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Case 2:07-cv-00631-RSM Document 37 Filed 06/06/2007 Page 1 of 41 1
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APPEARANCES:
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For the Plaintiff: Scott Baker
20 and
Morgan Tovey
21 Reed Smith
Attorneys at Law
22
Lawrence R. Cock
23 Cable, Langenbach, Kinerk & Bauer
Attorney at Law
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For the Defendant: William Kinsel
25 Kinsel Law Offices
Attorney at Law
Dockets.Justia.com
Case 2:07-cv-00631-RSM Document 37 Filed 06/06/2007 Page 2 of 41 2
10 defendant.
13 other cases.
19 your time.
21 the plaintiff?
3 thrust upon you in the course of these last few days. And I
5 clear.
6 But one thing that occurred to me, I was reading the papers
7 myself and trying to assemble all this, and try and come up with
8 a unified theory for all the facts that have come out in this
10 thinking about it is, obviously this case and all the rights that
11 are involved here, the rights that emanated from Amiga and were
14 promises.
22 respect.
24 the key things that Hyperion promised to do. The first thing
25 they promised to do was to build the Amiga OS 4.0. And that was
Case 2:07-cv-00631-RSM Document 37 Filed 06/06/2007 Page 4 of 41 4
1 this new and next generation operating system that they were
3 hardware.
5 do, was to use their best efforts to not only build it but
10 any event, the original promise in the agreement, use their best
14 deliver this product, including all its code, object code, soft
23 anything?
9 What we were going to get was the software, get the code.
11 have our own development plans. And we have our own interests to
14 balance for ourselves. And the deal was, we will grant you all
15 these rights, but you have to give us the code at the end of the
20 the limited scope of their license and the fact that Amiga
23 their zone, we were going to have our zone. This was supposed to
24 be a cooperative venture.
3 acquire from them after they built it. They were supposed to use
4 under this contract their best efforts to make sure that they had
7 rights as possible.
8 The next thing that Hyperion promised is that they would not
11 that's the ACube problem that we will be talking about here this
12 morning.
13 And the last thing they promised, that is not on the slide,
20 single thing, not a dollar, not a piece of code, not a byte, not
23 absolutely total.
1 the Amiga OS 4.0 for commercial release timely. And maybe they
6 paid them over $40,000, because there were disputes about offsets
8 when you are talking about that kind of money, we kept giving
9 them money, okay, will this take care of it, we do this without
10 prejudice, we reserve all our rights, but let's get this over
13 Because what we are hearing from Hyperion today is, gee, we don't
14 really have much of that source code, that has all been
15 contracted out and owned by third parties. They did not protect
17 in that code.
23 the first thing it did, and has been doing, and is part of our
24 claim here, is they have exploited our brand. The Amiga brand is
1 formed Amiga, the brand, was well-known. Amiga, the company, was
10 license.
11 And what does Hyperion now claim in this case? They claim,
12 in fact, that not only can they give us nothing, not only can
13 they trample our rights, but they claim their rights expanded.
20 nothing and their rights get bigger. Again, that is the issue we
22 The code issue is the first one I want to turn to, your
24 the one thing that we did bargain for is that when Hyperion was
1 equal footing. We would have what they have. And, again, there
2 was a market reason for that, because we needed what they were
3 doing in order to go about our way in our markets and in our zone
10 the payment is made pursuant to 3.01 below, they shall -- not may
14 pieces of the code, not the critical pieces, but for certain
16 And they agreed to use their best efforts to secure, again, the
25 some cash. Rather than waiting until we get done with the
Case 2:07-cv-00631-RSM Document 37 Filed 06/06/2007 Page 10 of 41 10
1 product and then deciding to buy it at that point, would you pay
6 And they knew that the payments were for that purpose. And
17 amount that should have been reflected in this invoice, that was
20 If you go back and get the checks and the wire transfer the
25 because later Hyperion came back and said not, hey, you didn't
Case 2:07-cv-00631-RSM Document 37 Filed 06/06/2007 Page 11 of 41 11
1 pay $25,000, what they said is, gee, there are some offsets you
2 should have been paying, additional money above and beyond what
3 you paid.
10 you were late. They don't say, you didn't pay it. They don't
12 don't say, we didn't acknowledge that you had made this election.
16 the code at the end of 2004 for developer purposes, for testing
18 completion.
20 six months after is the end date for payment of this money. So
23 your Honor.
25 Mr. Frieden's declaration, the fellow who gave this opinion, you
Case 2:07-cv-00631-RSM Document 37 Filed 06/06/2007 Page 12 of 41 12
1 will see that the final update -- what he calls the final update
2 for version 4.0 didn't occur until December of '06. And by then
4 clear that the payments were on time and within the time.
7 4.0. He says, see, this shows 4.0 was really to go. The
14 still a beta OS. Things should improve over time." This report
15 comes out after Mr. Frieden says supposedly the code was
16 complete.
18 not ready for general public consumption. There are many rough
22 somehow the payments were too late. It simply doesn't mesh with
23 the facts.
3 principal of Hyperion.
6 the Amiga principal. And then there are answers under those
8 principal.
11 the code is complete. And they have our money. And McEwen asks
12 Carton, "where is our copy of the 4.0 source and object code?"
13 And Carton says, "well, we can send you a copy of the object code
15 They don't say, you are passed the time, you have blown your
16 rights, the window is shut, you didn't pay enough. They didn't
17 say any of that. We can send you the code -- the object code.
23 services.
3 sent you the source code is because we haven't paid for it yet.
8 taking in this case, that this option we had somehow was never
10 issue here.
23 The idea of this contract was when they had completed their
5 get that resolved. And by then the horse may have already left
6 the barn.
8 all, zero harm to Hyperion to just give us the code. They are
9 obligated to do it. They have got our money. They should just
11 Now, they say that some of their rights -- they don't have
12 all the rights. I have two answers to that. One, give us the
13 rights you do have. You can at least give us what you do have.
20 when we talk about us being hurt in the market, the same thing is
23 trademarks. These marks were not unknown at the time. Amiga was
3 to our code, but they are now going beyond their zone, and they
12 Hyperion's partner, and now, again, they are acting and marketing
20 MR. BAKER: I didn't know that they had said that, your
24 our authority. And the fact of the matter is, they knew they
1 deal was made. The next thing we know they show up on the other
9 assignment of rights.
17 be confused with the EyeTech like the human eye. That assignment
7 from KMOS. They know that KMOS is their licensing entity. They
8 know that.
13 afterwards?
20 contract.
7 place. This begins with the April 24th, 2003 contract between
20 this agreement.
1 that other party notice of this motion to claim that they are
2 defunct.
11 Itec, I-T-E-C, LLC, a New York company and KMOS. We drop down to
13 seller is the owner of the object code --" seller being Itec "--
22 admission that Amiga Washington did not give its prior written
11 the claim that KMOS simply changed its name to Amiga Delaware, we
15 November, 2006.
19 assignor Amiga, Inc and the assignee, KMOS, Inc on the 30th day
5 30th day of August 2004. If you drop down to the bottom, or the
8 privy to, the Reed Smith firm certified that they were attaching
20 plaintiff has any rights through valid transfers under the 2001
3 have no effect.
6 and unless they fully knew and were informed of this insolvency
7 and knowingly waived, Amiga Delaware can't come in now and say,
8 oh, because they have dealt with us all these years they have
13 the best case scenario they have paid $24,750. And that is if
8 from them at the time saying, what are you talking about, why are
15 That also ignores the fact, and it has been admitted, that
17 they were still $5,000 short, because they had a May 5, 2001
19 together.
21 that they had not fully paid for the software and that in fact
25 KMOS and Hyperion, signed May 26th, 2004. I have highlighted the
Case 2:07-cv-00631-RSM Document 37 Filed 06/06/2007 Page 25 of 41 25
2 services. This agreement is made and entered into this 26th day
6 And the key thing here, and we are talking about payments
7 from KMOS, Section 3.01 has underlined, "KMOS had agreed to pay
11 really beside the point, and does not prove anything with respect
13 And then perhaps the most interesting for this point or this
25 assuming that it was still in effect, that Amiga Delaware had the
Case 2:07-cv-00631-RSM Document 37 Filed 06/06/2007 Page 26 of 41 26
6 They claim it's -- they just assert that it is not true. But
9 They can't just claim it has been violated and try to take
12 are looking for the big theme here, they are trying to take
13 something that has cost my client well over a million dollars for
17 this source code that was required under the original agreements.
21 about breaches of a timetable when you are the one that caused
6 not have complete rights to. Object code, they do have a lot of.
12 They are not proof of anything beyond the fact of what I was
13 saying. We will give you the object code. Did they provide it?
16 been paid.
20 likelihood of success.
2 improper.
4 Group. How does this injure them? Well, it injures them because
7 under the failure to pay the $25,000 and grant the full rights.
16 any of those people have ever been in this State, let alone this
18 them.
20 this Court order defendant Hyperion, and its contractors and each
1 possession."
6 ten days, to compel people who are not subject to this Court's
8 to.
10 they were assured by Mr. McEwen in February of this year, oh, no,
12 And now they are. And clearly they are unhappy, and they will
23 Hyperion itself to say that this Court does not have jurisdiction
25 contract.
Case 2:07-cv-00631-RSM Document 37 Filed 06/06/2007 Page 30 of 41 30
8 principles."
20 Washington.
9 time, can't use its own actions with the other party to the
11 the software for the new hardware that Amiga Delaware identified
18 They can't do that. They say OS 4.0. But there are so many
20 it.
23 issued.
1 the defendant no later than five days before the hearing date."
5 get replevin.
9 are moving pretty fast here and setting the oral argument and
6 motion to strike.
8 entire factual basis for the opposition, when in fact they had
12 all that material they lose. Because the product was complete in
14 that you realize that they should have paid by June 27th of 2005.
21 KMOS will not have any adverse impact whatsoever on the release
24 2004.
4 And at the end of his review he just observes, oh, and by the
5 way, we have a new one coming out in December of 2004. And that
8 going to consider it, they are claiming that, oh, no, you know,
16 They don't say privileged. Maybe they just don't want us to know
17 what it says.
10 What is crystal clear, and this comes from the very document
15 joint press release that came from both Amiga and Hyperion. And
16 here you have Evert Carton, who now in his papers says, gee, we
6 updates before the final update. And I think that complete means
7 that it has to be complete. Why else would we buy code that was
9 position as them when the code is complete. The final update for
12 When you talk about a bond, and this issue of if there is any
13 issue about payment there shouldn't be. There is. We will bond
17 of times over. But that is why this completion date issue just
21 update 1, that was really the complete code. You had to exercise
25 don't get much out of this deal other than that code. There is
Case 2:07-cv-00631-RSM Document 37 Filed 06/06/2007 Page 37 of 41 37
1 no -- there is very little else coming our way from this deal but
2 that code.
3 The idea that now in 2007 they can try and backdate that I
5 that.
15 were on the hardware side. They pull out of this deal, they are
20 make a Rule 19 motion, they can make it. It still doesn't effect
21 this relief.
1 those rights include the ability to acquire the code they should
3 place. Okay. But at the very lease we are entitled to get what
4 they have, at the very least. That doesn't impact anyone else's
5 rights.
10 the code.
23 here is the code itself. The contract set the price for that at
24 $25,000.
1 Hyperion was getting our trademarks and our copyrights for free.
2 We are the reason they are able today to sit there and market
3 this product. All rights that they enjoy today emanated from us,
4 and emanated from this agreement. They came from nowhere else.
5 Yes, they did work. Yes, they are seeking to exploit the benefit
7 trying to stop that. But they have to stay within their zone,
9 agreement.
10 And, frankly, the bond for that purpose ought to be very low.
11 And the same with the trademark infringement, your Honor, because
17 arguments that have been made. I will try to get a ruling for
25 But when I see what some of these parties are putting into
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8 (Adjourned.)
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Case 2:07-cv-00631-RSM Document 37 Filed 06/06/2007 Page 41 of 41
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1 CERTIFICATE
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I, Barry L. Fanning, Official Court Reporter, do hereby
9 certify that the foregoing transcript is true and correct.
10
11 S/Barry L. Fanning
12 ____________________________
Barry L. Fanning
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