Free Response in Opposition to Motion - District Court of Arizona - Arizona

EXHIBIT C

Case 2:04-cv-00400-PGR

Document 141-4

Filed 08/28/2006

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Bryan Farney

June 15, 2006
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA HYPERCOM CORPORATION, Plaintiff, v. OMRON CORPORATION, Defendant. º º º º º º º º º

CIVIL ACTION NO. 04-0400 PHX PGR

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THE ORAL DEPOSITION OF BRYAN FARNEY June 15, 2006 * * * * * * * * * * * * * * * * * *

ORAL DEPOSITION OF BRYAN FARNEY, produced as a witness at the instance of the Plaintiff and duly sworn, was taken in the above styled and numbered cause on the 15th day of June, 2006, from 9:24 a.m. to 10:36 a.m. before Sandra S. Givens, CSR, in and for the State of Texas, reported by machine shorthand method, at the law offices of Fulbright & Jaworski, LLP, 600 Congress Avenue, Suite 2400, Austin, Texas 78701, pursuant to the Federal Rules of Civil Procedure.

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Bryan Farney

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FOR THE PLAINTIFF: Sid Leach Snell & Wilmer, LLP 400 E. Van Buren One Arizona Center Phoenix, Arizona 85004 602.382.6372 FOR THE DEFENDANT: John K. Henning IV (via speakerphone) Baker & Daniels 300 N. Meridian Street Suite 2700 Indianapolis, Indiana 46204 317.237.1317

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Bryan Farney

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I N D E X Appearances - - - - - - - - - - - - - - - - - - - - - 2 Exhibits - - - - - - - - - - - - - - - - - - - - - 3

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BRYAN FARNEY
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Examination by Mr. Leach - - - - - - - - - - - - - 4 Examination by Mr. Henning - - - - - - - - - - - 31 Further Examination by Mr. Leach - - - - - - - - 46 Reporter's Certification - - - - - - - - - - - - - - 53

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E X H I B I T S
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NO. 1 2 3

DESCRIPTION Declaration of Bryan Farney Response to First Set of Interrogatories from Verifone to Verve LLC

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Verve's Response to Hypercom's Motion to Compel 11 Notice of Appearance Redacted Omron-Verve Agreement 031804 Verve's First Supplemental Responses Patent Assignment & License Agmt. 031804 Verve Production Notice of Withdrawal of Counsel Patent Assignment & License Agmt. 031804 Omron Production Patent Assignment Agreement 081303 Patent Assignment Agreement 101403 Addendum to Patent Assignment 10 15 21 26 29 47 27 27 28

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Bryan Farney

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BRYAN FARNEY, having been first duly sworn, testified as follows: EXAMINATION BY MR. LEACH: Q A Q A Q What is your name? William Bryan Farney. What's your occupation? I'm a patent attorney, patent litigator. During the 2004, 2005 time frame, which is I go by Bryan.

what we're interested in in this case, what law firm were you with? A I was with, at least indirectly, a firm called Dewey Ballantine, LLP; but the actual partner that was Brian Farney, PC, Professional Corporation, I was the president and sole employee of that corporation. Q All right. So you incorporated your law practice, but your law practice as Bryan Farley, PC was a partner at Dewey Ballantine? A That's right. For practical purposes I was a partner in the firm, but for tax reasons I was, you know -Q A Q Sure. -- practicing through a PC structure. And at some point in time did you and

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Bryan Farney

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Dewey Ballantine become involved in an investigation before the United States International Trade Commission styled "In the Matter of Certain Point of Sale Terminals and Components Thereof," investigation number 337-TA-524? A Q A Q Yes. All right. Okay. Were you the partner in charge of the work I'm just going to refer to

that as ITC proceeding, if that's okay.

that Dewey Ballantine did in connection with that investigation? A Yes. And let me just add, I was also So when we refer representing other clients in the ITC and other ITC proceedings at the time. to -- when you ask me what I'm doing in the ITC, let's just make sure it's referring to this one. Q Okay. And when you say ITC, just for the benefit of the jury or the Court, you're referring to the International Trade Commission? A Q Yes. All right. So at some point in time did

Dewey Ballantine and you become involved in representing Verve LLC in this ITC proceeding? A Yes.

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Bryan Farney

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Q

And this ITC proceeding we're talking

about was Omron Corporation, one of the respondents or the parties accused of infringement? A Q correct? A date. Q That's sounds about right. That sounds about right. Now, Dewey Ballantine was not involved in I don't remember having an independent recollection of the Yes. I believe so. Now, this ITC proceeding involving Verve

was based on a complaint filed on July 31, 2004,

representing Verve in any way in connection with the filing of the complaint, correct? A Q That's correct. And Dewey Ballantine was not involved in

doing any pre-filing investigation in that Verve ITC proceeding, correct? A Q That's correct. When did the first meeting occur between

Dewey Ballantine and Verve to discuss the potential representation of Verve by Dewey Ballantine in this ITC proceeding? A Let me say that you've handed me Exhibit No. 1, which is a Declaration that I signed later relevant to this ITC proceeding, and that reflects

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Bryan Farney

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more my contemporaneous understanding than I would remember now a year and a half later. Of my own recollection I would have said it was the fall of 2004, but to the extent there's a date more specific in here, that would be more accurate. Q All right. I've pre-marked as Farney Is this a I may have Deposition Exhibit 1 a document entitled "Declaration of Bryan Farney." A Yes. Declaration that you signed and drafted? I drafted most of it. had some associates revise it or plug in some dates for me, but I was responsible for it and signed it. Q And if you'll look at the last page of this Declaration, is that your signature on Deposition Exhibit 1? A Q A Q A Q Yes, it is. And did you sign the Declaration on or Would have been on March 8. All right. And does this -Yes.

about March 8, 2005?

That's my writing of the date as well. And at the time that you signed the

Declaration of Deposition Exhibit 1 did you regard it as setting forth truthfully and accurately the facts as best you could recall them?

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A vetted. Q meeting.

Yes.

It was very carefully reviewed and So in paragraph number 2 there

So I'm sure it was accurate at the time. All right.

is a date mentioned there concerning the first Does that refresh your recollection as to when the first meeting between Dewey Ballantine and Verve occurred to discuss the potential representation of Verve by Dewey Ballantine in the ITC proceeding? A Q A Q A Q Yes. October 20th would be consistent with my recollection. October 20 of 2004, correct? Yes. That's right. And at that time the ITC proceeding was Yes. And who was present at this first meeting

already in progress, correct?

that occurred between Dewey Ballantine and Verve in connection with discussing potential representation of Verve in the ITC proceeding? A It was Ray Galasso, Kevin Imes, myself, and Dean Munyon, who was an associate of the firm. I believe Dean had some prior connection with Kevin Imes in some way, and that's how they got in touch with us.

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Bryan Farney

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Q A

And Dean Munyon was an associate at Dewey That's right. Let me add, he left the

Ballantine? firm not too long after that, and so he never actually had any involvement in the actual case. Q Okay. And was the purpose of talking with Dewey Ballantine that Verve was considering adding co-counsel to represent them in the proceeding? A Q A Yes. What was the first action that Dewey Initially we agreed to represent them in

Ballantine took on behalf of Verve? discussing possible settlement of the resolution with the respondents. Q A Q Okay. Just a few days before we formally filed Okay. Did Dewey Ballantine play any role

appearance in the matter. in contacting the respondents in the ITC proceeding to communicate Verve's settlement position to them? A over. Yes. When you say "played any role," I don't know and don't recall whether -- let me start I believe that Verve had, through some person or persons, communicated either an interest in settlement or a settlement position to the

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Bryan Farney

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respondents prior to this; but they asked us to step into that, and we did by contacting counsel for each of the respondents or most of the respondents around November 16 through November 18, 2004 and communicating a Verve settlement position to them. Q A Q And did you call Hypercom's counsel and I believe that I did. At some point in time did Dewey Ballantine communicate a settlement position to them?

file a formal Notice of Appearance in the ITC appearance involving Verve? A Q Yes, we did. Let me show you a document that I've Is

pre-marked as Farney Deposition Exhibit 4.

Deposition Exhibit 4 a true and correct copy of the Notice of Appearance that Dewey Ballantine filed in the ITC proceeding? A Q It certainly appears to be. Yes. This Let me show you a document that I've

marked as Farney Deposition Exhibit 2.

document, which is dated September 27, 2004, this is a document that was filed in the proceeding before Dewey Ballantine or you got involved in the case, correct? A Yes. That's right.

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Q

So if you look at the answer to question

number 3 which appears on page 4 of Deposition Exhibit 2 -A Q A Q I'm sorry, which one? Page 4, question number 3. Uh-huh. This is an interrogatory that asks for

identify any right, title, or interest in the '077 patent retained or held by person or entity other than Verve in identifying documents purporting to support or negate such right, title, or interest. I've sort of paraphrased that, but the answer that's given here, the answer that Omron has not retained any right or title to the '077 patent, Dewey Ballantine had no involvement in preparing the answer to this question at this time, correct? A Q That's correct. All right. I've marked as Deposition

Exhibit 3 a document entitled "Verve's Response to Hypercom's Motion to Compel," and this is a document that was filed in the International Trade Commission on or about November 12, 2004. Again, this is a document that Dewey Ballantine did not play any part in creating or filing with the ITC, correct? A That's correct.

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Q

And this Deposition Exhibit 3 includes at

the -- as an attachment of Exhibit A a copy of Verve's Response to Commission Investigative Staff's Second Set of Interrogatories. Again, Verve's response to the Commission's second set of interrogatories that's attached as Exhibit A to Exhibit 3 is also a document that Dewey Ballantine played no role in creating, correct? A Q That's correct. So the answer to interrogatory number 33

that Verve gave to the Commission investigative staff, which is on the first page of Exhibit A here, where the Commission staff asks for them to fully describe Verve's relationship or agreements with Omron, including any current or past financial arrangements that cover sharing of monies received from enforcement and/or licensing of '077 patent, Verve's answer that Omron assigned to Verve all rights, title, and interest in, including rights to all past damages of the '077 patent and that Omron does not control Verve in any way, those are answers that Dewey Ballantine had no involvement in preparing, correct? A Q That's correct. Now, at the time that you stepped in and

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entered an appearance to represent Verve in the ITC proceedings were you aware that there were motions to compel Verve to disclose documents relating to its agreements with Omron that were being litigated at that time? THE WITNESS: back? (The referenced portion was read back by the court reporter.) THE WITNESS: No. At the time we stepped in we were aware that there had been -- we'd been made aware by Verve that there were some issues as to what confidential information the respondents would have to produce, given Verve's relationship with its existing counsel and that that was, as it was explained to us, the primary reason that Verve was seeking additional counsel, was so that they could have a counsel to receive and review respondent's confidential documents. So we were aware that was an issue, and we were aware that the case was in discovery and that there were ongoing discovery issues, but at the time that we entered an appearance that's all we knew. Q (By Mr. Leach) So you didn't know about Can you read that

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the motions to compel and the orders that had been entered compelling Verve to disclose its agreements with Omron? A Q A As best I recall, we did not. All right. Now, whether we knew the day before we

filed the Notice of Appearance or something, I'm not sure, but it wouldn't have been until that -- I don't think until after. Q All right. Now, Dewey Ballantine never did file or appear or take any action on behalf of Verve in connection with any other proceeding other than the ITC proceeding, correct? A That's right. Except I would say I think that when we communicated the settlement proposals in connection with the ITC there may have been some discussions with some respondents about whether it would include all of the related litigation. Q A Q All right. But we weren't representing them in any All right. And so Dewey Ballantine was

litigation and took no steps in that regard. not involved in any pre-filing investigation for any federal district court case that Verve filed? A That's correct.

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Q

Let me show you a document that has been

marked as Deposition Exhibit 5 to your deposition. This is a copy of the Verve-Omron agreement number 3 -- excuse me, 031804 that has been redacted, correct? A Q I'm sorry. Say that again? Deposition Exhibit 5 is a redacted copy of

the Verve-Omron agreement that was produced in the ITC proceeding, correct? A Well, just to be careful, it is a copy of what appears to be an agreement, at least one agreement between Omron and Verve that's numbered 031804, and it is significantly redacted. Q Okay. Now, if you refer to paragraph 7 of your Declaration marked as Exhibit 1, let me ask you, when did Dewey Ballantine for the first time receive this redacted copy of the Verve-Omron agreement number 031804 that's marked as Exhibit 5? A Well, let me say that while I don't independently recall the specific date sitting here, I can see from Exhibit 1 that I had determined that it was November 23rd, 2004; and I'm sure that's correct, because at the time I had verified that. Q All right. So at the time you wrote the Declaration of Exhibit 1, the date that of November

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3, 2004 that you put in paragraph 7 of your Declaration, that date was true and accurate, correct? A Q Yes. Now, at the time that Dewey Ballantine

received for the first time this redacted copy of the Verve-Omron agreement number 031804 you only received this document in redacted form, correct? A Right. Exactly. Assuming this is what we produced, what's now Exhibit 5, we produced exactly as it came to us. Q correct? A Q correct? A Q That's correct. And the redactions that were made in the That's correct. And you had never seen them at that time, All right. And you did not have any unredacted copies of the agreements at that time,

document that's marked as Deposition Exhibit 5, those redactions were not made by Dewey Ballantine, correct? A Q That's correct. And Dewey Ballantine produced the document

marked as Deposition Exhibit 5 the day after you got

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it from Verve, correct? A Q correct? A Q That's correct. In connection with the work that Dewey That's correct. And the day you produced it would have

been November 24, 2004, the day before Thanksgiving,

Ballantine did in the ITC proceeding, did you have an associate, Mr. Cabrach Connor, assigned to work on the case under you? A Q you? A Q Yes. It's pronounced PLEEZ, but yes. And Mr. Plies and Mr. Connor were both He was one of them. Yes. And did you also have an associate named

Mr. Jeffrey Plies assigned to work on the case under

lawyers who were working for the firm of Dewey Ballantine, correct? A Q A Q That's correct. And they were not partners, they were That's correct. Now, when did Dewey Ballantine receive for

associates, correct?

the first time an unredacted copy of any of the agreements between Verve and Omron?

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A

As is indicated in paragraph 9 of my

Declaration, it was Wednesday, December 1st, 2004; with the same caveat that I don't recall the exact date now, but I'm sure this is correct, and it's consistent with my recollection of the timing. Q A me by fax. Q Did Mr. Galasso include any instructions concerning your disclosure of this unredacted document to anyone? A Yes. Now, I should say, I didn't receive Mr. Plies this at the time it was sent, because I was out in another matter for a different client. documents. Mr. Galasso included with the transmission of the unredacted document an instruction to not disclose this unredacted document to any other attorney at Dewey Ballantine before he gave further notice, he or someone at Verve gave further notice. Q And at that time you were traveling to did, and I later determined this by reviewing the Okay. How did Dewey Ballantine receive the documents? What's stated here is the unredacted document was sent by Mr. Galasso to Mr. Plies and to

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Madison, Wisconsin in connection with a preliminary injunction hearing for a different client on a different matter? A Q A Q That's right. When did you return to the Dewey It was Friday afternoon, December 3rd. And when did you first have a chance to

Ballantine office?

look at the unredacted Verve-Omron agreements that Mr. Galasso had provided? A It was the week of December the 6th, and I I recall at the time when we were preparing this Declaration we tried to pin down the exact date. don't believe it was the Monday that I -- that I actually saw it on the Monday, but it was sometime a little later in that week that I saw it. Q agreement? A Q Yes. Did Mr. Plies send an e-mail to other All right. And was that the first time that you'd ever seen the unredacted Verve-Omron

attorneys at Dewey Ballantine telling them to delete any copies of the attached agreement, unredacted agreements that they may have received by mistake in or about this time period?

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A

Yes.

This is reflected in paragraph 10.

As I earlier said, the fax from Mr. Galasso included the instruction not to let any other attorney at Dewey Ballantine see it until further notice from Verve, other than myself and Mr. Plies. However, since the fax came in to me when I was out of town and my secretary just has a routine matter of circulating to what we would call the Verve team what faxes came in, she had just done that routinely. At some point Mr. Plies realized that it had happened and read the instruction, and in attempting to comply with that instruction he sent an e-mail to those to whom it had been circulated and asked them to not review it. Q A Q All right. Or to delete the e-mail and not review it So at least prior to the time that you got

at that time. back to your office in the week of December the 6th from this case that you were handling out of town, no one at Dewey Ballantine had seen the unredacted Verve-Omron agreements except Mr. Plies, correct? A Yes. And I'm not sure that even he saw it He saw that it was in, saw that no one on that day.

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else was to see it on the cover, but I don't think -- my best recollection right now is he didn't see it on that day. Q Okay. He had other cases going on as well that had some briefs going out or something. Let me show you a document that This we've marked as Farney Deposition Exhibit 6. and Objections to Verifone's First Set of Interrogatories that was served on December 3rd, 2004 in the ITC proceeding. A Q That's correct. Now, the information that Dewey Ballantine This is a pleading that was served by Dewey Ballantine, correct?

is a copy of Verve's First Supplemental Responses

gave in these supplemental responses to Verifone's interrogatories was information that the firm obtained from Mr. Galasso or Mr. Imes, correct? A Yes. Or others at Verve. I believe there was at least one other person at Verve that he may have communicated with. Q Okay. Now, did Mr. Connor meet with Ray Galasso on or about December 3, 2004 for the purpose of obtaining the information that was needed to prepare these supplemental responses that we've marked as Exhibit 6? A Yes, as is reflected in my Declaration at

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paragraph 12; although I don't think at the time, because I was involved in another matter which was urgent, that I knew he was meeting with him. Q Sure. Now, one of the interrogatories that he was trying to obtain information for was interrogatory number 3, which is on page 4 of Deposition Exhibit 6, correct? A Q A Q What page? Page 4. I believe that is correct. And the supplemental response to

interrogatory number 3 that was given at this time was, quote, "Omron has not retained any right, title, or interest in the '077 patent," unquote, correct? A Q A Q You're saying that was a supplemental Yes. Yes. And in giving that supplemental response response that was given?

did Mr. Connor rely on Raymond Galasso for the information that is provided here? A Yes. To the extent it's reflected in paragraph 12 and other parts of my Declaration, I believe that's correct.

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Q A Q

And did Mr. Galasso inform Mr. Connor that Again, as reflected in the Declaration, I And did Mr. Galasso also inform Mr. Connor

it would be accurate to make this statement? believe that's correct. that it would be accurate to make the statement that Verve owned all right, title, and interest in the '077 patent, correct? A Q A Q A Same response. As it is reflected in the Declaration, I believe that's correct. And the '077 patent is the patent that was Yes. I believe that's right. involved in the ITC proceeding, correct? And that's one of the patents that Verve It was one of the patents that Verve was

alleged that Omron had assigned to Verve, correct? asserting against the respondents that had originated from Omron. Q Now, at the time that Mr. Connor at Dewey Ballantine prepared this supplemental response to interrogatory number 3 of Deposition Exhibit 6 stating that Omron has not retained any right, title or interest in the '077 patent, he had not seen the unredacted agreements, correct? A That's right. That's what we determined.

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Q

And, in fact, Raymond Galasso had

instructed Mr. Plies not to disclose them to any other attorney, including Mr. Connor, correct? A Q A Q Well, to any other attorney. Right. He just said "to any other attorney." Let me put it this way. At that time He didn't expressly say "including Mr. Connor."

Mr. Galasso's instructions restricted the unredacted agreements to only two attorneys at Dewey Ballantine, neither one of which was Mr. Connor, correct? A Q That's correct. And Mr. Plies was not involved in

preparing the supplemental answers to interrogatory number 3 set forth in Deposition Exhibit No. 6, correct? A he -Q Well, let me ask it this way to try to Did Mr. Plies review the make it more closely conform to the understanding that you expressed here. supplemental interrogatory responses provided in Deposition Exhibit 6 prior to the document being served on the respondents? Look at paragraph number 14. When you say "involved with," I believe

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A

No.

For as best I recall, there was some As I've

reason, either by agreement or otherwise, that they needed to go out on December the 3rd. mentioned, Mr. Plies was busy with other matters, so as is indicated in part in paragraph 14, when Mr. Connor returned he prepared and sent them out and Mr. Plies had no time to review them. Q Okay. And at this time on December 3, Now, in the supplemental 2004 the -- withdrawn.

responses to interrogatories that are set forth in Deposition Exhibit 6, did one of the Verve principals verify these answers and sign a Declaration swearing that they were true and correct? A I believe that Exhibit 6 appears to be an unverified copy, but my understanding is that on Monday, the following Monday on December 6, that, let's see, one of the principals in Verve did verify them. Q A Q A Q I think it's reflected in the Declaration. If you look at -Mr. Imes, paragraph 15. All right. So Mr. Imes verified these

responses to the interrogatories? That's correct. Now, on Monday, December the 6th did you

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send Mr. Connor over to meet with Raymond Galasso and Kevin Imes at Mr. Galasso's office for the purpose of collecting any remaining documents still in Verve's possession that might be relevant to the ITC case? A Q Yes. During that meeting did Mr. Galasso

finally provide Mr. Connor with the original executed Omron-Verve assignment document in its unredacted form? A Q Yes, as reflected in the Declaration at And did Mr. Connor then return and paragraph 16. immediately produce the documents he had obtained to the respondents in the ITC proceeding? A 16. Q Let me show you what I've marked as Are these the documents that Deposition Exhibit 7. December 6, 2004? A What you've handed me as Exhibit 7 is stamped VER 001058 and carries through to 1089, and as reflected in the Declaration, this would have been one of the documents produced on that day. Yes, as is again reflected in paragraph

were produced in the ITC proceeding on or about

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Q

Okay.

Now, the Verve-Omron agreements

include a series of agreements on different dates. Do you recall that? A Q I don't know if I'd call it a series, but Yes. So there was first an That's part of Exhibit 7. All right. there were several.

agreement number 081303, which I've marked as Exhibit 10, correct? A Q A Q Okay. And then there was an agreement number I would confirm that. Yes.

101043, which I've marked as Exhibit 11, correct? And then they had the document entitled

"Patent Assignment and License Agreement" that we've marked as Exhibit 7, and this includes those two agreements as exhibits. MR. LEACH: THE WITNESS: question for me? Q (By Mr. Leach) Oh, yeah. That's correct? Those two documents are included as exhibits in Deposition Exhibit 7, correct? A You're asking me if Exhibit 10 and Exhibit 11 are included within Exhibit 7? I don't think Is there a there's any dispute about that, right, Mr. Henning?

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Q A quickly. Q A Q

Yes. I believe that's right. I can verify it Exhibit 10 is included within Exhibit 7, Okay. -- in Exhibit 7. Now, the reason I've split these up is

and Exhibit 11 appears to be included as well --

that there was also a two-page document entitled "Addendum 1-033004" which I've marked as Exhibit 12 that was produced on December 6, 2004, correct? A Q Yes. Okay. I see Exhibit 12, and it is the last Now, was December the 6th, 2004 the two pages also of Exhibit 7. first time that you or anyone at Dewey Ballantine had ever seen the Addendum marked as Deposition Exhibit 11? A Q A Right. The first time -Deposition Exhibit 12, right? Excuse me.

The Addendum is Exhibit 12, and December

6th would have been the first time that anyone at Dewey Ballantine had ever seen it or even heard about it. Q mind. Since I've messed up the exhibit number Was December the 6th, 2004 the first date let me ask you the question again, if you don't

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that anyone at Dewey Ballantine ever saw or ever heard about the Addendum that I've marked as Deposition Exhibit 12? A Q Yes, as reflected in paragraph 16 of my And at the time that Dewey Ballantine Declaration. prepared those Supplemental Answers to Interrogatories that I referred to as Deposition Exhibit 6, no one at Dewey Ballantine knew about the Addendum that we've marked as Deposition Exhibit 12, correct? A Q That's correct. After this happened did Dewey Ballantine

at some point withdraw as Verve's counsel in the ITC proceeding? A Q A When you say "after this happened" -After these events, some subsequent date. After the production of these documents on

December 6th, yes, Dewey did withdraw sometime later on February 17th, 2005. Q A Let me show you Deposition Exhibit 8. Let me clarify. As stated in my I

Declaration, we notified Verve at that time that we were withdrawing and no longer representing them. believe at that same date we filed papers with the

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ITC accordingly, but it could have been the day after. Q ITC. A Just for the record, it may have been Does Deposition Exhibit 8 refresh your I guess that's right. I guess we notified March 3, 2005 when you actually made the filing with recollection? Verve that we were no longer representing them, and I believe we did that in writing; and then I guess we did not file anything with the ITC because there was no ongoing matters in the ITC for that period of time, nothing filed, no filings, nothing due, as I recall. Q decision? A Q A 17. Q And since that date, to the best of your knowledge, has Dewey Ballantine ceased doing any work representing Verve in any matter? Yes. Dewey Ballantine withdrew from its representation. So Dewey Ballantine terminated the That's correct, as reflected in paragraph relationship, not the other way around? Was the decision to no longer represent Verve in the ITC proceeding Dewey Ballantine's

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A

Yes.

We've had no -- Dewey Ballantine had

no further contact with them, as best as I recall; except Mr. Plies may have contacted them about what to do with the documents and so forth, but no representation. Q questions. EXAMINATION BY MR. HENNING: Q A Q questions. Can you hear me? Yes. Okay. Mr. Farney, I think I have a few Just a I'm not going to want to put a time All right. MR. LEACH: I have no further

limit on it, but it won't be that long. far this morning.

follow-up on a few questions from your testimony so With respect to Exhibit 2 to your deposition, which I believe is the document filed in the ITC action, was it filed on September 27, 2004? A Q A I'm sorry. I'm looking for Exhibit 2. I don't have a copy of it Take your time. All right.

in front of me either. I have Exhibit 2, and it has a service certificate of September 28.

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Q No. 2? A Q that? A Q

Okay.

Okay.

Are you aware of Omron

playing any role in creating or preparing Exhibit No. Okay. This was done in September when we So you're not aware one way or the

had no awareness or involvement in the case at all. other if Omron was involved in helping to create That's correct. Okay. Same question with respect to You're not aware of any involvement

Exhibit No. 3.

by Omron in creating or drafting the document that's been submitted as Exhibit No. 3 to your deposition? A Q That's correct. Refresh my recollection. Is Exhibit

No. 3, that's Verve's response to Hypercom's Motion to Compel; is that correct? A Q That's what it's titled. Okay. Yes. At the time of your appearance, as

I understand it, in the ITC action there were some -- there was a discovery dispute and some motions to compel already on file; is that correct? A Q I believe that's generally correct. Okay. Yes. Are you aware of any role on the

part of Omron in responding to those motions to

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compel? A I have some general recollection that there was an issue pending in the case about respondents trying to get some documents from Omron. I have some general vague recollection of that, but nothing specific; and without reading the various motions to compel, I couldn't tell you off the top of my head whether they actually involved Omron or not. Q Okay. With respect to Exhibit No. 5, I believe that's a redacted copy of an assignment agreement that was produced in the ITC; is that correct? A Q I'm looking for it. Sure. My apologies. I'm just trying to

make sure I've got the right documents in front of you, since I don't have them here with me. MR. LEACH: THE WITNESS: exhibit. Q question back? (By Mr. Henning) Oh, sure. I just want to make sure that you have the exhibit in front of you and that Exhibit No. 5 is -- that's the redacted John, Exhibit No. 5 I have the has production numbers VER 929 through VER 938. Do you want to have her just read the

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copy of agreement 031804 produced in the ITC? A Q A number 7. That's correct. Okay. Who did you receive a copy of this

redacted agreement from? Well, Dewey Ballantine received it from I believe it was provided to one of those Verve, as is reflected in Declaration paragraph associates that we've mentioned before, and they would have provided it to me. Q Are you aware of any involvement by Omron or Omron's representatives in creating the redacted agreement that is Exhibit 5? A document. Q version? A I never, as best I recall, I never spoke It seems like we with an Omron employee directly. counsels at different times. specific recollection of that. Q A Okay. I don't believe I would have talked to Did you ever talk to Omron about the agreement that's marked as Exhibit 5, the redacted I'm not aware of who redacted the

spoke with a couple of Omron, two different Omron The topic of this agreement may have come up, but I don't have a

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them about the redactions, per se.

If I talked to

them at all about this, it might have been about the agreement in general, and I don't even recall doing that, necessarily. Q Okay. But do you recall if those conversations, if they did take place, did they take place before the redacted copy was produced in the ITC? A Q A I don't recall the timing. Okay. With respect to Exhibit No. 6 -Well, let me say, it probably, looking at

the timing reflected in the Declaration where we made our appearance on November 19 and obtained the redacted document on November 23rd, my best recollection of when we might have talked to Omron's counsel is that it would have been later than that. Q A guess. Q Okay. With respect to Exhibit No. 6, do you recall whether or not Dewey Ballantine provided a copy of this document to Omron before it was filed in the ITC proceedings? A I don't think that -Okay. But that's just kind of speculation. I

don't really remember, but that would be my best

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MR. LEACH: produced? MR. HENNING: produced. Yeah.

When you say "before

it was filed," did you mean to say before it was Before it was

Because it's supplemental MR. LEACH: MR. HENNING: Right. Okay. Yeah.

discovery responses; is that correct?

You're right, Sid. Q (By Mr. Henning) Before it was produced I just want to know if Dewey Ballantine provided a copy of that to Omron. A Q Just a second. Okay. Yeah. As best as I recall, no. Do you recall receiving any input from Omron or any representative of Omron in helping to -- in helping to prepare Exhibit No. 6? A I don't recall any, but I recall that I wasn't the one preparing it; but I don't believe that anyone at Dewey Ballantine would have. Q Okay. Do you recall whether Exhibit No. 6 was provided to Omron or any of its representatives by Dewey Ballantine after it was served? A I don't think it was. You know, I'm virtually certain it wasn't.

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Q

Okay.

Let me make sure I've got the right I believe Exhibit No. 12 is the

exhibit here.

Addendum -- I don't have the number, but I believe there's only one Addendum to the assignment agreements, and I believe you testified that the first time you saw the Addendum or heard about it was on December 6, 2004; is that correct? A I don't know if I saw it on December the The first time anyone at Dewey 6th or not.

Ballantine, as reflected in paragraph 16 of the Declaration, was on December 6. Q Okay. Thank you. MR. LEACH: the record -MR. HENNING: MR. LEACH: Sure. -- Exhibit 12 has And John, just for

production numbers VER 1088 through 1089, just so you can tell which document it is. MR. HENNING: Sid. Okay. Thanks, And I think I got this, but exhibits -- just

to make sure, I think Exhibit No. 7 actually encompasses Exhibits 10 through 12; is that correct? MR. LEACH: MR. HENNING: THE WITNESS: That's right. Okay. Okay. But it also

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includes, Exhibit 7 also includes additional documents other than Exhibits 10 through 12. Q A Q (By Mr. Henning) Yes. Okay. MR. HENNING: That's also Okay. Well, and is Exhibit No. 7, that's VER 001058 through 89?

reflected in Mr. Farney's Declaration, so -- and I'll get copies of this with the transcript, so that's fine. Q (By Mr. Henning) Prior to Dewey Ballantine having received the Addendum on or about December 6, 2004, do you recall whether anyone at Dewey Ballantine ever communicated with Omron or Omron's representatives about the Addendum marked as Exhibit 12? A I'm certain both from paragraph 16 and my own recollection that if we had prior communications with Omron, it would not have involved discussion about the Addendum, because we didn't know the Addendum existed. Q A I guess that's a fair point, Mr. Farney. At some point, just to add, at some point,

but I can't tell you when on this, it seems like Mr. Plies and Mr. Connor had a conversation with

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some counsel for Omron about obtaining some technical documents or some documents related to the patent history. I think that was the only It was really communications we had with Omron. of the case, as best I recall. Q A Okay. No. Do you recall when that I believe it would have been conversation might have taken place? certainly at least a week and probably a couple weeks after we got into the case. Q A Q A Do you know who they would have spoken There was, if I recall, there was a Was it Herbert Kerner? I don't know. That name sounds familiar, with for Omron? counsel at Hunton & Williams.

just some discovery related to the technical parts

and he probably was the one because it sounds familiar to me, but I couldn't tell you for certain. There was an attorney in Chicago, I believe, with a different firm that seems like someone spoke to, and then I think we actually may have spoken with someone in Japan. I believe what it was, was the respondents were seeking some of these documents related to the file history of the patent and so

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forth, and we were trying to see if we could obtain them. Q Okay. Do you remember any more details about the conversation that may have taken place with someone in Japan? A It wasn't me that had the conversation, And the answer would and, you know, I'm only partially certain that conversation did take place. be no. Q A Q Okay. That's -If someone had some notes or documents, And I want to confirm, when you were

that might refresh my recollection. retained by Verve to represent Verve in the ITC action, Omron was not a party to that action, correct? A Q That's correct. Okay. And just some -- I just want to

make sure I understand something, but in the ITC proceedings is it your understanding that Verve was pursuing patent infringement claims based on agreements purporting to assign certain patents from Omron to Verve? A We understood that Verve had an assignment or sufficient rights from Omron to pursue the case,

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as was reflected by the assignment recorded in the Patent Office, which we checked before we engaged in the representation. Q Okay. THE WITNESS: correctly? (The referenced portion was read back by the court reporter.) THE WITNESS: Yeah. I would answer that actually no, because we didn't -- we didn't know that Verve was proceeding on the basis of one or more agreements. We simply understood that they had the rights by assignment to pursue the case and as reflected by the assignment reflected or recorded in the Patent Office. But when you say "agreements," I don't think we at that time had any knowledge or anything that there was more than one agreement involved. Q A Q (By Mr. Henning) Yes. Okay. So if I understand, you reviewed Okay. And that was the agreement that was in the Patent Office? Can I have the And so I think the answer to your question is yes, if I recall the question.

question read back just to make sure I answered it

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the assignment agreement that was filed with the Patent Office, and then you became aware of other agreements related to the assignment of certain patents later in the ITC proceedings? A The way that I recall it happened is that, As part you know, Verve approached us, as reflected in the Declaration, about coming in as co-counsel. of our due diligence we reviewed the technical merits of the case, and we did double check to make sure there was a recorded assignment in the Patent Office; and we also had the fact that Verve's existing counsel based out of Detroit had submitted the petition to initiate the investigation. Ownership or assignment rights was not a major issue at that time. As soon as we got into the case and got up to speed on what the main discovery issues were, it became clear that the respondents were all pushing to try to get certain documents reflected to assignment or ownership rights, and that's when we first became aware there might be an issue here we had not been aware of before. Q Okay. You mentioned before that you may have had some communications with Omron or counsel for Omron related to the ITC proceedings after you

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were retained as counsel for Verve, is that -- that is correct? A I think it seems like, as best I recall, I had at least one conversation, and perhaps the associates had one or two conversations with the people that I mentioned before. Q A Q Okay. And you mentioned you may have had a conversation with Herb Kerner? Is he at Hunton & Williams? Yes. Well, he was at -- I'll represent I

that he was at Hunton & Williams at the time. believe that's correct. A I think that's right.

I mean, the name

sounds familiar, and I know it was someone at Hunton & Williams. Q Okay. Do you remember any more details about that conversation with the attorney at Hunton & Williams? A You know, I honestly cannot even remember It just seems like what the conversation was about. I remember having one. Q A Okay. I do recall that the conversation was, I

mentioned, with someone in Japan at Omron, and I think it was with Mr. Plies simply about collecting

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documents. Q Okay. Did you ever have any conversations with Omron or its representatives regarding litigation strategies in the ITC proceedings? A Q I don't believe so. Other than what you've mentioned already,

and that is that you may have had, you or someone at Dewey Ballantine may have had conversations with Omron or someone at Omron to collect certain technical documents or documents related to the claims, the patent claims in the ITC proceedings -- and before I continue this question, does that accurately state the substance of communications that you recall with Omron or its representatives? A Well, as I said -- and this, again, I'm just trying to be honest with you, I have a faint recollection of this -- is that there was a call that involved someone from Hunton & Williams related to this case, and they were on the phone as an Omron representative. It may well have had to do with There was a call with an attorney which may have been with your firm. I have a recollection it was in Chicago, but it may have been settlement strategy and how much money was at issue.

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somewhere else up north.

If you're in Texas,

anything up there is all about the same. And then there was one or more calls by Mr. Plies and Mr. Connor, I think, with I believe a counsel in Japan that represented Omron just about collecting -- whether Omron would be willing to produce documents in the case, technical documents. I don't think anybody was focused on agreements. Q A Do you recall if Dewey Ballantine ever If we did, they would have been produced, I just received any of those documents? and so it would be evident to everyone. don't recall. Q Okay. Do you recall coordinating with Omron or its representatives regarding any other discovery in the ITC proceedings other than what we've already discussed? A No. And also as I'm sitting here I'm virtually certain we could not have been trying to get any kind of ownership documents from Omron as reflected in these exhibits, because Verve would have had whatever was relevant. Q Do you recall whether Dewey Ballantine coordinated with Omron or Omron's representatives regarding any filings by Verve in the ITC

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proceedings? A Q As best I recall, it would not. We were not representing Verve in the matter. When you came into the case when you were first retained by Verve did you check with Omron or any of its representatives to determine whether or not Omron had conducted a pre-filing investigation before Verve filed the ITC action? THE WITNESS: back? (The referenced portion was read back by the court reporter.) THE WITNESS: Q (By Mr. Henning) I have, Mr. Farney. any follow-up? MR. LEACH: couple of follow-up questions. FURTHER EXAMINATION BY MR. LEACH: Q In response to questions by Mr. Henning, you indicated that Dewey Ballantine checked the assignment recorded in the Patent Office before the firm entered an appearance in the ITC proceeding on Yeah. Let me ask a No. We did not. That's all the questions Sid, do you have Can you read that

Thank you very much. MR. HENNING:

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behalf of Verve; is that correct? A Q A Q That's what I recall. Yes. And the purpose in doing that was what? Just to confirm that they had the rights All right. And if you only know about the

to proceed. assignment recorded in the Patent & Trademark Office, that document makes it appear that Verve has all the rights in the patent, correct? A I don't have it in front of me, but I'm sure it makes it appear that Verve had sufficient rights to proceed or we wouldn't have taken the case. Q But as part of the due diligence you, Dewey Ballantine -- one of the items that it considered important enough to check was to make sure that Verve had sufficient rights to bring the proceeding in the ITC, correct? A Q Yes. That's what I recall. Were you aware that Omron Let me show you a document I've marked as

Deposition Exhibit 9.

produced copies of all of these agreements in this case as -- and they have production numbers OMRON 161 through 192 -- without any designation of confidentiality whatsoever?

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A Q A Q

When you say "this case," which case? This case, the civil action in Arizona Oh, yeah. Okay. No. I have no involvement in At some point

that you're testifying in connection with. the case, so I had no idea. At the -- withdrawn. in the ITC proceedings the Administrative Law Judge entered an order to the effect that Verve did not have sufficient standing to continue with the ITC investigation by itself, based on the agreements that we marked as Deposition Exhibit 7, correct? A Q Yes. I mean, to paraphrase his long opinion, that's generally right. Now, did -- was Dewey Ballantine involved in communications with Omron about whether or not Omron would join the ITC proceedings as a party? THE WITNESS: back to me? (The referenced portion was read back by the court reporter.) THE WITNESS: more time. Q Read it back one I'm trying to be a little careful there (By Mr. Leach) Oh, sure. Well, let me Can you read that

where there's a privilege involved. just try to ask you the question, break it down a

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little bit.

At some point Omron -- withdrawn.

At

some point a notice or pleading was filed in the ITC notifying the Administrative Law Judge that Omron was not going to join the ITC proceedings as a party. A Q A right. Q Where did that information come from that Did it come from Verve, was given to the ITC? Omron? A I just don't recall. I don't recall it. As I recall, either in the Court's opinion or by our own judgment from the Court's opinion the standing issue could have been corrected by Omron coming in as a named plaintiff or petitioner. And so obviously at some point someone, either us or probably Verve, contacted Omron about it and Omron declined. Q But who did that I don't know. I don't recall that. Now, prior to this deposition today did you have any conversations with any attorneys representing Verve about the fact that this I think that's right. Do you recall that? I think that did happen. I think that's

Raymond Galasso, or did it come from somebody at

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deposition was going to go forward? A Q A Yes. So was Verve's attorneys aware that the When you say "Verve's attorneys," I talked When

deposition was going to take place today? to three different sets of Verve's attorneys.

my deposition in connection, I think, with a related case involving Verve was noticed about a month ago I spoke with Verve's counsel, I believe based out of Arizona. And if you remind me of his name, I'll I can't I spoke to him probably be able to tell you it's correct. remember it off the top of my head. briefly about it.

At that point it wasn't clear

whether the deposition was going to take place, and then nothing happened. Then when the deposition came up in connection with this case I was advised by what I believe is your colleague -- Monica Limon? Q A Limon-Wynn. Limon-Wynn, that Verve's counsel was

Rick Rollin, Rawsom, something like that, in Arizona; and I contacted him, because I prefer that Verve have a counsel here to preserve their or protect their privileged confidential information, and he referred me to Tom Anderson -- I think that's

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the correct name -- at Hunton & Williams. And Mr. Anderson and a colleague of his, I don't know if it was an associate or a partner, contacted me to tell me that they would not -- they were making some distinction about whether they represented Verve in this case or some other, the ITC proceedings, but said they would not be attending or representing Verve in connection with the deposition but advised me that Verve was aware the deposition was taking place and that Verve wanted them to remind me that I had a continuing duty to protect Verve's confidentiality and any privileged communications. thing. Q All right. So prior to today's deposition you were notified by Verve or someone representing Verve that Verve did intend to assert the attorney/client privilege to anything that you might know that was privileged, correct? A And to preserve any confidentiality. MR. LEACH: no further questions. MR. HENNING: follow-up questions. I have no All right. I have They later sent me a letter stating the same thing, roughly the same

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(At 10:35 a.m. the proceedings went off the record, continuing at 10:36 a.m.) MR. LEACH: Back on the record. The court reporter has asked Mr. Farney whether he wanted to read and sign the deposition or waive signature, and I thought we should put his response on the record. THE WITNESS: right now. MR. LEACH: Thank you. And I did waive, although I think Mr. Henning is not on the phone

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA HYPERCOM CORPORATION, Plaintiff, v. OMRON CORPORATION, Defendant. º º º º º º º º º

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CIVIL ACTION NO. 04-0400 PHX PGR

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REPORTER'S CERTIFICATION DEPOSITION OF BRYAN FARNEY June 15, 2006 I, Sandra S. Givens, Certified Shorthand Reporter in and for the State of Texas, hereby certify to the following: That the witness, BRYAN FARNEY, was duly sworn by the officer and that the transcript of the oral deposition is a true record of the testimony given by the witness; That signature was waived by the witness, and the original deposition transcript was submitted on June 16, 2006 to Sid Leach, the attorney who asked the first question; That $513.40 is the deposition officer's charges to the Plaintiff for preparing the original deposition transcript and any copies of exhibits;

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That the amount of time used by each party at the deposition is as follows: Sid Leach - 49 minutes John K. Henning IV - 23 minutes That pursuant to information given to the deposition officer at the time said testimony was taken, the following includes counsel for all parties of record: Sid Leach - Attorney for Plaintiff John K. Henning IV - Attorney for Defendant I further certify that I am neither counsel for, related to, nor employed by any of the parties or attorneys in the action in which this proceeding was taken, and further, that I am not financially or otherwise interested in the outcome of the action. Certified to by me this 16th day of June, 2006. GIVENS COURT REPORTING 9532 Morgan Creek Drive Austin, Texas 78717 (512) 301-7088

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___________________________ SANDRA S. GIVENS, CSR Certification No. 5000 Certificate Expires 12/31/07 # sg-788

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