Case Clip(s) Detailed Report

Qualcomm

Saturday, January 05, 2019, 3:17:28 PM

Case 5:17-cv-00220-LHK Document 1161-3 Filed 01/07/19 Page 1 of 13
Case Clip(s) Detailed Report

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Qualcomm

Jacobs, Paul (Vol. 01) - 04/17/2018 1 CLIP (RUNNING 00:33:40.881)

Good morning. ...

PJ 44 SEGMENTS (RUNNING 00:33:40.881)

1. PAGE 11:03 TO 11:06 (RUNNING 00:00:05.656)

 03 Q Good morning. 

 04 A Good morning. 

 05 Q It's "Dr." Jacobs; correct? 

 06 A If you want. 

2. PAGE 76:16 TO 76:17 (RUNNING 00:00:04.116)

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

 17 CX7041. 

3. PAGE 76:19 TO 76:23 (RUNNING 00:00:18.637)

 19 MR. CHESLER: Thanks. 

 20 BY MS. MILICI: 

 21 Q And this has a Bates-stamp 

 22 Q2014FTC03399394. And it's an e-mail from Paul 

 23 Jacobs to Bill Keitel, dated October 21st, 2005. 

4. PAGE 78:04 TO 78:15 (RUNNING 00:00:33.283)

 04 Q And then in the next paragraph, you say, 

 05 "As we discussed, it is difficult for us to reduce 

 06 Motorola's royalties given the impact it could have 

 07 on other license agreements." Do you see that? 

 08 A Yes. 

 09 Q What did you mean? 

 10 A Oh, of that particular sentence? 

 11 Q Yes. 

 12 A I assume it meant that we -- if we 

 13 reduced Motorola's royalties, then it would have -- 

 14 we would need to reduce other people's royalties so 

 15 that everybody was, you know, roughly the same. 

5. PAGE 78:16 TO 78:25 (RUNNING 00:00:36.287)

 16 Q Do you understand that everyone had 

 17 roughly the same royalties? 

 18 A I actually don't -- I mean, I can't 

 19 remember -- and I probably didn't even know at the 

 20 time all the details of everybody's license 

 21 agreements, but, in general, that was -- the notion 

 22 was that we try to keep things as -- as even as we 

 23 could across the industry, but I don't know -- I 

 24 can't sit here and tell you I could pick up contract 

 25 "X," "Y," or "Z" and point to it, specifically. 

6. PAGE 83:15 TO 83:21 (RUNNING 00:00:27.160)

 15 In this instance, Motorola was asking for 

 16 a reduction in royalties and Qualcomm was giving a 

 17 counteroffer of a marketing incentive payment 

 18 that -- that would be conditioned on Motorola using 

 19 Qualcomm's chips in some percentage of its WCDMA 

 20 phones? 

 21 A That's what it looks like, yes. 

7. PAGE 92:21 TO 93:08 (RUNNING 00:01:02.565)

 21 Q I'll hand you what's been marked CX7225. 

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 22 This has a Bates-stamp Q2017MDL1_00255347. 

 23 (Exhibit CX7225 marked) 

 24 THE WITNESS: Yes. 

 25 /// 

 00093:01 BY MS. MILICI: 

 02 Q And on this first page in the middle of 

 03 the page, there's an e-mail from you dated 

 04 January 9th, 2006. It says, "We will be having a 

 05 number of meetings with operators in the next week 

 06 and we need to have an acceptable slide deck to show 

 07 them." Do you see that? 

 08 A Yes. 

8. PAGE 110:22 TO 111:06 (RUNNING 00:00:53.235)

 22 Q Okay. Can you turn to page 26 of the 

 23 document. And this is a slide that's titled, "3GPP 

 24 Contributions"? 

 25 A Hmm-hmm. 

 00111:01 Q And this pie chart shows that Qualcomm 

 02 contributed 12.5 percent -- or had a share of the 

 03 contribution of 12.5 percent? Do you see that? 

 04 A Yeah. I think what it's saying that 

 05 12 -- of all the documents that were submitted, 

 06 Qualcomm submitted 12.5 percent of those documents. 

9. PAGE 150:20 TO 150:20 (RUNNING 00:00:04.482)

 20 Q Okay. I'm going to hand you CX7224. 

10. PAGE 150:23 TO 151:06 (RUNNING 00:00:36.383)

 23 BY MS. MILICI: 

 24 Q So the Bates-stamp Q2017MDL1_01125900. 

 25 Do you see that? 

 00151:01 A Yes. 

 02 Q And the first e-mail in this chain is 

 03 from somebody named Andrew Gilbert. It starts on 

 04 page 3. It's from Andrew Gilbert to Paul Jacobs and 

 05 a number of other people? 

 06 A Hmm-hmm. 

11. PAGE 152:14 TO 153:24 (RUNNING 00:01:48.808)

 14 Q And then the text of the e-mail says, 

 15 "There was a really excellent portion of the 

 16 presentation we made to DG Comp related to" a way 

 17 WCDMA -- sorry -- "a way to look at the proportion 

 18 of valuable IP in the WCDMA standard." Do you see 

 19 that? 

 20 A I do. 

 21 Q And it says that, "A way of looking at it 

 22 showed the percentage of citations we had." Do you 

 23 see that? 

 24 A Yes. 

 25 Q Do you know what that refers to? 

 00153:01 A I -- I think I do, but I'm not positive. 

 02 I think what it was -- so when -- citations means 

 03 another patent refers to a previous patent. So I 

 04 think that's what it means is that -- it's like a -- 

 05 like when Google ranked websites, they did it by 

 06 looking at what websites linked to that particular 

 07 website. And that's how they promoted it, or made 

 08 it higher, or lower in the ranking. So this was the 

 09 kind of thing that says: If somebody made a good 

 10 patent -- like, not one that just twiddled the bits, 

 11 but actually something fundamental -- then people 

 12 take those patents, and they build on top of them. 

 13 That's the idea of the patent system that you 

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 14 publish -- the patent, and then other people can see 

 15 it, and they can innovate and do things. And so the 

 16 ex -- excuse me -- to extent that a patent -- a 

 17 later patent refers to an earlier one, it means that 

 18 the person that was doing the later innovation was 

 19 building off of something that they saw on a patent. 

 20 And so the idea of this is that patents 

 21 are -- could you look as one measure of value, not 

 22 necessarily dollar value, but just technical value, 

 23 you could look at based off of how many patents 

 24 later on referred to that earlier patent. 

12. PAGE 153:25 TO 154:24 (RUNNING 00:01:01.459)

 25 Q Okay. And you write in this e-mail, "We 

 00154:01 should use this to show that we are not unfair." Do 

 02 you see that? 

 03 A I do. 

 04 Q And what did you mean by, "use this to 

 05 show that we are not unfair"? 

 06 A Well, I assume this probably happened 

 07 after I had gone around and talked to a lot of 

 08 operators. But if you show people that the 

 09 technical value of your patents is very high, as 

 10 opposed to some of the patents as we discussed 

 11 earlier that are just bit-twiddling ones and are 

 12 only valuable because they're in a patent -- in a 

 13 standard, this shows that these patents are valuable 

 14 intrinsically; that they aren't necessarily valuable 

 15 just because they're in a standard. They're 

 16 available because they were technical innovations 

 17 that were important technical innovations, and we 

 18 would just that they were technical innovations 

 19 because other people thought they were important 

 20 enough to build new innovations on top of them. 

 21 Q All right. And if you go to the 

 22 e-mail -- the last e-mail -- one at the very top of 

 23 the first page. 

 24 A Yeah. 

13. PAGE 154:25 TO 155:20 (RUNNING 00:00:56.067)

 25 Q That's an e-mail from you to Steve 

 00155:01 Altman. And you say, "I've made the point that it 

 02 isn't a good metric going forward since the system 

 03 can be gamed." Do you see that? 

 04 A Yes. 

 05 Q And what do you mean by "the system can 

 06 be gamed"? 

 07 A So there's redacted stuff. So I'm not 

 08 100 percent sure. But I think what it's referring 

 09 to is the same thing that happens with, like, search 

 10 engine optimization. If I use the name analogy, 

 11 people get their pages up by doing things to make 

 12 references to a patent. 

 13 So you've got a bunch of people to say: 

 14 Oh, well, here's a patent that's not that valuable, 

 15 but we're all going to write patents that reference 

 16 it to try to make its value come up -- that would be 

 17 a way of gaming the system. 

 18 Q Are there other ways to game that system? 

 19 A I'm sure there are, but I'd have to sit 

 20 here and be creative to figure them out (Laughter). 

14. PAGE 157:21 TO 158:05 (RUNNING 00:00:30.851)

 21 Q Do you have an understanding of what 

 22 Qualcomm's market share was in cdma2000 chips while 

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 23 you were CEO? 

 24 A I know that at certain points we had high 

 25 percentages of the market for cdma2000 chips but -- 

 00158:01 if that's a market, I don't know. 

 02 Q And when you say "high percentages," what 

 03 do you mean? 

 04 A That most people were using our cdma2000 

 05 chips. 

15. PAGE 168:14 TO 168:15 (RUNNING 00:00:05.657)

 14 Q Okay. Let's move on. I'll hand you 

 15 CX7042. 

16. PAGE 168:19 TO 169:02 (RUNNING 00:00:43.928)

 19 Q This is Bates-stamped Q2014FTC03592698. 

 20 And the e-mail is from Kathleen Young to qcbod? 

 21 A Yes. 

 22 Q And is "qcbod" an e-mail address for the 

 23 board? 

 24 A Yes. 

 25 Q And who's Kathleen Young? 

 00169:01 A She is the secretary -- CFO's secretary. 

 02 So she was Bill Keitel's assistant at that point. 

17. PAGE 169:03 TO 169:12 (RUNNING 00:00:58.502)

 03 Q All right. And the PowerPoint attached 

 04 is about a Motorola License Amendment. See that? 

 05 A Yes. 

 06 Q Are you familiar with this? 

 07 A I think this -- I mean, it's possible 

 08 this is the one that Ron Garriques did. I mean, I 

 09 don't know the specific time but this looks like the 

 10 sort of things that -- that they agreed so. 

 11 So -- yeah. Essentially, they gave us 

 12 not to assert. Didn't remember the details of it. 

18. PAGE 169:13 TO 169:17 (RUNNING 00:00:19.395)

 13 Q All right. On page 2, at the second 

 14 bullet, under "Key terms," it says, "Motorola agrees 

 15 not to assert its cdma2K and WCDMA-essential patents 

 16 against our chip customers." Do you see that? 

 17 A Yes. Yeah. 

19. PAGE 171:09 TO 171:24 (RUNNING 00:00:36.313)

 09 Q Right. And on page 3 under the Executive 

 10 Summary, the first bullet says, "Pass-through rights 

 11 for Motorola have significant value for Qualcomm"? 

 12 A Yes. 

 13 Q See that? 

 14 A Yes. 

 15 Q And then it says under that, "Help QCT 

 16 gain market share through greater IP protection for 

 17 its customers"? 

 18 A Yes. 

 19 Q Did having pass-through rights from other 

 20 patent holders help QCT gain market share? 

 21 A Yeah. I said earlier, to the extent we 

 22 had the ability to do that and other chip 

 23 competitors didn't do that, then we were in a 

 24 stronger competitive position. No question. 

20. PAGE 176:15 TO 176:15 (RUNNING 00:00:02.517)

 15 Q This is CX6605. 

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21. PAGE 176:19 TO 177:21 (RUNNING 00:01:18.494)

 19 Q And this has a Bates-stamp 

 20 QNDCAL04808594. And there's an e-mail from you 

 21 starting this chain that's dated May 5th, 2007. 

 22 A Yup. 

 23 Q You see that? 

 24 A Yup. 

 25 Q And you wrote, "I have enclosed some 

 00177:01 initial thinking on potential scenarios for 

 02 restructuring the company"? 

 03 A Yes. 

 04 Q So would it be fair to infer that you 

 05 started thinking about how the company could be 

 06 split -- how a split company could be restructured 

 07 around May 2007? 

 08 A That seems a reasonable assumption. 

 09 Q And there's a response from Marv Blecker 

 10 that says, "I've added a few pros and cons." You 

 11 see that? 

 12 A Yup. 

 13 Q And then if you look at the attachment, 

 14 there's a -- there are a couple of scenarios 

 15 proposed, and then some pros and cons of each one? 

 16 A Yes. 

 17 Q Did you draft the initial document? 

 18 A I believe I did. 

 19 Q And then the -- the edits are from Marv 

 20 Blecker? 

 21 A That's what it looks like. 

22. PAGE 182:19 TO 184:22 (RUNNING 00:02:44.257)

 19 Q All right. Number 11 there says, 

 20 "Without chip business, more licensees, potential 

 21 licensees might fight QTL license demands." Do you 

 22 see that? 

 23 A Yes. 

 24 Q And was that one of the cons of 

 25 separating QTL from the rest of Qualcomm? 

 00183:01 A I mean, what -- what he's talking about, 

 02 and that's Marv's thing -- but the point there is 

 03 that you -- by being a partner with companies on 

 04 the -- on the chip side like you're helping them get 

 05 their products out and when there's a new 

 06 technology, that new technology often shows up in 

 07 the form of a new chip and so forth. 

 08 So the idea is that you're a closer 

 09 partner with somebody through the combination of the 

 10 two businesses than you would on any business alone; 

 11 that if the licensing business was going out, and 

 12 they didn't see that the licensing business would on 

 13 its standalone basis was helping them -- helping a 

 14 handset manufacturer get a new product with new 

 15 technology into the market, then they might be less 

 16 likely to, you know, be willing to negotiate on a 

 17 friendly basis with you. 

 18 And it's true in general of the licensing 

 19 business. I mean, in general, if you're negotiating 

 20 with somebody and you have a good rapport with them, 

 21 you're more likely to give them the benefit of the 

 22 doubt on things, as opposed to being untrusting of 

 23 them, and, therefore, you're more likely to find 

 24 compromised positions, as opposed to ones where it's 

 25 a strict quid pro quo; like, you give me this much, 

 00184:01 I value this -- yeah, you know, how negotiations go. 

 02 Q So I just want to understand this. 

 03 So this here says, "Without chip business 

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 04 more licensees, potential licensees might fight QTL 

 05 license demand." 

 06 A Right. 

 07 Q And you think that's true; correct? 

 08 A Yeah. I think that without the chip 

 09 business -- like a QTL standing on its own, naked, 

 10 going to somebody to get a license -- when that 

 11 company doesn't see kind of the whole Qualcomm 

 12 helping them bring out new products and they just 

 13 see this as, okay, it's a license for technology, 

 14 yeah, I think they're less -- you know, they're less 

 15 amenable. They look at you less as your partner and 

 16 more as somebody who's coming and asking for stuff. 

 17 And there -- it's not like a definitive 

 18 thing. It's more like a shading of something. 

 19 You're more likely to do it. I think that's what he 

 20 was saying. Without sort of the working 

 21 interrelationship that you have, companies would be 

 22 more likely to push back. 

23. PAGE 187:06 TO 187:07 (RUNNING 00:00:07.068)

 06 Q Okay. Great. I am going to hand you 

 07 what's been marked CX7279. 

24. PAGE 187:12 TO 187:18 (RUNNING 00:00:35.109)

 12 Q And this is Bates-stamped QNDCAL04966103. 

 13 This is an e-mail from you to Sanjay Jha, dated 

 14 July 2007. Do you see that? 

 15 A Yeah. 

 16 Q And it's attaching a Berlin Strategic 

 17 Committee Discussion. See that? 

 18 A Yeah. 

25. PAGE 187:19 TO 187:23 (RUNNING 00:00:14.436)

 19 Q And did you draft this document? 

 20 A Did I draft the -- the PowerPoint? 

 21 Q Yeah. 

 22 A I doubt it. I'm sure I read it, but I'm 

 23 sure somebody else drafted it. 

26. PAGE 209:18 TO 209:19 (RUNNING 00:00:07.202)

 18 Q Okay. I'm going to hand you what's been 

 19 marked CX7233. 

27. PAGE 209:24 TO 210:09 (RUNNING 00:00:49.314)

 24 And this has a Bates-stamp 

 25 Q2017MDL1_2696656. 

 00210:01 BY MS. MILICI: 

 02 Q And this is an e-mail to you and Steve 

 03 Altman, Bill Keitel, Don Rosenberg, Stu Francis from 

 04 David Wise, attaching a Berlin presentation. Do you 

 05 see that? 

 06 A (Examining document). 

 07 Q And so at this point, this is -- this 

 08 e-mail's dated December 2nd, 2007. 

 09 A Yes. 

28. PAGE 212:11 TO 215:04 (RUNNING 00:03:23.086)

 11 Q Okay. And on the next page, there's, 

 12 again, a list of the pros and cons of Project 

 13 Berlin. Under "Con," there is -- it just says, 

 14 "China." Do you know why China would be identified 

 15 as a con of Project Berlin? 

 16 A My guess is because of Jing's 

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 17 presentation or something. I assume that's what it 

 18 is. 

 19 Q And below that -- to below, that it says, 

 20 "Increase attacks on QTL." 

 21 A I think that's talking about that issue 

 22 that I said earlier, that if you're a closer partner 

 23 with people, they're more likely to -- they're not 

 24 taking a hard line and look for compromised 

 25 positions as opposed to when they don't like you, 

 00213:01 they go after you. 

 02 Q And when you say being "a closer 

 03 partner," you mean selling them chips; correct? 

 04 A I mean, not -- the selling of chips is 

 05 the part of the -- is the outcome of a longer 

 06 process which is working with them to create the 

 07 product and getting them new technologies and 

 08 creating markets for new things and inventing the 

 09 next new thing that's going to cause a consumer to 

 10 buy the phone and so on and so forth. 

 11 Q Is there a reason that QTL couldn't do 

 12 those things without selling chips? 

 13 A It was just harder to get technology into 

 14 the market like I said earlier. And it's harder to 

 15 create the relationship if you're not in there with 

 16 them actually helping them get the product to 

 17 market. It's a little more attenuated of a 

 18 relationship. 

 19 Q So as I understand, selling chips is a 

 20 critical part of that relationship that helps QTL; 

 21 is that correct? 

 22 A Selling chips is sort of the outcome of 

 23 having this good relationship. I mean, you have a 

 24 relationship with the company. You work with them 

 25 to develop a product. And then when that product is 

 00214:01 successful, you sell chips into it. But the selling 

 02 of chips -- the working with them and the stuff that 

 03 all leads into selling the chips is a -- creates a 

 04 lot of goodwill between companies because you're 

 05 helping them get a new out to market. 

 06 Q That's why I'm confused. Why couldn't 

 07 QTL do all those things leading up to developing a 

 08 product working with somebody to develop a product 

 09 if it wasn't selling chips? 

 10 A Because it doesn't have the -- the 

 11 product is built around the chip. The chip is like 

 12 the core of the product, and people put their stuff 

 13 around it and so forth. But the chip is kind of the 

 14 thing that makes the product. So they want the next 

 15 new technology in the chip and they want to work 

 16 with us so that -- it's not -- especially in the old 

 17 days it wasn't that easy. You put a chip on the 

 18 Board and sometimes the radio stuff didn't work 

 19 right or you had the wrong component. 

 20 There's lots of reasons you had trouble 

 21 getting a product to market even after getting the 

 22 chip. So having the people who developed it and 

 23 could help you debug the software and hardware and 

 24 all that stuff -- there's a huge amount of benefit 

 25 to that. 

 00215:01 If you weren't selling the chips, it 

 02 wouldn't be that intimately related to the 

 03 development of a new product. It's just one more 

 04 step removed. 

29. PAGE 216:07 TO 216:10 (RUNNING 00:00:29.259)

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

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 08 CX7234. It's a large document. And I apologize to 

 09 the environment. And this has a Bates number of 

 10 QNDCAL02797418. 

30. PAGE 216:14 TO 216:22 (RUNNING 00:00:23.383)

 14 Q And this -- this is an e-mail from Bill 

 15 Keitel that says, "Soft copy of January 11th board 

 16 materials attached." Do you see that? 

 17 A Yes. 

 18 Q And do you recognize this as the board 

 19 materials from a discussion with -- regarding Berlin 

 20 in January of 2008? 

 21 A I mean, I -- just because I see it here, 

 22 I don't remember this specific document. 

31. PAGE 217:01 TO 217:07 (RUNNING 00:00:19.603)

 00217:01 Q And at page 4 of the PowerPoint, it says, 

 02 "Preliminary recommendation, spin off QCT to 

 03 shareholders." Do you see that? 

 04 A Yes. 

 05 Q And that was management's recommendation 

 06 as of July 11th -- January 11th; is that correct? 

 07 A Looks like it, yes. 

32. PAGE 217:18 TO 218:12 (RUNNING 00:00:45.526)

 18 All right. Sorry. 

 19 We were very close to doing the spin. 

 20 That was for sure. 

 21 Q You had come up with a name for the new 

 22 company? 

 23 A I think -- actually, did they? Is it in 

 24 here somewhere? I can't remember, actually. 

 25 Q No, you -- 

 00218:01 A It was the first one they had bought all 

 02 the advertising for that we launched BREW. 

 03 Q Have you determined who was going to be 

 04 CEO of the new company? 

 05 A I assume Sanjay was going to take the 

 06 chip business. 

 07 Q And -- 

 08 A Actually, I should say more than that. 

 09 I'm sure Sanjay was going to take it. 

 10 Q So you did come very, very close to doing 

 11 this -- 

 12 A Yes. 

33. PAGE 218:15 TO 219:08 (RUNNING 00:01:03.970)

 15 Q And what happened between January of 2008 

 16 and your decision to -- to not go forward with 

 17 Berlin? 

 18 A Like why did I come to that decision? 

 19 Q Yes. 

 20 A I guess I -- I don't -- I'm not sure I 

 21 was ever completely sold that it was the right thing 

 22 to do. Although everybody wanted to do it. And in 

 23 the end, I decided that the -- I didn't agree with 

 24 the balance of synergies and dyssynergies, and it 

 25 turned out I was right. 

 00219:01 Q What do you mean, it turned out you were 

 02 right? 

 03 A We solved the Nokia -- we settled with 

 04 Nokia. And the fact the businesses were together. 

 05 The company grew 30 percent a year for a bunch of 

 06 years. Quadrupled the revenues, doubled the market 

 07 cap. It was the right now business decision. And I 

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 08 think even Sanjay today would tell you that. 

34. PAGE 221:07 TO 221:10 (RUNNING 00:00:21.017)

 07 And CX7252 has a Bates-stamp 

 08 Q2017MDL1_00026705. And these are minutes of a 

 09 meeting of the board of directors of Qualcomm, dated 

 10 February 28th, 2008. 

35. PAGE 221:23 TO 222:01 (RUNNING 00:00:11.640)

 23 Q Do you recall this meeting? 

 24 A I don't remember the specifics of it, but 

 25 I -- like I said, I was sure the board had to have 

 00222:01 agreed. So. 

36. PAGE 222:08 TO 222:22 (RUNNING 00:00:35.532)

 08 Q And the board minutes continue, "At 

 09 Dr. Irwin Jacobs's request, Dr. Paul Jacobs updated 

 10 the board noting that it was management's current 

 11 recommendation that its decision to spin the chip 

 12 business is deferred." Do you see that? 

 13 A Yes. 

 14 Q And it says: "Dr. Paul Jacobs briefed the 

 15 board on the reasoning behind management's 

 16 recommendation noting that the strategic landscape 

 17 had changed, in particular with respect to China's 

 18 decision to restructure its operators and to allow 

 19 for broader competition for standards against 

 20 TDS-CDMA." Do you see that? 

 21 A I do -- and I didn't remember that aspect 

 22 of it. I do see that. 

37. PAGE 225:15 TO 226:20 (RUNNING 00:01:51.735)

 15 Q Okay. I'm going to hand you what's been 

 16 marked CX7035. This has a Bates-stamp 

 17 Q2017MDL1_2697467. And this is an e-mail from Steve 

 18 Altman to you and Don Rosenberg dated February 27th. 

 19 (Exhibit CX7035 marked) 

 20 THE WITNESS: (Examining document). 

 21 BY MS. MILICI: 

 22 Q Do you see that? 

 23 A Yes. 

 24 Q And that's the day before the meeting in 

 25 which you recommended not going forward with Berlin 

 00226:01 to the board; is that correct? 

 02 A Yes. 

 03 Q And what Steve writes is, "Here's one way 

 04 we can view the China situation having positive 

 05 change in our thinking." 

 06 And then the second paragraph says, 

 07 "Since our preliminary recommendation to spin, China 

 08 has reorganized the carriers and China Telecom will 

 09 own the cdma2000 network. This is extremely 

 10 positive news for us. From a spin perspective, it 

 11 militates against spinning." Do you see that? 

 12 A Yes. 

 13 Q And is that the China restructuring that 

 14 you were then referring to in February the 

 15 February 28th board meeting? 

 16 A Certainly looks like it, yes. I just 

 17 have to see what -- what Steve actually said here. 

 18 Or does that matter? Do you want me to look at that 

 19 or -- 

 20 Q No. That's okay. I don't have any 

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38. PAGE 226:19 TO 229:13 (RUNNING 00:03:52.507)

 19 or -- 

 20 Q No. That's okay. I don't have any 

 21 questions about that. 

 22 If you look at -- towards the end of the 

 23 paragraph there, it says, "If you consider the fact 

 24 that the only companies that have attacked us today 

 25 are companies that have essentially purchased little 

 00227:01 or no ASICs from us" -- do you see that? 

 02 A Yes. 

 03 Q Do you understand that to be true, that 

 04 the companies that had attacked Qualcomm up to that 

 05 date had been companies that did not purchase many 

 06 ASICs from Qualcomm? 

 07 A I mean, certainly -- this was back in the 

 08 day -- it was Nokia and Ericsson. Nokia bought TI. 

 09 Ericsson did their own chips. Broadcom wasn't -- 

 10 wouldn't have bought chips, anyways. TI, of course, 

 11 not either. NEC and Panasonic, I think were DoCoMo 

 12 companies so they were probably getting their WCDMA 

 13 chips from DoCoMo. So, yeah, I think that's right. 

 14 Q And then he continues you can understand 

 15 how the combination of QCT with QTL greatly enhances 

 16 QTL's success. See that? 

 17 A Yes. 

 18 Q And that's because customers of QCT are 

 19 less likely to attack QTL; is that correct? 

 20 A I mean, it was this thing that I was 

 21 saying earlier, that, you know, you keep a positive 

 22 relationship because you're working together on 

 23 the -- on getting the products out to market. So, 

 24 yes. I mean, that's -- that's the -- that's the 

 25 point I made earlier; that people working with the 

 00228:01 chip business created a positive relationship for -- 

 02 that helped QTL do licensing negotiation. 

 03 Q And that continues: As cdma2000 and OEMs 

 04 desire to participate in its further market share, 

 05 OEMs will remain reliant on us for continued supply 

 06 and will need to maintain positive relationships 

 07 with us. Do you see that? 

 08 A Yes. 

 09 Q And at this point, were other chip makers 

 10 selling cdma2000 chips? 

 11 A I believe so, because earlier, it says 

 12 today, QC is by far the leading cdma2000 ASIC 

 13 supplier. And then it says why: Because people 

 14 thought WCDMA was the market. So we -- we were the 

 15 leader in that market. 

 16 Q And according to Steve, OEMs will remain 

 17 reliant on Qualcomm for continued supply. 

 18 A Because up to that point, other chip 

 19 manufacturers hadn't put a lot of effort into 

 20 cdma2000 because they thought it was a slow-growth 

 21 market. 

 22 Q Okay. And it's this dynamic you were 

 23 reporting on to the board the next day on 

 24 February 28, 2008; is that correct? 

 25 A I don't know whether I adopted Steve's 

 00229:01 point of view exactly, but certainly aspects of it, 

 02 I -- I adopted. It's hard to remember exactly. 

 03 Q Okay. You referred a number of times to 

 04 the positive relationship with chip manufacturers. 

 05 I mean -- strike that. Let me start over. 

 06 You referred a number of times to having 

 07 positive relationships with OEMs as a result of 

 08 selling chips; is that correct? 

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 09 A I mean, that it helped create a more 

 10 positive relationship, yes. 

 11 Q OEMs have frequently complained about 

 12 Qualcomm's royalty rates; is that correct? 

 13 A Yes. 

39. PAGE 230:02 TO 230:07 (RUNNING 00:00:17.550)

 02 Q I wasn't asking whether you thought 

 03 Qualcomm's conduct was unfair. I was asking whether 

 04 companies that buy chips from Qualcomm complain that 

 05 Qualcomm's royalties are unfair? 

 06 A I agreed. I said, yes, there are some 

 07 companies that complain about that. 

40. PAGE 231:01 TO 231:02 (RUNNING 00:00:04.806)

 00231:01 Q I'm going to hand you what's been marked 

 02 as CX7244. 

41. PAGE 231:07 TO 231:12 (RUNNING 00:00:27.817)

 07 So this is CX7244. Bates-stamped 

 08 Q2017MDL1_01442150. 

 09 BY MS. MILICI: 

 10 Q And this is an e-mail exchange from 2011 

 11 about ZTE. 

 12 A Yes. 

42. PAGE 231:13 TO 231:19 (RUNNING 00:00:21.352)

 13 Q Do you recall negotiations with ZTE from 

 14 2011? 

 15 A Oooh. I don't -- I remember negotiations 

 16 with ZTE. Whether I remember the specific ones in 

 17 2011, I probably don't. But I might remember 

 18 aspects of it and just not know that was the date 

 19 that it happened. 

43. PAGE 233:11 TO 233:21 (RUNNING 00:00:27.204)

 11 Q And do you know what a Strategic Fund is? 

 12 A That can mean lots of things. But I 

 13 assume that was either a marketing fund, or a 

 14 product- development fund, or something that we 

 15 contributed to help them with their business -- 

 16 Q And -- 

 17 A -- and us. 

 18 Q Sorry. And the Strategic Fund was being 

 19 offered to ZTE in the context of a license 

 20 negotiation; is that correct? 

 21 A Looks like that from this document. 

44. PAGE 233:22 TO 234:13 (RUNNING 00:01:03.713)

 22 Q And the first bullet says, "ZTE is still 

 23 not satisfactory [sic] with our proposal. They 

 24 agreed that based on their calculation with the 2010 

 25 numbers, royalty paid versus chips purchased, they 

 00234:01 still cannot meet the goal of reducing their royalty 

 02 to 3.5 percent. The result is 4 percent, even when 

 03 the 2015 Strategic Fund rate of 2.5 percent 

 04 applied." Do you see that? 

 05 A Yes. 

 06 Q And your understanding that ZTE was 

 07 looking at the -- it was calculating the Strategic 

 08 Fund as a reduction of the royalty payment? 

 09 A I mean, I read what it says here, it 

 10 looks like that was how they were mixing the dollars 

 11 together. Generally, with a Strategic Fund, there 

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 12 were requirements to do something -- product 

 13 development, marketing, those kinds of things, so -- 

TOTAL: 1 CLIP FROM 1 DEPOSITION (RUNNING 00:33:40.881)

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