Case Clip(s) Detailed Report

Qualcomm

Saturday, January 05, 2019, 9:14:16 PM

Case 5:17-cv-00220-LHK Document 1161-1 Filed 01/07/19 Page 1 of 18
Case Clip(s) Detailed Report

Saturday, January 05, 2019, 9:14:16 PM

Qualcomm

Reifschneider, Eric (Vol. 01) - 02/22/2018 1 CLIP (RUNNING 00:52:03.866)

Could you state your name for the record? ...

ER V1 61 SEGMENTS (RUNNING 00:52:03.866)

1. PAGE 12:18 TO 12:19 (RUNNING 00:00:03.814)

 18 Could you state your name for the record? 

 19 A Eric Reifschneider. 

2. PAGE 13:07 TO 13:10 (RUNNING 00:00:07.311)

 07 Q And did you work for Qualcomm before you 

 08 joined as an employee in 2012? 

 09 A I was outside counsel on certain matters 

 10 before that. 

3. PAGE 24:21 TO 25:04 (RUNNING 00:00:39.490)

 21 Q So for the subscriber devices, can you think 

 22 of any licensee who did not -- who was not a current 

 23 modem chip customer? 

 24 A There's a Chinese company called Meizu that I 

 25 remember we were negotiating with toward the end of my 

 00025:01 time as general manager. I did not personally 

 02 participate in negotiations with them, but I was part of 

 03 the internal discussions about how to negotiate with 

 04 them. 

4. PAGE 25:05 TO 25:08 (RUNNING 00:00:17.477)

 05 Q Can you think of any company that you 

 06 negotiated with, for a SULA license, that was not a 

 07 current customer, buying modem chips from Qualcomm? 

 08 A Not as I sit here right now. 

5. PAGE 26:17 TO 26:25 (RUNNING 00:00:45.436)

 17 Q While you were the general manager of QTL, did 

 18 Qualcomm have a policy of not selling modem chips to 

 19 customers unless they had a separate license agreement 

 20 with Qualcomm? 

 21 A My understanding of the time I was general 

 22 manager of QTL was that we had a practice of not selling 

 23 modem chips to a company that was not licensed under the 

 24 patent portfolio for the kind of product that that modem 

 25 chip would go into. 

6. PAGE 27:16 TO 27:18 (RUNNING 00:00:05.763)

 16 Q Are you aware of any other company that has 

 17 that practice? 

 18 A No, not that I can think of. 

7. PAGE 28:18 TO 28:19 (RUNNING 00:00:08.937)

 18 Q I'm going to hand you a document that's been 

 19 marked Exhibit 6548 -- oh, sorry. You're so far away. 

8. PAGE 29:05 TO 29:15 (RUNNING 00:00:34.098)

 05 Q It appears to be an e-mail from you to Derek 

 06 Aberle, David Cianflone -- I don't know if I'm saying 

 07 that right -- Marv Blecker, Lou Lupin, and Fabian 

 08 Gonell. Do you recall this e-mail? 

 09 A No. 

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 10 Q And it's dated May 4th, 2012? 

 11 A I see the date. 

 12 Q Do you have any reason to believe that this 

 13 isn't an e-mail that you sent? 

 14 A No. 

 15 Q And attached to the e-mail is a slide. 

9. PAGE 29:23 TO 31:04 (RUNNING 00:01:59.876)

 23 So the slide is titled "Licensee 

 24 Disputes/Extensions," and the text says: "Issue: 

 25 Whether to maintain policy of refusing to sell ASICs to 

 00030:01 unlicensed entities." 

 02 What's an ASIC? 

 03 A Application-specific integrated circuit. 

 04 Q And is that -- can we colloquially call that a 

 05 "modem chip"? 

 06 A Well, ASIC could be any kind of chip. 

 07 Q Okay. So that's broader than just a modem 

 08 chip? 

 09 A The common use of the term, yes, it's broader. 

 10 Q Okay. Under that point, it says: "Such sales 

 11 present the risk of a finding of patent exhaustion in a 

 12 dispute over royalties." 

 13 Is that what you understand to be the 

 14 reason for the policy? 

 15 A My understanding was that was the concern for 

 16 the risk to the licensing business of selling -- selling 

 17 chips to unlicensed customers, the -- the risk of a 

 18 customer making an argument of patent exhaustion and 

 19 sort of undercutting the ability to license the patent 

 20 portfolio. Yes. 

 21 Q Are you aware of any other reasons for the 

 22 policy? 

 23 A I can't remember at this point. 

 24 Q And just to note that this is referred to as a 

 25 policy in this slide. 

 00031:01 So the only reason that you're aware of 

 02 is the patent exhaustion? 

 03 A It's the only one I can remember at this 

 04 point. 

10. PAGE 33:03 TO 33:05 (RUNNING 00:00:13.289)

 03 Q (BY MS. MILICI) Did Qualcomm communicate this 

 04 policy to its customers and licensees? 

 05 A I believe so. 

11. PAGE 33:17 TO 34:11 (RUNNING 00:01:16.551)

 17 Q So by the time that you were general manager 

 18 at QTL, licensees generally knew that if they did not 

 19 have a license, they could not purchase ASICs from 

 20 Qualcomm; is that correct? 

 21 A I think, generally, licensees understood that 

 22 they needed to have a license for the device that the 

 23 ASIC would incorporate into. 

 24 Q Or they could not purchase ASICs from 

 25 Qualcomm? 

 00034:01 A I think they understood that our practice was 

 02 not to sell chips into unlicensed devices. 

 03 Q During licensing negotiations, did you ever 

 04 remind a licensee about this practice? 

 05 A Yes. 

 06 Q Can you recall which licensees you reminded of 

 07 this practice, during licensing negotiations? 

 08 A Yes. 

 09 Q Can you tell me who they are? 

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 10 A I remember Sony and Huawei. I can't 

 11 remember -- think of any others. 

12. PAGE 34:21 TO 35:09 (RUNNING 00:01:26.232)

 21 Q Starting with Sony, what do you recall about 

 22 reminding them about the licensing practice during 

 23 negotiations? 

 24 A Well, I recall in 2012 there was a very unique 

 25 situation where the Sony Ericsson handset business, 

 00035:01 which had been operating under the Ericsson license 

 02 agreement because it was an affiliate of Ericsson, 

 03 became -- or was going to become and did become 

 04 unlicensed, as a result of Sony buying out Ericsson's 

 05 stake in the joint venture. And so the business was no 

 06 longer an affiliate of Ericsson. And I remember 

 07 reminding -- or having discussions with people at Sony 

 08 Mobile about the difficulty that would put us in, in 

 09 terms of selling chips for unlicensed products. 

13. PAGE 42:06 TO 42:10 (RUNNING 00:00:20.389)

 06 Q So if I understand the concern, the concern is 

 07 that if you sell a chip to an unlicensed customer, that 

 08 you would not be able to get royalties for the IP 

 09 embodied on the chip and the -- and not for any other 

 10 IP? 

14. PAGE 42:13 TO 42:17 (RUNNING 00:00:17.427)

 13 A The concern, as I tried to explain before, was 

 14 that the company we were dealing with would argue, or 

 15 take the position, that, as a result of patent 

 16 exhaustion, they did not need to pay royalties at all, 

 17 or needed to pay less in royalties. 

15. PAGE 50:17 TO 51:09 (RUNNING 00:01:31.048)

 17 Q You said earlier that you had reminded Sony, 

 18 during negotiations, about the policy, or practice, of 

 19 not selling ASICs into unlicensed devices, and that you 

 20 had also reminded Huawei; is that correct? 

 21 A Yes. 

 22 Q Can you tell me what you recall about the 

 23 Huawei, the times you reminded Huawei of the policy? 

 24 A Yes. So I remember there was a situation when 

 25 Huawei had a sort of unique China license agreement. 

 00051:01 Well, I say "China" because it was an agreement that 

 02 bore out of unique circumstances in China. And that 

 03 agreement was going to expire. I think it had a 

 04 ten-year term. And they had an option -- a unilateral 

 05 option to renew it for another ten years, as I recall. 

 06 And we were approaching the deadline for them to renew 

 07 it. 

 08 Q And was that a 3G license? 

 09 A As I recall, yes. 

16. PAGE 53:12 TO 53:18 (RUNNING 00:00:40.312)

 12 While you were a general manager of QTL, 

 13 did Qualcomm have a policy of not granting exhaustive 

 14 licenses to ASIC manufacturers? 

 15 A Well, again, I -- I didn't think of things in 

 16 terms of policies. But the practice at the time I was 

 17 general manager was not to seek to license exhaustively 

 18 other component suppliers. 

17. PAGE 87:02 TO 87:03 (RUNNING 00:00:05.076)

 02 Q I'm going to hand you what's been marked as 

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 03 5186. 

18. PAGE 87:04 TO 87:04 (RUNNING 00:00:01.766)

 04 Do you recognize this document? 

19. PAGE 87:05 TO 87:14 (RUNNING 00:00:31.898)

 05 A This appears to be a series of e-mails, sent 

 06 in October of 2012, relating to our negotiations with 

 07 Sony. 

 08 Q And the e-mail on top is from you to Marv 

 09 Blecker, Fabian Gonell, and Derek Aberle, with other 

 10 people copied, on October 20th, 2012; correct? 

 11 A I see that, yes. 

 12 Q Do you have any reason to believe you didn't 

 13 send this e-mail? 

 14 A No. 

20. PAGE 87:24 TO 88:07 (RUNNING 00:00:15.850)

 24 Q (BY MS. MILICI) It says, "Frankly, I am an 

 25 outlier. I would delay final approval of chip shipment 

 00088:01 until Tuesday to let them know that we are serious about 

 02 this." 

 03 Do you see that? 

 04 A Yes. 

 05 Q Do you understand what Marv meant by "let them 

 06 know we are serious about this"? 

 07 A No. 

21. PAGE 88:15 TO 89:05 (RUNNING 00:01:22.753)

 15 Q (BY MS. MILICI) And then, in your e-mail, it 

 16 starts with, "At minimum, we need to be prepared to stop 

 17 all chip shipments after Tuesday if they don't sign on 

 18 Tuesday." Do you recall writing that e-mail? 

 19 A I don't specifically recall writing it. 

 20 Q Do you recall having internal discussions 

 21 about whether to stop chip shipments to Sony? 

 22 A I don't recall specific discussions. I recall 

 23 that we were generally, you know, very concerned about 

 24 what to do since, as I recall, at this point in time, by 

 25 October 20th, the six-month interim agreement had 

 00089:01 expired. I think we did a short-term extension after 

 02 that, which had also expired. So they were, again, 

 03 unlicensed. And we were on that horns of the dilemma I 

 04 described earlier about what to do. And so we had 

 05 discussions around that. 

22. PAGE 89:25 TO 90:01 (RUNNING 00:00:08.033)

 25 Q I'm going to hand you what's been marked 

 00090:01 as CX6534. 

23. PAGE 90:02 TO 90:04 (RUNNING 00:00:55.072)

 02 Do you recognize this document? 

 03 A This appears to be a couple other e-mails that 

 04 branched off the earlier e-mail chain. 

24. PAGE 90:16 TO 91:15 (RUNNING 00:01:48.704)

 16 Q Okay. And then in this, you write, "Arguably, 

 17 it should not be a big deal if all that happens is that 

 18 a shipment is delayed a few days." 

 19 And are you talking there about the 

 20 shipment to Sony that was the subject of the earlier 

 21 e-mail? 

 22 A It looks that way. 

 23 Q Okay. And then the last sentence before the 

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 24 redaction says, "The relevant questions are, one, are 

 25 they more or less likely to sign on Tuesday if we hold 

 00091:01 the shipment (if it makes any difference at all)." 

 02 So were you considering delaying the 

 03 shipment in order to increase the likelihood that 

 04 they -- that Sony would sign? 

 05 A I don't -- I mean, I don't know. I don't 

 06 remember. 

 07 Q Okay. 

 08 A I mean, at the level of specificity you're 

 09 asking me right now, I don't remember. 

 10 Q Well, is that -- is that what you would take 

 11 from the sentence that you wrote? 

 12 A It appears that I was identifying as one 

 13 relevant question, "Are they more or less likely to sign 

 14 on Tuesday if we hold the shipment, if it makes any 

 15 difference at all?" 

25. PAGE 98:01 TO 98:21 (RUNNING 00:02:00.559)

 00098:01 Q My apologies about that. Okay. I'm going to 

 02 have Chris hand you what's been marked as 5224. And my 

 03 apologies in advance. It looks like this printed in 

 04 some weird, funky way. I'm not sure why, but hopefully, 

 05 we can muddle through anyway. 

 06 So this appears to be an e-mail sent -- a 

 07 series of e-mails sent from -- in May 1st, 2013, through 

 08 May 8th, 2013, including several e-mails written by you. 

 09 Do you recognize these e-mails? 

 10 A Generally, yes. 

 11 Q So the last e-mail we looked at was April 9th. 

 12 And you referred to reminding them of the consequences 

 13 of becoming unlicensed. And then if you look at the 

 14 first e-mail on this exhibit, it's May 1st. And I'd 

 15 like to draw your attention to the -- to the last 

 16 sentence of the second-to-last paragraph on page 2. And 

 17 it -- 

 18 A So we're looking at the e-mail -- 

 19 Q I'm sorry. Page 3. The last page. It's an 

 20 e-mail from you, dated May 1st, 2013. 

 21 A Okay. 

26. PAGE 98:22 TO 99:15 (RUNNING 00:01:05.212)

 22 Q And who is this -- who is it addressed to? 

 23 Who is that person? 

 24 A It looks like that's Xuxin Cheng. 

 25 Q And do you know who that is? 

 00099:01 A He was one of the people in Huawei's IP group 

 02 that we dealt with on licensing issues. 

 03 Q Okay. And then, if you look at the 

 04 second-to-last paragraph, the last sentence, it says, 

 05 "Moreover, as you know, if the C2K SULA expires and has 

 06 not been replaced by a new patent license agreement 

 07 covering C2K products, there will be issues with 

 08 Huawei's ability to continue to use C2K chipsets or 

 09 QMC's software, issues which I am sure both our 

 10 companies would like to avoid." 

 11 Do you see that? 

 12 A I see that. 

 13 Q And do you recall writing that? 

 14 A Not specifically, but I have no reason not to 

 15 think this is an accurate copy of the e-mail. 

27. PAGE 100:16 TO 100:17 (RUNNING 00:00:10.885)

 16 Q Okay. I'm going to hand you -- or Chris 

 17 will -- a document marked CX6528. And this is an e-mail 

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28. PAGE 100:16 TO 100:20 (RUNNING 00:00:15.185)

 16 Q Okay. I'm going to hand you -- or Chris 

 17 will -- a document marked CX6528. And this is an e-mail 

 18 from you to Tom Rouse and Deborah Dwight. And I think 

 19 you've told us who Tom Rouse is. Who is Deborah Dwight? 

 20 A She was a lawyer within QTL. 

29. PAGE 100:25 TO 101:04 (RUNNING 00:00:17.484)

 25 Q Okay. So the -- so this is titled "Huawei 

 00101:01 meeting notes." And it appears to be notes of a meeting 

 02 with Huawei held on May 10th. Is that the meeting that 

 03 you were referencing? 

 04 A It looks like it. 

30. PAGE 102:15 TO 102:17 (RUNNING 00:00:07.198)

 15 Q And at the end there, it says "TR." I'm 

 16 assuming that's Tom Rouse? Just a random guess. 

 17 A Looks like it. 

31. PAGE 103:07 TO 103:14 (RUNNING 00:00:32.740)

 07 Q Okay. And for meeting notes like this, would 

 08 the practice of QTL have been to be accurate in the 

 09 notes? 

 10 A Well, I don't -- there was no general practice 

 11 in taking meeting notes like this. Tom had the habit of 

 12 doing this sort of thing. I don't remember anyone else 

 13 doing it like Tom did. I, you know, would expect Tom to 

 14 try to be as accurate as he could be. 

32. PAGE 106:16 TO 107:07 (RUNNING 00:01:05.966)

 16 Q And then skipping a sentence after that, it 

 17 says, "Not to mention the chip supply problem." And is 

 18 that chip supply problem, again, the issue of the policy 

 19 or practice of not selling chips into unlicensed 

 20 devices? 

 21 A As I look at the sentence before that, which 

 22 says, "Well, we've got some attractive terms, e.g., 

 23 265 -- 2.65 for C2K in China. That would not be 

 24 available if the agreement expired" -- which seems clear 

 25 to me I'm talking about the expiration of the C2K 

 00107:01 framework agreement. And the next sentence says, "Not 

 02 to mention the chip supply problem." So it appears to 

 03 me that was a reference to the potential situation, if 

 04 they did let the agreement expire without exercising 

 05 their option to renew it, that there could be an issue 

 06 with selling them chips for those devices if they wanted 

 07 to buy those chips. 

33. PAGE 124:23 TO 124:23 (RUNNING 00:00:08.329)

 23 Q I'm going to give you Exhibit 52 -- CX5211. 

34. PAGE 125:04 TO 126:07 (RUNNING 00:02:29.851)

 04 Q And is this a recap of a Huawei meeting dated 

 05 July 11th, 2013, that you sent to Fabian Gonell and 

 06 Derek Aberle, Marv Blecker, and Tom Rouse? 

 07 A Yes. That's what it appears to be. 

 08 Q And I believe you testified earlier that when 

 09 you wrote up such recaps or summaries, it would be your 

 10 intent to be as accurate as possible; is that correct? 

 11 A I would do my best. 

 12 Q Okay. If you turn to page 2, 5211-002, the 

 13 second full paragraph says: "We explain the rationale 

 14 behind our proposal and how it was designed to address 

 15 the concerns they raised at our meeting in San Diego, 

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 16 how it deviates from our standard terms in some 

 17 significant ways. We explained why we have little 

 18 flexibility with the royalty rates, given the 

 19 established value of our patent portfolio, and indicated 

 20 our willingness to consider other ways to have a mutual 

 21 exchange of value, such as a patent transfer. But we 

 22 didn't have a specific proposal (regarding a patent 

 23 transfer) because they had not gotten back to us." I'm 

 24 not going to read the rest of the sentence. 

 25 So does this refresh your recollection of 

 00126:01 whether the patent transfer that you were talking about 

 02 in an e-mail the next day was related to the license? 

 03 MR. BORNSTEIN: Object to the form of the 

 04 question. 

 05 A Well, the -- the topic of a patent transfer 

 06 was part of the overall conversation, part of the same 

 07 discussion as the negotiation of license terms. 

35. PAGE 126:20 TO 127:07 (RUNNING 00:00:46.819)

 20 Q So to be clear: Huawei was asking Qualcomm to 

 21 reduce its rates. Qualcomm was responding: We can't 

 22 reduce our rates, but we'll consider other ways to 

 23 exchange value. Is that correct? 

 24 A I think that's generally right. 

 25 Q And one of those other ways to exchange value 

 00127:01 was a patent transfer? 

 02 A Yes. 

 03 Q And as the e-mail from the next day we were 

 04 looking at said, another way to exchange value would be 

 05 a strat fund. 

 06 A Yes. I don't recall that we ever proposed a 

 07 strat fund to Huawei, and I don't think that we did. 

36. PAGE 132:04 TO 132:18 (RUNNING 00:01:03.915)

 04 Q Okay. On the bottom of the next page -- 

 05 MR. BORNSTEIN: You're on 003? 

 06 MS. MILICI: Yes. 

 07 Q (BY MS. MILICI) That last paragraph mentions 

 08 explaining the concept of a strat fund to them. 

 09 Afterwards, they became much more interested. Does that 

 10 refresh your recollection about whether you offered a 

 11 strat fund to Huawei? 

 12 MR. BORNSTEIN: Wait. Where are you? 

 13 MS. MILICI: The last sentence on page 3. 

 14 MR. BORNSTEIN: Thank you. 

 15 A I see that. I didn't recall that we had 

 16 mentioned the idea or explained the idea of a strat fund 

 17 to them at this meeting. I don't recall that we ever 

 18 made them a specific proposal around a strat fund. 

37. PAGE 137:03 TO 137:04 (RUNNING 00:00:07.054)

 03 Q I'm going to pass out what has been marked 

 04 CX5210. Do you recognize this document? 

38. PAGE 137:04 TO 138:11 (RUNNING 00:03:31.991)

 04 CX5210. Do you recognize this document? 

 05 A No. 

 06 Q This is a document titled "Lenovo 4G 

 07 Strategy." It's dated March 14th, 2013. 

 08 A I see that. 

 09 Q If you turn to page 8, there's a slide that 

 10 says "Current Status of 4G Negotiations and Overdue 

 11 Royalty Payments." Does that refresh your recollection 

 12 of what you were negotiating with Lenovo in March of 

 13 2013? 

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 14 A A little bit. A little bit. 

 15 Q Is it -- was Qualcomm trying to get Lenovo to 

 16 sign a 4G license in the spring of 2013? 

 17 A As I recall, yes. 

 18 Q Okay. If you could flip ahead to page 11, 

 19 there is a slide titled "Carrots and Sticks." Do you 

 20 understand what "Carrots and Sticks" means in this 

 21 context? 

 22 A Seems to me the carrots were a series of 

 23 things we could possibly offer to them that would be 

 24 some benefit to them, potentially. And sticks were, 

 25 sort of, things we could sort of -- I don't know how to 

 00138:01 put it. I don't know how I would describe the term 

 02 "sticks." 

 03 Q Would it be fair to say that carrots and 

 04 sticks are two different sets of incentives you could 

 05 use to encourage Lenovo to sign a 4G license? 

 06 A Seems possible. 

 07 Q The goal of all of these suggestions would be 

 08 to get Lenovo to sign a 4G license. Is that how you 

 09 understand this slide? 

 10 A Presumably, as I look at the overall slide 

 11 deck presentation. 

39. PAGE 150:05 TO 150:05 (RUNNING 00:00:05.745)

 05 Q I've got another exhibit. It's CX6491. 

40. PAGE 150:06 TO 150:08 (RUNNING 00:01:14.690)

 06 Do you recognize this document? 

 07 A Okay. I've looked at it. I don't 

 08 specifically recall the e-mails, but . . . 

41. PAGE 152:11 TO 153:09 (RUNNING 00:01:37.717)

 11 Q Okay. So this proposal has to do with QTI's 

 12 Snapdragon chips -- 

 13 (Phone interruption.) 

 14 MS. MILICI: Sorry about that. 

 15 Q (BY MS. MILICI) -- in multimode handsets that 

 16 are reported by Lenovo to Qualcomm under the applicable 

 17 license agreement, and it's offering $5 per unit in 

 18 funding, up to $80 million dollars, for eighteen months; 

 19 and then $100 million during the last twelve months. Do 

 20 you remember that proposal? 

 21 A Vaguely. 

 22 Q And does this indicate that those funds would 

 23 accrue on the use of Qualcomm chipsets in subscriber 

 24 units? 

 25 A It indicates that the funds would accrue upon 

 00153:01 the sale of a handset containing the QTI Snapdragon chip 

 02 that was reported by Lenovo to Qualcomm under the 

 03 applicable license agreement. 

 04 Q So under this proposal, it would not accrue 

 05 any funds on the -- on the reporting of handsets that 

 06 used a competitor's chip instead of a QTI Snapdragon 

 07 chip; is that correct? 

 08 A According to the terms of this proposal, I 

 09 think that's right. 

42. PAGE 159:23 TO 160:01 (RUNNING 00:00:10.818)

 23 Q So I understand this proposal: There is -- we 

 24 have Lenovo wants lower royalty rates. Is that correct? 

 25 Do you recall that? 

 00160:01 A Vaguely. 

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43. PAGE 175:09 TO 175:14 (RUNNING 00:00:53.243)

 09 Q I'm going to show you CX5179. And the first 

 10 e-mail in this chain is from you to Derek Aberle, Fabian 

 11 Gonell, Tom Rouse, dated October 15th, 2015. And it's 

 12 "LGE update." And it's reporting on a meeting with LGE. 

 13 Do you recall that meeting? 

 14 A Vaguely. 

44. PAGE 177:20 TO 178:13 (RUNNING 00:01:10.973)

 20 Q Okay. If you look at the e-mail above that, 

 21 the last sentence, this is an e-mail from you to Derek 

 22 Aberle, also dated October 15th, 2015. And at the end 

 23 of that e-mail, you say: "I forgot to mention that they 

 24 also complained about the strat fund and indemnity funds 

 25 being tied to the use of QCT chips." 

 00178:01 Had -- had Qualcomm offered LGE a strat 

 02 fund and indemnity funds tied to the use of QCT chips? 

 03 A I'm pretty sure this is referring to strat 

 04 fund -- a strat fund and indemnity fund that were 

 05 already in place. 

 06 Q So at some point, there was an offer of a 

 07 strat fund and indemnity fund tied to the use of QCT 

 08 chips, but it had been accepted and was an actual -- 

 09 A Those funds were put in place before I joined 

 10 Qualcomm. 

 11 Q And the funds were tied to the use of QCT 

 12 chips? 

 13 A Apparently. 

45. PAGE 178:14 TO 178:14 (RUNNING 00:00:03.438)

 14 Q This is CX6500. I think you testified earlier 

46. PAGE 178:14 TO 178:22 (RUNNING 00:00:45.318)

 14 Q This is CX6500. I think you testified earlier 

 15 that you only recalled a couple of strat funds that were 

 16 negotiated, along with licenses; is that correct? 

 17 A That I was involved in. 

 18 Q Okay. What about that you weren't involved 

 19 in? 

 20 A Well, I -- I remember there being proposals of 

 21 strat funds made to some of the Chinese licensees from 

 22 time to time. 

47. PAGE 180:25 TO 181:08 (RUNNING 00:00:32.032)

 25 Q Then there's an e-mail from Jeff Altman, 

 00181:01 saying: "We would like to propose the following to 

 02 Yulong." There's an up-front fee, two-year term, and 

 03 then a 65-cents-per-unit MDF per C2K devices using QMC 

 04 chips sold in China. 

 05 Is "MDF" there meaning "market 

 06 development fund"? 

 07 A I think that's what Jeff intended that acronym 

 08 to stand for, yes. 

48. PAGE 181:15 TO 182:01 (RUNNING 00:01:02.390)

 15 Q And you say: "Thanks. Have we looked into 

 16 how the accounting for this would work?" And your next 

 17 question is: "Would any of this be allocated to QCT?" 

 18 So how would you decide beforehand 

 19 whether any of this would be allocated to QCT? 

 20 MR. BORNSTEIN: Object to the form. 

 21 A Well, it wasn't my decision. But I would want 

 22 to understand the impact of any potential deal to the 

 23 QTL P&L. And so understanding how much of a strat fund 

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 24 might be allocated to QCT as opposed to QTL would be 

 25 relevant to my understanding of the overall impact of 

 00182:01 the deal on our -- on our -- on the QTL P&L. 

49. PAGE 182:02 TO 182:04 (RUNNING 00:00:06.645)

 02 Q And it's the accounting people who would 

 03 decide that? 

 04 A Yes. 

50. PAGE 188:04 TO 188:04 (RUNNING 00:00:04.858)

 04 And this is CX6516. This appears to be 

51. PAGE 188:04 TO 189:20 (RUNNING 00:03:24.538)

 04 And this is CX6516. This appears to be 

 05 an e-mail dated May 2nd, 2013, from you to Derek Aberle 

 06 and Marv Blecker. And the second paragraph -- well, 

 07 first you start with, "Good meeting, in the end, with 

 08 OPPO today." 

 09 In the second paragraph, it says, "Think 

 10 we have a good chance of getting them to take a 4G 

 11 license now if we are willing to give them, in addition 

 12 to the 5 million strat fund, a cap deduction for 

 13 marketing expenses." 

 14 Does that refresh your recollection on 

 15 whether the strat funds were related to getting Chinese 

 16 OEMs to take 4G licenses? 

 17 MR. BORNSTEIN: Object to form. 

 18 A So as I look at this e-mail, I think I recall 

 19 now the meeting with OPPO that it refers to. And I 

 20 recall at the time we were discussing with them the 

 21 possibility of them entering into a 4G SULA with us. I 

 22 didn't remember the strat funds element of the proposal, 

 23 but it sounds like there was one. I remember this 

 24 being, I think for me, my first time meeting them in 

 25 person and, at least from my standpoint, a preliminary 

 00189:01 discussion. I don't remember there being -- I mean, so 

 02 it was kind of a high-level discussion, not a lot of 

 03 specifics. 

 04 Q (BY MS. MILICI) So you don't recall that 

 05 there were a number of strat funds offered to Chinese 

 06 companies roughly around the same time, in connection 

 07 with 4G licensing? 

 08 A Well, I remember -- I remember we were -- we 

 09 were making an effort to -- to get 4G licenses signed, 

 10 with Chinese companies in particular. Samsung was 

 11 already signed. LG, I think, was already signed. And, 

 12 you know, I remember Jeff Altman was the one doing most 

 13 of that work. And I remember him suggesting or asking 

 14 for permission, you know, from time to time to offer 

 15 strat funds as part of those discussions he was having 

 16 with certain companies. 

 17 I don't remember, of the -- now having 

 18 seen these e-mails relating to OPPO and Yulong and 

 19 Lenovo, I don't remember how many overall or which other 

 20 ones there might have been. 

52. PAGE 203:08 TO 203:08 (RUNNING 00:00:05.602)

 08 Q (BY MS. MILICI) So this is a document marked 

53. PAGE 203:09 TO 203:09 (RUNNING 00:00:02.176)

 09 CX6522. Do you recognize this document? 

54. PAGE 203:10 TO 203:14 (RUNNING 00:00:39.212)

 10 A I -- it's a long e-mail chain, the top of 

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 11 which is an e-mail from me, to a group of people at 

 12 Qualcomm, when I was still in private practice. I 

 13 don't -- I mean, I don't recognize all the e-mails lower 

 14 in the chain. 

55. PAGE 203:24 TO 204:09 (RUNNING 00:00:43.856)

 24 Q And the last full paragraph of this e-mail 

 25 says, "At this time, given these unresolved licensing 

 00204:01 and supply terms issues, our operations team has been 

 02 advised to hold all component shipments to SCMC, Sony 

 03 Mobile." Do you see that? 

 04 A I see that. 

 05 Q Are you aware that the operations team was 

 06 directed to hold shipments to Sony Mobile? 

 07 A I was not in the loop on what was going on 

 08 with the operations team at this point in time, while I 

 09 was still outside counsel. 

56. PAGE 205:03 TO 206:20 (RUNNING 00:03:51.291)

 03 Q Okay. This is CX5180. And there are -- the 

 04 e-mail at the top is from Eric Reifschneider to Marv 

 05 Blecker, Derek Aberle, Lou Lupin, Fabian Gonell, dated 

 06 March 21st, 2012. 

 07 I want to look at an e-mail that starts 

 08 at the bottom of the second page and continues into the 

 09 third page. And it's from -- it's an e-mail from 

 10 Mr. Reifschneider to others, but it's forwarding below 

 11 an e-mail from J. Pearl. And it starts, "Dear Eric" at 

 12 the bottom of the page. Do you see that? 

 13 A Yes. 

 14 Q And at the bottom of that e-mail, the last 

 15 paragraph, it says: "Finally, I am sure that, in 

 16 raising the imminent delivery of Q chipsets, that you 

 17 are not threatening to withdraw or delay chipset 

 18 supplies." 

 19 So did you have a conversation with 

 20 Jonathan Pearl in February 2002 -- I mean 2012, where 

 21 you raised the issue of Qualcomm chipset supply? 

 22 A I don't remember. And if Jonathan is 

 23 referring to me personally or the royal "you," Qualcomm, 

 24 here, I just don't remember. 

 25 Q Well, do you recall ever reminding an OEM of 

 00206:01 Qualcomm's policy or practice of not selling chips into 

 02 unlicensed devices, while you were outside counsel? 

 03 A Well, no. I mean, the only possible instance 

 04 where that could have happened would have been these 

 05 discussions with Sony. And I just -- I don't remember 

 06 exactly, you know, what happened in the short period of 

 07 time with Sony. 

 08 Q Do you recall ever telling Sony that you were 

 09 going to tell QTC that they had refused to sign a 

 10 license? 

 11 MR. BORNSTEIN: Object to form. 

 12 A While I was outside counsel or -- 

 13 Q (BY MS. MILICI) No. After you were at 

 14 Qualcomm. 

 15 A After I was at Qualcomm? I remember reminding 

 16 Jonathan at different points in time that, you know, we 

 17 had a -- a real problem we needed to solve, and it was 

 18 going to get -- I mean, it was very serious. Exactly 

 19 how I expressed that to him, I don't remember at this 

 20 point. 

57. PAGE 206:21 TO 206:23 (RUNNING 00:00:07.967)

 21 Q Okay. I'll do one last document of the day, 

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 22 because I understand we're running low on tape. This is 

 23 CX5204. The e-mail on the top is from 

58. PAGE 206:23 TO 207:16 (RUNNING 00:01:25.353)

 23 CX5204. The e-mail on the top is from 

 24 Mr. Reifschneider, to Don Rosenberg and others, and has 

 25 been completely redacted. But the first e-mail in the 

 00207:01 chain is from Eric Reifschneider to Jonathan Pearl, 

 02 dated October 27th, 2002. 

 03 MR. BORNSTEIN: 2012. 

 04 MS. MILICI: I mean 2012. Sorry. It's a 

 05 long day. 

 06 Q (BY MS. MILICI) And at the end, the very last 

 07 sentence in that e-mail, it says, "It is regrettable 

 08 that SMC has chosen this course of action. But at this 

 09 point, I must report to QCT that SMC appears unwilling 

 10 to enter into a license agreement with Qualcomm." 

 11 Now, do you -- does that refresh your 

 12 recollection of telling Sony that you were going to tell 

 13 QCT that they wouldn't enter a license? 

 14 A Yes. I see what I wrote here to Jonathan. 

 15 And I was communicating to him what appears to be kind 

 16 of the next step in the escalation process. 

59. PAGE 207:17 TO 208:19 (RUNNING 00:02:08.536)

 17 Q The next step in the escalation process -- the 

 18 next step in what escalation process? 

 19 A Well, decisions about chip shipments were not 

 20 mine. And so -- I mean, I think, ultimately, they went 

 21 to the very top of the company. But, you know, the 

 22 whole sort of situation, or issue, was triggered by the 

 23 status of the license discussions. And if the 

 24 discussions, you know, were going well and we were done 

 25 or close to done and everything seemed okay, that was 

 00208:01 one type of report. 

 02 If -- and what appears to be the case in 

 03 this point in time from the e-mail -- the discussions, 

 04 you know -- they weren't even getting back to us. We 

 05 thought we were just about done. And then Lee wasn't 

 06 even returning our phone calls, and we had no idea what 

 07 was going on, on their side. Then that was a different 

 08 type of report I would have to give to people 

 09 internally. 

 10 Q Did you tell Jonathan Pearl that this was just 

 11 the next step in escalation and that you couldn't make 

 12 the decision? 

 13 A I don't remember exactly what I said to him in 

 14 oral conversations. I mean, we were communicating on a, 

 15 as I recall, pretty regular basis, you know, throughout 

 16 all of this, working -- I thought, working together 

 17 to -- to try to get an agreement done and get everything 

 18 resolved. But I don't remember, like, word for word 

 19 exactly what I said. 

60. PAGE 210:25 TO 211:08 (RUNNING 00:01:27.375)

 25 Q All right. This is 6530. And do you 

 00211:01 recognize that e-mail? 

 02 A I sort of recognize it. I don't specifically 

 03 remember writing it. But, I mean, I recognize the topic 

 04 it's addressing and so on. 

 05 Q And do you recall recommending that you 

 06 discontinue chip supply for certain customers? 

 07 A I see here that it says that. I don't, again, 

 08 specifically remember writing the e-mail. 

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61. PAGE 211:09 TO 211:21 (RUNNING 00:01:00.303)

 09 Q Okay. Do you recall what the response was 

 10 of -- what any response was to your recommendation? 

 11 A I don't believe we ever discontinued chip 

 12 supply to any of these customers. 

 13 Q Do you know why? 

 14 A The decision was made by the people who made 

 15 the decision to continue shipping. I don't recall 

 16 whether I -- you know, what their reasons were or if I 

 17 even knew their reasons. 

 18 Q And who would have made that decision? 

 19 A Well, I mean, I think, ultimately, the 

 20 decisions would have been made by Derek and Steve, maybe 

 21 some of the other senior EVP-level executives. 

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Reifschneider, Eric (Vol. 02) - 02/23/2018 1 CLIP (RUNNING 00:09:39.096)

MR. PIERCE: This is PX402. ...

ER V2 8 SEGMENTS (RUNNING 00:09:39.096)

1. PAGE 313:04 TO 313:04 (RUNNING 00:00:02.980)

 04 MR. PIERCE: This is PX402. 

2. PAGE 313:07 TO 313:16 (RUNNING 00:00:32.705)

 07 Q (BY MR. PIERCE) There's two e-mails -- it's 

 08 three e-mails here -- e-mail chain from February 20th, 

 09 2015. I'm going to be focusing on the top e-mail, which 

 10 is an e-mail from you, Eric Reifschneider, to Derek 

 11 Aberle and Fabian Gonell. 

 12 A Uh-huh. 

 13 Q Do you see that? And it says -- the subject 

 14 is regarding "Mav follow up." Fair to say that this 

 15 whole e-mail chain is about Apple negotiations? 

 16 A Yes. Yes. 

3. PAGE 315:19 TO 316:07 (RUNNING 00:00:50.085)

 19 Q And it's towards the end, the second-to-last 

 20 sentence. "We have tried to find compromises and 

 21 workarounds as they have whittled away, slowly and 

 22 surely, at every layer of protection of our business 

 23 model." 

 24 A Okay. I see that, yes. 

 25 Q So your business model is built to protect 

 00316:01 against an OEM bringing FRAND litigation; correct? 

 02 A No. No. What I think, as I sit here now and 

 03 look at this, I was referring to was the ability to have 

 04 both a licensing business and a product business -- in 

 05 our case, a chip business -- at the same time and be 

 06 able to generate revenues from both of those businesses 

 07 at the same time. 

4. PAGE 318:09 TO 321:06 (RUNNING 00:05:08.054)

 09 Q And so everyone at Qualcomm understood that in 

 10 this licensing negotiation with Apple, where Apple 

 11 wanted a guarantee of chipset supply, the -- the return 

 12 objective was that Qualcomm got legal language that 

 13 protected them against exhaustion arguments; correct? 

 14 MR. BORNSTEIN: Object to the form. 

 15 A That was an important consideration for us. 

 16 Q (BY MR. PIERCE) But that consideration alone 

 17 didn't seem to alleviate your concerns about how Apple 

 18 was attacking your business model. Based on this 

 19 e-mail, it seems that you had broader concerns than just 

 20 exhaustion. You were also concerned about the fact that 

 21 Apple could disrupt the peaceful relationship by, for 

 22 example, initiating litigation that resulted in a 

 23 judicial determination of a FRAND rate for Qualcomm's 

 24 SEPs. 

 25 MR. BORNSTEIN: Is there a question? 

 00319:01 Q (BY MR. PIERCE) Isn't that a fair 

 02 characterization of your -- of your comments in this 

 03 e-mail, where you talk about how they are "whittling 

 04 away slowly and surely at every layer of protection of 

 05 our business model"? 

 06 A I remember being concerned, based on things 

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 07 they had said about things they might do if we didn't 

 08 work out some sort of agreement, that could create 

 09 serious risks for QTL and for Qualcomm. 

 10 Q Is it a serious risk to QTL that a judge could 

 11 determine a FRAND rate for Qualcomm's portfolio that was 

 12 different from Qualcomm's proposed FRAND rate? 

 13 A At the time I was general manager, I think 

 14 there were fewer such FRAND decisions than there are 

 15 now. But generally, I was concerned about that risk. 

 16 Q And Qualcomm's -- QTL is responsible for a 

 17 majority of Qualcomm's profits. And so if a judge came 

 18 along and slashed -- slashed Qualcomm's royalty rate, 

 19 that would destroy a great deal of the value of 

 20 Qualcomm's business model; correct? 

 21 A As I said, I was concerned about the 

 22 possibility of, you know, a FRAND determination having 

 23 an impact on QTL royalty revenue. 

 24 Q And the first time that -- did Nokia bring 

 25 FRAND claims against Qualcomm in the mid 2000s? 

 00320:01 A I believe so. 

 02 Q After that -- between that and the current 

 03 Apple litigation, which I assume you've heard something 

 04 about, has anybody -- has any other cell phone 

 05 manufacturer brought FRAND claims against Qualcomm, to 

 06 your knowledge, based on publicly available information? 

 07 A I can't think of -- I'm not -- as I think 

 08 about it, I'm not aware of another situation where there 

 09 is an actual lawsuit. There were some arbitrations. 

 10 I'd have to think a little bit harder about whether 

 11 FRAND issues came up in those or not. But I'm not -- I 

 12 can't think of anything off the top of my head. 

 13 Q So Qualcomm's business model has been 

 14 successful at -- apart from Apple and Nokia, at 

 15 preserving a peaceful relationship with cell phone 

 16 manufacturers where they don't initiate FRAND 

 17 litigation; correct? 

 18 MR. BORNSTEIN: Object to the form of the 

 19 question. 

 20 A I mean, we worked very hard to maintain 

 21 peaceful relationships, which is why we were, you know, 

 22 always willing to listen and engage in discussion. And, 

 23 you know, there was just no shortage of, you know, 

 24 issues that would come up from time to time with 

 25 licensees. But we -- my time as general manager, we 

 00321:01 were, I think, able to resolve most of them amicably. 

 02 And there were some that were unresolved when I stepped 

 03 down. But I -- other than an arbitration with LG that 

 04 was either pending or looming at the time, I don't 

 05 remember any other situation that resulted in 

 06 litigation. 

5. PAGE 456:11 TO 456:13 (RUNNING 00:00:10.277)

 11 Q (BY MR. RENNER) Mr. Reifschneider, I've 

 12 placed in front of you a document that we've marked as 

 13 Apple Reifschneider Exhibit 10. Exhibit 10 bears the 

6. PAGE 456:14 TO 456:14 (RUNNING 00:00:08.155)

 14 Bates stamp Q2014FTC02874707. 

7. PAGE 456:15 TO 457:03 (RUNNING 00:00:32.870)

 15 Now, it appears to be a set of 

 16 handwritten notes that you took during the period of 

 17 your employment at Qualcomm. I can represent it was 

 18 produced in your files. There are pages in here that 

 19 are -- appear to be images of notebook covers with your 

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 20 name on them. Let me ask you a series of questions that 

 21 might help us to authenticate the document. 

 22 In your tenure at QTL, did you 

 23 occasionally take handwritten notes in the normal course 

 24 of business? 

 25 A Yes. 

 00457:01 Q And did you keep those handwritten notes in 

 02 composition books? 

 03 A Sometimes. 

8. PAGE 458:01 TO 459:15 (RUNNING 00:02:13.970)

 00458:01 Q And if we actually turn back two pages, I 

 02 think it will help us to orient ourselves. So turning 

 03 back to the page that ends in 4745, you see there's a 

 04 caption for "Sony"? 

 05 A Yes. 

 06 Q And the date "3-25" to the left of that? 

 07 A Yes. 

 08 Q Would it be your practice at QTL to take notes 

 09 of, among other things, negotiations that you had with 

 10 OEMs? 

 11 A Sometimes, yes. 

 12 Q Is this your handwriting that we're looking 

 13 at? 

 14 A It looks like it. 

 15 Q Do you recognize these pages as something that 

 16 you wrote? 

 17 A I believe so. 

 18 Q So let's go to the page I originally directed 

 19 you to, ending in 4747. At the top, does that read, 

 20 "Sony feedback"? 

 21 A Looks like it, yes. 

 22 Q Okay. And then you've got a few bullets. 

 23 First bullet: "Don't like three-year standstill"; 

 24 correct? 

 25 A Yes. 

 00459:01 Q Do you know what that was a reference to? 

 02 A I don't remember at this point. 

 03 Q The next bullet reads: "Sony concerned about 

 04 QC applying pressure through chip supply." Do you see 

 05 that? 

 06 A I see that. 

 07 Q Can you tell me anything about how it came to 

 08 be that you made that notation? 

 09 A No, I don't recall it. 

 10 Q Is that something you would have learned in 

 11 your discussion with Sony? 

 12 A It appears I'm taking notes of, you know, the 

 13 meeting with Sony and sort of writing down some of the 

 14 things that were said at the meeting. I don't recall 

 15 whatever was said that prompted me to write that. 

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