUESTS AS TO THE SAME DOCUMENT, BUT HAD 

DIFFERENT PORTIONS SEALED. 

MR. VAN NEST: RIGHT. RIGHT. 

THE COURT: SO IF YOU HAD GIVEN ME YOUR RESPONSE 

SAYING, WELL, I WANT, IN ADDITION, X, Y, Z ALSO SEALED, THEN WE 

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WOULDN'T HAVE HAD THIS PROBLEM. 

MR. VAN NEST: OKAY. OKAY. 

THE COURT: I HAVE BEEN ASKING FOR THE PARTIES TO BE 

MORE ACTIVE IN THESE THIRD PARTY SEALING REQUESTS BECAUSE IT 

DOESN'T MAKE SENSE FOR ME TO DO THE SAME DOCUMENTS WITH THE 

THIRD PARTY AND THEN HAVE QUALCOMM, TWO DAYS LATER, FILE A 

SEALING REQUEST FOR THE SAME DOCUMENT. 

MR. VAN NEST: I GOT IT. 

THE COURT: I AGREE, IT'S GOING TO CAUSE SOME 

CONFUSION WHAT SHOULD BE SEALED OR NOT. 

MR. VAN NEST: I GOT IT. 

THE COURT: SO IF THERE COULD BE SOME COORDINATION SO 

I COULD DO ONE ORDER THAT TAKES CARE OF YOUR CONCERNS, TAKES 

CARE OF A THIRD PARTIES CONCERNS -- 

MR. VAN NEST: I UNDERSTAND, WE'LL DO IT. 

THE COURT: -- YOU KNOW, TO TAKE CARE OF HAVING 

SOMETHING UNSEALED THAT YOU DON'T WANT AND THAT YOU HAVE A 

COMPELLING REASON TO SEAL. SO IS THERE A WAY WE CAN COORDINATE 

THAT? 

MR. VAN NEST: I THINK WE CAN. 

THE COURT: OKAY. 

MR. VAN NEST: WE'LL SIMPLY ACCELERATE, ONCE THE 

THIRD PARTY FILES, IF IT'S A DOCUMENT WE'RE GOING TO SEEK TO 

SEAL ALSO, WE'LL GET OUR MOTION IN QUICKLY. 

THE COURT: THAT WOULD HELP. 

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MR. VAN NEST: OKAY. 

THE COURT: AND THEN I CAN HOPEFULLY AVOID -- I DON'T 

WANT TO CREATE ANY HEADACHES FOR ANYBODY OF FORCING, YOU KNOW, 

THE PUBLICIZING OF INFORMATION THAT YOU FEEL YOU NEED SEALED. 

MR. VAN NEST: WE GOT IT. 

THE COURT: TO AVOID MAKING THAT MISTAKE, THAT WOULD 

HELP. 

MR. VAN NEST: WE'LL ACCELERATE -- WHERE A THIRD 

PARTY HAS FILED, WE'LL ACCELERATE OUR FILING AS WELL. 

THE COURT: OKAY. SO I AM DENYING THIS MOTION, ECF 

1242, BECAUSE I DON'T THINK WE NEED TO DELAY BY 48 HOURS -- 

WHAT I'M ASKING IS YOU DO THAT COORDINATION ON THE FRONT END -- 

MR. VAN NEST: WE'LL DO IT. 

THE COURT: -- WHEN THE THIRD PARTY FILES ITS MOTION 

RATHER THAN MAKING ME HAVE TO GO THROUGH TWO -- I DON'T 

UNDERSTAND WHY I'M GOING THROUGH TWO SEPARATE MOTIONS ON THE 

SAME DOCUMENT ANYWAY. IF YOU COULD COORDINATE AND DO ONE 

UNIFIED MOTION -- 

MR. VAN NEST: WELL, THAT'S OFTEN -- 

THE COURT: -- THAT WOULD HELP. YOU KNOW, DURING 

THESE BREAKS, YOU KNOW, I'M GRANTING MOTIONS TO COMPEL 

ARBITRATION, DENYING MOTIONS TO REMAND, VACATING SOCIAL 

SECURITY APPEALS, SENTENCING CRIMINAL DEFENDANTS. THIS IS NOT 

MY ONLY CASE. SO, YOU KNOW, WE DID SEVEN SEALING ORDERS 

YESTERDAY. 

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MR. VAN NEST: YOU DID. 

THE COURT: SO IF THERE COULD BE COORDINATE -- AND 

MAYBE THE TIME PERIOD ISN'T ALLOWING THAT MUCH COORDINATION. 

BUT IT WOULD VERY MUCH HELP TO NOT HAVE THESE SERIAL SEALING 

MOTIONS ON THE SAME DOCUMENT. 

MR. VAN NEST: WE'LL TRY TO DO THAT. I THINK WITH 

SOME THIRD PARTIES, IT'S EASIER THAN OTHERS. THAT MOTION IS 

MOOT BECAUSE WE REACHED OUT TO APPLE, WORKED IT OUT, AND THE 

EXHIBIT WILL BE FILED WITH EVERYTHING SEALED. 

THE COURT: OKAY. THANK YOU FOR DOING THAT. BUT I'M 

ASKING, AGAIN, AS SOON -- I MEAN, IF YOU CAN COORDINATE WITH 

THE THIRD PARTY SO YOU FILE ONE UNIFIED MOTION AS TO THE SAME 

DOCUMENT, THAT WOULD BE SO APPRECIATED. IT WOULD REALLY BE 

APPRECIATED. RATHER THAN HAVING US -- 

MR. VAN NEST: THAT'S MORE DIFFICULT, BUT WE'LL 

CERTAINLY TRY. 

MR. MATHESON: YOUR HONOR, THERE'S ONE I WILL FLAG SO 

WE'RE NOT SURPRISED. ERICSSON I BELIEVE HAD FILED A MOTION TO 

SEAL A PORTION OF OUR EXPERT, MR. LASINSKI'S, DEMONSTRATIVE, 

WHICH WILL BE DISPLAYED ON MONDAY. WE ANTICIPATE -- WE 

COORDINATED WITH OTHER THIRD PARTIES. 

THE COURT: OKAY. 

MR. MATHESON: WE ANTICIPATE THAT THEY WILL ALSO FILE 

MOTIONS BECAUSE THEY ONLY FILED A MOTION TO SEAL A SPECIFIC 

LINE OF THE DEMONSTRATIVE. 

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SO IF WE JUST SEAL THE WHOLE SLIDE, THAT MIGHT OBVIATE THE 

NEED FOR FURTHER FILING ON THE SAME DOCUMENT, WHICH WOULD 

OBVIOUSLY BE GOOD FOR THE COURT. 

THE COURT: DID THEY FILE THAT THIS MORNING? I DON'T 

HAVE A RECORD OF THAT. I KNOW I HAVE QUALCOMM'S FROM LAST 

NIGHT -- I MEAN, I DID TWO QUALCOMM ORDERS YESTERDAY, BUT I 

KNOW YOU HAVE ONE THAT YOU FILED LAST NIGHT THAT I STILL OWE 

YOU A RULING ON. THAT'S FOR MONDAY'S EVIDENCE. 

MR. VAN NEST: RIGHT. 

THE COURT: AND I FILED A SAMSUNG ORDER YESTERDAY, 

BUT I GUESS THEY MUST HAVE FILED ANOTHER ONE LAST NIGHT. 

MR. MATHESON: THIS WAS ERICSSON I REFERRED TO, YOUR 

HONOR, I BELIEVE YOU GRANTED THE ORDER. 

THE COURT: OKAY. I GRANTED THE ORDER LAST NIGHT. 

WELL, GRANTED IN PART, DENIED IN PART. SO THEY FILED 

ANOTHER -- I GET A PRINTOUT EVERY MORNING OF WHOSE MOTIONS ARE 

STILL PENDING. I DON'T HAVE ANYTHING FROM ERICSSON ON THIS. 

MR. MATHESON: THEY DO NOT. MY POINT WAS YOU HAD 

GRANTED THEIR MOTION AND SEALED A PORTION OF A SLIDE. WE 

EXPECT OTHER THIRD PARTIES WILL ATTEMPT TO SEAL OTHER PORTIONS 

AFTER THAT SAME SLIDE. 

WE HAD ASKED ERICSSON TO FILE THE MOTION AS SOON AS 

POSSIBLE, AS WE ASKED THE OTHER THIRD PARTIES. ERICSSON GOT 

THEIRS ON FILE FIRST. 

WE'RE IN DISCUSSIONS WITH THE OTHER THIRD PARTIES THAT ARE 

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IMPACTED BY THAT SLIDE. I WANTED TO FLAG THE COURT, THAT WILL 

BE ANOTHER INSTANCE ON WHICH THERE WILL BE MORE THAN ONE 

SEALING MOTION ON THE SAME DOCUMENT FROM MORE THAN ONE PARTY. 

THE COURT: OKAY. I'M GOING TO ASK YOU ALL, WE HAVE 

A TINY TEAM HERE. WE'RE KEEPING ALL OF OUR OTHER CIVIL AND 

CRIMINAL ACES GOING. THIS IS NOT THE ONLY CASE WE'RE WORKING 

ON RIGHT NOW. 

TO THE EXTENT WE CAN COORDINATE UPFRONT, IT WOULD BE 

APPRECIATED. I'M DOING SERIAL MOTIONS ON THE SAME DOCUMENT. 

IT JUST TAKES A LOT MORE OF OUR TIME TO HAVE TO REVIEW -- YOU 

KNOW, THESE SEALING MOTIONS ARE ON HUNDREDS AND HUNDREDS AND 

HUNDREDS OF PAGES AND MAKING US HAVE TO LOOK THROUGH THE SAME 

THING TWICE TO SEAL DIFFERENT PORTIONS -- ANYWAY. 

MR. MATHESON: WE UNDERSTAND, YOUR HONOR. 

THE COURT: WE'D REALLY APPRECIATE YOUR HELP IF YOU 

COULD. 

MR. VAN NEST: UNDERSTOOD. 

THE COURT: ALL RIGHT. WHERE IS YOUR ANSWER? 

MR. VAN NEST: YOUR HONOR, BEFORE WE BRING THE 

WITNESS IN, I WANTED TO VISIT JUST BRIEFLY THE DISCUSSION WE 

HAD LATE ON THE RECORD ON TUESDAY ABOUT WHAT WE COULD ELICIT 

FROM WITNESSES ON THE SUBJECT OF APPLE'S USE OF INTEL MODEMS. 

THE COURT: UM-HUM. 

MR. VAN NEST: AND I WENT BACK TO THE TRANSCRIPT OF 

THE RECORD, AND I JUST WANT TO MAKE SURE THAT I UNDERSTAND 

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WHERE THE LINE IS. 

IF I COULD HAVE THE TRANSCRIPT. 

THE COURT: THIS IS GOING TO BE ON YOUR TIME. 

MR. VAN NEST: UNDERSTOOD. 

THE COURT: IT'S 9:12. 

MR. VAN NEST: WHEN WE WERE DISCUSSING THIS IN 

OCTOBER, THE FTC SAID THE FOLLOWING, WHICH I HAVE ON THE SCREEN 

THERE. 

"I THINK WE'RE RAISING AN ISSUE THAT'S A LITTLE BIT 

DISINGENUOUS. THERE IS EVIDENCE IN THE RECORD ABOUT THE CHIPS 

THAT APPLE IS USING. THAT IS A PUBLIC FACT. THERE IS NO 

DANGER THAT YOUR HONOR IS NOT GOING TO HAVE THE INFORMATION 

ABOUT WHICH CHIPS APPLE IS USING." 

THEN IN THE BRIEF THEY FILED ON THE SUBJECT OF POST-MARCH 

EVIDENCE, THEY SAID, "QUALCOMM SPECIFICALLY STATES THAT APPLE 

SOURCED MODEMS FROM INTEL FOR ITS 2018 MODELS, BUT THE DECISION 

TO USE THE CHIPS WAS MADE BEFORE THE CLOSE OF DISCOVERY AND IS 

THE SUBJECT OF EXISTING DISCOVERY." 

YOUR HONOR THEN PICKED THAT UP IN HER ORDER, YOUR ORDER ON 

THIS ISSUE -- 

THE COURT: WHAT'S YOUR REQUEST? 

MR. VAN NEST: MY REQUEST IS -- I UNDERSTAND THAT WE 

CAN ASK WITNESSES WHAT DECISION WAS MADE. 

THE COURT: UM-HUM. 

MR. VAN NEST: THAT'S CLEAR. 

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I UNDERSTOOD, THOUGH, THAT GIVEN THAT THE ACTUAL USE WAS A 

PUBLIC FACT, THAT THE FTC WASN'T OBJECTING TO THAT, AND THAT 

SINCE THE DECISION WAS MADE BEFORE THE CUTOFF, WE COULD ALSO 

ESTABLISH THAT APPLE IS ACTUALLY USING EXCLUSIVELY INTEL MODEMS 

IN THE CHIPS. 

THE COURT: OKAY. WHAT'S THE FTC'S RESPONSE? 

MR. MATHESON: WE'RE NOT REALLY SURE WHAT THE 

CONTROVERSY IS. THERE WAS DISCOVERY ON THIS AS YOUR HONOR 

ORDERED AS DOCKET 997 ON THIS ISSUE DURING DISCOVERY. WE DON'T 

UNDERSTAND WHY THEY CAN'T JUST ASK THE QUESTION IN A WAY IN 

WHICH THEY ASK A WITNESS, AS OF MARCH 30TH, HAD THE DECISION 

BEEN MADE? HAD IPODS BEEN LAUNCHED? IPADS BEEN LAUNCHED? OR 

OUR CONCERN IS IT'S DISINGENUOUS TO SAY THAT ALL IPHONES 

CONTAIN INTEL CHIPS. I DON'T KNOW IF THAT'S TRUE OR NOT. IT 

MAY BE TRUE THAT ALL NEW MODELS LAUNCHED IN CALENDAR YEAR 2018 

CONTAIN NEW CHIPS. IF THAT'S THE CASE, THEY SHOULD BE ABLE TO 

ELICIT THAT FROM FACT WITNESSES BASED ON WHAT WAS IN THE 

DISCOVERY RECORD AS OF MARCH 30TH, 2018. 

WE'RE NOT SURE WHY WE'RE BEING ASKED TO STIPULATE TO 

SOMETHING INSTEAD OF GETTING THE TESTIMONY FROM FACT WITNESSES. 

AND IF THIS HAD BEEN A STIPULATION THAT HAD BEEN SOUGHT, WE 

COULD HAVE FILED IT WITH THE JOINT PRETRIAL STATEMENT. EXHIBIT 

A HAS A BUNCH OF STIPULATIONS. WE OFFERED TO MAKE A 

STIPULATION ON THIS ISSUE AS LONG AS THERE IS SOME PRECISION. 

WE THINK THE EVIDENCE SHOULD COME FROM FACT WITNESSES, NOT 

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IMPRECISE STATEMENTS ABOUT APPLE'S CURRENT SOURCING DECISIONS. 

MR. VAN NEST: WE'RE ON BOARD WITH GETTING IT FROM 

THE WITNESSES. I'M JUST TRYING TO ESTABLISH THE DIVIDING LINE. 

I UNDERSTAND WE CAN ASK ABOUT DECISIONS BEFORE 2018. 

WHAT I UNDERSTOOD, AND MAYBE I'M RIGHT, IF THEY'RE NOT 

OBJECTING TO OUR ASKING THE WITNESSES, WHAT ARE YOU ACTUALLY 

USING IN PHONES THAT WERE LAUNCHED IN 2018, THEN THAT'S FINE. 

THAT'S ALL I'M SEEKING, THE RIGHT TO BE ABLE TO DO THAT. 

THE COURT: WHAT'S YOUR RESPONSE TO THAT? 

MR. MATHESON: I WOULD ASK A WITNESS, IS IT THE CASE 

THAT BY MARCH 30TH OF 2018, YOU HAD MADE A DECISION WITH 

RESPECT TO SOURCING OF ALL MODELS THAT WOULD BE LAUNCHED DURING 

2018? WHICH MODELS ARE THOSE? 

THEN WE'RE DONE. 

I DON'T UNDERSTAND WHY WE CAN'T DO THIS IN THREE QUESTIONS 

INSTEAD OF TRYING TO GET SOME STIPULATION. WE'RE NOT TRYING TO 

PREVENT ANY INFORMATION FROM REACHING THE COURT. WE JUST WANT 

TO MAKE SURE THE INFORMATION THAT REACHES THE COURT COMES FROM 

FACT WITNESSES SO WE KNOW IT'S ACCURATE. 

THE COURT: I'M SORRY TO INTERRUPT YOU. I THOUGHT 

YOU OBJECTED LAST FRIDAY, OR LAST TUESDAY. 

MR. MATHESON: YOUR HONOR, WE UNDERSTOOD YOUR ORDER 

TO SAY THAT CURRENT ACTIVITY IS OUT OF BOUNDS AND THAT 

QUESTIONS SHOULD RELATE TO THE INFORMATION THAT WAS REVEALED TO 

THE DISCOVERY RECORD PRIOR TO MARCH 30TH, 2018. 

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IT DOESN'T SEEM DIFFICULT TO ASK A WITNESS IF THEY HAD 

MADE DECISIONS AS OF MARCH 30TH THAT WOULD BE BINDING FOR ALL 

IPHONE MODELS RELEASED DURING CALENDAR YEAR 2018. 

MR. VAN NEST: WE KNOW WE CAN DO THAT. YOU'VE 

ALREADY RULED THAT. 

WHAT I'M SAYING IS, AND I DON'T WANT A STIPULATION, I JUST 

WANT TO BE ABLE TO ASK THE FOLLOW ON QUESTION: AND, THEREFORE, 

IN THE MODELS THAT LAUNCHED IN 2018, ARE YOU USING EXCLUSIVELY 

INTEL CHIPS? 

THE COURT: WHAT'S YOUR RESPONSE TO THAT QUESTION. 

MR. MATHESON: I SUPPOSE, YOUR HONOR, IF THAT IS IT, 

IF IT RELATES TO A DECISION MADE DURING THE DISCOVERY PERIOD, 

THAT'S FINE. I DON'T UNDERSTAND WHY WE NEED TO GO PAST THE 

DISCOVERY PERIOD. WE BROUGHT THE COURT TO A HARD LINE ON THAT. 

WE'RE TRYING TO RESPECT THE COURT'S ORDER. 

THE COURT: IT SOUNDS LIKE YOU MIGHT BE IN AGREEMENT 

ON THAT. 

MR. VAN NEST: I THINK WE ARE. MY UNDERSTANDING IS I 

CAN ASK WHAT, WHAT DECISION IS MADE, THAT'S CLEAR. BUT I CAN 

ALSO ASK FOR MODELS LAUNCHED IN 2018, ARE YOU USING IT 100 

PERCENT INTEL MODEMS. I CAN ASK THAT QUESTION AS WELL. 

MR. MATHESON: IF IT WAS INFORMATION IN THE DISCOVERY 

RECORD AS OF MARCH 30TH, 2018, WE'RE IN COMPLETE AND VOCIFEROUS 

AGREEMENT. 

MR. VAN NEST: WE'RE NOT BECAUSE THE LAUNCH MAY HAVE 

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UNITED STATES COURT REPORTERS

653

OCCURRED AFTER MARCH. THE DECISION WAS MADE BEFORE. SO ALL 

I'M SAYING IS I UNDERSTOOD FROM WHERE WE WERE THAT I COULD ASK 

THAT SECOND QUESTION, WHAT ARE YOU ACTUALLY ASKING FOR 2018 

LAUNCHES, WHETHER THEY'RE BEFORE MARCH OR NOT. 

THE COURT: I THINK WHAT HE'S SAYING IS IF IT WAS 

INFORMATION THAT WAS AVAILABLE BEFORE MARCH, THAT'S FINE. 

MR. VAN NEST: RIGHT. BUT WHAT THEY'RE ACTUALLY 

USING IF THEY LAUNCHED IN SEPTEMBER OBVIOUSLY WASN'T AVAILABLE 

IN MARCH. 

THE COURT: I THINK YOU WOULD BE OBJECTING TO THAT. 

MR. MATHESON: WE JUST DON'T WANT TO OPEN THE DOOR TO 

MORE FIGHTS ABOUT WHAT THE USE OF PAST DISCOVERY ANSWERS. SO 

IF WE CAN HAVE AGREEMENT THAT THIS WOULD NOT OPEN THE DOOR AND 

THEY'RE GOING TO ASK ABOUT MODELS LAUNCHED IN 2018 AND WE'RE 

NOT GOING TO HAVE ANOTHER SIDE FIGHT ABOUT WHETHER WE CAN 

REOPEN DISCOVERY, I THINK THAT'S COMPLETELY FINE, AS LONG AS 

IT'S OKAY WITH THE COURT. 

THE COURT: OKAY. ARE WE IN AGREEMENT THEN? 

MR. VAN NEST: I THINK SO, YES. 

THE COURT: IF THERE'S A PROBLEM, MAKE AN OBJECTION, 

AND WE'LL WORK IT OUT. 

MR. VAN NEST: GREAT. THANK YOU. 

THE COURT: IT SOUNDS LIKE THERE'S AGREEMENT. 

MR. MATHESON: THANK YOU, YOUR HONOR. 

THE COURT: ALL RIGHT. THANK YOU. TIME IS 9:18. 

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EVANS CROSS BY MR. RYAN (RESUMED)

UNITED STATES COURT REPORTERS

654

CAN YOU PLEASE BRING IN YOUR WITNESS? 

(PAUSE IN PROCEEDINGS.) 

THE COURT: COME FORWARD, PLEASE, ON THE WITNESS 

STAND. 

MA'AM, YOU'RE STILL UNDER OATH. 

DO YOU UNDERSTAND THAT? 

THE WITNESS: YES, I DO. 

THE COURT: OKAY. PLEASE TAKE THE WITNESS STAND. 

THE WITNESS: GOOD MORNING. 

THE COURT: OKAY. GOOD MORNING. WELCOME TO 

EVERYONE. 

(PLAINTIFF'S WITNESS, AICHATOU EVANS, WAS PREVIOUSLY 

SWORN.)

THE COURT: OKAY. TIME IS 9:19. GO AHEAD, PLEASE.

MR. RYAN: GOOD MORNING, YOUR HONOR. MAY I HAND UP 

ANOTHER COPY OF THE WITNESS BINDER? 

THE COURT: YES, PLEASE. 

THE WITNESS: GOOD MORNING. 

MR. RYAN: GOOD MORNING. 

CROSS-EXAMINATION (RESUMED)

BY MR. RYAN:

Q. MS. EVANS, WHEN WE BROKE ON TUESDAY WE WERE TALKING ABOUT 

HOW THE GROSS MARGIN FOR AN INTEL BASEBAND CHIPSET IS THE 

AVERAGE SELLING PRICE MINUS THE PRODUCT COST; RIGHT? 

A. YES. 

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EVANS CROSS BY MR. RYAN (RESUMED)

UNITED STATES COURT REPORTERS

655

Q. NOW, INTEL HAS CONCLUDED THAT THE PRODUCT COST OF ITS 

MODEM CHIPS IS HIGHER THAN QUALCOMM'S; RIGHT? 

A. YES. 

Q. NOW, IF YOU COULD TURN, PLEASE, IN YOUR BINDER, MS. EVANS, 

TO QX 95. IT'S A LITTLE BIT OVER HALFWAY THROUGH. 

A. THANK YOU. I'M THERE, YES.

Q. AND DO YOU SEE THAT THIS IS AN INTERNAL INTEL E-MAIL FROM 

MAY 30TH, 2017, SENT BY SAMUEL SPANGLER ATTACHING A DECK CALLED 

MULTI GENERATIONAL LTE PRICING PROPOSAL? 

A. YES.

Q. AND ICE HERE IS A CODE NAME FOR APPLE, IS IT NOT? 

A. THAT'S CORRECT.

Q. AND THE APPLE SALES TEAM AT INTEL E-MAILED YOU THIS 

PRESENTATION; RIGHT? 

A. YES. 

MR. RYAN: YOUR HONOR, I OFFER QX 95 INTO EVIDENCE. 

THE COURT: ANY OBJECTION? 

MR. CARSON: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(DEFENDANT'S EXHIBIT QX 95 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MR. RYAN:

Q. ALL RIGHT. NOW, THIS IS A DOCUMENT SUBJECT -- CERTAIN 

PORTIONS ARE SUBJECT TO AN INTEL SEALING ORDER, SO WE'LL PUT 

THIS UP ON THE SCREEN, BUT IT WON'T BE ON THE PUBLIC MONITOR. 

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EVANS CROSS BY MR. RYAN (RESUMED)

UNITED STATES COURT REPORTERS

656

IF YOU COULD TURN, PLEASE, MS. EVANS, TO SLIDE 3 OF THIS 

DOCUMENT. 

A. YES.

Q. IT HAS THE BATES NUMBER ENDING IN 314. 

AND DO YOU SEE ON THE RIGHT-HAND SIDE OF THIS SLIDE A 

TABLE HEADED PRODUCT COST GAP WORSENING? 

A. YES.

Q. AND DOES THE INTEL COLUMN ON THE LEFT OF THIS TABLE HAVE 

PROJECTED PRODUCT COSTS FOR INTEL MODEM CHIPS FROM 2017 THROUGH 

2019? 

A. YES. 

Q. AND DOES THE QUALCOMM COLUMN ON THE RIGHT HAVE INTEL'S 

ESTIMATE OF QUALCOMM'S PRODUCT COST FOR ITS SLIM MODEMS DURING 

THAT SAME TIME PERIOD? 

A. YEAH. I MEAN, OUR BEST GUESSTIMATE; RIGHT? WE DON'T WORK 

AT QUALCOMM, SO -- 

Q. SURE. 

A. UH-HUH.

Q. BUT THESE ARE INTEL'S BEST ESTIMATES OF WHAT QUALCOMM'S 

PRODUCT COSTS ARE; RIGHT? 

A. YES.

Q. AND AS SHOWN IN QX 95, INTEL'S PRODUCT COSTS ARE HIGHER 

THAN QUALCOMM'S; RIGHT? 

A. YEAH. IT'S HARD TO COMPETE WITH YOU GUYS. WITH QUALCOMM, 

WE HAVE TO PICK OUR SPOTS, AND WE WERE VERY CLEAR THAT FIRST WE 

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EVANS CROSS BY MR. RYAN (RESUMED)

UNITED STATES COURT REPORTERS

657

GET THE SOCKET, SECOND WE GET THE SEAT AT THE TABLE WITH 

RESPECT TO THE STRATEGY, AND THEN WE DRIVE TO PROFITABILITY. 

Q. AND THESE ARE CHIP PRODUCT COSTS WITHOUT ANY LICENSE 

ROYALTIES INCLUDED; RIGHT? 

A. WE, WE NEVER KNOW WITH QUALCOMM. WE ASSUME. I MEAN, WE 

DON'T WORK THERE AND WE DON'T KNOW HOW THE SHIFTING HAPPENS.

Q. SO AS FAR AS YOU KNOW, ALL THE DATA SHOWN THERE ON QX 95, 

SLIDE 3, ARE CHIP PRODUCT COSTS WITH NO LICENSE RIGHTS; RIGHT?

A. WE ASSUME SO. 

Q. ALL RIGHT. NOW, YOU TESTIFIED ON TUESDAY THAT QUALCOMM'S 

LICENSING PRACTICES, IN YOUR VIEW, CREATE AN UNFAIR PLAYING 

FIELD; RIGHT? 

A. THAT IS CORRECT. 

Q. AND YOU ALSO TESTIFIED THAT SOLVING THAT PROBLEM WOULD 

REQUIRE INTEL, IN YOUR VIEW, TO HAVE A LICENSE FOR QUALCOMM; 

RIGHT? 

A. ASSUMING IT'S FAIR AND REASONABLE. 

Q. OKAY. NOW, DO YOU RECALL THAT YOU MET WITH THE FTC STAFF 

IN SEPTEMBER OF 2016 WITHOUT ANY LAWYERS FROM QUALCOMM PRESENT 

AND THAT YOU GAVE TESTIMONY UNDER OATH IN THE INVESTIGATION OF 

THIS MATTER? 

A. IF YOU SAY SO, YEAH. I'VE MET WITH A LOT OF YOU ALL, 

YEAH. 

Q. DO YOU RECALL THAT THE FTC ASKED YOU IF HAVING A LICENSE 

TO QUALCOMM'S STANDARD ESSENTIAL PATENTS WOULD BENEFIT INTEL 

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EVANS CROSS BY MR. RYAN (RESUMED)

UNITED STATES COURT REPORTERS

658

AND YOU TESTIFIED THAT YOU COULDN'T ANSWER YES OR NO? 

DO YOU RECALL THAT?

A. I -- I DON'T RECALL. THREE YEARS IS A LONG TIME IN MY 

LIFE.

Q. OKAY. 

A. BUT I'M SURE YOU HAVE -- YOU NEED TO SHOW ME AS USUAL SO I 

CAN SEE THE FULL CONTEXT, PLEASE.

Q. ALL RIGHT. SO IF YOU COULD LOOK, IT'S THE THIRD TAB FROM 

THE BACK OF THE BINDER. 

A. UH-HUH.

Q. DO YOU SEE THAT THIS IS SEPTEMBER 15TH, 2016 -- 

A. MR. RYAN, YOU'RE GOING VERY FAST AGAIN. WHICH TAB, 

PLEASE? 

Q. THE THIRD TAB FROM THE BACK. DO YOU SEE THAT THIS IS A 

SEPTEMBER 15TH, 2016 TRANSCRIPT? 

A. YES, SEPTEMBER 15. YES, I SEE THAT ONE, YES.

Q. AND IF WE COULD PUT UP, PLEASE, PAGE 134, LINES 1 TO 13. 

AND DO YOU SEE YOU WERE ASKED BY THE FTC STAFF, "DOES 

INTEL NOW HAVE A LICENSE TO QUALCOMM'S STANDARD ESSENTIAL 

PATENTS?"

AND YOU REPLIED NO? 

A. UM-HUM.

Q. AND DO YOU SEE THAT YOU WERE THEN ASKED, "WOULD HAVING 

SUCH A LICENSE BENEFIT INTEL"? 

AND YOU THEN GAVE THE ANSWER SHOWN HERE ON LINES 5 TO 13, 

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EVANS CROSS BY MR. RYAN (RESUMED)

UNITED STATES COURT REPORTERS

659

AND AS PART OF THAT, ON LINE 8, YOU TESTIFIED, "RIGHT NOW I 

CAN'T -- I CAN'T ANSWER "YES" OR "NO."

DO YOU SEE THAT? 

A. MY FULL ANSWER WAS, "MAYBE AT THE BEGINNING OF OUR JOURNEY 

IT WOULD HAVE, BECAUSE CONDITIONS WOULD HAVE BEEN CLEAR AS 

WE'RE ESTABLISHING WHAT WE'RE NEEDING TO DO IN THIS SPACE." 

I.E., CLEAR, LEVEL PLAYING FIELD. 

"RIGHT NOW, I CAN'T ANSWER YES OR NO." 

Q. AND THAT WAS A TRUTHFUL -- 

A. "I WOULD TEND TO THINK, YOU KNOW -- I MEAN, I'M NOT IN 

THAT MINDSET RIGHT NOW. RIGHT NOW I'M IN THE MINDSET OF, YOU 

KNOW, THE SITUATION IS WHAT IT IS, AND I THINK IF WE CAN GET 

THROUGH THESE BUSINESS CONDITIONS AND EXECUTION AND SHINING A 

LIGHT ON WHAT'S GOING ON OUT THERE," I.E., THE BUSINESS 

PRACTICES. 

SO, YES, MY ANSWER THAT I JUST READ IS TRUTHFUL IN 

SEPTEMBER 15, 2016. 

Q. ALL RIGHT. SO AS OF SEPTEMBER 2016, IT WAS THE CASE THAT 

YOU COULD NOT ANSWER YES OR NO AS TO WHETHER HAVING A LICENSE 

TO QUALCOMM'S CELLULAR STANDARD ESSENTIAL PATENTS WOULD BENEFIT 

INTEL? THAT WAS TRUTHFUL, RIGHT? 

A. AT THAT POINT IN TIME, WITH THE CONTEXT THAT I HAVE 

ESTABLISHED.

Q. NOW, YOU BELIEVE, DON'T YOU, THAT QUALCOMM REMAINED 

LEADING MODEM SUPPLIER TODAY, DRIVING AGGRESSIVE ECOSYSTEM 

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EVANS CROSS BY MR. RYAN (RESUMED)

UNITED STATES COURT REPORTERS

660

EVOLUTION, LEADING ON KEY PERFORMANCE INDICATORS AND FEATURES; 

RIGHT? 

A. I DON'T KNOW WHAT THAT MEANS. 

Q. WELL, DO YOU BELIEVE THAT QUALCOMM REMAINS THE LEADING 

MODEM SUPPLIER TODAY?

A. BY -- I DON'T KNOW. THAT'S A VERY VAGUE STATEMENT. IS 

THAT ON EARTH? THROUGHOUT THE UNIVERSE? 

IN THE PREMIUM SEGMENT -- I MEAN, I'M NOT SURE. YES, THEY 

ARE VERY GOOD IF THAT'S WHAT YOU'RE TRYING TO ESTABLISH. 

BUT LEADING MODEM SUPPLIER, ARE WE TALKING THIN MODEMS? 

ALL SEGMENTS? WHAT ARE WE TALKING ABOUT? 

Q. OKAY. DO YOU RECALL THAT IN SEPTEMBER OF 2018, YOU GAVE 

TESTIMONY AT AN ITC HEARING ON BEHALF OF APPLE? 

A. YEAH. 

Q. OKAY. SO IF WE CAN PUT UP, PLEASE, ON THE SCREEN PAGE 

1495 OF THAT TESTIMONY, LINES 14 TO 19. 

THE COURT: DO YOU HAVE A COPY OF THAT? IT'S NOT IN 

MY BINDER. 

MR. RYAN: I DO. 

THE COURT: OKAY. THANK YOU. 

MR. RYAN: LET ME HAND THIS UP. 

MR. CARSON: YOUR HONOR, I DON'T THINK I HAVE A COPY 

OF THAT, EITHER. IF I CAN JUST SEE IT. 

THE WITNESS: WHAT ABOUT ME? 

MR. RYAN: MAY I, YOUR HONOR? 

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EVANS CROSS BY MR. RYAN (RESUMED)

UNITED STATES COURT REPORTERS

661

THE COURT: GO AHEAD, PLEASE. 

THE WITNESS: THANK YOU. 

BY MR. RYAN:

Q. AND DO YOU SEE THAT I ASKED YOU AT THAT HEARING, "AND YOU 

BELIEVE, DON'T YOU -- 

A. EXCUSE ME, SIR. MAY I KNOW WHERE THIS IS IN THIS 

DOCUMENT, PLEASE?

Q. YES. IT IS PAGE 1495, BEGINNING ON LINE 14. 

A. AH, 1495. 

Q. LINE 14. 

A. OKAY. ONE SECOND, PLEASE. 

Q. AND DO YOU SEE THAT I ASKED YOU, "AND YOU BELIEVE, DON'T 

YOU, THAT QUALCOMM REMAINS THE LEADING MODEM SUPPLIER TODAY 

DRIVING AGGRESSIVE ECOSYSTEM EVOLUTION AND LEADING ON KEY 

PERFORMANCE INDICATORS AND FEATURES; RIGHT?"

AND YOU TESTIFIED, "YEAH. I MEAN, YOU CAN LOOK AT THE 

BOARD OVER THERE. YES." 

THAT'S THE TESTIMONY THAT YOU GAVE IN SEPTEMBER 2018, 

ISN'T IT? 

A. YES.

Q. NOW, YOU HAVE A LOT OF RESPECT FOR QUALCOMM AS A COMPANY? 

A. AS A TECHNOLOGY COMPANY, YES. 

AS A BUSINESS MODEL COMPANY, NO. 

Q. AND YOU HAVE SAID THAT THEY'VE EARNED WHAT THEY HAVE 

ACHIEVED; ISN'T THAT RIGHT? 

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EVANS REDIRECT BY MR. CARSON

UNITED STATES COURT REPORTERS

662

A. FROM A TECHNICAL STANDPOINT, YES. 

Q. YOU SAID YOU'VE ALWAYS BEEN SUPER RESPECTFUL OF QUALCOMM 

BECAUSE THEY'VE EARNED WHAT THEY'VE ACHIEVED; ISN'T THAT RIGHT? 

A. FROM A TECHNICAL STANDPOINT, YES.

Q. AND YOU SAID THAT QUALCOMM IS NUMBER ONE -- YOU SAID, 

MS. EVANS, THAT QUALCOMM IS NUMBER ONE AND THE UNDISPUTED 

LEADER, THEY HAVE BLAZED THE TRAIL, YOU RESPECT THEM, THEY 

DESERVE TO AND THEY'VE EARNED THAT POSITION. 

THAT'S WHAT YOU'VE SAID BEFORE, RIGHT. 

A. YES. I HAVE A LOT OF FRIENDS THERE. WE ALL WORK IN THE 

SAME INDUSTRY. WE GREW UP TOGETHER. THEY ARE EXCELLENT 

TECHNICAL ENGINEERS. THAT DOESN'T GIVE THEM THE GOD-GIVEN 

RIGHT TO BE THE ONES USING UNFAIR BUSINESS PRACTICES. 

MR. RYAN: I HAVE NO FURTHER QUESTIONS, YOUR HONOR. 

THE COURT: ALL RIGHT. THE TIME IS 9:29. 

MR. CARSON: BRIEF REDIRECT, YOUR HONOR. 

THE COURT: YES. LET ME KNOW WHEN YOU'RE READY. 

MR. CARSON: I'M READY. 

THE COURT: OKAY. ALL RIGHT. GO AHEAD. IT'S 9:29. 

REDIRECT EXAMINATION

BY MR. CARSON: 

Q. HELLO AGAIN, MS. EVANS. 

A. GOOD MORNING.

Q. IF YOU REMEMBER ON TUESDAY, MR. RYAN ASKED YOU SOME 

QUESTIONS ABOUT INDICATIONS INTEL HAD RECEIVED BY MARCH 2018 

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EVANS REDIRECT BY MR. CARSON

UNITED STATES COURT REPORTERS

663

THAT THEY'D BE GIVEN A LARGER SHARE OF APPLE'S MODEM BUSINESS? 

DO YOU REMEMBER THAT?

A. I REMEMBER THAT LINE OF QUESTIONING, YES.

Q. NOW, EVEN WITH THAT LARGER SHARE, WOULD INTEL'S MODEM 

BUSINESS STILL BE ON FRAGILE GROUND? 

A. YES, IT IS ON FRAGILE GROUND BECAUSE WE'RE NOT COMPETING 

FAIR AND SQUARE IN THIS ELEMENT. 

NOW, IT'S TRUE THAT OBVIOUSLY WE STARTED BEHIND, AS I 

ESTABLISHED IN 2011, AS IT'S VERY PRECARIOUS. 

Q. AS OF MARCH 2018, ARE YOU AWARE OF ITC PROCEEDINGS BETWEEN 

QUALCOMM AND APPLE WHICH I THINK MR. RYAN JUST REFERENCED? 

A. MARCH -- OKAY. SO NOW -- I BELIEVE WE ARE -- WHERE ARE WE 

NOW? WE'RE IN JANUARY 2019. YES, I AM. 

Q. SO UNDERSTANDING YOU'RE NOT A LAWYER, DO YOU UNDERSTAND 

WHAT QUALCOMM WAS SEEKING IN THOSE ITC PROCEEDINGS? 

A. YEAH, CUT US OFF AT THE KNEES BEFORE WE'RE BORN AND ASK 

FOR A BAN OF INTEL BASED IPHONES FROM THE UNITED STATES. 

Q. SO IF THERE WAS A BAN OF INTEL BASED IPHONES IN THE 

UNITED STATES, WHAT EFFECT WOULD THAT HAVE ON INTEL'S MODEM 

CHIP BUSINESS? 

A. I TESTIFIED MANY TIMES AND STATED MANY TIMES THAT THIS 

WOULD -- I'M NEARLY CERTAIN THAT WE WOULD EXIST (SIC), THEREBY 

LEAVING THEM AS THE SOLE SUPPLIER, WHICH IS WHAT I BELIEVE THEY 

CONTINUOUSLY SEEK.

Q. SO LAST TOPIC. MR. RYAN, I THINK, ASKED YOU ON TUESDAY 

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EVANS REDIRECT BY MR. CARSON

UNITED STATES COURT REPORTERS

664

ABOUT INTEL'S ABILITY TO PROVIDE CHIPSETS TO APPLE FOR A 2014 

APPLE PRODUCT. 

DO YOU REMEMBER THAT? 

A. I DO. 

Q. IF GIVEN THE OPPORTUNITY, COULD INTEL, FROM A TECHNICAL 

AND SCHEDULE STANDPOINT, HAVE PROVIDED CHIPSETS FOR A 2014 

APPLE PRODUCT? 

A. WE WOULD HAVE DONE WHATEVER IT TAKES TO DELIVER THAT 

SOCKET AND WE'VE PROVEN THAT. AND EVERY TIME WE'VE BEEN GIVEN 

THAT OPPORTUNITY, NO MATTER WHAT IT TOOK, THAT'S WHAT WE DID. 

MR. CARSON: THANK YOU, MS. EVANS. 

NO FURTHER QUESTIONS, YOUR HONOR. 

THE COURT: OKAY. IT'S 9:31. IS THERE ANY RECROSS, 

I GUESS? 

MR. RYAN: YES, YOUR HONOR, I HAVE ONE QUESTION. 

THE COURT: ALL RIGHT. GO AHEAD, PLEASE. 

RECROSS-EXAMINATION

BY MR. RYAN:

Q. IN THE ITC PROCEEDING THAT YOU JUST REFERRED TO, QUALCOMM 

IS BRINGING CLAIMS BASED ON NONSTANDARD ESSENTIAL PATENTS; 

ISN'T THAT RIGHT? 

A. IF YOU SAY SO. I MEAN, WHEN WE START SAYING SEPS, NOT 

SEPS, I'M NOT A LAWYER. I DON'T LIVE IN THE FRAND SPACE. 

MR. RYAN: THAT'S IT, YOUR HONOR. 

THE COURT: OKAY. 9:31 TO 9:32. 

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EVANS FURTHER REDIRECT BY MR. CARSON

UNITED STATES COURT REPORTERS

665

MR. CARSON: BEFORE THE WITNESS STEPPED DOWN, I THINK 

THERE MIGHT HAVE BEEN A TRANSCRIPTION ERROR POTENTIALLY. IF I 

COULD CLARIFY? 

THE COURT: OKAY.

FURTHER REDIRECT EXAMINATION

BY MR. CARSON:

Q. SO, MS. EVANS, I ASKED YOU WHAT WOULD HAPPEN IF THE 

EXCLUSION ORDER FROM QUALCOMM WAS GRANTED. 

DID YOU SAY INTEL WOULD EXIT OR STILL EXIST?

A. EXIT. 

Q. OKAY. 

A. SORRY, MY ENGLISH FRENCH. EXIT, LIKE DIE, STEP OUT OF THE 

BUSINESS. 

MR. CARSON: THANK YOU, MS. EVANS. 

NO FURTHER QUESTIONS. 

THE COURT: OKAY. 9:32. IS THERE A NEED TO HAVE 

THIS WITNESS SUBJECT TO RECALL, OR IS SHE COMPLETELY EXCUSED? 

MR. CARSON: NOT FOR THE FTC, YOUR HONOR. 

MR. RYAN: NOT FOR US, EITHER. 

THE COURT: OKAY. THEN YOU HAVE COMPLETED YOUR TRIAL 

TESTIMONY AND YOU ARE FREE TO LEAVE. 

THE WITNESS: THANK YOU. 

NICE TO MEET YOU. BYE-BYE. 

THE COURT: OKAY. IF YOU WOULD -- OH, YOUR NEXT 

WITNESS IS BY VIDEO; CORRECT? 

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UNITED STATES COURT REPORTERS

666

MR. ANSALDO: YES, YOUR HONOR. 

THE COURT: OKAY. 

MR. ANSALDO: ALEX ANSALDO FOR THE FEDERAL TRADE 

COMMISSION. 

NEXT THE FEDERAL TRADE COMMISSION WILL OFFER BY DEPOSITION 

THE TESTIMONY OF MARK DAVIS, THE CHIEF TECHNOLOGY OFFICER OF 

VIA TELECOM UNTIL 2014. 

THE COURT: OKAY. 

MR. ANSALDO: MAY I APPROACH WITH BINDERS? 

THE COURT: YES. THANK YOU. 

OKAY. DO YOU WANT TO ADMIT ANY EXHIBITS? 

MR. ANSALDO: YES, YOUR HONOR. 

THE COURT: OKAY. TIME IS 9:33. GO AHEAD, PLEASE.

MR. ANSALDO: MOVE TO ADMIT JX 0007. 

THE COURT: OKAY. I'M SORRY, GIVE ME ONE MINUTE. 

SORRY. IT'S 9:34. 

OKAY. GO AHEAD. WHAT IS IT? 

MR. ANSALDO: JX 0007. 

THE COURT: JX 0007, OKAY. 

ANY OBJECTION? 

MR. BORNSTEIN: NOT TO A JX, YOUR HONOR, NO. 

THE COURT: OKAY. THAT'S ADMITTED. 

MR. ANSALDO: AND CX 8295. 

THE COURT: OKAY. WHAT ARE YOUR OTHERS? 

MR. ANSALDO: 1770, 1771. 

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DAVIS DEPOSITION

UNITED STATES COURT REPORTERS

667

THE COURT: AND THESE ARE ALL CX'S? 

MR. ANSALDO: YES, YOUR HONOR. 

THE COURT: OKAY. 

MR. ANSALDO: 6552, 1774, 1785. THAT'S IT. 

THE COURT: ANY OBJECTION TO THESE EXHIBITS? 

MR. BORNSTEIN: NONE, YOUR HONOR. 

THE COURT: ALL RIGHT. THEY'RE ADMITTED. 

(JOINT EXHIBIT JX 0007 AND CX 8295, 1770, 1771, 6552, 1774 

AND 1785 WERE ADMITTED IN EVIDENCE.) 

MR. ANSALDO: MR. KOTARSKI, IF YOU WOULD PLEASE START 

THE TAPE. 

(THE VIDEOTAPED DEPOSITION OF MARK DAVIS WAS PLAYED IN 

OPEN COURT OFF THE RECORD.) 

THE COURT: OKAY. TIME IS 9:35. I'M SORRY. 9:58. 

I'M LOOKING AT THE WRONG ONE. 

MR. BAKER: GOOD MORNING, YOUR HONOR. JOE BAKER FOR 

THE FTC. 

THE COURT: OKAY. 

MR. BAKER: THE FTC CALLS TONY BLEVINS. 

THE COURT: OKAY. 

NOW, DID YOU THINK THAT A PORTION OF HIS TESTIMONY WILL 

NEED TO BE IN A SEALED COURTROOM? 

MR. BAKER: A NUMBER OF THESE DOCUMENTS HAVE BEEN 

SEALED IN PART IN THE LAST 24 HOURS. 

I BELIEVE THAT ON THE FTC'S SIDE, WE CAN WORK AROUND THAT, 

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NOT DISPLAYING DOCUMENTS PUBLICLY AND ASKING THE WITNESS TO 

AVOID GIVING DOLLAR AMOUNTS IN HIS ANSWERS. 

I DON'T KNOW IF THE SAME IS TRUE ON CROSS. 

MS. SESSIONS: WE'RE GOING TO TRY OUR BEST, YOUR 

HONOR, AND I BELIEVE IF THE FTC DOES NOT INTEND TO ELICIT AND 

THE WITNESS DOES NOT PROVIDE SPECIFIC DOLLAR AMOUNTS IN HIS 

ANSWERS, I THINK WE CAN PROBABLY DO MOST, IF NOT ALL OF THIS, 

ON THE PUBLIC RECORD. 

THE COURT: OKAY. ALL RIGHT. LET ME KNOW IF AT ANY 

POINT YOU THINK I NEED TO SEAL THE COURTROOM. OKAY? 

MR. BAKER: OKAY. 

THE COURT: ALL RIGHT. THANK YOU. CAN YOU BRING 

YOUR WITNESS FORWARD, PLEASE. 

I ASSUME THAT DAVIS IS NOT SUBJECT TO RECALL; IS THAT 

RIGHT? 

MR. ANSALDO: THAT'S CORRECT, YOUR HONOR. 

THE COURT: OKAY. AND IS THAT -- 

MR. BORNSTEIN: THAT'S CORRECT, YOUR HONOR. 

THE COURT: ALL RIGHT. THANK YOU. 

(PAUSE IN PROCEEDINGS.) 

THE CLERK: PLEASE RAISE YOUR RIGHT HAND. 

(PLAINTIFF'S WITNESS, TONY BLEVINS, WAS SWORN.)

THE WITNESS: YES. 

THE CLERK: THANK YOU. PLEASE BE SEATED. 

PLEASE STATE YOUR FULL NAME AND SPELL YOUR LAST NAME FOR 

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THE RECORD. 

THE WITNESS: YES. MY NAME IS TONY BLEVINS, AND THE 

LAST NAME IS SPELLED B-L-E-V-I-N-S. 

THE COURT: ALL RIGHT. TIME IS 10:01. GO AHEAD, 

PLEASE. 

DIRECT EXAMINATION

BY MR. BAKER: 

Q. GOOD MORNING, MR. BLEVINS. 

A. GOOD MORNING, SIR.

Q. WHERE DO YOU WORK? 

A. I WORK AT APPLE IN CUPERTINO, CALIFORNIA.

Q. WHAT IS YOUR TITLE? 

A. MY TITLE IS VICE PRESIDENT OF PROCUREMENT. 

I'M SORRY. VICE PRESIDENT OF PROCUREMENT.

Q. WHAT ARE YOUR RESPONSIBILITIES IN THAT ROLE? 

A. ESSENTIALLY MY TEAM IS RESPONSIBLE FOR ACQUIRING GOODS, 

MATERIALS, LABOR, OTHER SERVICES THAT APPLE NEEDS TO ASSEMBLE 

AND SHIP ITS FINAL PRODUCTS TO CONSUMERS.

Q. WHEN DID APPLE LAUNCH ITS FIRST IPHONE? 

A. MY RECOLLECTION IS WE ANNOUNCED IT IN JANUARY OF 2007, AND 

THEN WE SHIPPED IT IN JUNE OF THAT YEAR.

Q. AND HOW MANY COMPONENTS ARE IN AN IPHONE? 

A. EACH IPHONE WOULD VARY. BUT YOU CAN SAFELY SAY THAT THERE 

ARE APPROXIMATELY, PLUS OR MINUS, 1,000 COMPONENTS PER IPHONE.

Q. AND HAVE YOUR RESPONSIBILITIES SINCE 2007 INCLUDED 

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PURCHASING MODEM CHIPS FOR APPLE IPHONES? 

A. YES, THAT IS CORRECT, SIR.

Q. WHAT SORT OF FACTORS DOES APPLE TAKE INTO CONSIDERATION 

WHEN MAKING MODEM CHIP PROCUREMENT DECISIONS?

A. THERE ARE MANY FACTORS. WE STRIVE FOR OVERALL BEST VALUE. 

SO WE'LL LOOK AT TECHNICAL ATTRIBUTES AND CHARACTERISTICS OF A 

PARTICULAR OFFERING; WE WILL EXAMINE VARIOUS COST FACTORS, 

TOTAL COST OF OWNERSHIP IS CERTAINLY IMPORTANT; WE'LL LOOK AT 

THE QUALITY OF THE COMPONENTS. 

SO WE TRY TO LOOK AT THE TOTAL OWNERSHIP EXPERIENCE AND 

ACHIEVE OVERALL BEST VALUE IT WOULD BE SAFE TO SAY.

Q. DO YOU TAKE INTO ACCOUNT ASSOCIATED I.P. LICENSING COSTS 

IN MAKING MODEM CHIP PROCUREMENT DECISIONS? 

A. YES. AS A MATTER OF FACT, WE LOOK AT WHAT WE TERM TOTAL 

COST OF OWNERSHIP. 

Q. HOW OFTEN DOES APPLE CHOOSE TO BUY A SINGLE COMPONENT FROM 

MULTIPLE SUPPLIERS? 

A. INFREQUENTLY. I CAN TELL YOU THAT WE REALLY VALUE MARKET 

COMPETITION AND LEVERAGE. WE THINK THAT'S A VERY IMPORTANT 

CONCEPT FOR US TO ACHIEVE OVERALL BEST VALUE. 

SO AS WE SOURCE COMPONENTS, WE TYPICALLY STRIVE TO GET AT 

LEAST TWO SOURCES, PROBABLY NOT MORE THAN SIX FOR EFFICIENCY 

REASONS. AND IT VARIES CIRCUMSTANTIALLY. BUT WE ALWAYS TRY TO 

GENERATE ENOUGH SOURCES TO ESTABLISH SOME COMPETITION. IN SOME 

CASES THAT'S NOT POSSIBLE AND WE WIND UP WITH ONE SOURCE, WHICH 

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IS CERTAINLY A LOT MORE CHALLENGING.

Q. JUST TO BE CLEAR, IT'S INFREQUENT FOR APPLE TO HAVE A 

SINGLE SOURCE FOR A GIVEN COMPONENT? 

A. YES, IT'S INFREQUENT. IT DOES HAPPEN UNFORTUNATELY ON 

OCCASION.

Q. WHEN APPLE DOES SOLE SOURCE ON IPHONE COMPONENT, DOES 

APPLE GENERALLY AGREE TO BUY THAT COMPONENT EXCLUSIVELY FROM 

THAT SOLE SUPPLIER? 

A. NO. MY EXPERIENCE OVER THE COURSE OF THE LAST 18 YEARS IS 

WE HAVE ONLY AGREED TO DO THAT ONCE. 

Q. WHY IS IT UNCOMMON FOR APPLE TO AGREE TO EXCLUSIVITY? 

A. WELL, AS I MENTIONED EARLIER, THAT WE THINK MARKET 

COMPETITION AND MARKET FORCES ARE VERY IMPORTANT FOR US TO 

ACHIEVE OVERALL BEST LEVERAGE. AND SO FOR THAT REASON, YOU 

WOULDN'T WANT TO LIMIT YOURSELF TO ONE SOURCE BECAUSE YOU 

ESSENTIALLY EVISCERATE THAT COMPETITION. 

AND FOLLOWING THAT, YOU CERTAINLY WOULDN'T WANT TO ENTER 

INTO AN EXCLUSIVITY AGREEMENT UNLESS YOU ABSOLUTELY HAD TO 

BECAUSE THERE WOULD BE ABSOLUTELY NO COMPETITION AT THAT POINT.

Q. DO YOU UNDERSTAND THE TERMS GSM, CDMA, UMTS, AND LTE? 

A. YES, I HEAR THOSE TERMS AS A PART OF MY WORK AT APPLE. 

Q. AND WHAT IS YOUR UNDERSTANDING OF WHAT THOSE TERMS REFER 

TO?

A. EACH OF THEM ARE DIFFERENT WIRELESS STANDARDS.

Q. DOES APPLE SELL IPHONES THAT ARE COMPATIBLE WITH BOTH CDMA 

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AND UMTS? 

A. YES, WE DO. 

Q. WERE THE EARLIEST IPHONES COMPATIBLE WITH CDMA?

A. THE EARLIEST ONES WERE NOT. 

Q. WHAT STANDARDS DID THEY EMPLOY? 

A. THE VERY EARLIEST PHONES WERE GSM AND GSM EDGE. THEN 

LATER UMTS, AND IT WASN'T UNTIL MUCH LATER, I BELIEVE JANUARY 

OF 2011, THAT WE MADE OUR FIRST CDMA OFFERING. 

Q. WHAT CAUSED APPLE TO START MAKING CDMA PHONES? 

A. WE DESIRED TO SELL PRODUCTS ON THE VERIZON NETWORK IN 

PARTICULAR, AND THERE WERE SOME OTHERS AROUND THE WORLD, JAPAN, 

FOR EXAMPLE. 

SO THERE WERE SOME NETWORKS THAT WE DESIRED TO SELL 

PRODUCTS ON, AND THE ONLY WAY THAT WE COULD DO THAT WAS TO 

DESIGN CDMA CAPABLE OFFERING BECAUSE THAT'S WHAT THEIR NETWORKS 

OVER THE INTERFACE WAS.

Q. WHEN DID APPLE FIRST LAUNCH AN IPHONE THAT SUPPORTED 4G 

LTE STANDARDS? 

A. MY RECOLLECTION IS OUR FIRST LTE PRODUCT OFFERING WOULD 

HAVE BEEN FALL 2012. 

Q. SINCE LAUNCHING THE FIRST LTE BASED IPHONE, HAS APPLE 

LAUNCHED ANY NEW CELLULAR DEVICES THAT DO NOT SUPPORT LTE? 

A. NO. AFTER THAT LAUNCH, ALL SUCCESSFUL LAUNCHES HAVE ALSO 

SUPPORTED LTE.

Q. HAVE YOU HEARD THE TERM PREMIUM LTE USED IN RELATION TO 

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MODEM CHIPS? 

A. YES, I HAVE.

Q. WHAT IS YOUR UNDERSTANDING OF WHAT PREMIUM MODEM LTE CHIPS 

ARE? 

A. PREMIUM LTE CHIPS WOULD BE A SUPERIOR OFFERING AS COMPARED 

TO STANDARD.

Q. IN YOUR VIEW, WHAT CHARACTERISTICS DISTINGUISH PREMIUM LTE 

CHIPS FROM NON-PREMIUM LTE CHIPS? 

A. THERE ARE MANY. BUT IN ESSENCE, I WOULD SAY THAT THE 

SPEED OF THE CHIPS, THE UPLINK AND DOWNLINK PERFORMANCE, 

CERTAINLY THE CHARACTERISTICS, QUALITY IS VERY IMPORTANT, SIZE, 

MINIATURIZATION BEING FAR PREFERABLE IS IMPORTANT, POWER 

CONSUMPTION OF THE CHIP. IN A MOBILE DEVICE, PEOPLE LIKE THEIR 

BATTERIES TO LAST LONGER. 

SO THOSE WOULD BE SOME OF THE HIGH LEVEL ATTRIBUTES THAT 

WOULD DISTINGUISH A PREMIUM CHIP FROM SOMETHING WE WOULD 

CONSIDER NON-PREMIUM.

Q. IS THERE A PRICE DIFFERENCE BETWEEN PREMIUM AND 

NON-PREMIUM LTE CHIPS? 

A. GENERALLY SPEAKING, THERE'S A PRICE DIFFERENCE. IT WOULD 

VARY BY QUARTER AND BY SUPPLIER, BUT A PREMIUM CHIP WOULD COST 

ROUGHLY DOUBLE WHAT WE DETERMINE A NON-PREMIUM CHIP WOULD COST.

Q. DOES APPLE BUY PREMIUM LTE CHIPS? 

A. YES. WE FOCUS EXCLUSIVELY ON PREMIUM CHIPS. OUR 

PERCEPTION IS THAT THE IPHONE IS A PREMIUM SMARTPHONE, SO 

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THEREFORE ALL OF ITS COMPONENTS NEED TO BE THE BEST THAT WE CAN 

POSSIBLY DESIGN OR ACQUIRE. 

Q. WHEN APPLE FIRST BEGAN BUYING LTE CHIPS FOR THE 2012 

IPHONE, WHICH COMPANIES WERE CAPABLE OF SUPPLYING CHIPS THAT 

MET APPLE'S NEEDS? 

A. MY RECOLLECTION IS OUR ASSESSMENT WAS THAT QUALCOMM HAD A 

SUPERIOR OFFERING, AND SO THEREFORE, WE NARROWED OUR CHOICE TO 

QUALCOMM FOR THAT FIRST OFFERING.

Q. DID THAT EVER CHANGE? 

A. IT CHANGED LATER. I THINK AROUND 2016, WE SOURCED WITH 

BOTH QUALCOMM AND INTEL.

Q. AND IN BETWEEN 2012 AND 2016, WERE OTHER SUPPLIERS CAPABLE 

OF SUPPLYING PREMIUM LTE CHIPS THAT MET APPLE'S NEEDS? 

A. YES. IN PARTICULAR, WE FELT THAT INTEL HAD CAPABILITY IN 

THAT INTERIM PERIOD. 

Q. FOR THE FIRST IPHONE LAUNCHED IN 2007, WHEN DID YOU START 

COMMUNICATING WITH POTENTIAL MODEM CHIP SUPPLIERS? 

A. WE STARTED APPROXIMATELY TWO YEARS IN ADVANCE OF THE 

LAUNCH. AND SO AROUND SPRING TO SUMMER OF 2005 IS WHEN MOST OF 

THAT WORK WAS GOING ON.

Q. WHAT TYPE OF MODEM CHIPS WAS APPLE SEEKING AT THAT TIME?

A. AT THAT POINT IN TIME, WE WERE LOOKING AT GSM EDGE FOR 

WHAT WOULD BE THE FIRST IPHONE IN 2007; AND WE WERE ALSO 

THINKING ABOUT WHAT WOULD BECOME ITS SUCCESSOR IN 2008, WHICH 

WAS A 3G IPHONE. 

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Q. AND WHOSE MODEM CHIPS DID YOU END UP USING IN THAT FIRST 

IPHONE? 

A. IN THE FINAL ANALYSIS, WE SELECTED INFINEON OF MUNICH, 

GERMANY.

Q. DID APPLE CONSIDER QUALCOMM AT THAT TIME? 

A. WE ATTEMPTED TO CONSIDER THEM, YES.

Q. WHAT WAS THE RESULT OF THAT? 

A. IT WAS UNSUCCESSFUL, THAT IN THIS CASE, AS IS STANDARD 

PROTOCOL FOR US, WE WOULD GO OUT TO POTENTIAL SUPPLIERS, WE 

WOULD ASK FOR SAMPLES, WE WOULD ASK FOR TECHNICAL 

SPECIFICATIONS SO THAT WE CAN BEGIN TO DO THE VALUE ANALYSIS 

THAT I MENTIONED. 

WE DIDN'T HAVE ANY EXPERIENCE WITH QUALCOMM AT THAT POINT, 

AND WE WERE SURPRISED THAT INSTEAD OF OFFERING US SAMPLES AND 

SPECIFICATIONS, WE GOT A LETTER INDICATING THAT THEY HAD A 

LICENSING AGREEMENT THAT HAD TO BE COMPLETED PRIOR TO THEM 

SHIPPING US ANY SAMPLES OR HAVING ANY ENGAGEMENT.

Q. I'D LIKE YOU TO LOOK IN THE BINDER OF EXHIBITS THAT YOU 

HAVE AT TAB 2, PLEASE. THAT'S JX 0032. 

THIS IS AN E-MAIL FROM JEFF ALTMAN TO SOMEBODY NAMED 

B. CORLETT. 

I WANT TO ASK YOU, YOU'RE NOT NAMED ON THIS E-MAIL, BUT 

HAVE YOU EVER SEEN IT? 

A. YES, I RECALL THIS SPECIFICALLY. B. CORLETT WAS BARRY 

CORLETT. HE WAS THE ENGINEER IN CHARGE OF DOING THE WORK THAT 

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I DESCRIBED. HE RECEIVED THIS LETTER IN SUBSTITUTE OF SAMPLES 

HE WAS EXPECTING, AND SO HE IMMEDIATELY BROUGHT IT TO ME AND 

ASKED ME WHAT I THOUGHT ABOUT THIS AND REQUESTED SOME GUIDANCE. 

AND I TOLD HIM THAT UNFORTUNATELY, I'D SPENT 20 YEARS IN 

THE INDUSTRY, I HAD NEVER SEEN A LETTER LIKE THIS. IT WAS 

GOING TO TAKE ME SOME TIME TO EVALUATE, BUT IT LOOKED LIKE 

THERE WAS A REQUIREMENT FOR AN AGREEMENT BEFORE WE GOT SAMPLE. 

MR. BAKER: YES. YOUR HONOR, I MOVE THE ADMISSION OF 

JX 0032. 

MS. SESSIONS: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(JOINT EXHIBIT JX 0032 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE.

BY MR. BAKER:

Q. MR. BLEVINS, IF YOU COULD FOCUS ON THE PARAGRAPH NEAR THE 

BOTTOM OF THE PAGE THAT BEGINS "ONCE THIS PATENT LICENSE HAS 

BEEN COMPLETED." 

CAN YOU EXPLAIN WHAT YOU UNDERSTOOD QUALCOMM TO BE 

COMMUNICATING TO APPLE IN THIS LETTER. 

A. OUR INTERPRETATION WAS THAT THIS ESSENTIALLY MEANT NO 

LICENSE, NO CHIPS, THAT YOU COULDN'T BUY ANY CHIPS WITHOUT A 

LICENSE. IN FACT, YOU COULDN'T GET ANY SAMPLES OF CHIPS, YOU 

COULDN'T GET ANY SPECIFICATIONS OF CHIPS. 

THAT THE FIRST ORDER OF BUSINESS WAS TO COMPLETE A 

LICENSE, AND WE LATER LEARNED THAT LICENSE ALSO REQUIRED APPLE 

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TO CROSS-LICENSE ITS I.P. BACK TO QUALCOMM, WHICH WE FOUND 

UNSETTLING. 

Q. WHAT WAS YOUR REACTION TO THIS? 

A. WE WERE TAKEN ABACK. WE DIDN'T EXACTLY KNOW WHAT TO MAKE 

OF IT. 

BUT WE KNEW THAT WE WEREN'T GOING TO CROSS-LICENSE ALL OF 

OUR I.P. BACK TO QUALCOMM. WE WERE SIMPLY TRYING TO BUY A 

CHIP. 

SO AT THIS POINT WE ESSENTIALLY ELIMINATED QUALCOMM FROM 

FURTHER CONSIDERATION. WE NEEDED TO MAKE A CHIP DECISION, AND 

WE KNEW THIS WAS GOING TO TAKE TOO LONG TO UNRAVEL.

Q. HAS ANY OTHER MODEM CHIP SUPPLIER DEMANDED THAT APPLE 

ENTER INTO A LICENSE BEFORE SENDING ENGINEERING SAMPLES TO 

APPLE?

A. NO, NO NEVER. 

Q. HAVE YOU EVER HAD ANY COMPONENT SUPPLIER IN THE IPHONE 

MAKE SUCH A DEMAND?

A. ACTUALLY, YES. I CAN THINK OF ONE INSTANCE A COUPLE OF 

YEARS BACK, THE REASON I RECALL THIS ONE, I HAPPENED TO BE ON 

VACATION DURING A DATE THAT NXP SEMICONDUCTOR HAD A MEETING 

WITH MY TEAM AND CAME IN AND SAID THAT THEY HAD A LICENSING 

REQUIREMENT FOR THEIR NFC CHIP. 

SO I RECALL BEING REALLY TAKEN ABACK BY THAT, AND SO 

DESPITE THE FACT THAT I WAS ON VACATION THAT DAY, I CALLED 

THEIR CEO THAT VERY DAY AND WE QUASHED IT. WE TOLD THEM THAT 

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IF THEY WANTED MORE MONIES FROM APPLE, THEY SHOULD PRICE IT 

INTO THEIR HARDWARE. AND IF THEIR HARDWARE WERE COMPETITIVE, 

WE WOULD CONTINUE TO BUY IT. IF WE WERE UNCOMPETITIVE, WE 

WOULD GO TO SONY OR SOMEONE ELSE. THEY WITHDREW THEIR LICENSE 

THAT DAY. WE QUASHED IT. OTHER THAN THAT, I CAN'T THINK OF 

ANOTHER INSTANCE.

Q. HAVE YOU EVER HAD A SUPPLIER REQUEST A CROSS-LICENSE TO 

APPLE'S I.P. BEFORE THEY WOULD AGREE TO SEND ENGINEERING 

SAMPLES TO APPLE? 

A. THIS IS THE ONLY ONE THAT I'VE EVER PERSONALLY SEEN. 

Q. DID APPLE ENTER INTO A LICENSE AGREEMENT WITH QUALCOMM? 

A. NO. TO THIS DATE, WE'VE NOT ENTERED INTO A LICENSE 

AGREEMENT WITH THEM.

Q. WHY NOT? 

A. THERE HAVE BEEN A NUMBER OF STUMBLING BLOCKS. THE BIGGEST 

ONE IS WE DON'T UNDERSTAND WHY, IN ORDER TO BUY A COMPONENT 

FROM THEM, WE HAVE TO ENTER INTO A LICENSING AGREEMENT THAT 

CROSS-LICENSES ALL OF APPLE'S I.P. BACK TO THEM. WE SIMPLY 

DON'T UNDERSTAND WHY THAT'S FAIR OR WHY IT'S IN ANYONE'S BEST 

INTEREST, OTHER THAN QUALCOMM. 

Q. I'D LIKE YOU TO TURN TO TAB 3 IN YOUR BINDER, PLEASE. 

THIS IS EXHIBIT CX 0507. 

A. YES. 

Q. THIS IS AN E-MAIL FROM QUALCOMM TO YOU DATED 

SEPTEMBER 11TH, 2006. 

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DO YOU RECOGNIZE THIS DOCUMENT?

A. YES, I RECALL SEEING THIS DOCUMENT.

Q. WHAT IS IT? 

A. AT THAT POINT IN TIME, WE SENT OUT AN RFQ, OR REQUEST FOR 

QUOTATION. WE WERE LOOKING FOR A PROPOSAL FROM VARIOUS 

SUPPLIERS TO PROVIDE APPLE BASEBAND MODEMS. SO THIS WOULD 

APPEAR TO BE QUALCOMM'S RESPONSE TO THAT REQUEST. 

MR. BAKER: YOUR HONOR, I MOVE TO ADMIT CX 0507. 

MS. SESSIONS: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 0507 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MR. BAKER:

Q. MR. BLEVINS, TURNING TO PAGE 3 OF THIS EXHIBIT, IT LOOKS 

LIKE THERE'S AN ATTACHMENT TO THE E-MAIL. CAN YOU TELL ME WHAT 

THIS ATTACHMENT IS? 

A. YES. AS I RECALL, THIS IS WHAT QUALCOMM CALLED A SULA, OR 

A SUBSCRIBER UNIT LICENSE AGREEMENT. SO ONCE AGAIN, THEY WERE 

REITERATING THAT YOU HAVE TO SIGN THIS LICENSE AGREEMENT IF YOU 

WANT TO BUY CHIPS. 

SO IT WAS A CONTINUATION OF THE POLICY THAT WE DETERMINED 

NO LICENSE, NO CHIPS.

Q. AND TURNING TO PAGE 49 OF THIS EXHIBIT, PLEASE, THERE'S 

ANOTHER ATTACHMENT. IT'S TITLED SUMMARY OF THIRD PARTY I.P. 

RIGHTS BENEFITING CUSTOMERS OF QUALCOMM'S MSM'S AND SOFTWARE. 

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DO YOU SEE THAT? 

A. YES. 

Q. CAN YOU TELL ME WHAT THAT IS? 

A. YES. APPLE'S PHILOSOPHY IS WHEN WE WANT TO BUY HARDWARE, 

THAT AMONG OTHER THINGS WE WANT TO BUY IT EXHAUSTIVELY, AND WE 

ALSO WANT INDEMNIFICATION, MEANING WE WANT FREEDOM OF USE ONCE 

WE PURCHASE THE HARDWARE. 

QUALCOMM SAID THAT INSTEAD OF PROVIDING US THE INDEMNITY 

THAT WE THOUGHT WAS CRITICAL, THEY WOULD INSTEAD SUMMARIZE A 

BUNDLE OF I.P. RIGHTS THAT MIGHT COME WITH USE OF THEIR CHIPS, 

IMPLYING THAT OTHERS MAY HAVE SIGNED AGREEMENTS THAT WERE 

SIMILAR OR SAME AS THE ONE THEY SENT US. 

Q. AND THIS DOCUMENT WAS SUBMITTED BY QUALCOMM IN CONNECTION 

WITH ITS RESPONSE TO APPLE'S MODEM CHIP RFP; IS THAT RIGHT? 

A. YES, THAT'S CORRECT. 

Q. DID APPLE EVENTUALLY ENTER INTO AGREEMENTS WITH QUALCOMM? 

A. YES, WE DID ENTER INTO A DIRECT LICENSING AGREEMENT. BUT 

WE HAVE ENTERED INTO AGREEMENTS WITH THEM SINCE. 

Q. ARE YOU FAMILIAR WITH A 2007 AGREEMENT BETWEEN APPLE AND 

QUALCOMM CALLED THE MARKETING INCENTIVE AGREEMENT? 

A. YES. I WAS NOT THE SIGNATOR OF THAT AGREEMENT. BUT SINCE 

THAT POINT IN TIME, I HAVE BECOME FAMILIAR WITH IT. 

Q. IF YOU TURN TO TAB 4 IN YOUR EXHIBIT BINDER, PLEASE. 

THAT'S EXHIBIT JX 0040. 

IS THAT THE 2007 MARKETING INCENTIVE AGREEMENT? 

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A. YES. I'VE SEEN THIS DOCUMENT MANY TIMES. 

MR. BAKER: PORTIONS OF THIS DOCUMENT HAVE BEEN 

SEALED, YOUR HONOR. I MOVE ITS ADMISSION, JX 0040. 

MS. SESSIONS: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(JOINT EXHIBIT JX 0040 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MR. BAKER:

Q. MR. BLEVINS, ARE YOU FAMILIAR WITH THE 2009 AGREEMENT 

BETWEEN APPLE AND QUALCOMM CALLED THE STRATEGIC TERMS 

AGREEMENT? 

A. YES. I WAS NOT THE SIGNATOR OF THAT AGREEMENT. BUT I'M 

VERY FAMILIAR WITH THE AGREEMENT. 

Q. IF YOU TURN TO TAB 5 IN YOUR BINDER AND LOOK AT EXHIBIT 

JX 0052. IS THAT THE 2009 STRATEGIC TERMS AGREEMENT? 

A. PARDON, BUT I MAY BE MISSING TAB 5. 

MR. BAKER: YOUR HONOR, MAY I APPROACH? 

THE COURT: GO AHEAD, PLEASE. 

THE WITNESS: THANK YOU. 

YES, I'M VERY FAMILIAR WITH THIS DOCUMENT. 

MR. BAKER: YOUR HONOR, I MOVE TO ADMIT JX 0052. 

PORTIONS OF THIS DOCUMENT ALSO HAVE BEEN SEALED. 

MS. SESSIONS: NO OBJECTION. 

THE COURT: OKAY. IT'S ADMITTED. 

(JOINT EXHIBIT JX 0052 WAS ADMITTED IN EVIDENCE.)

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682

BY MR. BAKER: 

Q. MR. BLEVINS, ARE YOU FAMILIAR WITH THE 2011 AGREEMENT 

BETWEEN APPLE AND QUALCOMM CALLED THE TRANSITION AGREEMENT? 

A. YES. ONCE AGAIN, I WAS NOT THE SIGNATOR, BUT I HAVE 

BECOME VERY FAMILIAR WITH THE AGREEMENT SINCE THAT TIME.

Q. AND ARE YOU FAMILIAR WITH THE 2013 AGREEMENT BETWEEN APPLE 

AND QUALCOMM CALLED THE FIRST AMENDMENT TO TRANSITION 

AGREEMENT? 

A. YES, I AM. ONCE AGAIN, I WAS NOT THE SIGNATOR, BUT I'M 

VERY FAMILIAR WITH IT.

Q. IS THERE A DOCUMENT CALLED JX 0057 BEHIND TAB 6 IN YOUR 

BINDER? 

A. YES. 

Q. DOES THE 2011 TRANSITION AGREEMENT APPEAR AT PAGES 1 

THROUGH 5 OF THIS EXHIBIT? 

A. YES, IT DOES. 

Q. AND DOES THE 2013 FIRST AMENDMENT TO TRANSITION AGREEMENT 

APPEAR AT PAGES 6 THROUGH 13 OF THE AGREEMENT? OF THE EXHIBIT? 

A. YES, IT DOES. 

MR. BAKER: YOUR HONOR, I MOVE THE ADMISSION OF 

JX 0057. PORTIONS OF THIS DOCUMENT ALSO HAVE BEEN SEALED. 

MS. SESSIONS: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(JOINT EXHIBIT JX 0057 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

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683

BY MR. BAKER:

Q. MR. BLEVINS, ARE YOU FAMILIAR WITH THE 2013 AGREEMENT 

BETWEEN APPLE AND QUALCOMM CALLED THE BUSINESS COOPERATION AND 

PATENT AGREEMENT? 

A. YES, I'M FAMILIAR WITH THAT DOCUMENT.

Q. IS THAT AGREEMENT SOMETIMES REFERRED TO AS THE BCPA? 

A. YES, IN FACT, IT IS.

Q. IF YOU TURN TO TAB 7 IN YOUR BINDER, WHICH WOULD BE 

EXHIBIT JX 0078. IS THAT THE 2013 BCPA? 

A. YES, IT IS. 

MR. BAKER: YOUR HONOR, I MOVE TO ADMIT JX 0078, ALSO 

PARTIALLY REDACTED. 

MS. SESSIONS: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(JOINT EXHIBIT JX 0078 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MR. BAKER:

Q. MR. BLEVINS, AS I'VE NOTED, EACH OF THOSE AGREEMENTS THAT 

WE'VE JUST DISCUSSED HAS BEEN PARTIALLY SEALED BY THE COURT, 

AND I WOULD ASK IN OUR DISCUSSIONS TODAY OF THIS AGREEMENTS, IF 

YOU COULD AVOID PROVIDING ANY SPECIFIC PERCENTAGE AMOUNTS, 

SPECIFIC DOLLAR AMOUNTS FROM THOSE AGREEMENTS AS WE DISCUSS 

THEM? 

A. YES, I UNDERSTAND. 

Q. THANK YOU. 

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684

AS APPLE WAS PREPARING TO LAUNCH ITS FIRST CDMA IPHONE, 

DID IT EVALUATE CDMA MODEM CHIP SUPPLIERS. 

A. WE ATTEMPTED TO, BUT WE VERY RAPIDLY CAME TO THE 

CONCLUSION THAT OUR ONLY ALTERNATIVE WAS QUALCOMM. 

Q. WHAT DID APPLE DO AS A RESULT OF THAT CONCLUSION? 

A. AS A RESULT OF THAT, WE ENTERED INTO AN AGREEMENT WITH US 

THAT WOULD GIVE OUR AUTHORIZED PURCHASERS THE ABILITY TO BUY 

THOSE MODEMS. 

Q. DOES APPLE TYPICALLY SEEK TO PUT IN PLACE SUPPLY 

AGREEMENTS WITH ITS COMPONENT SUPPLIERS? 

A. YES, OF COURSE. WE DO THAT, AND IT'S VERY IMPORTANT TO 

US. 

Q. WHAT ARE SOME OF THE IMPORTANT TERMS THAT APPLE TYPICALLY 

INCLUDES IN THESE AGREEMENTS? 

A. THERE ARE MANY IMPORTANT TERMS THAT WE WANT TO MAKE 

CERTAIN THE PERFORMANCE SPECIFICATIONS ARE WELL KNOWN, WE WANT 

TO ENSURE THAT WE'RE GETTING VERY HIGH QUALITY PRODUCTS, WE 

WANT TO BUY THE HARDWARE EXHAUSTIVELY, WE REQUIRE 

INDEMNIFICATION, WE WANT VERY STRICT QUALITY STANDARDS TO BE 

HONORED. 

WE WANT THE PRICING TO BE COMPETITIVE, WE WANT SUPPLY 

CONTINUITY ASSURANCES. 

SO THERE ARE MANY THINGS THAT WE REQUEST IN THOSE 

AGREEMENTS.

Q. WHY IS SUPPLY CONTINUITY IMPORTANT TO APPLE? 

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685

A. SUPPLY CONTINUITY IS ABSOLUTELY CRITICAL TO US, THAT WE 

DESIGN OUR PRODUCTS IN CUPERTINO, CALIFORNIA, BUT APPLE DOESN'T 

OWN ITS OWN MANUFACTURING FACILITIES. WE CAN'T MAKE THOSE 

PARTS OR COMPONENTS. THEREFORE, WE ARE VERY DEPENDENT ON A 

SUPPLIER NETWORK TO MAKE THOSE COMPONENTS, SHIP THEM IN ORDER 

FOR US TO HAVE CONTINUOUS SUPPLY TO CUSTOMERS AND TO RECEIVE 

REVENUES THAT WE NEED TO FUEL FURTHER DEVELOPMENT. 

AND SO IF THERE IS A DISRUPTION IN SUPPLY OF A SINGLE 

COMPONENT, BEARING IN MIND THERE'S AROUND 1,000 COMPONENTS PER 

IPHONE, WE DON'T SHIP IPHONE, WE DON'T COLLECT ANY REVENUE. SO 

THAT IS A HUGE PROBLEM FOR US. 

Q. DID APPLE EVENTUALLY ENTER INTO A SUPPLY AGREEMENT WITH 

QUALCOMM PRIOR TO BEGINNING TO BUY MODEM CHIPS FROM QUALCOMM?

A. YES, WE DID. 

Q. WAS THAT THE STRATEGIC TERMS AGREEMENT THAT WE LOOKED AT 

EARLIER? 

A. THAT IS CORRECT, SIR. 

Q. GENERALLY SPEAKING, HOW DID THE BUSINESS TERMS OF THE 2009 

STRATEGIC TERMS AGREEMENT COMPARE TO APPLE'S SUPPLY AGREEMENTS 

WITH OTHER SUPPLIERS?

A. THEY ARE VERY, VERY DISSIMILAR. THEY'RE NOT WHAT WE 

TYPICALLY WANT. EXAMPLES I CAN GIVE YOU IS WE WANT TO BUY 

PARTS EXHAUSTIVELY; THE AGREEMENT DOESN'T PROVIDE FOR THAT. WE 

WANT INDEMNIFICATION; THE AGREEMENT DOESN'T PROVIDE FOR THAT. 

WE WANT VERY STRINGENT QUALITY STANDARDS; THE AGREEMENT DOESN'T 

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686

PROVIDE FOR THAT. WE WANT VERY STRONG SUPPLY ASSURANCES, AS I 

MENTIONED BEFORE FOR OBVIOUS REASONS; THE AGREEMENT DOESN'T 

PROVIDE FOR THAT. 

SO THE TWO ARE SO DISSIMILAR, IT WOULD BE DIFFICULT TO 

COMPARE THEM BRIEFLY OTHER THAN TO SAY THAT THEY'RE VERY 

DISSIMILAR, AND THEY DON'T MATCH THE OBJECTIVES THAT WE ACHIEVE 

WITH OTHER SUPPLIERS.

Q. IF YOU COULD TURN TO TAB 8 IN YOUR EXHIBIT BINDER, PLEASE. 

A. YES.

Q. LOOKING AT THE -- THIS IS EXHIBIT CX 8261, AND THE SECOND 

E-MAIL DOWN IS AN E-MAIL FROM ERIC KOLIANDER OF QUALCOMM TO YOU 

DATED FEBRUARY 22ND, 2008. 

DO YOU SEE THAT? 

A. YES, I SEE IT.

Q. DO YOU RECOGNIZE THIS E-MAIL? 

A. YES, I RECOGNIZE AND RECALL THIS E-MAIL.

Q. WAS THIS DOCUMENT RELATED TO THE NEGOTIATION OF THE 2009 

STRATEGIC TERMS AGREEMENT? 

A. YES, IT IS. 

MR. BAKER: YOUR HONOR, I MOVE TO ADMIT CX 8261. 

MS. SESSIONS: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 8261 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MR. BAKER:

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687

Q. IF YOU COULD TURN TO PAGE 4 OF THIS EXHIBIT, PLEASE, 

SECOND PAGE OF THE ATTACHMENT. 

THE COURT: IS ANY OF THIS SEALED? ANY OF THE 

DOCUMENT SEALED. 

MR. BAKER: THIS IS NOT SEALED TO MY KNOWLEDGE. 

THE COURT: OKAY. 

BY MR. BAKER:

Q. THERE'S A DIAGRAM WITH AN ARROW POINTING FROM QCT PRODUCTS 

TO MAVERICK? 

A. YES, SIR. 

Q. WHAT IS MAVERICK? 

A. MAVERICK IN THIS CASE WAS A CODE NAME THAT QUALCOMM USED 

TO REFER TO APPLE.

Q. ARE YOU ABLE TO EXPLAIN THE DIAGRAM ON THE LEFT SIDE OF 

THIS PAGE? 

A. YES. WE HAD MANY MEETINGS ON THIS TOPIC. THIS WAS A 

QUALCOMM CHART THAT SUMMARIZED THEIR POSITION. SO THEY WERE 

MAKING A COUPLE OF POINTS HERE, THAT UNDERNEATH MAVERICK, YOU 

CAN SEE A BOX CALLED WAN AND A BOX CALLED NON WAN. ONE 

REPRESENTED CELLULAR PRODUCTS, THINGS LIKE MODEMS. NON WAN 

REPRESENTED NON CELLULAR PRODUCTS, THINGS LIKE WI-FI, BECAUSE 

THEY HAD A BROADER PORTFOLIO. 

WHAT THEY WERE TRYING TO TELL US IN THIS CHART IS FOR NON 

WAN, THINGS LIKE WI-FI, NO SEPARATE PRODUCTS WERE REQUIRED, THE 

PRODUCTS WERE SOLD ON A SEPARATE BASIS, THEY WOULD GIVE US 

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688

STRONG REPS AND WARRANTIES ON USE AND FREEDOM OF USE. 

AND SO THEY WERE ESSENTIALLY SAYING THAT FOR THESE TYPES 

OF PRODUCTS WHERE THERE WAS COMPETITIVE ALTERNATIVES, THEY 

WOULD MATCH WHAT OTHER COMPETITORS WOULD PROVIDE AND THEY WOULD 

MATCH APPLE'S OBJECTIVES. SO THIS IS WHAT WE WANTED, THIS BOX 

THAT SAID NON WAN. AND I CONTRAST THAT WITH THE BOX ON THE 

LEFT THAT SAYS WAN, WHICH IS CELLULAR, THEY SAID THIS IS AN 

ENTIRELY DIFFERENT STORY. WE DON'T OFFER YOU THOSE KINDS OF 

ASSURANCES AND PROTECTIONS ON WAN, AND YOU START BY BEING A 

LICENSEE IN GOOD STANDING. 

SO THIS WAS REITERATION OF NO LICENSE, NO CHIPS.

Q. AND THIS PRESENTATION WAS PROVIDED TO APPLE BY QUALCOMM; 

IS THAT RIGHT? 

A. YES, THIS IS A QUALCOMM DOCUMENT. THEY WERE SIMPLY 

SUMMARIZING THEIR POSITION. 

Q. I'D LIKE TO ASK SOME QUESTIONS ABOUT THE 2011 TRANSITION 

AGREEMENT AND THE 2013 FIRST AMENDMENT TO TRANSITION AGREEMENT 

NOW. 

A. OKAY. 

Q. YOU TESTIFIED EARLIER THAT YOU'RE FAMILIAR WITH THESE TWO 

TRANSITION AGREEMENTS. HOW DID YOU GAIN THAT FAMILIARITY? 

A. I GAINED THAT FAMILIARITY OVER TIME AS WE EXECUTED AND 

COMPLIED WITH THE AGREEMENTS, AND I SOUGHT THE ADVICE OF 

COUNSEL WITHIN APPLE ON WHAT CERTAIN TERMS MAY MEAN AND HOW WE 

COMPLIED WITH THOSE TERMS.

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689

Q. ARE YOU ABLE TO GIVE ME A VERY HIGH LEVEL DESCRIPTION OF 

HOW THESE AGREEMENTS FUNCTION FROM THE BUSINESS PERSPECTIVE? 

A. YES. THE TRANSITION AGREEMENT WAS INTENDED TO PROVIDE FOR 

APPLE TO HAVE AN APPROPRIATE LICENSE AS WE WOULD NEED TO SHIP 

CDMA CHIPS, AND THAT THE LATER FIRST AMENDED TRANSITION 

AGREEMENT GAVE US SIMILAR ABILITY TO SHIP UMTS AND LTE CHIPS. 

HOWEVER, AND IMPORTANTLY, THERE WOULD BE LARGE REBATES 

ASSOCIATED WITH THE NOMINAL ROYALTY PAYMENTS IF WE WERE TO USE 

QUALCOMM CHIPS EXCLUSIVELY. 

Q. SO THESE AGREEMENTS PROVIDED REBATES FROM QUALCOMM TO 

APPLE IN CONNECTION WITH CHIP PURCHASES; IS THAT RIGHT?

A. YES. SPECIFICALLY WE WERE REQUIRED TO USE THEIR CHIPS 

EXCLUSIVELY. AT A POINT IN TIME WHERE WE USED ANYONE ELSE'S 

CHIP, THEN WE WOULD FORFEIT THOSE REBATES THAT WERE OTHERWISE 

EARNED WHICH WERE QUITE LARGE. 

Q. DO YOU HAVE AN UNDERSTANDING OF HOW THESE AGREEMENTS 

IMPACTED APPLE'S MODEM CHIP PROCUREMENT DECISIONS?

A. YES, I DO. THEY MADE IT VERY UNATTRACTIVE FOR US TO 

CHOOSE A DIFFERENT CHIPSET SUPPLIER. I WON'T MENTION THE 

NUMBERS, BUT THESE REBATES WERE VERY, VERY LARGE. 

SO WHEN WE FACTORS IN THE REBATES THAT WE WOULD FORFEIT BY 

USING A DIFFERENT CHIP SUPPLIER, IT SERVED AS A VERY STRONG 

DISINCENTIVE FOR US TO DO SO. IT WAS NO LONGER A LEVEL PLAYING 

FIELD AS IT WAS BEFORE. 

Q. YOU MENTIONED EARLIER THAT AT SOME POINT BETWEEN 2012 AND 

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690

2016, APPLE CONSIDERED INTEL AS A POSSIBLE SUPPLIER OF MODEM 

CHIPS. 

DID APPLE EVER CONSIDER INTEL MODEM CHIPS FOR ANY 2014 

APPLE CELLULAR DEVICES?

A. YES, WE DID. AS I RECALL, AT ONE POINT IN TIME WE HAD AN 

OFFICIAL PLAN OF RECORD WITHIN APPLE THAT WE WOULD IMPLEMENT 

INTEL ON AN IPAD PRODUCT LAUNCH, AND THEN THAT WOULD GIVE US 

CONFIDENCE TO EXTEND THEIR PRESENCE INTO AN IPHONE. WE FELT 

THAT IPAD WAS A SIMPLER TRANSITION BECAUSE IT WAS DATA ONLY, 

AND THEN WE WOULD ADD VOICE AS WE MOVED TO PHONE.

Q. CAN YOU PLEASE TURN TO TAB 10 IN YOUR EXHIBIT BINDER, 

EXHIBIT JX 0074. 

A. YES, SIR. 

Q. THIS IS AN E-MAIL FROM OCTOBER 2, 2012. 

DO YOU RECOGNIZE THIS DOCUMENT?

A. YES, I RECALL SEEING THIS DOCUMENT. 

Q. WHAT IS THIS DOCUMENT? 

A. THIS WAS AN UPDATE ON A MEETING THAT WE HAD AT APPLE AND A 

SUMMARY OF OUR DECISION TO PROCEED WITH INTEL ON THE IPAD THAT 

I MENTIONED PREVIOUSLY. 

MR. BAKER: YOUR HONOR, I MOVE TO ADMIT JX 0074. 

MS. SESSIONS: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(JOINT EXHIBIT JX 0074 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

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691

MR. BAKER: THERE ARE PORTIONS OF THIS DOCUMENT THAT 

ARE SEALED. I DO NOT PLAN TO SHOW THEM TODAY OR TO ASK ABOUT 

THEM. 

THE COURT: OKAY. 

BY MR. BAKER:

Q. ON THE THIRD LINE OF THIS E-MAIL, THERE ARE SOME NAMES 

LISTED ON THE SIDE. 

WHO IS JEFF? 

A. JEFF WOULD BE MY MANAGER, JEFF WILLIAMS, WHO WAS PREVIOUS 

OPERATIONS OFFICER OF APPLE. 

Q. WHO'S TONY? 

A. THAT WOULD BE ME.

Q. AND WHO'S ISABEL? 

A. ISABEL IS MY COLLEAGUE WHO WAS VICE PRESIDENT OF SOFTWARE 

ENGINEERING.

Q. WHAT PRODUCTS WAS APPLE CONSIDERING INTEL FOR AT THIS 

POINT? 

A. IN THIS PARTICULAR E-MAIL CHAIN, THIS WAS A DECISION THAT 

WE WERE MEMORIALIZING WHERE WE INTENDING TO GO WITH INTEL FOR 

OUR NEXT IPAD LAUNCH IN SPRING 2014. 

Q. AND HOW WOULD AN IPAD SLOT HELP INTEL PROGRESS TOWARDS AN 

IPHONE SLOT?

A. WE FELT THAT WAS A LESS SEVERE LEARNING CURVE FOR THEM 

BECAUSE THEY HAD BEEN OUT OF OUR PRODUCTS FOR A NUMBER OF 

YEARS, THAT WE FELT TECHNICALLY AND OPERATIONALLY, IF WE COULD 

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USE THEIR PRODUCT IN AN IPAD, WHICH WAS DATA ONLY, NO VOICE, 

THAT WE WOULD GET A GREAT DEAL OF LEARNING FROM THAT EXERCISE 

AND THEN WE WOULD BE ABLE TO MUCH MORE SMOOTHLY AND WITH LESS 

RISK IMPLEMENT THEM INTO AN IPHONE LATER. 

Q. TURN TO PAGE 2 OF THE EXHIBIT, PLEASE, ABOUT EIGHT LINES 

DOWN. THE E-MAIL READS, "ALL AGREED IN THE MEETING THAT IMC 

FOR J86 WAS A GOOD PLAN." 

CAN YOU TRANSLATE THAT STATEMENT FOR ME?

A. YES. J86 IS AN INTERNAL CODE NAME THAT REFERRED TO THE 

IPAD MINI 2. AND SO THIS ESSENTIALLY SAYS EVERYONE IN THE 

MEETING, AND AS YOU'LL RECALL FROM THE DISTRIBUTION LIST, THAT 

WAS HARDWARE ENGINEERING, SOFTWARE ENGINEERING, OPERATIONS, ALL 

OF US AGREED WE WANTED TO USE THE INTEL MODEM IN THE IPAD MINI 

2. SO THIS WAS THE OFFICIAL PLAN OF RECORD FOR US. 

Q. AS OF OCTOBER 2012, WAS APPLE MOVING FORWARD WITH AN 

ENGINEERING ENGAGEMENT WITH INTEL FOR THE IPAD MINI 2? 

A. YES, THAT IS CORRECT. 

Q. CAN YOU DESCRIBE WHAT LEVEL OF COMMITMENTS SUCH AN 

ENGINEERING ENGAGEMENT ENTAILED BY APPLE? 

A. IT'S A LARGE COMMITMENT. IT'S A LARGE COMMITMENT ON OUR 

BEHALF, BOTH HARDWARE AND SOFTWARE ENGINEERING, AND IT'S A 

LARGE COMMITMENT ON BEHALF OF THE SUPPLIER, WHICH IN THIS CASE 

WAS IMC.

Q. WAS THAT ENGAGEMENT SUCCESSFUL IN GETTING AN INTEL MODEM 

CHIP INTO A 2014 IPAD? 

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A. IN NET, NO, IT WAS NOT. WE ABORTED THAT PLAN AFTER THIS 

OCTOBER MEETING. 

Q. WHY DID YOU DO THAT? 

A. WE FOUND THAT IT WASN'T IN APPLE'S BEST OVERALL INTEREST. 

AROUND MID-JANUARY OF THE FOLLOWING YEAR, 2013, WE REACHED 

AN AGREEMENT WITH QUALCOMM WHEREBY THAT WE WOULD OBTAIN VERY, 

VERY LARGE REBATES IF WE USED THEM EXCLUSIVELY. 

AND SO IT WAS JUST NOT ECONOMICALLY VIABLE FOR US TO USE 

INTEL IN AN IPAD MINI, EVEN THOUGH WE THOUGHT THEIR PERFORMANCE 

WAS SIMILAR AND THEIR PRICE WAS MUCH LESS, WHICH OFFERED US 

ADDITIONAL VALUE. 

IT WOULD CAUSE US TO FORFEIT THOSE REBATES THAT WE HAD 

OTHERWISE EARNED. SO IT WAS A LOSING PROPOSITION FROM A 

FINANCIAL STANDPOINT. SO THE PLANS WERE CHANGED.

Q. SO ARE THOSE THE 2013 AGREEMENTS THAT WE DISCUSSED 

EARLIER?

A. THAT IS CORRECT, SIR.

Q. THE BCPA AND THE FIRST AMENDMENT TO THE TRANSITION 

AGREEMENT? 

A. YES, I BELIEVE THEY WERE SIGNED AROUND FEBRUARY OF 2013. 

Q. WHEN DID THE NEGOTIATIONS OCCUR? 

A. THE NEGOTIATIONS HAD BEEN ONGOING FOR AT LEAST ABOUT SIX 

MONTHS PRIOR TO SIGNATURE. 

HOWEVER, A DATE THAT I DO SPECIFICALLY RECALL, BECAUSE IT 

WAS IMPORTANT, WE HAD A BIG MEETING WITH THE TOP EXECUTIVES 

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694

BETWEEN APPLE AND QUALCOMM IN CUPERTINO IN MID-JANUARY. 

I SPECIFICALLY RECALL THAT BECAUSE ALL OF THE MAJOR 

BUSINESS PRINCIPLES WERE AGREED. IT THEN TOOK THE ATTORNEYS 

FROM BOTH SIDES A FEW WEEKS TO STRAIGHTEN OUT SOME OF THE 

DETAILS. 

BUT THE REASON I RECALL THAT MEETING, IT WAS ON A SUNDAY 

AND I HAD PLANNED TO HAVE SOME FRIENDS OVER TO WATCH THE 49ERS 

GAME, AND I MISSED THAT. I WAS ABLE TO GO BACK THROUGH MY 

NOTES AND DETERMINE THAT DATE WAS JANUARY 12TH.

Q. WHAT WERE THE KEY TERMS THAT WERE HAMMERED OUT? 

A. THE KEY TERMS WERE, IN ESSENCE, THAT APPLE WOULD RECEIVE 

VERY, VERY LARGE REBATES FROM THE LICENSE PAYMENTS IF WE AGREED 

TO BUY OUR CHIPSETS EXCLUSIVELY FROM QUALCOMM.

Q. IF YOU COULD TURN TO TAB 11, PLEASE, IN YOUR BINDER, 

CX 0531. THIS IS A JANUARY 29TH, 2013 E-MAIL FROM YOU, 

MR. BLEVINS, TO JEFF WILLIAMS? 

A. YES, THAT IS CORRECT. 

MR. BAKER: YOUR HONOR, I NOVEMBER TO ADMIT CX 0531. 

MS. SESSIONS: NO OBJECTION, YOUR HONOR. 

THE COURT: OKAY. IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 0531 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MR. BAKER:

Q. WHAT WERE YOU COMMUNICATING WITH MR. WILLIAMS ABOUT? 

A. WELL, THE TIMELINE HERE WAS WE HAD REACHED AGREEMENT IN 

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695

PRINCIPLE WITH QUALCOMM ON OR ABOUT JANUARY THE 12TH. THE 

AGREEMENT WAS IN FINAL STAGES OF BEING SIGNED, AND THIS WOULD 

CAUSE US TO CHANGE OUR PLANS FROM INTEL TO QUALCOMM. 

AND OUR THOUGHTS WERE INTEL WERE CONTINUING TO USE 

SIGNIFICANT ENGINEERING RESOURCES ON OUR PROJECT THAT WASN'T 

GOING TO HAPPEN. SIMILARLY, APPLE ENGINEERING TEAM WAS 

EXERTING EFFORT THERE, THEY WANTED TO ABORT THOSE EFFORTS. AND 

SO THE TASK FELL TO ME TO GO BACK TO HERMANN EUL IN THIS CASE, 

WHO AT THE TIME WAS PRESIDENT OF IMC, AND TELL HIM THAT THE 

PROJECT WAS AWARDED, THAT HE SHOULD STOP, OUR PLANS HAD 

CHANGED. 

AND I WAS EXPRESSING HERE THAT HAD SOME MISGIVINGS ABOUT 

THAT, WE HAD AWARDED THE BUSINESS TO THEM, THEY HAD WORKED VERY 

HARD, THEY HADN'T DONE ANYTHING TO CAUSE THEM TO LOSE THE 

BUSINESS SPECIFICALLY, IT WAS JUST THAT WE HAD AN AGREEMENT 

WITH QUALCOMM NOW THAT MADE THIS VERY FINANCIALLY UNATTRACTIVE 

FOR US. 

SO THAT'S WHY I MADE THE COMMENT THAT WE HAVE ACCIDENTALLY 

MISLED HERMANN. IF WE KNEW WHERE WE WERE GOING TO LAND WITH 

QUALCOMM, WE WOULD HAVE NEVER STARTED THEM ON THIS PROJECT. IT 

WASN'T THE RIGHT THING TO DO. 

Q. IN LINE 3, YOU REFER TO A NEW QC STRATEGY. WHAT IS THAT 

REFERRING TO? 

A. THAT'S THAT I KNEW WE HAD AN AGREEMENT IN PRINCIPLE WITH 

QUALCOMM THAT MADE ALL THOSE REBATES CONTINGENT ON EXCLUSIVITY. 

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696

SO WE HAD A NEW PLAN. WE WERE GOING TO ATTEMPT TO ACQUIRE 

THOSE REBATES AND THAT REQUIRED THAT WE WORK EXCLUSIVELY WITH 

QUALCOMM, WHICH LED TO DISENGAGEMENT WITH IMC. 

Q. FROM A TECHNICAL OR ENGINEERING STANDPOINT IN EARLY 2013, 

HAD THERE BEEN CONCERNS ABOUT INTEL'S PERFORMANCE WITHIN APPLE? 

A. YES. THERE ARE ALWAYS CONCERNS. I SHOULD PROBABLY 

DESCRIBE TO YOU THAT APPLE'S ENGINEERING TEAM ARE SOME OF THE 

MOST DETAILED OBSESSED, INSANELY PASSIONATE PEOPLE ON THIS 

PLANET. THEY HOLD THEMSELVES TO HIGH STANDARDS. THEY HOLD 

THEIR SUPPLIERS TO HIGH STANDARDS. NO ONE CAN MEET ALL OF 

THEIR REQUIREMENTS EVER, AND THAT'S WHY I LOVE WORKING WITH 

THOSE GUYS. THEY'RE THE BEST IN THE WORLD IN MY VIEW. 

SO IN EVERY SUPPLIER ENGAGEMENT I'VE EVER BEEN INVOLVED 

IN, NO ONE EVER MEETS ALL OF THEIR REQUIREMENTS. I'M NOT SURE 

IT'S POSSIBLE. SO I DO HAVE SOME SYMPATHY FOR OUR SUPPLIERS. 

BUT CLEARLY INTEL WASN'T MEETING ALL OF OUR REQUIREMENTS. 

I'M NOT CERTAIN THEY'VE EVER MET ALL OF OUR REQUIREMENTS ON ANY 

PRODUCT, AND I'M NOT CERTAIN QUALCOMM HAS EITHER OR EVEN EVER 

WILL. THAT'S THE NATURE OF THE GAME FOR US. WE THINK THAT'S 

WHAT MAKES APPLE PRODUCTS GREAT. IT'S WHERE A REASONABLE 

PERSON MIGHT STOP AND SAY GOOD ENOUGH IS GOOD ENOUGH. OUR 

ENGINEERING TEAM CONTINUES.

Q. WERE ANY OF THE TECHNICAL CONCERNS ABOUT INTEL CHIPSETS 

DEAL BREAKERS FROM YOUR PERSPECTIVE? 

A. NOT FROM MY PERSPECTIVE. I MONITORED THIS CLOSELY ON A 

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697

WEEKLY BASIS. AGAIN, THERE WERE ALL SORTS OF CONCERNS WITH 

INTEL, JUST AS THERE WERE ALL SORTS OF CONCERNS AT THAT STAGE 

WITH LCD WE WOULD HAVE BEEN USING, WITH THE FLASH MEMORY. 

THAT'S THE NATURE OF THE GAME FOR US. THE ENGINEERING TEAM IS 

JUST WORKING INSANELY PASSIONATELY TO IMPROVE EVERYBODY'S 

PERFORMANCE, AND NOBODY IS EVER GOOD ENOUGH. 

Q. IN PARTICULAR, DID APPLE ENGINEERS RAISE ANY CONCERNS 

ABOUT INTEL'S ABILITY TO SUPPORT A FEATURE AT THAT TIME CALLED 

CARRIER AGGREGATION? 

A. I RECALL THAT WE WERE IN EARLY STAGES OF CARRIER 

AGGREGATION DISCUSSIONS AT THAT POINT IN TIME. THE IPAD MINI 2 

ARCHITECTURE ITSELF DIDN'T SUPPORT CARRIER AGGREGATION. SO 

WHETHER THE CHIP WAS CAPABLE OR NOT WAS IRRELEVANT. THE 

ARCHITECTURE OF THE SYSTEM DIDN'T SUPPORT IT IN THAT PERIOD.

Q. WHEN WAS THE IPAD MINI 2 ULTIMATELY RELEASED? 

A. AS I RECALL, WE WERE ORIGINALLY TARGETING IT FOR THE 

MARCH/APRIL TIMEFRAME. 

WE -- OUR PLANS, BY THE WAY, CHANGE VERY FREQUENTLY. 

THEY'RE VERY FLUID, DYNAMIC DOCUMENTS. SO I'LL TELL YOU THAT 

THE MAJOR CHECKPOINTS THAT I RECALL, IT MOVED FROM THE 

MARCH/APRIL OF 2013 TIMEFRAME TO THE SEPTEMBER 2012 TIMEFRAME. 

IT LATER MOVED TO OCTOBER OF 2012, AND MY RECOLLECTION IS 

WE FINALLY LANDED ON NOVEMBER OF 2012. 

Q. YOU MEAN 2013? 

A. YES, EXCUSE ME, 2013. 

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698

Q. WHAT SUPPLIER PROVIDED THE MODEM FOR THAT DEVICE WHEN IT 

WAS ULTIMATELY LAUNCHED? 

A. IT WAS QUALCOMM.

Q. DID THE QUALCOMM MODEM IN THE IPAD MINI 2 SUPPORT CARRIER 

AGGREGATION? 

A. NO. THE SYSTEM ITSELF, THE ARCHITECTURE DIDN'T SUPPORT 

CARRIER AGGREGATION, AND I DON'T BELIEVE THE QUALCOMM CHIP 

ITSELF SUPPORTED CARRIER AGGREGATION, ALTHOUGH I'M NOT CERTAIN. 

BUT I KNOW THAT THE SYSTEM WAS NOT CARRIER AGGREGATION ENABLED. 

Q. WERE ANY IPAD MINI MODELS RELEASED IN 2014? 

A. YES, WE RELEASED A NEW MODEL IN 2014.

Q. WHO WAS THE MODEM SUPPLIER FOR THAT DEVICE?

A. THAT WAS ALSO QUALCOMM. 

Q. DO YOU KNOW IF THE MODEM IN THAT DEVICE SUPPORTED CARRIER 

AGGREGATION? 

A. I KNOW FOR A FACT THE SYSTEM DID NOT. THE SYSTEM 

ARCHITECTURE WAS NOT DESIGNED TO ENABLE CARRIER AGGREGATION.

Q. MOVING FORWARD IN TIME FROM A PROCUREMENT STANDPOINT, DID 

APPLE SERIOUSLY CONSIDER SUPPLIERS OTHER THAN QUALCOMM FOR ITS 

2015 CELLULAR DEVICE MODELS? 

A. WE CONTINUED TO DO EVALUATIONS, BUT IT WAS VERY APPARENT 

TO US THAT THE VERY, VERY LARGE REBATES THAT I MENTIONED 

EARLIER WOULD MAKE IT A COMPLETE NONSTARTER TO WORK WITH 

SOMEONE ELSE, THAT WE COULDN'T ACHIEVE THE VALUE THAT I CITED 

EARLIER THAT FORFEITING THOSE REBATES THAT WOULD OTHERWISE BE 

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699

EARNED WOULD MAKE ANYONE ELSE JUST A FAR TOO EXPENSIVE 

PROPOSITION TO SERIOUSLY CONSIDER.

Q. IF YOU COULD TURN TO TAB 12 IN YOUR BINDER, PLEASE. IT'S 

EXHIBIT CX 0853. 

A. YES, I SEE IT. 

Q. THIS IS A FEBRUARY 20TH, 2014, E-MAIL EXCHANGE BETWEEN YOU 

AND ISABEL MAHE? 

A. YES.

Q. DO YOU RECOGNIZE THIS DOCUMENT?

A. YES, I RECOGNIZE IT AND REMEMBER IT. 

MR. BAKER: YOUR HONOR, I MOVE TO ADMIT CX 0853. 

MS. SESSIONS: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 0853 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MR. BAKER:

Q. WHO IS MS. MAHE? 

A. MS. MAHE WAS ONE OF MY COLLEAGUES THAT WAS SPECIFICALLY 

RESPONSIBLE FOR SOFTWARE ENGINEERING. IN FACT, SHE WAS VICE 

PRESIDENT OF SOFTWARE ENGINEERING.

Q. AT THE TOP OF PAGE 1 OF THIS EXHIBIT YOU WRITE, "IN NET, 

THERE IS NO WAY THAT WE WOULD FOREGO OTHERWISE EARNED 

INCENTIVES IN FAVOR OF LAUNCHES IPAD ONLY IN 15." 

CAN YOU EXPLAIN WHAT YOU MEANT BY THAT? 

A. YES. YOU SEE IN THIS E-MAIL EXCHANGE, ISABEL WAS POINTING 

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700

OUT THAT FROM AN ENGINEERING STANDPOINT, THE PRUDENT APPROACH 

WAS TO LAUNCH IN AN IPAD FIRST AND THEN USE THAT LEARNING TO 

CONTINUE ON TO AN IPHONE. 

FROM A PURELY TECHNICAL PERSPECTIVE, SHE WAS ABSOLUTELY 

RIGHT, THERE WAS NO QUESTION, EVERYONE AGREED WITH THAT 

PERSPECTIVE, WITHIN APPLE AGREED WITH WHAT SHE SAID FROM A 

TECHNICAL PERSPECTIVE. 

SO MY E-MAIL IN RESPONSE TO HER WAS I DIDN'T DISAGREE WITH 

HER, BUT THERE IS NO -- I USED THE TERM, THERE'S NO WAY WE 

WOULD FORGO OTHERWISE EARNED INCENTIVES IN FAVOR OF LAUNCHING 

AN IPAD IN 2015. IT JUST SIMPLY WASN'T AN ECONOMIC PROPOSITION 

FOR US. 

Q. AND THE OTHERWISE EARNED INCENTIVES YOU'RE REFERRING TO 

ARE THE INCENTIVES UNDER THE AMENDED TRANSITION AGREEMENT? 

A. I WAS SPECIFICALLY REFERRING TO THE QUALCOMM REBATES THAT 

WOULD BE DUE PER THAT AGREEMENT, YES. 

Q. COULD YOU TURN TO TAB 13 IN YOUR BINDER, PLEASE, EXHIBIT 

CX 0578. 

THIS IS ANOTHER E-MAIL FROM THIS PERIOD DATED 

FEBRUARY 24TH, 2014. 

DO YOU RECOGNIZE THIS DOCUMENT? 

A. YES, I DO. 

MR. BAKER: YOUR HONOR, I MOVE TO ADMIT CX 0578. 

MS. SESSIONS: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

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701

(PLAINTIFF'S EXHIBIT CX 0578 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MR. BAKER:

Q. AND THE PARAGRAPH THAT BEGINS "IN AN IDEAL WORLD," YOU 

WRITE, "WE'D LIKE TO HAVE THE FREEDOM TO EITHER CHOOSE QUALCOMM 

CHIPSETS OR NOT ON THE BASIS OF OUR OVERALL VALUE." 

AND YOU END, "AND NOT ENTANGLE THE LICENSING ISSUES." 

WHAT DO YOU MEAN BY THAT? 

A. WHAT I MEANT SPECIFICALLY IS AS WE PURCHASE HARDWARE, WE'D 

LIKE TO EVALUATE EVERYONE ON A LEVEL PLAYING FIELD, AND WE 

WOULD LIKE TO CHOOSE THE SUPPLIERS THAT OFFER US OVERALL BEST 

VALUE. 

AND TO BE SPECIFIC, I WAS EXPLAINING TO THAT THE VALUE 

WOULD INCLUDE THE TECHNICAL SPECIFICATIONS, IT WOULD BE THEIR 

SCHEDULE, IT WOULD BE THE KINDS OF TERMS WHICH WOULD INCLUDE 

SUPPLY CONTINUITY PROTECTION, IT WOULD INCLUDE PRICE 

SPECIFICALLY, AND I WAS SUGGESTING TO HER THAT IN AN IDEAL 

WORLD THAT'S HOW I'D LIKE TO CHOOSE THESE CHIPSETS AND I DID 

NOT WANT TO, QUOTE-UNQUOTE, "ENTANGLE THE LICENSING ISSUES." 

BUT I WENT ON TO EXPLAIN TO HER, IN THIS CASE THE 

LICENSING ISSUES WERE HOPELESSLY ENTANGLED, THAT WE'D ENTERED 

INTO AGREEMENTS THAT OFFERED APPLE VERY SIGNIFICANT SUMS OF 

MONEY FOR USING THEIR CHIPSETS EXCLUSIVELY. SO IT WASN'T THE 

KIND OF FREE MARKET THAT WOULD GIVE US FREEDOM TO CHOOSE 

WHOMEVER WE MIGHT WANT BASED ON A LEVEL PLAYING FIELD. 

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702

SO THAT WAS THE ESSENCE OF MY E-MAIL.

Q. HOW WERE THESE AGREEMENTS RELATED TO LICENSING? 

A. THE AGREEMENTS THAT WE DID WITH QUALCOMM, THERE WAS A 

SERIES OF AGREEMENTS THAT WE REFERENCED EARLIER THAT OFFERED 

APPLE VERY SUBSTANTIAL REBATES, BUT A CONDITION OF THAT IS WE 

HAD TO USE THEIR CHIPSETS EXCLUSIVELY. 

AND SO ON THE BASIS OF THAT, WHEN I WOULD EVALUATE THEIR 

CHIPSET VERSUS INTEL, DESPITE HOW INTEL MIGHT LOOK BETTER IN 

ANY OR ALL ASPECTS, I ALSO HAD TO FACTOR IN THE POTENTIAL OF 

LOSING THOSE VERY LARGE REBATES, AND THAT SERVED AS A 

DISINCENTIVE TO PURSUE INTEL OR ANYONE ELSE. 

SO THESE LICENSING ISSUES WERE HOPELESSLY ENTANGLED FROM 

OUR PERSPECTIVE.

Q. SO YOU CONSIDERED THOSE REBATES TO BE ROYALTY REBATES? 

A. OH, THEY WERE ABSOLUTELY ROYALTY REBATES, YES. 

Q. TURN TO TAB 14 IN YOUR BINDER, PLEASE. THIS IS A SEALED 

DOCUMENT. 

THIS IS CX 0856. THIS IS A SEPTEMBER 10TH, 2014 E-MAIL 

FROM YOU TO MR. WILLIAMS. 

DO YOU RECOGNIZE THIS E-MAIL? 

A. YES, I RECOGNIZE IT AND RECALL IT. 

MR. BAKER: YOUR HONOR, I MOVE TO ADMIT CX 0856. 

MS. SESSIONS: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 0856 WAS ADMITTED IN EVIDENCE.) 

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703

THE COURT: GO AHEAD, PLEASE. 

BY MR. BAKER:

Q. I'D LIKE TO LOOK AT THE FOURTH PARAGRAPH DOWN, THE ONE 

THAT BEGINS WITH DEREK'S ARGUMENT, AND I'D LIKE TO BE 

SENSITIVE, AGAIN, NOT TO MENTION ANY DOLLAR AMOUNTS. 

A. OKAY. 

Q. AND I'LL TRY TO READ IT WITHOUT MENTIONING THOSE DOLLAR 

AMOUNTS. 

YOU WRITE, "DEREK'S ARGUMENT IS THAT TODAY'S ACTUAL 

ROYALTY IS, X AND THE CHIPSET PRICE IS CRISTIANO'S BUSINESS. 

ONLY IF WE BRING TO THEM SOME ADDITIONAL VALUE (E.G., CHIPSET 

EXCLUSIVITY), WOULD HE CONSIDER A REDUCTION OF THE X."

A. YES. 

Q. CAN YOU GIVE ME JUST A YES OR NO ANSWER ON THIS ONE. IS 

THIS SOMETHING THAT DEREK ABERLE SAID TO YOU? 

A. IN THIS INSTANCE, BOTH DEREK AND CRISTIANO SAID IT TO ME. 

BUT, YES. 

Q. CAN YOU DESCRIBE FOR ME THE CONTEXT OF THIS STATEMENT? 

A. THE CONTEXT WAS THAT IF WE WANTED ANY TYPE OF ROYALTY LESS 

THAN $10, THE ONLY WAY HE COULD ENVISION DOING THAT, HE BEING 

DEREK, WOULD BE IF WE BROUGHT SOME ADDITIONAL VALUE TO THE 

TABLE. 

AND HIS SPECIFIC EXAMPLE WAS EXCLUSIVITY, IF HE GAVE ME 

EXCLUSIVE CHIPSET, THEN MAYBE I'LL THINK ABOUT DOING SOMETHING 

LESSER. 

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704

Q. WHY WERE YOU TALKING TO MR. ABERLE IN YOUR CAPACITY AS A 

PROCUREMENT OFFICIAL SEEKING MODEM CHIPS? 

A. I GENERALLY DON'T. I'M GENERALLY NOT INVOLVED IN SEPARATE 

AND DISTINCT INTELLECTUAL PROPERTY LICENSING DISCUSSIONS. WE 

HAVE A SEPARATE TEAM AT APPLE THAT DOES THAT. 

HOWEVER, IN THIS CASE, THESE TWO ISSUES, THEY WERE JUST 

HOPELESSLY ENTANGLED. THE CHIP PRICE WAS DEPENDENT ON THE 

REBATE. 

SO WHEN I MET WITH QUALCOMM, I VERY OFTEN MET WITH EACH AT 

THE SAME TIME. SO THEY WERE ENTANGLED TO THE DEGREE THAT I 

SPENT A GREAT DEAL MORE TIME ON THIS TOPIC THAN I DID WITH ANY 

OTHER SUPPLIER. 

THE COURT: I'M SORRY TO INTERRUPT, BUT IT'S 10:45. 

SO LET'S GO AHEAD AND TAKE OUR BREAK NOW. WE'LL TAKE A 15 

MINUTE BREAK TO 11:00 O'CLOCK.

MR. BAKER: THANK YOU. 

THE COURT: ALL RIGHT. THANK YOU. YOU MAY STEP DOWN 

DURING THE BREAK. 

THE CLERK: COURT IS IN RECESS. 

(RECESS FROM 10:46 A.M. UNTIL 11:01 A.M.) 

THE COURT: OKAY. WELCOME BACK. PLEASE TAKE A SEAT. 

ARE YOU READY? 

MR. BAKER: YES. 

THE COURT: OKAY. 11:01. GO AHEAD, PLEASE. 

BY MR. BAKER:

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705

Q. MR. BLEVINS, BEFORE THE BREAK WE WERE LOOKING AT CX 0756. 

DO YOU REMEMBER THAT?

A. YES, SIR.

Q. IN YOUR PROCUREMENT ROLE, WAS IT COMMON FOR TO YOU DEAL 

WITH QUALCOMM'S I.P. LICENSING EXECUTIVES FROM QTL?

A. IT WAS UNCOMMON IN GENERAL FOR ME TO DEAL WITH ANY 

COMPANY'S I.P. LICENSING. THAT'S NOT MY DOMAIN. BUT IN THE 

CASE OF QUALCOMM, IT WOUND UP BEING VERY COMMON.

Q. DID YOU EVER MEET TOGETHER WITH REPRESENTATIVES OF BOTH 

QCT AND QTL?

A. YES, OF COURSE, MANY, MANY TIMES.

Q. WHAT DYNAMICS DID YOU OBSERVE BETWEEN QCT AND QTL IN THESE 

MEETINGS? 

A. I CAN RECALL ONE INSTANCE IN PARTICULAR, I CAN'T RECALL 

EVERY MEETING, BUT THERE WAS ONE INSTANCE THAT WAS QUITE 

MEMORABLE TO ME. I WAS IN SAN DIEGO AT THE TOP EXECUTIVE FLOOR 

OF THEIR MAIN BUILDING. I WAS MEETING WITH CRISTIANO AMON AND 

HIS COUNTERPART WHO RAN QTL AT THAT TIME PERIOD, I BELIEVE THE 

GENTLEMEN'S NAME WAS ERIC REIFSCHNEIDER, AND THE THING THAT 

MADE THAT CONVERSATION MEMORABLE TO ME IS CRISTIANO WAS 

SPEAKING DIRECTLY TO ME AND ERIC STOPPED HIM, CUT HIM OFF, GAVE 

HIM THE HAND, AND SAID, "STOP TALKING. I RUN THE DIVISION THAT 

GENERATES TWO-THIRD'S OF THIS COMPANY'S PROFITS. YOU RUN A 

DIVISION THAT MAKES ONE-THIRD. SO LET'S GET THAT STRAIGHT 

WHO'S DOING THE TALKING." 

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706

AND SO THE FACTS OF THAT CIRCUMSTANCE DIDN'T SURPRISE ME, 

I ALREADY KNEW THAT. 

WHAT DID SURPRISE ME, I THOUGHT IT WAS INAPPROPRIATE IN 

FRONT OF A CUSTOMER TO MAKE SUCH A STATEMENT; AND, SECONDLY, I 

ACTUALLY FELT SOME SYMPATHY FOR CRISTIANO. I DIDN'T THINK IT 

WAS THE RIGHT WAY FOR TWO PEOPLE IN THE SAME COMPANY TO BEHAVE 

IN FRONT OF A CUSTOMER. SO THAT'S MEMORABLE TO ME.

Q. CAN YOU TURN TO TAB 15, PLEASE, EXHIBIT CX 0597. 

THIS IS A SEALED DOCUMENT. THE FIRST PAGE, I BELIEVE, HAS 

NOT BEEN SEALED. 

AND THAT'S THE ONLY PAGE WE'LL BE LOOKING AT. 

THIS IS AN E-MAIL CHAIN BETWEEN YOU AND JEFF WILLIAMS WITH 

THE TOP E-MAIL DATED DECEMBER 2, 2013. 

DO YOU RECALL THIS E-MAIL. 

A. YES, I SPECIFICALLY RECALL THIS E-MAIL. 

MR. BAKER: YOUR HONOR, I MOVE TO ADMIT CX 0597. 

MS. SESSIONS: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 0597 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MR. BAKER:

Q. IN THIS E-MAIL, YOU REFERENCE A CONVERSATION YOU HAD WITH 

CRISTIANO AMON. DO YOU RECALL THIS CONVERSATION? 

A. YES, I RECALL THIS CONVERSATION VERY WELL. IT WAS A BIT 

OF A WATERSHED MOMENT, IF YOU WILL. 

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707

Q. CAN YOU RECOUNT THAT CONVERSATION FOR THE COURT AS WELL AS 

YOU REMEMBER? 

A. YES, THERE'S A BIT OF BACKGROUND I SHOULD MENTION SO IT 

MAKES SENSE. THE POINT IN TIME WHERE APPLE ENTERED INTO OUR 

RELATIONSHIP WITH QUALCOMM WHERE OUR REBATES WERE CONTINGENT ON 

BUYING THE CHIPSETS EXCLUSIVELY, IT WAS NOT MY BELIEF THAT WE 

WOULD GET THE BEST PRICING FROM THEM IN SUCH A CIRCUMSTANCE. I 

DIDN'T DELUDE MYSELF. 

HOWEVER, I THOUGHT THAT OVER TIME WE COULD AVOID BEING 

GOUGED, THAT THE THOUGHT BEING THAT QUALCOMM WOULD PROBABLY 

WANT THIS RELATIONSHIP TO BE CORDIAL AND COPACETIC, AND SO THEY 

WOULD CHARGE ME A HIGHER PRICE IN A NONCOMPETITIVE ENVIRONMENT 

THEN THEY WOULD A COMPETITIVE ONE CLEARLY, BUT I THOUGHT I 

COULD GET TO A NUMBER THAT WAS SOMETHING THAT APPLE COULD LIVE 

WITH. 

SO MY NEGOTIATION STRATEGY, GIVEN THESE CIRCUMSTANCES, WAS 

THAT WITHIN APPLE WE WOULD DO VERY DETAILED COST MODELING OF 

WHAT IT COST QUALCOMM TO HAVE THEIR CHIPSETS FABRICATED AT 

TSMC, AND WE WERE ABLE TO DO THAT BECAUSE APPLE ALSO PURCHASES 

SILICON DIRECTLY, DIRECTLY FROM TSMC, FROM THE SAME FOUNDRIES. 

SO WE ALREADY HAD THE TEAMS, THE COST MODELS. 

AND MY THOUGHTS WERE IF WE COULD AGREE UPON THE COST, 

WHICH SHOULD BE A STRAIGHTFORWARD MATHEMATICAL EXERCISE, I 

WOULD THEN APPROACH HIM AND SAY, WELL, I'D LIKE TO PAY YOU A 

GROSS MARGIN SOMEWHERE AROUND THE AVERAGE OF WHAT YOU CHARGE 

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708

OTHERS. 

AS I MENTIONED, I'M NOT GOING TO GIVE THE BEST PRICE, 

OBVIOUSLY I'M NOT GOING TO GET AS AGGRESSIVE A PRICE AS I MIGHT 

OTHERWISE GET, BUT I CAN AT LEAST AVOID GETTING GOUGED. AND WE 

HAD A NUMBER OF CONVERSATIONS, DOZENS. 

FINALLY, OUT OF SOME DEGREE OF FRUSTRATION, CRISTIANO 

LEVELED WITH ME, HE AND I HAD A FAIRLY OPEN AND DIRECT 

CONVERSATION AT THAT POINT IN TIME AND HE SAID, LOOK, I'M JUST 

COMING BACK FROM AN INVESTOR CONFERENCE IN NEW YORK. I'M UNDER 

INTENSE PRESSURE AND SCRUTINY TO MONETIZE THIS ADVANTAGE IN 

LTE, THAT I'M GOING TO CHARGE ABSOLUTELY ANYTHING AND 

EVERYTHING THE MARKET WILL BEAR. I KNOW YOU HAVE THIS 

EXCLUSIVE AGREEMENT WITH ME, AND BY THE WAY, APPLE CAN AFFORD 

TO PAY THIS. SO REALLY THE ONLY FACTORS WE NEED TO TALK ABOUT 

ARE NOT COST AND NOT MARGINS. I KNOW THAT I'M YOUR ONLY 

CHOICE. AND I ALSO KNOW APPLE CAN AFFORD TO PAY IT. 

SO THAT WAS A WATERSHED MOMENT. I SAID THIS RELATIONSHIP 

IS GOING IN A VERY DIFFERENT DIRECTION THAN WE'D HOPED. THAT 

WAS MEMORABLE TO ME BECAUSE I RECALL CANCELLING THE REST OF THE 

MEETINGS ON MY CALENDAR THAT DAY AND PULLING THE TEAM TOGETHER 

AND SAYING WE NEED A DIFFERENT PLAN OR STRATEGY. THERE'S A LOT 

OF MONEY INVOLVED HERE, AND WE HAVE ALMOST NO LEVERAGE AT ALL. 

WE NEED TO DO SOMETHING DIFFERENT OR THIS IS HEADED TOWARDS A 

VERY, VERY BAD PLACE. SO THAT WAS A MEMORABLE CONVERSATION FOR 

ME.

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709

Q. SO WHAT DID APPLE DO NEXT? 

A. WE KICKED OFF A PROJECT WHERE WE WANTED TO FIND AN 

ADDITIONAL SOURCE FOR MODEMS SO THAT WE COULD ADD SOME 

COMPETITION TO THE MIX, THAT CRISTIANO HAD ALL BUT TOLD ME HE 

KNEW I DIDN'T HAVE AN ALTERNATIVE, THEREFORE, COMPETITIVE 

CIRCUMSTANCES DOESN'T EXIST, HE WOULD CHARGE ME EVERYTHING THAT 

HE POSSIBLY COULD. 

SO I REACTED BY SAYING I MUST HAVE A COMPETITIVE 

ALTERNATIVE. IT'S QUITE OBVIOUS. 

Q. TURN TO TAB 16 IN YOUR BINDER, PLEASE, IT'S EXHIBIT 

CX 0534. 

PORTIONS OF THIS DOCUMENT HAVE ALSO BEEN SEALED, YOUR 

HONOR, AND WE'RE GOING TO STAY ON THE FIRST THREE PAGES, WHICH 

HAVE NOT. 

THIS IS A PRESENTATION DATED APRIL 24TH, 2014. 

DO YOU RECOGNIZE THIS PRESENTATION, MR. BLEVINS. 

A. YES, I RECALL IT. 

Q. THE TITLE IS PROJECT ANTIQUE; IS THAT RIGHT? 

A. THAT'S CORRECT. 

MR. BAKER: YOUR HONOR, I MOVE THE ADMISSION OF 

CX 0534. 

MS. SESSIONS: ARE YOU -- COUNSEL, ARE YOU SEEKING TO 

ADMIT THIS DOCUMENT FOR THE TRUTH OF THE MATTER? IF SO, I 

WOULD ASK THAT YOU LAY A FOUNDATION. 

THE COURT: I'M SORRY. CAN YOU REPEAT THAT? I 

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COULDN'T HEAR YOU. 

MS. SESSIONS: SORRY, YOUR HONOR. FOR WHAT PURPOSE 

ARE YOU SEEKING TO ADMIT THIS DOCUMENT? 

MR. BAKER: I'LL LAY A BUSINESS RECORD FOUNDATION. 

Q. MR. BLEVINS, DOES APPLE ORDINARILY MAINTAIN SLIDE DECKS 

REFLECTING ITS BUSINESS PLANNING ACTIVITY?

A. YES.

Q. WAS THIS SLIDE DECK CREATED IN THE COURSE OF APPLE'S 

BUSINESS PLANNING ACTIVITIES? 

A. YES, IT WAS. 

Q. IT WAS CREATED AT THE TIME OF APPLE'S BUSINESS PLANNING 

ACTIVITIES? 

A. YES. 

Q. WAS IT STORED AND KEPT BY APPLE IN ITS RECORDS? 

A. I WOULD ASSUME SO, YES. 

MR. BAKER: YOUR HONOR, I MOVE THE ADMISSION OF 

CX 0534. 

MS. SESSIONS: NO OBJECTION, YOUR HONOR. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 0534 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MR. BAKER:

Q. WHAT WAS PROJECT ANTIQUE? 

A. AS I MENTIONED, WE IMMEDIATELY KICKED OFF A PROJECT TO 

FIND A SUPPLEMENTAL SOURCE TO QUALCOMM FOR MODEMS, AND WE GAVE 

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THAT PROJECT AN INTERNAL CODE NAME TO PROTECT CONFIDENTIALITY 

AND CALLED IT ANTIQUE. 

Q. TURN TO THE SECOND PAGE OF THE EXHIBIT, PLEASE. I'LL ASK 

YOU ABOUT THE BOTTOM BULLET POINT. 

IT READS, "IMPROVE OUR ROYALTY LEVERAGE." 

CAN YOU EXPLAIN WHAT THAT MEAN ITSELF. 

A. YES. AS I TALKED ABOUT EARLIER, BY THIS POINT IN TIME IT 

HAD BECOME OBVIOUS TO US THAT THE LICENSE ISSUES AND THE CHIP 

ISSUES WERE HOPELESSLY ENTANGLED. SO OUR VIEW WAS THAT IF WE 

COULD ESTABLISH A SUPPLEMENTAL CHIP SOURCE, WE WOULD NOT ONLY 

GIVE SOME LEVERAGE ON CHIPSET PRICING, BUT WE WOULD REDUCE THE 

STRANGLEHOLD THAT QUALCOMM HAS ON US RELATIVE TO ROYALTY 

LEVERAGE, THAT THE POINT IN TIME THEY KNEW WE HAD TO BUY THEIR 

CHIP, WE FELT IT PUT US IN A VERY UNFAVORABLE POSITION ON 

LICENSING. 

SO WE THOUGHT THIS PROJECT HAD POTENTIALLY BROAD BENEFITS 

TO APPLE. 

Q. I'D LIKE TO END WITH A FEW QUESTIONS ABOUT THE MORE RECENT 

TIME PERIOD, MR. BLEVINS. 

I'D LIKE TO CAUTION YOU, IF YOU WOULD, TO LIMIT YOUR 

STATEMENTS TO KNOWLEDGE THAT YOU HELD AT OR BEFORE MARCH 30TH 

OF 2018. 

HAS APPLE BEEN ABLE TO CHALLENGE QUALCOMM'S ROYALTIES 

SINCE INTRODUCING INTEL MODEM CHIPS INTO ITS IPHONES? 

A. YES, WE HAVE RECENTLY CHALLENGED THEM. 

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Q. HOW DID APPLE DO THAT? 

A. THERE ARE COURT PROCEEDINGS WHERE WE'RE TRYING TO 

ESTABLISH WHAT IS A FRAND RATE FOR ROYALTY.

Q. FROM YOUR PERSPECTIVE AS VICE PRESIDENT OF PROCUREMENT FOR 

APPLE, HAD THE BUSINESS RELATIONSHIP BETWEEN APPLE AND QUALCOMM 

CHANGED AT ALL AS A RESULT OF THE ONGOING LITIGATION BETWEEN 

THE COMPANIES? 

A. OH, YES, IT'S CHANGED IN A VERY PROFOUND AND NEGATIVE 

MANNER, UNFORTUNATELY.

Q. HOW SO? 

A. THERE ARE MANY, MANY REASONS. THE TWO THAT I WOULD CITE, 

IN THE INTERESTS OF BREVITY, AT THE TIME WE MADE THOSE 

CHALLENGES, QUALCOMM WAS NO LONGER WILLING TO SELL US CHIPS. 

THAT WAS VERY OBVIOUS, VERY APPARENT TO US. AND SO WE WENT 

RIGHT BACK TO THE NO LICENSE, NO CHIPS, THAT WE WERE FACING 

BACK IN 2005. 

AND THEN IN ADDITION TO THAT, I THINK THEY WERE TRYING TO 

ESTABLISH ADDITIONAL LEVERAGE BECAUSE THEY HAD FILED 

INJUNCTIONS AGAINST APPLE AND LAWSUITS ON NON SEP'S, AGAIN, TO 

IMPROVE THEIR POSITION, IN MY POSITION, ON THE SEP'S. 

AND SO IT'S LED TO VERY NEGATIVE CIRCUMSTANCES, AND WE 

HAVE FACED REPERCUSSIONS FROM CHALLENGING THEIR LICENSING 

MODEL. BUT, AGAIN, IT FEELS LIKE WE'VE CIRCLED ALL THE WAY 

BACK TO 2005. 

Q. SO FROM YOUR PERSPECTIVE, HAS QUALCOMM BEEN UNWILLING TO 

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PARTICIPATE IN SUPPLYING MODEM CHIPS TO APPLE? 

A. YES, ABSOLUTELY.

Q. AS OF MARCH 2018, WAS APPLE SATISFIED WITH THE STATE OF 

COMPETITION IN THE MODEM CHIP MARKET? 

A. NO, NOT AT ALL. WE HAVEN'T IMPROVED OUR POSITION AT ALL. 

THE ENTIRE CONCEPT OF PROJECT ANTIQUE WAS TO ADD A SECOND 

SUPPLIER. WE WANTED SOME COMPETITIVE LEVERAGE, AND WE WORKED 

VERY HARD TO ADD A SECOND SUPPLIER, AND WE IMPLEMENTED THAT IN 

2016, AND WE ENJOYED THE BENEFITS OF THAT COMPETITION. 

HOWEVER, ONCE QUALCOMM ELECTED TO NOT PARTICIPATE ANY 

FURTHER, WE WERE DOWN TO ONE SUPPLIER, WHICH IS IMC, AND NO 

OFFENSE TO IMC, BUT WE DON'T WANT TO BE SO DEPENDENT ON THEM. 

WE WANT MARKET COMPETITION. WE WANT MULTIPLE SOURCES SO THAT 

WE CAN GET BEST OVERALL VALUE. 

SO WE VERY MUCH WANTED BOTH QUALCOMM AND IMC IN THE MIX. 

COMPETITION LEADS TO VERY, VERY GOOD BEHAVIOR FROM OUR 

STANDPOINT. IT'S NOT JUST PRICING, WHICH IS SIGNIFICANT, BUT 

PEOPLE PRODUCE BETTER QUALITY PRODUCT, THEY'RE MORE DILIGENT 

ABOUT HITTING TECHNICAL SCHEDULES, THEY INNOVATE. THE IDEA OF 

COMPETITION IS JUST INVALUABLE TO US AS WE WORK THROUGH OUR 

BUSINESS PLANS. AND WITHOUT COMPETITION, WE JUST CAN'T BE 

SUCCESSFUL ON A COMPONENT BASIS. 

Q. THANK YOU, MR. BLEVINS. I JUST HAVE TWO QUICK 

HOUSEKEEPING QUESTIONS AND THEN I THINK WE'RE DONE. 

JUST TO MAKE -- THERE MAY BE SOME CONFUSION IN THE 

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714

TRANSCRIPT, AND I JUST WANT TO REPEAT A QUESTION I ASKED 

EARLIER. 

HAS APPLE EVER ENTERED INTO A DIRECT LICENSE WITH 

QUALCOMM? 

A. NO. 

THE COURT: WHAT DOES THAT MEAN? BECAUSE MY NOTES 

ARE ALSO A LITTLE UNCLEAR ON THIS, THAT THERE WAS NO LICENSE IN 

2005, BUT THEN THERE WAS A LICENSE IN 2007. WHAT'S -- I DON'T 

UNDERSTAND THE RELEVANCE OF THIS. 

BY MR. BAKER:

Q. MR. BLEVINS, CAN YOU DESCRIBE FOR THE COURT THE NATURE OF 

THE AGREEMENT, THE MARKETING INCENTIVE AGREEMENT THAT WAS 

ENTERED INTO IN 2007? 

A. YES, I CAN. SO QUALCOMM PROPOSED A LICENSE AGREEMENT TO 

APPLE BACK IN 2005. WE HAVE YET TO EVER ENTER INTO A DIRECT 

LICENSING AGREEMENT. 

HOWEVER, WHAT HAS BEEN A SUBSTITUTE FOR THAT IS QUALCOMM 

HAS TOLD US THEY HAVE DIRECT LICENSING AGREEMENTS WITH OUR 

CONTRACT MANUFACTURERS. AND SO THOSE CONTRACT MANUFACTURERS 

WERE USING THE QUALCOMM LICENSE TO SHIP APPLE PRODUCTS. 

THE SERIES OF AGREEMENTS I MENTIONED WOULD REBATE SOME OF 

THOSE ROYALTIES BACK TO APPLE SO THAT THE NET ROYALTIES WE PAID 

WERE STILL EXORBITANT, BUT THEY WEREN'T AS HIGH AS THEY WOULD 

HAVE OTHERWISE BEEN. SO WE DID GET SOME RELIEF, STILL LANDING 

IN AN EXORBITANT PLACE, BUT THOSE AGREEMENTS WERE DESIGNED TO 

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715

GIVE US SOME RELIEF RELATIVE TO THE NOMINAL ROYALTIES OUR CM'S 

WOULD OTHERWISE PAY. 

Q. AND THAT MARKETS INCENTIVE AGREEMENT, THAT EXPIRED AT THE 

END OF 2012; IS THAT RIGHT? 

A. YES, THAT IS CORRECT.

Q. AND THE TRANSITION AGREEMENTS, HAVE THEY EXPIRED? 

A. THEY EXPIRED AT THE END OF 2016. 

MR. BAKER: NO FURTHER QUESTIONS. THANK YOU. 

THE COURT: OKAY. TIME IS 11:15. 

THE WITNESS: THANK YOU, SIR. 

(PAUSE IN PROCEEDINGS.) 

THE COURT: ARE YOU READY? 

MS. SESSIONS: I AM, YOUR HONOR. 

THE COURT: OKAY. GO AHEAD, PLEASE. GO AHEAD, 

PLEASE. 

CROSS-EXAMINATION

BY MS. SESSIONS: 

Q. GOOD MORNING, MR. BLEVINS. MY NAME IS JUSTINA SESSIONS, 

AND I REPRESENT QUALCOMM. 

A. GOOD MORNING, MA'AM. 

Q. APPLE DESIGNED THE ORIGINAL IPHONE TO BE COMPATIBLE IN THE 

UNITED STATES WITH AT&T'S NETWORK; CORRECT? 

A. YES, THAT IS MY RECOLLECTION.

Q. AND AT&T'S NETWORK AT THE TIME USED THE UMTS AIR 

INTERFACE?

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716

A. YES, THAT'S CORRECT. 

Q. THE FIRST DISCUSSIONS THAT YOU HAD WITH POTENTIAL BASEBAND 

PROCESSOR SUPPLIERS WERE THE FIRST IPHONE WERE IN 2005? 

A. YES, THAT IS ALSO CORRECT. 

Q. AND IN 2005, YOU SPOKE TO AT LEAST QUALCOMM, SONY 

ERICSSON, TEXAS INSTRUMENTS, AND INFINEON ABOUT SUPPLYING 

BASEBAND PROCESSORS FOR THE FIRST IPHONE? 

A. YES, THAT IS CORRECT. 

Q. AND IN 2005, APPLE LEARNED THAT QUALCOMM HAD A POLICY OF 

REQUIRING A LICENSE OR A LICENSE CONTRACT MANUFACTURER BEFORE 

IT WOULD SELL MODEM CHIPS; CORRECT? 

A. YES, THAT IS ALSO CORRECT.

Q. APPLE CHOSE INFINEON AS THE BASEBAND SUPPLIER FOR THE 

FIRST IPHONE; CORRECT?

A. YES. 

Q. AND APPLE CHOSE INFINEON EVEN THOUGH INFINEON DID NOT HAVE 

THE LOWEST PRICED OFFERING? 

A. YES. MY RECOLLECTION WAS WE THOUGHT INFINEON OFFERED US 

OVERALL BEST VALUE, BUT NOT NECESSARILY ABSOLUTE LOWEST PRICE.

Q. INFINEON WAS DECLARED TO BE THE BEST TECHNICAL ALTERNATIVE 

AND IT HAD A COMPETITIVE PRICE?

A. I THINK THAT'S A FAIR SUMMARY, YES. 

Q. APPLE DID NOT CONSIDER BUYING BASEBAND PROCESSORS FOR THE 

FIRST IPHONE FROM MORE THAN ONE SUPPLIER; CORRECT? 

A. THAT IS ALSO CORRECT.

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717

Q. SO APPLE BOUGHT ITS BASEBAND PROCESSOR FOR THE FIRST 

IPHONE SOLELY FROM INFINEON?

A. AS PART OF A PLAN OF STRATEGY, YES. IT WAS OUR FIRST 

PHONE, WE WERE TECHNICALLY IMMATURE. WE THOUGHT IT WAS TOO BIG 

OF A CHALLENGE AT THAT POINT IN TIME TO TRY TO DO TWO. THAT 

WAS ALSO OUR PHILOSOPHY ON OTHER COMPONENTS IN THE FIRST 

IPHONE.

Q. AND FOR THE SECOND IPHONE RELEASED IN 2008, APPLE BOUGHT 

ITS BASEBAND PROCESSORS SOLELY FROM INFINEON AS WELL; CORRECT? 

A. YES, THAT'S CORRECT.

Q. AND APPLE DID NOT CONSIDER ANY SUPPLIERS OTHER THAN 

INFINEON FOR THE IPHONE RELEASED IN 2008; CORRECT?

A. ACTUALLY, I WOULD SAY WE DID CONSIDER OTHER, BUT IT WAS A 

FAIRLY SHORT CONSIDERATION BECAUSE WE PRETTY MUCH KNEW IT 

NEEDED TO BE INFINEON. SO WE CONSIDERED, BUT NOT SERIOUSLY.

Q. SO THERE WERE POSSIBLY INFORMAL CONSIDERATIONS OF OTHER 

SUPPLIERS, BUT THE ONLY SUPPLIER SERIOUSLY CONSIDERED WAS 

INFINEON? 

A. YES, THAT'S TRUE. 

Q. AND FOR THE IPHONES THAT WERE RELEASED IN 2009 AND 2010, 

APPLE SOURCED ITS BASEBAND PROCESSORS FOR THOSE IPHONES SOLELY 

FROM INFINEON AS WELL; CORRECT?

A. THAT IS CORRECT. 

Q. AT THE TIME THAT APPLE ENTERED INTO THE MARKETING 

INCENTIVE AGREEMENT WITH QUALCOMM IN 2007, IT WAS BUYING NO 

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718

CHIPS FROM QUALCOMM; CORRECT? 

A. CORRECT. THEY WEREN'T EVEN OFFERED TO US. WE WERE NOT 

PROCURING ANY. 

Q. AND I BELIEVE THAT YOU'VE TESTIFIED THAT APPLE VIEWED 

ITSELF AS PAYING SORT OF A NET ROYALTY PAYMENT, AND I DON'T 

WANT YOU TO NAME THE AMOUNT, UNDER THE MARKETING INCENTIVE 

AGREEMENT; IS THAT CORRECT?

A. THAT IS CORRECT.

Q. SO IN 2007, APPLE VIEWED ITSELF AS PAYING THAT CERTAIN NET 

ROYALTY AMOUNT TO QUALCOMM WHILE IT WAS BUYING NO CHIPS FROM 

QUALCOMM; CORRECT? 

A. YES, I WOULD AGREE WITH THAT.

Q. OKAY. AND IN 2008, APPLE WAS PAYING THAT SAME NET 

EFFECTIVE ROYALTY RATE UNDER ITS VIEW TO QUALCOMM WHILE BUYING 

NO CHIPS FROM QUALCOMM; CORRECT? 

A. YES, THAT'S CORRECT. 

Q. AND IN 2009, APPLE VIEWED ITSELF AS PAYING A CERTAIN NET 

EFFECTIVE ROYALTY TO QUALCOMM, AND, AGAIN, APPLE WAS BUYING NO 

CHIPS FROM QUALCOMM IN 2009; CORRECT?

A. ALSO CORRECT, YES. 

Q. AT SOME POINT, APPLE DECIDED THAT IT WANTED TO OFFER AN 

IPHONE THAT WOULD WORK ON VERIZON'S NETWORK? 

A. YES. 

Q. AND THAT ENDED UP BEING THE 2011 IPHONE, WHICH WAS THE 

IPHONE 4? 

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A. YES, THAT'S CORRECT. 

Q. WHEN APPLE DECIDED TO LAUNCH AN IPHONE ON VERIZON'S 

NETWORK, APPLE BELIEVED THAT IT WOULD NEED TO WORK WITH 

QUALCOMM; CORRECT? 

A. YES, THAT WAS OUR CONCLUSION. 

Q. FOR THE IPHONES RELEASED IN 2012, APPLE AWARDED ALL OF ITS 

BASEBAND PROCESSOR BUSINESS TO QUALCOMM; CORRECT? 

A. YES, THAT'S CORRECT. 

Q. AND FOR THE IPHONES RELEASED IN 2012, APPLE WANTED LTE 

CAPABILITY AND INFINEON DID NOT HAVE A GOOD SOLUTION FOR LTE; 

CORRECT? 

A. YES, THAT'S MY RECOLLECTION. WE THOUGHT QUALCOMM HAD A 

LEAD. 

Q. OKAY. AND INFINEON WAS NOT A LEADER IN LTE AT THAT TIME? 

A. AT THAT POINT WE TIME, WE FELT THAT THEY WERE NOT.

Q. AND YOU FELT THAT THEY WERE NOT A LEADER BECAUSE THEIR 

PERFORMANCE WAS NOT LEADING EDGE; CORRECT? 

A. GENERALLY, YES. 

Q. AND INFINEON'S PERFORMANCE WAS NOT LEADING EDGE AT THAT 

TIME, DESPITE THE FACT THAT INFINEON HAD BEEN WORKING WITH 

APPLE FOR SEVERAL YEARS SUPPLYING BASEBAND PROCESSORS FOR 

IPHONES; CORRECT? 

A. TRUE. AS I RECALL, INFINEON AS A CORPORATION WAS GOING 

THROUGH UPHEAVAL. THEY SOLD OFF THE DIVISIONS. SO THERE WAS 

PROBABLY A NUMBER OF INTERNAL FACTORS AND DISTRACTIONS THAT, IN 

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720

RETROSPECT, HURT THEIR INNOVATIVE PACE. 

Q. MR. BLEVINS, AS OF THE DATE OF YOUR DEPOSITION IN THIS 

CASE, WHICH WAS MARCH 13TH AND 14TH OF 2018, APPLE HAD DECIDED 

TO USE INTEL AS THE SOLE SUPPLIER OF BASEBANDS FOR THE 2018 

IPHONES; CORRECT? 

A. THAT IS CORRECT. 

Q. AND, IN FACT, FOR THE MODELS THAT APPLE -- THE IPHONE 

MODELS THAT APPLE DID LAUNCH IN 2018, APPLE USED INTEL MODEMS 

IN THOSE IPHONES; CORRECT? 

A. YES. THAT WASN'T OUR DESIRE, BUT THAT WAS THE RESULT. 

Q. AS OF THE DATE OF YOUR DEPOSITION, APPLE HAD DECIDED TO 

USE INTEL AS THE SOLE PROVIDER OF BASEBANDS FOR WHATEVER THE 

NEXT APPLE WATCH WAS GOING TO BE; CORRECT?

A. THAT IS CORRECT, YES. 

Q. AND APPLE HAD ALSO DECIDED TO USE INTEL AS THE SOLE 

PROVIDER OF BASEBANDS FOR WHATEVER THE NEXT IPAD WAS GOING TO 

BE; CORRECT? 

A. THAT IS CORRECT AS WELL. 

Q. AS OF THE DATE OF YOUR DEPOSITION, APPLE WAS CONSIDERING 

INTEL, MEDIATEK, AND SAMSUNG FOR BASEBAND PROCESSORS FOR 2019 

IPHONES; CORRECT?

A. THAT IS CORRECT, BECAUSE IN THAT PERIOD OF TIME WE KNEW 

THAT QUALCOMM HAD ALREADY WITHDRAWN. SO THEY WERE NO LONGER A 

CANDIDATE. YOUR STATEMENT IS CORRECT.

Q. SO I THINK YOU ANTICIPATED MY NEXT QUESTION. SO AS OF THE 

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721

DATE OF YOUR DEPOSITION IN THIS CASE, APPLE WAS NOT CONSIDERING 

QUALCOMM TO PROVIDE BASEBAND PROCESSORS IN ANY 2019 APPLE 

PRODUCTS; CORRECT?

A. CORRECT. WE ALREADY KNEW BY THAT POINT IN TIME THAT THE 

PRODUCTS WEREN'T AVAILABLE TO US.

Q. AS OF YOUR DEPOSITION IN MARCH 2018, APPLE HAD BEEN 

COMMUNICATING FOR MANY YEARS WITH MEDIATEK WITH SOURCING 

BASEBANDS; CORRECT? 

A. YES, THAT'S CORRECT.

Q. AND APPLE HAD ALSO BEEN CONSIDERING SAMSUNG AS A BASEBAND 

SUPPLIER FOR AT LEAST TWO TO THREE YEARS?

A. WE HAD BEEN IN TALKS WITH THEM, YES.

Q. THE FACT THAT SAMSUNG ALSO SELLS PHONES IN COMPETITION 

WITH APPLE DOES NOT INHIBIT APPLE'S ABILITY TO PURCHASE 

COMPONENTS FROM SAMSUNG? 

A. IT'S NOT AN IDEAL ENVIRONMENT FROM OUR PERSPECTIVE. BUT I 

WOULD AGREE WITH YOU, IT DOESN'T INHIBIT US FROM BUYING 

COMPONENTS. IN FACT, WE BUY A GREAT DEAL OF COMPONENTS FROM 

THEM.

Q. IN FACT, SAMSUNG IS CURRENTLY APPLE'S LARGEST SUPPLIER OF 

COMPONENTS?

A. THEY CURRENTLY ARE, THAT'S CORRECT. 

Q. MR. BLEVINS, IF -- OH, I NEED TO HAND OUT YOUR BINDERS. 

EXCUSE ME ONE MOMENT. 

(PAUSE IN PROCEEDINGS.) 

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722

MR. VAN NEST: MAY I APPROACH, YOUR HONOR? 

THE COURT: YES. 

THE WITNESS: THANK YOU, SIR. 

BY MS. SESSIONS: 

Q. MR. BLEVINS, DO YOU HAVE YOUR BINDER NOW?

A. YES, MA'AM.

Q. OKAY. IN 2016, APPLE WAS CONSIDERING ENGAGING IN 5G 

DISCUSSIONS WITH BASEBAND VENDORS; CORRECT? 

A. YES. 

Q. MR. BLEVINS, I'D ASK YOU TO TURN IN THE BINDER THAT I 

JUST -- THAT WAS JUST HANDED TO YOU TO THE DOCUMENT LABELED 

QX 9097. 

AND PORTIONS OF THIS DOCUMENT HAVE BEEN SEALED, YOUR 

HONOR. 

A. OKAY. I BELIEVE I HAVE IT. 

Q. OKAY. MR. BLEVINS, CAN YOU IDENTIFY QX 9097 AS AN E-MAIL 

FROM AARON SCHAFER TO YOU DATED DECEMBER 9TH OF 2016? 

A. YES. 

Q. AND MR. SCHAFER REPORTS TO YOU?

A. THAT IS CORRECT.

Q. WHAT'S MR. SCHAFER'S ROLE? 

A. HIS ROLE IS SENIOR DIRECTOR OF WIRELESS PROCUREMENT. 

Q. AND DOES THIS E-MAIL CONCERN APPLE'S POTENTIAL DISCUSSIONS 

WITH 5G VENDORS? 

A. YES. SPECIFICALLY, AARON, AS A PART OF HIS DUTIES, WAS 

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723

PROPOSING A GO FORWARD LONG TERM STRATEGY TO ME FOR REVIEW AND 

APPROVAL. 

MS. SESSIONS: OKAY. YOUR HONOR, I'D LIKE TO OFFER 

INTO EVIDENCE QX 9097. 

MR. BAKER: YOUR HONOR, THE FTC HAS RAISED AN HPO 

HEARSAY OBJECTION WITH RESPECT TO THIS DOCUMENT, AND YOUR HONOR 

OVERRULED THAT OBJECTION, BUT DIRECTED THAT IT NOT BE ADMITTED 

FOR THE TRUTH OF THE MATTER. 

THE COURT: THAT'S FINE. THIS IS ADMITTED, BUT IT'S 

NOT ADMITTED FOR THE TRUTH OF THE MATTER ASSERTED. 

(DEFENDANT'S EXHIBIT QX 9097 WAS ADMITTED IN EVIDENCE.) 

MS. SESSIONS: THANK YOU, YOUR HONOR. 

Q. MR. BLEVINS, IN THIS E-MAIL, MR. SCHAFER REPORTED TO YOU 

THAT THE ENGINEERING TEAMS WANT TO ENGAGE IN 5G DISCUSSIONS 

WITH ONE VENDOR; IS THAT CORRECT? 

A. YES. HE WAS REPORTING TO ME THE RESULTS OF A COUPLE OF 

MEETINGS HE HAD WITH ENGINEERING.

Q. AND HE ALSO REPORTED TO YOU THAT THE ENGINEERS WERE 

HESITANT TO TALK TO QUALCOMM; CORRECT? 

A. YES. 

Q. AND I'M NOT GOING TO GET INTO THE SPECIFICS OF FOLKS THAT 

ARE NAMED OR ANYTHING ELSE THAT'S DISCUSSED IN THE BODY OF THIS 

E-MAIL BECAUSE THAT'S UNDER SEAL. 

BUT MR. SCHAFER PROPOSED USING A PARTICULAR VENDOR TO 

ENGAGE -- MR. SCHAFER PROPOSED ENGAGING IN DISCUSSIONS WITH A 

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724

PARTICULAR VENDOR; CORRECT? 

A. YES, HE DID. 

Q. AND MR. SCHAFER ALSO REPORTED TO YOU A TECHNICAL 

ASSESSMENT BETWEEN POTENTIAL VENDORS; CORRECT? 

A. YES, HE DID. 

Q. THANK YOU, SIR. 

MR. BLEVINS, DRAWING YOUR ATTENTION TO THE TRANSITION 

AGREEMENT, THE 2011 AGREEMENT. WHEN APPLE WAS NEGOTIATING THIS 

AGREEMENT, IT WAS CONTEMPLATING TRANSITIONING ITS BASEBAND 

PROCESSOR BUSINESS FROM INFINEON TO QUALCOMM; CORRECT? 

A. YES. AS I RECALL, THAT WOULD HAVE BEEN THE FIRST CHIP 

THAT WE PURCHASED FROM QUALCOMM WHICH WAS CDMA CAPABLE. THAT'S 

MY RECOLLECTION.

Q. AND THE TRANSITION FROM ONE BASEBAND SUPPLIER TO ANOTHER 

IS DIFFICULT? 

A. YES, I WOULD SAY SO.

Q. YOU'VE ANALOGIZED IT TO A HEART TRANSPLANT? 

A. YES. 

Q. PART OF THE DISCUSSIONS SURROUNDING THE TRANSITION 

AGREEMENT WAS QUALCOMM OFFERING INCENTIVES SO THAT APPLE WOULD 

BE WILLING TO TAKE THE RISK OF TRANSITIONING BASEBAND 

SUPPLIERS? 

A. THAT WAS A PART OF IT, YES. 

Q. APPLE WORKED WITH BASEBAND SUPPLIERS OTHER THAN QUALCOMM 

SHORTLY AFTER IT SIGNED THE TRANSITION AGREEMENT; CORRECT? 

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725

A. YES, WE CONTINUED TO WORK WITH OTHERS.

Q. AND APPLE CONTINUED TO IDENTIFY POTENTIAL ALTERNATIVES TO 

QUALCOMM AFTER IT SIGNED THE TRANSITION AGREEMENT? 

A. YES, THAT'S CORRECT. 

Q. SPECIFICALLY, APPLE WORKED WITH BOTH ST ERICSSON AND INTEL 

AFTER SIGNING THE TRANSITION AGREEMENT? 

A. YES, CORRECT. 

Q. NOW DIRECTING YOUR ATTENTION TO THE 2013 AMENDED 

TRANSITION AGREEMENT, SO THE AMENDMENT SO THE 2011 AGREEMENT. 

YOU'D AGREE THAT LEVERAGE FROM QUALCOMM'S CHIP SUPPLY WAS 

NOT A FACTOR INFLUENCING APPLE'S DECISION TO ENTER INTO THAT 

AMENDED TRANSITION AGREEMENT; CORRECT? 

A. NO, I WOULDN'T AGREE WITH THAT STATEMENT. 

Q. YOU, YOU BELIEVED THAT LEVERAGE FROM QUALCOMM'S CHIP 

SUPPLIER WAS A FACTOR INFLUENCING APPLE'S DECISION TO ENTER 

INTO THE TRANSITION AGREEMENT? 

A. WELL, MY RECOLLECTION AT THAT POINT IN TIME WAS WE DESIRED 

TO BUY QUALCOMM CHIPS AND WE DESIRED TO LESSEN THE ROYALTY FEE. 

AND THAT AGREEMENT PROVIDED FOR EACH OF THOSE THINGS. WE 

GOT ACCESS TO QUALCOMM CHIPS AND WE LESSENED THE ROYALTY FEES. 

THAT'S WHAT I RECALL.

Q. SO, SIR, MY QUESTION WASN'T ABOUT YOUR GOALS IN ENTERING 

INTO THE TRANSITION AGREEMENT. 

BUT MY QUESTION WAS SPECIFICALLY WHETHER LEVERAGE 

CONCERNING QUALCOMM'S CHIP SUPPLY WAS A FACTOR INFLUENCING 

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726

APPLE'S DECISION TO ENTER INTO THAT AGREEMENT. 

A. I DON'T RECALL ALL OF THE CONSIDERATIONS AT THAT POINT IN 

TIME AS I SIT HERE TODAY. 

I DO RECALL WE WANTED TO BUY QUALCOMM CHIPS AND WE WANTED 

TO LESSEN OUR ROYALTY OBLIGATIONS. THOSE TWO THINGS I 

SPECIFICALLY REMEMBER. THERE MAY HAVE BEEN OTHERS. 

Q. MR. -- 

YOUR HONOR, MAY I APPROACH? 

THE COURT: GO AHEAD, PLEASE. 

MS. SESSIONS: (HANDING.) 

THE WITNESS: THANK YOU, MA'AM. 

THE COURT: IS THAT A SEPARATE BINDER? 

MS. SESSIONS: THIS IS, YOUR HONOR. THIS IS A BINDER 

OF DEPOSITION AND HEARING TRANSCRIPTS OF MR. BLEVINS. 

THE COURT: ALL RIGHT. THANK YOU. 

BY MS. SESSIONS: 

Q. MR. BLEVINS, DO YOU RECALL GIVING TESTIMONY AT AN 

INVESTIGATIONAL HEARING CONDUCTED BY THE FTC ON JANUARY 28TH, 

2016? 

A. I DON'T REMEMBER THE EXACT DATES. I'LL TAKE YOUR WORD FOR 

IT, BUT I DO RECALL GIVING SOME TESTIMONY IN WASHINGTON D.C.

Q. AND YOU WERE UNDER OATH AT THE TIME?

A. YES.

Q. MR. BLEVINS, I'D LIKE TO TURN YOUR ATTENTION TO PAGE 207 

OF THE INVESTIGATIONAL HEARING TRANSCRIPT THAT SHOULD BE IN 

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727

YOUR BINDER. 

A. WHICH TAB WOULD THAT BE? I'M NOT SURE HOW TO FIND IT. 

Q. IT'S THE FIRST TAB IN YOUR BINDER, SIR. 

A. OKAY. 

Q. AND I'M ACTUALLY GOING TO START ON PAGE 206, LINE 25, 

FOLLOWING OVER TO PAGE 207, LINE 4. 

MR. BLEVINS, AT YOUR INVESTIGATIONAL HEARING, WERE YOU 

ASKED THE QUESTION, "WAS THIS SUPPLY LEVERAGE THAT YOU HAVE 

BEEN DESCRIBING A FACTOR INFLUENCING APPLE'S DECISION TO ENTER 

INTO THE AMENDED TRANSITION AGREEMENT AND THE OTHER AGREEMENTS 

IN EARLY '13?"

AND YOU ANSWERED, "I WOULD SAY NO." 

DO YOU SEE THAT?

A. YES.

Q. DID YOU GIVE THAT TESTIMONY? 

A. YES.

Q. DO YOU STAND BY THAT TESTIMONY TODAY?

A. WELL, I'M TRYING TO THINK WHAT MY STATE OF MIND WAS AT 

THAT POINT IN TIME AND HOW I WAS REACTING TO THAT QUESTION. 

THERE WAS A SERIES OF QUESTIONS BEFORE IT, AND I WOULD NEED TO 

READ ALL OF THEM TO GET AN IDEA OF WHAT I WAS THINKING ABOUT. 

BUT IF I READ ONLY THAT QUESTION, I'M TRYING TO THINK HOW 

WOULD I HAVE INTERPRETED THE WORDS "SUPPLY LEVERAGE"? IS THAT 

SUPPLY LEVERAGE ON QUALCOMM'S SIDE OR APPLE'S SIDE? BECAUSE IT 

ACTUALLY DOESN'T SAY. 

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728

SO I'M NOT SURE IF I WAS ANSWERING ON QUALCOMM'S BEHALF OR 

APPLE'S BEHALF AT THAT POINT IN TIME IN WASHINGTON D.C. 

BUT AS I SIT HERE TODAY, I WOULD SAY THAT WE DEFINITELY 

WANTED TO BUY CHIPS. THAT WAS PART OF THE AGREEMENT. WE 

WANTED TO BUY CHIPS. AND THE AGREEMENT GAVE US THE ABILITY TO 

BUY CHIPS.

Q. MR. BLEVINS, AT THE TIME THAT APPLE ENTERED INTO THE 

AMENDED TRANSITION AGREEMENT, APPLE WAS CONFIDENT THAT IT WOULD 

USE A QUALCOMM BASEBAND PROCESSOR IN THE NEAR TERM; CORRECT? 

A. YEAH. MY RECOLLECTION WAS WE DESIRED TO USE IT IN THE 

NEAR TERM, I WOULD AGREE WITH THAT.

Q. SO APPLE MADE A CALCULATED GAMBLE THAT BE AVAILING ITSELF 

OF THE REBATES UNDER THAT AGREEMENT IN THE NEAR TERM, YOU WOULD 

NOT GIVE UP MORE ON COMPETITIVENESS IN THE OUT PERIOD? 

A. I THINK THAT'S GENERALLY RIGHT. AS I TESTIFIED BEFORE, WE 

THOUGHT THAT AT THE OUT PERIODS WE COULD LAND IN A PLACE THAT 

BOTH SIDES COULD LIVE WITH. SO, YES, I WOULD AGREE WITH THAT 

STATEMENT.

Q. SO IN OTHER WORDS, APPLE THOUGHT ITS NET EFFECTIVE COST OF 

CHIPSETS WOULD BE COMPETITIVE AFTER FACTORING IN THE REBATES IN 

THE TRANSITION AGREEMENT? 

A. WE DIDN'T NECESSARILY THINK THEY WOULD BE COMPETITIVE, AS 

I TESTIFIED BEFORE. BUT WE DIDN'T THINK WE WOULD GET GOUGED. 

WE KNEW THEY WOULD BE HIGHER. IN HINDSIGHT, THEY WERE MUCH 

HIGHER THAN WE ANTICIPATED AT THAT POINT IN TIME. 

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729

Q. AND UNDER THE TRANSITION AGREEMENT AND THE AMENDED 

TRANSITION AGREEMENT AND THE BUSINESS COOPERATION AND PATENT 

AGREEMENT, APPLE WAS ALLOWED TO USE ANY BASEBAND SUPPLIER THAT 

IT WANTED, BUT THE FINANCIAL CONSEQUENCES OF USING A SECOND 

BASEBAND SUPPLIER WOULD BE THAT APPLE WOULD HAVE TO RETURN 

CERTAIN REBATES AND INCENTIVES; CORRECT? 

A. YES. THERE WERE HUGE AMOUNTS OF MONEY AT STAKE THAT HAD 

THE NET EFFECT OF DISSUADING US FROM USING ANYONE ELSE, I THINK 

THAT'S CORRECT. 

Q. OKAY. MR. BLEVINS, THERE WAS SOME TESTIMONY EARLIER ABOUT 

A SPRING IPAD MINI. 

A. YES.

Q. AND THE SCHEDULE WAS MOVED UP. 

DO YOU RECALL THAT?

A. YES. AND I THINK I MISSPOKE AND GOT THE YEARS TANGLED. 

SO I APOLOGIZE.

Q. OKAY. COULD YOU PLEASE LET US KNOW YOUR UNDERSTANDING OF 

THE TIMEFRAME OF THE SPRING 2014 IPAD MINI AND WHEN -- WHAT 

THAT SCHEDULE WAS MOVED UP TO. 

A. YES. WHAT I RECALL IS AT AN EARLY STAGE, WE WERE PLANNING 

TO SHIP THAT MINI IN APRIL, AND THEN LATER IN MARCH OF 2014. 

BUT IT WAS KNOWN AS THE SPRING. 

AND I'VE RECENTLY SEEN SOME DOCUMENTS, YOU KNOW, 

MEMORIALIZING THAT THAT PRODUCT WOULD BE SPRING OF 2014. 

LATER WE WERE PLEASED TO DETERMINE THAT WE FELT WE COULD 

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730

MOVE ALL OF THE COMPONENTS IN, "ALL" MEANING LCD'S, ENCLOSURES, 

NAND FLASH, AND SO WE REVISED OUR PLAN AND WE SET THE SHIP DATE 

FOR SEPTEMBER OF 2013. 

BEFORE I THINK I USED THE WRONG YEAR, THE RIGHT MONTH AND 

THE WRONG YEAR. 

SO IT WAS SEPTEMBER 2013. AS WE CONTINUED TO WORK ON THAT 

PRODUCT, THE DATE MOVED FROM SEPTEMBER OF '13 TO OCTOBER OF 

'13, AND THEN LATER IT FINALLY LANDED AND SHIPPED IN NOVEMBER 

OF 2013. THAT'S WHAT I RECALL, AND I THINK I MISSPOKE EARLIER. 

SO MY APOLOGIES.

Q. OKAY. SO THAT IPAD WAS SHIFTED TO THE FALL OF 2013; 

CORRECT?

A. THAT IS CORRECT.

Q. OKAY. SO YOU ALSO TESTIFIED THAT THE APPLE IPAD MINI THAT 

WAS RELEASED IN 2014 DID NOT HAVE CARRIER AGGREGATION; IS THAT 

RIGHT? 

A. YES.

Q. OKAY. BUT THERE WERE OTHER APPLE IPAD MODELS RELEASED IN 

2014 THAT DID HAVE CARRIER AGGREGATION; IS THAT RIGHT? 

A. I DON'T RECALL SPECIFICALLY. I COULDN'T SAY FOR CERTAIN. 

I BELIEVE THAT'S TRUE, BUT I WOULDN'T WANT TO SAY FOR CERTAIN 

BECAUSE I DON'T KNOW. 

Q. IN EARLY 2018, SIR -- AND I'M NOT LOOKING FOR A SPECIFIC 

NUMBER -- BUT APPLE'S GROSS MARGINS WERE GENERALLY IN THE LOW 

40'S; IS THAT CORRECT? 

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UNITED STATES COURT REPORTERS

731

A. I THINK THAT'S GENERALLY CORRECT, YES.

Q. AND AS OF THE DATE OF YOUR DEPOSITION, YOU BELIEVED THAT A 

FAIR GROSS MARGIN FOR A BASEBAND PROCESSOR SUPPLIER WOULD ALSO 

BE IN THE MID-40'S? 

A. YES, I BELIEVE THAT'S WHAT I TESTIFIED TO IN THE 

DEPOSITION AT THAT POINT IN TIME. 

Q. SIR, IS IT YOUR TESTIMONY THAT THE BUSINESS COOPERATION 

AND PATENT AGREEMENT IS -- THAT ANY PAYMENTS UNDER THAT 

AGREEMENT ARE CONTINGENT ON CHIP SALES? 

A. MY UNDERSTANDING OF THE AGREEMENTS IN ORDER FOR US TO 

OBTAIN THE REBATES THAT WE'RE ELIGIBLE FOR IN THE SUMMATION OF 

THREE AGREEMENTS THAT WERE NEGOTIATED AT THE SAME POINT IN 

TIME, THAT WE HAVE TO USE QUALCOMM EXCLUSIVELY AS A CHIPSET 

SUPPLIER. 

THAT'S MY UNDERSTANDING.

Q. SO, SIR, MY QUESTION WAS SPECIFICALLY ABOUT THE BUSINESS 

COOPERATION AND PATENT AGREEMENT. 

IS IT YOUR TESTIMONY THAT THAT AGREEMENT IS CONTINGENT ON 

CHIP SALES TO QUALCOMM? 

A. I'M NOT SURE IF I'M QUALIFIED TO ANSWER THAT, THE REASON 

BEING I KNOW THAT THAT AGREEMENT IN WHAT WAS KNOWN AS THE FIRST 

AMENDED TRANSITION AGREEMENT WERE NEGOTIATED EXACTLY AT THE 

SAME POINT IN TIME AND THE TWO WERE VERY CLOSELY AND HEAVILY 

LINKED AND THAT QUALCOMM WANTED THEM TO BE IN TWO SEPARATE 

AGREEMENTS AS OPPOSED TO ONE. APPLE REALLY DIDN'T HAVE A 

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UNITED STATES COURT REPORTERS

732

PREFERENCE ONE WAY OR THE OTHER AS LONG AS THE RESULT WAS THAT 

WE WOULD GET REBATES. 

SO I DON'T THINK I'M QUALIFIED TO ANSWER YOUR QUESTION. I 

KNOW THE TWO WORK IN CONCERT AND IF WE'RE EXCLUSIVE THEN WE GET 

THE REBATES AND IF WE'RE NOT, WE DON'T GET THE REBATES. THAT 

MUCH I KNOW.

Q. YOU CAN'T SPEAK TO THE SPECIFIC TERMS OF THE BUSINESS 

COOPERATION AND PATENT AGREEMENT; CORRECT? 

A. NO, MA'AM, I CAN'T. I KNOW THEY WERE NEGOTIATED AT THE 

SAME TIME, BUT FOR SOME REASON THEY WERE TWO SEPARATE 

AGREEMENTS.

Q. OKAY. YOU ALSO TESTIFIED THAT APPLE AND QUALCOMM ARE NOW 

ENGAGED IN A DISPUTE CONCERNING, AMONG OTHER THING, CERTAIN OF 

QUALCOMM'S BUSINESS PRACTICES; CORRECT? 

A. YES, I THINK THAT'S TRUE.

Q. OKAY. QUALCOMM CONTINUED TO SHIP BASEBAND PROCESSOR 

CHIPSETS TO APPLE AFTER THAT DISPUTE BEGAN; CORRECT? 

A. THAT'S TRUE. WE HAD A SPECIFIC AGREEMENT THAT WE'D 

NEGOTIATED PREVIOUSLY TO MAKE ABSOLUTELY CERTAIN THAT WAS THE 

CASE BECAUSE WE HAD GRAVE CONCERNS THAT QUALCOMM WOULD STOP 

SHIPPING TO US BASED ON RUMORS WE HEARD IN THE INDUSTRY.

Q. SO YOU HAD NEGOTIATED WITH QUALCOMM FOR CONTINUITY OF 

SUPPLY; CORRECT? 

A. I RECALL THAT VERY SPECIFICALLY. IT WAS LABORIOUS. I 

THINK WE SPENT ABOUT 15 MONTHS TO COME TO THAT AGREEMENT. SO I 

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BLEVINS REDIRECT BY MR. BAKER

UNITED STATES COURT REPORTERS

733

DO RECALL IT.

Q. AND QUALCOMM DID AGREE TO PROVIDE APPLE WITH CONTINUITY OF 

SUPPLY? 

A. FINALLY IN THE FINAL ANALYSIS, THEY DID.

Q. AND QUALCOMM HONORED ITS AGREEMENT TO PROVIDE APPLE WITH 

CONTINUITY OF SUPPLY; CORRECT?

A. YES, THEY DID. 

MS. SESSIONS: THANK YOU. NO FURTHER QUESTIONS. 

THE WITNESS: THANK YOU, MA'AM. 

THE COURT: OKAY. TIME IS 11:39. 

DO YOU HAVE ANY REDIRECT? 

MR. BAKER: JUST A COUPLE QUESTION, YOUR HONOR. 

THE COURT: OKAY. LET ME KNOW WHEN YOU'RE READY. 

MR. BAKER: I'M READY. 

THE COURT: OKAY. 11:39. GO AHEAD, PLEASE. 

REDIRECT EXAMINATION

BY MR. BAKER: 

Q. MR. BLEVINS, BETWEEN 2011 AND THE SPRING OF 2016, DID 

APPLE USE ANY NON-QUALCOMM MODEM CHIPS IN ANY OF ITS NEWLY 

LAUNCHED DEVICES?

A. NO, SIR. 

Q. MR. BLEVINS, YOU TESTIFIED JUST NOW ABOUT THE FACTORS 

INFLUENCING APPLE'S DESIRE TO ENTER INTO THE 2013 AMENDED 

TRANSITION AGREEMENT. 

WAS A DESIRE TO OBTAIN ROYALTY RELIEF A FACTOR INFLUENCING 

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UNITED STATES COURT REPORTERS

734

APPLE TO ENTER INTO THAT AGREEMENT? 

A. WELL, YES, OBVIOUSLY. THOSE ROYALTY REBATES WERE HUGE AND 

THEY LESSENED WHAT THAT, THAT VIEW, WHICH WE CONSIDERED 

EXORBITANT, TO BE OTHERWISE. 

Q. AND FINALLY, YOU JUST WERE TESTIFYING ABOUT THE 

SEPTEMBER 2015 SUPPLY CONTINUITY AGREEMENT BETWEEN APPLE AND 

QUALCOMM. DO YOU RECALL THAT? 

A. YES, I RECALL THAT.

Q. DOES THAT SUPPLY CONTINUITY AGREEMENT PROVIDE ASSURANCE TO 

APPLE FOR FUTURE DEVICE MODELS? 

A. NO, IT SPECIFICALLY DID NOT. 

WE DESIRED THAT IT WOULD. BUT AS I MENTIONED, WE SPENT 15 

MONTHS NEGOTIATING THIS AGREEMENT AND THE BEST THAT WE COULD DO 

WAS SECURE A SUPPLY CONTINUITY FOR THINGS THAT HAD ALREADY BEEN 

LAUNCHED AT THAT POINT IN TIME. 

WE TRIED VERY AGGRESSIVELY TO GET THE SAME CONDITIONS IN 

FUTURE CHIP, BUT WE WERE UNSUCCESSFUL IN NEGOTIATING SUCH A 

CONDITION. 

MR. BAKER: THANK YOU. 

NO FURTHER QUESTIONS, YOUR HONOR. 

THE COURT: OKAY. TIME IS 11:41. 

IS THERE ANY FURTHER -- 

MS. SESSIONS: NO FURTHER QUESTIONS, YOUR HONOR. 

THE COURT: OKAY. AND IS THIS WITNESS EXCUSED 

SUBJECT TO RECALL, OR NOT SUBJECT TO RECALL? 

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UNITED STATES COURT REPORTERS

735

MR. BAKER: NOT SUBJECT TO RECALL. 

MS. SESSIONS: NOT SUBJECT TO RECALL, YOUR HONOR. 

THE COURT: OKAY. THEN YOU HAVE COMPLETED YOUR TRIAL 

TESTIMONY AND YOU ARE FREE TO LEAVE. 

THE WITNESS: THANK YOU, YOUR HONOR. 

THE COURT: YOUR NEXT WITNESS IS A VIDEO ONE. IS 

THAT RIGHT? 

MR. MATHESON: YES, YOUR HONOR. WITH THE COURT'S 

PERMISSION, WE'D LIKE TO BEGIN THE VIDEO OF MR. LEE. YOUR 

HONOR HAS SEALED A PORTION OF THAT VIDEO. 

THE COURT: OKAY. 

MR. MATHESON: IF IT'S CONVENIENT FOR THE COURT, OUR 

PROPOSAL WOULD BE TO PLAY THE UNSEALED PORTION. 

THE COURT: OKAY. 

MR. MATHESON: WHICH IS ABOUT EIGHT MINUTES LONG AND 

THEN IF YOUR HONOR WANTED TO SEAL THE ROOM AND DISMISS EVERYONE 

EXCEPT FOR THE LAWYERS, WE CAN COMPLETE THE SEALED PORTION 

BEFORE LUNCH AND THAT WOULD HOPEFULLY MINIMIZE THE DISRUPTION 

ON THE AUDIENCE SHUFFLING IN AND OUT BECAUSE WE COULD COME BACK 

AFTER LUNCH IN OPEN SESSION. 

THE COURT: OH, OKAY. 

MR. MATHESON: THAT WOULD END US RIGHT AROUND NOON IF 

THAT'S CONVENIENT. 

THE COURT: THAT'S FINE WITH ME. 

OKAY. SO LET'S PLAY THE PUBLIC VERSION. AND DO YOU WANT 

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UNITED STATES COURT REPORTERS

736

TO ADMIT ANY EXHIBITS THROUGH THIS WITNESS? 

MR. MATHESON: YES, YOUR HONOR. AND ONE POINT OF 

CLARIFICATION. 

THE COURT: YES. 

MR. MATHESON: WE HAD AGREED IN THE JOINT PRETRIAL 

STATEMENT THAT WE MIGHT PLAY SOME VIDEO WITH THE TRANSCRIPT, OR 

THE TRANSCRIBED ANSWERS IN ENGLISH. THAT'S HOW WE HAVE 

PREPARED THIS ONE. 

THAT IS NOT THE CASE FOR FUTURE VIDEOS IN FOREIGN LANGUAGE 

IN WHICH WE HAVE CAPTURED THE QUESTION IN ENGLISH, THE QUESTION 

IN THE SPEAKER'S NATIVE LANGUAGE, AND THE ANSWER IN BOTH THE 

SPEAKER'S NATIVE LANGUAGE AND ENGLISH. 

THE COURT: OKAY. 

MR. MATHESON: FOR THIS ONE, IT'S JUST THE QUESTION 

IN ENGLISH, THE ANSWER IN THE NATIVE LANGUAGE AND THE 

TRANSCRIPT. 

IF YOUR HONOR DOESN'T LIKE THAT PRESENTATION, WE CAN 

ADJUST THAT AND CHANGE IT. 

THE COURT: THAT'S -- I MEAN, YOU SAID THAT'S THE 

ONLY CASE FOR THIS ONE; RIGHT? 

MR. MATHESON: CORRECT. 

THE COURT: THAT'S FINE. 

MR. MATHESON: THANK YOU VERY MUCH. 

THE COURT: ALL RIGHT. SO YOU WANT TO INTRODUCE 

EXHIBITS? 

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LEE DEPOSITION

UNITED STATES COURT REPORTERS

737

MR. KEHL: YES, YOUR HONOR. 

THE COURT: OKAY. TIME IS 11:43. GO AHEAD, PLEASE. 

WHAT ARE THE EXHIBITS? 

MR. KEHL: YOUR HONOR, THE FTC MOVES TO ADMIT 

CX 2564A, CX 2568A, CX 2639A, CX 2641A, CX 2642A, CX 2643A, AND 

JX 0024. 

THE COURT: ANY OBJECTION? 

MR. BORNSTEIN: NO, YOUR HONOR. 

THE COURT: ALL RIGHT. THOSE ARE ADMITTED.

(PLAINTIFF'S EXHIBITS CX 2564A, CX 2568A, CX 2639A, 

CX 2641A, CX 2642A, CX 2643A AND JOINT EXHIBIT JX 0024 WERE 

ADMITTED IN EVIDENCE.) 

MR. KEHL: YOUR HONOR, AND WE'LL NOTE THAT THIS VIDEO 

CONTAINS ONE MINUTE OF QUALCOMM COMPLETENESS DESIGNATIONS. 

THE COURT: ALL RIGHT. GO AHEAD, PLEASE. DO YOU 

WANT TO GET IT STARTED. 

MR. KEHL: PLEASE PLAY THE VIDEO. 

(THE VIDEOTAPED DEPOSITION OF INJUNG LEE WAS PLAYED IN 

OPEN COURT OFF THE RECORD.)

THE COURT: IS THAT IT? 

MR. KOTARSKI: I'M GOING TO THE NEXT PART. 

(THE VIDEOTAPED DEPOSITION OF INJUNG LEE WAS PLAYED IN 

OPEN COURT OFF THE RECORD.)

MR. KEHL: YOUR HONOR, WE'VE NOW REACHED THE POINT IN 

THE TRANSCRIPT WHERE THE SEALED INFORMATION WOULD -- 

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LEE DEPOSITION

UNITED STATES COURT REPORTERS

738

THE COURT: OKAY. IT'S 11:52. 

ALL RIGHT. HOW LONG IS THE SEALED PORTION? 

MR. KEHL: IT'S SEVEN MINUTES AND 34 SECONDS, YOUR 

HONOR. 

THE COURT: OH, OKAY. SO WE'LL DO IT BEFORE NOON. 

ALL RIGHT. THEN I'M GOING TO GO AHEAD AND ASK, AND I 

GUESS I'LL LEAVE IT TO THE PARTIES TO MAKE SURE THAT WHOEVER 

REMAINS SHOULD BE STAYING. 

ALL RIGHT. I'LL ASK EVERYONE ELSE IF YOU WOULD PLEASE 

STEP OUTSIDE. WE WILL BE IN LUNCH RECESS UNTIL 1:00 O'CLOCK. 

AND WE'LL RESUME AT 1:00. SO LET'S GIVE FOLKS A MINUTE TO 

LEAVE. 

MR. KEHL: THANK YOU, YOUR HONOR. 

(PAUSE IN PROCEEDINGS.)

(PROCEEDINGS UNDER SEAL FROM PAGES 739 TO 740.) 

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UNITED STATES COURT REPORTERS

741

(IN OPEN COURT.)

AFTERNOON SESSION

THE COURT: OKAY. GOOD AFTERNOON AND WELCOME. 

PLEASE TAKE A SEAT. 

SO ON THE LASINSKI DEMONSTRATIVE, NUMBER 1, IT HAS NO PAGE 

NUMBERS. CAN YOU PLEASE NUMBER YOUR DEMONSTRATIVES, BECAUSE 

WHEN EVERYONE SAYS PAGE 1, IT DOESN'T -- YOU KNOW, THE ECF 

PAGE 1 DOESN'T MATCH WHAT I THINK YOU'RE COUNTING AS PAGE 1 AS 

THE OPENING SLIDE. IS THAT RIGHT? SO I DON'T EVEN KNOW, WHEN 

YOU SAY PAGE 1, WHAT NUMBER YOU'RE TALKING ABOUT. 

MR. MATHESON: THAT'S RIGHT, YOUR HONOR. WE DID 

THAT -- WE WILL CHANGE THAT. 

THE COURT: OKAY. NOW, THE OTHER THING IS, YOU KNOW, 

WE'VE ALREADY GOTTEN NOKIA'S MOTION TO SEAL THE SAME DOCUMENT, 

SAMSUNG'S MOTION TO SEAL THE SAME DOCUMENT, QUALCOMM'S MOTION 

TO SEAL THE SAME DOCUMENT, AND AVANCI'S MOTION TO SEAL. SO 

I'VE GOTTEN FOUR MOTIONS TO SEAL THIS ONE DOCUMENT. 

THIS IS WHAT I'M TALKING ABOUT. YOU ALL ARE MAKING US DO 

THINGS FOUR, FIVE, SIX TIMES FOR THE SAME DOCUMENT. 

IS THERE ANY COORDINATION -- 

MR. MATHESON: WE'RE TRYING, YOUR HONOR. 

THE COURT: -- THAT CAN BE DONE? 

MR. MATHESON: RIGHT NOW WE'RE WRITING AND FILING AT 

THE MOMENT A RESPONSE TO ALL OF THESE THAT WE HOPE WILL ALLOW 

YOU JUST TO RESPOND ONCE AND JUST ORDER ONE PAGE SEALED 

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UNITED STATES COURT REPORTERS

742

BECAUSE, AS I PREVIEWED THIS MORNING, THERE ARE A NUMBER OF 

FOLKS WHO MOVED TO SEAL DIFFERENT LINES OF THE SAME PAGE. THEY 

EACH MOVED TO SEAL THEIR OWN ROYALTY RATE. 

AND WE ARE GOING TO FILE A RESPONSE TO THOSE MOTIONS THAT 

WILL COLLECT ALL THE MOTIONS THAT RELATE TO MR. LASINSKI'S 

SLIDES AND ASK THE COURT TO RESOLVE THEM ALL BY ORDERING US TO 

SIMPLY NOT SHOW ONE PAGE OF ONE DOCUMENT. 

THE COURT: OKAY. 

MR. MATHESON: THAT SHOULD RESOLVE IT. 

THE COURT: BUT QUALCOMM ALSO MOVED TO FILE AN 

ADDITIONAL ONE, TWO, THREE, FOUR PAGES OTHER THAN -- THE 

COMPARABLE AGREEMENTS APPROACH I THINK IS THE PAGE YOU'RE 

TALKING ABOUT. 

MR. MATHESON: YES, I BELIEVE SO. 

THE COURT: BUT THEN AVANCI MOVED TO SEAL AN 

ADDITIONAL FOUR PAGES. 

MR. MATHESON: AND WE WILL PROVIDE A RESPONSE TO THAT 

POSITION AS WELL, YOUR HONOR. 

THE COURT: WELL, I DON'T SEE HOW YOU'RE SAYING 

YOU'RE SEALING WITH THIS ONE PAGE, 8 OR 9, HOWEVER YOU COUNT, 

IS GOING TO DEAL WITH THE REST OF THE SEALING REQUESTS. 

AND DO YOU KNOW IF ANYONE ELSE IS -- IS ERICSSON GOING TO 

FILE ONE? IS APPLE GOING TO FILE ONE? IS HTC GOING TO FILE 

ONE. IS INTERDIGITAL GOING TO HAVE TO FILE ONE? 

I DON'T WANT TO BE HERE ON SATURDAY WAITING FOR 

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UNITED STATES COURT REPORTERS

743

INTERDIGITAL, APPLE, AND ERICSSON'S MOTION. 

MR. MATHESON: WE UNDERSTAND, YOUR HONOR.

THE COURT: WHAT'S THE PROCESS FOR THIS? 

MR. MATHESON: ERICSSON HAD ALREADY FILED ONE, WHICH 

I BELIEVE YOUR HONOR GRANTED. 

WE THEN HAD ASKED THEM TO FILE EARLY, AND WE'VE REACHED 

OUT TO OTHER THE PARTIES. 

APPLE HAS COMMUNICATED -- I'LL LET THEM COMMUNICATE WITH 

THE COURT THEMSELVES. 

BUT IF WE CAN SEAL THE ONE PAGE WE'RE TALKING ABOUT, I 

THINK THAT WILL OBVIATE ALL OF APPLE'S CONCERNS. WE'RE TALKING 

TO THEM RIGHT NOW. 

AND THE RESPONSE WE ENVISION WOULD DEAL WITH ALL THE 

MOTIONS THAT RELATE TO MR. LASINSKI'S DEMONSTRATIVES, AND WE 

WILL RESPOND TO ALL OF THEM AND TRY TO HAVE IT ALL IN ONE 

PLACE. 

THE COURT: OKAY. 

MR. MATHESON: WE SHOULD HAVE THAT ON FILE SOON, YOUR 

HONOR. WE'RE READYING IT RIGHT NOW. 

THE COURT: OKAY. WHAT ARE WE GOING TO DO ABOUT THE 

PAGE NUMBERS? IT'S REALLY UNHELPFUL THAT I EVEN DON'T KNOW 

WHAT CONVENTION PEOPLE ARE USING FOR THE DIFFERENT PAGE 

NUMBERS. 

MR. MATHESON: WE WILL CLARIFY THAT, YOUR HONOR. WE 

WILL POINT TO THE ECF NUMBER THAT MAKES IT CLEAR TO THE COURT 

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UNITED STATES COURT REPORTERS

744

WHAT PAGE EACH PARTY IS TALKING ABOUT IN OUR FILING. 

THE COURT: OKAY. NOW, IS THIS GOING TO COME UP WITH 

YOUR OTHER EXPERTS AS WELL? 

MR. MATHESON: THE ONLY THING -- WELL, SO YOUR HONOR 

GRANTED A REQUEST TO SEAL A LARGE PORTION OF MR. DONALDSON'S 

REPORT, AND SINCE THEN, SOME OF THAT HAS BEEN ANNOUNCED ON THE 

PUBLIC RECORD, SOME OF THE THINGS THAT WERE SEALED. 

THE ONLY PARTY THAT HAS TOLD US THAT THEY INTEND TO FILE 

ANYTHING REGARDING MR. DONALDSON IS TEXAS INSTRUMENTS, HIS 

FORMER EMPLOYER, AND WE ARE TRYING TO TALK THEM OUT OF THAT 

BECAUSE HIS EXPERIENCE WITH THEM SHOULD NOT CAUSE THEM TO NEED 

TO FILE A -- TO FILE ANY SORT OF SEALING MOTION. THAT'S THE 

ONE WE ANTICIPATE. 

AND THEN DR. SHAPIRO'S DEMONSTRATIVES HAVE BEEN PROVIDED 

TO RELEVANT THIRD PARTIES. AS FAR AS I KNOW, WE ARE NOT 

ANTICIPATING FURTHER SEALING MOTIONS, BUT I WOULD HAVE TO CHECK 

WITH THOSE THIRD PARTIES JUST TO BE SURE. 

THE COURT: ALL RIGHT. I'D LIKE YOU TO REFILE, THEN, 

DONALDSON'S EXPERT REPORT WITH THE INFORMATION THAT'S BEEN 

PUBLICLY DISCLOSED DURING THE TRIAL UNREDACTED. 

MR. MATHESON: OKAY. 

THE COURT: WHEN CAN YOU DO THAT? 

MR. MATHESON: WE CAN DO THAT OVER THE WEEKEND, YOUR 

HONOR. 

THE COURT: OKAY. GIVE ME A DATE. 

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LEE DEPOSITION

UNITED STATES COURT REPORTERS

745

MR. MATHESON: TOMORROW. 

THE COURT: ALL RIGHT. DO THAT BY TOMORROW. 

OKAY. WHAT'S THE TIME, MS. SHORTRIDGE? 

THE REPORTER: 1:11. 

THE COURT: 1:11. GO AHEAD WITH YOUR DEPO. 

MR. MATHESON: THANK YOU. 

(THE VIDEOTAPED DEPOSITION OF INJUNG LEE WAS PLAYED IN 

OPEN COURT OFF THE RECORD.)

THE COURT: OKAY. TIME IS 1:27. 

MR. KEHL: OUR NEXT WITNESS, YOUR HONOR, IS THE 

VIDEOTAPED DEPOSITION OF TODD MADDEROM. 

THE COURT: ALL RIGHT. AND IS MR. LEE SUBJECT TO 

RECALL OR NOT SUBJECT TO RECALL? 

MR. KEHL: NOT SUBJECT TO RECALL, YOUR HONOR. 

THE COURT: DO YOU AGREE WITH THAT? 

MR. BORNSTEIN: YES, YOUR HONOR. 

THE COURT: OKAY. SO HE'S NOT SUBJECT TO RECALL. 

ALL RIGHT. WHO IS YOUR NEXT WITNESS? 

MR. KEHL: TODD MADDEROM BY VIDEOTAPED DEPOSITION. 

THE COURT: OKAY. AND ARE YOU SEEKING TO ADMIT 

EXHIBITS? 

MR. KEHL: YES, YOUR HONOR. 

THE COURT: OKAY. GIVEN ME ONE MINUTE, PLEASE. 

(PAUSE IN PROCEEDINGS.) 

THE COURT: ALL RIGHT. TIME IS STILL 1:27. 

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MADDEROM DEPOSITION

UNITED STATES COURT REPORTERS

746

WHICH EXHIBITS ARE YOU SEEKING TO ADMIT? 

MR. KEHL: THE EXHIBITS ARE CX 2018, CX 2060, 

CX 2065, CX 2123, CX 2124, CX 2125, AND CX 2168. 

THE COURT: ALL RIGHT. ANY OBJECTION? 

MR. BORNSTEIN: NONE, YOUR HONOR. 

THE COURT: OKAY. THOSE ARE ADMITTED. 

(PLAINTIFF'S EXHIBITS CX 2018, 2060, 2065, 2123, 2124, 

2125, AND 2168 WERE ADMITTED IN EVIDENCE.)

THE COURT: GO AHEAD, PLEASE. 

MR. KEHL: AND, YOUR HONOR, THE VIDEO CONTAINS ONE 

MINUTE OF QUALCOMM COMPLETENESS DESIGNATIONS. 

THE COURT: OKAY. THANK YOU. 

MR. KEHL: PLEASE PLAY THE VIDEO. 

(THE VIDEOTAPED DEPOSITION OF TODD MADDEROM WAS PLAYED IN 

OPEN COURT OFF THE RECORD.)

THE COURT: OKAY. TIME IS 2:11. 

IS THIS WITNESS EXCUSED SUBJECT TO RECALL OR NOT SUBJECT 

TO RECALL? 

MR. KEHL: NOT SUBJECT TO RECALL, YOUR HONOR. 

THE COURT: DO YOU AGREE WITH THAT? 

MR. BORNSTEIN: YES, YOUR HONOR. 

THE COURT: OKAY. SO THAT WITNESS IS EXCUSED. 

WHO'S YOUR NEXT WITNESS, PLEASE? 

MS. MILICI: YOUR HONOR, THE FTC CALLS 

STEVE MOLLENKOPF, AND I THINK THAT THERE ARE A COUPLE OF 

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UNITED STATES COURT REPORTERS

747

SEALING ISSUES WE NEEDED TO RESOLVE INITIALLY. 

THE COURT: OKAY. GIVE ME JUST ONE MINUTE TO ADD HIM 

TO MY WITNESS LIST. 

MR. SHACHAM: GOOD AFTERNOON, YOUR HONOR. 

MATAN SHACHAM FOR QUALCOMM. 

MS. MILICI: AND JENNIFER MILICI FOR THE FTC. 

THE COURT: OKAY. DO YOU HAVE A BINDER OF EXHIBITS 

FOR THIS WITNESS? 

MS. MILICI: WE DO. 

THE COURT: OKAY. DOES THIS PERTAIN TO CX 8190 OR 

NOT. 

MS. MILICI: YES, YOUR HONOR. I BELIEVE THERE'S TWO 

DOCUMENTS THAT YOU WANTED TO RESOLVE BEFOREHAND. 

THE COURT: ALL RIGHT. SO I'M GOING TO CHARGE TIME 

TO FTC TO IDENTIFY THE PAGES THAT YOU WANT TO USE, AND THEN 

I'LL CHARGE TIME TO QUALCOMM FOR WHICH PAGES IT WANTS TO SEAL. 

MS. MILICI: SO -- 

THE COURT: SO 2:13. GO AHEAD, PLEASE. 

MS. MILICI: THANK YOU, YOUR HONOR. 

FOR CX 8190, THE FTC WOULD LIKE TO ADMIT THE COVER E-MAIL, 

ALONG WITH PAGES 66 TO 69 AND 259 TO 268. 

THE COURT: ALL RIGHT. TIME IS 2:13. 

SO WHICH OF THOSE DO YOU WANT TO SEAL? 

MR. SHACHAM: THANK YOU, YOUR HONOR. WE DO NOT NEED 

TO SEAL THE COVER E-MAIL. WITHIN THE SECOND RANGE OF 66 TO 69, 

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UNITED STATES COURT REPORTERS

748

WE WOULD LIKE TO SEAL ALL OF THOSE. 

THE COURT: WHEN YOU SAY 66 -- YOU MEAN 268 -- PARDON 

ME, 266 TO 269; IS THAT CORRECT? 

MR. SHACHAM: NO, YOUR HONOR. I BELIEVE -- AND 

COUNSEL CAN CORRECT ME, BUT WE'RE TALKING ABOUT 066 TO 069. 

MS. MILICI: YES, YOUR HONOR. THE FIRST RANGE WAS 

066 TO 069. 

THE COURT: WHICH NUMBER ARE YOU REFERRING TO? I'M 

LOOKING AT CX 8190. I'M LOOKING AT TAB 4, CX 8190. 

OH, I SEE. YOU'RE LOOKING AT 66. 

WHY ISN'T THIS PUBLIC INFORMATION? 

MR. SHACHAM: YOUR HONOR, THESE ARE DETAILED 

FINANCIAL NUMBERS THAT ARE LESS THAN TWO YEARS OLD. THEY'RE 

ABOUT A YEAR AND A HALF OLD. AND THEY ALSO -- 

THE COURT: BUT WHOSE NUMBERS ARE THESE? ARE THESE 

THIRD PARTIES NUMBERS? 

MR. SHACHAM: THESE ARE QUALCOMM'S NUMBERS RELATING 

TO POTENTIAL SALES TO THIRD PARTIES. BUT THEY ARE QUALCOMM'S 

NUMBERS, YOUR HONOR. 

WE WOULD BE FINE IF THE COURT WOULD PREFER JUST SEALING 

THE NUMBERS THEMSELVES. WE DON'T HAVE ANY PROBLEM WITH THE 

HEADINGS BEING UNSEALED. BUT THE NUMBERS ARE HIGH LY 

CONFIDENTIAL. 

THE COURT: ALL RIGHT. LET'S SEAL THE NUMBERS IN 66, 

67, 68, AND 69. BUT NOT THE HEADINGS, EITHER THE HEADINGS ON 

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UNITED STATES COURT REPORTERS

749

THE LEFT COLUMN OR THE HEADINGS ON THE TOP OF THE COLUMNS OR 

THE HEADINGS ON EACH PAGE. 

MR. SHACHAM: THAT'S CORRECT, YOUR HONOR. 

THE COURT: OKAY. 

MR. SHACHAM: WITHIN THE SECOND RANGE OF 259 THROUGH 

268, WE WOULD NOT SEEK TO SEAL 259, BUT WE WOULD SEEK, YOUR 

HONOR, TO SEAL THE REMAINDER OF THAT RANGE. SO 260 THROUGH 

628. 

AND THE REASON IS THE SAME. 

THE COURT: OKAY. BUT WHY -- 

MS. MILICI: YOUR HONOR -- 

THE COURT: THIS WAS A PROBLEM I HAD LAST NIGHT. IT 

JUST SEEMS OVERLY BROAD. YOU WANT TO SEAL CHIPSET TIERS, MID, 

LOW, HIGH PREMIUM, DISCRETE MODEM. I MEAN, THERE'S BEEN SO 

MUCH TESTIMONY ABOUT THAT THROUGHOUT THE TRIAL. 

MR. SHACHAM: SO WE -- 

THE COURT: KEY CAPABILITIES, TECHNOLOGY, EXECUTION, 

CUSTOMER SUPPORT, SCALE VOLUME. THAT JUST DOESN'T SEEM 

CONFIDENTIAL TO ME. 

MR. SHACHAM: SO THE NUMBERS AT THE VERY LEAST WE 

WOULD NEED TO SEAL. WE WOULD NOT HAVE A PROBLEM WITH THE -- 

THE COURT: THERE'S NO NUMBERS I'M LOOKING AT 261. 

THERE'S NOT A SINGLE NUMBER IN THAT DOCUMENT. I GUESS THERE'S 

ONE IN THE FAR RIGHT CORNER THAT'S NOT EVEN IN THE CHART. 

MR. SHACHAM: IT IS REVEALING, THOUGH, CONNECTIONS 

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UNITED STATES COURT REPORTERS

750

BETWEEN THOSE SPECIFIC CUSTOMERS. IT'S REVEALING CUSTOMER 

SPECIFIC INFORMATION. 

THE COURT: WHAT IF WE SEALED THE DOTS? 

MR. SHACHAM: WE WOULD BE -- 

THE COURT: BUT DIDN'T SEAL EITHER THE LEFT COLUMN 

THAT SAYS THINGS LIKE PREMIUM TIER, HIGH CHIPSET TIERS, AND 

THEN THE MERCHANT SUPPLIERS. I THINK THAT'S NOT ANY SURPRISE, 

OR VERTICAL OEM'S. WHO THOSE ARE, THERE'S ALREADY BEEN 

TESTIMONY. 

MR. SHACHAM: COULD YOU GIVE ME ONE MOMENT, YOUR 

HONOR? 

THE COURT: YES. 

THIS WAS THE NARROW TAILORING THAT I WAS HOPING TO SEE AND 

DIDN'T SEE WITH REGARD TO THIS DOCUMENT. THAT'S WHY I DIDN'T 

WANT TO SEAL THE WHOLE THING. 

MS. MILICI: YOUR HONOR, WHILE THEY'RE CONFERRING, I 

WOULD NOTE THAT THERE'S A VERY SIMILAR SLIDE IN 8191 THAT THEY 

DID NOT SEEK TO SEAL AT ALL. 

THE COURT: AND WHAT'S THAT ONE? 

MS. MILICI: THAT'S 8191-089. 

MR. SHACHAM: YOUR HONOR, MAY I PROPOSE A SOLUTION TO 

THIS? I THINK WHAT YOU PROPOSED IS EXACTLY RIGHT. WE CAN SEAL 

THE NUMBERS ON THE LEFT-HAND SIDE -- 

THE COURT: AND I WANT THIS REFILED WITH THE CORRECT 

REDACTIONS, OKAY? WE SHOULDN'T BE HAVING TO DO THIS ON THE 

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UNITED STATES COURT REPORTERS

751

FLY. THE NARROW, TAILORED SEALING REQUESTS SHOULD HAVE ALREADY 

DONE THIS. 

MR. SHACHAM: SO WE ARE FINE WITH THE NAMES ON THE 

LEFT AS YOUR HONOR PROPOSED BEING PUBLIC, AND WITH THE ICONS ON 

THE TOP BEING PUBLIC AS WELL. BUT THE GRID WITH THE DOTS WE 

WOULD REQUEST TO SEAL. 

THE COURT: THAT'S FINE. SO THAT'S ON 261. 

MR. SHACHAM: YES, YOUR HONOR. AND ON THE SLIDE 

BEFORE THAT, AGAIN, THE HEADING IS FINE. BUT THOSE CHARTS ARE 

SHOWING -- 

THE COURT: THAT'S FINE, 262, THAT'S FINE. 

ON 263 -- 

MR. SHACHAM: AGAIN, WE COULD JUST DO THE INSIDE OF 

THAT TABLE, YOUR HONOR. 

THE COURT: THAT'S FINE. 

MR. SHACHAM: IF THAT'S ACCEPTABLE. 

THE COURT: THAT'S FINE. AND WHAT ABOUT 264? 

MR. SHACHAM: SIMILARLY, THE INSIDE OF THE TABLE 

WOULD NEED TO BE SEALED. 

THE COURT: WHAT ABOUT SOME OF THE BULLETS BELOW IT? 

IF YOU WANTED THE BULLETS BELOW IT SEALED, THAT WOULD BE 

FINE. 

MR. SHACHAM: YEAH, WE WOULD LIKE TO SEAL THE BULLETS 

AS WELL. 

THE COURT: THAT'S FINE. 

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UNITED STATES COURT REPORTERS

752

MR. SHACHAM: AND SO 265, THOSE BULLETS; 266. 

THE COURT: THAT'S FINE. ON 265, THAT'S FINE, JUST 

SEAL THE BULLETS. 

MR. SHACHAM: 266, AGAIN, THE INSIDE OF THAT CHART. 

THE COURT: THAT'S FINE. 

MR. SHACHAM: 267, SAME IDEA. AND 268, SAME IDEA, 

YOUR HONOR. 

THE COURT: THAT'S FINE. 

MR. SHACHAM: AND I BELIEVE THAT WAS ALL. 

THE COURT: SO INSIDE OF THE CHART, BUT NOT ANY OF 

THE FAR LEFT COLUMN THAT IS JUST DESCRIBING WHAT YOU'RE LOOKING 

AT, OR THE TOP. 

MR. SHACHAM: THAT'S CORRECT, YOUR HONOR. 

THE COURT: TOP ROW. 

OKAY. ANYTHING ELSE ON THIS DOCUMENT, 8190? 

MR. SHACHAM: IF THAT'S ALL THE FTC IS GOING TO USE, 

THAT'S ALL. 

MS. MILICI: THAT IS ALL WE'RE SEEKING TO INTRODUCE, 

YOUR HONOR. 

THE COURT: OKAY. ALL RIGHT. ARE THERE ANY OTHER 

DOCUMENTS FOR WHICH WE NEED TO GO THROUGH THIS PROCESS? 

MR. SHACHAM: I BELIEVE WE NEED TO GO THROUGH THE 

PROCESS, YOUR HONOR, ON CX 5913. 

THE COURT: OKAY. 5 -- AND WHAT TAB NUMBER IS THAT? 

IS IT NOT 591 -- YOU SAID 5913, SO TAB 8? 

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UNITED STATES COURT REPORTERS

753

MS. MILICI: TAB 8, YES, YOUR HONOR. 

THE COURT: OKAY. GO AHEAD, PLEASE. 

MR. SHACHAM: WE MIGHT BE ABLE TO SHORTEN THIS IF THE 

FTC HAS SPECIFIC SLIDES THEY'RE GOING TO USE. 

MS. MILICI: YOUR HONOR, WE WERE GOING TO USE THE 

COVER E-MAIL. BUT IF THE COURT WOULD LIKE US TO INTRODUCE -- 

THE COURT: TIME IS 2:20. THIS IS ON THE FTC'S TIME. 

OKAY. THE COVER E-MAIL AND WHAT ELSE? 

MS. MILICI: JUST THE COVER E-MAIL. 

MR. SHACHAM: OH. 

THE COURT: THAT'S IT. 

MS. MILICI: THE ATTACHMENT IS ALLOWED BECAUSE IT'S 

ONE DOCUMENT. 

MR. SHACHAM: IF ALL THEY'RE USING IS THE COVER 

E-MAIL, YOUR HONOR, WE DON'T HAVE ANY PROBLEM. THE ATTACHMENT 

IS WHAT WE HAVE A PROBLEM WITH. SO IF THEY'RE LIMITING IT TO 

THAT, WE CAN JUST INTRODUCE THE COVER E-MAIL AND NOT INTRODUCE 

THE ATTACHMENT AND THERE'S NO SEALING ISSUE. 

THE COURT: OKAY. THAT'S FINE. 2:20. 

ALL RIGHT. SO HAVE WE RESOLVED ALL THE SEALING? 

MS. MILICI: YES. 

THE COURT: YES? 

MR. SHACHAM: NOTHING FURTHER ON THIS. 

THE COURT: OKAY. SO THANK YOU. THANK YOU BOTH. 

SO GOING FORWARD, YOU KNOW, IF IT'S ANOTHER 368 PAGE 

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UNITED STATES COURT REPORTERS

754

DOCUMENT, IF WE COULD GO THROUGH THIS PROCESS, THE PARTIES DO 

IT, AND THEN WHEN YOU MAKE YOUR SEALING REQUEST, IT COULD BE 

MUCH MORE NARROW, BOTH AS TO WHAT YOU'RE ACTUALLY GOING TO USE, 

AND ALSO I'D LIKE SOME NARROWING -- NARROW TAILORING ON 

QUALCOMM'S PART, OBVIOUSLY SEALING WHETHER IT'S THE DIFFERENT 

TIERS OF PHONES OR CHIPS. I JUST THINK THAT'S UNNECESSARY. 

OKAY. 

MR. SHACHAM: THANK YOU, YOUR HONOR. 

MS. MILICI: THANK YOU, YOUR HONOR. 

THE COURT: ALL RIGHT. SO, MS. GARCIA, I DON'T THINK 

YOU SWORE IN THE WITNESS. 

IF YOU COULD PLEASE DO THAT. THANK YOU. 

THE CLERK: PLEASE STAND. PLEASE RAISE YOUR RIGHT 

HAND. 

(PLAINTIFF'S WITNESS, STEVE MOLLENKOPF, WAS SWORN.)

THE WITNESS: YES. 

THE CLERK: THANK YOU. PLEASE BE SEATED. 

PLEASE STATE YOUR FULL NAME AND SPELL YOUR LAST NAME FOR 

THE RECORD. 

THE WITNESS: STEVE MOLLENKOPF. M-O-L-L-E-N-K-O-P-F. 

THE COURT: ALL RIGHT. TIME IS 2:22. GO AHEAD, 

PLEASE. 

///

///

///

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MOLLENKOPF DIRECT BY MS. MILICI

UNITED STATES COURT REPORTERS

755

DIRECT EXAMINATION

BY MS. MILICI: 

Q. GOOD AFTERNOON, MR. MOLLENKOPF. I'M JENNIFER MILICI FROM 

THE FEDERAL TRADE COMMISSION. 

YOU ARE THE CEO OF QUALCOMM; CORRECT? 

A. YES.

Q. AND YOU BECAME THE CEO OF QUALCOMM IN 2014? 

A. YES, I DID.

Q. AND BEFORE THAT, YOU WERE THE PRESIDENT OF CHIP DIVISION, 

WHICH IS KNOWN, OTHERWISE KNOWN AS QCT; CORRECT? 

A. I WAS PROBABLY THE PRESIDENT AND THE CHIEF OPERATING 

OFFICER BEFORE THAT EXACTLY. 

Q. THANK YOU. 

SIR, DO YOU AGREE, SIR, THAT TO BUY CHIPS FROM QCT, 

CUSTOMERS HAVE TO AGREE TO A LICENSE WITH QTL AND BE IN 

COMPLIANCE WITH THAT LICENSE; CORRECT? 

A. I'M SORRY. COULD YOU REPEAT THE QUESTION AGAIN?

Q. YOU WOULD AGREE, SIR, THAT TO BUY CHIPS FROM QCT, 

CUSTOMERS HAVE TO AGREE TO A LICENSE WITH QTL AND BE IN 

COMPLIANCE WITH THAT LICENSE? 

A. YES. 

Q. COULD YOU PLEASE TURN TO TAB 1 IN YOUR BINDER? 

AND THIS DOCUMENT IS AN E-MAIL IN THE MIDDLE OF PAGE, 

THERE IS AN E-MAIL FROM MARK BLECKER TO YOU DATED 

SEPTEMBER 28TH, 2012, AND THEN YOUR RESPONSE; CORRECT? 

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A. YES. 

MS. MILICI: YOUR HONOR, WE SEEK TO ADMIT CX 8287. 

THE COURT: ANY OBJECTION. 

MR. VAN NEST: NO OBJECTION, YOUR HONOR. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 8287 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. IN THIS E-MAIL TO YOU MR. BLECKER WROTE, "ONCE WE START 

SELLING THEM CHIP, WILL WE CUT THEM OFF IF WE DON'T PAY THE 

ROYALTY. PRIOR TO SELLING THEM CHIPS, WE SHOULD EXPLICITLY 

REINFORCE THE MESSAGE THAT IF THEY DON'T PAY THE ROYALTY WE 

CANNOT SELL THEM CHIPS." 

AND YOU RESPONDED, "ISN'T THAT PART OF EVERY CSA?" 

AND BY CSA YOU MEANT THE COMPONENT SUPPLY AGREEMENT; 

CORRECT. 

A. I COMMENT THE COMPONENT SUPPLY AGREEMENT, YES.

Q. AND MARK BLECKER RESPONDED TO YOU; CORRECT? 

A. YES, THAT'S WHAT'S WRITTEN HERE.

Q. NOW, QUALCOMM ALSO SELLS WI-FI CHIPS, DOESN'T IT?

A. IT DOES.

Q. AND QUALCOMM DOES NOT APPLY THE SAME POLICY WHEN IT SELLS 

WI-FI CHIPS, DOES IT?

A. I'M NOT SURE OF ALL THE DETAILS FOR HOW WE SELL THE WI-FI 

CHIPS. 

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757

Q. WHEN YOU SELL WI-FI CHIPS, DO YOU NOT REQUIRE THE 

PURCHASER TO HAVE A LICENSE TO A STANDALONE WI-FI PRODUCT; 

CORRECT? 

A. AGAIN, I'M NOT -- I DON'T KNOW THE DETAILS OF HOW WE SELL 

THE WI-FI CHIPS.

Q. DO YOU KNOW WHETHER QUALCOMM REQUIRES THE PURCHASER TO 

HAVE A LICENSE IN ORDER TO PURCHASE WI-FI CHIPS? 

A. I DON'T KNOW FOR SURE. 

Q. SIR, CAN YOU PLEASE TURN TO TAB 2 IN YOUR BINDER. 

AND THIS IS AN E-MAIL EXCHANGE BETWEEN YOU AND 

DEREK ABERLE IN THE FALL OF 2012, ISN'T IT? 

A. YES, IT IS. 

Q. AND THE E-MAILS CONCERN NEGOTIATIONS WITH SONY; CORRECT? 

A. YES. 

MS. MILICI: YOUR HONOR, WE SEEK TO ADMIT CX 5376. 

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 5376 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. AND IN THE MIDDLE OF PAGE 1 DEREK ABERLE WRITES, "THANKS 

FOR YOUR INVOLVEMENT." 

DO YOU SEE THAT? 

A. YES. 

Q. AND HE WAS SAYING THANK YOU FOR YOUR INVOLVEMENT IN THE 

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758

NEGOTIATIONS WITH SONY; CORRECT? 

A. YES. 

Q. AND YOU RESPONDED, "THANKS. THE MDF HELPED MORE THAN ME." 

AND BY MDF YOU MEANT MARKET DEVELOPMENT FUND; CORRECT? 

A. YES. 

Q. AND IS IT FAIR TO SAY, SIR, THAT QUALCOMM BEGINS WORKING 

WITH SOME OEM'S SEVERAL YEARS IN ADVANCE OF SHIPPING THEM ANY 

CHIPSETS? 

A. YES, THAT'S FAIR. 

Q. AND FOR SOME OEM'S, YOU MIGHT WORK WITH THEM SEVERAL YEARS 

IN ADVANCE OF SHIPPING CHIPSETS AND FOR OTHERS JUST A PERIOD OF 

SEVERAL MONTHS; IS THAT CORRECT? 

A. THAT'S CORRECT. 

Q. SIR, CAN YOU PLEASE TURN TO TAB 4 IN YOUR BINDER. AND 

THIS IS AN E-MAIL TO YOU ATTACHING BUDGET AND EARNINGS CALL 

DECKS. 

A. YES, IT IS. 

MS. MILICI: YOUR HONOR, THE FTC MOVES TO ADMIT 

CX 8190. 

MR. VAN NEST: NO OBJECTION, YOUR HONOR. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 8190 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. SIR, COULD YOU PLEASE TURN TO PAGE 67? AND THAT PAGE WAS 

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759

JUST SEALED. 

AND, SIR, ON PAGE 67, THERE'S A LIST OF HANDSETS ON THE 

LEFT-HAND SIDE; CORRECT? PAGE 067. 

A. OKAY. I HAVE IT. 

Q. OKAY. THERE'S A LIST OF HANDSETS ON THE LEFT-HAND SIDE; 

CORRECT? 

A. YES. 

Q. AND THERE'S CDMA HANDSETS, AND THEN THERE'S A SEPARATE ROW 

FOR WCDMA HANDSETS; CORRECT? 

A. YES. 

Q. AND THEN ACROSS THE TOP THERE IS INFORMATION, INCLUDING 

THE TOTAL AVAILABLE MARKET IN QCT MARKET SHARE PERCENTAGE; 

CORRECT? 

A. CORRECT.

Q. AND THIS SLIDE REPORTS SEPARATE NUMBERS FOR CDMA MARKET 

SHARE AND FOR WCDMA MARKET SHARE; CORRECT? 

A. YES. 

Q. OKAY. COULD YOU PLEASE TURN TO PAGE 263. DASH 263. AND 

THIS SLIDE WAS ALSO JUST SEALED. 

SIR, THIS SLIDE IS TITLED COMPETITIVE POSITION IN PREMIUM 

TIER. DO YOU SEE THAT?

A. I ACTUALLY DON'T HAVE THAT SLIDE. 263?

Q. 263. 

A. GOT IT. 

Q. AND THE SLIDE IS TITLED COMPETITIVE POSITION IN PREMIUM 

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760

TIER; CORRECT? 

A. YES, THAT'S THE TITLE.

Q. AND IT HAS THE NAMES OF FOUR COMPANIES LISTED ACROSS THE 

TOP; CORRECT? 

A. YES. 

Q. AND THERE'S A ROW, THE SECOND ROW FROM THE BOTTOM IS MODEM 

LEADERSHIP; CORRECT? 

A. CORRECT.

Q. AND ON THAT ROW THERE ARE INDICATIONS ABOUT THE MODEM 

LEADERSHIP OF EACH OF THESE COMPANIES; CORRECT? 

A. YES. 

Q. THANK YOU. 

SIR, COULD YOU PLEASE TURN BACK TO PAGE 261. AND THIS 

SLIDE WAS ALSO JUST SEALED. 

AND THE TITLE OF THIS SLIDE IS COMPETITIVE LANDSCAPE. 

AND IT LISTS THREE MERCHANT SUPPLIERS; CORRECT? 

A. LET ME LOOK AT IT HERE. IT'S PRETTY SMALL TYPE. 

YES. 

Q. AND SO THERE ARE THREE MERCHANT SUPPLIERS, QUALCOMM AND 

SOME VERTICAL OEM'S ON THE TOP OF THE CHART; CORRECT? 

A. YES, THAT'S WHAT IT SHOWS.

Q. AND ON THE LEFT-HAND SIDE OF THE CHART, THE FIRST FEW ROWS 

ARE CHIPSET TIERS; CORRECT? 

A. YES.

Q. AND THE CHIPSET TIERS LISTED HERE ARE DISCRETE MODEM, 

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MOLLENKOPF DIRECT BY MS. MILICI

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761

PREMIUM, HIGH, AND MID/LOW; DO YOU SEE THAT? 

A. I DO. 

Q. AND THIS CHART IDENTIFIES THE MERCHANT SUPPLIERS THAT HAVE 

EACH OF THESE KINDS OF CHIPS; CORRECT? 

A. SORRY. I CAN'T ACTUALLY READ THE TYPE THAT IS IN THE BOX. 

DO YOU MIND ON THE SCREEN JUST MAKING IT FULL SCREEN? 

YEAH, THANK YOU. 

(PAUSE IN PROCEEDINGS.) 

THE WITNESS: OKAY. I'M SORRY. COULD YOU REPEAT THE 

QUESTION? 

BY MS. MILICI: 

Q. SURE. THIS SLIDE SHOWS WHICH OF THE SUPPLIERS LISTED AT 

THE TOP OFFER CHIPSETS IN EACH OF THE TIERS IDENTIFIED; 

CORRECT? 

A. I THINK SO. I THINK IT'S TRYING TO SHOW -- MAKE A 

PERFORMANCE EVALUATION. 

I DON'T KNOW WHETHER IT SHOWS THAT THEY HAVE IT OR NOT.

Q. WELL, ON THE LEGEND, AND I KNOW IT'S SMALL, IT SAYS A 

BLANK REPRESENTS NO OFFERING, NOT RELEVANT; CORRECT? 

A. I SEE THAT. 

Q. SO ANY SUPPLIER WITH A BLANK ON A ROW FOR A CHIPSET TIER 

DOESN'T HAVE A RELEVANT OFFERING IN THAT TIER; CORRECT? 

A. YES, I THINK THAT'S WHAT THIS SLIDE SAYS, YEAH. 

Q. THANK YOU. 

COULD YOU PLEASE TURN TO TAB 5 IN YOUR BINDER. AND THIS 

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762

IS -- AND THIS IS MATERIALS FROM A BOARD OF DIRECTORS MEETING 

ON JULY 10TH, 2017; CORRECT? 

A. YES. 

Q. AND YOU WERE A DIRECTOR AT THE TIME? 

A. YES. 

MS. MILICI: YOUR HONOR, I MOVE TO ADMIT CX 8191. 

MR. VAN NEST: NO OBJECTION, YOUR HONOR. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 8191 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. AND CAN WE TURN, PLEASE, TO PAGE 086. 

AND AT THIS POINT OF THE BOARD PRESENTATION, THIS IS THE 

QCT STRATEGIC PLAN; CORRECT? 

A. 086? 086, YES.

Q. OKAY. AND NOW LET'S TURN TO PAGE 089, WHICH IS A SLIDE 

WITHIN THE QCT STRATEGIC PLAN. 

AND THE TITLE OF THIS SLIDE IS MOBILE COMPETITIVE 

ENVIRONMENT, AND IT SAYS, "QCT IS NUMBER 1 CHIPSET SUPPLIER FOR 

MOBILE HANDSETS, WITH STRONG PORTFOLIO ACROSS ALL TIERS." 

DO YOU SEE THAT? 

A. I DO.

Q. AND LOOKING AT THE CHART ON THE LEFT-LAND SIDE, THIS SHOWS 

THAT QUALCOMM SOLD 42 PERCENT OF ALL MODEM CHIPS; CORRECT? 

A. I THINK IT MEANS BASEBAND, BASEBAND SHIPMENTS.

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MOLLENKOPF DIRECT BY MS. MILICI

UNITED STATES COURT REPORTERS

763

Q. OKAY. 42 PERCENT OF ALL BASEBAND SHIPMENTS; CORRECT? 

A. YES.

Q. AND MEDIATEK HAD 27 PERCENT OF THE SALES; CORRECT?

A. YES.

Q. AND IF WE LOOK AT THE CHART ON THE RIGHT, IT IDENTIFIES 

FOUR MERCHANT SUPPLIERS. 

DO YOU SEE THAT?

A. I DO.

Q. AND THE FOUR MERCHANT SUPPLIERS ARE QUALCOMM, MEDIATEK, 

INTEL, AND SPREADTRUM; CORRECT? 

A. YES, THAT'S WHAT IT SHOWS.

Q. AND THEN ON THE LEFT-HAND SIDE, THERE IS A CHIPSET PRICE 

TIER. 

DO YOU SEE THAT? 

A. I DO.

Q. AND ACCORDING TO THIS SLIDE, QUALCOMM HAS LEADERSHIP IN 

PREMIUM MDM CHIPS; CORRECT? 

A. YES. 

Q. AND INTEL IS THE ONLY OTHER MERCHANT SUPPLIER OFFERING A 

PREMIUM MDM CHIP ACCORDING TO THIS SLIDE; CORRECT? 

A. YES.

Q. AND ACCORDING TO THIS SLIDE, QUALCOMM HAS LEADERSHIP IN 

THE PREMIUM TIER CHIPSET; CORRECT? 

A. YES. 

Q. AND ACCORDING TO THIS SLIDE, NO OTHER MERCHANT SUPPLIER 

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MOLLENKOPF DIRECT BY MS. MILICI

UNITED STATES COURT REPORTERS

764

OFFERS A PREMIUM TIER CHIPSET; CORRECT? 

A. YES. 

Q. AND HERE ON THIS SLIDE IT SHOWS IN THE VERTICAL OEM'S THAT 

HISILICON HAS A PREMIUM MDM; RIGHT?

A. YES. 

Q. AND IT INDICATES THAT HISILICON'S PREMIUM MDM IS LAGGING; 

CORRECT? 

A. YES, THAT'S WHAT IT SHOWS. 

Q. WE CAN -- WE'RE DONE WITH THAT DOCUMENT. 

SIR -- 

THE COURT: I'M SORRY TO INTERRUPT YOU. COULD PEOPLE 

PLEASE MAKE ROOM. WE HAVE PEOPLE STANDING IN THE BACK. CAN 

YOU MAKE ROOM? 

THANK YOU. 

ALL RIGHT. GO AHEAD. SORRY FOR THE INTERRUPTION. 

BY MS. MILICI: 

Q. SIR, QUALCOMM HAS DESCRIBED ITSELF AS THE LEADER IN 5G, 

HASN'T IT? 

A. IT HAS.

Q. AND YOU EXPECT TO HAVE A TIME TO MARKET ADVANTAGE FOR YOUR 

5G MODEMS; CORRECT?

A. WE EXPECT TO BE AMONG THE LEADERS. 

Q. OKAY. SIR, COULD YOU PLEASE TURN TO TAB 6 IN YOUR BINDER? 

THIS IS CX 8198. 

AND, SIR, THIS IS A PRESS RELEASE ABOUT A LETTER TO 

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765

STOCKHOLDERS AND AN INVESTOR PRESENTATION; CORRECT? 

A. YES. 

MS. MILICI: YOUR HONOR, MOVE TO ADMIT CX 8198. 

MR. VAN NEST: NO OBJECTION, YOUR HONOR. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 8198 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. SIR, IF WE LOOK TO PAGE 004 IN THE MIDDLE OF THE PAGE, 

THERE'S A PARAGRAPH, AND IN THE -- ACTUALLY, IT'S AT THE BOTTOM 

OF THE PAGE. MY APOLOGIES. 

AND IN THE MIDDLE OF THAT PARAGRAPH, IT SAYS "QUALCOMM IS 

12 TO 24 MONTHS AHEAD OF OUR MERCHANT COMPETITORS IN THE 

TRANSITION TO 5G." 

DO YOU SEE THAT? 

A. I DO.

Q. AND THAT WAS A TRUE STATEMENT WHEN YOU POLITICIZED IT; 

CORRECT? 

A. YES.

Q. WOULD YOU PLEASE TURN TO PAGE -- TO TAB 7 IN YOUR BINDER? 

AND THIS IS CX 8197. 

SIR, DO YOU RECOGNIZE THIS AS AN INVESTOR PRESENTATION? 

A. YES. 

MS. MILICI: YOUR HONOR, WE MOVE TO ADMIT CX 8197. 

MR. VAN NEST: NO OBJECTION, YOUR HONOR. 

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766

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 8197 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. SIR, COULD WE PLEASE TURN TO PAGE 020. 

THIS SLIDE HAS THE TITLE, TECHNOLOGY TRANSITIONS CREATE 

SIGNIFICANT RETURNS FOR QUALCOMM. 

AND THAT'S A TRUE STATEMENT; CORRECT? 

A. YES.

Q. AND ON THE LEFT-HAND SIDE IT SAYS, "DURING 3G TO 4G 

TRANSITION, QUALCOMM REVENUES MORE THAN DOUBLED." 

AND THAT'S A TRUE STATEMENT; CORRECT? 

A. YES.

Q. AND NEXT TO THAT, IT SAYS "CAPTURED 80 PERCENT SHARE OF 

UNITS DURING FIRST THREE YEARS OF TECHNOLOGY TRANSITION FROM 3G 

TO 4G." 

AND THAT'S A TRUE STATEMENT; CORRECT? 

A. YES. 

Q. SIR, CAN WE PLEASE TURN TO TAB 8 IN YOUR BINDER. AND AS 

WE JUST DISCUSSED, WE ARE ONLY SEEKING -- WE'RE ONLY DISCUSSING 

THE COVER E-MAIL. 

SIR, DO YOU RECOGNIZE, ON PAGE 2 OF THIS DOCUMENT, 

STARTING -- I'M SORRY, STARTING ON THE BOTTOM OF PAGE 1 AND 

CONTINUING ON TO PAGE 2, THAT'S AN E-MAIL FROM YOU TO 

MATT GROB, G-R-O-B; CORRECT? 

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767

THE COURT: B.

MS. MILICI: B.

Q. SIR, DO YOU AGREE THAT THIS IS AN E-MAIL THAT YOU WROTE ON 

APRIL 19TH, 2015? 

A. I JUST WANT TO READ IT HERE REAL QUICK TO MAKE SURE. 

(PAUSE IN PROCEEDINGS.) 

THE WITNESS: YES. 

MS. MILICI: YOUR HONOR, THE FTC ASKS TO ADMIT THE 

FIRST TWO PAGES OF CX 5913. 

MR. VAN NEST: NO OBJECTION, YOUR HONOR. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 5913 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. OKAY. AND IN YOUR E-MAIL, YOU WROTE, "I HAVE BEEN 

SPENDING THE LAST FEW HOURS ON THE BOARD DECK ON SPLIT." 

AND YOU WROTE, "ONE OF THE ARGUMENTS FOR NOT SPLITTING IS 

THAT WE NEED TO BE POSITIONED FOR 5G AND THEN WE SHOW THE 

INVESTMENT LEVEL OF 19 MILLION FOR 5G AND 15 MILLION FOR 3G 

(STILL)." 

AND THAT'S WHAT YOU WROTE TO MATT GROB ON APRIL 19TH, 

2015; CORRECT? 

A. YES.

Q. AND THEN IF YOU LOOK AT THE E-MAIL ABOVE THAT ON THE FIRST 

PAGE DAVID WISE RESPONDS TO YOU, "THE MAIN POINT ON 5G IS THAT 

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768

WE ARE IN A STRONGER POSITION TO EXTEND QTL LICENSING MODEL 

TOGETHER THAN SEPARATE." 

AND THAT'S WHAT DAVID WISE WROTE YOU IN APRIL 2015; 

CORRECT? 

A. YES.

Q. AND DAVID WISE WAS WORKING ON PROJECT PHOENIX AT THE TIME; 

CORRECT? 

A. YES. 

Q. CAN WE PLEASE TURN TO TAB 9 IN YOUR BINDER. 

AND, SIR, THIS APPEARS TO BE A TRANSCRIPT OF A NEW YORK 

ANALYST'S MEETING. AND IF YOU LOOK ON PAGE 2, YOU ARE LISTED 

AS ONE OF THE CORPORATE PARTICIPANTS. 

DO YOU SEE THAT? 

A. I DO. 

MS. MILICI: YOUR HONOR, THE FTC MOVES TO ADMIT 

CX 6439. 

MR. VAN NEST: NO OBJECTION, YOUR HONOR. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 6439 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. SIR, IF YOU COULD PLEASE TURN TO PAGE 035. ON 035, THERE 

BEGINS A PRESENTATION BY BILL KEITEL, AND BILL KEITEL WAS THE 

CFO; CORRECT? 

A. THIS IS 035?

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769

Q. YES, SIR. 

A. YES. 

Q. LET'S TURN AHEAD A FEW PAGES IN HIS PRESENTATION TO SLIDE 

039. 

AND ABOUT HALFWAY DOWN THE PAGE, HE REFERS TO THE 

APPROXIMATE 15 BILLION WE'VE RETURNED TO STOCKHOLDERS IN THE 

LAST EIGHT YEARS. 

DO YOU SEE THAT? 

A. I DO.

Q. AND, SIR, IT'S TRUE, ISN'T IT, THAT QUALCOMM SPENT $15 

BILLION ON STOCK REPURCHASES AND DIVIDENDS BETWEEN 2002 AND 

2010? 

A. I COULDN'T -- I COULDN'T ATTEST TO THAT. I'M SURE 

WHATEVER IS WRITTEN HERE IS RIGHT, BUT I DIDN'T WRITE THIS.

Q. OKAY. BUT THIS IS WHAT BILL KEITEL SAID DURING THIS 

ANALYST DAY PRESENTATION; CORRECT? 

A. YES. 

Q. AND HE WAS THE CFO? 

A. CORRECT. 

Q. OKAY. CAN WE PLEASE TURN TO TAB 11 IN YOUR BINDER. SIR, 

THIS IS AN E-MAIL THAT -- THE COVER E-MAIL WENT TO E-MAIL 

ADDRESS CALLED EXC. AT THIS TIME IN 2008 YOU WOULD HAVE BEEN 

ONE OF THE RECIPIENTS OF THIS E-MAIL; CORRECT? 

A. YES. 

Q. AND THE ATTACHMENT IS A QCT STRATEGIC PLAN FOR 2008? 

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770

A. YES. 

MS. MILICI: YOUR HONOR, WE MOVE TO ADMIT CX 7559. 

MR. VAN NEST: NO OBJECTION, YOUR HONOR. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 7559 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. COULD YOU PLEASE TURN TO PAGE 010. 

AND THIS PAGE HAS A QCT STRENGTHS, WEAKNESSES, 

OPPORTUNITIES AND THREATS; CORRECT? 

A. YES.

Q. AND UNDER STRENGTHS THE FIRST BULLET SAYS, "C2K LEADERSHIP 

AND PROFITABILITY." 

THE SECOND BULLET SAYS, "UMTS LEADERSHIP AMONG MERCHANT 

SUPPLY." 

DO YOU SEE THAT? 

A. I DO.

Q. AND THOSE WERE TWO OF QCT'S STRENGTHS IN 2008; CORRECT? 

A. THAT'S WHAT ANDY, WHO WROTE THIS, PUT ON THE SLIDE, YES.

Q. AND THIS SLIDE WAS PART OF A QCT STRATEGIC PLAN; CORRECT? 

A. YES. 

Q. AND, SIR, YOU WERE INVOLVED IN THE NEGOTIATION OF A 2011 

AGREEMENT BETWEEN APPLE AND QUALCOMM THAT WAS CALLED THE 

TRANSITION AGREEMENT; CORRECT? 

A. YES. 

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771

Q. AND WHEN NEGOTIATING THAT AGREEMENT, YOU UNDERSTOOD THAT 

APPLE WAS PLANNING TO RELEASE THE FIRST IPHONE THAT WOULD BE 

COMPATIBLE WITH THE VERIZON NETWORK; CORRECT? 

A. I'M SORRY. AT WHAT TIMEFRAME?

Q. WHEN YOU WERE NEGOTIATING THE TRANSITION AGREEMENT. 

A. SAY IT AGAIN. I'M JUST TRYING TO GET THE TIMEFRAME RIGHT. 

SORRY. 

Q. WHEN YOU WERE NEGOTIATING THE TRANSITION AGREEMENT, THE 

2011 TRANSITION AGREEMENT, YOU UNDERSTOOD THAT APPLE WAS 

PLANNING TO RELEASE THE FIRST IPHONE THAT WOULD BE COMPATIBLE 

WITH THE VERIZON NETWORK; CORRECT? 

A. I THOUGHT THEY HAD RELEASED THAT EARLIER. 

Q. SIR, COULD YOU PLEASE TURN TO PAGE 211 OF YOUR DEPOSITION. 

THERE SHOULD BE A BINDER WITH YOUR DEPOSITION IN FRONT OF YOU. 

A. YES. YOU SAID 211?

Q. YES, SIR. 

AT 211, LINE 15 YOU SAY -- THERE'S A QUESTION: "BY THIS 

DATE OF FEBRUARY 2011, DID YOU UNDERSTAND THAT APPLE WANTED TO 

RELEASE THE FIRST IPHONE FOR VERIZON, WHICH REQUIRED 

IMPLEMENTATION OF THE CDMA STANDARD?"

DO YOU SEE THAT? 

A. I'M SORRY. CAN YOU GIVE ME THAT LINE AGAIN?

Q. SURE. IT'S ON THE SCREEN. 

SO YOU WERE ASKED THAT QUESTION. YOU ANSWERED, "IN 2011?"

AND THEN YOU SAID, "YES." 

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YOU WERE ASKED THOSE QUESTIONS AND YOU GAVE THOSE ANSWERS; 

CORRECT. 

A. I'M SORRY. WHICH QUESTIONS ARE YOU REFERRING TO. 

Q. THE QUESTION IS BY FEBRUARY OF 2011, DID YOU UNDERSTAND 

THAT APPLE WANTED TO RELEASE THE FIRST IPHONE FOR VERIZON, 

WHICH REQUIRED IMPLEMENTATION OF THE CDMA STANDARD? 

A. YES. 

Q. OKAY. THANK YOU. 

CAN YOU PLEASE TURN TO TAB 12 IN YOUR BINDER. AND THE 

COVER E-MAIL IS A -- IS AN E-MAIL FROM PETER CARSON. 

WHO IS PETER CARSON? 

A. I DON'T REMEMBER WHAT HIS EXACT TITLE WOULD HAVE BEEN AT 

THIS TIME. THIS IS 2010. 

Q. PETER CARSON WORKED IN QCT? 

A. HE -- YEAH, EITHER THAT OR IN A STRATEGY ROLE.

Q. AND THIS ATTACHMENT TO THIS E-MAIL IS A MODEM STRAT PLAN. 

DO YOU SEE THAT? 

A. YES.

Q. AND YOU WERE FAMILIAR WITH MODEM STRAT PLANS; IS THAT 

CORRECT?

A. I WOULD GET THEM SENT TO ME. 

MS. MILICI: YOUR HONOR, WE WOULD SEEK TO ADMIT 

CX 6381. 

MR. VAN NEST: NO OBJECTION, YOUR HONOR. 

THE COURT: IT'S ADMITTED. 

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773

(PLAINTIFF'S EXHIBIT CX 6381 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. SIR, COULD WE PLEASE TURN TO PAGE 008. 

AND ON PAGE 008, IT REPRESENTS THE KEY THREATS TO THE 

MODEM BUSINESS; CORRECT? 

A. YES. 

Q. AND THE SECOND BULLET SAYS, "COMPETITION IS LASER FOCUSSED 

ON THIN MODEM WITH SIGNIFICANT COST ADVANTAGE ON SCALEABLE 

ARCHITECTURES." 

DO YOU SEE THAT? 

A. YES.

Q. AND THIN MODEMS ARE THE TYPE OF MODEMS THAT QUALCOMM 

SUPPLIED TO APPLE; IS THAT CORRECT? 

A. YES. 

Q. AND SO AT THIS TIME, AT THE TIME OF THIS 2010 STRAT PLAN, 

QUALCOMM'S ANALYSIS WAS THAT ITS COMPETITORS WERE LASER 

FOCUSSED ON MAKING THIN MODEMS; CORRECT? 

A. THAT'S WHAT IT SAYS. 

Q. COULD WE PLEASE TURN TO TAB 13 OF THE BINDER. 

AND IF YOU LOOK AT TAB 13, WHICH IS CX 5348, THE SECOND 

E-MAIL ON THE PAGE IS WRITTEN BY YOU; CORRECT? 

A. YES. 

Q. AND YOU WROTE THAT E-MAIL TO PAUL JACOBS, STEVE ALTMAN, 

AND DEREK ABERLE; CORRECT?

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A. CORRECT. 

MS. MILICI: YOUR HONOR, WE MOVE TO ADMIT CX 5348. 

THE COURT: ANY OBJECTION? 

MR. VAN NEST: NO OBJECTION, YOUR HONOR. 

THE COURT: ALL RIGHT. IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 5348 WAS ADMITTED IN EVIDENCE.) 

THE COURT: I'D LIKE TO TAKE A BREAK AT 2:50, SO YOU 

HAVE ABOUT THREE MORE MINUTES. OKAY. 

MS. MILICI: OKAY. 

Q. SIR, IF YOU LOOK AT YOUR E-MAIL YOU WROTE, "ATTACHED IS 

THE DECK SIZING IT FROM QCT SIDE." 

AND BY "SIZING IT," YOU MEANT SIZING THE DEAL WITH APPLE; 

CORRECT? 

A. LET ME READ THE E-MAIL. I DON'T RECALL THIS E-MAIL. 

(PAUSE IN PROCEEDINGS.) 

BY MS. MILICI: 

Q. SIR, WE DISCUSSED THIS E-MAIL AT YOUR DEPOSITION; CORRECT?

A. AGAIN, I DON'T REMEMBER THE E-MAIL. BUT LET ME JUST 

QUICKLY ORIENT MYSELF TO IT. 

(PAUSE IN PROCEEDINGS.) 

THE WITNESS: YES, THAT'S WHAT "IT" REFERS TO. 

BY MS. MILICI: 

Q. OKAY. AND THEN IN THE SECOND PARAGRAPH OF YOUR E-MAIL YOU 

WROTE, "THEY BECOME A SAMSUNG SIZED CUSTOMER IN 2012." 

DO YOU SEE THAT? 

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775

A. I DO.

Q. AND BY "THEY" YOU MEANT APPLE; CORRECT? 

A. YES.

Q. AND IN THE NEXT PARAGRAPH YOU WROTE, "THERE ARE 

SIGNIFICANT STRATEGIC BENEFITS AS IT IS UNLIKELY THAT THERE 

WILL BE ENOUGH STANDALONE MODEM VOLUME TO SUSTAIN A VIABLE 

COMPETITOR WITHOUT THAT SLOT." 

AND "THAT SLOT" REFERS TO APPLE'S MODEM CHIP BUSINESS; 

CORRECT? 

A. YES. 

Q. IS IT NOW TIME FOR A BREAK? 

THE COURT: THAT'S FINE. IT'S 2:49. LET'S GO AHEAD 

AND TAKE A BREAK UNTIL 3:00 O'CLOCK. THANK YOU. 

WE'RE IN RECESS GO AHEAD, PLEASE. 

(RECESS FROM 2:49 P.M. UNTIL 3:02 P.M.) 

THE COURT: GOOD AFTERNOON. WELCOME BACK. PLEASE 

TAKE A SEAT. 

IF IT'S NECESSARY FROM THE RECORD, WHEN WE CAME BACK FROM 

LUNCH, WE WERE IN OPEN COURT. I THINK THAT WAS CLEAR FROM 

BEFORE, BUT JUST IN CASE. 

ALL RIGHT. TIME IS 3:02. GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. SIR, COULD YOU PLEASE TURN TO TAB 15 IN YOUR BINDER. 

A. OKAY.

Q. AND THIS IS AN E-MAIL SENT BY MARC MCCLOSKEY TO YOU 

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NOVEMBER 29TH, 2010, ISN'T IT? 

A. YES. 

Q. AND MR. MCCLOSKEY WORKED FOR QUALCOMM? 

A. HE DID.

Q. AND THE E-MAIL CHAIN RELATES TO QUALCOMM AND APPLE'S 

NEGOTIATION OF THE TRANSITION AGREEMENT; CORRECT? 

A. YES. 

MS. MILICI: YOUR HONOR, WE WOULD MOVE TO ADMIT 

CX 5357. 

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 5357 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. AND IN THIS E-MAIL AT THE TOP HERE, MR. MCCLOSKEY WAS 

CONSIDERING WHETHER A 1 PERCENT -- WHAT A 1 PERCENT SHARE WOULD 

BE WORTH TO QUALCOMM IF THE ALTERNATIVE WAS THAT APPLE WOULD 

USE A COMPETITOR LIKE IFX AND SAMSUNG AND MAKE THEM MORE 

COMPETITIVE IN THE MARKET; RIGHT? 

A. LET ME READ THE DOCUMENT. 

(PAUSE IN PROCEEDINGS.) 

THE WITNESS: COULD YOU REPEAT THE QUESTION, PLEASE. 

BY MS. MILICI: 

Q. SIR, I'M JUST ASKING YOU IF THE E-MAIL SAYS THAT 

MR. MCCLOSKEY WAS CONSIDERING WHAT 1 PERCENT SHARE WOULD BE 

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777

WORTH TO QUALCOMM IF THE ALTERNATIVE WAS THAT APPLE WOULD USE A 

COMPETITIVE LIKE IFX AND SAMSUNG? 

THAT'S WHAT HE'S WRITING; RIGHT? 

A. YES. 

Q. AND IFX REFERS TO INFINEON? 

A. YES.

Q. AND INFINEON WAS PURCHASED BY INTEL; CORRECT? 

A. YES.

Q. CAN WE PLEASE TURN TO TAB 16 IN YOUR BINDER. AND A PART 

OF THIS DOCUMENT IS UNDER SEAL. 

LET'S LOOK NOW AT PAGE 3. AND THIS IS AN E-MAIL -- ON 

PAGE 3, THE MIDDLE OF THE PAGE IS AN E-MAIL FROM YOU DATED 

DECEMBER 7TH, 2010; CORRECT? 

A. YES. 

MS. MILICI: YOUR HONOR, WE SEEK TO ADMIT CX 5360. 

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 5360 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. AND ON THIS E-MAIL YOU WROTE, "HERE IS WHAT I WROTE DOWN 

AS NEXT STEPS FROM FRIDAY CALL." 

DO YOU SEE THAT? IT'S ON YOUR SCREEN. 

A. I'M SORRY. WHICH PLACE IN THE DOCUMENT?

Q. IN YOUR E-MAIL, THREE LINES DOWN, THREE PARAGRAPHS DOWN. 

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778

"HERE IS WHAT I WROTE DOWN AS NEXT STEPS FROM FRIDAY CALL." 

DO YOU SEE THAT? 

A. GOT IT. 

Q. AND ONE OF THOSE NEXT STEPS WAS "NEED PAYMENT AND EARN-OUT 

MECHANISM THAT ALIGNS WITH GOAL OF DESIGN-INS AND EXCLUSIVITY." 

DO YOU SEE THAT? 

A. I DO.

Q. AND IN THAT INTRODUCTORY SENTENCE THAT I JUST READ, IT 

SAYS THAT THESE NEXT STEPS ARE INTERNAL ONLY AND NOT AGREED 

WITH JEFF. 

AND THE JEFF THAT YOU'RE REFERRING TO THERE IS 

JEFF WILLIAMS OF APPLE; CORRECT?

A. YES. 

Q. THIS IS JX 55. AND, AGAIN, THIS DOCUMENT IS PARTIALLY 

SEALED, SO WE WON'T BE SHOWING IT ON THE SCREEN. 

CAN YOU TURN TO PAGE 006. THERE'S AN E-MAIL FROM YOU TO 

JIM LEDERER DATED DECEMBER 19TH, 2010; CORRECT? 

A. YES. 

Q. AND YOU WROTE THAT E-MAIL ABOUT MAVERICK? 

A. YES. 

Q. AND MAVERICK IS APPLE; CORRECT? 

A. YES. 

MS. MILICI: YOUR HONOR, THE FTC MOVES TO ADMIT 

JX 55. 

MR. VAN NEST: NO OBJECTION. 

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779

THE COURT: IT'S ADMITTED. 

(JOINT EXHIBIT JX 55 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD. WHAT'S THE TAB NUMBER FOR 

THAT, PLEASE? 

MS. MILICI: IT IS TAB 14. 

THE COURT: OKAY. THANK YOU. 

MS. MILICI: AND WE ARE ON PAGE 006. 

Q. SIR, IN THIS E-MAIL YOU WROTE ABOUT A CALL WITH JEFF ON 

FRIDAY NIGHT? 

A. I DID.

Q. AND JEFF AGAIN WAS JEFF WILLIAMS OF APPLE?

A. YES.

Q. AND LATER IN THIS E-MAIL YOU SAY, "OVER THE LAST 20 HOURS, 

I HAVE BEEN THINKING A LOT ABOUT HOW HARD WE SHOULD RISK TO 

DE-RISK THIS ACCOUNT." 

DO YOU SEE THAT? 

A. I DO.

Q. AND YOU LIST A COUPLE OF SCENARIOS THAT MIGHT BE RISKY TO 

QUALCOMM; CORRECT? 

A. YES. 

Q. AND THOSE SCENARIOS INCLUDED SAMSUNG GOES INCREASINGLY 

VERTICAL AND HOSTILE, AND IT INCLUDES VIA IS ACQUIRED BY EITHER 

INTEL OR BROADCOM. 

DO YOU SEE THAT? 

A. I DO.

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780

Q. AND THEN IT INCLUDES MTK GETS OVER THE QUALITY THRESHOLD 

AND STARTS TO UNDERCUT US AT THE BIG ACCOUNTS. 

DO YOU SEE THAT? 

A. YES.

Q. AND THESE WERE THREATS THAT YOU WERE CONSIDERING WHEN YOU 

WERE NEGOTIATING WITH APPLE FOR THE AGREEMENT THAT BECAME THE 

2011 TRANSITION AGREEMENT? 

A. YES. 

Q. COULD WE PLEASE TURN TO PAGE -- TO TAB 17 IN YOUR BINDER. 

AND THIS IS JX 0086. 

AND ON THE FIRST PAGE IS AN E-MAIL FROM SANJAY MEHTA TO 

YOU AND MARC MCCLOSKEY, AND YOU RECEIVED THAT E-MAIL ON 

APRIL 29TH, 2013, DIDN'T YOU? 

A. YES. 

MS. MILICI: YOUR HONOR, WE MOVE TO ADMIT JX 86. 

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(JOINT EXHIBIT JX 86 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. AND THIS COVER E-MAIL REFERS TO AN ENCLOSED UPDATE TO THE 

SLIDES. 

DO YOU SEE THAT? 

A. YES.

Q. AND THE ATTACHED SLIDES ARE CONFIDENTIAL, SO WE'RE NOT 

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MOLLENKOPF DIRECT BY MS. MILICI

UNITED STATES COURT REPORTERS

781

SHOWING IT TO THE COURT, TO THE COURTROOM. 

BUT WE'D LIKE TO SEE -- BUT IF YOU COULD LOOK AT PAGE 009. 

AND PAGE 009 IS A CHART THAT SHOWS TWO AGREEMENTS; 

CORRECT? 

A. YES. 

Q. AND THE FIRST AGREEMENT IS THE ORIGINAL TRANSITION 

AGREEMENT; CORRECT? 

A. YES. 

Q. AND UNDER -- AND THE ORIGINAL TRANSITION AGREEMENT 

REFERRED TO ON THIS SLIDE IS THE 2011 AGREEMENT; RIGHT? 

A. YES.

Q. AND THAT AGREEMENT INCLUDED THREE DIFFERENT KINDS OF 

FUNDS? 

A. YES, THAT'S WHAT IT SHOWS.

Q. AND THE FIRST AND THIRD FUNDS LISTED HERE WERE SUBJECT TO 

CLAWBACK IF APPLE LAUNCHED ANY DEVICE WITH A NON-QUALCOMM 

MODEM; CORRECT? 

A. I'M SORRY. COULD YOU REPEAT THE QUESTION?

Q. THE FIRST AND THIRD FUNDS LISTED UNDER THE ORIGINAL 

TRANSITION AGREEMENT WERE SUBJECT TO CLAWBACK IF APPLE LAUNCHED 

ANY DEVICE WITH A NON-QUALCOMM MODEM CHIP; CORRECT? 

A. YES. 

Q. AND YOU WERE NOT AWARE OF ANY OTHER AGREEMENTS WITH ANY 

OTHER OEM WHERE QUALCOMM HAS THE RIGHT TO CLAW BACK FUNDS IN 

THE EVENT THAT THEY USE A NON -QUALCOMM CHIP; CORRECT?

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782

A. THAT IS CORRECT.

Q. AND THE BOTTOM HALF OF THIS SLIDE CONCERNS THE NEW 

ADDITIONAL TRANSITION AGREEMENT TERMS, FEBRUARY 2013. 

DO YOU SEE THAT? 

A. YES.

Q. AND THAT REFERS TO THE 2013 FIRST AMENDMENT TO THE 

TRANSITION AGREEMENT; CORRECT? 

A. YES. 

Q. AND THIS ALSO LISTS TWO KINDS OF FUNDS UNDER THAT 

AGREEMENT; CORRECT? 

A. YES. 

Q. AND FOR THE FIRST KIND OF FUND, THERE'S A CLAWBACK 

PROVISION IF APPLE LAUNCHES A PHONE OR TABLET WITH NON-QC 

MODEM; CORRECT? 

A. CORRECT.

Q. AND FOR THE SECOND KIND OF FUND, THERE'S A CLAWBACK IF 

APPLE LAUNCHES A PHONE OR TABLET WITH A NON-QC MODEM AS WELL; 

RIGHT? 

A. I'M SORRY. COULD YOU ASK THE QUESTION AGAIN. 

Q. FOR THE SECOND FUND, THERE'S ALSO A CLAWBACK IF APPLE 

LAUNCHES A PHONE OR TABLET WITH A NON-QC MODEM? 

A. THERE IS. 

Q. AND IN ADDITION FOR THAT SECOND FUND, ALL OF THE FUND 

MONIES PAID BY QUALCOMM ARE REIMBURSED TO APPLE AND THE 

AGREEMENT WOULD TERMINATE, CORRECT, IF APPLE USED A 

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783

NON-QUALCOMM MODE; CORRECT? 

A. I'M SORRY. COULD YOU REPEAT THAT?

Q. SURE. 

A. I THINK YOU MAY HAVE MIXED IT UP OR I MISHEARD IT. 

Q. THE SECOND FUND ON THAT CHART, UNDER THAT FUND, IT REFERS 

TO CLAWBACK AND THE CLAWBACK PROVISIONS INCLUDE IF MAVERICK 

LAUNCHES A PHONE OR TABLET WITH NON-QC MODEM. 

DO YOU SEE THAT? 

A. I DO.

Q. AND THAT'S THE CLAWBACK FEATURE OF THE FIRST AMENDMENT 

TRANSITION AGREEMENT? 

A. YES.

Q. AND THIS ALSO SAYS THAT THE FUND MONIES PAID BY QC ARE 

REIMBURSED AND THE AGREEMENT WOULD TERMINATE; CORRECT? 

A. CORRECT. 

Q. THANK YOU. 

WILL YOU PLEASE TURN TO TAB 18. THIS IS CX 5425. 

SIR, IS IT FAIR TO SAY THAT EXCLUSIVITY WAS ONE OF THE 

PRIMARY BENEFITS OF THE 2011 TRANSITION AGREEMENT? 

A. NO. 

Q. OKAY. COULD YOU PLEASE LOOK AT THE DOCUMENT HERE, 

CX 5425? AND DO YOU RECOGNIZE THIS AS AN E-MAIL ATTACHING A 

FINAL ACCOUNTING MEMO? 

A. YES. 

Q. AND ACCOUNTING MEMOS IS A STANDARD TYPE OF MEMO THAT YOUR 

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784

ACCOUNTING DEPARTMENT WOULD WRITE AFTER AN AGREEMENT WAS 

CONCLUDED; CORRECT? 

A. CORRECT. 

MS. MILICI: AND, YOUR HONOR, WE MOVE TO ADMIT 

CX 5425. 

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 5425 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. AND THE DOCUMENT IS PARTIALLY SEALED, BUT WE'RE NOT GOING 

TO BE LOOKING AT THE SEALED PORTION. 

IF WE COULD TURN TO PAGE 002. ACTUALLY, SORRY, THE PAGE 

THAT WE WANT TO LOOK AT IS SEALED SO WE'RE GOING TO COVER IT 

UP. THANK YOU. 

LET'S LOOK AT PAGE 004, PLEASE. AND UNDER -- DO YOU SEE 

THAT PAGE? IT SAYS ACCOUNTING AGREEMENT IN BOLD AT THE TOP. 

DO YOU SEE THAT? 

A. YES.

Q. AND IT SAYS THERE, "THE PRIMARY BENEFITS OF THE TRANSITION 

FUND TO QUALCOMM ARE THE VOLUME REQUIREMENTS AS WELL AS THE 

EXCLUSIVITY PROVISION DESCRIBED ABOVE." 

DO YOU SEE THAT? 

A. YES.

Q. SO IS IT FAIR TO SAY THAT THE ACCOUNTING DEPARTMENT 

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785

THOUGHT THAT ONE OF THE PRIMARY BENEFITS OF THE TRANSITION 

AGREEMENT TO QUALCOMM WAS THE EXCLUSIVITY PROVISION? 

A. YES, THAT'S WHAT'S WRITTEN HERE. 

Q. CAN WE PLEASE TURN TO TAB 19. THIS IS CX 7968. 

AND, SIR, THIS IS AN E-MAIL, THE TOP E-MAIL IS AN E-MAIL 

THAT YOU WROTE DECEMBER 13TH, 2012? 

A. YES. 

Q. AND AT THIS TIME YOU WERE NEGOTIATING WITH APPLE THE 

POTENTIAL AMENDMENT TO THE TRANSITION AGREEMENT; CORRECT? 

A. CORRECT.

Q. AND THIS E-MAIL IS ABOUT THAT? 

A. YES. 

MS. MILICI: YOUR HONOR, WE MOVE TO ADMIT CX 7968. 

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 7968 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. AND, SIR, ON THE E-MAIL THAT YOU WROTE ON THIS PAGE, YOU 

WROTE, "I DO NOT SEE WHY WE WOULD MAKE A MOVE IN 2013 OR 

PROVIDE ANY INCENTIVE IN THE WINDOW OF THE OLD AGREEMENT (WHICH 

HAD AN OBJECTIVE OF EXCLUSIVITY UNTIL THE END OF 2015.)." 

DO YOU SEE THAT? 

A. I DO.

Q. AND SO WHAT YOU WERE SAYING THERE IS YOU DIDN'T SEE ANY 

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786

REASON TO, TO OFFER ANY PRICE INCENTIVES TO APPLE DURING THE 

PERIOD OF EXCLUSIVITY FROM THE FIRST TRANSITION AGREEMENT; 

CORRECT? 

A. YEAH. WE'RE TRYING TO EVALUATE WHAT IS THE RIGHT PATH 

FORWARD AND THAT'S ONE OF THE, ONE OF THE SCENARIOS WE'RE 

THINKING OF, YES. 

Q. SIR, COULD YOU PLEASE TURN TO PAGE 20 IN YOUR BINDER. AND 

TAB 20 HAS AN E-MAIL EXCHANGE WITH YOU AND JIM LEDERER FROM 

NOVEMBER 27TH, 2012. AND THIS E-MAIL EXCHANGE CONCERNS 

MAVERICK ASSUMPTIONS IN FISCAL YEAR 2013, DIDN'T IT? 

A. YES. 

MS. MILICI: YOUR HONOR, WE SEEK TO ADMIT CX 7592. 

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 7592 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. AND, SIR, IN THE E-MAIL IN THE MIDDLE OF THE PAGE FROM JIM 

LEDERER HE WROTE, "ONE THOUGHT YOU MAY WANT TO CONSIDER ON THE 

COMPETITIVE FRONT IN YOUR MEETING TODAY. REGARDING THE IFX 

THREAT, WHICH WE BELIEVE WOULD START IN THE TABLET SPACE, WE 

SHOULD CONSIDER THIS MAKING A SIGNIFICANT MOVE IN TABLET 

PRICING." 

DO YOU SEE THAT? 

A. I DO.

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MOLLENKOPF DIRECT BY MS. MILICI

UNITED STATES COURT REPORTERS

787

Q. AND IFX REFERS TO INFINEON, WHICH WAS PURCHASED BY INTEL; 

CORRECT? 

A. YES.

Q. AND SO MR. LEDERER IS REPORTING ON A POTENTIAL THREAT FROM 

INFINEON, WHICH WOULD START IN THE TABLET SPACE; CORRECT? 

A. THAT'S WHAT HE WROTE. 

Q. AND DURING NEGOTIATION OF THE 2013 AGREEMENT, INCLUDING 

THE FIRST AMENDMENT TO THE TRANSITION AGREEMENT, APPLE TOLD 

QUALCOMM THAT IT WAS CONSIDERING USING ALTERNATIVE SUPPLIERS; 

CORRECT?

A. THEY DID.

Q. AND THAT WAS ONE OF THE THINGS THAT YOU WERE CONSIDERING 

IN THE NEGOTIATIONS FOR THE 2013 AGREEMENTS; CORRECT? 

A. YES. 

Q. CAN WE PLEASE TURN TO TAB 21 IN YOUR BINDER. AND TAB 21 

HAS CX 5378, AND THERE'S THE SECOND E-MAIL ON THE PAGE, THAT'S 

AN E-MAIL THAT YOU WROTE ON DECEMBER 19TH, 2012; CORRECT? 

A. YES. 

Q. AND THE SUBJECT OF THE E-MAIL IS MAVERICK; CORRECT? 

A. CORRECT. 

MS. MILICI: YOUR HONOR, WE MOVE TO ADMIT CX 5378. 

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 5378 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

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788

BY MS. MILICI: 

Q. SIR, IF WE COULD START ON PAGE 003. THERE'S AN E-MAIL 

THERE FROM MR. KOLIANDER, AND MR. KOLIANDER WAS QUALCOMM'S LEAD 

SALESPERSON FOR APPLE; CORRECT? 

A. YES. 

Q. AND MR. KOLIANDER REPORTED TO YOU THAT APPLE DID APPEAR TO 

BE WORKING WITH INTEL, BUT WAS UNLIKELY TO LAUNCH AN 

INTEL-BASED PRODUCT UNTIL LATE 2013. 

DO YOU SEE THAT? 

A. I SEE THAT.

Q. AND HE ALSO REPORTED THAT THE INTEL-BASED PRODUCT WAS 

BELIEVED TO BE A DATA ONLY MODEM FOR AN IPAD. 

DO YOU SEE THAT?

A. YES.

Q. AND THAT'S ONE OF THE THINGS THAT YOU WERE CONSIDERING 

WHEN YOU NEGOTIATED THE 2013 AGREEMENTS; CORRECT? 

A. YES.

Q. AND IF YOU TURN BACK TO PAGE 002, AT THE BOTTOM OF THE 

PAGE, THERE'S AN E-MAIL THAT YOU WROTE ON DECEMBER 19TH, 2012. 

AND YOU WROTE, "GIVEN THIS AND THE ANALYSIS THAT SANJAY 

FORWARDED (WHICH RELIES ON OUR CONFIDENCE IN KEEPING THE 

HIGH-END SKU ALWAYS), WHY NOT TRY TO MAXIMIZE PROFIT INSTEAD OF 

KEEPING 100 PERCENT SHARE. THAT LAST BIT OF SHARE IS 

EXPENSIVE." 

DO YOU SEE THAT? 

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789

A. I DO. 

Q. AND THAT WAS ONE OF THE THINGS THAT YOU WERE CONSIDERING 

WHEN NEGOTIATING THE 2013 AGREEMENT WAS WHETHER TO TRY TO 

MAXIMIZE PROFIT INSTEAD OF KEEPING 100 PERCENT SHARE; CORRECT? 

A. I WROTE THAT, BUT I THINK IT'S A LITTLE, A LITTLE 

DIFFERENT AS TO WHAT THAT MEANT.

Q. BUT THAT IS WHAT YOU WROTE? 

A. I DID WRITE THAT.

Q. THANK YOU. CAN WE PLEASE TURN TO TAB 28. THIS IS 

CX 5381, AND THERE'S AN E-MAIL FROM YOU THAT YOU WROTE TO 

DEREK ABERLE, AND THE SUBJECT IS "NOTE TO TIM." 

DO YOU SEE THAT? 

A. I DO, I SEE THAT.

Q. AND YOU WROTE THAT E-MAIL? 

A. I DID. 

Q. AND TIM IS TIM COOK? 

A. YES. 

MS. MILICI: YOUR HONOR, WE MOVE TO ADMIT CX 5381. 

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT 5381 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. AND FOR -- THIS TOP E-MAIL HERE, YOU WROTE -- YOU INCLUDED 

SOME CALCULATIONS. 

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790

DO YOU SEE THAT? 

A. I DO.

Q. AND WHAT YOU WERE DOING THERE IS YOU WERE PROJECTING WHAT 

YOU THOUGHT APPLE'S INTERNAL CALCULATION CONCERNING QUALCOMM'S 

OFFER WOULD BE; CORRECT? 

A. I'M SORRY. COULD YOU SAY THAT AGAIN. 

Q. WHAT YOU WERE DOING HERE WAS PROJECTING WHAT YOU THOUGHT 

APPLE'S INTERNAL CALCULATION WOULD BE; CORRECT? 

A. NOT EXACTLY. I'M TRYING TO DO A HYPOTHETICAL CALCULATION 

OF WHAT THEY MUST BE THINKING FOR THE DEAL. I'M NOT SURE THAT 

WE PROPOSED THESE. 

Q. SO YOU WERE PROJECTING WHAT YOU THOUGHT APPLE'S INTERNAL 

CALCULATION WOULD BE OF A PROPOSAL THAT YOU WERE CONSIDERING; 

CORRECT? 

A. I'M -- YES. WHAT I'M TRYING TO DO IS FIGURE OUT WHAT THEY 

MUST BE THINKING, AND I'M DOING A SCRATCH CALCULATION. I'M NOT 

SURE WE PROPOSED THESE NUMBERS. THAT'S WHAT I'M TRYING TO 

CLARIFY. 

Q. OKAY. CAN WE TURN, PLEASE, TO TAB 23 IN YOUR BINDER. 

IT'S CX 5739. 

AND ON PAGE 2 OF THIS DOCUMENT, THERE'S AN E-MAIL FROM 

SANJAY MEHTA TO YOU AND OTHERS DATED JANUARY 8TH, 2013. 

AND YOU RECEIVED THAT E-MAIL; CORRECT? 

A. YES. 

MS. MILICI: YOUR HONOR, WE MOVE TO ADMIT CX 5739. 

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UNITED STATES COURT REPORTERS

791

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 5739 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

MS. MILICI: THIS IS UNDER SEAL. 

Q. SIR, MR. MEHTA WROTE TO YOU ON JANUARY 2013 THAT "RECALL 

THE COMPETITIVE THREAT WE VIEWED IS ON THE IPADS AND LOW TIER 

AS OUR TECHNOLOGY WOULD PREVAIL ON HIGH SKU." 

DO YOU SEE THAT? 

A. I'M SORRY. COULD YOU SHOW ME WHERE THAT IS ON THE 

DOCUMENT?

Q. SURE. IT'S THE FIRST FULL PARAGRAPH OF HIS E-MAIL. 

A. THIS IS IN 002?

Q. YES, SIR. 

A. OKAY. GOT IT. 

Q. THE QUESTION IS, WAS MR. MEHTA EXPRESSING TO YOU THAT 

QUALCOMM PERCEIVED A THREAT THAT APPLE WOULD USE A COMPETITOR 

CHIP IN AN IPAD OR LOW TIER PRODUCT, BUT THAT QUALCOMM WOULD 

RETAIN THE HIGH TIER? 

A. YES. 

Q. THANK YOU. 

CAN WE PLEASE TURN TO TAB 24 IN THE BINDER. AND ON THE 

SECOND PAGE OF THE DOCUMENT, WHICH IS CX 7910. 

AND ON THE SECOND PAGE, THERE'S AN E-MAIL FROM JIM LEDERER 

TO YOU ON MARCH 2ND, 2013. 

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MOLLENKOPF DIRECT BY MS. MILICI

UNITED STATES COURT REPORTERS

792

AND THE SUBJECT LINE THERE IS "MAVERICK DEALS ARE DONE." 

AND YOU RECEIVED THIS E-MAIL; CORRECT? 

A. YES. 

MS. MILICI: YOUR HONOR, WE MOVE TO ADMIT CX 7910. 

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT 7910 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. AND MR. MEHTA -- I'M SORRY. MR. LEDERER WROTE TO YOU, "I 

UNDERSTAND FROM SANJAY THAT BILL K. WANTED A SUMMARY AND 

COMPARISON OF THE OLD AND NEW MAV DEALS." 

DO YOU SEE THAT? 

A. I DO. 

Q. AND THE OLD AND NEW MAV DEALS WERE THE 2011 DEAL AND THE 

2013 DEALS WHICH HAD JUST BEEN SIGNED; CORRECT? 

A. YES.

Q. AND HERE MR. LEDERER WRITES, "THE LARGE BENEFIT THAT QTL 

ACCRUES IN THE NEW DEAL IS NOT REPRESENTED." 

DO YOU SEE THAT? 

A. YES. 

Q. AND IT'S YOUR UNDERSTANDING THAT THE 2013 AGREEMENTS HAD A 

LARGE BENEFIT THAT WOULD ACCRUE TO QTL; CORRECT? 

A. I DIDN'T WRITE THIS SO -- 

Q. DO YOU AGREE WITH THE STATEMENT? 

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MOLLENKOPF DIRECT BY MS. MILICI

UNITED STATES COURT REPORTERS

793

A. WHICH STATEMENT?

Q. THAT THERE IS A LARGE BENEFIT FROM THE 2013 AGREEMENTS 

THAT ACCRUES TO QTL? 

A. WHICH AGREEMENT?

Q. THE AGREEMENT THAT MR. LEDERER IS REFERRING TO IN THIS 

E-MAIL WHERE IT SAYS MAVERICK DEALS ARE DONE, AND IT'S DATED 

MARCH 2ND, 2013? 

A. YEAH. I THINK HE'S REFERRING TO A NUMBER OF AGREEMENTS, 

NOT JUST THE AGREEMENTS THAT YOU MENTIONED. THAT'S WHY I 

CLARIFIED.

Q. AND IN MARCH OF 2013, THERE WERE FOUR DIFFERENT AGREEMENTS 

THAT WERE ENTERED; CORRECT? 

A. CORRECT.

Q. AND THOSE AGREEMENTS WERE ALL NEGOTIATED AT THE SAME TIME? 

A. YES. 

Q. AND PART OF THOSE AGREEMENTS GAVE A LARGE BENEFIT THAT 

ACCRUED TO QTL; CORRECT? 

A. THAT'S WHAT JIM IS SAYING, YES. 

Q. AND IF WE TURN TO THE FIRST PAGE MR. LEDERER SAYS, "THE 

PREVIOUS STRAT PLAN COMPARISON," AND AT THE BOTTOM OF THE PAGE, 

AND HE'S REFERRING TO THE ATTACHMENT THERE; RIGHT? 

A. YES.

Q. AND HE WRITES "THAT PLAN ASSUMED THAT WE STARTED LOSING 

SHARE IN FISCAL Q4, 2014." 

DO YOU SEE THAT? 

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UNITED STATES COURT REPORTERS

794

A. I DO. 

Q. AND THE PLAN THERE REFERS TO THE STRATEGIC PLAN; CORRECT? 

A. CORRECT.

Q. AND THE STRATEGIC PLAN AT THAT POINT ASSUMED THAT QUALCOMM 

WOULD START LOSING SHARE IN FISCAL Q4, 2014?

A. YES. THAT'S WHAT JIM WRITES.

Q. THAT'S WHAT THE STRAT PLAN SAID; CORRECT? 

A. I ASSUME WHAT JIM SAID IS CORRECT, YES.

Q. AND WHEN THAT'S REFERRING TO LOSING SHARE, THAT MEANS 

LOSING SHARE WITH APPLE; CORRECT? 

A. CORRECT. 

Q. AND THEN THE E-MAIL FROM YOU AT THE TOP OF THIS CHAIN, 

IT'S DATED MARCH 2ND, 2013, AND YOU WROTE, "I UNDERSTAND IT BUT 

THE SCENARIO IS REALLY THAT THERE WOULD HAVE BEEN A LICENSE 

FIGHT AS WELL AND A PUSH FOR ALTERNATIVE SOURCE." 

DO YOU SEE THAT? 

A. YES.

Q. AND THAT IS THE COMPARISON THAT YOU THOUGHT SHOULD BE 

MADE, A COMPARISON BETWEEN THE DEALS AND A SCENARIO WHERE THERE 

WOULD HAVE BEEN A LICENSE FIGHT AND A PUSH FOR AN ALTERNATIVE 

SOURCE; CORRECT? 

A. CORRECT. 

Q. COULD WE PLEASE TURN TO TAB 25, AND THIS IS ANOTHER 

DOCUMENT THAT'S PARTIALLY UNDER SEAL. IT'S CX 5389. 

AND, SIR, THIS TOP E-MAIL IS AN E-MAIL THAT YOU WROTE TO 

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MOLLENKOPF DIRECT BY MS. MILICI

UNITED STATES COURT REPORTERS

795

PAUL JACOBS DATED MARCH 3RD, 2013; CORRECT? 

A. CORRECT.

Q. AND THE SUBJECT OF THAT E-MAIL WAS "MAVERICK DEALS ARE 

DONE"; CORRECT? 

A. CORRECT.

Q. AND YOU ATTACHED A POWERPOINT OF THE KEY TERMS AND 

FINANCIAL SUMMARY; CORRECT? 

A. YES. 

MS. MILICI: YOUR HONOR, I MOVE TO ADMIT CX 5389. 

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 5389 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. AND IN THIS E-MAIL AT THE -- YOUR LAST PARAGRAPH IN THIS 

E-MAIL YOU AGAIN SAY, "THE MOST RELEVANT COMPARISONS HOWEVER 

SHOULD HAVE BEEN MADE TO THE CASE WHERE THEY FIGHT ON I.P. AND 

SPIN UP A SECOND SOURCE IN 2014 AND 2015." 

DO YOU SEE THAT? 

A. YES. 

Q. AND YOU SAY THAT IT IS HUGE AND HAS A LARGE STRATEGIC 

DOWNSIDE. 

DO YOU SEE THAT? 

A. YES.

Q. AND YOU'RE REFERRING TO THAT ALTERNATIVE SCENARIO WOULD 

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MOLLENKOPF DIRECT BY MS. MILICI

UNITED STATES COURT REPORTERS

796

HAVE BEEN HUGE AND HAD A LARGE STRATEGIC DOWNSIDE; CORRECT? 

A. YES. 

Q. CAN WE TURN, PLEASE TURN TO TAB 26. AND THIS IS AGAIN 

PARTIALLY SEALED. 

THIS IS CX 5391. 

AND, SIR, DO YOU RECOGNIZE THIS AS AN E-MAIL THAT YOU 

RECEIVED APRIL 16TH, 2013? 

A. YES, BUT I DON'T RECOGNIZE IT.

Q. OKAY. BUT YOU DID -- YOU AGREE THAT YOU RECEIVES IT? 

A. YES. 

MS. MILICI: OKAY. YOUR HONOR, WE MOVE TO ADMIT 

CX 5391. 

MR. VAN NEST: NO OBJECTION, YOUR HONOR. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 5391 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. OKAY. AND THIS ATTACHES ANOTHER ACCOUNTING MEMO; CORRECT? 

A. YES. 

Q. AND WHILE PART OF THIS ACCOUNTING MEMO IS UNDER SEAL, THE 

FIRST PAGE IS NOT, AND THAT'S THE PAGE I WANT TO LOOK AT. 

CAN WE LOOK AT PAGE 002. 

NOW, PAGE 002 IT SAYS, "ON FEBRUARY 28TH, 2013, QUALCOMM 

AND APPLE EXECUTED THE FOLLOWING AGREEMENTS." 

DO YOU SEE THAT? 

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UNITED STATES COURT REPORTERS

797

A. YES.

Q. AND IT LISTS FOUR AGREEMENTS? 

A. YES.

Q. AND THOSE ARE THE FOUR AGREEMENTS WE WERE JUST DISCUSSING 

A MINUTE AGO? 

A. YES. 

Q. AND RIGHT BEFORE IT SAYS, "SUMMARY OF THE BCPA AGREEMENT," 

THERE'S A SENTENCE THAT SAYS, "SINCE THE AGREEMENTS WERE 

NEGOTIATED AT THE SAME TIME AND THERE IS NOT SUFFICIENT 

EVIDENCE TO SHOW THAT THEY ARE ACCEPTABLE, THE PRESUMPTION IN A 

SC 605-25-25-3 HAS NOT BEEN OVERCOME, AND THE AGREEMENTS WILL 

BE EVALUATED AS A SINGLE ARRANGEMENT." 

DO YOU SEE THAT? 

A. I DO. 

Q. AND THAT'S CONSISTENT WITH WHAT YOU JUST TESTIFIED, WHICH 

IS ALL THE AGREEMENTS WERE NEGOTIATED AT THE SAME TIME AND 

CONSIDERED TOGETHER? 

A. I'M SORRY. 

Q. THAT'S CONSISTENT WITH THE TESTIMONY THAT YOU JUST GAVE, 

THAT THE AGREEMENTS WERE NEGOTIATED AT THE SAME TIME AND 

CONSIDERED TOGETHER?

A. YES. 

MR. VAN NEST: OBJECTION. MISSTATES THE PRIOR 

TESTIMONY, YOUR HONOR. 

THE COURT: OVERRULED. 

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UNITED STATES COURT REPORTERS

798

BY MS. MILICI: 

Q. SIR, WOULD YOU -- 

THE COURT: WHY DON'T YOU REPEAT THE QUESTION? I 

THINK HE SAID YES. HE TESTIFIED YES. BUT GO AHEAD. 

MS. MILICI: HE DID. 

Q. SIR, WOULD YOU AGREE THAT THE AGREEMENTS WERE NEGOTIATED 

AT THE SAME TIME AND THAT THE AGREEMENTS WERE EVALUATED AS A 

SINGLE ARRANGEMENT? 

A. I WOULD NOT AGREE WITH THAT. I AGREE WITH THE FIRST PART 

BUT NOT THE SECOND PART.

Q. SIR, THE SENTENCE HERE SAYS "THE AGREEMENTS WILL BE 

EVALUATED AS A SINGLE ARRANGEMENT." 

DO YOU SEE THAT? 

A. I DO. 

Q. SO IT WAS AT LEAST THE VIEW OF THE ACCOUNTING DEPARTMENT 

THAT THE AGREEMENTS WOULD BE EVALUATED AS A SINGLE ARRANGEMENT; 

CORRECT? 

A. THAT'S WHAT THE ACCOUNTING MEMO SAYS. 

THE COURT: HE ORIGINALLY SAID "YES," AND THAT'S NOT 

IN THE TRANSCRIPT. 

SO DID YOU ALL HEAR THAT? 

MR. VAN NEST: I DIDN'T HEAR IT, YOUR HONOR. 

MS. MILICI: I DID HEAR IT. 

THE COURT: YOU DID OR DID NOT? 

MS. MILICI: I DID. 

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UNITED STATES COURT REPORTERS

799

THE COURT: I DID HEAR HIM SAY YES, AND THEN THERE 

WAS THE OBJECTION. 

SO I THINK THAT SHOULD BE REFLECTED IN THE TRANSCRIPT. 

BY MS. MILICI: 

Q. SIR, CAN WE PLEASE TURN TO CX -- I'M SORRY, TAB 27 IN YOUR 

BINDER, WHICH IS CX 5527. 

AND, SIR, DO YOU -- THIS IS A, THE MAY 2013 BOARD BRIEFING 

MATERIALS; CORRECT?

A. YES.

Q. AND YOU WERE ON THE BOARD AT THE TIME? 

A. YES. 

Q. OKAY. 

YOUR HONOR, WE MOVE TO ADMIT CX 5527. 

THE COURT: ANY OBJECTION? 

MR. VAN NEST: NO OBJECTION, YOUR HONOR. 

THE COURT: ALL RIGHT. IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 5527 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE.

BY MS. MILICI: 

Q. ALL RIGHT. CAN WE TURN TO PAGE 026. 

AND THIS IS A SECTION OF THE PRESENTATION TO THE BOARD 

PROVIDING AN OVERVIEW OF THE APPLE AGREEMENTS; CORRECT? 

A. YES. 

Q. AND THIS IS THE 2013 APPLE AGREEMENTS; CORRECT? 

A. YES. 

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UNITED STATES COURT REPORTERS

800

Q. OKAY. CAN WE PLEASE TURN TO THE NEXT PAGE, 027. 

AND WHAT QUALCOMM TOLD THE BOARD IS THAT THE APPLE DEAL 

WAS A GOOD DEAL FOR QUALCOMM; CORRECT? 

A. YES. 

Q. AND IT TOLD THE BOARD THAT THE APPLE DEAL PROTECTS QCT'S 

POSITION AGAINST DOWNSIDE OF AN I.P. FIGHT; CORRECT? 

A. YES. 

Q. AND QUALCOMM TOLD ITS BOARD THAT QCT WAS WILL WELL 

POSITIONED UNTIL 2016; CORRECT? 

A. CORRECT.

Q. AND QUALCOMM ALSO TOLD ITS BOARD THAT PART OF THE REASON 

IT WAS WELL POSITIONED IS BECAUSE OF THE STRATEGIC IMPORTANCE 

OF APPLE MODEM DESIGN-WIN; CORRECT? 

A. CORRECT. 

Q. SIR, COULD WE PLEASE TURN TO TAB 29 IN THE BINDER. 

THIS IS CX 7257. 

AND, SIR, DO YOU RECOGNIZE THIS AS QUALCOMM'S 10-K WHICH 

WAS FILED ON NOVEMBER 1ST, 2017? 

A. I'M SORRY. I'M ON THE WRONG DOCUMENT. COULD YOU SAY IT 

AGAIN?

Q. TAB 29. IT'S CX 7257. 

A. GOT IT. OKAY.

Q. AND DO YOU RECOGNIZE THIS DOCUMENT AS QUALCOMM'S 10-K 

FILED NOVEMBER 1ST, 2017? 

A. YES. 

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UNITED STATES COURT REPORTERS

801

MS. MILICI: YOUR HONOR, MOVE TO ADMIT CX 7257. 

MR. VAN NEST: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 7257 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

BY MS. MILICI: 

Q. NOW, YOU WOULD EXPECT ANY REPRESENTATIONS IN THIS DOCUMENT 

TO BE ACCURATE; CORRECT? 

A. YES. 

Q. SO ANY REPRESENTATIONS ABOUT QUALCOMM'S R&D EXPENDITURES 

WOULD BE ACCURATE; CORRECT? 

A. CORRECT.

Q. AND ANY REPRESENTATIONS ABOUT THE SHARE REPURCHASES OR 

BUYBACKS OR DIVIDENDS YOU WOULD EXPECT TO BE ACCURATE; CORRECT? 

A. CORRECT.

Q. AND ANY STATEMENTS ABOUT PENDING LITIGATION AND REGULATORY 

ACTION YOU WOULD EXPECT TO BE ACCURATE; CORRECT?

A. CORRECT. 

MS. MILICI: THANK YOU. NO MORE QUESTIONS. 

THE COURT: ALL RIGHT. TIME IS 3:33. GO AHEAD, 

PLEASE. OR LET ME KNOW WHEN YOU'RE READY. 

(PAUSE IN PROCEEDINGS.) 

MR. VAN NEST: I'M READY TO GO, YOUR HONOR. 

THE COURT: ALL RIGHT. 3:34. 

GO AHEAD, PLEASE. 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

802

MR. VAN NEST: THANK YOU, YOUR HONOR. 

CROSS-EXAMINATION

BY MR. VAN NEST: 

Q. GOOD AFTERNOON, MR. MOLLENKOPF. 

A. HI.

Q. HOW LONG HAVE YOU WORKED AT QUALCOMM?

A. SINCE 1994. 

Q. DID YOU JOIN THE COMPANY AFTER GETTING OUT OF SCHOOL? 

A. I DID. 

Q. WHAT'S YOUR EDUCATIONAL BACKGROUND? 

A. IT'S A MASTER'S DEGREE FROM UNIVERSITY OF MICHIGAN. 

Q. CAN YOU TAKE THE COURT THROUGH THE VARIOUS ROLES YOU 

PLAYED WORKING YOUR WAY UP THROUGH QUALCOMM? 

A. SURE. I STARTED IN '94 AS AN ENGINEER; SPENT PROBABLY A 

LITTLE MORE THAN A DECADE IN VARIOUS ENGINEERING PROJECTS; WENT 

INTO THE CHIP GROUP IN LATE '99; THEN EVENTUALLY IN 2007, I 

WENT INTO THE BUSINESS GROUP AS HEAD OF PRODUCT MANAGEMENT; AND 

THEN HEAD OF THE CHIP GROUP IN 2008, THROUGH A COUPLE OF 

EXECUTIVE ROLES INCLUDING THE PRESIDENT AND COO; AND THEN 

ULTIMATELY THE CEO IN 2015. 

Q. OKAY. SO YOU'VE BEEN CEO NOW FOR JUST OVER THREE YEARS, 

ALMOST FOUR YEARS; IS THAT RIGHT? 

A. I THINK IT'S CLOSER TO FIVE THESE DAYS. 

Q. CLOSER TO FIVE. TIME FLIES. 

A. YEAH. 

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Q. YOU TESTIFIED EARLIER THAT QUALCOMM HAS A PRACTICE OF 

SELLING CHIPS ONLY TO FOLKS LICENSED ON ITS TECHNOLOGY. 

HOW LONG HAS THAT BEEN, THAT PRACTICE BEEN IN EFFECT AT 

QUALCOMM? 

A. AS LONG AS I CAN -- AS LONG AS I KNOW ABOUT IT.

Q. WAS IT THERE WHEN YOU ARRIVED? 

A. AS FAR AS I KNOW. 

Q. AND IS THAT PRACTICE WELL KNOWN AMONG QUALCOMM'S 

CUSTOMERS? 

A. IT IS.

Q. ARE THERE BUSINESS REASONS FOR THE PRACTICE AT QUALCOMM?

A. THERE ARE. 

Q. CAN YOU DESCRIBE THOSE FOR THE COURT, PLEASE. 

A. THIS IS THE PRACTICE OF SELLING TO LICENSED OEM'S?

Q. THAT'S RIGHT. 

A. YEAH. SO YOU HAVE TO THINK OF QUALCOMM AS A SYSTEMS 

COMPANY. ESSENTIALLY WE HAVE TWO, TWO BUSINESSES. 

THE LICENSING BUSINESS TENDS TO INVEST IN KIND OF THE 

FUNDAMENTAL R&D THAT MAKES THE CELLULAR SYSTEM HAPPEN, 

GENERATES A LOT OF I.P., SOME OF THAT I.P. IS ON THE PHONE, 

SOME OF THAT I.P. IS IN THE CHIPS, SOME OF THE I.P. COVERS -- 

Q. SLOW DOWN JUST A LITTLE BIT, MR. MOLLENKOPF, IF YOU WILL, 

PLEASE. 

A. SORRY. 

Q. THEY'RE TRYING TO TAKE DOWN EVERY WORD. GO AHEAD. 

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A. SO AS I SAID, TWO BUSINESSES. THE LICENSING BUSINESS 

TENDS TO INVEST IN THE FUNDAMENTAL R&D THAT MAKES THE ECOSYSTEM 

HAPPEN, THAT DRIVES CELLULAR. IT GENERATES A LOT OF I.P., IT 

INVESTS VERY EARLY. 

AND SOME OF THAT I.P. IS IN THE CHIP, SOME OF THAT I.P. IS 

IN THE PHONE, SOME OF THAT I.P. COVERS THE OVERALL OPERATION OF 

THE SYSTEM BETWEEN THE PHONE AND THE CORE NETWORK AND 

TECHNOLOGIES LIKE THAT. 

THAT'S THE, THAT'S THE LICENSING BUSINESS. 

WE ALSO HAVE A CHIP BUSINESS AS WELL, AND WHAT WE DO IS WE 

DON'T LICENSE THE -- OR WE ONLY SELL TO, TO COMPANIES WITH A 

LICENSE BECAUSE NOT ALL OF THE I.P. IS ACTUALLY COVERED IN THE 

CHIP. 

AND SO WHAT WE WANT TO DO IS MAKE SURE THAT THE OEM'S ARE 

COVERED. WE SELL TO LICENSED OEM'S AND THEN WE SELL TO CHIP 

COMPANIES. WE WANT TO MAKE SURE IT'S A LEVEL PLAYING FIELD ON 

THE CHIP SIDE AND WE WANT TO MAKE SURE THAT THE OEM IS COVERED 

TOTALLY WITH THE I.P. THAT WE GENERATE, MUCH OF IT OUTSIDE THE 

CHIP.

Q. WHEN YOU SAY YOU WANT TO CREATE A LEVEL PLAYING FIELD ON 

THE CHIP SIDE, CAN YOU DESCRIBE FOR US WHAT YOU MEAN? 

A. YEAH. WE WANT TO -- SINCE A NUMBER OF OUR -- SOME OF OUR 

I.P. IS IN THE CHIP AND SOME OF IT ISN'T. THERE ARE 

COMPETITORS WHO WOULD BE SELLING CHIPS THAT ARE USING OUR I.P. 

THAT IF WE PUT THE PRICE IN THE CHIP, IT WOULD CREATE A 

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SITUATION WHERE PEOPLE COULD BE SELLING A PRODUCT WITHOUT 

PAYING US FOR THE I.P. THAT'S KIND OF THE -- ONE OF THE 

REASONS WHY WE DO IT. 

Q. WHY DOESN'T QUALCOMM SIMPLY PRICE THE VALUE OF ITS 

INTELLECTUAL PROPERTY INTO THE CHIPS AND SELL IT -- RECOVER IT 

THAT WAY? 

A. WELL, I THINK IT'S -- I THINK IT'S, FIRST OF ALL, NOT THE 

WAY THE INDUSTRY HAS BEEN ORGANIZED AND RUNNING. IT'S BEEN 

RUNNING FOR A LONG TIME SO THAT THE LICENSING IS ACTUALLY AT 

THE DEVICE LEVEL. THAT'S ONE. 

AND ONE OF THE REASONS WHY THAT'S THERE IS I THINK IT'S 

THE MOST EFFICIENT PLACE TO DO IT, OTHERWISE THE LICENSING 

FRAMEWORK WOULD VERY, VERY, VERY CUMBERSOME. 

SO OUR PRACTICE IS ACTUALLY VERY CONSISTENT WITH WHAT THE 

INDUSTRY IS DOING, AND WE THINK IT'S VERY EFFICIENT.

Q. IF YOU ATTEMPTED TO PRICE THE FULL VALUE OF I.P. INTO YOUR 

CHIPS, WOULD YOU BE ABLE TO RECOVER ON THE PATENTED INVENTIONS 

THAT ARE OUTSIDE THE CHIPS? 

A. NO, NOT UNLESS WE LICENSED TO OTHER PEOPLE AS WELL.

Q. ALL RIGHT. AND DOES QUALCOMM GENERATE AND CREATE PATENTED 

INVENTIONS THAT ARE NOT EMBODIED IN THE CHIPS THEMSELVES?

A. YES.

Q. CAN YOU GIVE US SOME EXAMPLES OF THAT? 

A. SURE. SO I'LL JUST -- I'LL GO BACK TO -- SO IF YOU THINK 

OF QUALCOMM AS, YOU KNOW, THE COMPANY THAT WORKS ON THE 

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FUNDAMENTAL TECHNOLOGY THAT MAKES THE CELLULAR ECOSYSTEM 

HAPPEN -- AND WE'VE DONE THAT FOR MANY GENERATIONS -- WHAT 

WE'RE TRYING TO DO IS ANTICIPATE WHAT IS IT -- HOW -- WHAT DO 

YOU NEED TO INVENT SO THAT CERTAIN ECOSYSTEM, CELLULAR 

ECOSYSTEMS CAN HAPPEN. 

SO ONE OF THE REASONS THAT WE CAN MAKE A CALL ANYWHERE IN 

THE WORLD OR A DATA CALL ANYWHERE IN THE WORLD TO ANYWHERE ELSE 

IN THE WORLD IS BECAUSE PEOPLE HAVE GOTTEN TOGETHER AND 

BASICALLY FIGURED OUT HOW ALL THESE DEVICES WORK TOGETHER. HOW 

DOES A NETWORK WORK TOGETHER WITH A DEVICE? HOW DOES A DEVICE 

AUTHENTICATE? 

SO IT'S AS IF THEY GOT TOGETHER AND DETERMINED WHAT TYPE 

OF LANGUAGE THEY WANTED TO SPEAK. AND WHAT WE DO IS WE DO A 

BIG PORTION OF THE GRAMMAR OF THAT LANGUAGE AND WE ESSENTIALLY 

LICENSE THAT TO PEOPLE AND SHARE IT WITH THE STANDARDS BODIES. 

AND SO ULTIMATELY, YOU KNOW, IF YOU LOOK AT 5G, FOR 

EXAMPLE, THERE'S A WHOLE CLASS OF TECHNOLOGY THAT DEFINES THE 

SECURITY FRAMEWORK THAT ALLOWS, LET'S SAY, A DEVICE TO CONNECT 

TO THE NETWORK SECURELY ONE WAY OR THE OTHER. IT ACTUALLY 

ISN'T EMBODIED IN THE CHIP, IT'S NOT EMBODIED IN THE PHONE. 

IT'S ACTUALLY SOMETHING THAT'S IN BETWEEN ALL OF THOSE THINGS. 

QUALCOMM DOES A LOT OF THAT WORK. WE ACTUALLY DO ALL THAT 

FUNDAMENTAL WORK. THE SECURITY FRAMEWORK IN 5G IS A BIG 

EXAMPLE OF A BIG CLASS OF I.P. THAT WE WORK ON. 

SO IT'S PRETTY COMPLICATED. 

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LIKEWISE, EVEN THE PORTIONS OF THOSE I.P., THAT CLASS OF 

I.P. THAT WE GENERATE, IT'S NOT EVEN IMPLEMENTED IN ONE PLACE 

WITHIN THE PHONE. SO IF YOU LOOK WITHIN THE PHONE, IT MIGHT 

ACTUALLY BE IMPLEMENTED IN A PORTION OF THE PHONE THAT'S 

DIFFERENT FROM THE PRODUCT THAT QUALCOMM EVEN DELIVERS INTO 

THAT PRODUCT IF, IN FACT, THEY DELIVER A CHIP INTO THAT 

PRODUCT. 

SO THE POINT OF THAT IS THERE'S, THERE'S A TREMENDOUS 

AMOUNT OF I.P. THAT WE GENERATE THAT MAKES THE SYSTEM WORK THAT 

IS EITHER IN THE PHONE, IN THE CHIP, OR NOT IN THE PHONE OR THE 

CHIP, BUT JUST CONTROLS THE WAY THE NETWORK WORKS. 

Q. AND THE VALUE OF THAT INTELLECTUAL PROPERTY IS RECOVERED 

WHERE? 

A. THAT'S RECOVERED THROUGH OUR LICENSING BUSINESS. 

Q. YOU WERE ASKED A COUPLE OF QUESTIONS ABOUT CHIP SUPPLY 

DURING THE CROSS-EXAMINATION. 

LET'S START WITH A GENERAL QUESTION. WHAT, IN GENERAL, IS 

THE NATURE OF THE RELATIONSHIPS BETWEEN YOUR CHIP BUSINESS, 

QCT, AND YOUR CHIP CUSTOMERS, THE OEM'S? 

A. YEAH. I THINK IT'S EVEN, MAYBE EVEN BROADER. AT THE 

QUALCOMM LEVEL, ONE OF THE THINGS WE DO, WE HAVE A FAIRLY CLOSE 

RELATIONSHIP WITH OUR CUSTOMERS, PRIMARILY BECAUSE OF THE 

NATURE OF OUR BUSINESS. WE'RE -- AS I SAID, WE INVENT THE 

FUNDAMENTAL TECHNOLOGIES THAT MAKE THE CELLULAR ECOSYSTEM 

HAPPEN. SO IT'S VERY IMPORTANT FOR US TO UNDERSTAND WHERE OUR 

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CUSTOMERS AND WHERE OUR CUSTOMER'S CUSTOMERS. SO, FOR EXAMPLE, 

WE WANT TO KNOW WHERE SAMSUNG OR HTC, OR ANY OF THE HANDSET 

MANUFACTURERS, LENOVO, WHAT HAVE YOU, WE WANT TO KNOW WHAT THEY 

WANT TO DO WITH THEIR BUSINESS. 

BUT MORE IMPORTANTLY, WE ACTUALLY EVEN WANT TO KNOW WHAT 

THE CARRIERS WANT TO DO WITH THEIR BUSINESS, AND THAT'S SO THAT 

WE CAN CREATE CELLULAR TECHNOLOGIES THAT CAN CREATE THAT 

ECOSYSTEM. 

SO AS A RESULT, WE TEND TO HAVE A FAIRLY CLOSE 

RELATIONSHIP AT A SENIOR LEVEL WITH OUR CUSTOMERS, WE ACTUALLY 

CALL THEM PARTNERS, BECAUSE WE WANT TO MAKE SURE THAT WE KNOW 

THEIR STRATEGY, THEY KNOW OUR STRATEGY, AND WHAT TECHNOLOGIES 

WE'RE INVENTING AND IT CREATES A CLOSE BOND. 

LIKEWISE, WHEN WE'RE DELIVERING CHIP PRODUCTS, WHICH IS 

YOUR QUESTION, WE -- YOU KNOW, IT'S A VERY INVOLVED PROCESS. 

THE PRODUCT IS -- YOU KNOW, THESE ARE VERY COMPLICATED PRODUCTS 

AND WHAT HAPPENS IS THE ENGINEERING TEAMS TEND TO BE VERY CLOSE 

AND IT MIGHT TAKE FIVE, TEN YEARS TO BUILD THESE RELATIONSHIP 

S, AND WE THINK THAT'S A VERY IMPORTANT COMPONENT OF HOW WE RUN 

OUR BUSINESS IS MAKING SURE THAT THESE RELATIONSHIPS ONLY WITH 

OUR CUSTOMERS BUT WITH THE ECOSYSTEM IN GENERAL ARE MAINTAINED. 

Q. I'M GOING TO ASK YOU TO SLOW DOWN AGAIN, MR. MOLLENKOPF, 

BECAUSE WE'RE TRYING TO GET EVERY WORD? 

A. SURE.

Q. TO YOUR KNOWLEDGE, HAS QUALCOMM EVER STOPPED SHIPPING 

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809

CHIPS TO CUSTOMERS DURING OR BECAUSE OF A LICENSING DISPUTE? 

A. NO. 

Q. AND HAVE YOU EVER DIRECTED ANYONE AT QUALCOMM TO DISRUPT A 

CURRENT CUSTOMER'S CHIP SUPPLY DUE TO A LICENSING DISPUTE? 

A. NO.

Q. HAS ANYONE EVER ASKED YOU TO DISRUPT OR INTERFERE WITH A 

CUSTOMER'S CHIP SUPPLY AS A RESULT OF A LICENSING DISPUTE? 

A. NO. 

Q. ARE THERE OCCASIONS WHEN LICENSEES STOP PAYING ROYALTIES 

AND QUALCOMM CONTINUES TO SUPPLY CHIPS FOR PHONES?

A. I'M SORRY. CAN YOU SAY THAT AGAIN?

Q. ARE THERE OCCASIONS WHEN LICENSEES STOP PAYING ROYALTIES 

AS A RESULT OF A DISPUTE AND QUALCOMM CONTINUES TO SUPPLY 

CHIPS? 

A. YES. 

Q. WHY DOESN'T QUALCOMM DISRUPT OR STOP OR INTERFERE WITH 

CHIP SUPPLY IN THE CASE OF A DISPUTE WITH A LICENSEE? 

A. PRIMARILY IT'S BAD BUSINESS. IT ACTUALLY CREATES AN 

ENVIRONMENT THAT DOESN'T -- NUMBER ONE, IT ISN'T GOOD FOR THAT 

CUSTOMER RELATIONSHIP I MENTIONED. 

BUT IT ALSO TENDS NOT TO CREATE THE ENVIRONMENT TO RESOLVE 

WHATEVER DISPUTE YOU'RE TRYING TO RESOLVE. 

Q. WOULD IT HAVE AN IMPACT ON QCT'S REPUTATION IN THE 

BUSINESS COMMUNITY? 

A. YES.

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Q. WHAT WOULD THAT BE?

A. WELL, I THINK, YOU KNOW, AS I SAID, WE TEND TO -- IT TAKES 

A LONG TIME TO BUILD THOSE RELATIONSHIPS. WE'RE VERY CAREFUL 

TO MAKE SURE THAT WE DON'T DISRUPT THEM, AND I THINK IT'S VERY 

DIFFICULT TO CONTINUE TO BE A TOP TIER SUPPLIER, AS WE ALWAYS 

ENDEAVOR TO BE, IF YOU'RE NOT A RELIABLE SUPPLIER, AND THAT'S 

ONE OF THE KEY ELEMENTS IS TO MAKE SURE THEIR SUPPLY IS NOT 

DISRUPTED.

Q. YOU WERE ASKED A QUESTION OR TWO ABOUT SONY. AT SOME 

POINT IN 2012, DID YOU BECOME AWARE OF A LICENSING DISPUTE WITH 

SONY? 

A. I DID. 

Q. AND DID YOU GET INVOLVED IN THOSE DISCUSSIONS AT SOME 

LEVEL? 

A. I DID. 

Q. WHAT WAS THE BACKGROUND OR THE CONTEXT OF THE DISPUTE IN 

THE FIRST PLACE?

A. SONY WAS -- HAD A JOINT VENTURE WITH ERICSSON, AND THEY 

WERE RELYING ON ERICSSON'S, I THINK IT WAS THE WCDMA LICENSE. 

AND WHEN THAT JOINT VENTURE SEPARATED, THEY HAD TO GET A 

LICENSE, SO THERE WAS A LICENSE NEGOTIATION THAT OCCURRED BACK 

IN THAT TIMEFRAME.

Q. OKAY. AND AT SOME POINT DID THE CUSTOMER AT SONY REACH 

OUT DIRECTLY TO YOU?

A. HE DID.

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811

Q. WHO WAS THAT?

A. IT WAS BOB ISHIDA. 

Q. COULD WE HAVE ON THE -- WOULD YOU OPEN UP THE NOTEBOOK 

THAT WE GAVE YOU TO CX 7824. IT'S IN THE ONE THAT WE PROVIDED. 

A. YES.

Q. IS THAT AN E-MAIL CHAIN BETWEEN YOU AND MR. ISHIDA IN 

CONNECTION WITH THIS DISPUTE WITH SONY? 

A. YES. 

MR. VAN NEST: I'D OFFER CX 7824 IN EVIDENCE, YOUR 

HONOR. 

THE COURT: ANY OBJECTION? 

MS. MILICI: NO OBJECTION. 

THE COURT: IT'S ADMITTED. 

(PLAINTIFF'S EXHIBIT CX 7824 WAS ADMITTED IN EVIDENCE.) 

THE COURT: GO AHEAD, PLEASE. 

MR. VAN NEST: COULD WE DISPLAY IT ON THE SCREEN, AND 

GO TO THE VERY BOTTOM, THE LAST ENTRY, I THINK IT'S ON THE 

SECOND PAGE. THERE IT IS.

Q. IS THIS AN E-MAIL THAT YOU RECEIVED FROM MR. ISHIDA 

SOMETIME IN FEBRUARY OR SO OF 2012? 

A. YES.

Q. WHAT WAS MR. ISHIDA EXPLAINING ABOUT? 

A. HE HAD -- OUR TEAM HAD MISTAKENLY REALLY PUT IN A STOP 

SHIP FOR HIM, AND HE WAS CONCERNED ABOUT THAT. HE CALLED ME, 

AND THEN I INSTANTLY GOT INVOLVED AND TRIED TO WORK IT OUT FOR 

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HIM, KIND OF REALLY DE-ESCALATE THE SITUATION.

Q. DID YOU RESPOND QUICKLY? 

A. I DID. 

Q. COULD WE GO UP ON THE E-MAIL TO A COUPLE OF E-MAILS ABOVE 

FROM MR. MOLLENKOPF. YEAH. 

WHAT DID YOU TELL MR. ISHIDA? THIS IS THE SAME DAY OR 

LATER IN THE DAY? 

A. I TOLD HIM, THANKS FOR THE NOTE. I WASN'T AWARE, I SPOKE 

TO THE TEAM, THEY SENT YOU THE WRONG SIGNAL AND WILL MAKE SURE 

THAT NOTHING HAPPENS TO YOUR CHIP SUPPLY. 

Q. WHAT DID YOU COMMUNICATE TO THE TEAM? 

A. I COMMUNICATED THE SAME THING, DON'T, DON'T -- MAKE SURE 

THAT HIS CHIP SUPPLY IS NOT IMPACTED. 

AND THEN I ALSO SENT THEM A NOTE AND SAID IF ANYTHING LIKE 

THIS HAPPENS IN THE FUTURE, I WANT TO MAKE SURE I KNOW ABOUT 

IT, AND I KIND OF TALKED TO THEM ABOUT THE PROCESS INVOLVED AND 

I WANT TO MAKE SURE THAT, YOU KNOW, IT'S BROUGHT TO MY 

ATTENTION. 

Q. WOULD YOU OPEN UP THE SAME BINDER, MR. MOLLENKOPF, TO 

CX 6522. AND TELL ME IF YOU RECOGNIZE THAT AS AN E-MAIL CHAIN 

ON WHICH YOU WERE COPIED. 6522? 

A. 6522. 

Q. YEAH. 

I BELIEVE THIS IS IN EVIDENCE, YOUR HONOR. 

IS IT IN EVIDENCE? YEAH, IT'S IN EVIDENCE. LET'S PUT IT 

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ON THE SCREEN. 

THE COURT: IS IT ONE OF THE FTC'S EXHIBITS. 

MS. MILICI: IT MUST BE, YOUR HONOR. 

THE COURT: CAN YOU GIVE ME THE TAB NUMBER? 

MS. MILICI, CAN YOU GIVE ME THE TAB NUMBER, PLEASE. 

MS. MILICI: I THINK IT'S TAB 3, YOUR HONOR. 

MR. VAN NEST: YEAH. 

THE COURT: OKAY. THANK YOU. SORRY FOR THE 

INTERRUPTION. 

MR. VAN NEST: THAT'S OKAY, YOUR HONOR. ON THE 

SECOND PAGE, CAN.

WE HIGHLIGHT THE TOP OF THE PAGE. 

Q. IS THIS AN E-MAIL THAT YOU SENT ON OR ABOUT THE SAME DAY 

YOU HEARD FROM MR. ISHIDA? 

A. YES. 

Q. AND TELL US WHAT YOU WERE TRYING TO COMMUNICATE TO YOUR 

TEAM HERE. 

A. WHAT I WAS COMMUNICATING WAS ESSENTIALLY I'M NOT HAPPY AND 

LET'S, LET'S MAKE SURE THAT IF SOMETHING LIKE THIS HAPPENS 

AGAIN, BEFORE IT HAPPENS, MAKE SURE I KNOW ABOUT IT. 

Q. NOW, DID SUPPLY CONTINUE TO SONY? 

A. YES. 

Q. WHAT HAPPENED WITH RESPECT TO THE NEGOTIATIONS? DID THEY 

GO ON FOR SOME TIME?

A. THEY DID. I THINK THEY WENT ON THROUGH THE FALL. WE GAVE 

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THEM A COUPLE OF INTERIM AGREEMENTS TO TRY TO MAKE SURE THAT 

THERE WASN'T PRESSURE ON THE TEAMS. 

ULTIMATELY, WE ENDED UP RESOLVING IT I THINK IN THE 

SUMMER -- OR EXCUSE ME -- IN THE FALL, OCTOBER, NOVEMBER 

TIMEFRAME. 

AND THEN WE MOVED ON. THEY REMAIN A CUSTOMER AND BOB 

REMAINS A FRIEND. 

Q. HAS QUALCOMM CONSIDERED SPLITTING UP THE CHIP AND THE 

LICENSING BUSINESS IN THE PAST?

A. WE HAVE. 

Q. WAS THERE A DISCUSSION ABOUT THAT BACK IN 2015? 

A. THERE WAS. 

Q. SOME EVALUATION WAS DONE BY THE COMPANY AND BY THE BOARD? 

A. YES. 

THE COURT: I'M SORRY TO INTERRUPT YOU. THIS EXHIBIT 

WAS NOT ADMITTED, 6522. 

MR. VAN NEST: I APOLOGIZE, YOUR HONOR. 

THE COURT: DO YOU WANT TO MOVE IT IN? 

MR. VAN NEST: I DO. 

THE COURT: OKAY. I ASSUME THERE'S NO OBJECTION? 

MS. MILICI: THERE'S NO OBJECTION. YOUR HONOR, I 

BELIEVE THAT IT WAS ADMITTED, BUT WE CAN SORT THAT OUT LATER. 

WE HAVE NO OBJECTION. 

THE COURT: OH, IT WAS ADMITTED UNDER MARK DAVIS? 

MS. MILICI: YES. 

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815

THE COURT: OKAY. I APOLOGIZE. 

MS. MILICI: I'M SORRY. I'M BEING TOLD IT WAS WITH 

ERIC REIFSCHNEIDER, YOUR HONOR. 

THE COURT: REIFSCHNEIDER, OKAY. THANK YOU. MY 

MISTAKE. I APOLOGIZE. 

MR. VAN NEST: OKAY. 6522 IS IN EVIDENCE JUST TO BE 

SURE. 

Q. SO LET'S GO BACK TO 2015 TIMEFRAME. 

WHAT CONCLUSION OR RECOMMENDATION DID MANAGEMENT MAKE TO 

THE BOARD IN CONNECTION WITH THIS DISCUSSION ABOUT SPLITTING UP 

THE COMPANY? 

A. OUR RECOMMENDATION WAS TO NOT SPLIT THE COMPANY. 

AND JUST TO BE PRECISE, WE ACTUALLY MADE THE 

RECOMMENDATION TO THE SPECIAL COMMITTEE, THERE WAS A SPECIAL 

COMMITTEE, AND THEN ULTIMATELY IT WENT TO THE FULL BOARD. I 

THINK THE RECOMMENDATION WENT TO THE COMMITTEE.

Q. AND WAS THE RECOMMENDATION TO KEEP THE COMPANY TOGETHER 

CONSISTENT WITH YOUR OWN PERSONAL VIEWS, MR. MOLLENKOPF? 

A. YES.

Q. WERE YOU THE CEO OF THE COMPANY BY THIS TIME? 

A. YES.

Q. AND CAN YOU EXPLAIN TO US WHAT WERE THE REASONS UPON WHICH 

YOU BASED YOUR RECOMMENDATION THAT THE COMPANY STAY TOGETHER AS 

ONE? 

A. AT A HIGH LEVEL, THE VIEW WAS, OR MY VIEW WAS THAT IT WAS 

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REALLY THE BEST STRUCTURE THAT WE COULD CONTINUE TO DELIVER 

TECHNOLOGY BROADLY. SO TO THE ECOSYSTEM, TO OUR CUSTOMERS, TO 

OUR PARTNERS, AND IT WOULD CONTINUE TO BE SUCCESSFUL MOVING 

FORWARD. 

THE LICENSING BUSINESS ALLOWS US TO INVEST IN TECHNOLOGY 

EARLY. IT GENERATES A LOT OF I.P., AS I MENTIONED. 

THE CHIP BUSINESS ALLOWS US TO NOT ONLY INVENT 

TECHNOLOGIES THAT ARE RELEVANT, BUT IT REALLY HELPS US DELIVER 

THOSE TECHNOLOGIES TO MANY DIFFERENT CUSTOMERS AND TO THE 

ECOSYSTEM. 

LIKEWISE, IT ALSO GENERATES, THAT IS, THE CHIP BUSINESS 

GENERATES I.P. THAT GOES BACK TO THE LICENSING BUSINESS AND IT 

ENHANCES THE VALUE OF THE PORTFOLIO AND WHAT WE LICENSE OUT TO 

OUR CUSTOMERS. 

AND SO WE THOUGHT THAT CONTINUES TO BE THE RIGHT 

TECHNOLOGY TO DRIVE VALUE FOR THE SHAREHOLDER, BUT ALSO THE 

RIGHT TECHNOLOGY TO CONTINUE TO DRIVE TECHNOLOGY, YOU KNOW, 

THINGS TO OUR PARTNERS AND TO OUR CUSTOMERS.

Q. COULD YOU OPEN YOUR NOTEBOOK, THE ONE THAT THE FTC GAVE 

YOU, TO FIVE 913. THAT'S THE VERY BIG NOTEBOOK. 

AND COULD WE HAVE IT ON THE SCREEN. 

IT'S IN EVIDENCE, YOUR HONOR. IT WAS ADMITTED. 

I WANT TO CALL YOUR ATTENTION TO THE PARAGRAPH, OR A 

PARAGRAPH THERE, THE SECOND HALF OF THE PAGE. 

A. THIS IS 5913. 

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MOLLENKOPF CROSS BY MR. VAN NEST

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817

Q. 5913, THAT'S RIGHT. 

A. YEAH. 

Q. THIS IS AN E-MAIL TO YOU FROM MR. WISE, AND I'VE 

HIGHLIGHTED ON THE SCREEN THE LANGUAGE THERE. 

FIRST OF ALL, IS THIS A DISCUSSION IN GENERAL ABOUT THIS 

POTENTIAL SPLITTING UP OF THE COMPANY?

A. YES. 

Q. AND IN THE PARAGRAPH CITED IT SAYS, "MUCH MORE ABOUT OUR 

STRENGTH IN THE STANDARDS PROCESS AND REGULATORY. IF SEPARATE, 

QTL MAY BE ISOLATED AND INEFFECTIVE AT GETTING TECH INTO THE 

STD," STANDARD. 

WHAT WAS YOUR UNDERSTANDING OF MR. WISE'S COMMENT THERE? 

A. WHAT DAVE WAS SAYING, DAVE WISE WAS SAYING WAS THAT 

WITHOUT THE ABILITY TO DELIVER THE TECHNOLOGY AND NOT JUST 

INVENT IT, OUR ABILITY, OR THE RELEVANCE OF OUR INVENTIONS 

MIGHT BE IMPACTED, AND, THEREFORE, THE LONG TERM POTENTIAL OF 

THE COMPANY COULD BE IMPACTED. 

SO, FOR EXAMPLE, YOU KNOW, A COMPANY THAT CANNOT ONLY HAS 

A TRACK RECORD OF INVENTING TECHNOLOGY, BUT ALSO HAS A TRACK 

RECORD OF DELIVERING THAT TECHNOLOGY IS IN A STRONGER POSITION 

TO, TO, YOU KNOW, TO DELIVER TECHNOLOGY NOT ONLY TO THE 

STANDARDS BODY, BUT OBVIOUSLY DOWNSTREAM, AND WE THOUGHT THAT 

THAT WAS A GOOD COMBINATION TO MAINTAIN. 

Q. NOW, WE'VE SEEN SOME DISCUSSION, WE'VE SEEN SOME SLIDE 

DECKS FROM BOSTON CONSULTING GROUP. 

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MOLLENKOPF CROSS BY MR. VAN NEST

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818

WHAT ROLE DID BOSTON CONSULTING GROUP HAVE IN THIS 

DISCUSSION ABOUT SPLITTING THE COMPANY? 

A. THEY WERE ONE OF THE INDEPENDENT ADVISORS THAT THE SPECIAL 

COMMITTEE HIRED. THEY HIRED A NUMBER OF DIFFERENT ADVISORS, 

STRATEGIC ADVISORS, AND THEY WERE ONE OF THEM. 

Q. DID YOU INTERACT WITH THEM AT ALL PRIOR TO MAKING YOUR 

RECOMMENDATION THAT THE COMPANY BE KEPT TOGETHER AS ONE? 

A. I INTERACTED WITH THEM, BUT THEY WERE NOT ADVISING THE 

MANAGEMENT TEAM. THEY WERE ADVISING THE INDEPENDENT COMMITTEE. 

Q. LET'S TALK ABOUT APPLE AND THE TRANSITION AGREEMENT WHICH 

CAME ABOUT IN EARLY 2011. 

YOU WERE ASKED SOME QUESTIONS ABOUT THAT. 

BUT I'D LIKE TO STEP BACK AND ASK YOU, HOW DID THE 

AGREEMENT COME ABOUT IN THE FIRST PLACE? WHOSE PROPOSAL WAS 

IT? 

A. THIS IS IN 20 -- 

Q. THIS IS IN 2010. 

A. OKAY.

Q. WHAT WE'VE BEEN CALLING THE TRANSITION AGREEMENT. 

TELL US, HOW DID IT COME ABOUT AND WHO PROPOSED IT. 

A. IT WAS APPLE CAME TO US AND THEY WANTED TO GO WITH US IN A 

BIG WAY, MEANING THAT THEY WANTED TO USE US AS A SINGLE SKU. 

Q. WHAT'S A SKU?

A. A SKU WOULD BE A, A -- ACTUALLY, QUITE FRANKLY, I ALWAYS 

FORGET WHAT IT MEANS. BUT IT ESSENTIALLY MEANS A PLATFORM. 

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MOLLENKOPF CROSS BY MR. VAN NEST

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819

SO THINK OF IT AS THE DESIGN PLATFORM THAT A PHONE IS 

BASED OFF OF FOR -- SO THE DESIGN SKU IS -- I SHOULD KNOW, BUT 

I DON'T. 

SO ESSENTIALLY THEY WANTED TO USE OUR CHIP FOR 100 PERCENT 

OF THEIR IPHONES, AND THEY WANTED TO SEE WHETHER WE WERE 

INTERESTED IN IT. 

BUT THEY WANTED US TO PAY THEM, I THINK IT WAS A BILLION 

DOLLARS, IN ORDER TO GET THAT OPPORTUNITY. 

Q. HOW DID YOU FIRST LEARN ABOUT THE PROPOSAL? 

A. IT WAS AT A MEETING IN CUPERTINO.

Q. WHO WAS THERE? 

A. ON OUR SIDE IT WAS PAUL JACOBS, STEVE ALTMAN, MYSELF. I 

CAN'T REMEMBER IF THERE WAS ANYBODY ELSE THERE FROM THE 

QUALCOMM SIDE. 

ON THE APPLE SIDE THERE WAS TIM COOK, JEFF WILLIAMS, AND I 

THINK BRUCE SEWELL. 

Q. OKAY. AND WHAT DID YOU UNDERSTAND THEM TO BE PROPOSING IN 

CONNECTION WITH THE OVERALL -- LET ME BACK UP. 

DID THEY HAVE A PRODUCT FOR THE EXISTING IPHONE, A MODEM 

PRODUCT? 

A. THEY DID.

Q. AND WHO WAS PROVIDING THAT? 

A. I THINK IT WAS INFINEON OR INTEL. I DON'T REMEMBER WHEN 

THEY WERE ACQUIRED. 

Q. OKAY. WHAT WAS YOUR UNDERSTANDING OF WHY THEY WERE ASKING 

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MOLLENKOPF CROSS BY MR. VAN NEST

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820

YOU TO REPLACE THE INFINEON? 

A. I THINK WE HAD -- YOU KNOW, I THINK WE HAD THE BEST 

PRODUCT, QUITE FRANKLY. I THINK WE HAD THE BROADEST EXTENT OF 

TECHNOLOGIES, THE ABILITY TO GO INTO MORE MARKETS. 

AND I WOULD ALSO, YOU KNOW, SUGGEST AT THAT TIME WE LIKELY 

HAD THE BEST ROADMAP, ROADMAP MEANING OUR PLANS FOR FUTURE 

PRODUCTS WAS PROBABLY A LITTLE STRONGER THAN SOME OF THE 

COMPETITION. 

WHAT I DON'T REMEMBER WAS WHETHER THEY HAD A CDMA PHONE AT 

THE SAME TIME AND HAD SOME EXPERIENCE WITH US, BUT WE CLEARLY 

HAD A GOOD REPUTATION FOR SUPPLY. I JUST DON'T REMEMBER THE 

EXACT TIMING.

Q. AND WHAT WAS THE BASIS FOR THE BILLION DOLLARS ASK FROM 

APPLE TO QUALCOMM? 

A. IT WAS, IT WAS KIND OF A TRANSITION, KIND OF PRETTY 

TYPICAL IN CERTAIN INDUSTRIES FOR SOMEONE TO ASK FOR FUNDS TO 

OFFSET THE COST OF MOVING TO YOUR PLATFORM. I WILL TELL YOU, A 

BILLION DOLLARS IS NOT TYPICAL IN TERMS OF THE SIZE, IT'S A 

LARGE NUMBER. 

BUT THAT WAS WHAT IT WAS FOR. IT WAS AN INCENTIVE IN 

ORDER TO GET THAT DESIGN OPPORTUNITY.

Q. THEY WERE ASKING YOU TO PAY THAT MONEY?

A. THAT'S CORRECT.

Q. AND WHAT DID THEY SAY ABOUT WANTING QUALCOMM AS THE SOLE 

SUPPLIER FOR THE NEW IPHONE PLATFORM?

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

821

A. THEY REQUESTED IT.

Q. WHY? 

A. I -- I CAN ONLY GUESS, BUT I THINK IT'S BEST PRICE -- 

Q. DON'T GUESS. DON'T GUESS. 

A. YEAH. 

Q. DID THEY MAKE IT CLEAR THAT THEY WANTED TO USE EXCLUSIVELY 

THE QUALCOMM PRODUCT? 

A. YES, FOR 100 PERCENT OF THEIR VOLUME. 

Q. NOW, FOLLOWING THAT, WAS THERE A SERIES OF NEGOTIATIONS 

WITH THE FOLKS FROM APPLE? 

A. YES.

Q. DID YOU PARTICIPATE IN THOSE NEGOTIATIONS? 

A. YES. 

Q. DID APPLE HAVE ANY LEVERAGE IN THESE DISCUSSIONS WITH 

QUALCOMM? 

A. WE CERTAINLY FELT -- I CERTAINLY FELT IT, YES.

Q. WHAT WAS IT? 

A. THEIR -- THEY'RE A HUGE OPPORTUNITY. THERE'S A LOT OF 

VOLUME, THERE'S A LOT OF BUSINESS AT STAKE. AND, YOU KNOW, ANY 

SITUATION LIKE THAT, YOU'RE TRYING TO GET IT DONE. 

Q. DID QUALCOMM HAVE ANY LEVERAGE IN THE DISCUSSIONS? 

A. OTHER -- OTHER THAN THE -- YOU KNOW, WE THOUGHT WE HAD THE 

BEST PRODUCT, NOT MUCH. 

THE COURT: SORRY. I'M GOING TO INTERRUPT. IT'S 

4:00 O'CLOCK NOW. LET'S TAKE A TEN MINUTE BREAK. 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

822

MR. VAN NEST: THANK YOU, YOUR HONOR. 

THE COURT: ALL RIGHT. LET'S TAKE A BREAK. THANK 

YOU. 

(RECESS FROM 4:00 P.M. UNTIL 4:10 P.M.) 

THE COURT: OKAY. GOOD AFTERNOON. WELCOME. PLEASE 

TAKE A SEAT. 

I'LL GIVE EVERYONE A CHANCE TO SIT DOWN. PEOPLE ARE STILL 

MOVING. 

ALL RIGHT. MR. VAN NEST, PLEASE CONTINUE. IT'S 4:11. 

MR. VAN NEST: THANK YOU, YOUR HONOR. 

Q. MR. MOLLENKOPF, WE WERE TALKING ABOUT YOUR NEGOTIATIONS 

WITH APPLE FOR THE FIRST TRANSITION AGREEMENT BACK IN 2010. 

WAS A DEAL EVENTUALLY ARRIVED AT? 

A. IT WAS. 

Q. AND CAN YOU EXPLAIN TO THE COURT WHAT THE BASIC STRUCTURE 

OF THE AGREEMENT WAS? WHAT WAS APPLE PROVIDING? WHAT WAS 

QUALCOMM PROVIDING? 

A. SURE. 

Q. JUST AT A HIGH LEVEL. 

A. YEAH. WE -- WE -- ESSENTIALLY I THINK IT WAS ABOUT A 

THREE YEAR DEAL. IN THAT TIME PERIOD, WE WOULD SELL THEM CHIPS 

FOR 100 PERCENT OF THEIR IPHONES. 

THEY -- WE WOULD PAY THEM A BILLION DOLLARS IN INCENTIVE 

FOR THAT; AND THEN WE WOULD -- THERE WAS A LOT OF NEGOTIATION 

ABOUT THE SCHEDULE OF THAT, BUT ESSENTIALLY -- 

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MOLLENKOPF CROSS BY MR. VAN NEST

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823

THE COURT: HAS THAT INFORMATION BEEN UNSEALED OR HAS 

IT BEEN SEALED? 

MR. VAN NEST: I THINK THAT PART HAS BEEN KNOWN AND 

NOT SEALED. 

THE COURT: OKAY. 

MR. VAN NEST: THAT NUMBER. 

THE COURT: ALL RIGHT. GO AHEAD, PLEASE. 

THE WITNESS: AND ESSENTIALLY IT WORKED OUT. WE GOT 

TO AN AGREEMENT, AND I THINK IT WORKED OUT FOR BOTH PARTIES. 

BY MR. VAN NEST: 

Q. NOW, YOU SAID 100 PERCENT OF THE VOLUME. WHAT DID YOU 

MEAN BY THAT? 

A. IT -- WE WERE -- THEY WANTED TO GO TO ESSENTIALLY A SINGLE 

SKU, OR A SINGLE PLATFORM BASED ON OUR CHIPSET THAT THEY COULD 

USE EVERYWHERE IN THE WORLD FOR ALL THE MODELS. 

THE COURT: YOU KNOW, CAN I INTERRUPT YOU? I THINK I 

HAVE BEEN SEALING THAT IN THE APPLE SEALING MOTIONS, THE EXACT 

INCENTIVE PAYMENT AMOUNT. 

MR. VAN NEST: THAT WASN'T MY UNDERSTANDING, YOUR 

HONOR. 

THE COURT: WELL, I WOULD NEED TO GO BACK AND CHECK 

IT. 

MR. VAN NEST: WE CAN CERTAINLY -- I'LL MOVE ALONG. 

WE CAN CERTAINLY SEAL IT POST -- 

THE COURT: WELL, HE'S NOW DONE IT TWICE. 

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MOLLENKOPF CROSS BY MR. VAN NEST

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824

IF IT TURNS OUT THAT I SEALED IT, I'M GOING TO BE REALLY 

DISAPPOINTED THAT QUALCOMM IS JUST DOING THIS PERHAPS FOR THE 

MEDIA, OR I DON'T KNOW WHO ELSE. 

MR. VAN NEST: NO, NO, NOT THE MEDIA. 

THE COURT: I'VE BEEN SEALING THE NUMBERS IN THAT 

AGREEMENT. 

MR. VAN NEST: IT WAS MY UNDERSTANDING THAT NUMBER 

WAS NOT CONFIDENTIAL. 

THE COURT: ALL RIGHT. I'LL HAVE TO CHECK IT LATER. 

GO AHEAD, PLEASE. I APOLOGIZE IF IT'S MY MISTAKE. 

MR. VAN NEST: AND LIKEWISE IF IT WAS MINE. 

THE WITNESS: CAN I JUST MAKE SURE I DON'T DO 

SOMETHING AGAIN. WHAT -- 

MR. VAN NEST: WE'RE NOT GOING TO TALK ABOUT THE -- 

THE COURT: THE NUMBER THAT YOU'VE THROWN OUT TWICE, 

I BELIEVE I'VE SEALED. SO IF I HAVE, I PREFER THAT YOU NOT DO 

THAT BECAUSE OTHER THIRD PARTIES CAN CERTAINLY DO THAT WITH 

QUALCOMM'S INFORMATION, WHICH I ASSUME YOU WOULD NOT 

APPRECIATE. A LOT OF ROYALTY NUMBERS OF QUALCOMM'S IN THIS 

CASE THAT I'VE BEEN SEALING. SO -- 

BY MR. VAN NEST: 

Q. IN ANY EVENT -- 

THE COURT: OKAY. 

BY MR. VAN NEST: 

Q. -- MR. MOLLENKOPF, DID APPLE -- WERE YOU SEEKING A MINIMUM 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

825

VOLUME COMMITMENT AS PART OF THIS TRANSACTION? 

A. WE TRIED TO. WE WERE TRYING TO GET EITHER VOLUME BASED 

PRICING OR SOME FORM OF OTHER INCENTIVE STRUCTURE, AND WE ENDED 

UP GETTING THE INCENTIVE STRUCTURE THAT WAS IN THE AGREEMENT. 

APPLE TENDS NOT TO DO, AT LEAST IN MY EXPERIENCE, DOESN'T DO 

VOLUME COMMITMENTS.

Q. THEN WHY DID YOU WANT A VOLUME COMMITMENT? WHAT WERE YOU 

TRYING TO PROTECT? 

A. WELL, IT'S A -- FIRST OF ALL, THERE'S A PRETTY BIG 

INCENTIVE, IT'S A HUGE INCENTIVE, AND WE WANT TO MAKE SURE THAT 

IF WE PAY THAT MONEY, WE DON'T -- YOU KNOW, WE GET VOLUME TO 

OFFSET IT. IT'S PRETTY RISKY, ACTUALLY. 

LIKEWISE, IT WAS ALSO A PRETTY SUBSTANTIAL INVESTMENT IN 

ORDER TO SERVICE APPLE BUT PRIMARILY WANT TO MAKE SURE THAT WE 

DON'T PAY AN INCENTIVE AND DON'T GET VOLUME.

Q. YOU MENTIONED THIS WAS RISKY. WERE THERE DELIBERATIONS 

WITHIN QUALCOMM OVER THE RISK OF ENTERING INTO THIS AGREEMENT? 

A. YES. 

Q. AND I'D LIKE YOU TO OPEN YOUR BINDER, THE FTC BINDER, TO 

JX 55. 

AND I'M GOING TO CLOSE IT OFF FROM THE SCREEN, YOUR HONOR. 

JX 55 IS IN EVIDENCE, BUT I BELIEVE PORTIONS OF IT ARE 

SEALED. 

IF YOU COULD -- IT'LL BE ON YOUR SCREEN AS WELL, AND I'M 

LOOKING AT THE BOTTOM OF PAGE 006. 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

826

DO WE HAVE IT ON THE INDIVIDUAL MONITORS? 

SO THERE'S A SENTENCE I WANT YOU JUST TO LOOK AT YOURSELF. 

"THIS OFFER HAS US PAY TOO MUCH," ET CETERA, ET CETERA. 

A. I'M SORRY. 

Q. DO YOU SEE THAT? 

A. I DON'T, ACTUALLY.

Q. CAN WE HAVE IT HIGHLIGHTED AT THE BOTTOM OF THE PAGE? 

A. NOW I SEE IT, YEAH.

Q. SO WITHOUT TALKING ABOUT ANY OF THE NUMBERS HERE, CAN YOU 

JUST DESCRIBE WHAT THE DEBATE WAS WITHIN QUALCOMM ABOUT WHETHER 

OR NOT TO ENTER INTO THE TRANSITION AGREEMENT? WHAT WERE YOU 

CONCERNED ABOUT? 

A. WE WERE REALLY TRYING TO FIGURE OUT DO WE -- YOU KNOW, ARE 

WE GOING TO GET THE VOLUME THAT WE NEEDED TO GET IN ORDER TO 

MAKE THE BUSINESS DEAL WORK? 

SO WE'RE, WE'RE GOING THROUGH TRYING TO FIGURE OUT, YOU 

KNOW, HOW MUCH INCENTIVE IS LESS -- IT'S REALLY A DISCUSSION 

ABOUT HOW -- WHAT'S THE PAYMENT STRUCTURE OF THE INCENTIVE TO 

MAKE SURE THAT IT'S GOING TO WORK, AND, YOU KNOW, SOMEONE 

COULDN'T GAME THE, GAME THE STRUCTURE AND, THEREFORE, END UP 

WITH, YOU KNOW, WE PAY THE INCENTIVE AND DON'T GET THE VOLUME.

Q. OKAY. AND DID APPLE RETAIN THE RIGHT, THROUGHOUT THE 

FIRST TRANSITION AGREEMENT, TO BRING IN A SECOND SOURCE? 

A. THEY DID.

Q. AND IS THAT SOMETHING THEY NEGOTIATED FOR? 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

827

A. THEY DID. 

Q. AND IF THEY HAD BROUGHT IN A SECOND SOURCE, THEN WHAT 

WOULD QUALCOMM'S RIGHTS HAVE BEEN? 

A. WE ESSENTIALLY WOULDN'T HAVE TO PAY CERTAIN INCENTIVES 

DEPENDING ON THE SCHEDULE THAT CAME IN. BUT THEY WERE ALLOWED 

TO BRING IN A SOURCE.

Q. OKAY. WE SAW A COUPLE OF DOCUMENTS IN WHICH YOU REFER TO 

EXCLUSIVITY AS AN OBJECTIVE OF THE AGREEMENT. 

WHAT DID YOU MEAN BY THAT? 

A. WHAT I MEANT WAS, YOU KNOW, THE STRUCTURE OF 100 PERCENT 

OF THE VOLUME, YOU KNOW, TYPICALLY IT WOULD BE OFFSET BY AN 

INCENTIVE, BUT THAT'S REALLY WHAT WE'RE REFERRING TO, THAT 

DISCUSSION THAT YOU JUST MENTIONED.

Q. WHY WERE YOU SHOOTING FOR 100 PERCENT OF THE VOLUME? 

A. WELL, WE WANTED TO MAKE SURE THERE WAS ENOUGH VOLUME SO 

THAT WE COULD OFFSET THE INCENTIVE. IT WAS A VERY LARGE 

INCENTIVE, SO WE WANTED TO MAKE SURE WE WEREN'T AT RISK, 

THEREFORE, PAY THE INCENTIVE AND NOT GET THE VOLUME.

Q. AND AS OF THE TIME THAT YOU WENT INTO THE FIRST TRANSITION 

AGREEMENT, BASED ON YOUR PROJECTIONS, WERE YOU PROJECTING TO 

MAKE A PROFIT? 

A. WE WERE. 

Q. AND DID YOU EARN A PROFIT UNDER THE FIRST TRANSITION 

AGREEMENT? 

A. YES. IT WAS A GOOD BUSINESS.

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MOLLENKOPF CROSS BY MR. VAN NEST

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828

Q. AND DID THAT TAKE INTO ACCOUNT THE INCENTIVE PAYMENTS THAT 

YOU MADE? 

A. YES.

Q. I TAKE IT YOU MADE THE INCENTIVE PAYMENTS AND THE FIRST 

TRANSITION AGREEMENT WAS COMPLETED AND PERFORMED BY BOTH 

PARTIES? 

A. CORRECT. 

Q. AND AS A RESULT OF THAT, DID QUALCOMM EARN A PROFIT ON THE 

TRANSACTION? 

A. YES. 

Q. WAS THERE A SECOND TRANSITION AGREEMENT? 

A. THERE WAS. 

Q. DID YOU -- WERE YOU INVOLVED IN NEGOTIATING THAT?

A. I WAS.

Q. CAN YOU TELL THE COURT, WHAT WERE THE CIRCUMSTANCES THAT 

BROUGHT THE SECOND TRANSITION AGREEMENT INTO PLAY? 

A. WE WERE -- THE FIRST AGREEMENT, IT EXPIRED AT THE END OF, 

I THINK IT WAS 2012. 

AND THEN WE HAD A DISCUSSION WITH APPLE, AND I THINK WE 

BOTH AGREED THAT WE WOULD MOVE FORWARD WITH THE AGREEMENT. WE 

HAD A LOT OF DISCUSSION THEN ABOUT AN ADDITIONAL SET OF 

INCENTIVES, IT WAS A DIFFERENT NUMBER. 

AND WE MOVED FORWARD. 

Q. WAS THE STRUCTURE OF THE SECOND AGREEMENT SIMILAR TO THE 

STRUCTURE OF THE FIRST AGREEMENT, EXCEPT POSSIBLY FOR THE, SOME 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

829

OF THE FINANCIAL TERMS? 

A. YEAH, YEAH IT WAS SIMILAR.

Q. AND IN THE NEGOTIATIONS OVER THE SECOND AGREEMENT, DID 

APPLE HAVE LEVERAGE OVER QUALCOMM AT THAT POINT? 

A. IT DID. 

Q. WHAT WAS THAT? 

A. AGAIN, THEY HAD A LOT OF VOLUME. IT'S A BIG BUSINESS. I 

THINK ANYBODY WOULD WANT TO GET IT, AND THEY KNOW. 

AND SO, YOU KNOW, THEY REALLY -- THAT WAS REALLY THE KEY 

LEVERAGE. 

Q. NOW, AT THE TIME YOU ENTERED INTO THE SECOND TRANSITION 

AGREEMENT, DID YOU PROJECT FINANCIAL PERFORMANCE UNDER THE 

SECOND TRANSITION AGREEMENT? 

A. WE DID. 

Q. COULD YOU TURN IN YOUR BINDER, THE LARGE BINDER, TO 

CX 5389? 

YOUR HONOR, THIS IS IN EVIDENCE, BUT IT'S BEEN SEALED. 

A. I'M SORRY. CAN YOU SAY THE NUMBER AGAIN?

Q. IT'S 5389 IN THE LARGE BINDER. 

ACTUALLY, I'M NOT SURE IT'S IN EVIDENCE, SO LET'S LOOK AT 

IT FIRST AND -- 

THE COURT: I THINK IT IS. 

MR. VAN NEST: I THINK IT IS, TOO.

THE WITNESS: WHEN IT'S ON THE SCREEN.

BY MR VAN NEST:

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

830

Q. DO YOU HAVE IT ON THE SCREEN? 

A. WHEN IT'S THERE, I'LL LOOK.

Q. IS THIS A CHART THAT YOU PARTICIPATED IN PREPARING AT OR 

ABOUT THE TIME OF THE SECOND TRANSITION AGREEMENT? 

A. YES. 

Q. AND WHAT IS IT INTENDED TO REFLECT? WHAT IS IT SHOWING 

US? 

A. I DON'T SEE THE CHART ACTUALLY. 

Q. OH, CAN WE PUT THE CHART UP, MR. DAHN, FROM PAGE 11? 

I'M SORRY. THIS PAGE IS SEALED. 

A. I GOT IT. 

Q. PART OF IT IS SEALED, YOUR HONOR, I THINK. SOME OF IT IS 

SEALED. BUT I'LL SEAL THE WHOLE THING. 

WHAT DO THESE PROJECTIONS RELATE TO? 

A. THEY RELATE TO THE BUSINESS IN THE SECOND DEAL.

Q. AND CALLING YOUR ATTENTION DOWN TOWARDS THE BOTTOM OF THE 

PAGE, THERE'S A, A COLUMN IN BOLD, NET REVENUE M'S. WHAT DOES 

THAT REFER TO? 

A. THAT REFERS TO THE REVENUE NET OF THE INCENTIVE PAYMENTS 

THAT WE MADE UNDER BOTH AGREEMENTS.

Q. OKAY. AND THE NUMBERS TO THE RIGHT THERE, THEY'RE 

REFLECTED IN MILLIONS? 

A. YES. 

Q. AND THOSE ARE NET OF THE TOTAL INCENTIVE PAYMENTS UNDER 

THE SECOND TRANSITION AGREEMENT? 

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MOLLENKOPF CROSS BY MR. VAN NEST

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831

A. YES. 

Q. AND THEN BELOW THAT, ASP, WHAT DOES THAT MEAN? 

A. THAT'S THE PRICE PER CHIP. SO YOU COULD ESSENTIALLY 

DIVIDE THAT REVENUE NUMBER BY THE TOTAL UNITS.

Q. OKAY. AND THEN THERE'S A DIRECT MARGIN M'S. WHAT IS 

THAT? 

A. THAT'S THE -- THAT'S THE AMOUNT OF DIRECT MARGINS, SO YOU 

TAKE THE REVENUE AND SUBTRACT OUT THE COST OF THE PRODUCT. 

THAT'S HOW MUCH MONEY WE WOULD MAKE ON THAT BUSINESS PER YEAR.

Q. SO GOING ON THAT COLUMN, WITHOUT GETTING INTO THE NUMBERS, 

GOING ALL THE WAY TO THE RIGHT, THERE'S A PROJECTION THERE FOR 

THE TOTAL. 

WHAT DOES THAT NUMBER REPRESENT? 

A. I'M SORRY. COULD YOU TELL ME WHERE THAT IS.

Q. ON DIRECT MARGIN M'S, IF YOU GO TO THE RIGHT ON THAT ROW? 

A. YEAH. 

Q. THERE'S A NUMBER AT THE FAR RIGHT THAT REFLECTS -- SAYS 

TOTAL? 

A. YEAH.

Q. I DON'T WANT THE NUMBER, BUT WHAT DOES IT REPRESENT? 

A. IT REPRESENTS THE OVERALL BUSINESS OVER THAT PERIOD OF 

TIME THAT WE WOULD HAVE HAD IN DIRECT MARGIN, MEANING THE MONEY 

THAT WE WOULD HAVE GOTTEN.

Q. SO I TAKE IT FROM THIS YOU WEREN'T PROJECTING THIS 

TRANSACTION, THIS AGREEMENT, TO BE SOME KIND OF A LOSS LEADER? 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

832

YOU WERE EXPECTING TO MAKE MONEY? 

A. YES. 

Q. AND QUITE A BIT OF IT FOR THAT MATTER?

A. THAT'S CORRECT. 

Q. NOW, THIS IS A PROJECTION, SO IT'S AT THE TIME YOU WENT 

INTO THE AGREEMENT. 

HOW WAS THE ACTUAL PERFORMANCE UNDER THIS FIRST TRANSITION 

AGREEMENT? WAS IT -- I DON'T WANT THE NUMBER, BUT WAS IT 

BETTER THAN YOU PROJECTED OR WORSE OR ABOUT THE SAME? 

A. I DON'T REMEMBER THE EXACT DELTAS, BUT I CAN TELL YOU IT 

WAS -- IT WAS A GOOD AGREEMENT. WE WERE VERY HAPPY WITH THE 

WAY IT WORKED OUT. 

Q. HOW LONG WAS THE TERM OF THE FIRST TRANSITION AGREEMENT? 

EXCUSE ME, THE AMENDED TRANSITION AGREEMENT? 

A. I THINK IT WAS THREE YEARS.

Q. OKAY. AND DURING THE TERM OF THE AMENDED TRANSITION 

AGREEMENT, DID APPLE BRING ON A SECOND SUPPLIER? 

A. DURING THE SECOND AGREEMENT?

Q. YES. 

A. YES.

Q. WHO WAS THAT? 

A. IT WAS INTEL. 

Q. AND WHEN DID INTEL COME ON? 

A. IT CAME IN AT THE END OF 2016. 

Q. AND THAT WAS PURSUANT TO THE AGREEMENT? 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

833

A. YES. 

Q. APPLE HAD THE RIGHT TO DO THAT? 

A. YES.

Q. THEY HAD THE RIGHT TO DO THAT UNDER THE FIRST AGREEMENT? 

A. YES. 

Q. UNDER THE SECOND AGREEMENT, WHEN INTEL CAME ON BOARD, DID 

APPLE FORFEIT SOME OF THE INCENTIVES? 

A. YES. 

Q. WHAT IMPACT DID INTEL BECOMING THE SECOND SOURCE HAVE ON 

QUALCOMM'S VOLUMES UNDER THE SECOND AGREEMENT? 

A. THEY REDUCED THEM. 

Q. NEVERTHELESS, THE AGREEMENT ENDED UP AS A PROFITABLE ONE 

FOR QUALCOMM; IS THAT RIGHT? 

A. THAT'S CORRECT. 

Q. NOW, DID YOU PERCEIVE RISK BOTH IN ENTERING THE FIRST 

AGREEMENT AND THE SECOND AGREEMENT FOR QUALCOMM? 

A. YES.

Q. WHAT WERE THE RISKS THAT YOU WERE FOCUSSED ON? 

A. THE RISK I WAS WORRIED ABOUT WAS, YOU KNOW, WHAT WOULD THE 

VOLUME BE, BOTH FROM THE PERSPECTIVE OF JUST HOW BIG IS APPLE 

GOING TO BE BY ITSELF, AND ALSO, WOULD WE GET WHAT WE WANTED IN 

THE AGREEMENT GIVEN THAT WE PAID SO MUCH INCENTIVE? 

SO IT WAS REALLY TWO TYPES OF VOLUME RISK, EFFECTIVELY.

Q. WAS IT YOUR PURPOSE IN ENTERING EITHER OF THESE 

AGREEMENTS, TO FORECLOSE INTEL OR ANYONE ELSE FROM RECEIVING 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

834

THE CONTRACT? 

A. NO. 

Q. WHAT WAS YOUR GOAL IN ENTERING INTO THESE AGREEMENTS 

MR. MOLLENKOPF? 

A. I WANTED TO GET THE BUSINESS. 

Q. WHAT'S HAPPENED -- LET'S LIMIT OURSELVES TO UP THROUGH 

SPRING OF THIS PAST YEAR, 2018. 

HAVE YOU CONTINUED TO COMPETE FOR APPLE BUSINESS? 

A. YES. 

Q. HAVE YOU CONTINUED TO BID ON VARIOUS PROJECTS AVAILABLE AT 

APPLE AS AN OEM? 

A. YES. 

Q. WHAT'S BEEN THE STATUS OF YOUR BUSINESS WITH APPLE WITH 

RESPECT TO THE IPHONE AFTER THE TRANSITION AGREEMENTS EXPIRED 

IN 2016? 

A. WE HAVEN'T HAD ANY NEW BUSINESS.

Q. NO NEW BUSINESS? 

A. NO.

Q. HAVE YOU BEEN COMPETING TO GET NEW BUSINESS FROM APPLE?

A. YES.

Q. WAS THERE EVER A TIME WHEN QUALCOMM WITHDREW FROM 

COMPETITION FOR PROJECTS AT APPLE? 

MS. MILICI: YOUR HONOR, I OBJECT TO THE EXTENT HE'S 

ASKING FOR INFORMATION THAT POST-DATES DISCOVERY IN THIS CASE. 

MR. VAN NEST: I'LL -- I THOUGHT I HAD LIMITED IT AT 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

835

THE TOP, YOUR HONOR, TO SPRING OF LAST YEAR. 

Q. LET'S KEEP THAT IN MIND MR. MOLLENKOPF. I'M SORRY IF I 

DIDN'T MAKE THAT CLEAR. 

BUT UP THROUGH THE SPRING OF 2018. 

A. THAT'S HOW I HEARD IT. THAT'S HOW I ANSWERED THE 

QUESTION. 

Q. YEAH. WAS THERE EVER A TIME WHEN QUALCOMM WITHDREW FROM 

COMPETING FOR BUSINESS AT APPLE? 

A. NO. 

Q. AND UP THROUGH THAT TIME, DID YOU CONTINUE TO SELL MODEMS 

FOR OLDER VERSIONS OF THE IPHONE? 

A. YES. 

Q. AND THAT CONTINUED RIGHT ON UP THROUGH THE SPRING OF 2018? 

A. YES. 

Q. NOW, I WANT TO ASK A QUESTION ABOUT APPLE'S CONTRACT 

MANUFACTURERS. 

WHO ARE THE CONTRACT -- WHAT'S A CONTRACT MANUFACTURER? 

A. A CONTRACT MANUFACTURER REFERS TO A COMPANY THAT 

MANUFACTURES PRODUCTS FOR ANOTHER COMPANY. SO, FOR EXAMPLE, 

THEY MAY HAVE A NUMBER OF FACTORIES AND THEY MAY MANUFACTURE OR 

DO A PORTION OF DESIGN AND MANUFACTURE FOR ANOTHER COMPANY. 

APPLE TENDS TO USE THAT IN A BIG PORTION OF ITS SUPPLY 

CHAIN, CERTAINLY IN THE HANDSET SPACE.

Q. SO WHEN QUALCOMM PROVIDES CHIPSETS FOR APPLE IPHONES, WHO 

ACTUALLY PURCHASES THE CHIPSETS FROM QUALCOMM? 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

836

A. IT'S CONTRACT MANUFACTURERS. THERE'S PROBABLY SOME 

COMPLICATED STRUCTURE THAT I DON'T UNDERSTAND, BUT IT'S -- 

EFFECTIVELY IT GOES TO THE CONTRACT MANUFACTURERS.

Q. AND ARE THEY THE ONES THAT HAVE THE LICENSE WITH QUALCOMM? 

A. YES.

Q. AND THEY'RE LICENSED TO PURCHASE THE CHIPS AND THEN THEY 

BUILD THE PHONES FOR APPLE; IS THAT RIGHT? 

A. THAT'S CORRECT.

Q. NOW, DID THERE COME A TIME, AGAIN, BEFORE SPRING OF LAST 

YEAR, WHEN THE CONTRACT MANUFACTURERS BUILDING PHONES FOR APPLE 

STOPPED PAYING ANY QUALCOMM ROYALTIES AT ALL? 

A. I'M SORRY. WOULD YOU SAY THE TIMEFRAME AGAIN. I WANT TO 

MAKE SURE.

Q. YEAH, UP UNTIL THE SPRING OF LAST YEAR. STARTING FROM THE 

END OF THE TRANSITION AGREEMENTS IN 2016 UP UNTIL THE END OF 

LAST YEAR, DID THERE COME A TIME IN 2016 OR 2017 WHEN THE 

CONTRACT MANUFACTURERS FOR APPLE STOPPED PAYING ANY ROYALTIES 

AT ALL? 

A. YES, IN THE SPRING OF 2017, 2017, THEY STOPPED PAYING.

Q. NOW, DID THEY CONTINUE TO PAY ON CHIPS FOR OTHER HANDSET 

MAKERS?

A. THEY DID.

Q. IT WAS -- THIS WAS LIMITED TO APPLE? 

A. CORRECT. THIS WAS FOR VOLUME THAT WAS MANUFACTURED FOR 

APPLE.

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

837

Q. OKAY. AND RATHER THAN REDUCE THE ROYALTIES, THEY WENT TO 

ZERO; RIGHT?

A. THAT'S CORRECT.

Q. NOW, THROUGHOUT THE TIME, AGAIN, RIGHT UP UNTIL MARCH OF 

THIS PAST YEAR, NOTWITHSTANDING THE QUALCOMM WASN'T BEING PAID 

A DIME FOR THOSE CHIPSETS, DID YOU CONTINUE DELIVERING SUPPLY 

TO APPLE?

A. YES.

Q. WAS THERE ANY DISRUPTION IN THAT SUPPLY? 

A. NO. 

Q. WAS THERE ANY DELAY IN THAT SUPPLY? 

A. I MEAN, I DON'T KNOW ALL THE DETAILS OF ALL OF IT. 

ESSENTIALLY WE WERE A GOOD SUPPLIER. 

WHAT I DON'T KNOW IS THE INDIVIDUAL DETAILS OF EVERY 

SHIPMENT. SO I WANT TO MAKE SURE I'M NOT SAYING THE WRONG 

THING.

Q. FAIR ENOUGH. 

FROM A HIGH LEVEL, THOUGH, QUALCOMM HAS REMAINED A 

SUPPLIER TO APPLE THROUGH THE SPRING OF LAST YEAR, 

NOTWITHSTANDING THE NON-PAYMENT OF ROYALTIES BY APPLE'S 

CONTRACT MANUFACTURERS? 

A. THAT'S CORRECT. 

Q. IS QUALCOMM CURRENTLY ENGAGED, MR. MOLLENKOPF, IN RESEARCH 

RELATING TO THE 5G STANDARD? 

A. YES. 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

838

Q. HOW WOULD YOU CHARACTERIZE THAT EFFORT AT QUALCOMM? 

A. IT'S A BIG FOCUS OF THE COMPANY.

Q. WHEN DID YOU BEGIN RESEARCH AT QUALCOMM ON 5G? 

A. OH, A LONG TIME AGO. 

Q. HOW LONG AGO? 

A. OVER FIVE YEARS AGO.

Q. OKAY. AND ARE YOU STILL ENGAGED IN THE PROCESS OF 

RESEARCH ON 5G? 

A. YES. 

Q. WERE YOU ONE OF THE PROPONENTS WITHIN QUALCOMM OF SPENDING 

EVEN MORE MONEY ON 5G? 

A. YEAH. 

Q. TELL US ABOUT THAT. 

A. OH, I -- I BELIEVED THAT IT WAS IMPORTANT FOR US TO BE A 

LEADER IN 5G, AND I THOUGHT WE NEEDED TO SPEND MONEY CONSISTENT 

WITH THAT. 

Q. AND HAVE YOU BEEN SUCCESSFUL IN 5G SO FAR? 

A. WE THINK SO. IT'S STILL VERY EARLY, BUT WE FEEL LIKE WE 

HAVE A STRONG POSITION. 

THERE ARE A LOT OF OTHER PEOPLE ALSO INVESTING HEAVILY IN 

5G, BUT WE HOPE THAT WE'RE GOING TO BE THE LEADER.

Q. WHAT IS THE COMPETITIVE LANDSCAPE TODAY? 

LET ME BACK UP. HAS THERE BEEN A STANDARD APPROVED FOR 5G 

YET? 

A. THERE HAS.

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

839

Q. AND HOW RECENTLY WAS THAT? 

A. THERE ARE MULTIPLE STANDARDS OF 5G. THERE ARE MULTIPLE 

STANDARDS OF 5G. THE FIRST STANDARD I THINK WENT INTO -- WAS 

APPROVED END OF LAST YEAR. EXCUSE ME, END OF '17. 

Q. AND WHAT -- HOW WOULD YOU DESCRIBE FOR THE COURT THE 

COMPETITIVE LANDSCAPE AS OF, AGAIN, AS OF MARCH OF LAST YEAR, 

HOW WOULD YOU DESCRIBE THE COMPETITIVE LANDSCAPE IN 5G? 

A. THIS IS ON THE PRODUCT SIDE OR ON THE -- 

Q. ON THE PRODUCT SIDE. 

A. -- IN GENERAL? 

Q. ON THE PRODUCT SIDE. 

A. OKAY. ON THE PRODUCT SIDE, THERE ARE MANY PEOPLE THAT 

HAVE ANNOUNCED PRODUCTS. THERE'S APPLE -- EXCUSE ME. 

THERE'S INTEL, THERE'S SAMSUNG, THERE'S HUAWEI, THERE'S 

QUALCOMM, MEDIATEK I THINK HAS AN ANNOUNCED PRODUCT. SO 

EVERYONE IS WORKING ON 5G. THERE ARE MANY DIFFERENT COMPANIES, 

AS IS TYPICAL.

Q. AND WHERE DO YOU THINK QUALCOMM IS POSITIONED IN THAT 

COMPETITION? 

A. WELL, I MEAN, I THINK WE'RE THE LEADER. BUT IT'S STILL 

EARLY AND EVERYBODY ELSE IS TRYING TO BE THE LEADER AS WELL. 

MS. MILICI: YOUR HONOR, I OBJECT TO THE EXTENT THAT 

WE'RE EXTENDING BEYOND THE SPRING OF 2018, BEYOND DISCOVERY. 

MR. VAN NEST: I THOUGHT, AGAIN, I CLARIFIED THAT, 

YOUR HONOR, AND GAVE THAT AS A PREDICATE. 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

840

BUT I'LL -- I'LL ASK AGAIN TO MAKE SURE THAT THE WITNESS 

UNDERSTANDS THAT. 

THE COURT: THANK YOU. GO AHEAD, PLEASE. 

BY MR. VAN NEST: 

Q. WITH RESPECT TO -- AS OF LAST SPRING, BEFORE THE END OF 

MARCH, WAS THE OUTCOME IN THE 5G MARKET A CERTAIN ONE THAT 

COULD BE PREDICTED EASILY? 

A. NO. 

Q. IS THERE A LOT OF UNCERTAINTY IN WHAT'S GOING TO HAPPEN IN 

5G? 

A. YES.

Q. WHY IS THAT? 

A. WELL, IT HASN'T -- IT HASN'T HAPPENED YET AND -- I'M 

TRYING TO ANSWER IT IN THE -- 

Q. WELL, YOU MENTIONED -- AGAIN, AS OF MARCH OF LAST YEAR, 

WERE THERE A NUMBER OF DIFFERENT FOLKS IN THE MARKET, OR HAVING 

ANNOUNCED? 

A. YEAH. THERE ARE -- I MEAN, EVERYONE -- ALL OF MY ANSWERS 

PREVIOUSLY ASSUMED UP TO THAT POINT. 

Q. FAIR ENOUGH. FAIR ENOUGH. 

AND THOSE INCLUDE SOME OF THE BIGGEST COMPANIES IN THE 

WORLD, HUAWEI, SAMSUNG, AND INTEL? 

A. CORRECT. BIGGER COMPANIES THAN QUALCOMM TYPICALLY. 

MR. VAN NEST: I HAVE NO FURTHER QUESTIONS, YOUR 

HONOR. 

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MOLLENKOPF CROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

841

THE COURT: OKAY. THE TIME IS 4:33. 

I WONDER IF WE SHOULD JUST END FOR THE DAY AND CONTINUE. 

MR. VAN NEST: COULD I ASK, SO THE WITNESS -- 

THE COURT: HOW LONG DO YOU HAVE? 

MR. VAN NEST: THAT'S WHAT I WAS HOPING. 

MS. MILICI: I PROBABLY HAVE AT LEAST TEN MINUTES. 

THE COURT: AND THEN DO YOU HAVE -- 

MR. VAN NEST: I WON'T HAVE MUCH, IF ANYTHING. IF 

SHE HAS TEN MINUTES, I THINK WE COULD -- 

THE COURT: OKAY. JUST SO HE DOESN'T HAVE TO COME 

BACK ON MONDAY? 

MR. VAN NEST: THAT WOULD BE GREAT, YOUR HONOR. 

THANK YOU. 

THE COURT: SO, MS. MILICI, WHY DON'T YOU GO AHEAD. 

OR ACTUALLY, I SHOULD ASK THE MOST IMPORTANT -- BECAUSE WE'VE 

BEEN HAVING A LOT OF TRANSCRIPT TIME TODAY.

THE REPORTER: THAT'S FINE.

THE COURT: OKAY. ALL RIGHT. LET'S GO AHEAD THEN. 

OKAY. LET'S GO AHEAD. 

ARE YOU READY OR DO YOU WANT A COUPLE OF MINUTES? 

MS. MILICI: I JUST NEED TO GATHER UP SOME BINDERS. 

THE COURT: THAT'S FINE. LET ME KNOW WHEN YOU'RE 

READY. 

(PAUSE IN PROCEEDINGS.) 

THE COURT: READY? 

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MOLLENKOPF REDIRECT BY MS. MILICI

UNITED STATES COURT REPORTERS

842

MS. MILICI: YES. 

THE COURT: OKAY. 4:34. GO AHEAD, PLEASE. 

REDIRECT EXAMINATION

BY MS. MILICI: 

Q. MR. MOLLENKOPF, YOU WOULD AGREE THAT QUALCOMM HAS HAD 

EXHAUSTIVE LICENSES FOR ITS OWN CHIP BUSINESS FOR OTHER 

STANDARD ESSENTIAL PATENT HOLDERS; CORRECT? 

A. WE HAVE.

Q. AND YOU WOULD AGREE THAT OTHER COMPANIES LICENSE PATENTS 

AT THE DEVICE LEVEL WITHOUT SELLING CHIPS AT ALL? 

A. I'M SORRY. CAN YOU REPEAT THE QUESTION. 

Q. YEAH. ARE THERE OTHER LICENSORS THAT LICENSE AT THE 

DEVICE LEVEL WHO DON'T SELL CHIPS AT ALL? 

A. I AM NOT SURE OF THE ANSWER TO THAT. 

Q. ARE YOU AWARE OF ANY OTHER COMPANY THAT HAS A POLICY OF 

NOT SELLING CHIPS TO HANDSET MANUFACTURERS UNLESS THEY TAKE A 

SEPARATE LICENSE? 

A. NO. 

Q. OKAY. YOU REFERRED TO OEM'S AS YOUR PARTNERS; CORRECT?

A. YES.

Q. AND ARE YOU AWARE THAT MANY OEM'S HAVE TESTIFIED UNDER 

OATH THAT QUALCOMM THREATENED CHIP SUPPLY DURING LICENSE 

NEGOTIATIONS? 

A. I'M NOT AWARE OF THAT.

Q. AND YOU WOULD AGREE, SIR, THAT IT IS QUALCOMM'S POLICY NOT 

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MOLLENKOPF REDIRECT BY MS. MILICI

UNITED STATES COURT REPORTERS

843

TO SELL CHIPS TO COMPANIES THAT ARE UNLICENSED OR NOT COMPLYING 

WITH THEIR LICENSES; CORRECT? 

A. WE HAVE THAT POLICY, YES. 

Q. AND YOU AGREE THAT THAT POLICY IS WELL KNOWN IN THE 

INDUSTRY; CORRECT? 

A. I AGREE. 

Q. AND YOU AGREE THAT IT IS PART OF EVERY CSA? 

A. I COULDN'T TESTIFY ABOUT ALL THE CSA'S, BUT GENERALLY IT'S 

PART OF THE CSA, YES.

Q. AND THAT'S A CONTRACT? 

A. CORRECT. 

Q. SO IF SOMEBODY STOPPED PAYING THEIR ROYALTIES, QUALCOMM 

HAS A CONTRACTUAL RIGHT TO CUT OFF THEIR CHIP SUPPLY; CORRECT? 

A. WE HAVE THE RIGHT --

Q. THANK YOU.

A. -- TO DO IT.

Q. THANK YOU. 

A. BUT WE DON'T DO IT.

Q. NOW, YOU TESTIFIED ABOUT THE AGREEMENT WITH APPLE, 

CORRECT? 

A. YES. 

Q. NOW, IT'S TRUE, ISN'T IT, THAT YOU DON'T KNOW WHO -- YOU 

DON'T RECALL WHO RAISED THE CLAWBACK CONCEPT, DO YOU? 

A. I'M SORRY. IN WHICH AGREEMENT?

Q. IN THE 2013 AGREEMENT. YOU DON'T RECALL WHO RAISED THE 

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MOLLENKOPF REDIRECT BY MS. MILICI

UNITED STATES COURT REPORTERS

844

CONCEPT OF A CLAWBACK, DO YOU? 

A. IN THE 2013 AGREEMENT, IT WAS EITHER ME OR JEFF. I CAN'T 

REMEMBER WHICH ONE.

Q. OKAY. AND YOU DON'T RECALL WHETHER THAT -- APPLE 

SUGGESTED THAT OR QUALCOMM SUGGESTED THAT; CORRECT? 

A. I CAN'T REMEMBER WHICH ONE.

Q. OKAY. AND THE 2013 AGREEMENT WASN'T A SOLE SOURCE FOR A 

SINGLE PRODUCT, WAS IT? 

A. I'M SORRY. ASK THE QUESTION AGAIN.

Q. IT WASN'T A SOLE SOURCE AGREEMENT, WAS IT? 

A. IT WAS A -- IT WAS AN AGREEMENT -- I'M NOT SURE WHAT YOU 

MEAN BY "SOLE SOURCE." THAT'S WHY I'M -- 

Q. WELL, UNDER THAT AGREEMENT, IF APPLE USED ANOTHER CHIP IN 

ANY PRODUCT, IT HAD TO PAY YOU BACK A LOT OF MONEY; CORRECT? 

A. IT DID, YES.

Q. SO IT'S NOT JUST THAT THEY COMMITTED TO USING QUALCOMM'S 

CHIP IN A SINGLE IPHONE. IT'S THAT IF THEY LAUNCHED ANYTHING, 

WITH ANYBODY ELSE'S CHIPSET, THEY WOULD HAVE TO PAY YOU BACK A 

LOT OF MONEY; CORRECT? 

A. THAT'S CORRECT. THEY HAD AN ABILITY TO -- 

Q. THANK YOU. 

A. -- TO ESSENTIALLY GET BACK THE -- OR WE HAD THE ABILITY TO 

GET BACK -- NOT PAY THE INCENTIVE, ESSENTIALLY, IF THEY DID 

THAT. 

MS. MILICI: OKAY. YOUR HONOR. I WAS MUCH FASTER 

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MOLLENKOPF RECROSS BY MR. VAN NEST

UNITED STATES COURT REPORTERS

845

THAN I THOUGHT. I HAVE NO MORE QUESTIONS. 

THE COURT: OKAY. TIME IS 4:38. 

ANY REDIRECT? JEEZ. OR RECROSS, I SHOULD SAY. 

RECROSS-EXAMINATION

BY MR. VAN NEST: 

Q. NOTWITHSTANDING THE TERMS OF THE CHIP SUPPLY AGREEMENT, 

HAS QUALCOMM EVER EXERCISED THE RIGHT TO CUT OFF CHIP SUPPLY TO 

A CUSTOMER THAT WAS IN DISPUTE ABOUT LICENSING WITH QUALCOMM? 

A. NOT THAT I'M AWARE OF. 

Q. NOT EVEN ONCE? 

A. NOT THAT I'M AWARE OF. 

MR. VAN NEST: I HAVE NOTHING FURTHER, YOUR HONOR. 

THE COURT: ALL RIGHT. IS THERE ANY REDIRECT? THAT 

WAS 4:38? 

MS. MILICI: NO, YOUR HONOR. 

THE COURT: OKAY. MAY THIS WITNESS BE EXCUSED? AND 

IS IT SUBJECT TO RECALL OR NOT SUBJECT TO RECALL? 

MS. MILICI: IT IS SUBJECT TO RECALL, REBUTTAL. 

THE COURT: OKAY. SO SUBJECT TO RECALL. 

SO YOU'VE COMPLETED YOUR TESTIMONY FOR TODAY, BUT YOU MAY 

BE RECALLED. 

ALL RIGHT. THANK YOU. 

WE'LL BE IN RECESS AS FAR AS THE TRIAL IS CONCERNED, BUT I 

DO HAVE SOME HOUSEKEEPING WITH THE PARTIES. OKAY? 

THANK YOU. 

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UNITED STATES COURT REPORTERS

846

(PAUSE IN PROCEEDINGS.) 

THE COURT: OKAY. SO THE TIME LIMITS, OR TIME USAGE, 

I SHOULD SAY, FOR TODAY WAS 3 HOURS AND 59 MINUTES FOR FTC. 

AND I'LL GIVE YOUR TIME TO DATE. 

SO IF YOU'VE USED 3 HOURS AND 59 MINUTES TODAY, YOU'VE 

USED A TOTAL OF 14 HOURS AND 25 MINUTES. 

OKAY. SO YOU HAVE ABOUT 10 HOURS AND 35 MINUTES LEFT. 

OKAY? 

AND AS FAR AS QUALCOMM TODAY, YOU USED 1 HOUR AND 46 

MINUTES. WITH YOUR TOTAL FROM BEFORE, THAT'S 7 HOURS AND 17 

MINUTES. 

LET ME JUST DOUBLE-CHECK THAT. 

THAT'S RIGHT. SO 7 HOURS AND 16 MINUTES. SO YOU HAVE 

ABOUT 17 HOURS AND, WHAT IS THAT, 43 MINUTES LEFT? 

MR. VAN NEST: YES. 

THE COURT: OKAY. SO THOSE ARE YOUR TIMES. 

SO YOU MAY HAVE SEEN WE FILED THE ORDER AS TO QUALCOMM, 

AVANCI, NOKIA, AND SAMSUNG SEALING MOTIONS. 

I HAVE A VERY SHORT APPLE SEALING MOTION THAT HAS TO DO 

WITH INFORMATION THAT WAS IN A HIGH PRIORITY OBJECTION FILED 

THIS MORNING. I'LL FILE THAT SHORTLY. 

DO YOU ANTICIPATE ANY OTHER SEALING MOTIONS COMING IN OVER 

THE WEEKEND? OR -- 

MR. MATHESON: YOUR HONOR, IF YOU'VE ALREADY DEALT 

WITH THE APPLE AND AVANCI, THEN THE ONLY OTHER ONE WOULD BE THE 

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UNITED STATES COURT REPORTERS

847

TEXAS INSTRUMENTS ONE I MENTIONED WHICH WE WOULD OPPOSE, AND 

WE'RE TRYING TO HEAD OFF AT THE PASS. 

THE COURT: BUT IT HASN'T BEEN FILED YET, I DON'T 

THINK. BUT IT'S FOR MONDAY EVIDENCE. 

MR. MATHESON: IT WOULD BE FOR MONDAY EVIDENCE. 

THE COURT: OKAY. SO WE'LL HAVE TO WAIT FOR IT THEN. 

MR. MATHESON: WE DO ANTICIPATE BEING ABLE TO CONDUCT 

THE EXAMINATION OF MR. DONALDSON ENTIRELY IN OPEN COURT, 

DESPITE THE SEALING MOTIONS. 

THE COURT: OKAY. 

MR. MATHESON: THAT'S OUR GOAL. WE THINK WE CAN DO 

THAT BY JUST NOT REFERRING TO SPECIFIC THINGS. 

THE COURT: OKAY. ALL RIGHT. SO THEN WE HAVE TO 

LOOK FOR TI. 

MR. BORNSTEIN: AND, YOUR HONOR, ON THE UNDERSTANDING 

THAT THE FTC MAY REST ITS CASE ON TUESDAY, WE DISCLOSED 

PROACTIVELY SOME DESIGNATIONS OF DEPOSITION VIDEO. WE'VE 

ADVISED THE THIRD PARTIES OF THE FACT THAT WE MAY HAVE SOME 

DEPOSITION VIDEO OF THIRD PARTIES TO PLAY ON TUESDAY. SO SOME 

OF THOSE THIRD PARTIES MAY APPROACH THE COURT WITH SEALING 

MOTIONS. 

THE COURT: OKAY. BUT I -- I COULD WAIT UNTIL MONDAY 

TO RULE ON THOSE? 

MR. BORNSTEIN: ABSOLUTELY, YOUR HONOR. I JUST 

WANTED THE COURT TO BE AWARE. 

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UNITED STATES COURT REPORTERS

848

THE COURT: I JUST WANT TO MAKE SURE, WHAT DO I NEED 

TO RULE ON BY SUNDAY? IT SOUNDS LIKE ONLY TI ONCE I GET THE 

APPLE ONE DONE. 

MR. MATHESON: CORRECT. AND I WANT TO MAKE SURE I 

HAVE THE RIGHT APPLE ONE. WE DO ANTICIPATE REGARDING THE SAME, 

MR. LASINSKI'S MATERIAL. I THOUGHT THAT'S THE ONE YOU WERE 

REFERRING TO. 

THE COURT: NO, THEY FILED A SEPARATE ONE ABOUT THE 

HIGH PRIORITY OBJECTION. 

MR. MATHESON: I'M SORRY, YOUR HONOR. I WASN'T 

FOLLOWING THAT. 

THE COURT: OKAY. SO THERE'S GOING TO BE A SECOND 

APPLE ONE, AND A TI ONE. 

MR. MATHESON: YES, WE BELIEVE WE CAN RESOLVE THE 

APPLE ONE BY SEALING THE ENTIRE SLIDE THEY REFERRED TO, THE 

COMPARATIVE AGREEMENT SLIDE IN THE LASINSKI DEMONSTRATIVES. 

BUT -- 

THE COURT: WELL, BUT I HAVE THE SAME ISSUE I HAD 

WITH QUALCOMM'S. WHY DO YOU SEAL THE HEADER AND THE CHART 

AND -- I MEAN, YOU CAN SEAL THE NUMBERS. BUT I DON'T SEE WHY 

THE ENTIRE PAGE NEEDS TO BE SEALED. 

MR. MATHESON: WE COULD NOT AGREE MORE, YOUR HONOR. 

THE COURT: SO I'M NOT INTENDING TO SEAL THE LEFT 

COLUMN THAT SAYS WHAT IT IS, THE RIGHT COLUMN AS TO WHICH 

PARTIES ARE INVOLVED AND THE HEADING THAT IS JUST COMPARABLE 

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UNITED STATES COURT REPORTERS

849

REASONABLE ROYALTY RATES OR WHATEVER IT'S CALLED. 

MR. MATHESON: OKAY. THANK YOU, YOUR HONOR. 

THE COURT: ALL RIGHT. SO I'LL HAVE THREE SEALING 

MOTIONS THAT HAVE TO BE DECIDED BY SUNDAY. 

OKAY. ANYTHING ELSE BEFORE WE START ON MONDAY? 

DO YOU ANTICIPATE MONDAY NEEDING THE COURTROOM SEALED FOR 

ANYTHING? I DON'T KNOW WHO YOU HAVE. WHO DO WE NEED TO SEAL 

THE COURTROOM FOR ON MONDAY? 

MR. MATHESON: YOUR HONOR, WE HAVE A VERY SHORT 

PORTION OF THE LG TESTIMONY THAT AMOUNTS TO FOUR QUESTIONS THAT 

WOULD NEED TO BE SEALED. 

THE COURT: OKAY. 

MR. MATHESON: AND -- 

THE COURT: SHOULD WE DO THAT FIRST SO THEN WE DON'T 

HAVE TO OPEN AND CLOSE THE COURTROOM JUST FOR A FEW MINUTES? 

MR. MATHESON: THAT MAKES A LOT OF SENSE. WE'RE 

HAPPY TO START THAT WAY. OUR OTHER HOPE WAS TO MAYBE RUN IT 

INTO A BREAK AT THE END OF THE DAY. 

THE COURT: THAT'S FINE. 

MR. MATHESON: WE'LL TRY AND MAKE THAT WORK. 

THE COURT: IS THAT THE ONLY ONE? I DIDN'T SEE 

ANYTHING ELSE THAT NEEDED -- 

MR. MATHESON: WE'RE CONCERNED ABOUT THE LASINSKI 

EXAMINATION. THERE'S A SIGNIFICANT AMOUNT THAT'S SEALED, 

PARTICULARLY REGARDING THE ELEMENTS THAT GO UNDER THE UNDER THE 

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UNITED STATES COURT REPORTERS

850

AVANCI MODEL. 

THE COURT: A-V-A-N-C-I. 

MR. MATHESON: YEAH. BECAUSE THE ELEMENTS 

THEMSELVES, NOT JUST THE PARTICULAR WEIGHTING OF THEM, HAS BEEN 

SEALED. IT MAY BE DIFFICULT FOR MR. LASINSKI TO TESTIFY 

WITHOUT EXPLAINING THAT. 

THE COURT: ALL RIGHT. DO YOU THINK THERE WILL BE A 

SEALED PORTION AND UNSEALED PORTION OF HIS TESTIMONY? 

MR. MATHESON: I DO, YOUR HONOR. 

THE COURT: AND YOU THINK WE'LL GET TO HIM ON MONDAY? 

MR. MATHESON: YES, YOUR HONOR. 

THE COURT: ALL RIGHT. ANYTHING -- ANYONE ELSE THEN? 

SO IT LOOKS LIKE ONLY MR. CHO AND MR. LASINSKI. 

WHAT ABOUT DONALDSON? 

MS. MILICI: AS I SAID, YOUR HONOR, WE ANTICIPATE 

THAT CERTAINLY HIS DIRECT WILL BE UNSEALED. 

THE COURT: THAT'S FINE. OKAY. SO THOSE ARE THE 

ONLY TWO. 

MR. MATHESON: YES. 

THE COURT: OKAY. ALL RIGHT. WHAT ELSE? ANYTHING 

ELSE? 

MR. VAN NEST: YOUR HONOR, MS. MILICI AND I SPOKE 

ABOUT YOUR PROPOSAL ON THE CLOSING. 

THE COURT: YES. 

MR. VAN NEST: AND WE THINK THAT SOUNDS GOOD. 

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UNITED STATES COURT REPORTERS

851

THE COURT: OKAY. 

MR. VAN NEST: WHICH, WHAT I UNDERSTOOD, WHAT WE 

UNDERSTOOD WAS THAT WE'D FINISH EVIDENCE, I THINK, ON THE 28TH. 

THAT'S MONDAY. 

THE COURT: I THINK SO. THERE WAS A POSSIBILITY THAT 

I WAS NOT GOING TO BE AVAILABLE ON THE 28TH, BUT I THINK THAT'S 

NOT LIKELY NOW BECAUSE OF THE SHUTDOWN. 

MR. VAN NEST: OKAY. 

THE COURT: SO WE'LL FINISH ON THE 28TH. 

MR. VAN NEST: RIGHT. AND THEN WE WOULD PREPARE AND 

SUBMIT THIS LIST OF CITATIONS BY FRIDAY MORNING, AND THEN 

FRIDAY MORNING, THE 1ST, WE'D CONDUCT CLOSING ARGUMENTS AND 

THAT -- 

THE COURT: ONE HOUR PER SIDE. 

MR. VAN NEST: ONE HOUR PER SIDE, THAT'S FINE. 

THE COURT: UM-HUM. 

NOW, CAN YOU ALL REACH AGREEMENT AS TO WHAT THAT CHART 

WILL LOOK LIKE? 

MR. VAN NEST: YES. 

THE COURT: AND I'LL WANT PAGE LIMITS. 

MR. VAN NEST: YES. 

THE COURT: SO WHAT I WOULD PREFER IS IF YOU COULD 

COME UP WITH A JOINT PROPOSED CHART THAT YOU WILL THEN POPULATE 

WITH YOUR EVIDENCE. 

MR. VAN NEST: OKAY. 

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UNITED STATES COURT REPORTERS

852

THE COURT: SO WE CAN GET AGREEMENT ON THE FORMAT. 

MR. VAN NEST: OKAY. 

THE COURT: SO -- 

MR. VAN NEST: OKAY. 

THE COURT: I JUST WANT PAGE AND EXHIBIT CITES, AND 

THEN I JUST WANT DEPOSITION DATE, PAGE, AND LINE CITES. 

MR. VAN NEST: OKAY. 

MS. MILICI: AND YOU WANT THE -- 

THE COURT: OR TRIAL TESTIMONY CITES. 

MS. MILICI: AND YOU WANT THOSE ORGANIZED BY TOPIC. 

THE COURT: WELL, WHAT DO YOU THINK? WILL THAT GET 

TOO REDUNDANT? 

MR. VAN NEST: NO. I MEAN, I THINK IT WOULD NOT BE 

THAT USEFUL WITHOUT -- IT'LL JUST BE A JUMBLE. I WOULD -- I'D 

LIKE TO TRY TO WORK OUT -- I MEAN, WE'VE GOT SEVERAL ISSUES, 

RIGHT, ANTICOMPETITIVE EFFECT AND MARKET DEFINITION, MARKET 

POWER, AND THERE'S SOME SENSE AND SO ON. 

THE COURT: UM-HUM. 

MR. VAN NEST: BUT MY THOUGHT WAS WE'D JUST LIST THE 

TOPIC, AND THEN HERE'S THE FTC'S CITES, AND HERE'S THE QUALCOMM 

CITES, AND HERE'S THE NEXT TOPIC. 

BECAUSE, I MEAN -- WE COULD KEY IF OFF THE FINDINGS OF 

FACT BECAUSE WE'VE BOTH GOT COMPETING, YOU KNOW, POINTS IN 

THERE. YOU'RE GOING TO HAVE TO DO FINDINGS OF FACT. 

THE COURT: YEAH. 

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UNITED STATES COURT REPORTERS

853

MR. VAN NEST: SO WHAT I WAS GOING TO PROPOSE TO 

THEM, AND WE CAN WORK ON OVER, YOU KNOW, GOING FORWARD HERE, IS 

SOME CHART BASED ON THAT THAT MAKES IT EASY FOR YOU. OKAY, NOW 

I'M WORKING ON THIS ISSUE, HERE'S MY CITES, AND NOW I'M WORKING 

ON THIS ISSUE, HERE'S MY CITES. 

THE COURT: UM-HUM. 

MR. VAN NEST: THAT SEEMS TO ME TO BE -- AND THEN THE 

CLOSING ARGUMENTS CAN FRAME THAT UP FOR YOU AS WELL. 

THE COURT: OKAY. SO, MS. MILICI, DID YOU DISAGREE 

WITH THAT? 

MS. MILICI: NO. I THINK THAT WE CAN PROCEED THAT 

WAY. I THINK WE CAN CONFER -- 

MR. VAN NEST: WE HAVEN'T TALKED ABOUT THE 

FORMATTING. 

MS. MILICI: YEAH, THE FORMATTING. 

THE COURT: SO YOU HAVE AT LEAST TWO WEEKS MAYBE TO 

FIGURE OUT THE FORMAT. 

MR. VAN NEST: SURE. 

THE COURT: BUT I'D LIKE US TO GET AGREEMENT ON THE 

FORMAT, AND I'LL APPROVE IT, AND THAT'S WHAT YOU'LL POPULATE, 

AND WE'LL HAVE PAGE LIMITS. 

SO YOU'VE ALREADY BRIEFED FINDINGS OF FACT AND CONCLUSIONS 

OF LAW IN ABOUT 221 PAGES. SO I FEEL LIKE I AM -- 

MS. MILICI: OURS IS SHORTER.

THE COURT: I'M SORRY?

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UNITED STATES COURT REPORTERS

854

MS. MILICI: OURS IS SHORTER.

THE COURT: WELL, YOU'RE STILL 68 PAGES. I AGREE 

THEY'RE 153. BUT I CAN'T TAKE ANY MORE BRIEFING ON FINDINGS OF 

FACT AND CONCLUSIONS OF LAW. IT'S TOO LONG. ALL RIGHT? I 

WANT THIS TO BE TIGHT. 

MS. MILICI: UNDERSTOOD.

THE COURT: I WANT THIS TO BE TIGHT.

MR. VAN NEST: WE UNDERSTOOD THIS TO BE MORE OF AN 

OUTLINE WITH TOPICS AND THEN THE STUFF POPULATED. THAT'S WHAT 

I UNDERSTOOD. 

THE COURT: THIS ONE I JUST WANT CITATIONS TO 

EVERYTHING THAT CAME UP DURING THE TRIAL. I MEAN, I AM TRYING 

TO KEEP TRACK OF EVERYTHING AS WELL. 

MR. VAN NEST: YEAH. 

THE COURT: BUT I MAY HAVE MISSED SOMETHING, I MAY 

NOT HAVE UNDERSTOOD THE RELEVANCE OR IMPORTANCE OF SOMETHING. 

SO I'D LIKE TO KNOW FROM YOUR PERSPECTIVE WHAT IS 

IMPORTANT TO LOOK AT AND THINK ABOUT FOR THIS PARTICULAR TOPIC. 

SO THAT WOULD BE MOST HELPFUL, JUST A PAGE AND EXHIBIT CITE, 

AND THEN A TRIAL TESTIMONY TRANSCRIPT CITE. 

MR. VAN NEST: GOT IT. 

THE COURT: OR DEPOSITION CITE. 

MS. MILICI: GREAT. 

THE COURT: OKAY. SO WHEN DO YOU THINK YOU MIGHT BE 

ABLE TO COME UP WITH THAT? 

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UNITED STATES COURT REPORTERS

855

MS. MILICI: WITH A PLAN FOR THAT OR WITH A FINAL -- 

MR. VAN NEST: NO, WHAT THE FINAL IS ON THE 1ST. HOW 

ABOUT IN THE NEXT WEEK OR SO? 

THE COURT: OKAY. SO YOU'RE GOING TO GIVE YOUR 

CLOSING ARGUMENTS ON THE 1ST. WE'LL FINISH EVIDENCE ON MONDAY, 

THE 28TH. 

MR. VAN NEST: RIGHT. 

THE COURT: LET'S START 9:00 O'CLOCK ON FRIDAY, THE 

1ST OF FEBRUARY, WITH CLOSING. 

MR. VAN NEST: GOOD. 

THE COURT: DO YOU THINK YOU'LL NEED UNTIL THE 

MORNING OF THAT DATE TO FILE THIS CHART? 

MR. VAN NEST: YES. 

THE COURT: OKAY. THAT'S FINE. BUT FILE IT BY 8:00, 

PLEASE, SO THAT WAY WE CAN START LOOKING AT IT BEFORE YOU GIVE 

YOUR CLOSINGS. 

WHAT ELSE? ANYTHING ELSE? 

MS. MILICI: YOUR HONOR, I JUST HAD A NOTE FROM MY 

TEAM THAT A PORTION OF THE PETERSON VIDEO THAT'S BEING PLAYED 

ON MONDAY WILL BE SEALED. 

THE COURT: RIGHT. SO I DON'T KNOW, ARE YOU GOING TO 

BE ABLE TO SPLIT THAT UP SO WE'LL HAVE A SEALED PORTION AND 

UNSEALED PORTION, OR IS IT THE WHOLE THING? 

MS. MILICI: IT'S NOT THE WHOLE THING. BUT -- 

THE COURT: WELL, YOU CAN -- 

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UNITED STATES COURT REPORTERS

856

MS. MILICI: I BELIEVE WE CAN SPLIT IT UP. 

THE COURT: OKAY. YOU CAN LET ME KNOW ON, YOU KNOW, 

BEFORE THE WITNESS TESTIFIES HOW IT SHOULD BE SPLIT UP. 

MS. MILICI: OKAY. 

THE COURT: NOW, IS IT RELEVANT AT ALL WHAT OTHER 

COMPETITION AGENCIES OF OTHER COUNTRIES HAVE DONE AND WHEN THEY 

STARTED INVESTIGATING AND HOW THAT MAY HAVE IMPACTED VARIOUS 

PARTIES' ACTIONS AND THE MARKET? I MEAN, THERE'S BEEN 

REFERENCE TO IT IN A NUMBER OF THE EXHIBITS. 

MS. MILICI: YOUR HONOR, I THINK IT WOULD BE RELEVANT 

TO REMEDY, FOR ONE THING. 

THE COURT: YEAH. 

MS. MILICI: AND I THINK THAT IT'S RELEVANT TO SOME 

ANALYSIS THAT WAS CONDUCTED BY ONE OF THEIR EXPERTS, SORT OF 

THE RELEVANCE OF THE CROSS-EXAMINATION THERE. BUT I ALSO THINK 

IT'S RELEVANT TO REMEDY QUESTIONS. 

THE COURT: YOU MEAN WHETHER AN INJUNCTION WOULD BE 

NECESSARY IF THERE'S A VIOLATION? IS THAT WHAT YOU'RE 

REFERRING TO? 

MS. MILICI: THAT'S CORRECT, YOUR HONOR. 

THE COURT: OKAY. SO IS THERE GOING TO BE EVIDENCE 

OF THAT AS TO THE DATES OF WHEN INVESTIGATIONS STARTED IN 

VARIOUS COUNTRIES? 

MS. MILICI: SO THE 10-K THAT I INTRODUCED TODAY I 

THINK HAS MOST OF THAT INFORMATION. 

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UNITED STATES COURT REPORTERS

857

THE COURT: I SEE. OKAY. 

MR. VAN NEST: I DISAGREE ABOUT WHAT IT'S RELEVANT 

TO, YOUR HONOR, BUT I DON'T DISAGREE THAT THERE WILL BE SOME 

TESTIMONY ABOUT IT BECAUSE IN SOME CASES, MANY OF THE LICENSES 

HAVE BEEN ENTERED INTO PURSUANT TO AGREEMENTS WITH THOSE 

COUNTRIES. 

SO I THINK YOU'LL GET A LITTLE EVIDENCE ABOUT THAT FROM 

THE QUALCOMM'S SIDE. 

MS. MILICI: AND FROM THE FTC'S SIDE, YOU'LL GET 

EVIDENCE THAT THOSE SAME AGREEMENTS WERE FOUND TO BE COERCED. 

SO WE'LL HAVE DUELING EVIDENCE. 

THE COURT: OKAY. BUT THERE WILL BE EVIDENCE AS TO 

WHAT'S HAPPENING IN OTHER COUNTRIES WITH THEIR COMPETITION 

AGENCIES. 

MS. MILICI: YEAH. 

THE COURT: OKAY. ALL RIGHT. 

WHAT ELSE? ANYTHING ELSE FOR TODAY? 

MR. VAN NEST: I DON'T THINK, SO YOUR HONOR. 

THE COURT: ALL RIGHT. THANK YOU ALL VERY MUCH. 

MR. VAN NEST: THANK YOU. 

MS. MILICI: THANK YOU, YOUR HONOR. 

THE COURT: SEE YOU MONDAY. SEE YOU MONDAY MORNING.

(THE EVENING RECESS WAS TAKEN AT 4:52 P.M.)

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UNITED STATES COURT REPORTERS

CERTIFICATE OF REPORTERS

WE, THE UNDERSIGNED OFFICIAL COURT REPORTERS OF THE 

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF 

CALIFORNIA, 280 SOUTH FIRST STREET, SAN JOSE, CALIFORNIA, DO 

HEREBY CERTIFY: 

THAT THE FOREGOING TRANSCRIPT, CERTIFICATE INCLUSIVE, IS 

A CORRECT TRANSCRIPT FROM THE RECORD OF PROCEEDINGS IN THE 

ABOVE-ENTITLED MATTER. 

______________________________

IRENE RODRIGUEZ, CSR, CRR

CERTIFICATE NUMBER 8076

_______________________________

LEE-ANNE SHORTRIDGE, CSR, CRR 

CERTIFICATE NUMBER 9595

DATED: JANUARY 11, 2019

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