EXHIBIT 25
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA HYPERCOM CORPORATION § § § § § NO. CIV 04-0400 PHX PGR § § § § §
4 Plaintiff, 5 Vs. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 VERVE L.L.C. and OMRON CORPORATION, Defendant(s).
******************************************************* ORAL AND VIDEOTAPED DEPOSITION OF RAYMOND GALASSO March 11, 2005 Volume 1 of 1 ******************************************************* ORAL AND VIDEOTAPED DEPOSITION of RAYMOND GALASSO, produced as a witness at the instance of the Plaintiff, and duly sworn, was taken in the above-styled and numbered cause on the 11th of March, 2005, from 9:02 a.m. to 12:24 p.m., before Pamela Nichols, CSR in and for the State of Texas, reported by computer-aided machine shorthand, at the offices of Fulbright & Jaworski, 600 Congress Avenue, 23rd Floor, Austin, Texas, pursuant to the Federal Rules of Civil Procedure and the provisions stated on the record or attached hereto.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ALSO PRESENT: Corey Bailey, Videographer FOR THE DEFENDANT VERVE L.L.C.: Mr. Gregory S. Donahue SIMON, GALASSO & FRANTZ, PLC 6300 Bridgepoint Parkway, Building One Suite 410A Austin, Texas 78730 (512) 231-1311 FOR THE PLAINTIFF: Mr. Sid Leach SNELL & WILMER, L.L.P. One Arizona Center Phoenix, Arizona 85004-2202 (602) 382-6000 A P P E A R A N C E S
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INDEX Appearances......................................... 2 Stipulations (attached)............................N/A KEVIN IMES Examination by Mr. Leach........................ 6 Signature and Changes............................. 124 Reporter's Certificate............................ 126
EXHIBITS 10 NO. DESCRIPTION 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 22................................................. 113 E-mail, 11/16/2004, Raymond Galasso to Haruo Okada 21................................................. 108 E-mail, 12/17/2003, R. Galasso to Herbert Kerner w/ attached draft proposal 20................................................. 104 Various E-mails Re: Verve-Omron Patents 19................................................. 104 Letter, 4/23/2004, Herbert Kerner to Raymond Galasso, updated 18................................................. 103 Letter, 4/23/2004, Herbert Kerner to Raymond Galasso 17................................................. 100 Letter from Raymond Galasso to Herbert Kerner dated 3-19-04, w/ appendix 16.................................................. 96 E-mail stream, Ray Galasso/Herb Kerner 6/3&4/2004 PAGE
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1 EXHIBITS CONTINUED 2 3 4 5 6 7 8 9 10 11 PREVIOUSLY MARKED EXHIBITS REFERENCED 12 NO. 13 14 15 16 17 18 19 20 21 22 23 24 25 3............................................... 5............................................... 9............................................... 8............................................... 12.............................................. 15.............................................. 40 42 51 56 59 75 PAGE 25................................................. 117 E-mail, 1/5/2005, Kevin Imes to Herb Kerner 26................................................. 120 E-mail, 7/1/2004, Ray Galasso to Herbert Kerner 23................................................. 114 E-mail, 1/6/2005, Herbert Kerner to Ray Galasso 24................................................ E-mail, 1/10/2005, Herbert Kerner to "Jeff" 116 NO. DESCRIPTION PAGE
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BY MR. LEACH: Q.
THE VIDEOGRAPHER:
This is the videotaped
deposition of Raymond Galasso, taken in the matter of Hypercom Corporation Vs. Verve L.L.C., et al, Civil Action No. 04-0400 PHX PGR, for the United States District Court, District of Arizona, held in the offices of Fulbright & Jaworski, at 600 Congress Avenue, in Austin, Texas. Corey Bailey. Nichols. The videographer's name is
The court reporter's name is Pam We're on
Today's date is March 11th, 2005.
the record at 9:01 a.m. Would counsel please introduce themselves. MR. LEACH: I am Sid Leach and I am
representing Hypercom Corporation. MR. DONAHUE: I'm Greg Donahue from
Simon, Galasso & Frantz, and I'm representing Verve, who is the defendant in the litigation. RAYMOND GALASSO, having been first duly sworn, testified as follows: EXAMINATION
What is your name, please? MR. DONAHUE: Oh, excuse me. Let me just
get a couple of things out of the way so that I don't have to object as we get going. I just want to make sure that we're
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agreeing to the same things as we did yesterday. No. 1, I guess, was that any exhibits and any testimony that is entered into the record, Verve reserves the right to designate it as confidential later, and if you want to challenge the designation after we enter a protective order, that's fine. I think the other issue that I'd like to raise is, obviously we disagree on what the proper scope of personal jurisdictional discovery is. So I
think just in the interest of getting through this, we'll proceed like we did yesterday; but I just want to point out that to the extent we get outside the bounds of that, we may raise the issue with the judge and attempt to strike some of the deposition testimony as being in violation of his order on the discovery. MR. LEACH: Q. A. Q. A. Q. L.L.C.? A. Q. A. Fifty percent. And is Kevin Imes the other principal? That's correct. All right.
(BY MR. LEACH) What is your name, please? Raymond M. Galasso. Are you one of the principals of Verve L.L.C.? I am. What is your percentage interest in Verve
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Q. A. Q.
When was Verve L.L.C. incorporated or created? In October of 1998. At the time Verve L.L.C. was incorporated in
October 1998, were you the sole owner of the entity? A. Yes, I was. And let me just -It's
You used the word "incorporated."
an L.L.C., so it's not a corporation, so -- but just I think, you know -Q. A. Q. A. Q. Could you explain what an L.L.C. is, please? A limited liability company. And is it organized under Texas law? Yes. Were you the sole principal in Verve L.L.C. up
until the time that Kevin Imes became a principal? A. Q. Yes. When did Kevin Imes become a principal in
Verve L.L.C.? A. Q. A. Q. In roughly the -- late 2002. Do you remember what month? No, I do not. I'm sorry.
Is there any writing or document that
evidences the moment or the time when he became a principal? A. recall. There may have been, but I don't specifically
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 be?
Q.
If there was such a document, where would it
A. Q. A. Q.
I don't know. Let me ask the question this way. Uh-huh. If you were trying to find out whether there
was such a document, where would you search, who would you ask, how would you go about trying to determine that? A. Well, I'd ask Kevin, so -- and just
check -- generally check whatever records I may have, "I" meaning Verve may have. Q. Okay. So ...
Does Verve L.L.C. have any offices at
the moment? A. Q. A. Q. A. Q. A. Q. A. Q. A. Yes. Is that at 6300 Bridgeport Parkway? Bridgepoint Parkway. Excuse me, Bridgepoint Parkway? Yes. Building One, in Austin, Texas, correct? Building One, in Austin, Texas, correct. Now, when did Verve obtain that office space? When? Yes. Maybe within the last month or so.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 yes.
Q. A.
So in approximately February, March of 2005? In that time frame generally, approximately,
Q. A. Q.
And is Verve's address Suite 410B? That's correct. Now, your law firm, Simon, Galasso & Frantz,
recently moved into new office space, correct? A. Q. Correct. And is that also at 6300 Bridgepoint Parkway,
Building One, in Austin, Texas? A. Q. correct? A. Q. That's correct. What is the difference between Suite 410A and Correct. And the law firm's address is Suite 410A,
Suite 410B? A. Q. A. Q. A. Q. A. I don't understand your question. Are they physically separate enclosures? I still don't understand your question. Is Suite 410A separate from Suite 410B? Yes. How? One is Suite 410A and one is Suite 410B and
they're two different suites. Q. How are they separate?
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A. Q. them?
I don't understand your question. A separate building? Is there a wall between
Is there a door you have to open to go from one
to the other? A. Q. A. Q. A. Sure, yes. Well, would you tell me what it is, please? Tell you what what is? Describe it for me. There's a suite that's 410A and there's a There's doors. There's doors that
suite that's 410B. separate the suites.
That's all I -- I don't know what
else you're looking for. Q. If you're outside in the parking lot and you
want to go into 410A, which door do you go through? A. Q. A. Q. sort? A. Q. A. Q. Of this building? Yes. Of course, yes. All right. It's a commercial building. Which door? Uh-huh. Go to the building's front door, yeah. Okay. So there's an inside lobby of some
So you go into a lobby on the
first floor or go up to the fourth floor to get to your offices; is that right?
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A. Q.
Correct. All right. And you get out of the elevator or
the stairs on the fourth floor, and is there some door you would then go into in order to enter Suite 410A? A. Q. Yes. And if you want to enter 410B, do you go
through the same door or a different door? A. Q. Initially, you'd go through the same door. Okay. And when you go through that door, do
you encounter a receptionist? A. Q. there? A. In other words, we're just going to be Not currently. Okay. But the idea is to have a receptionist
speculating at this point, so -- I mean in terms of what is and what isn't there. space. Q. A. Q. A. Q. A. Q. A. Okay. Well, what is there at the moment? It's brand new office
There's no reception desk, period. Is it empty space? When you first walk in? Uh-huh. Generally it is, yes. There's no furniture in the room? No, not when you first walk in.
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Q.
Is the law firm fully moved in yet or are you
still in the process of moving? A. there. I'm not sure what you mean by that, but we're We're operating the Austin office of Simon,
Galasso & Frantz there, yes. Q. Do you still have any furniture boxes or other
materials at the other location that haven't been moved yet? A. Q. No. What was the specific date that the law firm's
furniture and boxes were moved to the new facility? A. I don't remember. I think it was towards the
end of February, which would make sense, yeah. Q. Okay. Now, if you go in the door to Suite
410, where would you then proceed if you wanted to find Suite 410B? A. Q. I don't understand your question. Well, we were just talking about getting on
the fourth floor of the building, you want to go to Suite 410A. room. You walk through a certain door into a
Where would you then proceed if you wanted to go
to Suite 410B? A. There would be another door that you'd proceed
to or through. Q. Okay. And would that be a different door that
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you would go through if you want to go through 410B? A. A different door if you wanted to go through
410B or 410A? I think you misspoke. 410A. Q. question. If you're on the fourth floor of 6300 Bridgepoint Parkway, we talked about you go through a door to go into Suite 410. A. Q. Uh-huh. And I asked you then do you go into a Actually, you may not have understood my I think you meant
different door if you want to go into 410B, and is that a door that you would not go through if you wanted to proceed to 410A or, say, to your office? A. Q. Yes. All right. How many square feet of space does
Verve L.L.C. have? A. Oh, probably somewhere in the order of 700 to I don't know for sure.
1,000 square feet, maybe. Q.
Isn't that something that you would normally
know if you were leasing space, how many square feet you have? A. Well, I just told you I know it's roughly 700 So it's -- I do know. You're -- yeah,
to 1,000 feet.
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so ... Q. A. Do you have a written lease for Verve L.L.C.? No, we do not have a written lease. It's a
month-to-month lease. Q. Does Simon, Galasso & Frantz have a written
lease for their space? A. Q. Yes. And who is Simon, Galasso & Frantz leasing
space from? A. I don't remember the specific entity. I
believe it's referred to as REIT, R-E-I-T. Q. Now, is the space that is being used by Verve
L.L.C. included in the space that is encompassed by the lease between REIT and Simon, Galasso & Frantz? A. Q. Yes, it is, and -So Verve is, in effect, leasing the space or
getting the space from Simon, Galasso & Frantz; is that right? A. Subleasing the space, that'd be correct,
with -- and REIT is fully aware of that, too. Q. Sure. And is there a written lease between Simon, Galasso & Frantz and REIT? A. Q. A written -- I think you -Is there some sort of writing or --
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A. Q. A. Q. A.
I think you already asked that, yeah. And you said yes? I said yes, that's correct. Do you know the date of that lease? I don't know the specific date. I want to say
maybe January of this year, roughly. Q. Who signed that lease on behalf of Simon,
Galasso & Frantz? A. Q. Myself. Are you the senior partner in the Austin,
Texas office? A. Q. I don't know what you mean by that. Well, you're the guy that signed the lease.
Are you sort of the principal person, the managing-type person, sort of the senior guy who would sign things like that? A. Under authority from Frank Simon as the
managing member of Simon, Galasso & Frantz, perhaps. So I'd certainly -- you know, it's not something I could run off and go do without bringing it to the managing member's attention. Q. A. Q. Does Verve L.L.C. have a telephone number now? Does -- I'm sorry? Does Verve L.L.C. have a telephone listing
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A.
I don't know if it has a listing.
It has
telephone numbers. Q. Does it have a telephone number that's
specifically for Verve L.L.C.? A. Q. A. Q. you know? A. Maybe a person or -- what do you mean? I I believe so, yes. Do you know what that number is? I don't remember it offhand. Who answers that telephone when it rings; do
don't -- you know, I mean, I'm going to try to answer your questions today, but a lot of times -- you're asking a lot of real open-ended questions and a lot of things that don't seem to relate anything to personal jurisdiction. But I'll be happy to try to keep
answering your questions. Q. Does the phone number for Verve L.L.C. ring at
Suite 410B? A. know. Q. Okay. But you don't know where the phone is I don't know. Maybe check with SBC, I don't
located that if you call that number, where the phone rings? A. Q. Where the phone rings? Yes. Is there -- what physical location
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that's associated with? A. Where the phone would ring, it would ring into
Suite 410B. Q. A. Q. phone? A. Q. A. perhaps. Q. Is the auto-attendant the same machine that Sure. Who? It would be an auto-attendant or Kevin Imes, Right. That was my question. So is that --
Yes, okay.
And is there someone there that answers the
answers the phone for Simon, Galasso & Frantz sometimes? A. Q. I don't know. Prior to October 1998, did the Verve business
exist in any form or fashion before the time that you created the L.L.C.? THE WITNESS: unclear question? Could you repeat that
I can't --
(Requested portion was read.) THE WITNESS: Q. venture? A. No, no. No, no.
(BY MR. LEACH) There was no partnership
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Q.
All right.
When you created Verve L.L.C., was
the principal place of business located in Austin, Texas? A. Q. today? A. No. I think it's changed to at points be in When I created it? Yes.
Has it remained in Austin, Texas up until
Michigan or be shared between Michigan and Austin, so ... Q. A. When did you first meet Kevin Imes? When did I first meet Kevin Imes? 19 --
somewhere in the 1990's, late 1990's, roughly. Q. met him? A. Q. And what were the circumstance under which you Were you both working at the same place or -Yes, we were working at Thompson & Knight. When was the first time that you had any
communications or discussions with Mr. Imes concerning the possibility of him participating in Verve L.L.C. in some fashion? A. Q. A. Q. A. 2002, roughly. Do you remember what month? No, huh-uh. Who contacted whom? I don't know. I mean, we were pretty -- I
mean, we would stay in contact with one another; so it
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would be hard to delineate who contacted or initiated that. Q. What were the discussions between you and
Mr. Imes that led up to him becoming a principal; what was the proposals or the substance of your negotiations? A. I don't understand your question, I'm sorry.
If you could just ask a little more specific question and I'll answer whatever -- what kind of question you have, but I don't understand what your question is. Q. A. Q. Well, what did you and him talk about? When? Well, I think it's quite apparent I'm asking
about that led up to him becoming a principal. A. Okay. So we're in the time frame leading up
to when -Q. A. Uh-huh. What did we talk about? We talked about a lot
of different things. Q. A. Q. Okay. Tell me.
Sports, weather. No, you know what I'm asking about. I'm
asking about what did you talk about in connection with him becoming a principal. A. Okay. Thank you for clarifying that.
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Q. A.
Answer my question, please. What did we talk about? We talked about his
interest in -- my desire and his interest of possibly becoming a part of Verve. Q. A. Q. Okay. What else?
That's it. He just said, hey, I think I may want to
become a part of Verve, and the next day you guys signed a deal? A. Q. A. Q. A. No, we -Is that your testimony? No, that's not my testimony. Then what did you talk about? We talked about the -- what that would look
like and what sort of things he could help with and what sort of terms and things he would join Verve. Q. Okay. Then tell me what it was that you
talked about it would look like and the terms and things. A. Q. I don't understand your question. Then explain your answer further. I want some
more details. MR. DONAHUE: THE WITNESS: question. Objection, confusing. I don't understand your
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Q.
(BY MR. LEACH) All right.
You said that you You said you
talked about what it would look like.
talked about terms and things, using your language. Tell me what those were. A. Q. I don't remember. Did you eventually reach an understanding or
an agreement with Mr. Imes prior to him becoming a principal in Verve? A. Understanding or agreement with Mr. Imes prior
to him becoming -- that led up to the reason he became or what -Q. A. Q. A. Yes. I don't understand your question. What is it that's so hard? It sounds like you're asking whether there was
like prior agreements prior to -Q. A. Q. Well, what was the agreement? I'm sorry? What was the agreement when he became a
principal? A. Q. A. Q. A. For him to become a principal in Verve. Uh-huh. That was the agreement. That's it? Fifty percent ownership in Verve.
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Q. A.
That's it? I don't remember anything else. You're asking
about a long time ago; so that's what I recall. Q. All right. There was no discussion about what
responsibilities he would have, what he would do, what responsibilities you would have, what business you were pursuing, nothing along those lines? A. Not that I specifically recall. But, I mean, I don't at
I'm sure there was discussions like that. this time recall anything specifically. Q.
Was there any discussion of Omron Corporation
at that time? A. Q. No. Did Kevin Imes contribute any capital to Verve
L.L.C. in connection with him becoming a principal? A. Did Kevin Imes contribute -- what was the
question -Q. A. Q. A. Q. A. Contribute any capital. Capital, like what type of capital? Any kind of capital. Monetary? Anything. I don't know. I don't -- I don't specifically Money?
recall any, as I understand your question. Q. Did he pay any money to become a principal?
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A. Q. A. Q. A.
Not that I specifically recall. Did he receive any shares of stock? Did he receive shares of stock? Yes. Verve is an L.L.C., so, no. And I still don't
understand what any of these questions have to do with personal jurisdiction, but I'll keep answering them. Q. Was there any written agreement or any writing
that evidenced Mr. Imes becoming a principal? A. before. Q. A. Q. Kerner? A. Herb Kerner, the first time I met him? By phone? There isn't -- or you don't know, right? I said there may be, but -When was the first time that you met Herb I think you already asked that question
Face-to-face? Q. A. Q. A.
In any fashion. In any fashion. Telephone, face-to-face, e-mail. Okay. Thank you for clarifying that. 2003.
Q.
Do you know what month in 2003? MR. DONAHUE: Could you speak up? I
can't really hear.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you? Q. A. Q. A. Q.
THE WITNESS: I'm sorry.
Yeah, I can't, either.
Can
(BY MR. LEACH) Do you know what month in 2003? What month? Yes. No, I do not. I don't specifically recall.
What were the circumstances under which you
first met Herb Kerner? A. The circumstances that I first met Herb Kerner
was in connection with -- in his capacity as a Hunton & Williams attorney. Q. Was Hunton & Williams representing Verve at
that time? A. Q. A. Q. Yes. Did Herb Kerner do work for Verve? I don't know. Do you have any knowledge or information
concerning when Herb Kerner left Hunton & Williams? A. Q. A. Q. A. Q. When he left? Yes. It was sometime in 2004, I believe. Do you know what month? No, I do not. Up until the time that Mr. Kerner left Hunton
& Williams, was Hunton & Williams continuing to
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represent Verve? A. Q. Up -- could you repeat that? Up until the time that Mr. Kerner left Hunton
& Williams, was Hunton & Williams continuing to do work for Verve, represent Verve? A. Q. correct? A. Q. Correct. Was Mr. Kerner doing any work for Verve up Up to the time he -Yes.
And Hunton & Williams continued after that,
until the time he left Hunton & Williams; do you know? A. It was Verve, my impression, yes. So to
answer your question, yes. attorney.
He's a Hunton & Williams
He would be -- as you know, there was an
agreement that was negotiated and it's my understanding he worked on it. So I don't have the internal records
of Hunton & Williams; so I can't answer and I can't speak for Herb or Hunton & Williams. But it's Verve's
understanding that he, Hunton & Williams and others at Hunton & Williams were Verve's attorneys. Q. And what's the agreement you were talking
about that was negotiated; the agreement with Omron? A. Yeah. As you know, there's many different
agreements; so it would have been the first agreement. Q. Did it involve the '895 patent?
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A.
I mean, it would have been -- it would have
been all agreements; but if we're talking that specific time frame when I first met Herb Kerner or -- then, okay? Q. A. Q. Sure. Okay. Let me show you a document that was previously Is this one of the
marked as Imes Exhibit 2.
agreements you were referring to between Verve and Omron? A. Q. A. Could you give me a minute to look it over? Absolutely. Thank you. Yes. (Witness reviews document.) This is at one stage of -- it looks
like Herb Kerner was sending Ray Galasso of Verve L.L.C. a letter: "Please find enclosed a copy of the
above-referenced agreement which has been executed by Omron," and this is from Herb Kerner as an attorney with Hunton & Williams. And it's "With your review and
approval, please execute both agreements and forward one original executed agreement to me on behalf of Omron." Q. Now, at the time of this correspondence,
Mr. Kerner was still with Hunton & Williams, correct? A. Yes. As I understand it, yes.
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Q. time? A.
And was Mr. Kerner representing Verve at this
I think you just got done asking that
question, and from Verve's perspective, yes. Q. Okay. The agreement of Exhibit 2 appears to
have been signed by Mr. Nakano for Omron Corporation on August -- and it's dated August 13, 2003. sign this agreement? A. Q. A. I believe I did. Do you recall the date you signed it? I don't recall the specific date, but it would Did you also
have been certainly within this time frame, within days, maybe, or a day or -Q. Okay. I'm not sure.
Now, Verve sued Hypercom in Michigan on
the Omron '895 patent on September 11, 2003. Did Mr. Herb Kerner know in advance of Verve's intention to sue Hypercom in Michigan? A. Q. I don't know. Did Omron know in advance of Verve's intention
to sue Hypercom? A. Q. I don't know. Had Hypercom already been identified as a
target to Omron? A. Q. By who? By Verve or anyone.
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A. Q. A. Q.
By Verve, yeah.
Well, what time frame?
Prior to September 11, 2003. Prior to -- sure. And Omron knew in advance that Hypercom would
be one of the companies that Verve was going to sue in Michigan on September 11, 2003? A. Q. I don't know. But Omron knew in advance that Hypercom was
one of the targets that Verve was going after? A. Q. A. Q. I don't know, you'll have to ask them. Well, did you tell them? I don't remember. I don't know.
Did you tell Herb Kerner that Hypercom was one
of the targets that Verve was going after? A. Q. I don't think so. Who if anyone did any investigation of
Hypercom products prior to September 11, 2003? A. Q. Could you repeat the question? Who if anyone did any investigation of
Hypercom products accused of infringement prior to September 11, 2003? A. Q. A. Who? Yes. That would have probably been primarily Verve
and its counsel.
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Q. A. Q. A.
I'm asking for people, please. People? Yes. Would that have been Kevin Imes or you?
It would have been primarily Kevin Imes and
the attorneys, Simon, Galasso & Franz, primarily Chris Walton, and I think that's it. recall. Q. I don't specifically
It's been a long time ago. What was the basis on which Verve -- that
Verve relied upon to accuse Hypercom products of infringement prior to September 11, 2003? A. Q. I don't -- I don't remember. Did you do any independent investigation of
Hypercom products that were accused of infringement in the Michigan suit filed on September 11, 2003? A. Q. A. Q. Did I personally? Yes. I think I did. What did you do? What did you do prior to
September 11, 2003? A. Prior to 11 -- I think I -- well, I -- I can't
really get into what I did because I think it's attorney-client privileged. to tell you, so ... Q. answer. Well, I'm going to ask. You can refuse to But I So I don't know what else
I think that's appropriate procedure.
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do want an answer. A. Okay. Well, to the extent you're asking for
attorney-client privileged-type communications, I guess I'm refusing to answer. Q. A. Q. A. All right. But what did you do?
What did I do? Yes. I don't understand what -MR. DONAHUE: Yeah, can I ask for
clarification of the question. Q. (BY MR. LEACH) What investigation did you make
personally prior to September 11, 2003, concerning any Hypercom products accused of infringement of the '895 patent? A. Well, I think the answer to that question asks
for attorney-client privileged information, so I guess I need to refuse to answer it. Q. Okay. Can you tell me what anyone else did
to investigate Hypercom products prior to September 11, 2003, concerning the Omron '895 patent? A. Q. A. Q. A. What anybody else did? Yes. Such as? Anybody who did any investigation. For those that I'm familiar with, I think it's
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all attorney-client privileged information. I'm refusing, I can't answer. Q.
So, no,
Did you obtain a copy of the file history for
the '895 patent prior to September 11, 2003? A. I don't remember. And I'd just like to clarify that if I don't remember, it doesn't mean that the file wrapper wasn't of course acquired prior to the -- I would assume that it was, but -So I just want to make sure that there's no inferences drawn from that. Q. Would you have any record of the -- that would
evidence when the file history for the '895 patent was obtained by Verve? A. Would I? Possibly, but I don't remember. I
don't know. Q. A. Where would those records be if they exist? They would be -- I'm assuming they would be
either in Verve's records or Simon, Galasso & Frantz's records. But again, if they're not -- if they're not
in existence, it wouldn't be necessarily a fair characterization meaning that it didn't occur. Q. Right. So ...
But if you wanted to try to find it,
where would you look for the records? A. Well, I just -- I just told you: It would
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either be with Verve's -- in Verve's records and/or -I'm assuming it's counsel's records. Q. The Verve records you're referring to, where
are they physically located? A. In its offices or various offices or its
counsel's offices. Q. A. Where is that? Could be Michigan, could be Austin, Texas, I think it'd primarily be Austin, Texas
could be --
and Michigan, primarily, I believe. Q. A. Q. A. Q. A. Okay. Where? Yes. For what? Verve records. Verve records? In the office that we talked Where in Austin, Texas?
about at length, the new -- Verve's office, Suite 410B. Perhaps home offices. Q. Where are the home offices? You mean
Mr. Imes' home office; is that what you mean? A. Q. A. Q. A. Yes, Mr. Imes'. Do you have a home office as well -I do. -- that you use for Verve? Well, use for Verve, sure.
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Q. A. Q. 410A? A. Q. A. Q.
You also use it for your law firm practice? No, that's not a fair characterization. Okay. Are there any Verve records in Suite
Are there any Verve records in Suite 410A? Yes. I believe there would be. At some point in time, did you have a meeting
with representatives of Omron? A. Q. Yes. Was there only one meeting that involved
Mr. Nakano? A. Q. A. Q. A. A face-to-face meeting? Yes. Yes. When did that meeting take place? It was sometime in 2003, I believe somewhere
in the middle of the year, roughly. Q. Did that meeting take place in the Washington,
D.C. area? A. Q. A. Q. office? Yes. Or more specifically, in Arlington, Virginia? I don't remember. All right. Did it take place at Mr. Nakano's
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A.
I think it did.
Well, Mister -- Omron's
offices in and around the Washington, D.C. area, yes. Q. A. remember. All right. Who attended that meeting? Let me try to
Who attended that meeting?
It was myself, Kevin Imes, Herb Kerner of
Hunton & Williams, and Tom Anderson of Hunton & Williams, and Mr. Nakano of Omron. Q. During this meeting was Herb Kerner
representing Verve? A. Same question as before and same answer from I think from Verve's perspective,
Verve's perspective.
yes, they were -- Herb Kerner was with Hunton & Williams and he was representing Verve. Q. A. Q. 2003? A. What was discussed? Generally, the interest And was Tom Anderson representing Verve? Yes. What was discussed at this meeting in mid-
by Omron to sell some of their patents and Verve's interest in buying those patents. Q. Prior to this meeting, had you had any direct
communications with Mr. Nakano of any type? A. Q. No, not -- no. And this meeting was more or less your
introduction to Mr. Nakano?
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A.
I suppose so.
I don't -- you'd have to ask
them, but it was -- yeah, it was our first meeting with him. Q. Did you discuss any more specific proposals
other than just the general interest in Verve buying the patents? A. about. Q. sharing? A. I don't -- I don't -- I don't recall. We Did you talk about any percentages of revenue I don't recall what other specifics we talked
could have, but I just don't remember. time ago. Q.
It was a long
Were there any negotiations between Omron and
Verve concerning this subject matter prior to this meeting? A. There could have been. Wait. I don't remember. I mean, I
Negotiations?
don't -- I mean, possible outline of, you know, what it might look like for them to sell the patents and for us to buy the patents. That's all. It's possible, but I
really don't remember. Q.
It was a long time ago.
If there were any communications or
negotiations or discussions, would they have been between you and Herb Kerner?
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A.
Well, it would have been between myself and
Hunton & Wililams, and actually probably mostly through Tom Anderson, but possibly Herb Kerner, too, but I really don't remember. But both -- in Verve's mind or They're from the
viewpoint they were one in the same.
same law firm representing Verve and Verve's interests. Q. Sure. How did you first learn of the Omron patents? A. Q. From Tom Anderson. In fact, he called me.
Can you tell me what -- the substance of what
he said to you about the Omron patents when he called you? A. It was something to the effect that, hey, we
have another client that has some patents that they have a desire to sell; are you guys interested in entertaining an interest in buying them. sure, we'll take a look at it. Q. Did you do any investigation or analysis of And I said,
the -- any of the Omron patents prior to this first meeting in mid-2003? A. Q. Do any -Did you look at the Omron patents, do any kind
of investigation? A. Prior to when?
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Q. A.
Prior to the meeting. Prior to the meeting? I'm sure we did, but I
don't recall what we did or -- but, I mean, it would make sense that we at least looked at the patents that they were proposing to sell to see if we had any interest, so ... Q. Was Kevin Imes already a principal of Verve
prior to this meeting? A. Q. Yes. Was Kevin Imes already a principal of Verve
prior to the first phone call that you received from Tom Anderson mentioning the Omron patents? A. Q. Yes. Did you have any written proposals that you
provided to Omron either prior to or during the meeting that took place? A. Prior to or during the meeting? I don't -- I
don't really remember.
I know there's proposals, I
just don't remember the time frame, if those came after or before this meeting, so ... Q. A. Okay. And again I have to say if there's -- you
know, because I don't remember doesn't mean that it's one thing or the other, it's just I don't remember. Q. Now, the meeting that we've been talking
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about, it took place prior to the date of Exhibit 2, correct? A. That would be my best recollection, and I Now that we've been talking
believe that's correct.
about it and I see this Exhibit 2, I think the meeting might have took place sometime in July of 2003, if that's helpful. Q. Do you have any records that would help you
establish the date of the meeting with Omron such as plane tickets, expense reports, anything like that? A. I don't -- I don't know. I really don't know.
There could be. Q.
Could have been, I don't know.
If you were to try to look for such records to
try to nail down the date of this meeting, where would you look? A. Probably -- perhaps in Verve's records,
perhaps a printout of an e-mail or something like that. I mean, I don't know. just -- I don't know. Q. And when you say you'd look in Verve records, I don't know if, you know, I
would you look in records at your home, would you look in records at Suite 410B, Suite 410A, Mr. Imes' home? A. Probably primarily Suite 410 -Well, I take
that back.
I probably actually would look at -- check You could check with Hunton &
with our counsel, too.
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Williams. primarily. Q.
So I guess their records and Suite 410B, It's just --
Does Verve use an accountant or someone to
maintain any financial records or do tax returns? A. Q. A. Yes. Who is the accountant that Verve uses? David Rea. And again, I really don't
understand what any of this has to do with personal jurisdiction, but I'll keep indulging your questions and try to be as cooperative as possible. Q. Texas? A. Q. A. Q. A. Q. A. Q. Actually, no, he's not. Where is he located? In Michigan. Is he with a firm? I believe he is. Do you know what the name of his firm is? Rea and Shoemaker (phonetic). And do you know where in Michigan his office And is David Rea an accountant in Austin,
is located? A. Q. A. Q. Where in Michigan? Yes. I believe it's Livonia, Michigan. I'm sorry?
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A. Q.
Livonia, Michigan. Livonia? What negotiations took place between
Verve and Omron other than the meeting that we've talked about that led up to the agreement of Exhibit 2? A. What negotiations? I don't specifically
recall, but I'm sure that this agreement was produced at some point and the terms were looked at, and this discussed and decided upon, so ... Q. A. Q. Who drafted this document? Actually, I believe Hunton & Williams. Who did you talk to about the terms and
conditions of this document? A. Primarily, Tom Anderson and Herb Kerner of
Hunton & Williams, and possibly -- I didn't talk necessarily directly to Mr. Nakano other than that meeting, so -- but it's possible that I -I mean, I
didn't talk with him after that meeting, but it's possible that communications were passed back and forth through him, or to him, via Hunton & Williams. Q. Let me show you Exhibit 3 that was marked This is a one-page document relating to the
yesterday.
assignment of the '895 patent, correct? A. Q. Actually, this is the assignment. Okay.
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A. Q. 2003? A.
This is the assignment of the '895 patent. And was this signed on or about September 5,
I'm reading Exhibit 3 and it's got the
signature of Mr. Nakano and he signed it on September 5th, 2003; so, yes. Q. At the time that this document was signed by
Mr. Nakano, was Omron aware that Verve was about to file suit against Hypercom? A. Q. A. Q. Was Omron? I don't know.
Was Herb Kerner aware? I don't know. And this was -- September 5 was just six days
before the lawsuit was filed, correct? A. If that's what -I don't remember when the
lawsuit was filed, so it could be. Q. 2003. A. Q. drafted? A. Q. Was the complaint -- I don't know. Had the Hypercom products already been Okay, great. Then it was six days after. I think it's undisputed it was September 11,
Was the complaint against Hypercom already
investigated by September 5, 2003, if any investigation was done?
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A. Q.
I don't remember and I don't know. Do you know who drafted the complaint that was
filed in Michigan against Hypercom on September 11, 2003? A. Q. I don't remember. Let me show you the document that was marked
as deposition Exhibit 5 during the deposition of Mr. Imes. This is another agreement between Verve and
Omron, correct? A. Correct. This is another agreement between It looks like it's dated
Omron Corporation and Verve. October 14, 2003. Q. 14, 2003? A. I don't remember.
Was this agreement actually signed on October
I don't have any reason to
believe it wasn't. Q. Do you have any recollection if this agreement
was backdated in any respect? A. Q. No. It appears that Mr. Nakano's e-mail to Japan
asking for authorization to sign this agreement was dated around October 27. Do you have any knowledge or
information about the timing between Mr. Nakano getting authorization from Japan to do this deal and the date that Exhibit 5 was signed?
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A. Q.
No. As far as you know, when Mr. Nakano signed
Exhibit 5 he already had authorization? A. As far as I know, when he signed this
agreement, on the date that he signed it he had authorization, yeah. anything else? Q. And the agreement of Exhibit 5 involved the Of course. Why would I believe
Omron '340 and '341 patents, correct? A. Q. Yes. Why were those patents not included in the
initial agreement, if you know? A. Why were they not included in the initial Because they weren't included in the I mean, it's pretty much -- it's They just weren't part of that
agreement?
initial agreement. just that simple. agreement, so ... Q.
Was there any reason why Omron and Verve did
this in two separate agreements rather than doing them all at the same time? A. I don't know from Omron's perspective. But from Verve's So
From -- and I can't speak for them.
perspective, because that's what was being offered. it's just pretty much that simple. Q. Now, I assume that there had to be some
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negotiations or discussions that led up to the agreement of Exhibit 5, correct? A. Negotiations or discussions that led up to --
I suppose, yes. Q. between? I take it on behalf of Verve you were involved in the discussions that led up to this? A. Q. A. Was I involved, yes. Who else? Kevin Imes, Hunton & Williams, including Tom My question is, who were the discussions
Anderson and Herb Kerner. Q. Did you do most of the discussions between
Verve and Hunton & Williams? A. Did I do most of the discussions between Verve
and Hunton & Williams, yes. Q. Was Mr. Imes involved in talking directly to
Hunton & Williams? A. Directly? He could have been on some calls.
I don't remember, but it's certainly possible. Q. A. Q. A. Q. Did the discussions take place by telephone? Primarily, I think. Were there e-mail communications? There could have been, but I -- I doubt it. Did you exchange any draft agreements or did
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these documents go through any revisions prior to being signed? A. Q. Which documents? Any of these agreements, the Exhibit 2 or
Exhibit 5? A. I don't -- I don't really recall a bunch of I think it was pretty much here's the
back and forth.
agreement, and maybe switch a term here; but I didn't remember a bunch of documents, you know, redlined documents or anything going back and forth. what I recall. Q. Do you have any drafts or letters or So that's
correspondence or e-mail or anything relating to the negotiations or drafts leading up to either Exhibit 2 or Exhibit 5? A. I don't -- I don't know. I mean, there could
be, but -Q. If you were going to look for such records to
ascertain whether they exist, where would you look? A. I would probably first turn to my counsel,
Hunton & Williams; then possibly at my other counsel, Simon, Galasso & Frantz; then perhaps Verve's records, again Suite 410B; maybe a home office, I don't know. But that would be pretty comprehensive. Q. What good faith basis did Verve have for
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accusing any Hypercom products of infringement of the '340 patent prior to October 15, 2003? A. Q. A. Q. A. Q. A. Q. A. Which patent? The '340. The '340? Before which date?
October 15, 2003. From Verve's perspective? Uh-huh. We believe that they're infringing the patent. And what was the basis for that belief? I mean, I'm not going to be able to get into
the attorney-client privileged information; so I can't answer. I don't know what else you want me to answer,
what specific questions. Q. I'd like to know the facts that Verve relied
upon, if any, to support any good faith basis for accusing the Hypercom products of infringement prior to that date of the '341 patent. A. Q. A. Q. A. Opinions of counsel. Are there any written opinions of counsel? I don't know. Any other facts? I mean, there could be, and if there was, I'm You need
not -- you know, it's privileged information. to know that.
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Q. A. Q.
Are there any other facts? What's that? Are there any other facts that formed the good
faith basis for accusing Hypercom products of infringement of the '340 patent prior to October -A. Any other facts? I don't specifically recall.
I don't remember. Q. Had you obtained a copy of the file history
for the '340 patent prior to October 15, 2003? A. Q. A. Did I? Yes. And by the way, today's deposition, is it
myself personally or is it on behalf of Verve? Q. A. recall. Q. A. Q. Do you know whether Verve did? Possibly. Do you have any knowledge or information that It's you personally today. Did I? Probably not. I don't -- I don't
anyone on behalf of Verve obtained a copy of the file history for the '340 patent prior to October 15, 2003? A. Q. A. Do I have any knowledge? Yes. I'm sure that somebody did, but I don't have
any other knowledge that I remember.
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Q. A.
Why do you say that you're sure? Oh, it just -- I think that it just seems like
it would have been under a file wrapper that got ordered. Q. It just seems -I'm not sure.
Without speculating, do you have any actual
knowledge of a file wrapper having been ordered? A. Q. A. For which patent? For the '340 patent. Do I have any -- no, I don't have any specific It doesn't mean, you know -- again, you
recollection.
can draw inferences. Q. What good faith basis did Verve have for
accusing any Hypercom products of infringing the '341 patent prior to February 4, 2004? A. Q. A. Q. Which patent? The '341 patent. Which good faith basis? Yes. What good faith basis did Verve have for
accusing any Hypercom products of infringing the '341 patent prior to February 4, 2004? A. basis? Q. A. Q. Good faith basis of Verve. Good faith basis of Verve? Yes. So my good faith -- my personal good faith
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A. patent. Q. A. Q. A. recall. Q.
Verve believed Hypercom's infringing that
Based on what facts or information? Opinions of counsel. Were there any written opinions? I don't know, I don't remember, specifically
What facts, if any, were such opinions based
upon, if any opinions exist? A. Q. What's that? What facts, if any, were such opinions based
upon if, in fact, opinions exist? A. The fact that Hypercom's infringing the
patents, in Verve's beliefs. Q. A. What facts would those be? There's a patent and there's products and you
simply compare the two, and those are the facts. Q. So what would be the functions, features and
characteristics of the Hypercom products that Verve relied upon? A. The ones that are contained in the '341
patent, and it would be the same answer for '340 or any of the other patents. Q. A. And what are those? They're in the '341 and '340 patents, and the
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other patents as well.
The functions that are in there
and are in the products of the Hypercom. Q. What functions are in the products of the
Hypercom -A. Q. I don't specifically recall right now. Did you personally do any comparison between
the claims of the '341 patent and any Hypercom products prior to February 4, 2004? A. Q. A. Q. A. Q. A. Did I personally? Uh-huh. Which patents? '341. It's possible. But you don't know? I don't know? I think I've certainly looked I don't --
at the patents and I looked at Hypercom products, concluded in my mind that Hypercom was clearly infringing those patents. Q. A. Q. Are there any documents or evidence of that? No, I don't think so. Had Verve obtained any Hypercom products for
purposes of testing them to see if they infringed any Omron patents prior to February 4, 2004? A. Did -I don't know. Did Hyper --
I'm sorry, could you repeat that?
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Q.
Had Verve obtained any samples of Hypercom
products to test them for purposes of determining whether they infringed any Omron patents prior to February 4, 2004? A. Prior to February 2004 obtained -I think my
answer -- I think my answer stays the same, but it's certainly possible that -- and I'm not sure what you mean by your question, too. answering the way I am. Q. All right. If Verve had obtained any samples So that's why I'm
of Hypercom products, would there be any records of it? A. Q. A. Q. exist? A. With its counsel's records, in Verve's Probably with its counsel's If Verve had obtained? Uh-huh. Possibly. And where would those records be if they
records, possibly. records. Q.
Let me show you a document that was marked as
deposition Exhibit 9 during the deposition of Mr. Imes. This is a written proposal that was provided
to Omron by Verve, correct? A. Can I ask you a favor? When you give me a
document, could you give me a chance to at least
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acquaintance myself with it? Q. it. That's the idea. Take your time to look at
That's what I meant. A. Thank you. I appreciate it. This was a
(Witness reviews document.)
point-of-sale portfolio assessment of market analysis that was prepared by Verve and provided to Hunton & Williams relating to Omron patents. Q. Was this provided to Hunton & Williams after
the date of the agreement of Exhibit 5? A. 14, 2003? After the date of Exhibit 5; so after October I don't -- I don't know. I don't remember. I just
Do you have anything to refresh my memory? don't remember. Q. A. Q.
If you look at Page 18 of Exhibit 9 -Uh-huh. -- there's a list of patents, and the '340 and
'341 patents have parentheticals underneath them suggesting that this document was after Exhibit 5. A. So it's -- yes, it's possible that this
document was created or prepared after October 14th, 2003. Q. Do you have any independent recollection of
the sequence between providing Exhibit 9 to Omron and the other agreements that we've identified already?
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A. Q. A. Q. A.
Providing Exhibit 9 to Hunton & Williams? Right. And? And the dates that the Exhibit 5 was signed. And the dates that exhibit -- no, I don't. I
don't have anything else that sparks my memory. Q. Were there any other communications or
negotiations going on between Verve and Omron subsequent to the date of Exhibit 5 in connection with any continuing proposals by Verve such as Exhibit 9? What I'm looking for is any other thing that went back and forth other than just this document of Exhibit 9. A. Q. I don't know. I don't remember.
Did those discussions and communications take
place between you and Herb Kerner? A. Wait a minute. I just said I don't remember
and you're -- so you assume that I just said I do remember and that there are discussions and communications. Q. Were there any -- anything that you -- were
you talking to anybody about any further proposals or any additional Omron patents prior to the date that Exhibit 9 was provided to Hunton & Williams? A. Could you repeat that? Do you want to repeat
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it or do you want her to? Q. A. Q. Yeah. Okay. Did you have any discussions with anybody;
were you talking with anybody about the other Omron patents, or did Exhibit 9 just appear out of the blue? A. Oh, I don't -- yeah, I mean, I don't think it I think there was interest
appeared out of the blue.
of -- on Verve's part as -- as -- I'm assuming as well as on -- I can't speak for Omron, but I'm assuming on their part to sell additional patents. So there was --
at least there was that interest expressed by both sides, yes. Q. Okay. And you were participating in any
discus