Free Statement - District Court of Arizona - Arizona

EXHIBIT 23

Case 2:04-cv-00400-PGR

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

- - - - - - - - - - - - -x HYPERCOM CORPORATION, Plaintiff, : : : : : : Case Number CIV 04-0400 PHX PGR

VERVE LLC and OMRON CORPORATION, Defendants.

- - - - - - - - - - - - -x

DEPOSITION OF TETSUYUKI NAKANO Volume I

Washington D.C. Wednesday, March 2, 2005

REPORTED BY: BRENDA SMONSKEY

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Deposition of TETSUYUKI NAKANO, called for examination pursuant to notice of deposition, on Wednesday, March 2, 2005, in Washington, D.C., at the offices of Steptoe & Johnson, 1330 Connecticut Avenue, Northwest, at 9:10 a.m., before BRENDA SMONSKEY, a Notary Public within and for the District of Columbia, when were present on behalf of the respective parties:

SID LEACH, ESQ. DAVID O. CAPLAN, ESQ. Snell & Wilmer One Arizona Center Phoenix, Arizona 85004 On behalf of Plaintiff

DAVID P. IRMSCHER, ESQ. Baker & Daniels 111 E. Wayne Street Fort Wayne, Indiana 46802 On behalf of Defendant Omron Corporation -- continued --

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APPEARANCES (CONTINUED):

ALSO PRESENT:

Herbert Kerner, Esq.

Stuart Huang, Esq. Kaori Ohta Marshall, Interpreter

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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 A Q Q Whereupon,

P R O C E E D I N G S

KAORI OHTA MARSHALL was called as an interpreter and, having first been duly sworn, interpreted the testimony as follows: Whereupon, TETSUYUKI NAKANO was called as a witness and, having first been duly sworn, was examined and testified as follows: (Nakano Exhibit 1 identified.) EXAMINATION BY MR. LEACH: I have marked as Deposition Exhibit

Number 1 the original notice of the deposition for today. What is your name, please? My name is Tetsuyuki Nakano. Do you understand that you are testifying

today on behalf of Omron Corporation? A Q Yes, I do understand. And you have agreed to be the designated

witness for the topics listed in the deposition

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notice of Exhibit 1? A Q A Q A Yes, I do. Who are you employed by? By Omron Corporation. Where is your office? The office right now is located in

Arlington, Virginia. Q A Q A Arlington. What is your position with the company? I am executive director at that company. And where in Arlington is your office? It is at 1700 North Moore Street, Let me confirm with my business card. It is at 1700 North Moore Street, suite 1605, Arlington, Virginia 22209. Q I notice that your business card says Can you tell me

"Omron North American IP office."

what the significance of that is, please. A Q A What do you mean by "significance"? What does that mean? "IP" stands for intellectual property.

Therefore, we are engaged in business related to intellectual property in North America.

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Q director? A

What are your duties as executive

There are several.

First of all, in the

United States, I have one of the jobs is to build infrastructure for intellectual property business, specifically patents. And in specifics, I build

systems to manage patents in this area and spread our technology in North America. Another duty of mine is to promote projects for invention. And the next duty is to

find marketing partner in the United States in order to utilize Omron's technology by utilizing Omron's patent. The third duty is to utilize Omron's patent. Q A Those are my duties here in North America. Do you do any licensing? The third duty I mentioned is to utilize

Omron's patent, which means that licensing is included in that duty. Q A patent. And that would include patent licensing? Of course, especially the licensing of the

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Q

How long have you been employed by Omron

or any of its affiliates or subsidiaries? A years. ago. I have been employed by Omron for 33 I was assigned here in the States two years I started my duty here February of the year

before last. Q A Q Is that February 2003? Yes, it is. Do you have an estimate of approximately

how many patent license agreements you have been involved in on behalf of Omron during your 33 years? A Including major ones and minor ones, I I think it is in

think I got involved less than 10.

between five and 10 -- well, it is between five or six. Q the world? A Q Are those license agreements anywhere in Is that included in your answer? Yes, it is. Does Omron or any of its affiliates have

anyone else in the United States who is involved in licensing any patents? A Yes, there is.

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Q A

How many people? Well, you are talking about the current,

at the present; right? Q A Let's start there. At the present, at the IP office I belong

to, there are three, I think. I would like to correct my deposition. If I take your questions to be directed to Omron as a whole, then there are more, probably twice as many. So six people.

In the first testimony, the testimony I just gave you, I said three, but I thought you were talking about the headquarters in Tokyo, in Japan. There are three at the IP office. However, there are other IP people spread out in different business departments. there are six. One more correction. not in Tokyo but in Kyoto. Our headquarters is Including them,

Therefore, the IP people

I mentioned, three IP people are in Kyoto. Q The six people, is that the total number

of people in Omron or any of its subsidiaries or

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affiliates who are involved in patent licensing anywhere in the world, even outside the U.S.? A Q Yes. What was the first occasion in which Omron

had any contact or communication from Verve LLC or Raymond Galasso? A I can't give you exact date. However, my

recollection is that it was around summer of 2003. Q Who had the first contact or communication

with Verve LLC or Raymond Galasso on behalf of Omron? A We didn't make a contact to them.

However, the person who met first time with them was me. Q 2003? A To the best of my recollection, it was And was that meeting in the summer of

summer of 2003. Q A meeting. Q Verve set up the meeting? Is that what Who set up the meeting? The side of Verve LLC did set up the

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your answer was? A To be precise, I think Verve set up the It is not

meeting through my counsel, Herb Kerner.

my recollection that Omron itself set up this meeting. Q So were there communications between Herb

Kerner and Raymond Galasso or Verve prior to the date of this meeting? A Yes, there were. I need to correct. I

don't think there was a meeting, any meeting, but there was some kind of contact between them. don't know if they actually met. Q But you mean some kind of a contact I

between Herb Kerner and Verve or Mr. Galasso? A I don't know directly or indirectly.

However, the meeting was set after that contact. Q So you don't know what kind of contact or

communication took place between Mr. Kerner and Verve prior to the date of the meeting that you were involved in? A I don't know the substance of that

communication.

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Q

What was your understanding of the purpose

or the reason for the meeting that you attended? A As I mentioned earlier, one of my missions Therefore, my

at Omron is to utilize our patent.

understanding was that the purpose of the meeting is about utilization. Q by Verve? A There are many choices -- as you utilize So my expectation You mean the utilization of Omron patents

patents, there are many choices.

was that probably Verve had some kind of plan to utilize Omron's patent. Q What if anything did you know about Verve

prior to the date of this first meeting you had in the summer of 2003? A Verve? Q Yes. What did you know if anything about Are you asking about Verve, relating to

Verve at that time? A I think at least I had knowledge that

Verve is an IP holding company before the meeting, and I think I got that information before the

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meeting from Herb Kerner. Q So you understood that Verve was not

interested in licensing the Omron patents; correct? A I believe that Verve is interested in

licensing of Omron's patent. Q Maybe something got lost in the

translation because I understand you are testifying through a translator. You understood that Omron did not need a license in order to practice the Omron -- excuse me. You understood that Verve did not need a license in order to make products under the Omron patents; correct? A You are asking me if I understood that

Verve does not need Omron's patent -- Omron's license to do their business? question? Q A Correct. I believed that licensing was included in Is that your

Verve's intention of executing the patent rights. Therefore, it was not my understanding that they were excluding licensing.

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Q

When you say "licensing," do you mean that

you understood that Verve was going to try to get other people to take licenses under the Omron patents? A Q A Is that what you mean? Are you referring to cross-licensing? No, just licenses. Are you asking me about obtaining license I don't quite understand your

from the third party? question. Q

What is it about getting other people to

take licenses under the patents that you are not understanding? THE INTERPRETER: question. BY MR. LEACH: Q You understood that Verve was going to get Is Could you repeat your

other people to take licenses under the patents? that what you said? A Are you asking me about Omron is getting

license of other company or Verve is getting the license of Omron's patent? Q Mr. Nakano, you can speak English; isn't

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that correct? A Q Limited, but yes. This first meeting you had with Verve in

the summer of 2003, that meeting took place in English; correct? A Q Yes, it did, in English. And your discussions with Herb Kerner, are

they in English? A Q Of course. He only speaks English.

Now, you understood when you had this

meeting with Verve in the summer of 2003 that they were merely a holding company and did not make any products themselves; correct? A Q Yes, I understood that. So if you did any kind of a deal with

Verve, it would be for the purpose of Verve turning around and trying to make other people take licenses under the Omron patents; correct? A Yes, I understood that their objective is

to utilize Omron's patent and licensing to other parties. Q Did you receive any written documents

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prior to the meeting with Verve that related in any way to that meeting or any proposals by Verve? A Q No, I did not. What else did you know prior to this first

meeting in the summer of 2003 about Verve or the purpose of the meeting other than Verve was a holding company? A Through Mr. Kerner, I have heard that

Verve is an IP holding company that we can trust somewhat. The word "trust" is not quite what I'm looking for, but it is more like a reliable company. Q What information did you have concerning

the reliability or trustworthiness of Verve prior to this meeting in the summer of 2003? A Q anything? A I don't remember much about that. As much as I have heard from Herb Kerner. Right. But what had you heard, if

However, the impression left me was that not only Mr. Kerner, but the people I consulted with also suggested that Verve is a reliable company.

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Therefore, having a meeting is something they suggested also. meeting was set. I have a correction. the translation. In translation, she said I consulted somebody, but I have to tell you that I never consulted anyone about Verve. from Herb Kerner. All information came I need to correct That's the situation I think the

He himself through his network

talked about Verve, and then he -- my understanding was that he through this consultation felt that Verve is a reliable company. Q So were you relying upon Herb Kerner at

that time to vouch or speak for Verve? A Of course, I trusted Herb Kerner, and I

had a basis of that confidence I had in Kerner. Q When did Herb Kerner first start doing

work for Omron? A I cannot give you the exact date, but I

think it is around four or five years ago. Mr. Hanada, who used to be with us but is no longer with us, was stationed here, was working

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in the United States, in D.C. specifically, and he introduced me to Mr. Kerner. Mr. Hanada had a great confidence in Mr. Kerner. Therefore, with Mr. Hanada's advice, I

asked Mr. Kerner to work with licensing matters. The company involved in this license agreement was Autonix Corporation, which is a Korean company. And Mr. Kerner was able to conclude a

licensing agreement with this company. Up to that time, Omron has never had a licensing agreement concluded in the United States. That really left me a strong impression. I had confidence in him. THE INTERPRETER: to my translation. BY MR. LEACH: Q A Okay. The translator said the first license That I need to He also has a correction Therefore,

agreement in the United States. correct.

I meant to say that among licensing

negotiations I was involved, that was the first successful conclusion of the licensing agreement.

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There might be other licensing agreements that were concluded without my involvement. Q A Q A Q Such as with NCR and IBM? Yes. Who is Mr. Hanada? Hisamaru Hanada. Could you spell that for the court What is his full name?

reporter, please. A Q H-i-s-a-m-a-r-u H-a-n-a-d-a. Did he hold your position prior to the

time that you came to the United States? A Q A Q A Q A Q A Q A No, he wasn't. What was his position with Omron? At least he was a manager. Manager of IP? Yes. Is he still in the United States? Now he is in Japan. Is he still with Omron? No, he is not with us anymore. Is he retired? He is a patent attorney. So he quit Omron

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and became independent, started his own business. Q know? A His own office is in a remote area of Mie He built his own law house and bring in What city in Japan does he work in, if you

Prefecture.

his own necessary equipment, and that's where he usually works. office. Q A Do you know the name of his firm? I can look into it, but I can't give you But he himself belongs to a Tokyo

off the top of my head right now. Q Prior to meeting with Verve in the summer

of 2003, other than the license with the Korean company that Mr. Kerner worked on with you, what other work had Mr. Kerner done for Omron, just generally? MR. IRMSCHER: I want to make sure we

don't invade the privilege. You can tell him generally what kind of work Mr. Kerner did. THE WITNESS (through interpreter): Other

than that, I don't remember -- I don't think there

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is anything. BY MR. LEACH: Q Had Mr. Kerner done any work for Verve

prior to the summer 2003 meeting that you were aware of? A Q I haven't heard of that at all. Was Herb Kerner representing -- withdrawn. Did Herb Kerner attend the first meeting with Verve in the summer of 2003? A I think the translation was wrong. Could

you repeat your question? Q Yes. You recall the meeting in the summer Was

of 2003, the first meeting with Verve. Mr. Kerner there? A Q A Q meeting? A He was our counsel for Omron. Yes, he was. And you were there; correct? Of course I was there.

Was Mr. Kerner representing Omron at that

So in that But I

sense, he could have been representing us. was from Omron. I was representing Omron.

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Q

Let me ask the question this way.

Mr. Kerner was there with you; correct? A Q A Yes. Who else was at this meeting? There are two more whose names I don't I can look

remember besides Mr. Raymond Galasso. into the names, but I don't remember. Q Verve? A

The other two people were people there for

I think those two were from two different

companies, one maybe from Verve, one maybe from some kind of law firm. business cards. But I don't even remember if Raymond Galasso was from Verve or not. investigate. But at least I know there are two -- they were from two different companies, maybe, Verve and a law firm that worked with Verve. Q So at the summer 2003 first meeting with I really need to I need to go back to their

Verve, you recall five people, you, Mr. Kerner, Raymond Galasso, two other people that came with

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Verve; correct? A Q A Q Those five, as far as I remember. Where did that meeting take place? In my office in Arlington. So at the time of that meeting, you were

unaware that Mr. Kerner had previously done work for Verve? MR. IRMSCHER: Objection; misstates his

earlier testimony and lack of foundation. THE WITNESS (through interpreter): I

would like to confirm that I need to answer your question. MR. IRMSCHER: BY MR. LEACH: Q A Yes. I haven't heard if Kerner did any work They may -- he may have or I don't want to speculate. Yes, you can answer.

with Verve previously. he may not have done it.

To be honest, at least I haven't heard that he did any work with Verve previously. the fact. Q Are you aware that Verve claimed that That's

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communications with Mr. Kerner back when he was with Hunton & Williams were privileged in the ITC case on grounds that he was Verve's attorney at that time? THE INTERPRETER: part of your question. BY MR. LEACH: Q Is he aware or has he heard that Verve I didn't get the latter

claimed that communications between Verve and Mr. Kerner were privileged back at the time he was working for Hunton & Williams on grounds that Mr. Kerner was representing Verve at the time. A You referred to privileged information.

You were saying that Kerner was representing Verve at that time? Q yes. A Q According to Verve in the ITC proceeding, Were you aware of that? I didn't know. Would you have thought that was a possible

conflict of interest that you would have wanted to know from Mr. Kerner prior to negotiations with Verve? MR. IRMSCHER: Objection; calls for

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speculation, lack of foundation. THE WITNESS (through interpreter): two questions here. The first one is should I I have

answer the question, and second one is I do not understand the intention of your question. BY MR. LEACH: Q My question was phrased in terms of your

understanding. Would you have regarded that as a conflict of interest that you would have wanted to know prior to your meeting with Verve? MR. IRMSCHER: Objection; lack of

foundation, calls for speculation. You can answer the question. THE WITNESS (through interpreter): trying to find out the meaning of "conflict of interest." So Kerner was representing Verve for the interest of Verve even though Mr. Kerner was the counsel of Omron. So your question is that by I'm

representing Verve, Mr. Kerner was working to disadvantage of Omron, meaning that Mr. Kerner was

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working against Omron's interests? question? BY MR. LEACH: Q That's close.

Is that your

You were relying on

Mr. Kerner to tell you about Verve being reliable. I think you used the word "trust," but that was perhaps not the best word, but you were relying on Mr. Kerner to tell you Verve was a good company; right? A Yes. MR. IRMSCHER: translation. BY MR. LEACH: Q If Mr. Kerner had previously worked for Please wait for the

Verve or had not disclosed everything about his relationship with Verve, would that have concerned you in terms of whether he has given you impartial advice strictly in the interest of Omron or whether he has some prior interest that he hasn't disclosed? MR. IRMSCHER: Objection; calls for

speculation, lack of foundation. You may answer.

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THE WITNESS (through interpreter): First of all, I trusted Kerner.

Let me

I believe I think

Mr. Kerner worked for the benefit of Omron. this feeling probably does not change.

Even if Mr. Kerner represented Verve in the past, I believe that Mr. Kerner did it for the interests of Omron. by hearing that. MR. IRMSCHER: Counsel, would this be a We have been Therefore, I was not surprised

reasonable spot to take a short break? going about an hour. MR. LEACH: (Recess.) MR. LEACH: Sure.

Back on the record.

I wanted to put on the record some discussions that we had during the break with counsel for Omron. Mr. Herb Kerner is sitting in on the deposition, and we believe he is going to be a witness in this case. So I believe under the

Arizona practice, we can ask for him to be excluded from the deposition, and I want to put on the record

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that we are seeking to exclude Mr. Kerner's attendance at the deposition. The obvious reason is that we don't think it is fair for someone who is a witness in a case to attend depositions of other witnesses if they are not a party to the case and have the ability to tailor their testimony to that of other witnesses. MR. IRMSCHER: And my response in that

meeting was that these depositions are public proceedings absent any protective order and Mr. Kerner has as much right to be here as anybody and that I was unaware of any particular protective order in this case or any standing order that would require the exclusion of Mr. Kerner, and I refuse to exclude him at this point on that basis. BY MR. LEACH: Q Mr. Nakano, I'm still asking you about the

meeting in the summer of 2003, which was the first meeting you had with Verve. meeting take place? A Q I recall it was within two hours. Who led the discussions or spoke for Omron How long did that

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at that meeting? A Are you asking me who led the discussion

on behalf of Omron? Q A Q A Correct. Rather, on the side of Omron? Yes. I was disadvantaged there because of So Mr. Kerner spoke most, but

language ability.

what he said was with the understanding of Omron, understanding and recommendation of Omron. Q Did you have meetings with Mr. Kerner

before the meeting in order to discuss what Omron's position would be or what he should say on behalf of Omron? A Q Omron? MR. IRMSCHER: Counsel, could we slightly And I'm just asking for a yes/no here. Yes. What did you tell him to say on behalf of

rephrase that one so we don't invade the privilege? Could you ask him what he did say? MR. LEACH: Actually, no, I think that's

not privileged, because if he told Mr. Kerner to say

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something to Verve on behalf of Omron, it would not be privileged because it would not be confidential. MR. IRMSCHER: He actually did say it was.

Could you ask the first question and see if there is a difference? MR. LEACH: start off with that. MR. IRMSCHER: Could you ask your question No. I would really like to

again and see if I will object. BY MR. LEACH: Q What did you tell Mr. Kerner to say to

Verve on behalf of Omron? MR. IRMSCHER: question. privilege. I think you can get the information that you are seeking without asking a question that would invade the privilege. I'm going to instruct Mr. Nakano at this point not to answer that question. BY MR. LEACH: Q Mr. Nakano, just for the record, if your I'm going to object to that

I think that invades the attorney-client

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attorney instructs you not to answer, then you are going to refuse to answer; correct? A Q I will follow my counsel. What was discussed at this first meeting

with Verve in the summer of 2003? A I don't recall any specifics, but I think

the discussion was about the utilization of Omron patents. Q patents"? A What do you mean "the utilization of Omron Can you be more specific? Maybe the word "utilization" is somewhat If I try to be more specific,

vague in English.

maybe the word "exploit" is better. Q A Q So you discussed exploiting Omron patents? Yes, exploiting Omron patents. What did you discuss more specifically

about how the Omron patents would be exploited? A My understanding is that the meaning of

"exploitation" includes licensing, which also includes cross-licensing. Q But my question is specifically what was Did you talk about licensing

said at the meeting.

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the Omron patents at this meeting? A Q That's my recollection. Did you talk about Verve suing people on

the Omron patents? A I would like to confirm the translation. You meant to say that Verve filed a suit against Omron's patent -- rather, use Omron's patent and sued against a third party? Q Yes. Were there any discussions about the

possibility of Verve using Omron patents and suing against a third party? A I don't know if we used the word "sue."

However, my understanding is that that word or the meaning of that word can be included in licensing. Q Is it possible that Mr. Kerner's

recollection of what was said at the meeting would be better than yours? MR. IRMSCHER: speculation. THE WITNESS (through interpreter): answer? MR. IRMSCHER: Yes, you may. May I Objection; calls for

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THE WITNESS (through interpreter): Naturally, I believe Mr. Kerner remembers what he said. So are you asking me if we can ask Mr. Kerner

to talk about it? BY MR. LEACH: Was there any part of the meeting that you

did not understand? A Q I don't think there was. So even though the people were speaking in

English, you believe you understood everything that was said? A Q That's my belief. And there have actually been occasions

today where you have corrected the translator's translation into English of what you have said; correct? A I do not understand everything, but I I can catch key words and

understand the key words.

I understand what's going on. Q Were any documents provided to Omron by

Verve at this meeting? A Yes, there was. I think I received some

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documents, I think, at that meeting. Q received? A The title was something like "patent I think these Can you describe for me the documents you

portfolio" or "market analysis."

are -- they are analyses of Omron's patent evaluation. Q This first meeting that took place between

Omron and Verve in the summer of 2003 was prior to the assignment or transfer of any Omron patents to Verve; correct? A patent? Q I'm saying this meeting was before any Are you asking me about assignment of

assignment, any transfer of any patent to Verve by Omron; correct? A I believe that was before, yes. To be

honest, I really don't remember since it has been a while. I think the two events were very close to each other. Q What is the second event that you are

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talking about that was very close? A The time frame of the assignment of the

patents and meeting. Q Well, there was no assignment of any Omron

patents prior to the first meeting between Omron and Verve, was there? A Q That was my recollection. And the summer 2003 meeting that we have

been talking about was the first meeting between Omron and Verve; correct? A Q The first and the last meeting. Do you know whether Herb Kerner had any

meetings with Verve or Mr. Galasso or anyone else for Verve prior to the summer 2003 meeting? A I haven't heard specifically that question

to him, but I believe there wasn't any. Q Do you still have the documents that were

provided at this meeting in the summer of 2003? A Q I think so. Have they been provided to the lawyers to

be produced in this case? A I think so.

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Q

Did you ever receive any further proposals

or market analysis from Verve after the documents you received at this meeting in the summer of 2003? A No, I haven't. MR. LEACH: exhibit. (Nakano Exhibit 2 identified.) BY MR. LEACH: Q I have had the court reporter hand you a Let's mark this as the next

document that we have marked as Exhibit 2 that has Omron production numbers 649 through 678. Is this the document you were talking about that you believe you were provided in the summer 2003 meeting? A Q Yes, it is. I believe so.

Look with me at page 11 of Exhibit 2, and

this page also has production number Omron 659 on it. Do you see that page? A Q Yes. At the top of this page, it says "Verve

has identified several additional patents that will assist in our licensing campaign of U.S. patent

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4,630,200 and 4,678,895." A Q

Do you see that?

Yes, I understand. Now, Exhibit 2 is the document that Verve

provided to you at the first meeting between Verve and Omron in the summer of 2003; correct? A Q Yes, it is. But according to the page I just pointed

you to, page 11 of Exhibit 2, Verve already had underway a licensing campaign for two Omron patents; correct? MR. IRMSCHER: Objection; misstates the

document and mischaracterizes the document. You can respond. THE WITNESS (through interpreter): According to the translation, Verve had started a licensing campaign. However, as far as I can tell,

this document states that -- this document used the word "will." BY MR. LEACH: Q Let me just ask you what the fact was.

Was there any licensing campaign that had already been discussed about these two Omron patents, the

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'200 patent and the '895 patent, prior to the meeting in the summer of 2003? A It is my recollection that there was no

discussion about these. Q Is it possible there were discussions that

did not include you? MR. IRMSCHER: speculation. THE WITNESS (through interpreter): Are Objection; calls for

you saying that I hadn't heard, however Verve was making a move? BY MR. LEACH: Q Is it possible there were discussions with

Mr. Kerner or someone else that did not involve you? MR. IRMSCHER: speculation. You can answer. THE WITNESS (through interpreter): don't think that is the case. I Objection; calls for

Always in order to

start any move, Mr. Kerner needs authorization from Omron. BY MR. LEACH:

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Q

Look with me at page 17.

Do you see this

heading on page 17 of Exhibit 2 under the letter A that says "Assignment Agreement with Verve"? A Q Yes. This paragraph that I have directed your

attention to says, "Similar to the assignment of the '895 and the '200, Verve recommends that the assignment of all or a portion of the PSO portfolio would allow Verve to maximize the economic value of Omron's POS subportfolio." Do you see that? MR. IRMSCHER: The first time you said

"PSO portfolio" and you meant POS. MR. LEACH: meant POS. THE WITNESS (through interpreter): it says so. BY MR. LEACH: Q As of the date of this meeting, had the Yes, Right. If I said "PSO," I

'895 patent and the '200 patent of Omron already been assigned to Verve? A According to this, yes.

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Q

So what discussions took place between

Omron and Verve prior to the meeting in the summer of 2003 that led up to the assignment of the '895 patent and the '200 patent from Omron to Verve? MR. IRMSCHER: me, please. (The reporter read the record as requested.) MR. IRMSCHER: Objection; lack of Read the question back for

foundation, calls for speculation. THE WITNESS (through interpreter): answer? BY MR. IRMSCHER: Q A Yes. According to this document, the meeting May I

took place after the assignment of these patents, you are right. My understanding also is that this

document indicates assignment of '895 and '200 patents came before the meeting. However, I would like to confirm whether this document came to me at the meeting or subsequent to the meeting. I believe that this came

to me at the meeting, but I need to confirm.

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So going back to your question about what kind of discussion was held regarding '895 and '200 before the meeting. Q So what discussions took place before the

meeting about the assignment of the '895 patent and the '200 patent from Omron to Verve? A at all. First of all, the discussion was not held By the discussion, I meant to meet with

people face to face. Q When I say "discussions" or

"communications," I mean e-mail, telephone, any kind of exchanging faxes. Were there any sort of communications prior to the meeting in the summer of 2003 that led up to the assignment of the '895 patent and the '200 patent from Omron to Verve? A I understand. My recollection is that our

counsel, Mr. Kerner, suggested that we assign these two patents, which were quite old patents, to Verve. Q Did he do that before the meeting in the

summer of 2003? MR. IRMSCHER: You mean communicated that

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to Verve; correct? BY MR. LEACH: Q A Did he suggest that? If this document is the one I received at

the meeting, then I assume -- rather, I think the suggestion to assign '895 and '200 was given to me beforehand. Q And prior to the time that the suggestion

to assign the '200 patent and the '895 patent was given to you by Mr. Kerner, Mr. Kerner would have had some discussions with Verve about that; correct? MR. IRMSCHER: Objection; calls for

speculation, lack of foundation. THE WITNESS (through interpreter): Generally speaking, you would think there must have been some kind of communication that took place. However, I have never heard of any meeting being held about this. MR. LEACH: next exhibit. (Nakano Exhibit 3 identified.) BY MR. LEACH: Would you mark this as the

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Q

I have handed you a document that has been Is this a copy of an agreement

marked as Exhibit 3.

between Omron and Verve in which the Omron '895 patent and the Omron '200 patent were assigned to Verve by Omron? A Q '895 and '205; right? No. '200. Counsel, is that two copies

MR. IRMSCHER: of this? MR. LEACH:

Apparently it is. There are two copies of the

MR. IRMSCHER: same exhibit. MR. LEACH:

We should correct the exhibit. It is the same

There are different numbers on them. document.

To avoid confusion, we can change it. MR. IRMSCHER: State on the record what

the Bates numbers are. MR. LEACH: exhibit back, please. For the record, Exhibit 3 includes Omron production numbers 429 through 435. BY MR. LEACH: Mr. Nakano, let me see the

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Q

Now let me ask my question again. Is Exhibit 3 a copy of an agreement

between Verve and Omron relating to the assignment of Omron's 200 patent and '895 patent from Omron to Verve? MR. IRMSCHER: As well as a cover letter. Yes,

THE WITNESS (through interpreter): it is. BY MR. LEACH: Q Was this agreement signed before the

meeting in the summer of 2003 that we have been talking about? A As I said earlier, these two events,

meeting and assignment, took place in the same time frame. So I'm not confident to say it. However, according to the signature we saw with this previous document and if I concede that that document came to me at that meeting, then the assignment took place before the meeting. If indeed that previous document was given to me at that meeting and that document did mention -- it is true that document mentioned

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assignment, if that is the case, it is logical to assume that the assignment was taking place before the meeting, at which time I received the document that mentioned the assignment. Q And the document that mentioned the

assignment, for the record, is Exhibit 2; correct? A Q Yes, it is. And the assignment of Exhibit 3, the last

page contains your signature; correct? A Q correct? A Q Yes. Were you authorized by Omron Corporation Yes, it is. And you signed this on August 13, 2003;

to sign this agreement, Exhibit 3? A Q Yes, I was. Who did you talk to at Omron Corporation

in order to obtain that authorization? A In Japanese companies, it is customary to The

have the process of obtaining authorization. substance of this process is to distribute the

information among the people related to this issue

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and eventually obtain authorization from the head of the division. In this case, I was authorized by the head of management planning division that governs IP department or IP activities -- IP department. Q A Who was that person? Mr. Suzuki Yoshinobu, managing director. I'm

He is a managing director of Omron Corporation. not quite sure about his first name. Y-o-s-h-i-n-o-b-u is his name. Yoshinobu. right. Q A Q A Q How do you spell his last name? S-u-z-u-k-i. So it is Mr. Suzuki? Yes.

I think his name is

I'm not certain, but I think that is

Now, prior to obtaining authorization, you

had to distribute information to people at Omron about the purpose of this assignment; correct? A Q Yes. What form did this take? Did you send Can

e-mails, send letters, documents, facsimile?

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you tell me what form it took, please. A There are many ways to do it. I think I

have distributed this request regarding this assignment agreement three times. settled this case using e-mail. However, I don't remember what form I took for the first distribution of the information. Maybe I did through fax or maybe I did through e-mail. Q times. So you distributed information three The last time you believe you distributed it I remember I

by e-mail; correct? A Yes. The last distribution of this

information was done through e-mail. Q And you believe that the first two times

you distributed information it may have been by fax, may have been by e-mail, you don't recall? A e-mail. Q Do you still have copies of the Yes, it is possible I did it through

information you distributed concerning this assignment agreement of Exhibit 3?

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MR. IRMSCHER:

You are talking about the

approval documents; correct? MR. LEACH: Yes, to get authorization. I do

THE WITNESS (through interpreter): have that request for authorization, yes. BY MR. LEACH:

Has that been provided to the lawyers to

produce to us? A Q A Q I believe so. Was that in English or in Japanese? In Japanese. Do you recall the approximate date of your

three distributions of information that you made in order to obtain authorization to sign Exhibit 3? A The first one was around August. The

second one was around October.

And the final and

effective one I think was submitted around March or April of 2004. The final request for authorization was combined -- the final authorization combined ones distributed in August and in October. three requests that were distributed. There were The first one

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and second one changed a little bit. So the third request was the final one by which authorization was obtained. Q When you say the first request was

distributed in about August, is that of 2003? A Q October. A Q Yes, it is. And the second one you said was in Was that October of 2003? Yes, it is. And the information you distributed in

October 2003 was different at least in some respects from what you distributed in August 2003; correct? THE INTERPRETER: BY MR. LEACH: Q The information you distributed in October Please repeat.

2003 was different at least in some respects from the information you distributed in August 2003; correct? A Q Yes, you are right. Now, the information you distributed in

August 2003 would have been prior to the date that you signed Exhibit 3, in other words, prior to

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August 13, 2003; correct? A Q I believe so. The information you distributed in August

2003 in order to obtain authorization, who specifically did you send that to? A As I mentioned earlier, this kind of

information is to be distributed to many different people. The first person to be distributed to was Mr. Yoshitsugu Kitamura, who is the head of IP department at headquarters in Kyoto. And

Mr. Kitamura and I discussed who is the best person to distribute next. Then we decided on Mr. Nemoto Takek -Takek Nemoto, who at the moment was doing only maintenance but at that time he was dealing with the business in the United States. And after Mr. Nemoto, it went to Mr. Suzuki. The last person to be distributed to was the head of IP -- Japan business -- IP department of Japan business. His name was Tomokazu Nishikoji,

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even though his name was not, I don't think, included in the document. I would like to add something here. have three points to add to my testimony. First of all, before even distributing first request as well as the information, I had an extensive discussion with Mr. Kitamura regarding whom to distribute this request and the information in advance. Second of all, Mr. Nemoto is retired now, but at that time he was involved in the maintenance of the U.S. patent -- U.S. POS. knowledge about this. He has an extensive I

That's the reason he was

chosen to be distributed. And the third point I wanted to make is about Mr. Nishikoji. POS business. There was the division called

Rather, there was the division called

SSB, which was involved in POS business, and Mr. Nishikoji was the manager of IP in this SSB division. Our belief was that by distributing the information to him, the substance of what's going on

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would be relayed to this business division. MR. IRMSCHER: an hour now. We have been going for over

Could we take a short break? Yes. Let's make sure she gets

MR. LEACH:

the spellings of the names. THE INTERPRETER: Before we go into the

break, he wants to mention something. BY MR. LEACH: Q A Yes. A small point I would like to make a

correction on. About the SSB division, this SSB division was involved in the POS business in the past. this business was pretty much withdrawn at that time. However, the person who knows the most about Japan's business related to SSB was the head of this SSB division. That's why we chose But

Mr. Nishikoji, who is the IP manager. Q Have you finished your answer with respect

to this question? A I finished, yes.

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MR. LEACH: (Recess.)

Let's take a break.

MR. IRMSCHER:

Before we continue,

Mr. Nakano wants to correct something about the time of the receipt of Exhibit 2. So if you could,

Mr. Nakano, just tell him what you recall about receiving Exhibit 2. THE WITNESS (through interpreter): stated earlier, I don't remember exactly when specifics of what happened at the meeting. However, As I

one thing I am certain of is that at the meeting held mid-August, at least I didn't receive this Exhibit 2. At that meeting, since it was the first meeting face to face with them, that was strictly introduction. Therefore, I do not think that we

received this document that contained the analysis. So I don't think I received this Exhibit 2 at that meeting. BY MR. LEACH: Did Mr. Kerner say anything to you during

the break to help you remember?

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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 Q answer?

MR. IRMSCHER:

I object to that as calling

for attorney-client privileged communication. You can testify as to how it was you recalled when you received Exhibit 2. MR. LEACH: Are you instructing him not to

Because I want an answer to that question. If Mr. Kerner is going to sit here in the

deposition and then during the breaks speak to the witness and say things to him to refresh his recollection or to suggest testimony to him, I think I'm entitled to know that. MR. IRMSCHER: I think you are entitled to I think

ask the question as to why he recalls that.

that's what you are entitled to do, not try and invade the attorney-client privilege. objected. BY MR. LEACH: Did Mr. Kerner say anything to you during That's why I

the break to help you remember this? MR. IRMSCHER: You can answer that. We

THE WITNESS (through interpreter): discussed --

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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 Q A that time. Q heard.

MR. IRMSCHER:

Don't get into the

substance of communications between you and your counsel. THE INTERPRETER: I will translate what I

BY MR. LEACH: Yes. We discussed remembering what happened at

Did Mr. Kerner tell you what events were

to help you remember what happened at the time? A He didn't directly help my recollection.

I just remembered that by myself. Q Do you understand what I'm trying to find

out is to what extent is your testimony your own memory and to what extent is it based on anything that you may have talked to Mr. Kerner about during the break. Was there anything that he said that helped you remember or suggested any sequence of events to you? MR. IRMSCHER: A very narrow question.

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Answer that yes or no. THE INTERPRETER: yes or no? BY MR. IRMSCHER: Q A Yes. It is very difficult to answer your So I would like to tell you a You want him to answer

question yes or no. little bit more. Q

Is it okay?

It's okay with me. MR. IRMSCHER: You can tell him why you

remember when it was that you received Exhibit 2. THE WITNESS (through interpreter): impression of that meeting was quite general. received this kind of detailed portfolio, then naturally I would have analyzed the portfolio right after the meeting. that. I am answering to you strictly from my recollection. The meeting lasted less than two But I don't recall if I did My If I

hours, and that was the first and last meeting with Verve, and the discussion was I believe -- and the discussion was I think about what kind of company

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Verve is. So I can definitely say this. I don't

recall that I received this analysis at that meeting. BY MR. LEACH: Q You said earlier that you thought you had What

received some documents at this meeting.

documents, if any, did you receive if it wasn't Exhibit 2? A was this. The only document I received from Verve Therefore, at that meeting, probably we

exchanged business cards. In my recollection, I haven't received from them anything other than that. But somehow I So

thought I received this document at the meeting. that's why I answered as such. Q What was said at the meeting about what

kind of company Verve is? A I remember this well. Verve brought their

catalogue, and based on the catalogue, they gave us a briefing on their company or their business. But

my understanding from that was that Verve is an IP

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holding company. Q What did Verve tell you about what their

business was? A Verve explained to me, and based on the

explanation, my understanding was that Verve is a company specializing in licensing of the patents that are purchased from the third party or assigned by the third party. Q Now, the agreement of Exhibit 3 did not

require Verve to pay any cash to Omron at the time the agreement was signed in exchange for the assignment of the '895 Omron patent and the '200 Omron patent; correct? A No payment was done at the time of signing

the agreement. Q Now, did Omron authorize you to sign the

agreement of Exhibit 3 without having received any kind of written proposal of any type from Verve? A Are you talking about at the time of

conclusion of the agreement? Q At the time that you signed Exhibit 3 in

August 2003.

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A

At the time of my signing, I understand

that there was no payment from the Verve, and I relayed that information in my request and the distribution of the information. Q That really wasn't my question. My question was you were authorized to sign Exhibit 3 in August 2003 without having received any kind of written proposal of any type from Verve; is that correct? A I don't quite understand the significance I will ask a question in Japanese

of the question.

and please confirm if my understanding is right. THE INTERPRETER: to him again. Permission to translate

I think there is a misunderstanding. Okay.

MR. LEACH:

(Interpreter conferred with witness.) THE WITNESS (through interpreter): I

didn't receive any kind of documents from Verve in order to obtain authorization from senior management. BY MR. LEACH: Q Again, given your recollection now that

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you did not receive Exhibit 2 at the meeting with Verve, you would agree, however, that Exhibit 3 was still signed before that meeting or not? I'm just

trying to find out as best we can what happened when. A I don't know how to answer, but I think

the best way is to say this, because what I'm going to say is the facts. The authorization for the assignment was obtained regardless of this Exhibit 2. Specifically, the time when I received this document has really nothing to do with the authorization of assignment. Q The two things are unrelated.

Another way of asking that, you signed

Exhibit 3 before you received Exhibit 2; correct? A At least I know that I didn't receive this This

Exhibit 2 at the time of the meeting. Exhibit 2 is about analysis.

So I believe I

received this long after the meeting. This is my recollection. signature is dated in August. But the

Therefore, I think it That is my

was before receiving of Exhibit 2.

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recollection, to the best of my ability. Q When the '895 patent and the '200 patent

were assigned to Verve by the agreement of Exhibit 3, who had been identified or discussed as potential defendants or licensing targets or prospects that Verve intended to pursue? A Naturally, Omron, including me, must have

been thinking about the parties that do not have any influence or relation to Omron's business or the persons or parties that do not conflict with Omron's business. Q I'm asking for names of companies. Who

had been identified or discussed? A right? Q A Q '200. A Sorry. Hypercom came up. But we didn't Yes. It is about patent '295 and '800? No. The numbers are actually '895 and At the time of assignment you are asking,

raise the name Hypercom ourselves. Q Hypercom was raised by Verve?

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A Q

Yes, they did. Do you still have the information that you

distributed to people at Omron in order to obtain authorization to sign the agreement of Exhibit 3? A Q Yes, I do. And have you given it to your lawyers to

produce to us? A Q I think so. What was said about Hypercom in connection

with the assignment of the '895 patent and the '200 patent from Omron to Verve? A No discussion ab