et v dm state # 644-21 & 22 | feb 7 2006 transcript vol 2

8/20/2019 ET v DM State # 644-21 & 22 | Feb 7 2006 Transcript Vol 2

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I

M ONTGOM ERY v. ETREPPID

,

DEPT OF DEFENSE

Case No. CV-N -06-056

SEA LED TRAN SCIUPT OF HEARING ON

PRELIM INARY LNJIJNCTION DATED 2-7-2006

(VOLUVIE 11 OF 11), IN 2ND JtyolctAl- DISTRICT COURT

OF NEVZYDA, COIJNTY OF W ASHOE

,

CASE NO. CV06-()0l 14

,

DEPT. 9

Case 3:06-cv-00056-PMP-VPC Document 644-21 Filed 05/28/08 of 207



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:W 2 '- SECOND JUDICIAL DISTRICT COURT O THE TATE OF NEVADA

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== @ BEFORE THE HONORABLE ROBERT H

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PERRY, DISTRICT JUDGE:

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ETREPPID TECH.7OLOG IES r t. . L .C . , a

Nevada Limitedï Liaëlili ty Company,

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Case No . CV0 6- 0 O l 14

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Dept. No . 9

DENNIS MONTGOMERY, an individual;

THE HONTGOMERY FAMILY TRUSX;

DENNIS MONTGOMERY and BRENDA

MONTGOMERY, a1s trustees for G'HE

MONTGOMERY FN 4ILY Z'RUST, and

DOEG 1 through 20,

Defendants .

/

S E A L E D

VOLUME 11 of 11

TRKNSCRIPT OF PROCEEDINGS

HEARING - PRELIM INARY INJUNCTION

Tuesday, February 7, 2006

RENO, NEVADA

Reported By: CECILIA VOHL: NV CCR #246, RPR, CRR, CCP

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CECILIA Fa/l, NV CCR #246 (775) 827-0672




l y/ P P E A R A N C E S

2

For the P kainti.f f : IIALEZ LANE, PEEK

,

DENNISON

3 AND HOWARD

E Y : STEPHEN J . PEEK, ESQUIRE

4 M d JERRY M

SNYDER, ESQU TRE

5441 Kietzke Lane; Second Floor

5 Reno

, Nevada 89511

M d

6 PILLSBURY WINTHROP SHAW PITTMAN

RY : DAVTD A . JAKOPIN, ESQUIRE

7 24 75 Hanover Street

Palo Alto, Calj

fornia 94 304- l 114

8

For the Def enl:iants : LAW OFFICES OF LOGAR & PULW R

,

APC

9 BY : RONM D J

.

LOGAR, ESQUIRE

M d ERIC A . PULVER, ESQUIRE

10 2 25 S;

Arlington Avenue r Sui te A

Reno, Nevada 89501

l 1 And

FLYNN & S T l L LM-RN

12 BY : M ICHAEL J

FLYNN, ESQUIRE

And PHILIP H . ST ILLMAN, ESQUIRE

13 22 4 Birmingham Drive

Suite lA4

14 Cardi f f , California 92007

15 -000-

1 6

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CFCTJ/TJI %DIjL, NV CCR #24 6 (7 75) 827 -0672




1 1

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N D F )g

2 WITNES S FOR

qjr PLAI IjLEJ'j( PAGE

3 WARREN TREPP

Direct Examination (Continued) by Mr . Jakopin 5

4 Cross-Examination by Mr . F'lynn 36

Redirect Examinat kon by Mr . Jakopin 109

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WITNESSES F()R THE EIJON NTIF

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F PAGE

6

DENN IS L . MON 'PGOMERY

7 Di rect Examination by Mr . Flynn 111

Cros s-Examina t ion by M z- . Peek 2 0 3

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E X 11 I B I T S;

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DESIGNATTON MARKED ADM ITI'ED

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Plainti f f f s Kxhibtt 8 27 30

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Plaintif f 1 s Exhibit 9 31 33

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Plainti f f ' s Zxhibi 1: 1 3 35 3 6

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De f endant # s Exhibit 19 116 -

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CLICILIA VOHL r NV CCR #24 6 ( 7 75) 82 7 -0672




1 ; : D E X (CONTINURD)

2 4 X H I B I T 4

3 DES IGNATION MJGAKE D ADMITTE D

4 De fendant ' s Kxhib lt 22 156 156

5 Pl a int i f t 1 s Kxhib i. t 2 3 2 1 6 2 18

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1 RENO, IAJEVADA, T'UFSDAY: FEBRUARY 7 , 2 O 0 6 , 3 : 2 5 P

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4 THE COURT : liltlase be seated . Go ahead .

5

6 DIREC'r EXAMINAT ION (CONTINUED)

7

8 BY MR . JAKOPIN :

9 Q . Thank you . Mr . Trepp, could you talk a l ittle bi t

10 about , f rom the f ormat:ion ot the business in 1998 w activities

11 that the company dtd t.o sort of grow the bus iness .

12 A . As I said berore : we basically s tarted out as an R&D

13 development company . 'E t. took us, 1 ' d say, at least a year and

14 a half to two years or developing bef ore we could actually get

15 into a quasi-zonmterciial mode where we could actually start

16 giving demons trations 01' putting together a Powerpoint or

17 something of Lhat ilk, but we started showing commercial

18 customers the type of business that we potentially were trying

19 to s e l 1 .

2 0 The f irst contract that we were able to secure af ter

21 an awf ul long time of negotiatkons was with General Ekectric

22 Company, and that was for a surveillance system which we built .

23 They were interested in it and asked us to do dramatic changes

24 or upgrades t.o the system that we origi nally builtw which they .

5

CECILIA VOHLr NV CCR #246 (775) 827-0672




1 eventually licensed from us to use in Lheir lnterlogic company,

2 which was their surveitlance company.

3 Q. Other than GE , were there other companies to whom

4 presentations were made?

5 A. Absolutely. Quite a few. lntel was one, which we had

6 gone over a1l of the dtfrerent -- or some of the different

7 potential applications that we could offer to them for their

8 use. Kodak was ano ther. There was a company based out of

9 Los Angeles, Crest International, whlch was a company which

10 related to Hollywood post-production business, and others.

11 Q. Were there meetings that you had with people from each

12 of the companâes that you mentioned?

13 A . Absolutely .

14 Q. And Were b0th you and Mr. Montgomery involved in those

15 meetings?

16 A . Absolutely .

17 Q. During those D.eetings, did you give any of the

18 prototypes that you had talked about before to show these

19 companies what, you could do?

20 A . We would -- Dennis never wanted to leave any of what

.

21 we were doing with any of the companies . But what we would do

22 i.s , we would dtgree in advance to create a test protocol where

23 we could aqrei, to show exactly what we were trying to

24 demonstrate t() use as a tool to eventually sell the product to

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CECILIA M5S=, NV CcR #246 (775) 827-0672




4 mx w e

t whatever that company might have been .

2 Q . And iRt that meet ingz were test protocols shown?

3 A . i belg your pa rdon?

4 Q . At those meet i ngs z were those test protocols shown?

5 A . Yes . M d therL we would leave literaturez a Powerpoint

6 or something, relat ing to wha tever their speci f ic des ire would

7 be .

8 Q . So# then f'rom the GE deal that the company had, how

9 did the compally sor t of progress f rom there?

10 A . Durillg the GE processr we -- I had a relationship with

11 the managemenlr at MGM in Las Vegas, and we asked if we could

12 use the surve:.llance rooms in the MGM . Having abotlt 5, 000

13 cameras # obvitlusly: it would be a good demonstration place .

14 We pllt in -- I don ' t know the number of computers , but

15 it was a largi number of computers to do video capture . And at

16 the same time/ we tested and demonstrated to other entities our

17 ability to do pattern recognition while at the MGM .

18 Q . Whtcdl enti ties are you ref erring to?

19 A . DOD lleople ; also people f rom Compaq .

20 Q. Did l'here come a time when your relationship with the

21 DOD people werït to another level?

22 A . Yes . We had clone a nllmloer of dif f erent

23 demonstrationi; . The Ai r Force particularly was extremely

24 interested in doing work relating to our abi lity to capture and

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CECILIA VOHL, NV CCR #246 (775) 827-0672




1 deliver video transm Lssions from predator or unmanned vehicle

2 aircrafts down to wherever they needed to geL Lo .

3 Q. Did you have -- froa that interest to that -- did that

4 go anywhere?

5 A . Yes, we were able to show the DOD, as well, a number

6 of demonstratj-ons that would relate to our ability to do

7 pattern detection or ATR, automatic tracking and recognition.

8 Q . And ''DODH in your last few answers, you meant

9 Department of Defense?

10 MR. FLYNN : Your Honor: could we have some timelines?

11 I think it would be a little helpful.

12 THE COURT : Yes, it would be a little help ful if you

13 put this in context .

14 BY MR . JAKOPIN:

15 Q. The GE contract, do you remember when that was,

16 Mr . Trepp? '

17 A . I donlt remenâler exactly, but we clearly did a number

18 of demons trations for a number ot the other companies which I

19 mentioned to '-- prior to getting the GE contract . The GE

20 contract kzas at leas t a year in the making: so I would say we

2 l were in -- I would say we started doing demonstrations in 2000

22 f or sure . I believe we did a demonstration for Intel either at

23 the end of 20.30 or the beginning of 2001 and worked with Intel

24 f rw I would say, at 2 east a year .

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CZCILIA VCISI,, NV CCR #24 6 (775) 82 7-0672




:

1 Q. How élbout the demonstrations a t the MGM you were

2 re f erring to?

3 A . That would have been in the -- 1 believe, again, the

4 end of 2000-2()01 time frame .

5 Q. Okay . And so the heightened interest by the

6 A ir Force, wab; Lhat , thenr shortly thereaf te r?

7 A . Yeahp. that wotlld have been 1n: I would say, end o f

8 2 0 01-2 002 i1k ..

9 Q. Did lnhere come a time that you entered into a contract

10 with the Air Iporce?

11 A . Yes .

12 Q . When was t hat?

13 A . 1 dolà ' t remember exactly, but 1 believe it was the end

1 4 o f 2 0 0 2 .

15 Q . M d lfas that contract f or a certaj.n duration?

16 A . Yes . The contract we had with them was on what I

17 would call an intelhim basis . It was -- 1 don ' t remember i f it

l 8 was six monthl; or nine months . M d at that point , the

19 Air Force had asked us to work with another governmental agency

2 0 where that agency basically picked up that contract and went

21 f orward with (Lt for approximately another year to 15 months .

22 Q . What was the contract f or?

23 MR. LOCG R : Which one, Counsel? Air Force?

2 4 THE COIJRT : Y e ah .

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CECILIA krffff s NV CCR #24 6 ( 7 75) 82 7-0 672




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1 MR. JAKOPCN: The contract with the Air Force .

2 THE WITNESS : This js going to get into what -- there

3 w111 be a debate as to what's classified and to what's not.

4 THE COURT: Well, here's my concern, is that

5 everything that's been submitted to me in terms of authority --

6 and my clerk and I did some zesearch on this issue too -- talks

7 about the government being the party that objects to thîngs

8 that are classified ancl not the persons that are involved .

9 And :50, unless somebody can convince me otherwisez il

10 there ls a question asked, and unless there's some statute or

11 some other procedure that precludes me from allowing that, I 'm

12 going to direct the witness to answer the question .

13 MR . FLYNN: The statute does involve agents, Your

14 Honor . Mr . Montgomery is, without question, as his examination

15 will show, an agent of the U.S. federal government . I doubt

16 Mr . Trepp is.

17 Whether eTreppid Technologies is under the contracts

18 that signed w tth this other department oK the government,

19 whether eTreppid Technologies is an agent, frankly, I have

20 nothing to ofrer, because these contracts are taken by the

21 agency and theybre not given to the individual.

22 But the contract -- in this instance particularly,

23 Mr. Montgomerg has the highest security clearance you can get.

24 He is under tNat contract, undoubtedly an agent, and

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C,b;CILIA br()lf.L, NV CcR #24 6 ( 775) 8.2 7-0672




?

1 Mr. Montgomer'g has spoken to an individual w ithin the

2 government who --

3 MR . LOGAR : Wait. Somebody walked in.

4 (Whereupon, a man is instructed to leave the

5 courtroom .)

6 THE COURT : G() aheacl -- as soon as this gentleman

7 leaves, go ahead and linlsh what you were golng to say, but 1

8 have a question. Maybe 1î11 just ask it now, if you don't

9 mind.

10 MR . FLYNN : Go ahead, Your Honor.

11 THE COURT: Assume he 's an agent, which is news -- I

12 mean, I don 't know about that. But assume that he is. Then I

13 need to see tae statute or the order or the rule that says, as

14 such an agent, thah issues like this cannot be discussed in

15 this courtroom . I haven 't seen that.

16 MR. FLYNN; J believe we gave you the Cheney case . We

17 gave you variaus cases from the Supreme Court which clearly

18 says he cannot.

19 THE WITNESS : Your Honor --

20 THE COURT: Well, these cases that I'm talking about

21 here are cases where the government -- the petitioner

22 government, the director of the Central Intelligence Agency,

23 who was a party defendant -- the statute that you gave me,

24 Title 18 U .S.C.S.: the United States may request the Court to

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CECILIA 7OS=z NV CCR #246 (775) 827-0672




re >-

l conduct a heazing to make determinations concerning the

2 relevant use c'r admisskbàlity of classified material . United

3 States ain 't here.

4 MR . FLYNN : You're right, Your Honor. And our ability

5 to bring in the United States in the next 48 hours is limited .

6 I w ill represent to the Court, because 1 was present with

7 Mr. Montgomery when he had the conversation with a ranking

8 United States government official who instructed him do not

9 teskify about any classified makerial or you will be in breach

10 of the agreement and it's treasonous. That ts the instruction

11 he was given. Now, what they choose to do -- because they are,

12 frankly, caught between Mr. Trepp and Mr . Montgomery. And what

13 they choose to do is up to them .

14 THE COURT : Do they know this hearing is being held

15 today?

16 MR . FLYNN : Yes, they know as of today.

17 THE COURT: Well, I mean: I1m assuming, being that it

18 was such an erlergency, they 'd be here.

19 MR. PEEK : Your Honor, this action was filed 19 days

20 aqo, January 19th. As this Court knows, Mr. Montgomery was

21 present with Judge Polaha . So theylve known about this, and

22 this was a ma'nter of some urgency to them.

23 THE COURT: I mean, we can get real silly. My

24 classmate and roommate at the Naval Academy is now the chairman

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CECILIA vcsf's NV CCR #246 (775) 827-0672




)

1 of the Joint Chiefs ot Staff, Peter Pace. 1 can call him on

2 the phone. You want me to do that?

3 MR . FLYNN : Sure . And 1 will represent to the Court

4 that I have contacted, prior to the TRO going in place, the

5 former Gecretary of Defense and others.

6 THE COURT : l 'm not trying to be difficult about this,

7 but I'm being placed jn a very uncomfortable situation because

8 1'm being asked to deal with an issue about which I have some

9 sensitivity. You might infer from my background that 1 do . At

10 the same time, we have a hearing here that's been scheduled for

11 a substantial period of time and don 't really see how, so far,

12 that webve taLked about anything thatls necessary to this

13 hearing in terms of whether or not this hearing can go forward

14 or whether or not 1 can qo ahead and make the decision I need

15 to make .

16 I was about to say we haven lt really gotten to the

17 pointz yet, ekther in terms of what thîs information is, and

18 I 'm hoping that we fre going to get there pretty quick.

19 MR. FLYNN : Your Honorz 1et me say this. If Mr. Trepp

20 wishes to vioLate his oath of secrecy on these matters, thatls

21 up to Mr . Trepp .

22 Mr. Montgomery, with a11 due respect -- and I think we

23 can avoid it on his direct so we can get to the core issues --

24 is going to assert the goverl= ental privilege .

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CECILIA l&lfi, s NV CCR #24 6 (7 75) 82 7 -0 672




. eg w e

1 Now, if it rclquires the goverrr ent coming in within

2 the next 48 hours ho talk to the Court, we bll see what

3 develops. 1 Lhink at this level, what you 're dealing with,

4 Your Honor, you rre not dealing on the level of Mr . Hennessey .

5 You rre dealing on a level that is so compartmentalized, as I

6 understand itr that there are very few indivîduals --

7 Mr. Hennessey wouldn 't even know who to contact to dekermine

8 relevant issues on some of Lhese issues . Bu* if Mr

. Trepp --

9 THE COURT: Wabt a minute. Hold on. Sit down.

10 Sir, you need t.o sit down too. I can 't hear when

11 there's a11 this conversation.

12 Now, go ahead and fjnish what you were going to say,

13 and then 1111 1et Mr. Peek speak.

14 MR. FLYNN : Finey Your Honor. We want to go forward.

15 If Mr. Trepp wants to violate his oath, that 's up to him .

16 Mr. Montgomery, hopefully, wâll be able to give the Court

17 enough so that won 't be necessary.

18 If the defense wants to then ask questions about it,

19 if the goverm aental privilege has to be asserted, maybe weïll

20 do a little vo ir dire. The Way we do it, I suppose weVll -- it

21 could be procedurally done in chambers.

22 THE COURT: Yeah, what I'm saying is, the contents of

23 it don't need to be disclosed, as far as I'm concerned z to

24 understand whether or not there should be an injunction with

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CECILIA VGHL, NV CCR #246 (775) 827-0672




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1 regard to it. And if youtre concerned about the contents, I

2 donlt think 1 need to know about that.

3 But Leh 's go ahead. I'm with you . We'll go ahead

4 with this thing. We bll see when we get there if hels got a

5 privilege to invoke.

6 MR. PEEK : Your Honor, so there's no m isunderstanding

7 with the Courl: and at least the plaintiff, this source code has

8 no classificallion to it . Ih has no top secret classification

9 to it. It certainly was used in conjunction with classified

10 material that was provîded to eTreppid to run the source code

11 programs to identify objects, identify patterns, identify

12 anomalies . But I want to at least make it clear to this Court

13 that despike Mr. Flynn's continuous statements unsupported by

14 affidavit, notz even really presented in his oppositionz not

15 even part of any motion practice here, that this technology was

16 started out as, this is technology that emanates from public

17 filings that E had in the copyright office, to now something

18 that has some super-secret aspect to it. It keeps evolving: it

19 keeps morphintp it keeps changing every time we knock down the

20 straw man tha'z he puts up .

21 THE COURT: Al1 right.

22 . MR . FLYNN; So 1 want to go , too, but I want to at

23 least correct the record that there is no -- nothing behind

24 this . This is our source code.

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CECILIA krff.L , NV CCR #24 6 (775) 827-0672




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/

1 THE COURT: 1 understand that's your position. I

2 just -- when you hear two thinqs from people that have

3 information, 1 don't know exactly how to balance it out until T

4 hear it all .

5 MR . PEEK : I Lhvnk you should hear it based upon sworn

6 declarations as opposed to anecdotal comments from counsel.

7 THE COURT : I understand .

8 MR . PEEK : And we have testimony. We have only

9 anecdotal remarks.

10 THE COURT : 1 understand .

11 MR . FLYNN : Your Honor, the evidence will be that it's

12 above the iighest security clearance called SAP. Not only is

13 it classified beyond -- it's the highest classification

14 existing in the United States, ''the source code.''

15 THE COURT: A1l right. Well, wedll see. Let's go

16 ahead . We'11 try to get through the process of figuring out

17 what it is and where it came from and where it is now.

18 BY MR . JAKOPIN:

19 Q. Strike the question. 1'11 try to start again.

20 The contract that we've been talking about, was that

21 contract with eTreppid or was with Dennis Montgomery?

22 A . With eTrepptd .

23 Q . Who was the contract for?

24 A . I don 't understand what you mean.

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CECILIA V'XJ.L, NV CCR #24 6 (775) 827-0 672




)

w- ' > .

1 Q. What were the services that eTreppid was providing

2 under the contract?

3 A. To p rocess video information and give outputs.

4 Q. And did e'I'reppâd fulfill that contract?

5 A. Yes.

6 Q. And ik was fulfillecl when?

7 A. I believe the Air Force contract was for six or nine

8 months, and then il. was given off to a different governmental

9 agency.

10 Q. And did it expire with respect to this different

11 governmental agency at any point in time?

12 A. Yes; about: a year and a half ago.

13 Q. Were there any other governmental contracts that

14 eTreppid has entered bnto as well?

15 A. Yesz there was another contract we got with Socom to

16 do testing for an ATR project.

17 Q . And when that was? '

18 A . 1 beLieve it was about a year ago .

19 Q. Does that contract continue today?

20 A . It's either expired or itfs about to expire.

21 Q. Other than that contractz any others?

22 A. Yes: there was one other project called -- another

23 Air Force project called Eagle Vision, which started about six

24 months ago and should end -- wellz we had ko put the contract

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CMCILIA Mofff/, NV CCR #246 (775) 827-0672




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1 on hold because, since we don ït have the source code, we can 't

2 do the work. So the ccntract, by definition, and our revenue

3 stream, by deflnition, is on hold until we can get it back.

4 Rut in theory, we were supposed to have another -- about seven

5 or eight months lelit on that contract .

6 Q. You refer to the source code being gone. When did you

7 first find out about the source code being removed at the

8 company?

9 A . It would either have been on Sundayp January 6th --

10 no, excuse me. That would be Sunday, January 8th, or Monday,

11 January 9th.

12 Q. How did you learn about it?

13 A . Sunday, I got a call from Jesse, one of our employees,

14 saying that he wanted to get together w ith me and discuss

15 something with me.

16 Q. And what happened next?

17 A . 1 got together with him that afternoon, and he

18 explained to rRe that there were -- either he knew spe ciftcally

19 or he knew other people that said over the last couple of weeks

20 Dennis had either taken their hard drives or they had noticed

21 something missing from their workstations.

22 MR. FLYNN: Objection. Move to strike. Hearsay, Your

23 Honor. .

24 THE COURT: I'm going to permit it . I<m going to

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CECILIA MOST, NV CCR #246 (775) 827-0672




.

J

1 listen to hearsay to a fairly large extent during this hearing

2 under the general exception to the hearsay rule .

3 BY MR . JAKOPIN:

4 Q. Mr. Trepp: before we continue with the source codez a

5 couple questions about the government contracts . Were those

6 government contracts fulfilled using a proprietary eTreppid

7 source code?

8 A . Yes .

9 Q . And how djd you fulfill them? Did you provide results

10 to the goverN aent?

11 A . Yes, in every case. Or, in one of the contracts, we

12 actually gave them -- 1 don't know the number -- a number of

13 laptops that had our executable source code on them so that the

14 Socom people could actklally operate them on their own .

15 Q. Thank you. Getting back again to the removal of the

16 source code, you talked about having an afternoon meeting with

17 Jesse. What did you dc) next?

18 A . I ca Lled Sloan thah night at home and satd what was he

19 -- was he aware of anything that was going on. And he either

20 alluded to the fact that while he was on his vacation, that he

21 wasn 't sure, but he eâther thought a substantial or all of the

22 source code was gone. I told him it was imperative he came in

23 early the nex'z morning to give me an update as to what was

24 going on relaLive to that .

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CECILIA Flffr, NV CCR #246 (775) 827-0672




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1 Q. Did he do that?

2 A . Yes.

3 Q. What did you do then?

4 A . 1 asked if he could give me a better assessment as to

5 what was going on, and 1 immediately went to Cind Dennis.

6 Q. Did you?

7 A . Yes .

8 Q. With respect -- when you found out what was going on,

9 what did you find out?

10 A . I basically said to Dennis, î'There 's obviously

11 something awry here . What's going on?''

12 Q. What did he say?

13 A . He said, ''1 don't know what you bre talking about .'' l

14 then had to ga back upstairs to my offbce. I had planned a

15 four-month vacation around the world with my family. I was

16 supposed to have left that day. And obviously, with a problem

17 brewing, I obviouszy figured out I shouldn't be leaving and

18 figure out exactly what was going on . So l did, in fact, go to

19 the airport to see off the people that we were supposed to be

20 traveling on this trip with.

21 When I came back in, I got a great deal more

22 information from the employees basically stating that the vast

23 majority of al1 of the workstations were deleted -- a1l of the

24 source code was deleted, the ISA server was deleted and maimedy

20

CECILIA U()SZZ NV CCR #246 (775) 827-0672




l

.,

?

1 and I was perplexed , to say the least.

2 Q. Did you direct the employees to do anything in finding

3 that out?

4 A . To fjnd otlt exactly: to the best of their knowledge,

5 exactly what happened. And I asked them a11 so that we cou ld

6 get together to cumulatively to come up w ith exactly where

7 everything stood . 1 asked Sloan to call Dennis and ask him to

8 come back into the office so that I could discuss with htm

9 again what was going on. And he said that he would come back

10 inr but he didnlt .

11 Q. Okay. That was on Monday, correct?

12 A . That is correct.

13 Q. Anything else happen on Monday with Mr. Montgomery?

14 A . Not that J can recall.

15 Q. How about on Tuesday?

16 A . Tuesday, l again put a call in to him , told him we had

17 to get together . 1 meL -- 1 don't remember if 1 met him

18 upstairs or downstairs initiallyy and saidr ''What on earth are

19 you doing? The people can't work. We've got 20 employees . If

20 we don lt have the source code, how can you have people work?

21 What did you do with it?''

22 And he said, ''I don lt know what you're talking abcut.''

23 And t saidy ''We11r what about a11 of the workstations

24 and the source server and the ISA serverz why did you delete

21

CLZCILIA MOfff,z NV CCR #246 (775) 827-0672




- -

) ....

l al1 of those?''

2 And he said, ''We11, I didn 't do it.''

3 So I said, ''Who on earth did?''

4 And he saîd to me, ''We11y Patty did it.''

5 Now, it was preposterousy that statement, because I

6 had found out from Sloan that morning that the only two people

7 that had access to be able to access either the source serverw

8 the 1SA serverz or aL1 of the individual workstations, were

9 Mr. Montgomery and Sloan .

10 1 said, ''Please 1et me help you get through this. I

11 donït understand whak you dre doing.''

12 And he just screamed and yelled and ranted and raved.

13 Half of the ellployees in the building certainly heard him

14 because he was in an absolute tirade. He went running out the

15 back, jumped into his truck. And once again, I appealed to 1et

16 me help you, and it went to no avail. He just drove away.

17 Q. There was reference earlier to backup disks. Are you

18 famillar with those?

19 A . Yes.

20 Q . Could you tell us about those.

21 A . Dennis had told Sloan to back up everything in the

22 building, with the exception of the source server stuff. I had

23 also said to Dennis from Day One, when we started the business,

24 that it was essential for what would be in my family's best

22

CLZCILIA VOHL, NV CCR #246 (775) 827-0672




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l interest and his family's best interest for me ho personally

2 keep a copy orL a regular basis of the source code . I asked him

3 to do that at a minlmum. of annually, and certainly, anytime

4 Lhere was a major event that would have occurred, we would

5 eltber have a new project or new projectz that I would be able

6 to keep a copy outside of the building, outside of the -- what

7 was in control ot eTreppid.

8 And 7, over a seven-year period, kept getting -- they

9 were first CDs, they became E'VDS, and then they became hard

10 drives. I kept all of those in safe-deposit boxes. And the

11 only two people who hacl access to the safe-deposit boxes was my

12 wife and myself.

13 Q. After the events that youfve just talked about took

14 place, did you get those retrieved?

15 A . Yes. I asked -- I ctidn't want to leave the building

16 because there was obviously a great deal of turmoil, and people

17 were worried about any number of things, obviously. I was

18 trying to keep -- get some klnd of stability, at least on an

19 interim basis, until we coulcl figure out what was going on . I

20 asked my wife to go to the safe-deposit boxes, retrleve al1 of

21 the disks and bring them back into the office.

22 Q. And she did that?

23 A . She did it.

24 Q. And what did you do with the disks then?

23





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l A . 1 iv tediately brought them into Sloan's office . And

2 Sloan -- 1 said to him , Lhese are the disks that Dennis had

3 given me over Lhe years with al1 of the source codes for a11 of

4 the projects that weld been working on from Lhe beginning of

5 time, and that this will be the answer; please look on these,

6 and tell me exactly what's on there, hoping that, obviously,

7 a11 of the source code for a11 of the projects that weld been

8 working on over the years was there.

9 Q. Did he report back to you after he did that?

10 A. Yes. He just started to laugh. The first thing he

11 said to me was: ''Hc)w come there's so few of these? Dennis told

12 me he used to give them to you every two weeks.''

13 MR. FLYNN: Your Honor: Ilve got a continuing

14 objection on hearsay.

15 THE COURT: Al1 right. Objection is noted. Tt will

16 be continued .

17 BY MR. JAMOPIN:

18 Q. Anything else?

19 A . 1'm sorry, I dsdn't understand what -- I didn't know

20 what just happened.

21 Q. He objected, and the judge allowed you to answer.

22 A . Okay. You better ask me the question again.

23 Q. Was there anything else that you were told about what

24 was on those disks?

24

CECILIA 7/SI, NV cCR #246 (775) 827-0672




f

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t -- .1 im

1 A . Yes. Sloan then went through , disk by disk, and went

2 through the whole thinq and basically started to laugh and

3 said, ''Therels nothing here.'' He did say there was some

4 reference to one compression project, but that it was totally

5 worthless by vlrtue of the fact that there wasn't source code

6 there for it; it was just an EXE. He said the bulk of it --

7 the rest of the junk on it was a bunch of imagery, just bitmap

8 im ages of stuff.

9 Q. What has the effect of the loss of the source code

10 been on the company?

11 A . Wellj we have no ability to generate revenue. We bve

12 told the two governmental agencies that we have pending

13 contracts with that we can't perform on them . Webve asked for

14 an extension , if that would be a possibility.

15 Obviouslyy by not having the contracts: we don't have

16 revenue. I have to make a decision at some point in the near

17 future, how many months 1îm going to be able to sustain paying

18 the 20 families who are employees . That's goinq to have to

19 come out of m'g pocket at some point.

20 Q . How many employees are there?

21 A . Twenty .

22 Q. How many of those are engineering types?

23 A . Seventeen or eighteen.

24 Q. Does the company routinely have a11 of their employees

25

CZCILIA krffzp, NV CCR #24 6 ( 775) 827-0672




$ -' ' ' * ' 3

1 sign agreements such that the work that they do is the

2 companybs?

3 A . Absolutely.

4 Q. Is the company currently in the process of trying to

5 negotlate new contracts?

6 A . Absolutely.

7 Q. Was llhe office software to be --

8 A . We were -- up until this evenk, we were on the verge

9 of getting a very substantial contract -- or multiple

10 substantial contracts.

11 Q . Up until these recent eventsr has there ever been any

12 conversation that you #ee had with Mr. Montgomery to the

13 effect -- 1 mean -- strike that.

14 Have there been conversations you#ve had with

15 Mr . Montgomery from time to time relating to pattern

16 recognition?

17 A . Yeah, for mang, many years.

18 Q. In any of those, did he say anything about his owning

19 it?

20 A . Owning what?

21 Q . Any of -- any software relating to pattern

22 recognition .

23 A . No, absolutely not.

24 MR . JAKOPIN: What 's our next number?

2 6

CECILIA voHLr NF cCR #246 (775) 827-0672




(

. Mt *

1 MR. IPLYNN: 1 think we're dealing with 8 now . I think

2 it's 8.

3 (PlaLntiff's Exhibit 8 was marked for ldentification.)

4 BY MR . JAKOPIN :

5 Q . Handtng you a copy of a document that has been marked

6 as Exhibit 8, do you recognize this as a business record of the

7 company, Mr. Trepp?

8 A . Yes.

9 Q. And what is it?

10 A . It's an assiglwtent of a U .S. patent .

11 Q. And on the foilowing page, is a copy of that patent

12 attached?

13 A . Yes.

14 Q. Actually, a patent application.

15 A . Yes .

16 Q. Is this the patent application relating to an

17 invention that was macle by Dennis Montgomery at the company?

18 A . Yes.

19 Q . And does this assignment reflect that he assigned this

20 patent to the company on this assignment dated March 7th# 20022

21 A . Yes, it is.

22 MR. JAKOPTN; Thank you.

23 Can I get this offered into evidence?

24 THE COURT: Are you offering Exhibit 82

27





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rr7 '%v

1 MR . JAKOPTN: Yes.

2 MR . FLYNN : May 1 have one moment, Your Honor?

3 THE COURT: Yes. lsnft this attached to one of the

4 pleadings?

5 MR . JAKOPIN: There were three patent applications

6 attached to the pleadings, Your Honor . Wedve actually got more

7 patenk applications than the three that were aktached to the

8 reply.

9 Fran kly, if they would stipulate, 1 could get a11 of

10 these marked together and we could move thîs along more

11 quickly.

12 THE COURT : So the answer to my question is ''no,''

13 right? My question was, isn't this --

14 MR . JAKOPIN : This particular one?

15 THE COURT : Yes.

16 MR. JAKOPIN : 1:11 find out.

17 1 don't believe soz Your Honor.

18 THE COURT: A1l right. 1 just thought I'd seen it.

19 MR. FLYNN: Your Honor: we're going to oblect on

20 authentication grounds. Even though we think it's irrelevant,

21 the individual who allegedly witnessed it was fired five weeks

22 prior to March 7th. And there are other documents that have

23 been given to the Court where Mr . Montgomeryls signature was

24 obviously forged .

28

CECILIA Mos2' NV CCR #246 (775) 827-0672




y'

q - . ) '.'.-

1 MR. PEEK: Your Honor, will they just say or do

2 anything?

3 THE COURT: Waj.t, wait, waitz wait.

4 MR . PEEK ; You know --

5 THE COURT: Ilold on, hold onz hold on .

6 Well, I haven 't heard -- maybe I have, but it's been

7 lost in a11 of the conversation here. Has a foundational

8 question with regard to Exhibit 8 been asked of the witness?

9 MR. JAKOPEN: When 1 asked him if it was a buslness

10 record of the company, he said yes. He indicated that he was

11 aware that this was one of the inventions of Mr. Montgomery and

12 that this was the assâgnment that related to that invention .

13 THE COURT : And he 's seen it before? And it's a true

14 and correct capy of what hels seen before; is that right?

15 MR . JAKOPIN : Whether he has seen this particular -- I

16 meanr what is --

17 MR. PEEK: Eâther he has or he hasnît.

18 THE NITNESS: I don 't believe 1 ever havez Your Honor.

19 THE OOURT: Al1 right. And how does he determine that

20 it ïs a business record of th'e company, simply because of its

21 content?

22 MR. JAKOPIN : Correct: Your Honor . Further, the

23 published application is published by the U.S. Patent Office.

24 I mean; this is in a format that is published by the patent

29

CSCILIA Uofff,e NV CCR 9246 (775) 827-0672




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1 office . And 150, that 's a record of what has been filed from --

2 with the patent office and published by them .

3 MR . FLYNN : Your Honor, in order to authenticate and

4 admit into evidence in any courtroom that I know of in the

5 United Statesg you neecl a certified copy from the patent

6 office, number one; nunl er two, in order to prove it ds a

7 business record y heds got to go through the four elements of

8 business records.

9 He doesn ft even know what it is, 1et alone being able

10 to go through the four records -- four elements, 1et alone

11 knowing what :zhe four elements are, let alone knowing what the

12 business routLnes of the company are with regard to

13 recordkeeping . None o1' that has been established .

14 THE COURT : Well, there truly hasn't been any

15 testimony about who the custodian is; whether it's kept in the

16 ordinary counse, things like that. Why don't you see if you

17 can 1ay just a little bit more foundation. I want to give this

18 a little bit of thought too.

19 My inclination is to -- Mr. Trepp, does that appear to

20 be Mr. Montgomery's signature on the bottom?

21 THE W ITNESS : Yes.

22 THE COURT: I'm going to admit it . It's admitted.

23 (Plaintiffls Exhibit 8 was admitted into evidence.)

24 MR . FLYNN : This will be 92

30

CECILIA UOfff/z NV CCR #246 (775) 827-0672




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....

) i' ..-,

l MR . JAKOPIN: This will be 9 .

2 (PlaC-ntiff's Exhibit 9 was marked for identification .)

3 BY MR . JAKOPIN :

4 Q . Handg.ng you a copy of a document that's been marked as

5 Exhibit 9, is this a business record of the company, Mr. Trepp?

.

6 A . It looks âike it .

7 Q. Is this a true and correct copy of an assignment

8 signed by Mr. Montgomery and the attached published patent

9 application entitled ''Method and Apparatus For Determining

10 Pattern Within Adjacent Blocks of Data''?

11 A . Yes.

12 MR. JAKOPIN : M ay I have Exhibit 9 marked into

13 evidence?

14 MR. FLYNN : Your Honor, same basis On authentication

15 for -- but as I understand it, this is a11 compression stuff.

16 THE COURT: Apparently, it is. You know, my thinking

17 was whether or not your client really contends that these are

18 not authentic and that these are not hâ.s signatures on these

19 documents, at least for the purpose of this hearing. The issue

20 about whether this person who witnessed it was there at the

21 time, I mean: that -- I mean, that's more -- almost more

22 James Bond type stuff, and I expect maybe helll be a witness in

23 this case before too long .

24 I think, for the purpose of authentication and for

31

CSCILIA VOHL, NV CCR #246 (775) 827-0672




(

1 relevance and for allowing these documents to be admitted, that

2 by looking at the contents of the documents themselves,

3 Mr. Trepp 's testimony, his familiarity with Mr. Montgomery 's

4 signature, this appears to be his signature, is enough for me

5 to allow these to be admîtted.

6 So Exhibit 9 is admîtted. And then if you have

7 testimony down the roacl, I can certainly reverse my decision on

8 that . But I lhink, in terms of relevance and admissibility and

9 authentication, that there 's been enough to allow it for the

10 purpose of this hearing.

11 MR. FLYNN: 'm d, Your Honor, just so therels some

12 clarlty here, we don't necessarily agree that this is

13 Mr. Montgomeryîs signature. Thû issue with some documents that

14 have been given to the Court, which is so obviously -- pardon

15 me -- fraudulent that we have to be cautious with reqard to --

16 MR. PEEK : Your Honor --

17 THE COURT: Well, 1'm saying --

18 MR. PEEK; 1'm giving --

19 THE COURT: Stop , stop, stop . There will be a time .

20 when that can be addressed. L mean, you know, if you object to

21 the document as fraudulent, then thereïs got to be more than

22 that objecticn. Therels got to be some proof: therels got to

23 be some evidence, there's got to be more than that.

24 And so what I1m saying is, if you can produce that

32

CECILIA VOSLa NV CCR #246 (775) 827-0672




r/''-rz =

1 evidence at some polnt in time, 1'11 consider that evidence.

2 But just to say it's fzaudulent when we've got testimony to Lhe

3 contrary -- I'm goîng to admit the exhibit .

4 MR . FLYNN : Finey Your Honor.

5 MR . PEEK : And , respectfully, what troubles me is that

6 M r. Flynn can come here from Massachusetts and do and say

7 anything abou-- me# who has submltted these doeuments, and say

8 what I submitled was fraudulent. Thatfs outrageous to me. I

9 just think that is -- you don't just come in here one time,

10 one shotz and take cheaip shots at people.

11 MR . FLYNN : Stevep assume it has got nothing to do

12 with you.

13 %HE COURT : ilold on, gentlemen . Don't get your

14 feelings hurt about this.

15 MR. PEEK: But just --

16 THE COURT: l've been around the block a couple times.

17 T understand whatfs going on. r don't take any of these things

18 to be personal as to you, and I'm not reading them that way .

19 So let 's get back to what we were talking about.

20 Exhibit 9 is admitted. lf you have some other similar

21 documentsz go ahead and offer themz and we:ll go from there .

22 (Plaintiff's Exhibit 9 was admitted into evidence.)

23 BY MR. JAKOPIN:

24 Q. Mr. Trepp , with respect to Exhibit 9, do you see in

33





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1 the abstract -- it's the seccnd page -- the first sentence

2 talks about f'ëahe present invention describes methods and

3 apparatus for providing pahtern recognition between adjacent

4 sequential fritmes of data''?

5 A . Yes.

6 Q. Were those activities that were going on at eTreppid

7 in the 2001 t:Lme frame when this application was filed?

8 A . Yes .

9 (Plakntiff's Exhtbit 10 was marked for

10 identification.)

11 MR. FLYNN : This is 10?

12 THE CLERK : Yes .

13 THE COURT: How many more of these do you have?

14 MR . PEEK : Five, Your Honor.

15 THE COURT : Why don 't you take -- well, I don 't want

16 t/ tell you how to do this --

17 MR . JAKOPIN: Welll look at them all and save a few

18 minutesz that 's fine, Your Honor .

19 THE COURT: Yotl read my mind.

20 MR. LOGAR : Counsel: for the record, will you identify

21 what you handed the clerk.

22 MR. FLYNN : And are these going Lo be in order?

23 MR. JAKOPIN : These are going to be in order.

24 THE CLERK : Top one is 11.

34

CRCILIA VOSA, NV CCR #246 (775) 827-0672




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1 MR. JAKOPjN: Top one is 11.

2 MR. FLYNN: Maybe you could just --

3 THE COURT : You marked Exhibits 11 through what?

4 MR. JAKOPEN : This is 11, 12r 13 and 14 and 15.

5 THE CLERK : Yes, Your Honor, that ts what I have.

6 THE COURT : A11 right.

7 MR . PEEK : Oh, therers one more.

8 THE COURT : So 11 through 16# then? ls that rîght:

9 sir?

10 MR . JAKOPIN : Actually, it will be two more, 11

11 through 17z Your Honor.

12 THE COURT : Al1 right.

13 (Plaintiff's Exhibits t1 through 17 were marked for

14 identification.)

15 MR . FLYNN : ls 16 the one --

16 MR. JAKOP IN: Exhibit 16 is ''System and Method For

17 Generating Work Conditions in a Surveillance System.''

18 BY MR . JAKOPIN:

19 Q. Mr. Trepp, I've handed you copies of documents that

20 have been marked as Exhibits 11 through 17. Are each of these

21 copies of the assignment and patent application for a different

22 invention filed by eTreppid?

23 A . Yes.

24 MR . JAKOPIN: T ask that each of these be admitted

35

CECILIA V(lSIs NV CCR #246 (775) 827-0672




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1 into evidence.

2 MR. FLYNN: Same objection, Your Honor.

3 THE COURT: A11 right. The objection with regard to

4 Exhibits 10 through 17 is noted. They lll be admithed .

5 (Plal.ntiff's Elxhibits 10 through 17 were admitted into

6 evidence.)

7 MR . JAKOPIN: That's al1 1 have of this witnessr Your

8 Honor .

9 THE COURT : A11 right. Mr . Flynn?

10 MR . FLYNN : Thank youz Your Honor .

11 The iast one was 17?

12 THE COURT : Yes, sir.

13 (Defendant's Exhibit 18 was marked for

14 identification.)

15

16 CROSS-EXAMINATION

17

18 BY MR . FLYNN :

19 Q . Mr. Trepp, before we get into the nuts and bolts of

20 what we're dealing with here, I've given you what -- a copy of

21 what has been identifâed thus far as Exhibit 18. Do you

22 recognize this document, sir?

23 A . Yes.

24 Q. Describe to the Court what it is.

36

CECILIA ketlsfzz NV CCR #24 6 (775) 827-0672




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l A . It's an amendment to a loan which 1 gave to Dennis

2 starting in 1999 . And I think the last loan 1 gave to h1m was

3 on December loth.

4 Q . Of what year, sir?

5 A . 105 .

6 Q. And who prepared this document?

7 A . Doug Frye .

8 Q. He's your lawyer?

9 A . Yes .

10 Q . How Long has he been your lawyer?

11 A . Abou L 20, 25 years.

12 Q. And fn fact, when you went on your six-month cruise

13 right after the deal was made with Mr. Montgomery, Mr. Frye ran

14 the company?

15 A. 1 don't think that's correct. 1 believe Dennis was

16 the manager wnen I was gone: and then I think when I got back,

17 Doug was made the manager. I'm not a hundred percent sure. 1

18 don 't know.

19 Q. Who signed the checks and paid the employees?

20 A . I beg your pardon?

21 Q. When you were gonez who signed the checks and paid the

22 employees?

23 A . 1 have no idea.

24 Q. What was -- wa,s Mr. Fryew during that six-ronth

37

CECILIA VOSL, NV CCR *246 (775) 827-0672




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1 period, being paid by eTreppid Technologies?

2 A . As cclrporate counsel or as an employee?

3 0. In any way.

4 A . lf he had a legal bill and he was corporate counsel,

5 I'm sure he was being paid.

6 Q. The date of this document is December 28th; is that

7 correct?

8 A . Well, thatts the date it was signed .

9 Q. Now, what date did you Sign it?

10 A . What date did 1 sign it? 1 signed it the same date he

11 did.

12 Q. And gour testimony is, what day is that, sir? ls that

13 the day that Ls recited on the front of the document?

14 A . Yeah .

15 Q. December 28th?

16 A . No . This -- wait. Regroup. I gave Dennis either two

17 or three of these where 1 told hîm I wanted -- he and Brenda

18 signed the notes . He came back to me after the 8th or Lhe

19 10th, whenever 1 gave him the original document, and he said

20 Brenda wouldn't algn it. And I sald, ''That 's preposterous. l

21 just gave you more money. You told me you were going to sign

22 1t. Why is this any different than the prior note that you had

23 where Dennis and Brenda signed them both?''

24 Go I got frustrated after two weeks -- or whatever the

38





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1 time frame was, and 1 saidr ''Dennis, sign this thing .''

2 Q . Or else?

3 A . Or e.'-se, what?

4 Q. Did he sign this in your presence?

5 A . Yes, of course.

6 Q. And so the two -- where did the two of you sign it?

7 A . He s.Lgned it at the front desk of our building, in the

8 reception area .

9 Q . And '/ou were right there too?

10 A . I handed it to him . He got the pen and he signed ît,

11 and then 1 had our receptlonist sign as a witness that he saw

12 him sign it.

13 Q. So tNis docr terft was signed out in the reception area

14 of the company; is that correct?

15 A . Correct.

16 Q. And eho was this indlvidual, Mr. Bora?

17 A . He's our receptioniat.

18 Q. And what relatîonship is he to you?

19 A . My brother-in-law.

20 Q. And this signature of Mr. Montgomery -- is it your

21 sworn testimony, sir, that this is Mr. Montgomery ïs signature?

22 A. Did I see him sign ît? Is that the question?

23 Q. Well, is it your testimony this is his signature?

24 A . Welq, the answer to that is, did I see him sign it?

39

CECILIA vtaffr,s NV ccA 11246 (775) 827-0672




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1 Yes, I saw htm sign ît.

2 Q . Have you compared thLs signature to any of

3 Mr . Montgomery 's prior szgnatures at eTreppid?

4 A . Itls irrelevant. 1 saW him sign it.

5 MR. FLYNN: Your Honor, 1 move to admit Exhiblt l8.

6 And I believe Exhibit 18 was given -- previousYy given to the

7 Court as part of the papers.

8 MR. PEEK: No objection, Your Honor.

9 THE COURT; 16 is admitted .


11 BY MR . FLYNN :

12 Q. Now, Mr. Trepp, letîs take you back to September of

13 1998, okay? When did you first meet Mr. Montgomery, the dater

14 if you can recall the date?

15 A . I have no idea . f think --

16 Q . Was it September?

17 A . When was the first time I met him? I think I met him

18 in 1996, firs'z time.

19 Q. Where?

20 A . At the Eldorado .

21 Q. And did you talk to him then?

22 A . Yes .

23 Q . What did you talk about?

24 A . About what he was proposing .

40

CECILIA VIIHL, NV CCR #246 (775) 827-0672




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1 Q . I n 19 9 6 ?

2 A . Ye s .

3 Q . What was iïe propos j-ng to you î.n l 996?

4 A . He w.anted to :start a business .

5 Q . And 'Jhat dâ.d you say?

6 A . ''I donft know enough about it.''

7 Q. What did he tell you the business was?

8 A . That he had tkhe ability -- he thought he had the

9 ability over time to develop something that could have a major

10 impact on the compressLon and movie industries.

11 Q. Do you recall anything else in that conversation?

12 A . No.

13 Q. Okay. When bs the next time you meet Mr. Montgomery?

14 A. It was either nine months or a year later.

15 Q. Where did you meet him?

16 A . The same place .

17 Q. What were you doing there?

18 A . The person introduced me, asked me to come down and

19 see him again.

20 Q. Okayu Were you there on business?

21 A . I came down to meet him because the third party said

22 he was going to be there and wanted to talk to me again,

23 because I hacb 't spoken to him in so long .

24 Q. And again, where was this?

41





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1 A . The Eldorado.

2 Q. Were you there gambling?

3 A . I don 't know . Itïs possible. T cou ld have been .

4 Q. Okay. Now, what was sald in that conversation, as

5 much as you can currentiy recall?

6 A . I don 't remeyâler at this -- specific details, but it

7 was more of the same. He had said that he had continued to

8 make progress on the work that he was doing. And I saîdw

9 finally, I'd be interested in actually looking to see --

10 actually, give me a demonstration of what you have so I could

11 try to come up with some evaluation as to if 1'd be interested

12 in investing in it.

13 Q. What did you say?

14 A. 1 just told you what I said.

15 Q . That no --

16 A . What 's the question'?

17 Q . Did you give him money at that point to start a

18 busineas?

19 A . Well, of course not.

20 Q. Why not?

21 A . He didn 't do the demonstration yet.

22 Q. But this is a year later, so this is in :97?

23 A . Yes.

24 Q. A11 right. Did you ask him to do a demonstration?

42

CECILIA Mosls NV CCR #246 (775) 827-0672




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e' Jr>-

1 A . He said that he would like to put together a

2 demonstration and we could get together at some point and he

3 would give me a demonstration.

4 Q . Okay. Anci then when is the next time that you met

5 him?

6 A . Sometime in :98. Beginning of 798.

7 Q . Where?

8 A . I think it. was at my home . 1'm not a hundred percent

9 sure, but I think ât was at rty home.

10 Q . Who arranged that meeting?

11 A . The same perscm .

12 Q . Wbo was it?

13 A . Steve Sands.

14 Q. And Now l()ng did you meet with him in early 1982

15 A . For Lhe demonstration purpose?

16 Q . For any purpose.

17 A . If itls for the demonstration purpose, it was probably

18 about a half hour or 45 minutes.

19 Q . And what did you see?

20 A . He showed me a compression technology, and he showed

21 me the Gunga Din pattern recognition stuff that I alluded to

22 earlier .

23 Q. The Gunga Dïn pattern recognition?

24 A . Yes.

43

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( . r ( .

.

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r . -

1 Q. How cid he show you the Gunga Din pattern recognition'?

2 A . He played a C?), and it played on a monitor or a

3 laptop . I don 't remember exactlg what it was .

4 Q. A CD of what?

5 A . Of the demonstration of the conversion of a

6 black-and-white series of frames into a colored serles of

7 frames .

8 Q. So at this point, in your mind: what was your

9 understanding of what tbe technology was tbat Mr. Montgomery

10 was demonstrating to you?

11 A . A, he had an ability to compress what he said was

12 audiow vldeo: text, iaagery, and also having the ability to

13 recognize patterns in either a series of frames -- and I'm not

14 sure if it was either just video and audio as well and video --

15 and belng ablfa to convert the video pattern onto future frames.

16 Q. So at this point in early 1998, you, as the investor

17 in this company, 50/50 with Mr. Montgomery --

18 A. We didn't even start the company, just to make sure

19 weAre on track here .

20 Q. You have an understanding that there are two types of

21 technology: pattern recognitionw as you've described itr and

22 data compression; is that correct?

23 A . Well, to the point, that is correct. He also told me

24 about a11 these other wonderful things that potentially he

44

CECILIA VOSZ, NV CCR #246 (775) 827-0672




( -. ( r.

1 would like to qrow and develop over time if he had the

2 engineers and the capital to do it.

3 Q- But at least, we're clear on those two?

4 A . Yeah.

5 Q . Thost) are demonstrated to you in early '98?

6 A . Yeah ,

7 Q . And what did you say to Mr. Montgomery at that time?

8 A . That it seemed like it was interesting .

9 Q . 1 beq your pardon?

10 A . It seemed like it was interesting and that I thought

11 uhat might be a good way to approach this was to agree, have

12 him contribute whatever he had going forward, and then we would

13 start a -- basically, a research and development project at

14 that time.

15 Q . Now: were there two separate demonstrations?

16 A . There could have been.

17 Q . But there clearly, j.n your memory, was one for pattern

18 recognition based on Gunga DinB

19 A . Yes .

20 Q. Unquestionably?

21 A . Unquestionably.

22 Q . And there clearly was one on data compression, but you

23 don 't recall how he showed you the data compression?

24 A . Well, it would have been the same thing. He would

45

CECILIA 7(),rfz' , NV CCR #24 6 (7 75) 82 7-O 672




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k

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s. .

.

l have showed me a movie and said this is the size of a normal

2 movie: this is the size I made ét, or a section of the movie or

3 something to that effect .

4 Q. Okay, Was tt the same movie?

5 A . Was the movte Gunga Din that he compressed?

6 Q . Yes.

7 A . I don't really remember.

8 Q. Okay . You do remember, a1l these years later: there

9 were two?

10 A . Two what?

11 Q . Two demonstrations --

12 A . No --

13 THE COURT RRPOPTER: Excuse me . One person at a time,

14 please.

15 THE COURT: Hold on. Stop.

16 THE WITNESS: I apologize, Your Honorw but he keeps

17 asking --

18 THE COURT : l understand . Lîke I said earlier, this

19 is not like -- this is an unnatural setting for human beings to

20 be in. It's not like ordinary conversation. So just try to

21 exercise a little care, both of you, to make sure that youbre

22 not talking oeer qach other, because the court reporter can 't

23 get that down .

24 //// ////

46

CECILIA Vclffîpz NV CCR #24 6 (7 75) 827-0672




) (-

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1 BY MR . FLYNN :

2 Q. Irl1 rephrase, Mr. R'repp. Youdre very sure, as you

3 sit here today under oath, there were two different things that

4 you talked about wâth Mr. Trepp (sic), that he demonstrated to

5 you, data compressjon and pattern recognltion?

6 A . Yes.

7 Q. When is the next tinte you meet Mr. Montgomery?

8 A . A t the end of '98 when we decided we were going to go

9 forward in a business.

10 Q. And where was that, sir?

11 A . I haqze no idea .

12 Q . Do you recall the month?

13 A . It was the end of the year. It was before I was going

14 to be leaving to go to get married and go on my honeymoon .

15 Q. When did you get married and go on your honeymoon?

16 A. We left -- well, I got married civilly on

17 October 30th: and 1 got marrted in the church on November 29th

18 of '98 .

19 Q. October -- what was it, sir?

20 A . 30th.

21 Q. 1998.

22 So how long before that is your best estimate that you

23 met with Mr. Hontgomery and made an agreement to form the

24 company?

47

CECILIA 7(?Sfp NV CCR #246 (775) 827-0672




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1 A . About a month, month and a half, something like that.

2 Q. So sometime in September?

3 A . Okay.

4 Q. Now, a1l these documents that your counsel,

5 Mr. Jakopinz showed you, did you review them before you come

6 into the courtroom?

7 A . Did : revjew these?

8 Q . Any of those.

9 A . No.

10 Q . How kong has Mr. Jakopin been your lawyer?

11 A . Whenever we started doing the -- I mean -- are you

12 saylng my lawver or eTreppidls lawyer?

13 Q. A11 right. Let me zephrase. After you -- before we

14 get into the conversation you had with Mr. Montgomery, after

15 you decided to form the company, did you call an attorney to

16 create paperwork?

17 A . Yes.

18 Q. Wbo -- whose attorney was that?

19 A. Whose attorney was it? Mine . Doug Frye.

20 Q. And -- and when you asked him to create the paperwork,

21 did you have any discussion with him -- just yes or no -- about

22 what type of paperwork he would create'?

23 A . Of course .

24 Q. Okay. Now, letls go back -- wedre going to go back

48





. - -.

.

) t .ry

l there, but let's go back to your conversation with

2 Mr. Montgomery. Describe to the Court, as best you can, what

3 you said to hl.m and what he said to you about forming a

4 company.

5 A . Who said t.o who and who said to who?

6 Q. What you said to Mr. Montgomery and what

7 Mr. Montgomery saicl Lo you .

8 A . I th tnk I've already said this before, but the best

9 that I can retzall js, Dennis was going to contribute everything

10 he had done, put it into the pot. I would contribute money

11 into the pot. We wouzd get a 50/50 lnterest. 1 would help him

12 get people to develop this research and develop the project to

13 make extensions of what he had done and continue to grow a

14 business together as partners .

15 Q . Well, let's fkrst take the part of your testimony

16 where you say Neverything he had done.''

17 A . Yes.

'

18 Q. What was your state of mindz your understanding, in

19 September 1998 as to what ''everything he had done'' meant, that

20 he was contributing to your company?

21 A . Well, clearly, the compression that he showed me,

22 clearly, the pattern recognition that he showed me, and any

23 other works that he said he had potentially in the hopper that

24 he was working on, that this would be part of the deal that we

49

CECILIA U(lHiz NV CCR #246 (775) 827-0672




( . , (-

w -$ x '+

1 were going to be partners qoing forward with.

2 Q. Did you take notes?

3 A . Did l what?

4 Q . Did you take any notes of what he would be

5 contributing?

6 A . No .

7 Q . Did you ask hiD whether he had anv copyrights?

8 A . No.

9 Q. Did '/ou ask him if he had any patents?

10 A . I don 't believe 1 personally did.

11 Q. Did 'gou ask him if he had ever assigned any interest

12 in any of these things that you were getting to any other

13 company?

14 A . No .

15 Q. Did, at any time, you have a meeting with Mr. Frye, as

16 your attorney, and Mr. Montgomery over what Mr. Montgomery was

17 contributing And what you were contributing?

18 A . I -- 1 don 't recall having a meeting with the three of

19 us# but I certainly Would have told Douq what my impression of

20 the deal was and asked Doug t'o have a discussion either with

21 Dennis or his counsel or -- so that we could actually put

22 together a term sheet and actually conclude a deal.

23 Q. Now: you'd consider yourself a sophisticated

24 businessman?

50

CECILIA Vtlffiz NV CCR #246 (775) 827-0672




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1 A. Yes.

2 Q. How many companîes do you own?

3 A. I don 't know. More than five.

4 Q. But you don't know?

5 A. No, q don 't know . I have a 1ot of different

6 investments . Would you kike me to think about it?

7 Q . Well, 1et me ask you this: As a sophisticated

8 businessman wjth a)l your different investments, you bre

9 familiar w ith legally binding contracts?

10 A . Yes.

11 Q. And Mr. Frye, who has been your lawyer for 20, 25

12 years, is someone you trust as being familiar with creating

13 fairly elaboratte intellectual property contracts?

14 A . Yes . And if he wasnlt satisfied with it: he 'd find

15 another attorney that could help him with it.

16 Q. Did Pillsbury Madison play any role in creating the

17 documents, the contribution aqreement or the operating

18 agreement, for eTreppid?

19 A . I donft know specifically, but I find it hard to

20 believe that that would be the case.

21 Q. So you reiied on Mr. Frye --

22 A . Correct.

23 Q. -- to create a sophisticated intellectual property

24 document where you were investing $1.3 millionz correct?

51





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1 A . lf you could deftne what -- is that a legal term?

2 Q . Well, you undfarstand a simple little contracL -- two,

3 three, four pages -- as opposed to something like this

4 contribution agreement here?

5 A . Well, 1 would say --

6 Q . ltls Exhibit 4.

7 A . 1 would say, typîcally, most of the contracts we do

8 are like that; not a two-, three-page, whatever you just

9 described.

10 Q . Typically, most of them are like this?

11 A . Yes.

12 Q. Nowz did you ânstruct Mr. Frye to go meet with

13 Mr. Montgomery?

14 A . 1 might have asked him to call him or call h is

15 counsel. l don rt think I ever -- 1 guess ''no'' is the answer to

16 that question . Did 1 ever tell Doug to go meet Dennis?

17 Q . Yes.

18 A . Not that I can recall.

19 Q. Well, obviously, it's a key issue to you, is -- you

20 know youlre putting ln 1.3 million, and you want some type of a

21 writing as to what Mr . Montgomery is putting in, correct?

22 A . Sure. Or I would like an understanding as to what

23 that would be.

24 Q. Now, 1 know this is an irrelevant question, but was

52

CECILIA V()SJw NV CCR #246 (775) 827-0672




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) 1.. -

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l $1.3 million a 1ot of nloney to you?

2 MR . PEEK: If he 's going to say it's irrelevant, then

3 we know it's irrelevant, and 1'm going to object to it as being

4 irrelevant.

5 THE COURT : You know, I think it probably is relevant.

6 Let him answer the question .

7 BY MR. FLYNN :

8 Q. In SepteO ler 1998.

9 A . And Lhe question was?

10 Q. Was Lhat a lot of money to you then?

11 A . It's a lot of money to anybody anytime. lt certainly

12 is -- yes, it's a lot of money.

13 Q . So iL was a lot of money to you when you made your

14 deal with Mr. Montgomery because you knew you were putting in a

15 1öt of money and you wanted to know what he was putting in,

16 correct?

17 A . Sure .

18 Q. Now, you don 't remember where the conversation took

19 place?

20 A . No.

21 Q. You donlt remember when it took place?

22 A . I gave you a general idea.

23 Q. Sometime in September?

24 A . Yeah.

53

CBCILIA UOSAS NV CCR #246 (775) 827-0672




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1 Q. Do you know how long it lasted?

2 A . No.

3 Q. Was anyone present?

4 A . T don 't recall.

5 Q. Did you write out a check for $1.3 million on

6 September 28th --

7 A . I donlt know .

8 Q . -- 1998?

9 Was Lhere an escrow agreement?

10 A . I would assume sot but 1 don't know .

11 Q. In most of your deals, are there escrow agreementa

12 where one party puts ân whatever theyRre putting in and you put

13 up the 1.32

14 A . Et would seem ko be logical, but I truly don 't know.

15 Q. Did you wire or transfer any laonies into Doug Frye's

16 account?

17 A . It's very posskble .

18 Q . Did you write a check for $1.3 million? You don't

, 19 know, do you?

20 A . I donït know.

21 Q. But you knew that was your part of the deal, but as

22 you sit in the courtroom today, you don't know whether you know

23 you, as part of your deal, paid the money, correct?

24 A . Do 1 know the money got there? Yes .

54

CECILIA VOATSS NV CCR #246 (775) 827-0672




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1 Q. HoW cLid it get there?


3 Q. When did it get there?

4 A . f don't know.

S Q. Did it get there in dribs and drabs over the next year

6 or so?

7 A . 1 don 't know, but I doubt that strongly.

8 Q. Did J.t get. -- well, dribs and drabs. Did it get there

9 in more than one check or wlre transfer over the next year or

10 so?

11 A . 1 don't know. That would seem very unlikely to me.

12 Q. In that first year -- or, strlke that .

13 Shorlnly after the deal was made, you got married

14 sometime in late October, and then you went on a six-month

15 cruise?

16 A . Four months.

17 Q . Four months?

18 A . Yes .

19 Q. Were you gone to June 19992

20 A . 1 think I got back from the cruise in either the end

21 of April or the beginning of May. It could have been June.

22 I'm not sure.

23 Q. And who did you leave in charge of the money part of

24 the business between September 28th and the time you got back

55

CECILIA VGSZS NV CCR #246 (775) 827-0672




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1 in May or June?

2 MR. PEEK: Is Lhere some relevance of this line of

3 examination that relates to Lhe issues Lhat llave been framed in

4 a preliminary injunction?

5 MR . FLYNN : Yes, Your Honor.

6 THE COURT : What is the relevance?

7 MR. FLYNN : He has the burden of proving that he will

8 prevail on the merlts. if there's a failure of consideration

9 under the contraet, if thereîs a breach of the contract, then

10 he canlt possg-bly prevail on the merits. '

11 THE COURT: Well, 1et me ask this question just

12 directly: Are you sayâng that Mr. Trepp didn't -- or eTreppid

13 didn 't pay the money?

14 MR. FLYNN : There are no books and records that my

15 client has ever been privy to. It's highly unlikelyr from what

16 I understand, the way the company was run: that the 1.3 ever

17 got in speciftcally on or about September 28th as his part of

18 the deal. Bu L the CD was put in for the data compression

19 technology as Mr. Montgomery 's part of the deal, and that goes

20 to the heart of the intent and understanding of the parties.

21 THE COURT: Well, I mean, it 's a little hard for me to

22 imagine that he gave him the CD and then waited how many years

23 now and said, ''By the way, you never paid me my 1.3 million.''

24 As the record stands right nowz there's testimony. in

56

CECILIA VOHL, NF CCR #246 (775) 827-0672




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.,-..

/

x

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1 whatever form and under whatever circumstances, the money was

2 paid. If you have evâdence that it wasn't paid, then that can

3 be presented. And so, the objection to relevance is overruled.

4 But go ahead . I'm sorry 1 took so long to rule on

5 that. Go ahead .

6 BY MR . FLYNN :

7 Q. Mr. Trepp, but just to clarify this and then welll

8 move on, you don't know when the money or how much actually got

9 put in after September 28th, do you?

10 A . Now but I could make one phone call and tell you .

11 Q. Okay. Well, all right. Picking up on that point, you

12 could have totd Mr. Montgomery over the years and shown him

13 specifically how much you specifically put in and when, could

14 you not have?

15 A . I coald have done a 1ot of thingsw but what is the

16 point of showing hlm? Rf the money is there, it's there.

17 Q. Well, when you went on your cruise, did you know

18 whether the 1.3 was there or not?

19 A . At this moment, 1 donbt. But I promise you, in a

20 phone call, I could tell you.

21 Q. The CD -- let 's look at the contribution agreement.

22 Paragraph 1.2.1, Your Honor: which --

23 THE COURT: We're talking about Exhibit 3,

24 paragraph 1.2.12

57

CZCILIA VOHL, NV CCR #246 (775) 827-0672




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2 THE COURT: By the way, while we bre talking about that

3 exhibit, where is -- i:5 there -- there's reference to

4 Schedule 1.2.2, and then when 1 go back to that, it indicates

5 that it 's to be completed.

6 MR . FLYNN : Correct, Your Honor.

7 THE COURT : Is there a completed Sehedule 1 point --

8 I 'm sorry, 1.2.2?

9 MR. FLYNN : It's never been given to us, Your Honor.

10 THE COURT: Counsel for the Plaintiff, do you know?

11 MR. PEEK : Your Honor, it was to be provided by

12 Mr. Montgomery. If. you actually look at al1 of the

13 contributor's books and records related to the contributed

14 assets, it was a1l of contributed books and records related to

15 the contributed assets.

16 1.2.2 is certain contributors' tangible personal

17 property. Contributory, Your Honor, identified in this is

18 Montgomery .

19 THE COURT: 1 understand.

20 MR . PEEK J So he was to provide the 1.2.2. So, for

21 Mr. Flynn to aay, oh, my goshr they never provided it, it was

22 his obligation to provide the 1.2.2, and I guess now that we've

23 learned -- it looks like we got gamed a little bit by the way

24 this has gone on now eight years later.

58

CECILIA VElf.fz' r AJV CCR #24 6 (7 75) 82 7 - 0 672




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1 MR . I'LYNN : The lawyer drew up the document.

2 THE COURT : My question was simply, is there a

3 completed document? 1?m understanding, from uhat 's been said,

4 that there is not, so let's go ahead.

5 BY MR . FLYNN :

6 Q . Mr. Trepp'?

7 A . Yes?

8 Q. Would you look at paragraph 1.2.1.

9 A . Is this about the CD?

10 Q . Yes, CD 1.

11 A . I looked at it before.

12 Q. Youdre familjar with it?

13 A. Yes .

14 Q. You lre comfoltable with your familiarity with this

15 paragraph?

16 A . Yes.

17 Q. Now, that CD, clid you have any conversation with

18 Mr. Frye about how the intellectual property for data

19 compression would be described in Exhibit 32

20 A . No.

21 Q. Did you have any discussion with Mr. Montgomery as Lo

22 how it would be described?

23 A . No .

24 Q . Did you rely on Mr. Fryer as your attorney: to create

59

CECILIA VJS.Ds NV CCR #246 (775) 827-0672




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1 a document whcrein the contribution by Mr. Montgomery would be

2 properly deseribed?

3 A . Yes.

4 Q . And where is CD Number 1, Mr. Trepp?


6 Q. Have you asked Mr. Frye for CD Number 12

7 A . I think I asked him if he had it.

8 Q . When Lhe 1.3 million was puL 1n, did you kno- where

9 CD Number 1 was?

10 A . No .

11 Q . Do you see anyLhing in paragraph 1.2.1 about pattern

12 recognition?

13 A . Which one are we looking at now?

14 Q. The ane you just said you were familiar with.

15 MR. LOGAR: Rxhibit number?

16 THE COURT : 3 .

17 THE WITNESS: l think I said I was familiar with the

18 CD. I'm not familiar with the paragraph you were alluding to .

19 BY MR . FLYNN :

20 Q. I'm sorryz I thought you said you were famillar with

21 the paragraph.

22 A . No, 1 said I was familiar with the CD 1 -- which

23 exhibit?

24 MR. FLYNN: The record speaks for itself.

60





,

p ? .s.

1 THE WITNESS: Exhibit what?

2 MR. FLYNN : Exhibit 3, paragraph 1.2.1.

3 THE COURT : Pcage 1.

4 BY MR . FLYNN :

5 Q. It's actually the last two or three lines of page 1.

6 A . Okay . I'm sorry. Page what?

7 Q. Page 1: Exhibit 3.

8 A . Yep .

9 Q. Last few pages. LetAs, first of all, establish your

10 signature on this document: which is at the end, on page

11 number --

12 %HE COURT: 12?

13 MR . TLYNN : I believe ît's 12. I've got to eheck.

14 Page number 12 .

15 BY MR . FLYNN :

16 Q. Is that your signature?

17 A . Yes .

18 Q. And when you executed this document: did you ask to

19 see CD Number 12

20 A . T don lt recall.

21 Q. Now, going through Lhe paragraph 1.2.1, the bottom of

22 the page, paqe 1 --

23 A . Yes .

24 Q . -- srou see that line that says -- let's read it into

61

CECILIA IXSF/ z A?V' CCR #24 6 ( 7 75 ) 82 7-0672




. .... ) f- .....)

.

.

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1 the record . Follow me as I read it. Okay, sir?

2 A . Uh-huh .

3 Q. This is what Mr. Montgomery is contributing: f'A1l of

4 Contributorls know-how ; trade secrets; patent rights,

5 copyrights, Lrademarks, licenses and permits, registered or

6 unregistered, pendâng or approved; software programs and al1

7 programming and sotlrce codes used in connection therewith or

8 otherwise required to operaLe any component thereof; and a1l

9 programming documentation, designs, materials and other

10 information, a1l in whatever form and wherever located:

11 relating to or used in connection with, or otherwise describing

12 or consisting of any part of, the software compression

13 technology contained on that certain Software Compression

14 Engine Development Program contained on CD No. 1, a11 of which

15 is being contributed by contributor hereunder (collectively,

16 the ''Technology'f).

17 Did ( read that correct, sir?

18 A . Yes.

19 Q. Was that your understanding when you executed the

20 agreement as 1-0 what Mr. Montgomery was contributing?

21 A . Well, yes.

22 Q . Now, your understanding for the prior nine months,

23 howeverr was Lhat he was also contributing something youbre

24 calling today Hpattern recognition technology''; is that

62

CECILIA î/rtlfff/z NV CCR #24 6 (775) 827-0672




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1 correct?

2 A . Yes.

3 Q. And you donft see the term ''paetern recognltlon

4 technology'' there: do you?

5 A . No, J do not.

6 Q. And it Was your lawyer who drew this up?

7 A . Yes .

8 Q . Now, let's go over to the next pager paragraph 1.3, .

.

.

ê'

9 ''Excluded Assflts and Liabilities.'' Read wlth mez if you will.

10 ''Notwithstanding any of the foregoingy Contributor is

11 specifically not contributingz transferring or conveying to

12 INTREPID under this Agreement or by any other meansr nor is

13 eTreppid acquiring from Contributor, any other tangible or

14 intangible assets of Contributor not specified herein ...''

15 Did ( read that correctly?

16 A . Yes .

17 Q . Was Lhat your understanding when you executed this

18 document prepared by your lawyer?

19 A . Yes.

20 G. Nowy did you consider CD Number l an asset of

21 eTreppid, then Intreptd?

22 A . Yes .

23 Q . And going back to Mr. Frye again, Mr. Frye was signing

24 the checks fcr everybody?

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CECILIA VOSL, NV CCR #246 (775) 827-0672




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2 Q . Do you know if Mr. Frye -- strike that. Did you ever

3 have a conversation with Mr. Frye about whether or not he ever

4 got CD Number 1?

5 A . Not that 1 can recalè.

6 Q . Nowz let's move forward. 1 believe your testimony was

7 on direct, and having bn mind Mr. Venable's testimony, that you

8 repeatedly: over the years, asked for CDs to bring you up to

9 date so you would possess the current technology being worked

10 on at eTreppid . Is that correct?

11 A . Copies of the source code that were generated by

12 eTreppid Technologâes at eTreppid Technologies' yes.

13 Q . How many times over the years did you ask for those?

14 A . Wellr at a minimum of once a year and at any tîm e we

15 had made any kind of new breakthrough on something thah we 'd

16 been working on through the research and development and over

17 the years we were j.n business .

18 Q . You filed a declaration in this case, did you not?

19 A . Yeah .

20 Q. Did you say that you repeatedly asked Mr. Montgomery

21 for the CDs so you'd have a copy of what the company was

22 working on?

23 A . Yes, to protect his family and mine in case there Was

24 a disaster.

64

CECILIA MOSZS NV CCR #246 (775) 827-0672




.

) 6 ?

1 Q. And Lhen -- feeling the importance of this technology,

2 you then went and put them in how many different safes?

3 A . One .

4 Q. In a safe-deposit box?

5 A . Yes.

6 Q. And how many CDS, or whatever, did you put in this

7 safe-deposit box?

8 A . 1 don't know the exact number. It was probably around

9 a dozen .

10 Q. Because you hacl in mind the importance of you having

11 possession of the source code for this technology that you felt

12 you bought when you put in the l.3 million, correct?

13 A . That's totally incorrect . I wanted the source code

14 backup over the seven years we were in business to preserve it

15 for hia family, my family, and for the company's best

16 interests .

17 Q. But as you s1t here today, the number one source code

18 containing tbe guts of the deal --

19 A . Yeak-

20 Q. -- you don't know where it is?

21 A . No .

22 Q. And you /ve never asked anyone for it?

23 A . 1 don 't think there would be any reason to ask for it,

24 because when we started the business, I assGmed Dennis would

65

CECILI'A k-cyff,, NV ccR #24 6 (775) 827-0672




, .

f r

.

1 have just put it onLo our workstations or servers: or whatever

7 it was. and that was the start of the business that we bad .

3 0. Oh, so -- buL then as the years went on, you wanted

4 a1l these other CDs, but the Number 1 CD, you just assumed --

5 you trusted Dennis that he put it înto the company?

6 A . Well, why wouldn't 12

7 Q . Well/ Mr. Trepp, webre going to determine that.

8 But xet me ask you thisz sir: Did you have any reason

9 to doubt, as the company went forward, that a11 of the

10 compression technology that you bought, as M r. Montgomeryls

11 50/50 partner., got put into eTreppid, or then Intrepid, was

12 then being -- actually then being used?

13 A . Can gou please say tThat again.

14 Q. Have in your mind what you bought from Mr. Montgomery

15 that was on CD NuH ner 1, compression technology. Is there any

16 doubt in your mindz as you sit here todayr that you got that

17 and it was then betng used in the company over the ensuing

18 years?

19 MR . PEEK: Your Honor, he didn't get it. Intrepid got

20 it, or eTreppid got it. He keeps referring to Mr. Trepp as

21 though he's buying it or Mr. Trepp is recekving it . It went

22 into the company.

23 THE COURT: I understand that.

24 MR. FLYNN : There are two principals.

66

C-ECILIA VOHL, M ? CCR #246 (775) 827-0672




.i .

) ...)

-


2 BY MR . FLYNN :

3 Q. Did llou have any doubt that the company got -- when

4 you put the 1.3 in some form over some time in, and so the

5 company was using that technology that was on CD Number 12

6 A. Do i believe?

7 Can ( ask a question, Judge, because 1'm not sure I

8 understand .

9 THE COURT : Well, if you don dt understand the

10 question, Jus'n simply say ''I don't understand the questiony''

11 and hedll rephrase it.

12 THE WITNESS: Can you p lease reword it .

13 BY MR. FLYNN :

14 Q. Yeah. Sometimes as the day goes on, given my advanced

15 agee my questtons get worse, but Ib11 try to make it simple.

16 Is there any doubt in your mindz as you 3it here

17 today, that yau got and the company usedp for your l.3 miAlion,

18 the compression technology that was on CD Number 12

19 A . Yes. I believe we got -- if there was a CD 1, I

20 believe we got what we bargained for.

21 Q . Now, you do not have a security clearance equal to

22 Mr. Montgomery bs: do you?

23 A . At this time?

24 Q. Corlect.

67

CECILIA Mofé, NV CCR #246 (775) 827-0672




% .4 .'

.

J .r7

1 A . No .

2 Q . Do ytlu know wtka t h1s security clearance is?

3 A . Y e s r T S S C 1* .

4 Q . M d what securî ty clearance do you have?

5 A . TS , dRnd my SCf is pending .

6 Q . Have you ever had any conversations wi th

7 Mr. Montgomerg in the presence of any government official --

8 just yes or no --

9 A . Yes.

10 Q . -- about the governmentls attitude toward you as a

11 principal at eTreppid?

12 A . Not that I can recall.

13 Q. Have you ever had any attitude -- strike that.

14 Have you ever had any discussîon with Mr. Montgomery

15 in the presence of a government official -- just yes or no --

16 about your background aL Drexel vis-a-vis government contracts

17 at eTreppid?

18 A . Yes .

19 Q. Now, is Mr. Milliken -- strike that.

20 Did you tell Mr. Montgomery that Mr. Milliken was

21 putting $12 rlillion into eTreppid for 5 percent of the company?

22 A . No .

23 Q. Mr. Milliken âs a friend of yours?

24 A . I wouldn't ca1.l him a friend.

68

CECILIA vrrrf,z NV C(?R #24 6 (775) 827-0672




. -

J >-'

1 Q. Well, you were b0th at Drexel together?

2 A . We worked toqether, thatts correct

.

3 Q. AL Drexel'?

4 A . Yes.

5 Q . Did you tell Mr. Montgomery that Mr

. Milliken gave you

6 $30 million to go on an extended -- a cruise to avoid being a

7 witness?

8 A . What?

9 Q. During the Drexel period.

10 MR. PEEK : Your Honor, this is way out of line and

11 way --

12 THE COURT: Well, I don rt understand the relevance of

13 this at all: '

'

.

really don 't .

14 MR. PEEK: -- time

, collateral -- collateral to this

15 case, Your Honor, as well, and nothing to do with this case at

16 all.

17 MR. FLYNN : The relevance is -- as I understand it

s

18 it's highly unlikely that the government will ever make a deal

19 exclusively with Mr. Trepp with regard to technology theylre

20 seeking an injunction on.

21 MR. PEEK : Your Honorr they will do and say anything

22 without evidence, and it -- frankly, it's getting to the point

23 now of how many times can you just say it and hope that maybe

24 some of it wizl stick, wîthout it really coming from the

69

CECILIA VOHL. NV CCR #246 (775) 827-0672




.. ..,

.

) c.

1 witness stand?

2 MR. FLYNN : Mr. Montgomery will so testify

.

3 MR. FEEK: This gentleman has done business with the

4 government. The contracks are with him. He's the majority

5 owner or has the most stock in it, and he has relationships

6 with General Bath, Conqressman Gibbonsy w ith John Hennessey and

7 others. So this is --

8 THE COURT : Will you trust me that I know the

9 difference between stattements of counsel and evidence?

10 MR. PEEK : 1 will, Your Honor. I apologize . I don't

11 mean to speechify: but it's getting a bit much, late in the

12 day.

13 THE COURT: ltfs late in the day . And 1 think the

14 more we can avoid this kind of stuff, the better wedre going to

15 be in moving the case along.

16 And 1 understand that therets a statement been mnde,

17 and 1111 consider it for what evidentiary value, if any, it

18 m ight have .

19 MR. PEEK: Againr I1m going to object to the same

20 thing.

21 THE COURT: I understand. I understand.

22 MR. PEEK: Is it overruled or sustained?

23 THE COURT: The objection is overruled. I think if

24 you use the standard for relevancez there might be some

70

CECILIA 7052,, NV CCR #246 (775) 827-0672




u -,

; .>..p' ;

1 relevance, but let's not spend too much more time on this

.

2 MR . FLYNN : I won 't, Your Honor

.

3 BY MR . FLYNN :

4 Q. Mr. Trepp, how many years has it been since the

5 governmentz Oa certain types of highly ckasskfied technology

,

6 has been dealing wtth you and Mr. Montgomery? How many years

,

7 sir? '

8 A . lt's been months .

9 Q. No# starting from the beginning, with the first

10 government contract. How far back does that go, from tbe

11 present, from January -- from now, February 20062

12 A . Okay. Can you ask the question again: please

.

13 THE COURT: You want to have ât read back?

14 MR. FLYNN : No, that's okay

. 1 think it would be

15 faster.

16 BY MR . FLYNN :

17 Q. Over how many years have you personally been dealing

18 with the United States Government, any department thereof, w ith

19 regard to highly classified software technology?

20 A . I believe it was December of 103.

21 Q. Okay , Let's take the December of :03. And it is now

22 February of 106: correct?

23 A. Uh-huh .

24 Q. During that time framer you never got the highest

71

CECILIA MOSZP NV CCA #246 (775) 827-0672




.

h >IF *

1 security clearance, but Mr

.

Montgomery did, correct?

2 A . Yes. There was a reason for t'hat

,

but yes.

3 Q. That entitled him, within eTreppid, to deal with the

4 government on these hbghly ckassùfked materiaks with thks

5 highly classified technology: but not you?

6 A . That's nonsense.

7 Q. What weren't 'gou entitled to deal with?

8 A . Anything Lhat was Scl-rated, until I got my SCI

9 clearance . '

10 Q. Wellz as we sit here today, dc) you have a clearance

11 equal to Mr. Montgomery's?

12 A . No .

13 Q. Okay. What can he deal with that you can't deal with?

14 A . Something that he's read into that 1 wouldn't be

.

15 Q. Okay. Now, do you know what heîs been read into that

16 you haven 't been read into?

17 A . Nothing.

18 Q. Nothlng?

19 A . Nothing.

20 Q. And how do you know that? Is this based on the

21 lunches with Mr. Montgomery every year for the last seven

22 years?

23 A . No: '

E -- Ilve dealt with the government on -- on a

24 contractual basis or on a day-to-day basis as to asking us

w

72





w -.e ' * ''

1 meaning the company, what they would lkke to do for ther.

2 Q . A11 right. Let's take the time frame, September .04.

3 A . Yes .

4 Q . Just yes or no : Did a certain agency of the

5 government want to purchase certain technology that

6 Mr. Montgomery had been dealing with, with the government on?

7 A . Can 1 ask you a question: Your Honor: because it makes

8 a difference.

9 Are you saying the government was dealing with

10 Mr. Montgomery on a deal that had nothing to do with eTreppid?

11 Q. I1m saying thall Mr. Montgomery was working with the

12 government on the contents of the technology.

13 A . Yes .

14 Q. And did you speak with the government about how much

15 you wanted for the contenté'bf that technology?

16 A . Yes.

17 Q. You did tell the government how much you wanted for

18 the technologyz correct?

19 A . I told the government what we would be happy to sell

20 the technology for.

21 Q. How much?

22 A . A hundred million dollars.

23 Q . In connection with that conversation, did you tell

24 them the government would have to post a bond for $1 billlon?

. .

l

73

CSCILIA v()Sl, Nv ccR #246 (775) 827-0672




1 A . There was a specific discussion relative to three

2 different pieces of this conversation. One was, we would

3 license the Lechnology to them for 10 laillion

.

We would sell

4 the technology to them for 100 million. And we wanted to have

5 a bond posted relative to having our technology secured in the

6 sense that it wouldn lt get out of the government 's hands

.

7 Q. How much was the bond?

8 A . Az they never offered us a penny; B, we got a

9 month-to-month license agreelaent to do the job; and C, they

10 laughed and said they wouldn't give us a nondisclosure

11 agreement for any price.

12 Q. How much pf a bond did you ask for?

13 A . How much of a bond? lt was elther 100 million or

14 500 million. I don 't remember .

15 Q . Was it one billion?

16 A . I highly doe lt it. I don't remembery though, exactly.

17 Q. You ïonït remenler. A11 right.

18 Now, in the context of this conversationr which yDu

19 say is 100 miklion to purchase --

20 A . Well, we offered to sell it.

21 Q. Let me finish, please, sir.

22 A . Yep .

23 Q. Would you say ât was 100 million to purchase --

24 forgetting for the moment the license thing, or whatever, in

74

CECILIA UOSLZ NV CCR #246 (775) 827-0672




1 some bond somewhere -- behween 100 million or 500 million or

2 possibly a billion, at. some point, did you tell Mr. Montgomery

3 not to process any more of the things the government wanted him

4 to process?

5 A . Absolutely not .

6 Q. At same pointu did the government stop paying for what

7 Mr. Montgomerg was processing?

8 A . T don't understand what that question means. The

9 government was only payîng eTreppid. They were never paying

10 Mr. Montgomerg anything. Bul: I donrt understand . Did the

11 government terminate our contract, is that the question?

12 Q. Well, I1m asking yolb did you terminate the contract

13 because you wanted $500 milllon and you said to Mr. Montgomery,

14 ''Don't do any work for themer? Did you do that?

15 A. Did 1 ask for $500 million and terminate the contract?

16 Q. Yes.

17 A . Absolutely not .

18 Q . You are aware the government was -- that

19 Mr . Montgomerg was processing things for the government during

20 this time period?

21 A . I'm aware that eTreppid was processing things for the

22 government.

23 Q. Who <as doing the work?

24 A . Dennis -- Dennis wa3 doing the bulk of the processing.

'

75

CSCILIA 75S;,z NV CCR #246 (775) 827-0672




1 Q. How many hours a day was he working?

2 A . It depended upon what was the time frame and what they

3 were asking h tm to do . In the -- the beginning, a lot; in the

4 end, veryy very little .

.

5 Q. Did Ae generally work seven days a week at 18 hours a

6 day?

7 A . No .

8 Q. Now -- but you know that -- how often were you there?

9 A . In the beginning, we were b0th there an enormous

10 amount of time .

11 Q . In the first six months or four months until June

12 of 199 you were gone?

13 A . You pre talking about a contract that was dealing in

14 2002, not in 1999.

'

5 I understand that. And you were there a11 during that Q.

16 time frame in 2002?

17 A . What does that question mean?

18 Q . Were you there seven days a week at eTreppid with

19 Mr . Montgomeryz processing this classified informationz seven

20 days a week, 18 hours a day?

21 A . No .

22 Q. How much did the government pay during the year 2003

23 for the work Mr. Montgomery was doing?

24 A . The government paid eTreppid a contract of -- I think

76





. .

I

1 it was a mill Lon eight .

2 Q. Was 'lhe ftrst check two and a half million from the

3 government?

4 A . There was no chance that the first check was two and a

5 half mîllion, no chance .

6 THE COURT: Excuse me . I need to make a phone call at

7 5 o'clock . I'z's now about one minute after that. How much

8 longer are we going to take to get done?

9 MR . PEEK: Your Honor, this is our last witness: so I

10 can't speak for Mr. Flynn.

11 MR . FLYNN : > àd l'm going to put Mr. Montgomery on .

12 M y direct is probably 30 to 40 minutes .

13 THE COURT : A1i right .

14 MR . PEEK : 1 w ill try to restrain myself on

15 cross-examinaLion.

16 MR. LOGAR : Which will be difficult.

17 MR. PEEK: Which is going to be difficult.

18 THE COURT: â was going to comment on that . 1'11 1et

19 Mr. Logar make that comment.

20 A11 right. Letls be in recess until 20 minutes after,

21 and then we 'll finish up for the night .

22 (A brief recess was taken at the hour of 5:03 p.m.)

23 THE COURT: A11 right. Please be seated. Al1 right.

24 Please continue.

77

CECILIA ltl.H7a, NV CCR #24 6 ( 775) 827-0672




1 MR . FLYNN : Thank you, Your Honor .

2 BY MR . FLYNN :

3 Q. Agaia, Mr. Trepp, letls go back to September '04. Was

4 a certain government contract ending in September '04?

5 A . Yes.

6 Q. And 5id the government want to extend it?

7 A . They asked ij wè could do a small amount of additional

8 work relating to that contract.

9 Q. And :id they want to extend it for a minimum period of

10 three months?

11 A . I don't recall if that was exactly what it was, but

12 they did want to extend it for a limited period of time.

13 Q. Were you in the presence of Mr. Montgomery -- strike

14 that.

15 Did you and Mr. Montgomery have a discussion about

16 extending it? '

17 A. Probably.

18 Q. Do you recall anything about that discussion? Just

19 yes or no .

20 A. Not in detail.

21 Q . Did either one of you say no to the government, you

22 wouldn lt extend it?

23 A . At some point, we -- we both agreed we weren't going

24 to continue it.

78

CWCILIA &r()J.f2,z NV CCR #24 6 ( 775) 827-0672




1 Q. You and the government or you and Mr. Montgomery?

2 A . Me and the government.

3 Q. Agreed you Wouldn't continue it; is that your

4 testimony?

5 A. They wanted to terminate the contract and said there

6 were -- were some other things that they would like us to do up

7 u'ntil some specific date, and I donlt remember what that

8 specific date was.

9 Q. Did Mr. Montgomery want to extend the contract?

10 A . I donlt think that option was available to us to

11 extend it.

12 Q. Just yes or no: Was this a national security current

13 issue in September 104'?

14 MR. PEEK: Objection. What is ''thisn?

15 BY MR . FLYNN :

16 Q. The nature of what the government wanted you to do.

17 A . It had to deal with potential national seeurity

18 interests.

19 Q. Can you imagine a higher priority than what these

20 interests involved?

21 A . Yes.

22 Q. Is this when you told the government 100 million?

23 A . Absolutely not.

24 Q. When did you tell the government 100 million?

79





1 A. We had been negotiating for a protracted period of

2 time prior to September of 604

3 Q. Okay. When did you first tell the government

4 l00 million?

5 A. Either the end of 903 or the beginning of 104. And

6 when you say ''i00 milllonz'' that was the price we had offered

7 to sell a11 of our technology to them for.

8 Q. Under the oath that you signedy you cannot disclose

9 the contents of those negotiations, correct?

10 A . I'm not sure that that is correct.

11 Q. Do yau know whether, under the oath in the clearance

12 that Mr . Mont7omery had: he could discuss those negotiations?

13 A . He didn't sign for the company; I did.

14 Q. That wasnlt the question, Mr. Trepp . Could he discuss

15 them with the government?

16 A. He could discuss anything with the government.

17 Q. Nowf at this point in time, September 104, the two of

18 you started as 50/50 partners, founders in eTreppid

19 Technologies dealing with data compression on CD Nl3mher 17 is

20 that correct?

21 A. We started as 50/50 owners.

22 Q. In September 104, what is your testimony as to what

23 Mr. Montgomery then owns?

24 A . llm not exactly sure in September of '04 but I

80

CECILIA MOSZ, NV CCR #246 (775) 827-0672




...w- - )

1 believe he owns approximately 30 percent right now. I believe

2 it was the salae thenz but I'ut not positive of that fact.

3 Q. He got somehow -- he somehow went from 50 to

4 3o-something percent?

5 A . Yes .

6 Q. Now, I1m not going to spend a 1ot of time on this

7 because I think, at some point, it 's going to become the core

8 of the case. But 1et me just ask you this: In the first stock

9 transaction, how djd Mr . Montgomery go from 50 percent to

10 40 percent?

11 A . I don rt know in the first transaction that he went

12 from 50 to 40 . I believe I have a Cairly good understanding of

13 how he was diluted over time.

14 Q. Was some of his stockr when it went from 50 to 4Oz

15 sold for l.5 million to one of your friends?

16 A . No .

17 Q. To someone that you know?

18 A . No .

19 Q. Whods Wayne Primm?

20 A . Wayne Primm is a good friend of mine.

21 Q. Was Mr. Montgomery's stock sold for $1.5 million to

22 Wayne Primm?

23 A . In one transactionz yesr that 's true.

24 Q. And Zhen Mr. Montgomery wrote a check back to you?

81

CECILIA Uofffrs NV CCR #246 (775) 827-0672




1 A . Back to whom?

2 Q. Well, Friendly Capital.

3 A. To repay a èoan that he borrowed.

4 Q . Let me finish the question.

5 A . Okay .

6 Q. Friendly Caapital is you?

7 A . I am the president of the general corporate partner of

8 Friendly Capital LP.

9 Q . And when Mr. Primm, your friend, paid the 1.5 millionz

10 Mr. Montgomery paid back Friendly Capital $975,000.297 is that

11 correct?

12 A . I don 't know that that's the exact number, but I

13 believe thatfs very possible.

14 Q. And ït's your testimony that was for loans?

15 A . The repaFnent back to Friendly Capital?

16 Q . Yes.

17 A . Yesz that was to repay a loan and probably interest .

18 Q . So you didn't want to see Mr. Montgomery diluted,

19 according to your direct testimony?

20 A . That is correct.

21 Q . But you arranged the sale with one of your buddies for

22 him to sell 10 percent of the eTreppid stock?

23 A . He did not sell 10 percent of the eTreppid stock.

24 Q. Did he go from 50 to 40?

82





J 1

l A . Yes, but you -- if you would like to ask me how he got

2 from where he was to where he is: 1'd be happy to go through

3 that, if 1 can. He did not go from 50 to 40 having to do

4 with -- anythkng to do with his sale to Wayne Primm.

5 Q. How many different alleged dilutions took place?

6 A . Thera weren rt any alleged dilutions. There were sales

7 or gifts or capitaL raises.

8 Q. 1'm not going to spend much more time on this, but

9 when you -- your company was originally 50/50, just the two of

10 you?

11 A . Yes.

12 Q. Over time, he gets down to 30, and a 1ot of your

13 friends, a11 of a suddero have stock interests. Is that

14 basically correct, according to Exhibit A to the amended

15 operating agreement that you put into evidence?

16 A . Yesr that is correct.

17 Q . And your partner, you didn't want to get diluted; is

18 that correct?

19 A . That is correctr at a point.

20 Q. Al1 right. Nowr did this -- just yes or no -- become

21 the subject of huge contention between you and Mr. Montgomeryz

22 of Mr. Montgomery saying that you werenît paying -- the company

23 wasnêt paying him what he deserved to be paid?


83





1 Q. Okay' And did money become the subject of contention

2 between the two of you throughout 2004 and 2005?

3 A . Yes, it was a big issue for Dennis because he was

4 desperate for money .

5 Q. So it was an jssue of contention between the two of

6 you?

7 A . lt was no contention for me. He just kept asking me

8 for money.

9 Q. Okay. Noku itï the context of him asking you for

10 money s was there a discussion during these government contracts

11 about his ownership of the technology relating to the

12 government contracts aud your acknowledgement that he owned it?

13 A . Irm not sure I understand what you bre saying.

14 eTreppid owned a11 of the technology. Dennis owned none of the

15 technology.

16 Q. Was Lhere a discussion between you and Mr. Montgomery,

17 when this issue became very heated about him being owed moneyw

18 about who owned the technology that was underlying these

19 governmenk contracts?

20 MR. PEEK: Objection. Compound. There's two

21 questionsz abaut him bei.ng owed money or --

22 THE COURT: Agreed, agreed. Break the question down.

23 BY MR . FLYNN :

24 Q . In the context of any discussion between you and

84

CECILIA yösfw NF CCR #246 (775) 827-0672




. .. . ... .

)

1 Mr. Montgomerll, were you fighting over money?

2 A . No .

3 Q. Was there a discussion about who owned the technology

4 that was fueling the government contracts?

5 A . AbsoLutely not.

6 Q. Never?

7 A . Never.

8 Q . Now, did Mr. Montgomery -- between 2004 and throughout

9 2005, was he making demands on you, eTxeppid or whatever, for

10 money in connection with moni.es paid by the government?

11 A. Absolutely not. He asked me for money because he

12 needed to borrow more money than he had borrowed in the past.

13 Q . I understand your testimony. Coming down to the end

14 of 2005, were you negotiating with the government on any

15 potential contracts that are classified?

16 A . No.

17 Q. Were you having discussions between September ï05 and

18 December 'O5 -- the end of December ï05, about government

19 contracts: sales ta the government of technology Mr. Montgomery

20 claimed that he owned?

21 MR. JAKOPIN: Objection. Foundation.

22 THE COURT: 1 think -- no, thatls a question. Were

23 you having discussions. I'm going to allow that.

24 THE WITNESS: eTreppid was having discussions with the

85





l

1 government about four potential contracts that the government

2 was interested in pursuing.

3 BY MR . FLYNN :

4 Q. Okay. And I donbt mean to be contradictory: but

5 didn't you just say a mlnute ago that eTreppid was not having

6 discussions with -- w j.th the government about government

7 contracts in the fall or. 20052 Didn't you just say that in the

8 question before that?

9 THE COURT : 1 think thatls argumentative .

10 MR . FLYNN : lt is, Your Honor . It is adm ittedly

11 argumentative .

12 BY MR . FLYNN :

13 Q. Mr. Trepp, in the fall of 2005, you now acknowledge

14 there w ere discussions between eTreppid and the government

15 about four contracts that were basically related to technology

16 Mr. Montgomery was involved in; is that correct? '

17 A . That eTreppid was involved inz yes .

18 Q. Okay. Mr. Montgomery was the chief technical officer:

19 he was the then-30 percent partner, and he was the one

20 exclusively in charge of the highest security clearance at that

21 time?

22 MR . PEEK: Is there a question there, Your Honors or

23 lust a whole series of predicates?

24 THE COURT: I would like a question, if you couldz

86





1 please.

2 BY MR . FLYNN :

3 Q. Okay. Mr. Trepp, did -- in the fall of 2005, did you

4 have the source codes that would have enabled you or

5 Mr. M ontgomerg to make a deal with the government?

6 A . Yes .

7 Q. You had them personally?

8 A . No.

9 Q. Who had them?

10 A . The company.

11 Q. Where were they?

12 A . 1 don't know exactly . I could tell you where I

13 believe they Jere.

14 Q. Were they on any of the CDs or DVDS or whatever you

15 had in your safes?

16 A . Of course not .

17 Q . Did you have discussion with Mr. Montgomery about that

18 technology that was needed for those government contracts and

19 how much he wanted -- Mr. Montgomery wanted?

20 A . Mr . Montgomery wanted for what?

21 Q . How much money he wanted, if you or whoever was going

22 to get 100 millionr 50 million, a licensing deal, whatever, how

23 those revenues would be split, did you have those conversations

24 with Mr. Montgomery? '

87






2 Q. Now, before we get to whatever it was that broke you

3 two folks apart -- I take it from your testimony, it wasn 't

4 money?

5 A . It was -- it was greed .

6 Q. Or it was money? Greed: money? It was money?

7 Did those -- clid that greed arise during the fall of

8 20052

9 A . I think what Ilve learned in the last three weeks,

10 Dennis has had greed since the day I met him beyond belief.

11 Q. Itm talking about your discussions with him in the

12 fall of 2005. Did that, what youbre characterizing as greedw

13 take place during the fall of 2005?

14 A. Ilve said it before. We never had a discussion about

15 money relating to the government contracts and what he was

16 going to get. He got a salary . He had a 30 percent interest

17 in the business . And that was our deal. It didn't change.

18 Q. Yet, on December 28tb, you had hâm sign a -- just

19 before you spïit up, an agreement and modification of a

20 promissory note and security agreement for -- how much money?

21 A. It was a million three in principal that he owed me

22 and about a million five in interest on loans that started from

23 1999.

24 Q. And just before you broke up, coming to the end of

88

CEICILIA &'(?f.fz', NV CCR #246 (775) 827-0672




1 2005, you had him sign bhis document; is that correct?

2 A . Yes, because he borrowed -- he borrowed an additional

3 150,000 on December 10th, and I said, ''You gonna sign a new

4 note for the monies you just borrowed?''

5 On December ilthz he had sent me an e-mail asking me

6 for $275,000. He saicl, ''I know I borrowed a 1ot of money from

7 you in the past. ltrs very, very important.''

8 Q . Now, sir, how much money, as of December 28th, 2005,

9 before you Gent on your cruiser had you taken out of eTreppid?

10 A . In what form'?

11 Q. Any form .

12 A. I was paid a salary in 2003, :4 and 65 of $400,000

13 each year. And the reason why I took any salary -- 1et me step

14 back.

15 In the years '99, 2000, 2001, 2002, I took zero salary

16 because the company wasn't making money and I wanted not to

17 have to go back and make more capital calls and dilute

18 ahareholders .

19 ln 2003, '4 and ï5, I was specifically asked by Patty

20 Gray to come up with a number that would be necessary so we

21 eould get our G&A number up on government contracts. You have

22 a cost-plus contract, meaning it's the cost and then you're

23 allowed to cbarge up to a certain percentage for G&A expenses.

24 By me not taking a salary, our company could not get the

.

89





'

-> '> . )

1 benefit o f the value of up to 12 percent, which was a fair

2 market value. Without my salary, it was 8-point-som ething .

3 And it was suggested by the attorneys and by myself

4 that we should a1l get together, give me this money so we could

5 at least get the G&A out of it. The net effect of that G&A

6 payment of a grossed-up value was that, yes, 1 was getting a

7 $400,000 salary, but there was more money going to the company

8 because of that.

9 Q. During this period the company didn rt have any moneyz

10 how much were you chargâng off of the company on the Gulfstream

11 jet?

12 A. On the Gulfstream jet?

13 Q. How much in your favor on the Gulfstream was being

14 expensed against eTreppld and your partner, Mr. Montgomery?

15 A . There was no money charged for the use of the

16 Gulfstream jet other than when I used iL to go on busïness

17 trips either with Mr. Montgomery or other employees.

18 Q. In one year alone, was it approximately one million?

19 A . That sounds extraordinarily hkgh. We might have

20 signed a contractual agreement with a company for hundreds of

21 thousands of dollars for the use of the jet over a period of

22 time. There -- it's inconceivable to me that we paid a million

23 dollars in one year for the use of it.

24 Q. In 1.999: Was it 560,0002

90

CECILIA Vofcff,s NV CCR #24 6 ( 775) 8a? 7-O 672




1 A . 1 have no idea. 1 could certainly look it up and give

2 you an answer to that.

3 Q. ln 2000, was it one million?

4 A . Itts inconceivable.

5 Q. Now, back to the fall of 2005, I understand from your

6 testimony that it was Mr . Montgomery's greed for money,

7 demanding money from you, that was the subjeet of discussion;

8 is that correct?

9 A . That is not what T said.

10 Q. I beLieve you said it wasnlt a discussion in the

11 context of the governaent contracts, but it was a subject of

12 discussion; is that. correct?

13 A . Noz it is not correct.

14 Q. How did Mr. Morltgomery 's greed manifest itself to you

15 in the fall of 2005?

16 A . I believe 1 found out the level of greed in the last

17 three weeks: not in the fall of 2005.

18 Q . Again: for time purposes, welre going to cut this

19 short for now. Let's go to the end of 2005. How much was in

20 the company bank accounts from government contracts?

21 A. How much was in the bank accounts? Around $5 million.

22 Q. Isn't closer to 9 million?

23 A . Absolutely impossible.

24 Q. Where is the 5 million today?

91

CECILIA MOSfZ NV CCR #246 (775) 827-0672




1 A . In the bank account.

2 Q . How nuch did you take out in the last 60 days:

3 M r. Trepp?

4 A . Where?

5 Q. Out af eTreppid.

6 A . Nothing.

7 Q. ln the last 90 days?

8 A . Nothing.

9 Q. The last 120 days?

10 A . 1 mean, other than a salary, like everybody else .

11 Q. How Much have you taken out?

12 A . Did I get --

13 THE COURT: Other than a salary?

14 MR. FLYNN : Other than a salary .

15 THE NITNESS : Zero .

16 BY MR . FLYNN :

17 Q. Did you have a discussion with Mr. Montgomery about

18 this issue?

19 MR. PEEK: Objection. Which issue?

20 BY MR . FLYNN :

21 Q . The issue of how much was in the eTreppid bank

22 accounts from government contracts and where it was going to

23 go, who was going to get it.

24 A . Who was going to get what?

92





1 Q. The money in the bank accounts.

2 A . Nobody was going to get it.

3 Q. Who Iaade that decision?

4 A . Me.

5 Q. Because then you were 50 percent owner with your

6 friends and Mr. Montgomery was only 30 percent?

7 A . I don ït know. Is that a question?

8 Q. Yeah .

9 A. But what was the questîon?

10 Q. Is that why you had the right to make the decision as

11 to what was going to be done with that money?

12 A . There is a management committee we have . The

13 management colnmittee has the right to determine what tc do with

14 the money in the company. I felt it was prudent to leave at

15 least two years' worth of operating expenses in the bank

16 account, not use it for other than that.

17 So, on a going-forward basis -- we only have $700,000

18 worth of contracts for the year 2006 in the company. I didn 't

19 want to be put into a position of making capital calls to

20 create more dilution for the shareholders, and I certainly

21 didn't want to start loaning millions of dollars back into the

22 company.

23 Q. Mr. Trepp, did you discuss with Mr. Montgomery what

24 was going to happen to uhat you say is the 5 million?

93





1 A . Yeah, 1 told him we were going to leave it in the

2 bu siness until we have enough money where we can make a

3 distribution when it's substantial enough where we don't have

4 to worry about operatâng expenses going forward.

5 Q. And when did you have that discussion?

6 A . Novele er: December .

7 Q. What did Mr. Montgomery say to you?

8 A . I don't remeo ler him even coDrlenting.

9 Q. Did Qe say something like, ''Ibve been working l8-hour

10 days for seven days a week for years wâth technology that I

11 own, and 1 want my share of that money''?


13 Q. And so then the fight you got into that 1ed to him

14 being -- was Ne fired?

15 A . I didn 't get into a fight with him . 1 have never

16 gotten into a fight with Mr. Montgomery .

17 Q. Was he fired?

18 A . Yes, he was fired.

19 Q. Who fired him?

20 A . I did.

21 Q. Naw, when did you become concerned that

22 Mr. Montgomery, by some trick or artifice or thievery, was

23 going to steal eTreppid technology?

24 A . He had already stolen it by the time I found out about

94





/

-<' xrz

l 1t .

2 Q. So when was that, Mr. Trepp?

3 A . January 10th or 11th.

4 Q. So yclu haci no fear before then that he was going to

5 steal eTreppîtl technology before January 10th; is that correct?

6 A . That 's correct.

7 Q . And l/ou had no discussion with him prior to

8 January 10th which you would characterize as a conflict in

9 wh ich he said . ''I own Lhe technology, I want my money, give it

10 to me''; is that your testimony?

11 A . Yeah. If thatrs what he said, it's a blatant lie.

12 Q. And yet, all of a sudden, after a1l these yearsw

13 Mr. Montgomerg is stea Ling the technology; is that your

14 testimony?

15 A . Yes .

16 Q. And his motive for doing it is what, sir?

17 A . Um, hels desperate for money. Hew on a number of

18 different transactions that lfve recently found out, defrauded

19 a number of different people on work that he had done in

20 conjunction wcith the company.

21 Q. So he --

22 A . He was covering up.

23 Q. So by doing it, he got himself fired, ended his --

24 whatever money he was getting from you and eTreppid and risked

95





(

1 qetting whatever for allegedly stealing the technology: ts that

2 your testimonyp because he needed money?

3 A . Yes .

4 Q. Now, when did you first find out that he needed money?

5 A. We11,, he's needed money for a11 the years he 's been

6 borrowing it from me.

7 Q. When you had him sign the document: Exhibit 18 --

8 A . Yep .

9 Q. -- on December 28th: did he ask you for money?

10 A. No. lt was 011 December 8th he sent me an e-mail that

11 said he wanted to borrow $275,000. On December lothw I gave

12 him $150,000. I then said to him, ''1 want you to sign an

13 amended note like the plior two notes that you amended.''

14 Q. Now, this 150,000 that you gave him --

15 A . Yeah .

16 Q . -- did you say you wanted stock in return?

17 A . I wanted what?

18 Q. Stock in return.

19 A . The note that I had from the beginning of time always

20 had -- therels a legal word for it, but a secured interest in

21 his shares.

22 Q. Weren't you parceling out money to Mr. Montgomery to

23 keep him hapry because he was demanding his share of the

24 profits from eTreppid from the government contracts?

96

CECILIA VOSZZ NV CCR #246 (775) 827-0672




-- t ' )

l A . Abso.kutely not .

2 Q . Mr. Irepp, dâd you have any control over

3 Mr. Montgomery in his doing his work in his workstation in

4 connection with these contracts?

5 A . I'm not sure 1 understand what that question means .

6 Q . Well, did you direct him in any way, did you supervise

7 him in any waxp as to how to do the work?

8 A . Supervise himy no.

9 Q . Did anyone supervise or control or direct him in terms

10 of how to do Lhe work?

11 A . No. He was the RCTO . It was his responsibility to do

12 the best job, you know. He had a fiduciary responsibility.

13 Everybody worked for him . He hiredz he fired, he delegated

14 people to do work. It was not my job.

15 Q. The source codes that youïre in court for that youïre

16 trying to get --

17 A . Yes.

18 Q. -- is it your testimony that only Mr. Montgomery has

19 those source codes?

20 A . With the exception of what welve been able to

21 re-create out of what's been deleted. Otherwise, I believe

22 Mr. Montgomely has those source codes.

23 Q. And he's the only one, is that correct, that you know

24 of?

97





f''

1 A . That I know of, yes.

2 Q. No one else on earth has them that you know of?

3 A . That I -- that 1 know of# yes, thatls true .

4 Q . No one at eTleppid Technologies has them that you know

5 of?

6 A . Correct.

7 Q. So those source codes that you want are a very

8 distinct set of codes that are required for a very specific and

9 distinet business purpose in connection with these classified

10 government contracts?

11 A. Well, not just them. They could be used for a very,

12 very vast groap of different contraets.

13 Q. Mr. Prepp, please.

14 THE COURT : Well --

15 BY MR. FLYNN:

16 Q. Thates what they've been used for in the past at

17 eTreppid; is that correct?

18 A . Theylve been used for them and other things for

19 eTreppld in the past, that 's correct .

20 Q . Now -- and only Mr. Montgomery, aacording to youz has

21 the codes. A11 of the work that's been -- belng done at

22 eTreppid and all of these doctors and sophisticated programmers

23 that you#ve çot employed, none of them have it; is that

21 correct?

98





I .

. .

l

-- . > 1

1 A . I do not betjeve they have anything other than what's

2 been recovered through our recovery process: and I bekieve

3 M r. Montgomer'/ has it .

4 Q. So we could call him a specialist in these particular

5 source codes; is that crorrect?

6 A . T betieve there are plenty of people that would have

7 the ability to understand the analysis, to understand what the

8 source codes are.

9 Q . But ao one has in 30 years; is that correct?

10 A . Well, how would I know that?

11 Q. Do you know of any person: in eTreppid or not, who has

12 the sophistication, the knowledge in hj.s brain, about how these

13 source codes work to process the things that Mr. Montgomery was

14 processing?

15 A . To some degree, absolutely .

16 Q . Who?

17 A . Zehang.

18 Q . Then Zehang could go out tomorrow and do it; is that

19 correct?

20 A . I did not say that. He has -- I believe what you

21 asked me wasr does he have some knowledge of. And my response

22 to that is yes. Do I believe other employees have some

23 knowledge of it? I believe the answer to that is yes. Who

24 kept it undeE his Wing in his private cubbyhole, not on a

99

CECILIA 75S.D, NV CCR #246 (775) 827-0672




.

... . ( .....J

1 source server? That was Mr. Montgomery.

2 Q. Than k you . Who else that you know of, other than

3 Mr. Montgomery, has the skill in the next year to put a11 these

4 source codes Logether so that these government contract items

5 can be processed?

6 MR. PEEK: Objection, Your Honor. Heîs assuming facts

7 not in evidence that Mr. Montgomery has the skill to actually

8 write the C++ code or the MET code that 's being described here.

9 MR . FLYNN : 'l3hatls absolutely correct, Your Honor.

10 Itls what he ;id for two-plus years.

11 MR. PEEK : That's maybe what his testimony is, but

12 that ls not what the testimony is so far.

13 THE COURT : Wellz I think -- go ahead and ask the

14 question, and we'll ti.e it up if we can .

15 BY MR . FLYNN :

16 Q. Who else has the skills to put the complete package of

17 source codes together so that these government contracts can be

18 done, other than Mr. Montgomery?

19 A . I don 't know .

20 Q . The instruments and tools that Mr. Montgomery used

21 while he was at eTreppid, do you know what they are, to do this

22 government ptocessing?

23 A . Is that a question about hardware, software? I don 't

24 understand the question.

l00

CECILIA VOSDZ NV CCA #146 (775) 827-0672




l Q. Do you have arty idea how he d1d 1t, how he would take

2 things and process them?

3 A . Well , T certainly can tell you what T believe that

4 he 's described to me. 1 also totally believe now that he's

5 lied to me .

6 Q. Wellr let's just take -- do you have any idea, as you

7 sit here under oath, how he did it?

8 THE COURT: How he dtd what?

9 BY MR . FLYNN :

10 Q. How ae would process -- see, how he would process

11 things in connection with these government contracts.

12 A . Just to the extent of what he told me he did.

13 Q. In terms of the source codes: the line coding, the

14 technology that was used, do you understand it?

15 A . No.

16 Q. And you woulcl agree with me that that was, in effect:

17 the tool by which these contracts were done?

18 A. I don't think 1 have the knowledge to be able to

19 answer that question.

20 Q. Up until the end of 2002, how was Mr. Montgomery

21 being -- even though he was a founder and principal, how was he

22 being treated in terms or being paid, as an independent

23 contractor? How was he being treated?

24 A. Thete was a period of time where he was being paidz T

1û1





1 guess you would call bt as an independent contractor: because

2 he wasn lt getlling a W-Q from me; he was getting a 1099.

3 And 'zhere were various reasons for doing thatp one of

4 which was his attorney said, ''We11, this is what Dennis told

5 me.'' His accountant had told him that he had tax loss

6 carry-forwards front pri.or lawsuits where he had losses in them

7 and that he d kdn 't need to get the deductions because --

8 whatever the CPA said.

9 Q. Who was -- do you know when he got K-ls, when he got

10 1099s? Do you know?

11 A. Well, I know he got -- I know he got -- wait . K-ls --

12 he 'd get a K-1 every year, lj.ke every other owner in the

13 entity, and a 1099. That 's not a W-2. I believe that was in

14 neither the first year -- earlier years because of this tax

15 thing that he had told me.

16 But he's gottert a W-2 certainly in -- well, to the

17 best of my knowledge, in 103, 104, and ï05 . 1 don't know

18 about '01 and .02 .

19 Q. To bring this to a close, Mr. Trepp, there was no one

20 at eTreppid who instructed Mr. Montgomery what to do in the

21 regular course of the fulfillment of his work on these

22 government contracts; isn rt that correct?

23 A . Well, Iïm not sure that is correct. I mean, if I told

24 him to do somethinq relative to the government contract, I

102

CECILIA voHL, NV ccR #246 (775) 827-0672




w

'

w J

u'

1 would cer'tainly expect he was going to do it

.

2 Q . Well; you don't even know what he was doing or how he

3 was doing it, do you?

4 A . That 's absolut:ely not true. I certainly knew the end

5 result. He knew exactly what he was doing. He established the

6 contract that our company received and we performed on .

7 Q . What you knew -- without gettîng into content, what

8 you knew, for example, was if a certain item was processed for

9 the governmenlo you would know the end result of whether the

10 information that was given to the government was accurate in

11 terms of what the government wanted. Thatîs what you knew , and

12 you were told that by Mr. Montgomery; isn't that correct?

13 A . No .

14 Q. Isn' it true that at a certaân time at eTreppid:

15 there was a certain governmental agency with certain employees

16 or agents who had nothinq to do with you, they only dealt with

17 Mr. Montgomery?

18 A . That 's absolutely ridiculous .

19 Q. Isn'L it true that you and Mr. Montgomery had a

20 discussion about what they told him and that you were not privy

21 to and he told you that he couldn 't tell you?

22 A . No. That 's absolutely ridiculous.

23 Q. Do yau know, as you sit here today, the end results of

24 the confirmations of the accuracy of the information that

103

CECILIA VOS1,, NV CCR #246 (775) 827-0672




' )

l J

:. u.2 .- œ

1 Mr. Montgomer'g procluced , the dates, the contentsz what they

2 related to, and how otten they were confirmed?

3 MR. PEEK: Youz Honor, could 1 have that question

4 back? 1 have no idea what was asked.

5 THE COURT : I think there were a 1ot of questions.

6 MR. FLYNN : 1111 try it again, Your Honor.

7 THE COURT: You might want to break it down a little

8 bit beeause it's a little confusing to me too.

9 BY MR . FLYNN :

10 Q. When Mr. Montgomery would process information for the

11 government --

12 A . Uh-huh .

13 Q . -- on one of these government contractsr first, do you

14 have any records: sir, of the end result of that processing?

15 A . Yes .

16 Q. Just in -- generically, what types of records do you

17 have?

18 A . I have spreadsheets that he gave me, starting from the

19 first processing frame we had through the end . I think I have

20 every record that he ever generated, both in electronical

21 format, and I certainly have it, reams of it, in paper format.

22 Q . Is this classified information that you claim you

23 have?

24 A . Is it classified information today? I believe it is

104

CECILIA Vosfz NV CCR #246 (775) 827-0672




)

u. .> .- '

1 not, although I:d like to check to see 1f, in fact, it was. 1

2 personally do not beljeve it is classified today .

3 Q. Letrs take 01162 aspect of one contract with the speeial

4 agency.

5 A . Uh-hah .

6 Q. In terms of confirmation of Mr. Montgomery's results,

7 is it your testimony you have eTreppid documents relating to

8 that conflrmation?

9 A . I don't understand the question, Your Honor .

10 Q. Welly you know that eTreppid, under the clearances

11 that they have, is not entitled to store any classified

12 informahion?

13 A . The înformation that eTreppid had was not classified.

14 The information -- the outputs of the information of that would

15 be classified as far as the government is concerned. We never

16 had that information classified for the simple reason, at the

17 time we were doing the work, we had no classifications

18 individually .

19 MR. FLYNN: May I have a moment, Your Honor?

20 THE COURT: Certainly.

21 BY MR. FLYNN:

22 Q. Who currently has the books and records of the

23 company?

24 A . TheyRre in the building.

105





j'

l Q. And who has custody of them? Is there a bookkeeper,

2 an accountant?

3 A . Yes.

4 Q . Who JLs the individual?

5 A . We have -- we have a bookkeeper . Her name is

6 Su Perez. We have a CPA firD, which is Ashley Quinn. 1

7 certainly have access to anything I want whenever I wank it.

8 0. And wbat books and records are there?

9 A . Whatever we need to do to create our K-ls at the end

10 of the year, Rnything relating to tax information . We

11 certainly have our checkbooks, our deposits, our withdrawalsz

12 our wires, all of the expenses. 1 mean, to create a tax

13 return, you have to have everything.

14 Q. Are there any E7 & Ls?

15 A . Well, we couLd certainly generate one. I don't know

16 if the accountant has qenerated a P & L. Well, he had to have

17 created a P & L to generate K-ls, so --

18 Q. And theypre in the company?

19 A . Well, they're either at the CPA'S or at the company

20 or -- I donRt. know, frankly, which.

21 Q. How many meetings of the board of directors have taken

22 place since 1.9982

23 MR. PEEK: Your Honor, this doesn't have a board of

24 directors. This j.s a limited llability company. Tt has member

l06





.

'

1

t

ee crrz

1 managers .

2 %HE COURT : You might want to rephrase thatl . But 1

3 just have a glàneral questton, and that is, I don ' t understand

4 the relevance o f a lot. of these questions z so you could maybe

5 try to tie thdltl in so tèhat 1 do .

6 MR. FLYNN : A l ot of it has to do with

7 r ir Montgomer g s test mony .

8 THE OOURT : A12 rj.ghtr . A11 right .

9 BY MR . F'LYNN ;

10 Q. Have there ever been any minutes kept of any meetings:

l 1 committee meetingsr shareholder meetings of eTreppid?

12 MR. PEEK: There aren' t shareholdersr Your Honor .

13 THE COIJRT : i tlnderstand that . Just s imply rephrase

14 it . This sounds more ïj.ke discovery than anything else to me#

15 but go ahead .

16 MR . FLYNN : E ' 11 move on, Your Honor .

17 THE COUIW : A1l right .

18 BY MR . FLYNN :

19 Q . Did you ever discuss with Mr . Montgomery the intrusion

' h had incorporated into certain parts0 detection sof tware that e

21 of the sof twetre?

22 MR . PEEK: Objedtion . Lacks f oundation, Your Honor,

23 that there wEts such a technology incorporated into the

24 sof tware . H() already asked Sloan if whether there was . We

l 0 7

CECILIA VOHrg NV CCR #246 (775) 827-0672




,

?

1 have Mr. Hennessey's evâ.dence that suggests that there was not.

2 THE COURT: I think he could ask the question did you

3 ever have a discussion about whether or not there was any

4 intrusion technology inserted into the software .

5 MR. PEEK: 1 don't have a problem with that kind of a

6 questionz Your Honor, and it would be a lot easier if he could

7 just ask it that way.

8 THE COURT: 2 understand your oblectîonz and if there

9 were a jury sitting herez Iîd sustain it. But 1 understand

10 what hefs askingr and I'm going to allow it.

11 BY MR. FLYNN :

12 Q. Did 'gou have those discussions?

13 A . No.

14 Q. Never?

15 A. I do not belâeve it ever existed.

16 Q. Was Uhere ever a discussion between you and

17 Mr. Montgomerg in a heated exchange wherein he told you that if

18 you or one of your people try to go access anything, the

19 software will melt down?

20 A . A, Ilve never had a heated exchange with him, with the

21 exception of the January 10th exit; and B, absolutely not.

22 MR. FLYNN: Thatls a11 I havez Your Honor.

23 THE COURT: Al1 right.

24 //// ////

l08





vi >.* '

.'- )

1 REDIRECT EXAMINAT 1ON

2

3 BY MR . JAKOP I.31 :

4 Q . One question . Was the source code used for processing

5 on the eTreppid goverlmtent contracts developed at e'Freppid?

6 A . M solutely .

7 MR . JAKOPIN: No further questions.

8 MR. FLYNN: J object. Move to strike. Lacks

9 foundation .

10 THE COURT: Wel.l, 1et me ask this question: Do you

11 know whether it was or not?

12 THE KITNESS: Well, I firmly believe a11 of the source

13 code at eTreppid was erfreppidts. And if it was eTreppid source

14 code that operated anything for any customer, I certainly

15 believe that it was ours and it was used.

16 THE COURT: A1l right. 1 understand that that's your

17 belief, but do you have any actual knowledge about that?

18 THE WITNESS : That there was a source code run to

19 operate the government equipment?

20 THE COURT: And that it was developed on eTreppid's

21 equipment.

22 THE WITNESS: Well, I don't see how it could be

23 developed anyplace else, Your Honor.

24 THE COURT : A1l right. A11 right. I understand .

109

CECILIA M()sfw NV CCR #246 (775) 827-0672




.. .,., ... -.

)

1 MR. FLYNN : That's a11 1 have, Your Honor.

2 THE OOURT : A L1 right.

3 THE HITNESS: Am I done?

4 THE COURT: J believe so.

5 THE WITNESS: Thank you.

6 THE COURT: You can step down .

7 (Witness excused.)

8 THE COURT: Ts that --

9 MR. JAKOPTN: That concludes our casey Your Honor .

10 THE COURT: A 1l right . Do you have one witness?

11 MR . FLYNN : ï do, Your Honor. I have one witness . 1

12 want to make a motion, but 1111 reserve on the motion, with the

13 Courtîs permission -- with regard to burden of proof, and 1'11

14 reserve on the motion .

15 THE COURT : A11 right. Go ahead.

16 MR. FLYNN : We would call Mr. Montgomery to the stand.

17 MR . PEEK : Your Honorz hoW late are you going to go?

18 THE COURT : Until we're done.

19

20 D E N N I S L. M O N T G O M E R Y,

21 called as a wj.tness, having been duly sworn,

22 testified as follows:

23

24 THE COURT: l mean, I should say within reason. But I

1l0

CECILIA VOSLS NV CCR #246 (775) 827-0672




.

f

''

-- '--*)

1 can't imagine that welLl be going later than I would be willing

2 to go .

3 MR. PEEK; Wel1., I understand that Mr. Flynn said he

4 was going to have M r. Montgomery for 3O, 40 minutes. I

5 wouldn ît anticipate a lengthy, lengthy, lengthy cross .

6 THE COURT : 1 think you're safe.

7 MR . PEEK : Okay .

8

9 D (RECT EXAM INATION

l 0

11 BY MR . FLYNN :

12 Q . State your name , please, sir .

13 A . Dennis L . Montgomery .

14 Q . Your age?

15 A . Fif ty-three .

16 Q . Where do you live?

17 A . You want the address?

18 Q . Just --

19 A . Reno, Nevada .

20 Q . What ' s your occupation?

21 A . Well, I ' m unemployed right now .

22 Q . What was your occupation?

23 ' A . Chie f technology of f icer at e'freppid Technologies .

24 Q. What ' s your educational backgroundz Mr . Montgomery?

l1l





l A . I got. a bachekor -- an associaLe of science in

2 cardiopulmonaly technotogy, and I did uot complete a bachelor's

3 degree in biology.

4 Q. And with regard to your career history, what type of

5 work have you done since college?

6 A . I went to work in a hospital for two years as a

7 perfusionist.

8 Q. What's a perfusionist?

9 A . If11 restate that . I went to work as a

10 cardiopulmonary technieian in a hospital, and as a

11 cardiopulmonary technâcian, I had duties regarding respiratory

12 therapy, EKG, blood gas analysis, so forth . That was from '73

13 to :75: I believe. And from '75 to around '8O I worked as a

14 consultant on medical equipment and medicine.

15 Q. Okay. What îs blood gas analysis?

16 A . It's a process by which you determine the gas levels

17 inside the blood.

18 Q. And what specifically was the nature of your work in

19 blood gas analysis when you were working at the hospital?

20 A . I was developing a series of programs that would allow

21 an automated method for calculating blood gas and several other

22 parameters .

23 Q. At that time, what was your background in computer

24 prograamlng?

1l2

CECILIA VOA'Zr NV CCR #246 (775) 827-0672




p.. t t

1 A. Um, i was just learning it as I was going along.

2 Q. And at some point, did you form a company?

3 A. Yes: in '81 or :82, called Coyputermate.

4 Q. And whatfs the business purpose ef Lhat company?

5 A . To do -- write medical software for medical

6 instrumentation .

7 Q. And did the company have clients?

8 A . Yes.

9 Q. Who were t:he clients?

10 A . Corn tng, (-'orning Medical, Kodak, Dupontz American

11 Hospital, so lorth.

12 Q. And at some point in connection with your work with

13 Corning and Computermate, did Corning enter into a licenslng

14 agreement with Computermate in connection with spectral

15 analysis of blood gasses?

16 A . Yes.

17 Q . And What was the nature of that agreement?

18 MR. PEEK : Your Honorz best evidence is the agreement

19 itself.

20 THE COURT : Oh, I think he can deacribe the nature of

21 it. This is al1 background, isn't it?

22 MR. FLYNN : Yes, Your Honor, but it 's the background

23 in regards tcI --

24 MR. PEEK : Itls background, Your Honor, related to

113





% >< v '

1 what the claila is as lramed by the opposition of certain

2 copyrights in this time frame . So that's why I am very

3 cautious in mg objectjons more than -- itls not just

4 background . It goes to the substance of their defense that

5 they own -- there we go (being shown document).

6 THE COURT: 1 think he's just showed you the document,

7 has he not?

8 MR . PEEK : 1 donlt believe so. It ls an agreement, but

9 itïs certainlg the document.

10 BY MR. FLYNN :

11 Q . Mr. Montgomery, does this file basically contain the

12 agreement on the nature of the work that you were doing for

13 Corning in coanection with blood gas analysis?

14 A . That was the manual that described the software that

15 was used on tQe instrumentation.

16 Q. And let me show you several documents that have been

17 taken out of that manual. And I'd ask you --

18 MR . PEEK : Your Honorz if hefs going to offer this so

19 I can at least examine it --

20 THE COURT: Yeah.

21 BY MR . FLYNN :

22 Q. And I'd just ask you if those pages come out of the

23 manual.

24 A . Yes .

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l MR . PEEK : This is Exhibit 19:'

2 MR . FLYNN: i'.xhibih 19.

3 MR. PEEK : Has that even been offered yet?

4 THE CLERK : Hasn't been marked.

5 MR. PEEK : Hasn 't been marked?

6 MR . FLYNN : l 'nl going to offer it.

7 MR. PEEK : Youbve got bo mark it.

8 MR. FLYNN : And then 1'm qoing to offer it.

9 MR. PEEK : Can you mark it first. ls it Exhibit 19?

10 MR. FLYNN : Do you want him to look at it first or --

11 THE COURT; You guys Want to have a recess so you can

12 have a conversation?

13 MR. FLYNN : Do you want to read it first, or do you

14 want me to mark it?

15 THE COURT : Well, I think it might he up to me. Mark

16 it, and let's go from there.

17 MR. PEEK: What I ask -- Ys he going to mark this

18 document?

19 THE COURT : Yes.

20 MR. PEEK : That's what I didnrt know . I thought he

21 was just going to mark the pages out of it. Do we have a copy

22 of it so 1 can have a copy of it?

23 MR . FLYNN: I have a copy of the pages which are

24 relevant.

115





. )

-' v '

1 THE CLERK : Jt's Exhibit 19.


3 identification.)

4 MR . PEEK : Your Honor, respectfully, this is what we

5 asked for las week . And if he's known about it and he's going

6 to use it as an exhibît, it's lmportant that 1 have the entire

7 document to be able to cross-examine, as opposed to just

8 limited pages.

9 THE COURT: 'It appears that you have the document

10 itself right Lhere in front of you --

11 MR . PEEK: 1 do .

12 THE COURT: -- and you 're holcling it --

13 MR . PEEK: I dc).

14 THE COURT: -- and he 's letting you look at it . And

15 webll decide tater about getting you a copy.

16 MR. PEEK: lïve just now seen it: Your Honor.

17 THE COURT: ALl right. I understand .

18 MR. FLYNN : Let's mark for identification, first, the

19 pages that the witness is going to testify about.

20 THE COURT: Mark those 20.

21 MR. FLYNN: 2O, Your Honor .

22 (Defendant's Exhibit 20 marked for identification.)

23 MR. FLYNN : And the record will reflect I gave a copy

24 of those pages to Plaintiff's Counsel .

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. . '' ) N

.

.

1 THE COURT : A11 right. Let me see the exhibit.

2 MR . FLYNN : Whlle he 's looking at that, why don't we

3 mark the copyrights for identification .

4 THE COURT : How are we going to mark thoser 21 through

5 what?

6 THE CLERK: He just gave me one document.

7 THE COURT : Mark it 21, then.

8 MR. FLYNN : Yeah, just 21, I think.


10 identification.)

11 MR. PEEK: Has this been identified as to what it is?

12 MR. FLYNN: It's just been marked.

13 MR . PEEK: Okay .

14 MR. FLYNN: Tell me when yourre ready.

15 MR. PEEK: I'm ready.

16 BY MR . FLYNN :

17 Q. With regard to Exhibit 20, Mr. --

18 A . Is this the manual?

19 Q. Yes, the pages from the manual.

20 A . Yes.

21 Q . Are those, in fact, pages that have been taken out of

22 Exhibit l9?

23 A . Yes.

24 Q. Theyrre copies thereof?

117

CECILIA MOSJJS NV CCR #246 (775) 827-0672




,

.

..

b

1 A . Yes.

2 Q. Describe what they are.

3 A . It's a series of program s that patient identification

4 information was put inr or calibration data, and the system

5 analyzed the blood and then produced the results.

6 Q. Can you describe to me, from a computer programming

7 point of view, how these pages describe the technology used to

8 do things like gas analysis?

9 A . The column in the middle, which represenks the output

10 of the data, is spectral analysis output of data: and that data

11 has patterns ln it. And you generate --

12 MR. PEEK: Your Honor, before we testify from the

13 document: could we have the document at least offered so that

14 we can deterpine whether or not it is or is not into evidence?

15 MR . FLYNN : 1''L1 offer the document, Your Honor .

16 THE COURT: A1ë right.

17 MR. PEEK: Your Honor, I would Object to this as

18 irrelevant tc this proceeding and so remote in time as to have

19 no relevance to what is at issue here in terms of pattern

20 recognition and our source code . This doesn't define the

21 actual source code. Someone could compare what is being done

22 here with what is actually being performed by the source code

23 of eTreppid.

24 THE COURT: Well, it seems a little remote. It seems

l18





*

1 unrelated. But 1 belîeve that under their theory of the case,

2 that it's not . And T'm goinq to allow him to develop that, so

3 I'm going to allow the exhibit.

4 MR . PEEK : The other concern 1 have , Your Honor, is

5 that what we have, which is Exhibit 21 -- and îf the Court

6 would look at the seeond page of that, it relates, if you will,

7 Your Honor, to apparently who the owners are of the various

8 copyrights. Fou will see here that the owner is not

9 Dennis Montgonery or the Montgomery trust. It is, ln fact,

10 Computermate, Computermate, Computermate, Computermate in every

11 one o f these .

12 Where is the link as we go showing an assignment back,

13 if you will, to the Montgomery trust? The Montgomery trustr in

14 fact, owns them, if that's what the Library of Congress says

15 the ownership of the copyrights is today.

16 So again, getting back to relevance: I think we'd have

17 to start the thread of, I have the copyright, I own the

18 copyright, tkts is the copyright, as opposed to thYs is the

19 copyrlght, without at leash establishing the predicate of

20 ownership .

21 THE COURT: I remember the testimony with regard to

22 what Computermate is. I see Mr. Montgomery's name on it. I

23 think: in terms of relevancep the relevance has been at least

24 established enough to my satisfactionr I'm going to admit

l19

CECILIA VOSXS NV CCR #246 (775) 827-0672




1 Exhibits 20 and 21. And then --

2 MR. PEEK ; He 's not the o-ner of the copyrightg,

3 though, Your Honor.

4 THE COURT: J admitted them . And whether he's hhe

5 owner or not wîll i)e developed in the testimony, and then Iï11

6 make a decision as to --

7 MR. PEEK : Whether to strike them or not?

8 THE COURT: I don't know about striking themz but

9 whether or noL they play into the decision 1'm going to make.

10 (Defendant's Exhibits 20 and 21 were admitted into

11 evidence.)

12 BY MR . FLYNN :

13 Q . With regard to Exhtbit 20z Mr. Montgomery --

14 A . Yes.

15 Q. -- would you describe to the Court how Exhibit 20

16 explains the nature of the software technology that was being

17 used for the spectral gas -- spectral analysis and how that

18 relates, first, to the copyrtghts in Exhibit 21 before we get

19 to the ownership issues.

20 A . The software that did the detection of the anomalies

21 and the patterns in the spectral analysis is that software that

22 was developed originally. That is the original work.

23 Q. That's being described in Exhibit 20?

24 A . Yes, that 's correct .

120

CECILIA vosnz Nv CcR #246 (775) 827-0672




..

--.1 , /

,

1 Q. And the copyrighting of that technology to do the work

2 that 's described ilt Exhibit 2O, which is the blood gas spectral

3 analysis, is based on the copyrights that are marked in

4 Exhibit 21; is that your testimony?

5 A. Yes.

6 Q. Now, today: who owns the copyrights that are reflected

7 on Exhibit 21?

8 MR. PEEK: Objection. The best evidence is the

9 document itself showinq ownership.

10 THE COURT: Overruled.

11 BY MR . FLYNN I

12 Q. Who owns them, sir?

13 A . The original copyrights were filed on behalf of

14 Computermate, which 1 was the owner.

15 Q. And subsequently, was Lhere an assignment from

16 Computermate to you?

17 A . Yes.

18 Q. And when did -- did -- at some polnt, did Computermate

19 close and cease doing business?

20 A . Yes .

21 Q . When did that take place?

22 A . I'm thinking around 185.

23 Q. In regard to what we will call the source codes --

24 MR . PEEK; Your Honorr againz move to strike. Where

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..- '- 1

1 is the assignment back to Computermate?

2 THE COURT: '( don 't know . Maybe wedre getting there.

3 Let's see. That was a question that I intended to ask myself,

4 but I'm not asking it right now: so let's let this go forward a

5 little bit.

6 Trust me that l'm going to give this evidence the

7 weight that 1 think ît deserves: but I need to hear it before I

8 can understand its relationship and its relevance. So as a

9 staring to these transactions, 1 need to get a11 the

10 înformation before I make a ruling that's going to be

11 prejudicial, or detrimental, to either side.

12 So, please, Mr. Flynnp go ahead.

13 MR. FLYNN : Thank you, Your Honor.

14 BY MR . FLYNN :

15 Q . Is there anything in Exhibit 20 that in some way shows

16 how the copyrights în Exhibit 21 work?

17 A . Well, I own Computermate, and the copyrights -- I was

18 the author, and I retained rights to those copyrights svnce the

19 beginning of time.

20 Q . And after Computermate ceased doing businessz did you

21 retain those rights?

22 A . Yes, I did. '

23 Q. Okay. Now, is there anything in Exhibit 20 that shows

24 how the copyrights are at play in the spectral analysis? Is

122





.. ,

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h

1 there anything the Court can look at?

2 A . Well, the source code was filed with the original

3 work. And I mean, otlèer than the names, there's nothing

4 directly on here. 1 mean, I know the work .

5 Q. If you look at these various diagrams or 1ab report

6 readouts --

7 A . Uh-huh.

8 Q. -- printouts, are those based on the copyrights that

9 are in Exhibit 21?

10 A . A11 of the software on that system reflects those

11 copyrights.

12 Q. Now, what is the terminology that you use to describe

13 those copyrights?

14 A . Well, they contain the anomaly and the pattern

15 detection work. That was the beginning of the work

.

16 Q. Now, those copyrights, 1 believer are dated in

17 May 1982, is it?

18 A . Correct, I thlnk up until February of 103.

19 Q. And between that timez May 182: February :03, to the

20 present, do you know any person on the planet who has the

21 anomaly detection software that is contained in these

22 copyrights?

23 A . No.

24 Q. Has it ever been duplicated?

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CECILIA VOSS, NV CCR #246 (775) 827-0672




,.xe

'

w e )

1 A . Well, I -- I don 't know about Corning

,

because 1

2 didnft continue doing work for them at some point

.

We -- you

3 know, we had moved on to other things

: so 1 reakly wouldn lt

4 know whether that's the case or not.

5 Q. Al1 right. But kn terms of the anomaly detectkon

6 aspect of the software thatïs in these -- these copyrights?

7 A . Iîve never seen anything in the literature describing

8 it.

9 Q. And at some time after 1982, did you improve on the

10 technology that's în these copyrights?

11 A . Yesy I believe in '86 or 187

.

1 can 't remember

12 exactly, but somewhere in that time frame

.

13 Q. Describe to the Court what you did.

14 A. Well: these were originally written on a

15 Hewlett-packard computer, and I had translated them to work on

16 IBM computers . This was the beginning when the IBM PC was

17 first becoming available.

18 Q. And in what way did that improve or refine the anomaly

19 detection software that you had proprietary rights in?

20 A . 1 was able to add more anomakies. I was able to make

21 it run faster. And HP computers -- the IBM was -- it was

22 pretty obvious that the IBM computer was to going to become

23 pretty popular.

24 Q. And at some pointr did you form a company called

124

CECILIA MOSZ: NV CCR #246 (775) 827-0672




1 Barrett Labs?

2 A . Yes.

3 Q. When was that, slr?

4 A . I think around '85 or :86. 1'm not certain of the

5 date.

6 Q. And did you us() the anomaly detection software that

7 you had developed between '82 and '87 in Barrett Labs?

8 A . Yes.

9 Q. And in what way did you use it?

10 A . Well, we had hooked up to more sophisticated

11 instruments. We did far more complicated spectral analysis

12 work and so forth.

13 Q. How was Computermate dissolved?

14 A . I think it was either sold -- 1 think it was sold.

15 Q. And who was ît sold to?

16 A . 1 don't reca) L the person.

17 Q . And how dtd you retain the rights in the company?

18 A . I have a letter retaining the rights to the original

19 work.

20 Q. Now, after 1980 to 1987 period, in connection with

21 Barrett Labs, did you do any further refining of the anomaly

22 detection software that's in Exhibit 21?

23 A . From then to when?

24 Q. Well, when was the next time you did any refining?

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N' o#r' t 1

1 A . I don't remerdaer if it was in 3Net or not . Surely

2 after 3Net I did.

3 Q . Okay. When was 3Net?

4 A . 180- -- 1 thjnk it was '87 to '92, '93.

5 Q. And what was 3hlet?

6 A . 3Net was a company that had built large-scale clinical

7 information systems in the hospital.

8 Q. And did any part of your anomaly detection software

9 play any role with reqpard to your involvement with 3Net?

10 A . Well, I'm sure that there was some small pieces inside

11 the 3Net software that. used anomaly detection, but that was not

12 their primary business.

13 Q. And what Ls the dlstinction between anomaly detection

14 and pattern recognition?

15 A . Anomaly detection is looking for anything out of the

16 normal, and pattern recognition is specifically looking for

17 patterns kn things.

18 Q. Are they two different technologies?

19 A . Yes.

20 Q. And does your prior testimony you just gave,

21 basically, in a simple way, in a layman 's way, describe the two

22 different technologies?

23 A . Yes.

24 Q . And Exhibit 21 containing the copyrights wasz in fact,

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CECILIA M(?SZS NV CCR #246 (775) 827-0672




1 used in connection with your company, Barrett Labs?

2 A . Yes.

3 Q. And in what way did you license that technology to

4 your clients?

5 MR. PEEK ; Best evidence is the license itself.

6 Everything here lacks iaîther an assignment document, a license

7. document or anything else. The best evidence are the documents

8 themselves to address the assignment or the licensing.

9 THE COURT: Objection ls overruled. Go ahead.

10 BY MR . FLYNN :

11 Q. In what way was the technology -- anomaly detection

12 software used, Mr. Montgomery?

13 A . In which company?

14 Q. In Barrett Labs.

15 A . Well, they had hooked up; I think I stated earlier,

16 far more sophisticated instruments and required far more

17 sophisticated anomaly detection or pattern recognition

18 software .

19 Q. And at that pointz to your knowledge, did anyone in

20 the world possess the sophistication, the software, to do that

21 type cf work of anomaly detection?

22 A . Since our work was in mediciner I did not know of

23 anyone.

24 Q. Now, when was the next time after 3Net that you had

127

CECILIA VOSf,r NV CCR #246 (775) 827-0672




I.p-e '

.

.

1 occasion to use your copyrights for anomaly detection?

2 A . 1 did some cortsulting work for Kaiser in '94 I

3 believe . And I was building some instrumentation control

4 unit -- I don't remember specifically what it was, but I was

5 doing work for them.

6 Q. And so you d5d further work on anomaly detection?

7 A . Yes .

8 Q . Okay. Now, between '93 and î98, how were you -- what

9 was your occupation?

10 A . I was self-employed as a consultant .

11 Q. And was that with Pacific Consulting?

12 A . Yes.

13 Q. And what type of cortsulting were you doing?

14 A . I was doing both medical -- and 1 started doing work

15 in Los Angeles in motjon pictures.

16 Q. And did anomaly detection software -- was that

17 involved in any of your consulting work at that time?

18 A . Not anomaly detection .

19 Q. What was involved?

20 A . Pattern recognition.

21 Q . What type of pattern recognition?

22 A . 1 was working with a company that had an interest in

23 trying to database assets out of live -- video -- movies.

24 Q . And what type of pattern recognition -- how would you

128

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..->m 7* '

1 describe that type of pattern recognition?

2 A. Well, that was looking for a known object in a film

.

3 So if they were looking for a cup: they would try to tell the

4 computer, and they needed software to say in -- this cup

,

is it

5 in any of bhese frames, and it would go look for it

.

6 Q. Now, at some pcd nt, you met Mr

.

Trepp?

7 A . Yes.

8 0. When did you first meet Mr. Trepp?

9 A . It might have been j

n #96 or 697. I don 't recall

.

10 The time 1 do recall is when I met him at the Eldorado in 198

.

11 Q. Okay. And describe to the Court everything that you

12 can recall in connection wikh your meeting with Mr

.

Trepp at

13 the Eldorado in 1998.

14 A. I was just introduced to him by a gentleman named

15 Steve Sands. And l've known Steve, I don't know

,

maybe a year

16 or so forth. When I went there, he had heard some of the work

17 I was doing in Los Angeles and said that he might have somebody

18 that might be interested in 1t.

19 Q. Okay. Describe the conversation about what you and

20 Mr. Trepp discussed with regard to the work you were doing

.

'

21 A . I simply told him the work that I'd been doing in

22 compression, b0th video and data compression, and I described

23 that to him .

24 Q. Okay. As best you can recall: understanding you can't

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. - m

1 remember word for word, but as best you can recall

,

describe to

2 the Court what you were tellkng Mr

. Trepp about data

3 compression.

4 A . I was simply telling him that I had the ability to

5 shrink a mo'vie much smaller at the time than the common

video

6 compressors worked .

7 Q. Okay. What Ls that, Mr. Montgomery?

8 A . It 's a form (3f lossy data compression

, where you take

9 information and add a certain amount of loss into it and shrink

10 it.

11 Q. And how does that differ from data -- strike that --

12 from pattern recognitïon?

13 A . It's totally different. Pattern recognition is

14 actually looking for something in the video.

15 Q. Now, when you say 'fit's totally different'' -- I'm not

16 a computer programmer and 11m not experienced in the ways ef

17 computer programming. Is there some way you can describe to

18 the Court in a layman's way how they are two completely

19 different animals?

20 A . Well, video compression is looking to shrink a file

21 and trying to keep the file intact, mostly

.

Pattern

22 recognition is looking through the file and trying to find

23 things.

24 Q. Okay. Now, you obviously were in the courtroom during

'

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.

. -- v ;-

1 Mr. Trepp's testimony about Gunga Din and --

2 A . Right

.

3 Q. -- discussing 130th pattern recognition and data

4 compression before the deal was signed on September 28th

,

1998.

5 A . Yes, I heard

.

6 Q. And you heard it --

7 A . Yes .

8 Q. -- is that correct?

9 A . Yes .

10 Q. Was it truthful?

11 A . 1 don't recall anything to do with Gunga Din

.

12 Q . Do you recalà anything about pattern recognition?

13 A . No .

14 Q. Is it possible that you had that conversation?

15 A . No .

16 Q . What was j

n your mind -- what was your intent as a

17 contracting party when you signed the contribution agreement

18 and formed eTreppid, then Intrepid Technologies

, with Mr. Trepp

19 as to what you were putting into the company?

20 MR. PEEK : Your Honor -- I'm sorry

.

1 apologize.

21 THE COURT: Go ahead

.

22 MR. PEEK: My objection is to intent

. 1 think the

23 Court allowed ''understoodr'' but intent

, I thinkz definitely

24 would go to vary the terms and conditions of the contract

, as

l31

CECILIA Uofffr NV CCX #246 (775) 827-0672




1 opposed to his understanding

.

2 THE COURT : WeLl, I think that there are some claims

3 here as to what the contract says and what it means and what

4 the parties intended . 2G d 1 know Mr

.

Trepp talked about what

5 his intent was, and I think it will aid me in understanding

6 exactly what we're dealing with. I#m going to overrule the

7 objection. I think ik%5 not necessarily to contradict the

8 terms of the contract, but to explain them

.

9 So, go ahead.

10 THE WITNESS : Daha compression

.

11 BY MR . FLYNN :

12 Q. And at this point in timez September 1998, how many

13 different technologies did you have sophisticated knowledge of

14 with regard to computer programming, other than data

15 compression?

16 A. Well, I had spentz you know, the last 10 or 15 years

17 working in medicine, so 1 had a 1ot of experience in building

18 medical-type devices and medical programming through a 1ot of

19 variety of areas, b0th in the ckinical laboratory and the

20 medical records and X-ray. And 3Net was building a large-scale

21 clinical information system to do that

.

22 Q . So you had a1l that sophkstication?

23 A. Yes.

24 Q. What other sophisticated knowledge did you have?

l32





l A . Well, obviousty: 1 had a 1ot of experience in pattern

2 and anomaly recognttion because it was used în those

3 technologies.

4 Q. So when you macle this deal with Mr. Trepp, again, what

5 was your understanding, understanding the differentiation

6 between these technologies, as to what you were putting in?

7 A . Data compression .

8 Q . At any time: tn any discussions with Mr. Trepp prior

9 to September 28th, do you recall any discussion about putting

10 in any other technology other than data compression?

11 A . No .

12 Q . In fact, you signed the 1998 contribution agreement,

13 sir?

14 A . Yes.

15 Q . And youîre aware of its provisions?

16 A . Yes.

17 Q . You're aware of that provision, 1.2.1, which says that

18 the only thing being given is the technology -- the software

19 compression engine development program contained on CD

20 Number 12 .

21 A . Yes.

22 Q . Did you, in factw prepare CD Number 12

23 A . Yes.

24 Q. When did you prepare it?

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CECILIA MOVZ, NV CCA #246 (775) 827-0672




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1 A . I don 't know the exact date, but in that time frame .

2 Q. Did you deliver it?

3 A . Yes.

4 Q. You wanted to form this company; isnît that correct,

5 sir?

6 A . Yes.

7 Q . You wanted to 7ut the data compression technology you

8 knew into that company; isn't that rightr sir?

9 A . Yes.

10 Q . What was the then-best form that you could utilize to

11 put that data compression technology into the company?

12 A . I put it on a CD. Is that your question?

13 Q. Yes.

14 A . Yeah, I put .t on a CD .

15 Q. And who did you give the CD to?

16 A . Doug Frye. '

17 Q. Where did you sign the documentsr the September 28th,

18 1998 contribution aqreement, which has been marked as

19 Exhibit 3?

20 A . I believe in my home in Lodi.

21 Q. And did Frye give it to you?

22 A . Yes.

23 Q. Did you have any discussion with Mr. Frye about the

24 provisions: the language, in the contribution agreement?

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1 A . Yes. 1 mean, they wanted the CD Number 1

,

which

2 contained the software for data compression

.

3 Q. lf you hadn dt clelivered CD Number 1, would the company

4 have started?

5 A . No .

6 Q. How could the company have started if it didn 't have

7 CD Number 12

8 A . Noz it did. That was the point.

9 Q. So, you gave the CD Number 1 to Mr. Frye?

10 A . Yes.

11 Q . Do you know what he did with ât?

12 A. No.

13 Q. And thereafter, after the deal was made, you gave

14 Mr. Frye CD Number 1. Shortly thereafter, did Mr

.

Trepp leave?

15 A . Yes. He teft, I believe, in November or December

16 of 198 .

17 Q. And who was running the company after he left?

18 A . Doug Frye.

19 Q. What did Mr. Frye do?

20 A . Well, he told me that Warren wasn't going to be back

21 until May or June and that he was the one that was in charge of

22 the company.

23 Q. Now, 1et me refer you to the contribution agreement,

24 which has been marked as Exhibit 3, to paragraph 1.3s ''Excluded

135

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,....

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1--- - Asae t.s and- Liabi-l-i-t lre.s . iî Do you recall tha U prew i-s ionv .-s i-l=Z?- - - -

2 A . Yes.

3 Q. And does that provision accurately set forth the

4 agreement thaL you made w1th Mr. -- with Mr. Trepp?

5 A . Yes.

6 Q. And it was your understanding that you weren't giving

7 any technology other than data compression and the data

8 compression on CD Number 1; is that correct?

9 A . Yes .

10 Q . Did you and Mr. Frye have any discussion about that?

- -

11 A' Well I had to deliver the CD to him.

12 Q . So it was a given?

13 A . Yes .

14 Q . Now, what type of work did Mr. Trepp do in running

15 then Intrepid Technologies after Mr. Trepp left?

16 A . To be honest with you, I don 't know because 1

17 continued to do my workr and 1 was waiting for Warren,

18 obviously, to get back.

19 Q . What type of work were you doing?

20 A . Data compression, working on the data compression

21 model.

22 Q . Describe, if you can, in some detail -- see if you can

23 flesh that out a little bit. Were you working on a computer?

24 A . Yes.

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.

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- - -. - .

1- .-.- .-- .p.p... . Wha L webe #rt-yu doingF-..WeF& -Y(n1.-G&eGtY l+g- Q-i-l.le D-VJ.f--C-OVleW -.-

2 A . I mean, 1 was generating code and creating different

3 varieties of that particular technology.

4 Q. For different applications?

5 A . Yes.

6 Q. What types of different applications?

7 A . Well, data compressbon inside of Windows, and video

8 and audio requires a specific interface so you can hook to the

9 hardware devices in Windows. So, I was building those

10 interfaces for those different hardware devices.

11 Q. And what was ycur typical work routine during that

12 time frame, i.e., early October 1998 through the end of

13 December :98?

14 A . I worked eighlo ten hours a day on the software .

15 Q. During that time frame?

16 A . Yes.

17 Q. How many days a week?

18 A . Probably five or six.

19 Q. During that time frame?

20 A . Yes.

21 Q. And for how long did you continue developing different

22 applications with that data compression technology?

23 A . Continuously.

24 Q. Up until what time?

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x

.

h

2 Q . Until you were fired? Okay.

3 Now, between the time you were working exclusively in

4 building those models that you described, forgetting, for the

5 moment, any anomaly detection in connection with government

6 classified issues, did you do any other type of data

7 compression work al: e7'reppid Technologies?

8 A . Welly we were cleveloping an audio and a video and a

9 data Kodak in multiple forms .

10 Q . And how many tines of code were typically being

11 written per day in connection with these applications you were

12 preparing?

13 A . By me personaïly or collectively?

14 Q. Well, let's f'trst talk you personally.

15 A . That ïs very hard to determine. Thousands.

16 Q. And collectivelyy how many lines of code were being

17 written?

18 A . Five to ten thousand .

19 Q. Per day?

20 A . Yes .

21 Q. A11 in data compression?

22 A . Yes.

23 Q. At this -- and for -- and that continued a1l the way

24 up until the time you were fired?

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. I w

)

1 A . That's correct.

2 Q . Now, where isr today: a11 of those -- before we get to

3 the source codes -- all of the lines of. code tha: were created

4 over all of those years for the data compression?

5 A. In eTreppid .

6 Q. And youlve heazd this testimony saying this has been

7 deketed and that has been deketed . lf you walked over to

8 eTreppid tomorrow Inorning, could you find the source codes,

9 first, for a11 of those lines of code?

10 A . Assuming it hasnït been destroyed, yes.

11 Q. Okay . Now, let's talk a little bit about the -- what

12 you cally what, ''copy and destroyr'' when youêre doing a -- when

13 you're creating something on a server.

14 A . 1 think what you're asking is, when people are writing

'1$ computer programs, the computers are contihföùsly building and

16 destroying filesz 1 mean, hundreds of files, files that are

17 used in the process of making the source code. .

18 Q. So, at every workstation, every programmer is

19 continuously creating and destroying every timez virtuallyz he

20 writes code?

21 A . That ls correct.

22 Q . And that has always been the way at eTreppid

23 Technologies; is that correct?

24 A . The nature of building complex programs, that is an

139

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ukx, . '- )

1 inherent -- you know, a task in it

.

2 Q. Okay-

3 A . Things are buiLt and taken apart

.

4 Q. Now, have you ever destroyed tn any way or taken any

5 data compression technology from eTreppid?

6 A . No

.

7 Q. On how many different computers a: eTreppid does data

8 compression technology appear?

9 A . Over a hundred.

10 Q. On how many different hard drives?

11 A . Hundreds. Three or four hundred

,

probably.

12 Q. And we heard a figure of about 150 million bytes of

13 information, was it?

14 A . Files.

15 Q . Files?

16 A . Yes .

17 Q. And Mr. Venable testified that there's still

18 80 percent or that that he's found there

. Have you heard that

19 testimony?

20 A . Yes .

21 Q. And with regard to the other 20 percent, have you done

22 or taken or deleted any of that 20 percent?

23 A . No.

24 Q. And if Mr. Venable cannot find this alleged purported

140

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('

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Y--.

1 20 percent, do you have any explanation as to where it might

2 be?

3 A . Well, ik was on the computers when I left the

4 bu ilding, um, so theydre obviously not looking in the right

5 spots, I presume.

6 Q. And as the chief technology officer, unless someone

7 else has destroyed it, if you went in there, could you find it?

8 A . If it hadu 't been destroyed: yes.

9 Q. Now: is there any reason it would have been destroyed

10 by other eTreppid Technologies employees?

11 A. The stuff 1 was working on downstairs had intrusion

12 detection.

13 Q. Nowr when you say ''downstairs,'' what do you mean?

14 A . ln the area of the warehouse.

15 Q. And describe ko the Court what that downstairs area --

16 or how it was configured.

17 A . There was abotlt l00 computers that were in cabinets

18 and about 20 computers that were not ln cabinets. And those

19 computers were a11 hooked together in what rs called one

20 cluster, and information was, obviously, on those computers.

21 MR. FLYNN : Your Honor, I have a chronology that will

22 simply aid the Court. 1 would just simply ask that it be

23 marked at this point in time . I don't know if 1:11 ever offer

24 it. I think it would help the Court to follow it.

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CECILIA VOSI', NV CCR #246 (775) 827-0672




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. p... 1xw..

)

1 . THE COURT: Is this going to be for demonstrative

2 purposes?


4 THE COURT : 1 don 't think it needs to be marked,

5 unless somebody wants i.t to be marked. 1 mean, if it 's

6 something you can write on the board, if you wanted to take the

7 time to write it on the board --

8 MR. FLYNN : lt would be time-consuming .

9 MR. PEEK : It's only for demonstrative purposes, Your

10 Honor, and not a matter of evidence. And he could use anything

11 he wants. And like you said, he could write it on the board.

12 THE COURT : Thatls why 1 fm saying: let's use the

13 chronology.

14 MR . PEEK : But letfs not assume that every one of

15 these items are, in fact, evidentiary or proven .

16 THE COURT : Any more than if he wrote them on the

17 board or anybody wrote them on the board.

18 BY MR . FLYNN :

19 Q. Nowr at some point in time, sir, during 1998, did you

20 have occasion to work 18 hours and seven days a week?

21 A . In ,982

22 Q. Yes.

23 A . I lost my train of thought.

24 MR. PEEK: Objection. Asked and answered. He said he

142





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1 worked about five or sâx days a week.

2 THE WITNESS: That was at the very beginning. 1 had

3 not moved up here.

4 THE COURT : That was what he said.

5 BY MR . FLYNN:

6 Q. How were you being treated by eTreppid Technologies i.n

7 terms of your status?

8 A. I was an independent contractar.

9 Q. And how much were you being paid?

10 A . Well, 1 started outr I believtb at 12,000 a monthw I

11 thinky in '98 and '99 . In 2000, I believe I went to 192,000 .

12 I:m not certain of the date, but roughly around then . No,

13 actually, T went to one-sixty in 2000, and then I went to --

14 in '99 or 2000, l went 1lo one-ninety or 200,000, I believe.

15 Q. Now, at some tLme in the summer of 1999, did you begin

16 to question the expenses that eTreppid was incurring, when you

17 were 50 pereent owner, ror airfare?

18 A . Yes .

19 Q. And what happened?

20 A . T believe we needed money already. Um, and I was

21 somewhat shocked. And I think I actually inquired in to Doug ,

22 and he said we had a pretty big airfare bill.

23 Q. Did you ask him îf the 1.3 million had been paid in?

24 A. Yeah. He said wedre out of money.

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1 Q. And did he tell you whether the 1.3 million had been

2 paîd in?

3 A . 1 don ': believe he said it had been paid in, but he

4 said we were out of money .

5 Q . And did he tell you how much the airfare bill was

6 that -- that he described to you was the reason you were out of

7 money?

8 A . I believe it w'as around 500,000.

9 Q. Now, during that period of time, did you have a

10 conversation wkth Mr. Trepp, around the summer of 1999, about

11 your stock interest in eTreppid?

12 A . Yes.

13 Q. What was that conversation?

14 A . It was regardîng the initial dilution 1 had to give

15 the stock up for.

16 Q. How did that occurz Mr. Montgomery?

17 A . I donlt remember the exact date: but I was told --

18 Steve Sands approached me and told me that documents were

19 produced and f -- Lhat I was immediately to give up 10 percent

20 of my stock.

21 Q . This is the same Steve Sands who was the finder who

22 connected you to Mr. Montqomery (sic); is that correct?

23 A . îlTrepp,'' yes.

24 Q . Mr. Trepp .

144





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2 A . Yes.

2 Q. And did you have a conversation with either Mr. Sands

3 or Mr. Yrepp about why your 10 percent should be given to

4 Mr. Sands?

5 A . 1 -- I don't know the exact date, so my date may be

6 off. 1 thlnk Mr. Trepp was still out of the country wben I was

7 approached by Mr. Sands initially, and 1 couldn ft contact him

8 because he was on a ship.

9 Q . And -- but Mr. Sands wanted 10 percent of what you

10 owned?

11 A . Yes .

12 Q . And then did you subsequently meet with Mr. Trepp on

13 this issue?

14 A . We -- I know : -- I had to sign the documents that

15 day. I was given no choice.

16 Q. When you say you were given no choice, who gave you no

17 choice?

18 A . Mr. Sands.

19 Q. What did he say to you?

20 A . ''You will sign the documents today as they were

21 prepared.''

22 Q. Or what?

23 A . ''Or you won't have any deal with Warren Trepp.''

24 Q. And how much were you then being paid, 12,000 a month?

l45





L...e ; $. .v

1 A. Roughly, yes.

2 Q . And is it fair to say you were basically living hand

3 to mouth at that time with regard to that salary, supporting

4 your family?

5 A . Yes .

6 MR. PEEK: Objectionr Your Honor. ''Hand to mouthe'?

7 12,000 a month? 144,000?

8 THE COURT: 1 mean, youdre objecting as to whether or

9 not that's hand to mouth?

10 MR. PEEK: But that's also leading .

11 MR . FLYNN : T'1l withdraw it.

12 MR . PEEK; Alscu 1 was a little b1t slow on the gun

13 because I wasnft sure how Steve Sands did it, but I'm going to

14 move to strike al1 the statements of Steve Sands as hearsay.

15 I'm not sure he's identified -- 1 mean, other than the

16 finders -- so I thought, well, maybe thatfs the, mayber the

17 leap that he's somehow -- the testimony will be admissible.

18 But the whole testimony was that he had no choice,

19 sign or no deal with Warren Trepp. 1 move to strike a11 of

20 that as hearsay.

21 MR. FLYNN: I am just offering this as to the state of

22 mind, Your Honor.

23 THE COURT; A1l right. The motion is denied .

24 //// //Z/

l46

CECILIA v()S%, NV CcR #246 (775) 827-0672




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N...e ' ' .-

1 BY MR . FLYNN :

2 Q. Mr. Montgomery, did you sign the documents?

3 A . Yes.

4 Q . Now, are you marriecl, sir?

5 A . Yes .

6 Q. How long have you been marriecl?

7 A. Thirty-three years.

8 Q . And what documents did you sign?

9 A . 1 think it was a stock -- I donlt want to say a stock

10 transfer . It was sone document like that. 1 had this

11 document, but I had to transfer 10 percent of it to him .

12 Q. And then what happened with regard to this 10 percent?

13 A . At some point, 1 think Mr. Trepp came backz and I

14 explained the problem or situation I was in .

15 Q. And what did he say?

16 A . He would deal with it .

17 Q. Then what happened?

18 A . I went, at some point, back to the office of the

19 attorney that represented Mr. Sands with Mr. Sands there. And

20 they had come up with a new deal where, a11 of a sudden: I only

21 had to give him , 1 believez 5 percent of the stock.

22 Q . And what happened to the other 5 percent?

23 A . I believe -- I don't know if all 5 percent went to

24 Mr. Frye .

147





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1 0. Did you hand another assignment to Mr. Frye?

2 A . Yes .

3 Q . And do you know -- you don't recall the specific

4 percentagez but it was --

5 A . 1 think iI: might have been 4 percent. 1 don 't really

6 remember .

7 MR. PEEK: Your Honor, I'm going to object to this '

8 line of questioning as being irrelevant related to the

9 dilution. I donlt know where welre gojwng here, Your Honor.

10 THE COURT: Well, 1'm not sure .

11 MR. PEEK: I want to try to finishz as you did,

12 tonight. We lre already past 40 minutea.

13 THE COURT: 1 have a concern ikbout where itls going

14 too. But 1 would like to allow it to continue just for a

15 little bit, and werll see where it's going.

16 MR . FLYNN : 1:.L1 keep moving (7n, Your Honor . And it

17 goes to the parties conforming to the terms of the contract .

18 BY MR . FLYNN :

19 Q . Nowz at some pointy did youz in early 2000, request to

20 see the books and records of eTreppid Technologies after you

21 had just lost this stock to Mr. Sands and Mr. Frye?

22 MR. PEEK: Objectionp Your Honor. Characterized as

23 loss of stock.

24 THE COUR%': Yesz if you could just ask the question

148





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q

l -.

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4

.

1 without characterization .

2 BY MR . FLYNN :

3 Q. After, the stock ended up in the hands of Frye and

4 Sands?

5 A . Yes .

6 Q . And were you given access to the records?

7 A NO . '

*

8 Q . Did you ask Mr . Trepp at that point how ntuch money had

9 been put into the company?

10 A . I believe so.

11 Q . What did he say?

12 A . Several mâ llion .

13 Q . Did you ask to see it to veri f y it?

14 A. 1 believe I wanted some f orm of proof .

15 Q . And were you glven any f orm of proof ?

16 A . No .

17 Q . Did you tàken have a discussion about the airfare

18 expenses of eTreppid Technologies when you were now: roughlyr a

19 40 percent okm er during the year 2000?

20 A . I had never been around anybcdy where the airf ares

21 were like this. This is unbelievable.

22 Q . And what were you told the airfares were in the year

23 20002

24 MR. PEEK: Do we have by Whom, Your Honor?

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(

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1 BY MR . FLYNN :

2 Q. By whom?

3 A . By whom? I mean, it was obvious, because I had seen a

4 few of the billsy that, you know, they were high . Youfre

5 talking fj.ftyy sixty thousand a trip.

6 Q . And where were the trips, to your knowledge?

y A uew York, LA.

8 Q. On what type ()f airplane?

9 A . Gulfstream, usually I11 or IV.

10 Q. Privately chartered?

11 A . Yes .

12 Q. What was the purpose or the trips?

13 A . I can 't remember a11 of them . Did we ever go on

14 business? Yes. But 1 can 't vouch for every trip that that

15 plane was ever used for.

16 Q . Did you have an understanding in the year 2000 as to

17 how much, roughly, the expenses were for airfare at eTreppid

18 Technologies?

19 MR. PEEK: Objection: Your Honor. Could we have a

20 foundation as opposed to an understanding.

k

.

21 BY MR. FLYNN :

22 Q. Where did you get the understanding from?

23 THE COURT: Well, first of all, did he have an

24 understanding.

150


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1 BY MR. FLYNN:

2 Q. Did you have an understanding, yes or no?

3 A . Yes .

4 THE COURT: Where did you get the understanding?

5 BY MR . FLYNN :

6 Q . Where did you get it?

V A . Zr' TrOPP '

8 THE COURT: A11 right. Go ahead.

9 BY MR . FLYNN ;

10 Q. And what was your understanding as to approximately

11 the expenses were in the year?

12 MR. PEEK: Your Honorr do we have a conversation

13 where, Mr. Trepp, time, place, who was present? Same

14 foundation that Mr. Flynn expected of us.

15 THE COURT: i understand . But I think -- what I think

16 he's asking is what did Mr. Trepp tell him about that.

17 So if you could just ask him that question, then we're

18 not talking about hâs understanding, but what he was told .

19 BY MR . FLYNN :

> 20 Q. What did he tell you?

21 A . That he had signed a contract for so many hours of

22 flight and that they had guaranteed those hours.

23 Q . Who did he tell you he signed the contract with?

24 A . Trans-Exec in Van Nuysr California.

151

CECILJA VOSZS NV CCR #246 (775) 827-0672

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1 Q . And did he tell you how much it was costing the

2 company?

3 A . 1 believe he said it was a million dollars.

4 Q. Now, let's move forward into November of 2001. Prior

5 to November of 2001, was a11 your work still data compression?

6 A . Yes .

7 Q. And in November of 2001, did you have a conversation

8 with Mr . Trepp abotlt sharing the profits of eTreppid

9 Technologies?

10 A . Welly I was cortcerned how I was going to get profit

11 out of the company .

12 Q. And what did you say to him?

13 A . ''How am I gojng to get profit out of the company?'î

14 Q . What did he say?

15 A . ''We haven ' t made any money yet . ''

16 Q . M d did you bring up the airf are expenses?

17 A . Yes .

18 THE COIJRT : Excuse me . I just wanted to ask my court

19 reporter how she was holding up . I didnï t mean to -- 1et me

20 just interrupt f or a minute . How much longer are you going to

21 be with this witness?

22 MR. FLYIIN : What time did Your Honor want to try to --

23 MR . PEEK : Don ' t take all my timez Mr . Flynn .

24 MR. FLYNN : 1 îm thinking 20 minutes, Your Honor .

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1




7 )

'

'

) - ?

l THE COURT: Well, perhaps this would be a good point

2 in time to take a break. We've been going since a little after

3 5:00. Would you antîcipate an equal amount of Lime on

4 cross-examination?

5 MR. PEEK : I would anticipate an equal amount of time

6 on cross-examlnatlon . So farr he ïs gone 40 minutes: almost 50.

7 THE COURT: I said a1l of it was irrelevant z so what

8 are you going to cross-examine him about? I'm just kidding.

9 MR. PEEK : I understand, Your Honor. Thatrs a nice

10 yank. I appreciate the yank. But by the same tokenz the Court

11 has considered it relevant: so I have to at least address the

12 points that were made by Mr. Flynn . If the Court had sustained

13 it, I wouldnlt have gone into it, Your Honor. But I appreciate

14 the yank.

15 THE COURT : A11 right. Let's be in recess for 15

16 minutes, so quarter after 7:00.

17 (A brief recess was taken at the bour of 7:00 p.m.)

18 THE COURT: Be seated.

19 BY MR . FLYNN :

'i 20 Q. November 2001, prior to November 2001, who paid for

21 your medical insurance?

22 A . I did.

23 Q. Did you qet any other employee benefits?

24 A . No.

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) tx-.-

1 Q. In November 2001 -- or, strike that .

2 Prior to 2001, was anything other than data

3 compression work being done at eTreppid Technologies?

4 A . The video game -- the video game was.

5 Q. And are you -- youdre not making any claim of any

6 ownership of any aspect of khe video game; is that correct?

7 A. No.

8 Q. In November 2001, did you have a meeting with

9 Mr . Trepp regarding your stock?

10 A . Well, 1 was being -- they needed to raise money, and 1

11 was going to be diluted.

12 Q. ls that what Mr. Trepp told you?

13 A . Yes.

14 Q. Did you have a conversation at that time about

15 Doug Fryels legal expenses being charged off against the

16 company?

17 A . Yes. They were enormous, I thought.

18 Q. And what range per year were they?

19 A . 200,000.

' 20 Q. And did you ask him if Mr. Frye was then doing

21 $2000,000 a year of work for eTreppid Technologies?

22 A . He said he would look into it.

23 Q. Did you ask to see the books and records of the

24 company to see what else was being expensed against the

154

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1 company?

2 A . Yes.

3 Q. Were you given access?

4 A . No .

5 Q . And what happened in connection with -- with the stock

6 transaction in November 20012

7 A . I don't remeH ler the exact datey but I had to borrow

8 250:000 so I would not be diluted.

9 Q . And at that times did you also sell 2 percent of your

10 stock to someone named Wayne Primm?

11 A . Yes .

12 Q . And how did that transaction take place?

13 A . Warren made an arrangement with Wayne, and Wayne and

14 Doug -- I don't know who -- they carrâed out the logistics of

15 it.

16 Q. Were you paid $1.5 million?

17 A . I believe so, yes.

18 Q. And what did you do with the $1.5 million?

19 A . T wrote Mr. Trepp back two checksz one for

' 20 g8o-some-thousand and one for 100,000.

21 Q. And, in fact, wa3 the cheek in the amount of

22 $975,000.29:

23 A. Yes.

24 Q. And is that a copy of the check?

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1 A . Yes.

2 MR. FLYNN : l1d offer this: Your Honor.

3 MR. PEEK: No cbjection, Your Honor.

4 THE COURT : lt's admitted.

5 (Defendant's Exhibit 22 was marked and admitted into

6 evidence.)

7 MR . PEEK; Is this 22?

8 THE CLERK : Yes, Exhibit 22 .

9 THE COURT: J'nt still not sure how this is al1 tied

10 into the issue welre trying to decide here today. It might be

11 tied into some potential counterclaimsr I suppose, but T don lt

12 see --

13 MR. FLYNN : It has to do with the breach of the

14 contract and the ultimate fight that takes place . And

15 notwithstanding Mr. Trepp ls testimony in the fall of 2005, this

16 was the foundation for the -- an accumulation.

17 MR. PEEK: I haven't heard what the breach of contract

18 was yet, though, Your Honor. He received $975,000: he paid

19 back $975,000.

20 %HE COURT: T understand.

21 MR . PEEK : Or, was it Doug Fryels legal fees?

22 THE COURT: %ry not tö spend a whole 1ot of time on

23 this.

24 MR. FLYNN: T won't Your Honor.

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l BY MR . FLYNN :

2 Q . And then did you have to pay taxes?

3 A . Yes.

4 Q . How much did you pay in taxes?

5 A . I believe 282,000.

6 Q . How much did you net?

7 A . 1 believe a hundred grand.

8 Q. Nowr in February 2002, where did you go?

9 A . To a location in Florida.

10 Q. And was that a government location?

11 A . Yes.

12 Q. And who went wLth you?

13 A . I think, the first dayz I went by myself.

14 Q. And for what purpose did you go?

15 A . We went to demonstrate video compression.

16 MR. PEEK: Couïd we have the ''wey'' Your Honor?

17 THE WITNESS: 1'm sorry. I went to demonstrate video

18 compression.

19 BY MR . FLYNN ;

20 Q. At some point, did someone else show up from eTreppid?

21 A . Yes.

22 Q. Who?

23 A . Patty Gray.

24 Q. And hoW long were you there?

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1 A . I believe five daysr four or five days .

2 Q. What type of video compression did you demonstrate?

3 A . 1 took data off of an aircraft, and 1 streamed it at a

4 very 1ow kilobit rate.

5 Q . Are we getting into classified information?

6 A . Yes.

7 Q. After you dicl this, did you go back and bave a

8 discussion with Mr. Trepp?

9 A . Yes.

10 Q. And what was the nature of that discussion in terms of

11 whether or not eTreppid was going to get involved in

12 object-tracking?

13 A . When 1 -- when 1 was out there, I did one

14 demonstration of object-trackingw and I came back and told him

15 the results of the object-tracking and the results of the video

16 compression.

17 Q. 5o there were Lwo different technologies being '

18 demonstrated out there?

19 A . Yes .

20 Q. And what did Mr. Trepp say?

21 A . He was very interested in the data compression.

22 Q. The video compression/data compression?

23 A . Yes.

24 Q. Was he interested 5.n the object-tracking?

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1 A . Not really.

2 Q. What did he say?

3 A. He was very ârïterest.ed in the data compression .

4 Q. And thereafter, during the year 2002, what were you

5 working on, as the chii?f technology officer?

6 A. Video compressâon.

7 Q. And during the year 2002, who was paying your medical

8 insurance?

9 A . I was .

10 Q. And what type of documents were you getting from

11 eTreppid with regard to your status?

12 A . A 1099.

13 Q. And were you getting a K-1?

14 A . Yes.

15 Q. A1l right- Now: in November 2002, did something

16 happen with your stock?

17 A . Well, I believe I was diluted again, if that's your

18 question.

19 Q. And dtd you have to, again, pay back money to

20 Mr. Trepp?

21 A . l don't believe at that time -- I'm -- Ifm not

22 certain.

23 Q. At some point, did you pay back money for --

24 A . Yes, yes.

.

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1 Q. And in 2002, did you have occasion to see Mr. Trepp

2 and Mr. Milliken on the premises of eTreppid Technologies?

3 A. Yes . They came to our building. 1 don l: remember if

4 it was December, but they had come to our building.

5 Q. And did you have a conversation with Mr. Trepp about

6 it?

7 A . Yes .

8 Q. And what was that conversation?

9 A . I was surprised that that was going to happen.

10 Q. And what did you say to him about Mr. Milliken?

11 A . I don't know how we would ever get clearance in the

12 government with him as an investor .

13 Q. Did he tell you what Mr. Milliken was going to invest?

14 A . I thought he said 10 or 12 million .

15 Q. For how much of the company?

16 A . Five percent.

17 Q . NoWz ln December oc 2002, did you complete certain

18 tests?

19 A . 2002 or ï3?

20 Q. December 2002.

21 A . Yes.

22 Q . What tests did you complete? Without describing the

23 contents, just what, generically, was the nature of the test?

24 A . We, once again, did some tests on aircraft with the

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1 video compression.

2 Q. And did any of those -- aspects of those tests involve

3 anomaly detection?

4 A . Yesy I believe it was pattern recognition.

5 Q. And without getting into the contents of or what you

6 were actually doingy can you differentïate for the Court?

7 MR . PEEK: Your Honor, could 1 ask if the witness is

8 just reading from his tîmeline or actually is testlfying from

9 memory?

10 THE WITNESS: Testifying from memory.

11 MR. PEEK : Okay . Could we have the Limeline removed

12 from the witness stand?

13 THE COURT: 1 don 't know that that's necessary .

14 MR . LOGAR : I clon't think he has a right to do that.

15 THE COURT: I don't either .

16 MR. PEEK: Your Honor, I think I1m --

17 MR. LOGAR: If the witness is using a document to

18 refresh his recollection, and Counsel has a right to see it,

19 but he has no right to --

20 MR. PEEK: But who prepared this, Your Honor? Did he

21 prepare it? Did it come contemporaneous from notes? Where did

22 it come from? I tùink I do have a right to know, and 1 don't

23 think the witness should be using it to testify from . It's not

24 going to come into evidence, Your Honor. It's not his notes,

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1 it's not contemporaneous, and I don 'h think he should be ustng

2 ît, respectfully, Your Honor.

3 THE COURT: Jt looks kind of like a script to me.

4 MR. PEEK : It does look like a script.

5 THE COURT : 4 hhink perhaps it's a good idea not to

6 refer to it, at least râght now. If you have something that

7 you cantt remember or want to refresh your recollectionz werll

8 see about it.

9 MR. PEEK : We dll put it aside, then, Your Honor?

10 MR. FLYNN : Turn it over, Mr . Montgomery.

11 BY MR . FLYNN :

12 0 . At some point, d1d y&u complete these tests?

13 A . Yes .

14 Q . Okay. And how would you differentiate the technology

15 that was being used on the testing with other types of

16 technology that you owned or eTreppid was -- or eTreppid owned?

17 A . This is what time frame? I believe December of 2002?

18 Q . Correct.

19 A . Is that the time frame?

20 Q . Right.

21 A . I believe Zehang, which had teskified earlier, had

22 just been hired, and he was beginning to do some work in

23 object-tracking. 1, on the other hand, was continuing to do --

24 had my anomaly and pattern detection software that I had made

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1 earlier. I had used that on occasion to test with also, and

2 video and data compression continued.

3 Q. And was e'rreppid paid for these tests?

4 A . Yes, yes.

5 Q. How much?

6 A . I believe 280,000.

7 Q. And after these teshs were completed -- strike that.

8 At the end of 2002, when these teats were complete -- and as 1

9 understand your testimony, based in part on your anomaly

10 detection and pattern recognition software; is that correct:

11 sir?

12 A . Yes.

13 Q. Were you still an independent contractor?

14 A . Yes.

15 Q. Was that technology complete?

16 A . Yes.

17 Q . Did you own .t?

18 A . Yes.

19 Q. And were you still an independent contraetor?

20 A . In 20022

21 Q. Yes.

22 A . Yes.

23 Q. In January 2003, did -- did you have a conversation

24 with Mr. Trepp about the change of your status?

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1 A . Yes. They told me I was qoing Lo become an employee .

2 Q. He told your you weze now going to be an employee?

3 A . That's correct .

4 Q. Nowy with regard to your routine work in the company,

5 after you were supposecily designated ''employee,t' did anything

6 change with regard to how you supervised yourself, conducted

7 yourself, and did your work?

8 A . No .

9 Q. Was there any change of any nature or description

10 between when you were classified as an independent contractor

11 and the way you worked and when you were now classified as an

12 employee?

13 A . No .

14 Q. And the technology, the anomaly detection and pattern

15 recognition software, as of December :92, was complete?

16 A . Yes .

17 Q . And did that result, in early :03, of a government

18 contract?

19 A . I think it was sometime around March or April.

20 Q. And now, was that for an agency within the government

21 different than the Air Force?

22 A . Yes.

23 Q. And did you sign an agreement in connection with that

24 project --

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1 A . Yes .

2 Q. -- with that department of the government?

3 A . Yes .

4 Q. And just generically, under that agreement --

5 MR . PEEK : Your Honor, could we have the agreement, âf

6 this is separate and apart from eTreppid, and maybe -- may 1

7 have the witness a little bit on voir dire?

8 THE COURT : Hold on a second .

9 MR. PEEK: I'm trying to understand, is this a

10 separate contract with eTreppid?

11 THE COURT: Hold on. Let me just ask Counsel, is this

12 a separate contract between Mr. Montgomery and this other

13 government agency?

14 MR. FLYNN: This is the oath of secrecyz Your Honor.

15 We 're not into the --

16 THE COURT : A11 right.

17 MR. FLYNN : But --

18 MR . PEEK : Well, I didn't hear the answer.

19 THE COURT; He sald an oath of secrecy.

20 MR. PEEK : Your Honor, hiding behind the so-called

21 national security --

22 THE COURT: Welly he hasnït -- a11 he said is, did you

23 sign --

24 MR. PEEK: Wellr this is the oath of secrecy. That's

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1 the agreement --

2 THE COURT: Did he sign iL? That's fine. I think he

3 can answer that .

4 MR . PEEK: 1 apologize, Your Honor. 1 thought he was

5 talking about a separate contract for work.

6 BY MR . FLYNN :

7 Q. Did you stgn a document, you personally, with the

8 government with regarcl to your seeurity clearance in connection

9 with what you could disclose and not disclose ever to anybody?

10 A . Yes .

11 Q. And did an indJLvidual from this department give you

12 that contract?

13 A . Yes .

14 Q. Did you execute lt?

15 A . Yes.

16 Q. Did you give it back to him?

17 A . Yes .

18 Q. Did you read it?

19 A . Yes.

20 Q. And did he give you a copy of it?

21 A . No .

22 Q. Under the terms of that contract, what is your

23 understanding today as to whether you can disclose anything

24 about the identity of anybody or the work you did in connection

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1 with the March 2003 contract for this department?

2 A . Well, we -- we signed -- the agreement states that 1

3 cannot divulge the nature of the work or who the clients are.

4 Q. And can you imagine any higher governmental security

5 or classified project at that time frame than what you were

6 doing?

7 MR. PEEK: Your Honor, 1 would object to that

8 because --

9 THE COURT: Yeahr if we're not going to get to know

10 what it is, the testimony about something higher than that

11 can't be cross-examined about. So since that cross-examination

12 is foreclosedr Idm not qoing to allow that question.

13 MR . FLYNN : Fine. Thank you: Your Honor.

14 BY MR . FLYNN :

15 Q. Did you use source codes to do this project?

16 A . Yes .

17 Q. Where did you get them?

18 A. There were multiple facets to the project. The video

19 and the face recognition was eTreppidAs, and the anomaly and

20 pattern detection was mine.

21 Q. And in connection with this particular project, did

22 you have dîscussions -- just yes or no -- with governmental

23 agents with regard to the anomaly detection aspect of the

24 software?

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1 A . At that time, no .

2 Q. At some point, did you have these discussions?

3 A . Yes.

4 Q. And when?

5 A . September of '03.

6 Q. And did you complete the project to the satisfaction

7 of the government?

8 A . Yes.

9 Q. And the source codes that you used ln terms of

10 governmental classtfication, what are they called,

11 Mr . Montgomery, the anomaly detection source codes?

12 A . Well, it was catlled the anomaly detection or pattern

13 recognition source codes .

14 Q. What the does the term ''SAP'' mean?

15 A . Special access program .

16 Q. Does anyone else have an eTreppid -- have any dealing

17 wikh any governmental agency about special access programs?

18 A . Ever?

19 Q . During this time frame.

20 A. Not that I know of.

21 Q. Were the source codes classified?

22 A. I believe, yes.

23 Q . And were they called SAP?

24 A. No. Well, it was just called source codes under that

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1 umbrella.

2 Q . Under the umbrella of SAP?

3 A . Yes .

4 Q . How much was being paid by the government -- this

5 governmental agency for the work you were doing during this

6 time frame?

7 A . Roughly, 350,000 a month.

8 Q . And for how long did you do it?

9 A . I think about a year.

10 Q. Up until what time?

11 A . September, October of 2004.

12 Q . Now, in SepteMner -- strike that. ln February of 103,

13 did you have a discuasion with Mr. Trepp about the ownership of


15 A . Yes .

16 Q. What was that discussion?

17 A . I wanted to know how l was going to be compensated for

18 it .

19 Q. And this was during the period where this governmental

20 contract was developing?

21 A . Yes.

22 Q . And what did he say?

23 A . He would work it out .

24 Q. Did you -- did you tell him who owned the technology

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1 that was being usecl?

2 A . He knew who did .

3 Q . M d What did 116, S ay?

4 MR . PEEK : Ob'j ection, Your Honor . Nonresponsive .

5 THE COURT : Did you tell him?

6 THE W ITNESS: :'m sorry . Yes .

7 THE COURT : What did you tell him ?

8 BY MR . FLYNN ;

9 Q. What did you say to him?

10 A . I owned it.

11 Q. And what did he say?

12 A. I think, initially, nothing. He just kept saying he

13 would work it out.

14 Q. And then at some point, did the -- did he acknowledge

15 your ownership?

16 A . Yes .

17 Q. When?

18 A . Middle -- middle of 2004 .

19 Q. Now, in July 2003, did this particular department of

20 the government state that they wanted security clearances for

21 five people?

22 A . I think -- yes . Wellp the way that workedz actually,

23 was after December of 2002, the Air Force applied for the

24 government because we needed access to those programs. And

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1 when we started dojng the work in 2003, they accelerated it,

2 the other group .

3 Q. Okay. Ancl what is an interim clearance?

4 A. Well, you apply for a clearance, and within 90 days,

5 they usually give you a temporary clearance .

6 Q. And how many plogranr ers got a temporary clearance?

7 A. One .

8 Q. And who was that?

9 A. Barjinder.

10 Q. And when did you get your clearance?

11 A . Interim or final?

12 Q. Interim.

13 A . March or April of 2004.

14 Q. 2003?

15 A . '3. Excuse me .

16 Q. And when did you get your final?

17 A . I believe it was sometime in the summer of 2004.

18 Q. Okay. In August of 2003, were you given certain tapes

19 by the government?

20 A . Yes, yes.

21 Q. And did those tapes and what was on them precipitate a

22 1ot of discussion with Mr. Trepp?

23 MR. PEEK: Objection, Your Honor. Again, it's leading

24 and, I think, lacks foundation.

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2 MR. PEEK : Assumes facts not ân evidence.

3 THE COURT: He asked him did it precipitate a

4 conversation. That may be a little bit. leading.

5 MR . PEEK: ftls also speculative as to whether the

6 tapes themselves --

7 THE COURT: Did you give him the tapes: and was there

8 a conversation about the tapes after you gave him the tapes?

9 THE W ITNESS : I received tapea, and there was

10 something on the tapes that was of interest.

11 THE COURT: A11 right. And did you have a

12 conversation with Mr. Trepp about that?

13 THE WITNESS: Yes.

14 THE COURT: A l1 right. Go ahead.

15 BY MR . FLYNN :

16 Q. And did the nature of the tapes and what was of

17 interest to this agency relate to the conversation you had with

18 Mr . Trepp?

19 MR. PEEK : Again r Your Honor, this goes back to not

20 being allowed to cross-examine because this is -- again, you're

21 going to say this is top secret, national secret' I canlt talk

22 about it, talk about it# so --

23 THE COURT: Wellr we don't know if hels going to say

24 that . I want to see what he says, and then we'll see where we

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1 go wlth that.

2 1 mean, one of the things that occurs ko me is that

3 where one side of a case or the other relies upon a privilegez

4 then I can take that into consideration with regard to whether

5 or not the other side has been provided with the information

6 theyfre entitled to be provided with.

7 BY MR . FLYNN :

8 Q . Having that jn mind, Your Honor -- did you share what

9 was on the tapes with Mr. Trepp?

10 A . Yes .

11 Q. And then did you have a conversation about money or

12 your ownership or interest in eTreppid Technologies with

13 Mr. Trepp?

14 A . And what time frame is this, again?

15 Q. At the time the tapes were given.

16 A . Yes.


18 A. I wanted to know how I was going to be eompensated.

19 Q. If you did the work on the tapes?

20 A . Thatls correct .


22 A . He would work it out .

23 Q. D1d you go ahead and do the work on the tapes?

24 A . Yes.

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1 Q. And whose technology was used to do the work on the

2 tapes?

3 A. Well, there were two pieces. The plece of facial

4 recognition and video recognition was eTrepp id's. The anomaly

5 detection was mine.

6 Q. And how much was being paid during that time frame?

7 A . Wellz f think t.hey -- f think that was close to

8 2O0w000.

9 Q. After doing the work on the tapes, did you, aa the

10 chief technology officer and then as the owner of the anomaly

11 detection software, make any conclusions about the reliability

12 of your software?

13 A . I thought lt was very reliable .

14 MR. PEEK: I'm sorry . What?

15 THE WITNESS: .Lt was very reliable.

16 BY MR . FLYNN :

17 Q. Did you have any conversation with Mr. Trepp about

18 that reliability?

19 A . I don't think initially at that exact time frame.

20 Later onr I think we did.


22 A . He wanted to know how confident 1 was that the data

23 was correctz and 1 told him that 1 believed it was .very

24 accurate.

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l Q. And did you ever have a conversation about :he value

2 of your technology at that point?

3 A . Sometime in 2004, is that --

4 Q . Yes.

5 A . Yeah. Wekl, he told me he asked for a billion dollar

6 bond from the U.S. Government .

7 Q. And did you have a discussion with him about how mueh

8 he wanted to sell the tecbnology for?

9 A . I believe inttially it was 500 million .

10 Q. And did you have a discussion with him about what part

11 of the 5O0 million would belong to you and what part would

12 belong to him?

13 A . Yes.

14 Q . And what was that conversation?

15 A . T was concerned that I wBs qoknq to get my fair share

16 of that .

17 Q. A11 right. Nowp in September of 2004, was the

18 government contract -- that phase of the government contract

19 coming to an end?

20 A . I believe at September 31str that -- the next phase

21 was going to be completed.

22 Q. And did you have a conversation with Mr. Trepp abouh

23 extending the contract for another three months?

24 A. The people that were here from the governmenk stated

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l they wanted to extend it.

2 Q. And did you have a conversation with Mr. Trepp about

3 extending it?

4 A . Yes .

5 Q . What was that conversation?

6 A . He wasn't goâng to .

7 Q. And did you have a conversation with him as to why he

8 wouldn 't?

9 A . At the time -- the initial time is that we wanted more

10 money . We, meaning eTreppid, had wanted more money and

11 Mr . Trepp wanted to move on to some other work.

12 Q . And so did you go forward and do -- continue -- did

13 you continue processing work for this particular department of

14 the government?

15 A . We continued processing, I believe, until after

16 Thanksgiving of 2004.

17 Q. And were you using your anomaly detection software?

18 A . Yes .

.

19 Q. And did you a conversation with Mr. Trepp in the fall

20 of 2004 about the fact that it was your software that you

21 owned?

22 A . Yes.

23 Q. Nowz at some time, did you have a conversation with '

24 the government from this particular department about protecting

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1 the software with jntrusion devices?

2 A . Well, early oru they told us --

3 MR. PEEK: Objection, Your Honor. Hearsay.

4 THE COURT : Well, I1m going to allow it. Iîve allowed

5 quite a bit of hearsay in this case anyway. 1ï1l determine

6 whether or not itls been being offered for the truth of it or

7 not, or whether it's being orfered to explain the question that

8 was asked.

9 Go ahead .

10 THE WITNESJS: 2 belleve, in early 2004, they suggested

11 what they wanted to do to protect the systems.

12 MR. PEEK: Could We have who the ''they'' is.

13 THE W ITNESS : The government.

14 MR . PEEK : Can we have Air Force, person, individualz

15 name .

16 THE WITNESS : Not the Air Force, the other group .

17 MR. PEEK : What was the name of the other group?

18 THE W ITNESS : I1m not going to say.

19 MR. PEES ; That's my problem agaln, Your Honorr hiding

20 behind the privilege.


22 MR. FLYNN : We're not hiding behind anything, Your

23 Honor. W elll allow Mr. -- we'll enable a number of procedures.

24 Either it goes to a judge who has a security clearance on this

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1 level, which is called for under tbe act, or we lll enable

2 Mr. Montgomeryz Mr. Trc3pp to go into chambers so the Court can

3 verify it, or we bll enable -- we All allow it ho go over to

4 federal court. Your Honor, werre not Kidlng behlnd anything.

5 THE COURT: l don't know how jt's going to go over to

6 federal court. It's already been bumped out once. Al1 I1m

7 saying al1 day is cite me the statute that says that he can

8 say, HIîm not going to answer the question.'' I 'm perfectly

9 happy with the idea that if he possesses information that 's

10 classified, he probably shouldn't, and has probably been told

11 not to say it. But I need some authority so that I can make a

12 reasonable, decent decision on this issue without speculating

13 about it. Now --

14 BY MR . FLYNN :

15 Q. Under the contract you signed with the government,

16 were you made an agent of the government in connection with

17 this software technology?

18 A . I believe so.

19 MR . PEEK: Your Honors again, 1 move to strike that.

20 He saidz ''I believe so,'' ''I don't have the contracty'' ''I don't

21 know what it says .'' 1 can't cross-examine him on that. He

22 says, ''I didn't get a eopy of it.'' Everybody else had it.

23 THE COURT : 1#m not even sure that this relates to any

24 of the issues in the case. And 1dm not -- you know, I'm not

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1 going to tell you how to try your case. But to me, I'm not

2 concerned about what it says or what it doesn't say. I don't

3 even care what agency it is.

4 MR . PEEK : I care, Your Honor, because of the

5 inference here that 1 was directed to put intrusion software,

6 and it is the intrusion software that, if there was any

7 deletion, that deleted a11 of tbis. When we and get an

8 affidavit from the Air Torce, who is managing this, a 1ot of

9 these contracts --

10 BY MR . FLYNN :

11 Q. Mr. Montgomery, in connection with this particular

12 work and the intrusion deviees, did the Air Force manage this

13 aspect of it?

14 A . No.

15 Q . And did you put the intrusion devices on?

16 A . Yes .

17 MR. PEEK: Same objection, Your Honor.

18 BY MR . FLYNN :

19 Q . When did you put the intrusion devlces on?

20 A . I believe it was February of 2003.

21 Q. And what are the intrusion devices? Explain to the

22 Court how they work. ls that classified?

23 A . I don't really know whether it is or not, to be honest

24 with you.

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1 Q. Well, generically, can you describe to the Court what

2 happens if someone trîes to access it?

3 A . The government group was very concerned that someone

4 would walk in and take a computer out of the building,

5 physically take it out. And since the room that we had in the

6 building was not big enough to hold a1l the computers, they

7 wanted some form of protection so that those computers coulz

8 not be taken out of the building and accessed.

9 Q. And how -- and did you load these devices onto these

10 computers?

11 A . Yes. It's software .

12 Q . And how does the software, basically, work? Does

13 it -- what does it do?

14 A . Well, itls deskgned to get a response over some period

15 of time, and if the response hasn't been given to it or the

16 responses are incorrect, it will purge itself.

17 Q. And did anyone at eTreppid know that thatfs how this

18 system worked?

19 A . I don't think so.

20 Q. I mean, in terms of the details of the technology.

21 A . No, no .

22 Q . In terms of the generic nature of the fact thak it

23 existed, did Mr. Trepp know?

24 A . 1 don't know if he did or not. I suspect he talked to

18O





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1 the same government people that I did: that he might have

2 known .

3 Q. Now --

4 THE COURT: Let me just stop and ask a question.

5 Do the lawyers know what agency we're talklng about?

6 MR . FLYNN : Yes .

7 THE COURT : Do you know?

8 MR. PEEK : No, 1 donft.

9 THE COURT: Your client has not told you? You don 't

10 know? You don't know?

11 MR. PEEK: 1 -- I don't know. I will ask Mr . Trepp.

12 MR. FLYNN : f doz Your Honor.

13 (Whereupon, Mr. Peek has a conversation with Mr. Trepp

14 off the record.)

15 MR . PEEK ; Yes: I do know.

16 THE COURT: Al1 right. Approach.

17 (A discussion was held at the bench out of the hearing

18 of the reporter.)

19 THE COURT : A11 right. Go ahead. I'm sorry for the

20 interruption.

21 MR. FLYNN : Thank you, Your Honor.

22 BY MR . FLYNN :

23 Q. Let's fast-forward a little bit. The work ended with

24 this particular agency at some point in time; is that correct?

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1 A . Yes.

2 Q . And that was after Thanksgiving of 2004?

3 A . Yes.

4 Q . And were there conttnued negotkations with that

5 departm ent thereafter?

6 A . My undersLanding was that that group wanted the

7 Air Force to get involved.

8 Q. And during 2004 -- just yes or no -- were there

9 individuals in the U.S. Government at the highest levels at

10 eTreppid Technologies?

11 A . Yes.

12 THE COURT: What is ''the highest levels''? Does that

13 mean was President Bush there? That doesn't mean anything to

14 me.

15 BY MR . FLYNN :

16 Q. Was Warren Trepp there?

17 A . Yes .

18 Q . So he knows who these individuals are?

19 A . Yes .

20 Q. Now, at the end of 2004, did you and Mr. Trepp begin

21 to have discussions -- heated discussions about who owned --

22 strike that -- about how you were going to be paid going

23 forward if there were fklture governmental contracts?

24 MR. PEEK: Objection. Leading, Your Honor: as to

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i qlr:

1 ''heated.'' They had dâscussions .

2 BY MR . FLYNN :

3 Q. Okay. Did you have discussions?

4 THE COURT : A ll right. Yeah.

5 THE WITNESS : Yes .

6 BY MR . FLYNN :

7 Q . And how would you characterize the development of the

8 relationship towards the end of 2004 and going into 2005, with

9 M r. Trepp?

10 A . It was getting stra tned.

11 Q. And what was the nature of the conflict?

12 A . Well: 1 had been promisedz um, to get this worked out,

13 and ît never gets worked out.

14 Q. And did Mr. Trepp ever dispute that you owned the

15 anomaly detection software?

16 A . No .

17 Q. Tn late November of 2005, did you have a conversation

18 with M r. Trepp about how much had been paid by the government

19 in connection with these various top secret projects?

20 A . Yes.

21 Q. And how much did Mr. Trepp say had been paid?

22 A . 1 think he said around 10 to 12 million .

23 Q. What was your -- your understanding of how much had

24 been paid?

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l A . In the two years?

2 Q. Yes.

3 A . I think more closer to 18 mil Lion.

4 Q . And in early December of 2005, did you have a

5 conversation of how much was in the bank and you wanted to see

6 the bank statements?

7 A Ye5

8 Q . What did you say to him?

9 A . ''l want to see the bank statements.''


11 A . He never showed it. He didn't say anything . He never

12 showed it .

13 Q. And after this conversation in early Deeember of 2005,

14 did he say anything about giving you any money?

15 A . Well, T told him I needed a couple hundred grand . Is

16 that the question?

17 Q. Yeah .

18 A . Yes.

19 Q. So what did he do?

20 A . In Decembere I don't remember the exact date. It must

21 have been around -- I think around the 10th or something, he

22 gave me either 125 or l50 thousand .

23 Q . And what was your understanding as to what that was

24 for?

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1 A . Once again, he said he 'll work it out.

2 Q . And 1et me show you Exhibit 18. Did you have a

3 conversation about Exhibit 18 with Mr. Trepp ln the end of

4 December of 1052

5 A . He brought me two documents, this being one of them --

6 1 don 't remember the other one -- and told me that he wanted me

7 to sign it.

8 Q . And what did you saAg?

9 A . HI wonlt sign it.''

10 Q. And is that your sâ.gnature on Exhibit 18?

11 A . No .

12 Q. Did you ever sign any document like that in front of

13 this individual, Mr. Bora?

14 A . No.

15 Q. Who is Mr. Bora?

16 A. Gellay's (phonetic): which is Warrenls wife's brother.

17 Q . And based on your knowledge of your own signature, is

18 that signature forged?

19 A . Tt's not mine. I didn't sign it.

20 MR. FLYNN: And at some pointr Your Honorz I1d ask the

21 Court to compare that signature to the signatures on al1 the

22 other documents with Mr. Montgomeryls handwriting that have

23 been introduced.

24 MR. PEEK: Your Honorr I think that --

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1 THE COURT : I've already done that . But my question

2 is, where is the original?

3 MR. PEEK : We have the original, Your Honor . I guess

4 wedre going to have to submit it to forensics now, questioned

5 document examiner, now that Mr. Flynn 's client denies, contrary

6 to the testimony of Mr. Treppz signing it and that of the

7 witness who witnessed it.

8 THE COURT : Weàl, I can 't tell you what to do.

9 MR. PEEK : I'm not going to dc) it today. l donït

10 think I need to do it for this purpose.

11 THE COURT : J know what I would do .

12 MR. PEEK: 1 certainly wouldn't ask the Court to

13 compare it to others.

14 THE COURT : i think it's within the laypersonls

15 ability to compare signatures and make judgments, but not --

16 I'm not really going to engage in that exercise for that

17 purpose. I was just curious.

18 MR. PEEK ; Are we about done here?

19 BY MR . FLYNN :

20 Q . Mr. Montgomery, youbve heard al1 of this testimony

21 about the various deletions during the January period in 2006,

22 files missingz et cetera, raid boxes gone.

23 Would you describe to the Court what you did in your

24 relationship with eTreppid Technologies in January of 2006 in

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1 connection w ith any of the software that was presen: in the

2 company.

3 A . I got called -- Mr. Trepp was getting ready to leave

4 on a cruise . I don't zemember which week that wasr if itrs the

5 week of the 8tb. And J planned on taklng the week off because

6 he was going to be gone also.

7 And 1 got a call on, 1 think, Monday morning from

8 Mr. Trepp saying that I need to come down to the building.

9 Q. And what was the nature of that discussion other than

10 that? Was there anything else?

11 A. No, he just sasd, ''You need to come down here right

12 now.''

13 Q. And what happened?

14 A . I had another commitment, and I couldn't come down

15 that day.

16 Q. So then what happened?

17 A. He called me either -- he left a message on my phone

18 that night, saying I needed to come down there tomorrow

19 morning.

20 Q. Did he tell you why?

21 A. No, he just said it was important, I needed to come

22 down.

23 Q. Did you go down the next day?

24 A . Yes .

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l Q . And then what happened?

2 A. 1 entered thrtlugh the warehouse, and I saw a11 of

3 these people going through a11 the hard drkves.

4 Q. Okay. What date was Lhat?

5 A . It's the -- it would be the Tuesday. 1 don't know --

6 I don 't know which day lt is . January.

7 Q. The Tuesday -- the second week in January?

8 A . Yes, the second week in January.

9 Q . And did you have any foreknowledge that these people

10 would be going through the hard drives?

11 A. No.

12 Q. Were they going through the hard drives in this area

13 here (indicating), this area near --

14 A Yes yes. '

15 Q. -- on Exhibit l --

16 A . Yep . Yes .

17 Q. -- which webve called Dennisrs, Mr. Montgomery's, work

18 area?

19 A . Work area, yes.

20 Q. And were those a11 government computers?

21 A . Yes .

22 Q. What was the value of those computers?

23 A . My guess, 350,000-plus .

24 Q. And when were those computers brought in to eTreppid?

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1 MR . PEEK : Counselx I can't see the witness answer the

2 question .

3 THE WITNEE;S: December 2003, I believe, or

4 January 2004.

5 BY MR . FLYNN :

6 Q . And did a particular braneh of the government bring

7 those in?

8 A . T -- we ptlrchased them on behalf of the government.

9 They were government computersr and we purchased tbemw one from

10 each group . So 1 don 't know which group belonged to wh ich one.

11 Q . Did -- at some point, did the government bring in

12 computers that you didnlt purchase?

13 A . Yes .

14 Q. When did they bring those computers in?

15 A . I believe January of 2004.

16 Q . And what was the value of those computers?

17 A . Three million.

18 Q. And --

19 MR. PEEK: Objection. Move to strike. There's no

20 foundation for thts testimony that the value of the camputers

21 was $3 million.

22 MR. LOGkR: What difference does it make? That's not

23 an oblection.

24 THE COURT: Hold on. Hold on. Hey, guys: listen to

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1 me. Hey, no, listen . Wefre getttng late here tonight. lt's

2 easy to get carried away and have exchanges, but I want to

3 maintain reasonable order in here. So if you have something to

4 say, say it to me.

5 And likewise to you, if you have something to say, say

6 lt to me .

7 So wbat we 'll do -- '

8 MR. PEEK: My objection, Your Honor, was lack of

9 foundation and qualification as to what the value is, as well

10 as the relevance here.

11 THE COURT: A1l right. Well, first of all, what is

12 the basis for your knowledge of the value of the computers?

13 THE WITNEGS: You bre asking me, Your Honor?

14 THE COURT : Yes .

15 THE WITNESS; I Gas told that was the price by the

16 government.

17 MR. PEEK: Objection. Hearsayr Your Honor.

18 THE COURT: I don't know that I see the relevance .

19 Whatês the relevance?

20 MR. FLYNN : The relevance, Your Honor, is that the

21 government brought those computers in because of

22 Mr. Montgomery's ownership of the anomaly detection software.

23 THE COURT: Well, that's your conclusion . But 1 meanz

24 I don't know that there's any evidence here from which we can

l90





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1 conclude thaL that's noL hearsay.

2 BY MR. FLYNN :

3 Q. Mr. Montgomery, why did the qovernment bring the

4 computers in?

5 A . They wanted us to run the anomaly detection software

6 on a11 the computers.

7 MR. PEEK: Again, Your Honor, objection. That's

8 hearsay. That calls for hearsay from the government as to why

9 they were there. lt had to have come from a hearsay statement

10 from a government official, as opposed to pursuant to a

11 contract.

12 THE COURT ; 1 understand that, but why they brought

13 them is pretty apparent to mez to run the programs. But the

14 question 1 was concerned about was: why is it -- the cost of

15 those programs, why is that relevant? That was the question I

16 had.

17 BY MR . FLYNN :

18 Q. The magnitude of the work that was being done with

19 regard to anomaly detection that warranked the contract price

20 had to do with how quickly you could process the information;

21 is that correct?

22 A . Yes.

23 Q. Now, continue with your -- you had no forewarning of

24 the fact that the people in eTreppid would be trying to access

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1 the hard drives?

2 A . No .

3 Q. And were they also in this area called the private

4 room (indicating)?

5 A . Not that 1 know of. I only walked in through the

6 warehouse up the back stairs to Mr. Trepp's office.

-1 Q. And did you have a conversation with Mr. Trepp about

8 what these people are doing w'ith these hard drivesz would do

9 with the software?

10 A . Yes .

11 Q. What did you tell them?

12 A . 1 was surprised that he was letting people with no

13 classification dismantle disk drives.

14 Q. And what did he aay?

15 A . He ïs looking for the software .

16 Q. And who did you see working on this -- on these hard

17 drives?

18 A . Michael Salvetek, Jim Bauder, Jesse Anderson,

19 Venkata Kalluri.

20 Q. Did any of these people have government clearances?

21 A. Jim, I believe -- orz Jesse, I believe, did; the

22 others, no .

23 Q. And when you confronted them with the fact that they

24 weren't allowed or permitted under the contract with the

l92

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1 government to do that, what did he say?

2 A . That he 's orderLng them to do it, Mr. Trepp is.

3 Q. And did he tell you why?

4 A . No .

5 MR . PEEK: Your Honorw can We move on? 11m going to

6 object. This is just dragging on and dragging on to be a

7 filibuster, and denying me the opportunity to eross-examine.

8 It 's now 8 o 'clock .

9 MR. LOGAR: Is there an objection, Counselr to your

10 statement?

11 THE COURT : Again, conversation -- 1 want conversation

12 direct to Lhe bench.

13 MR. LOGAR: It's just speaking objections.

14 THE COURT: I understand that. But 1 really am having

15 a lot of difficulty seelng how this ties into the issue here .

16 Werre almost at an hour now for your zo-minute examinationz so

17 please hurry up .

18 BY MR. FLYNN ;

19 Q . Did what they do destroy any of the softuare in any of

20 the source codes?

21 A . Possibly, yes.

22 Q. The source codes with regard to anomaly detection

23 software, where are they?

24 A . In the building.

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1 Q. And how many lines of code do they -- exist,

2 Mr. Montgomery?

3 A . Half a miltion-plus .

4 Q. And do you know whether, when they tried to access the

5 software, any of those lines of code were destroyed?

6 A . It could have been.

7 Q. And are those lines -- are the source cddes to access

8 those lines of code also in your head?

9 A . Yes.

10 Q. And are those the same -- is that the same anomaly

11 detection software that you copyrightecl back in 1982?

12 A . Yes.

13 Q. And explain to the Court why that is the case, namely,

14 that theyere identical.

15 A . Wellr I meanr Tfm the one that did a1l the original

16 work on the anomaly detection software.

17 Q. Did you destroy or take any files or hard drives or

18 anything from eTreppid Technologies?

19 A . No.

20 Q. And is there anyone at eTreppid Technologies today, to

21 your knowledge, that has the capability to determine what's

22 there and what isnft there in connection with the government

23 contract on anomaly detection?

24 A . I don't think so.

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1 0. So they wouldn't even know how to do it?


3 Q. Have you heard any testimony from Mr. Venable or

4 Dr. Sun or anyone else that would indicate they have any

5 knowledge or expertise whatsoever, or the expert that was

6 calledz as to how to access the anomaly detection codes inside

7 eTreppid today? '

8 A. No .

9 Q. Are you the only one?

10 A . I don't know that for a fact, but I would suspect

11 thatîs probably the ease.

12 Q. In connection with your conversations with Mr. Trepp

13 in the presence of governmental agents, d1d some of those

14 conversations relate to the fact that you were the only person

15 on the planet that could do this anomaly detection?

16 A. They just want -- I don't know if they said it exactly

17 like that, but up until that pointz We were the only ones that

18 were able to get out these kinds of results.

19 Q . Do you know of anyone else that, you knowz deleted

20 files at eTreppid Technologies?

21 A . Well, a11 the programmers, from time to time, did that

22 on their own.

23 Q. But do you know of anyone Who deleted files who

24 shouldn't have been deleting files?

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l A . No .

2 Q. Did anyone contcol your work, ever, at eTreppid

3 Technologies?

4 A . What do you meaa by that? Thatls --

5 Q . With regard to Bour -- first, your data compression

6 type of work, did, say, anyone instruct you or supervise you on

7 how to do that type of work?

8 A . No, no .

9 Q . With regard to your anomaly detection workz did anyone

10 ever instruct you or supervise you in any way on how to do that

11 work?

12 A . No .

13 Q. And in regard to the anomaly cietection workz that was

14 work that you distinctly understood as far back as 1982; is

15 that correct?

16 A . Yes .

17 Q . Did anyone else have the skill at eTreppld

18 Technologies to do the --

19 MR. PEEK: Objection. Lacks foundation as to how he

20 can evaluate somebody else's skill, given the fact he only has

21 an associate's science degree.

22 THE COURT: Well, I think you could evaluate it based

23 upon your experience, education, training, et cetera. Dut the

24 better questkon, 1 think, is how does he know what their level

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1 was? Thates the thing f?m concerned about.

2 BY MR . FLYNN :

3 Q . Based on al1 your years in working with all these

4 peoplez are you aware what skill levels these various

5 individuals had that were computer programmers at eTreppid?

6 A . Yes .

7 Q. Did anyone have the sklll level other than you to do


9 A . Probably not.

10 Q . And the instruntents and the tools that were used by

11 you to do the anomaly detection, was that based on the

12 copyrights that you --

13 A . Yes .

14 Q. -- filed back in 1982?

15 A . Sorry . Yes.

16 Q. With regard to the intrusion technology,

17 Mr. Montgomery --

18 A . Yes.

19 Q. -- was there some type of a system set up by you that

20 required a response, and if it didn 't get a response, it would

21 start self-destructing?

22 A . Yes.

23 Q . How did that work?

24 A . You set the time frame, and you had to respond within

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1 that period of time frame. And if you didnrt, it would purge

2 itself.

3 Q. And as you sit here today, do you have any

4 understanding as tc) whether that may have occurred at eTreppid

5 Technologies?

6 A . Well, since I was locked out of the building and 1

7 could never go into it, 1 suspect it probably happened.

8 MR. FLYNN: That's all 1 have, Your Honor .

9 THE COURT: Al1 right. Let me just stop and ask a

10 question, which is probably going to not make any sense. But

11 therels been an amended eomplaint filed on the 1st of February.

12 Obviously, time to answer it hasn 't expired, but there hasnrt

13 been an Answer filed, at least as far as I can see.

14 MR . PEEK : There's an Answer to the earlier, but not

15 to the amended one, that's correct.

16 THE COURT : 1 didnlt find that in my file, but was --

17 were there any counterclaims'?

18 MR. PEEK : There is a counterclaim, Your Honor, for

19 copyright infringement contained within the counterclaim.

20 THE COURT: A11 right. Let me ask you a question.

21 During the time that eTreppid was being paid for

22 this -- for the use of this copyrighted material by the

23 governmentz which you claim belongs to you, did you ever object

24 to the government and say, wait a minute, that's my material,

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l thatls not eTreppid's material?

2 THE WITNESS: L don't recall, Your Honor, if 1 did or

3 not.

4 THE COURT : Well, go ahead, Mr . Peek. f was going to

5 open my big mouth abou: something.

6 MR. PEEK : 1'> happy to hear from the Court. If ih

7 will shorten the proceeding, 1fm happy 'to hear from the Court.

8 THE COURT; Wetl, 1et me tell you, counsel for both

9 sides, kind of how I thknk 1îm seeing this: but 1'm prepared to

10 be persuaded otherwtse. But maybe that will be helpful . 1

11 know , when I was a practicing lawyerz I kind of lîked to know

12 sometimes what that judge was thinking about. Not always happy

13 to know, but I kind of wanted to.

14 And it seems to me that the agreement that was

15 originally enterect may or may not cover the technology that

16 we're talking about. But certainly, at some point in time, by

17 conduct or agreement, oral or by conduct and by performance, it

18 was agreed that eTreppid could market this technology and

19 didn 't market this technology to this agency of government and

20 that a11 the parties acknowledged that it was eTreppid's to

21 market .

22 %he problem arises with regard to a further agreement

23 or further compensation or other issues that may be the subject

24 of a very meritorious counterclaim. Whether it's meritorious

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1 or not, 1 have no idea. But I don't -- at this point in time,

2 I1m not -- it would appear to me that the technology was indeed

3 conveyed to eTreppâd to market and sell to the government and

4 that the government paid eTreppid for that.

5 Now, if there was an agreement that there would be

6 compensation for it later and that agreement wasnft honored,

7 that's part of the counterclaim. If therels an agreement that

8 copyrights were infringed, that's part of the counterclaim .

9 But as to the ownership of it, it would seem to me:

10 like I said, by conduet, by oral understandingz that it was

11 agreed: yeah, this belongs to eTreppid and I'm going to get

12 compensated for it later . That's where the counterclaims come

13 in. So tell me where I m wrong about that.

14 MR. FLYNN; Your Honor: w1th a1l due respect, black

15 letter law -- and we have a brief on it -- says Lhat no

16 copyright --

17 THE COURT: Title 17, right?

18 MR . FLYNN : -- no copyright can be given under these

19 circumstances without a written assignment.

20 The closest they can qet is the Work For Hire

21 Doctrine. We have -- a atate court is absolutely preempted,

22 under case 1aw statuter from using trade secret, from using

23 conduct, from using lmplied agreement, to breach the provisions

24 of the copyright act. The most that they could qet is a

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1 nonexclusive, oral license under the conduct.

2 And as I say, Your Honor: we have the brief. We 're

3 ready to submit the brj-ef to the Court.

4 THE COURT: Olu it hasn't been subm itted to me yet?

5 I'm familiar with Title 17.

6 MR . FLVN-N : TL hasn't been submitted.

7 THE COURT: And 1 think l knov' the section that you rre

8 talking about. But 1 mean, if that's the case, what the heck

9 are we doing in state court? Why aren't you guys in federal

10 court?

11 MR. FLYNN : The only reason welre here is the Court

12 simply said: you can't remove it based on the counterclaim.

13 But wefve already filed over in the federal court.

14 Sor no matter what this Court does --

15 THE COURT: I'm wasting my time?

16 MR . PEEK : You dre not wasting your timez Your Honor.

17 THE COURT: Well, why don't you just let me do it, and

18 then you can go to federal court and do whatever federal court

19 does.

20 MR. FLYNN: Your Honor, because it's just so

21 flagrantly incorrect: under the copyright law, for a state

22 court to -- in effect, eo give away a copyright, which is the

23 clear basls of the record at this point in time, with no

24 reputation, with no meeting of any burden of proof to the

201

CECILLA Moârlz NV CCR #246 (775) 827-0672




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1 contrary . Based on a11 the case 1a< and the brief welve got

2 for the Court, it siutpky cannot be done .

3 THE CGURT: A11 right. See, 1'11 have to consider

4 that. I meanz 1lm aware of Title 17. I'm aware, 1 thtnk, of

5 the section you're talklng about.

6 1'm just zooking at this from the standpoint of

7 regular contract . If it can't be done, then we go back to the

8 issuez and I determine whether or not, in fact, it was in

9 writing and Ghether the writing ks sufficient to convey that

10 and whether conduct can supplement it or expand upon that

11 agreement. Those are the things that 1'11 have to take into

12 consideration. And I'm not necessarily going to decide it now;

13 11m just telling you the contents ln my head.

14 MR. FLYNN: YeE;, Your Honor. See, on that point r

15 webre -- the contract clearly says only CD Number 1 has been

16 given. I do not see how you can possibly get outside of that

17 where youlre not dealing with an employee, you're dealing with

18 a founder and a principal and an independent contractor.

19 THE COURT: Well, that's something 1:11 have to decide

20 when I take that into consideration.

21 MR. PEEK: And a fiduciary duty as a membûr of the

22 LLC, Your Honor, with partnership fidueiary responsibilities.

23 May I go ahead and cross-examine?

24 THE COURT: Yeah, go ahead.

2 0 2

CECILIA VOHL z W CCR #24 6 (775) 82 7 -D 672




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1 MR . PEEK; I unclerstand where the Court is . I may be

2 able to shed some liqht c)n this , as well .

3 THE COURT REPORTER : May I say, for the recordz I ' m

4 getting really tired.

5 MR. PEEK : l ' Ll be s low , Ms . Vohl . 1 don ' t agree wit.h

6 that , but -- T don ' t bel ieve that .

7

8 CROSS '-EXAMINAT I()N

9

10 BY MR . PEEK :

11 Q . Let ' s talk a llttle bit , Mr . Montgomeryr about , as you

12 say, the anomaly detection, which you say you copyrighted as

13 part of your work at Computermate ; ia that correct?

14 A. Yes .

15 Q . And that was related to blood gas analysis?

16 A . Nell, it related to blood gas analysis .

l 7 Q . M d the blood gas -- the blood is being drawn f rom

18 time to tkme by techs and teshed as to what its gases are?

l 9 A . Yes .

20 Q . M d those gases have to be within a certain range, do

21 they not, have a certain medical range where they might show

22 that there ' s something wrong wîth the patient?

23 A . Is that a question?

24 Q . Yes . Is that correct?

2 3 ' -

CECILIA lzrfffzs NV CCE 11246 (775) 827-0672




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1 A . Yes.

2 Q. And your anomals' detection portion of the blood gas

3 was, you said that lqhe range for certain levels of blood gases

4 would be a percentage for hydrogen, oxygen, nitrogen, carbon

5 dioxide, things of that nature?

6 A. 1 don 't understand your questlon.

7 Q. Well, you tre determiningr are you not, whether or not

8 a person's blood gases contain more hydrogen, carbon dioxide,

9 or oxygen than they are supposed to?

10 A . No .

11 Q. What are you testing for, then? What is the anomaly?

12 A. I've never tested for hydrogen. You lust used

13 hydrogen as an example.

14 Q. Okay. But you were testing for other blood gasesr are

15 you not?

16 A . Yes.

17 Q . And there are medical ranges Eor blocd gases, are

18 there not?

19 A . Yes.

20 Q. And if those blood gases fall outside of those ranges,

21 that would be an anomaly; is that correct?

22 A . No. That would be abnormal.

23 Q . Well, whatfs the anomalyr Lhen, that is being tested,

24 the anomaly detectlon that you 're determining with your blood

CECILIA Vsffzz NV CCR #246 (775) 827-0672




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1 gas analysis?

2 A . Youlme shooting light through bloodz and a spectrum is

3 being produced . Am d that spectrum, depending on which value

4 youfre lookinq for, determines the spec- -- you look for each

5 of the variables in a different range in the spectrum .

6 Q. Youdre looking for, as 1 understand it, certain gases?

7 A . Patherns .

8 Q. Patterns?

9 A . Patterns .

10 Q . What are the patterns?

11 A . Well, a gas shows up at a certain spectrum and has a

12 certain appearance.

13 Q. Can you show me within Exhibit 19 where it talks about


15 A . You want me to read this whole thing?

16 Q. I want you to -- it's your book, is it not?

17 A . lt's been 20 years .

18 Q. Ohz so you haven't looked at this book for 20 years,

19 Mr. Montgomery; is that correct?

20 A . No .

21 Q. Well, what -- when was the last time you looked at

22 this book, sir?

23 A . Two weeks ago.

24 Q. When you looked at it two weeks ago, did you find the

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CECILIA UO:rZs NV CCR #246 (775) 827-0672




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l phrase ''anomaly detection'' anywhere within 1t?

2 A . I donlt recall if 1 did or not .

3 Q. Is there anything in there that you would characterize

4 as anomaly detection? 1(E it is, point us to it.

5 A . The software.

6 Q. Well, point us to someplace in that book that

7 describes anomaly detection.

8 A . I'm not sure this book describes anomaly detection.

9 Q . Well, what about Expzibit 21, which is part of -- came

10 out of that -- or Exhibit 20, I thinkr that came out of that?

11 A . The copyrightsE

12 Q . No, no. The Exhibit 2Oz which was the excerpts from

13 that: where in those documents that are excerpts from

14 Exhibit 19 does it describez as you sayz anomaly detection?

15 A . The center screen is the output of the determination

16 of that anomaly.

17 Q . Okay. Can you then tell me -- point me, thenz to that

18 exhibit.

19 A . Am I done with this book?

20 Q. Pardon?

21 A . Page 22 in the middle.

22 Q. Page 22?

23 A . Yep .

24 Q. Okay. So this is what you describe as being anomaly

2 0 6 -

CECILTA VOJ/ZZ NV CCR #246 (775) 827-0672




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2 A . Excuse me . 32 .

3 Q. Okay. I apologlze. 32. Well, what's on 22?

4 A. Wellz the hlood hadn't been ejected yet.

5 Q . Oh: okay. So on 32z there is something there that you

6 say relates to anomaly detection. Where do we see that?

7 A . You -- you see the value that is displayed, tells you

8 the peak of the detection of the anomaly, and that peak has a

9 qualifying amount.

10 Q. Where am 1 reading that?

11 A . Welly see: a number like 29z as an examplez for

12 bicarbonate.

13 Q. For what?

14 A. For HCOa.

15 Q. Is it in the middle column?

16 A . Yes, 29.1.

17 Q. 29.12

18 A . Yeah .

19 Q. That's a detection of an anomaly?

20 A . That gives you the size of the anomaly, that's

21 correct.

22 Q . How do I know that's the stze of an anomaly?

23 A. I Just told you it Was.

24 Q. Oh: just beeause you tell me it was.

2 0

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1 It saysz over herer if 1 read across the column on

2 Exhibit 20 -- the middle column has no heading; iL just says

3 ''Corning 178-3 1/1/-j6 '' Is ,'1/1/76'1 Lhe date? Is hhat a date?

4 A . 1 believe jt looks like a date .

5 Q. Okay. And then HCO -- what does HCO stand for?

2 3

6 A. Blcarbonate.

7 Q. And then it says ''29.1.N How do we know that's an

8 anomaly?

9 A . Well, weîre looking for --

10 Q. Tell me this --

11 A . Do 1 geL to answer?

12 Q. Yeah.

13 A. Wedre looking for the pattern in the spectral analysis

14 that relates Lo bicarbonate.

15 Q. Where do we see that in this that shows --

16 A . You see the result of it.

17 Q. What's that?

18 A . You see the end result of it .

19 Q. How do T know that that was part of the spectral

20 analysis and was an anomaly detection from this document, or

21 are you reading from the book?

22 A. I don't remember from the book. We put the

23 original -- what the original patterns looked like.

24 Q . So how is the Court going to tell from -- without aid

CECIL FA V'JM r NV CCR #24 6 (7 75) 82 7 -0672




1 of this exhibik, that there was a spectral analysis taken on

2 thls patlent's blood gas showâng an anomaly of apparently a

3 bicarbonate 29.12

4 MR. LOGAR; Other than Lhe witness's testimony?

5 THE COURT : Mr. Logar, please. If you have an

6 objection, direct it to rcte, would you, please.

7 W1l1 you?

8 MR . LOGAR : I w21l.

9 THE COURT: A11 right. Mr. Peek, where are you going

10 with this? Is your point that the stuff that was patented and

11 what was --

12 MR. PEEK: The copyright is noh anomaly detection.

13 It's just more stuff --

14 THE COURT: I get it.

15 BY MR . PEEK :

16 Q . Is there anything in there?

17 A . The end result.

18 Q. The end result. But we don't know what the -- was the

19 original to be able to look at the spectral analysis, as you

20 described it, to say this <as a detection of an anomaly, other

21' than your testimony?

22 A . Correct .

23 Q . And Lhere's ncthing in the book that talks about that?

24 A . 1111 look again .

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1 Q . Okay .

2 THE COURT : Wùli Le we ' re taking thi.s little break,

3 according to my review o E the f ile, 1 do not have an Answer to

4 the complaint . Do you have a copy of the Answer?

5 MR. LOGAR J Your Honorz did you not get the documents

6 that were f iled in f edera 1 court Dn remittitur?

7 THE COURT : ''C?n removal '' ?

8 MR. PEEK: ''C)n rem i Lti tur . ''

9 'I'HE COURT : 091, ''on remittitur . '' Yeah, when they sent

10 them back?

11 MR. LOGAR: Yes.

12 THE COURT : Perhaps not, but do you have a copy of

13 the --

14 MR. LOGAR: We do .

15 MR. PEEK : And, Your Honor, they were filed and

16 captioned the United States District Court in the District of

17 Nevada.

18 THE COURT : Do you have a copy 1 could look at?

19 MR. PEEK: I've got oner Your Honor .

20 MR. LOGAR: It was unclear, when we were in federal,

21 when the remittitur would occur. 1 assumed that the fike had

22 been sent back by now.

23 THE COURT: It may have. Who knows.

24 MR . LOGAR: But you don't have it?





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1 THE COURT: 1 donît have itz no .

2 MR . PEEK : We a1l assume tha: because Judge McKibben

3 ordered it that way.

4 THE COURT: Let me just see a copy. A11 I?m saying,

5 Mr. Peek, is, 1 thjnk 1 know where youdre going with this . And

6 ultimatelyy if we don't get finished: then 1fm going to have to

7 ultimately declare some kind of a recess, and God knows when

8 welre going to come back. So I encourage you to use your

9 Uime --

10 MR . PEEK : Wisely? Ifkl move onr Your Honor.

11 BY MR. PEEK :

12 Q . ln the brief moment youfve had to look, you find

13 nothing in there about anomaly detection, do you?

14 A . No .

15 Q. And you were not the only founder of Computermate,

16 were you?

17 A . Yes, I was the original founder.

18 Q. Were you the only founder, sir?

19 A . Yes: I was the original founder.

20 Q. Were there any other individuals who -- wellz for

.

21 example, who is Robert West?

22 A . I actually don 't remember.

23 Q. And who is William Mannak?

24 A. He joined Computermate -- I don't remember the exact

CECILIA VoHiz NV CCR #246 (775) 827-0672




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2 date.

2 Q. And was it in 1982?

3 A. It was like a year after -- I1m just --

4 Q. A year afher you had what?

5 A . Started Computermate .

6 Q. When did you start Computermate?

7 A . I thought it was '81 .

8 Q. So about a year laterz he joined you.

9 And the source code that you wrote for blood gas

10 analysis, that was written in what language?

11 A . I believe RPN.

12 Q. RPN . And in what language were you wrîting anomaly

13 detection at eTreppid?

14 A . The anomaly detection at eTreppid already existed.

15 Q. It already existed?

16 A . Yes.

17 Q. Because you put it on the computers?

18 A . Yes.

19 Q. Okay. And what language <as 1t that you put it on?

20 A. I think it was Visual C.

21 Q. Visual C. Not C++?

22 A . Not originallyz that's correct.

23 Q. Now: were there engineers who wrote code onto the

24 anomaly detection that you had, at some timeg put on the

CECILIA VOIIL, NF CCR #246 (775) 827-0672




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1 servers at eTreppid?

2 A. No .

3 Q. So, there were no -- none of :he engineers in Zehang's

4 group, as he is directcr of engineering, did any additions

5 whatsoever in writjng source code or writing code, either in

6 MET 1ab or C++, to the anomaly detection ; is that right?

7 A . To my anomaly detection?

8 Q . That's right.

9 A . No .

10 Q. Was your anomaly detection on the source server?

11 A. No .

12 Q. Was it on the ESA server?

13 A . No.

14 Q. Was it in a raid box?

15 A . Had it ever been on a raid box?

16 Q . Uh-huh.

17 A . Possibly.

18 Q. Possibly. So -- and d1d you -- from time to times as

19 the government was asking you to make additions or deletions or

20 improvements to the -- as you call your source code, did you

21 have to write additional code?

22 A . To the anomaly detectioh software?

23 Q. Yes.

24 A . No.

CECILIA VOSZP NV CCR #246 (775) 827-0672




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1 Q . Okay. And when did you put it on -- when did you put

2 the anomaly detectâon software onto the computers at eTreppid?

3 A . Which computers?

4 Q . The computers at eTreppid.

5 A . July or August of 2003, I believe.

6 Q. And which computer -- on which computer did you put

7 it? '

8 A . The one in my office.

9 Q. Okay. On this diagram here where we showed

10 Dennis Montgomery in sort of the lower right, is that where --

11 that's your desk statjon?

12 A . Where?

13 Q. ls that your desk? Show us -- actually: why don't you

14 do it in green . Do it in green, pleasib sir.

15 A . (Witness complles.)

16 Q . So it's not in the warehouse?

17 A . Thatïs correct.

18 Q . Okay. And do you have any other identîfying

19 'characteristics of that, other than that computer that was in

20 your office?

21 A . I don 't understand what you mean.

22 Q . Is there anything, if 1 were to -- I want to make sure

23 that I could go to the right computer. Is there just one

24 computer in your office?

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CECILIA VOS.L, NV CCR #246 (775) 827-0672




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1 A . And what time frame was that?

2 Q. Letîs say in Deeember of 2005.

3 A . 1 thought you said originally --

4 Q . No, I wanted to know --

5 A . You said originally 2003.

6 Q. You put it there. You put it there, in 2003, on your



9 Q . Did it go anyp'Lace after that?

10 A . Yes.

11 Q. Where did it go after that?

12 A . Downstairs .

13 Q. Thatîs into the warehouse area?

14 A . Yes .

15 Q. D1d you just take the entire box and put it -- take it

16 down to the warehouse, or did you just take portions of it?

17 A. I made just a copy of it.

18 Q. And did you leave the original on your desktop or your


20 A . No .

21 Q. So you deleted that?

22 A. Yes.

23 Q. Okay. And then where did you put it after 2003, which

24 computer?

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1 A . (Witness draws on diagram.)

2 Q. Is there any identifying characteristic of that

3 computer, location, type: manufacturer'?

4 A . Well, when I saw it last, it was still sitting there .

5 Q . What's the manufacturer of 1t?

6 A . It was a clone . There was no manufacturer of it .

7 Q. It was a clone built by --

8 A . eTreppid.

9 Q. eTreppid. Is it the first computer as you walk into

10 the warehouse on the left-hand side?

11 A . From which direction?

12 Q. As you rre walking into it from the -- I don ît know the

13 directions here, but from the offices into the warehouse: would

14 it be on the left-hand side?

15 A . Yes .

16 Q . That's where it's drawn on this drawing, isnlt it?

17 A . Welly that drawing didn't actually represent the way

18 the computers were set up in the warehouse .

19 Q. Okay.

20 (Plaintiff's Exhibit 23 was marked for

21 identification.)

22 BY MR. PEEK :

23 Q. Now, again with respect to Computermate, 1 think you

24 said that that company, at some timez went out of business?

216

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1 A . I don't remember if it did or not or we sold it .

2 Q. And did it merge into Barrett Laboratories?

3 A . I don': think so.

4 Q . And did Barrett Laboratories merge into 3Net?

5 A . That is a possibility. 11m not certain.

6 Q. Let me hand you what has been marked as Exhibit 23 and

7 ask you to tell me whether or not you can idenkify whether or

8 not that 's anything you have seen before today.

9 A . 1 can't read a11 of them, but I think I get the gist .

10 Q. The gist is, these are the original documents filed by

11 Computermate with the United states Copyright Officez are they

12 not?

13 A. I don't know if they are or not.

14 Q. Well, you recognize your name there as

15 Dennis Montgomery, do you not, as the author?

16 A . Yes.

17 Q. You recognize the TXu as corresponding to the claim

18 that you made?

19 A. I could look -- 1'11 trust you. Yes.

20 MR. PEEK: You recognize Mr. Mannak as being somebody

21 who was -- 1:11 offer itz thenz Your Honor.

22 THE COURT : What's the number?

23 THE CLERK : 23.

24 MR . PEEK : It's 23 .

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l THE COURT: Any objectlon?

2 MR . FLYNN : He has no foundatîon, Your Honor, for

3 authentication purposes.

4 THE COURT : 1 Uhink it has enough that 1ïm going to

5 admit it . lt's admitted .


7 THE COURT: Where are we going with this? Are we back

8 to wKo really owned it?

9 MR . PEEK : Yes, Your Honor.

10 THE COURT: If he didn't own itz how could he sell it

11 to your clients? He shouldn't even be here.

12 MR. PEEK ; That may very well be# Your Honor, as to

13 who should be here. What we maintain is, whatever he did with

14 blood gas has nothing to do with what happened -- or what was

15 actually developed at eTreppid.

16 THE COURT: Well, that, 1 understand.

17 MR . PEEK : There's two prongs.

18 THE COURT: Ownership has got a back side to it.

19 MR. PEEK : I understand it may be that I'm dealing

20 with Computermate or Barrett Laboratories or somebody else who

21 can come in and actually show us that their source code is the

22 same as ours and written in the same language.

23 MR. FLYNN: Your Honor, if that's the positionr there

24 isn't an iota of evidence so far that they have presented that

218

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1 this anomaly detection software was developed, produced, worked

2 on, anythingr by eTreppkd Technologies other than

3 Mr. Montgomery. And the only state of the record is it derives

4 from the copyrights . There is nothing to the contrary.

5 MR . PEEK : Your Honor, that 's untrue . Mr. Zehang

6 testified that he did anomaly detections in MET lab --

7 THE COURT : He did. He did.

8 MR . FLYNN : Nop Your Honor -- well --

9 THE COURT : Itls my recollection -- if I'm wrong, 1

10 suspect that what 1'm going to do is, tIm going to want to hake

11 a look at the transcript. Maybe not. But ï m ade some notesr

12 and I can tell you thab, according to my notes -- hold on --

13 according to my notes, Dr . Gun -- well, I don't see it right

14 here, but that was my recollection . 1'11 look back at my

15 notes . I1m not going to take the time --

16 MR . FLYNN : Your Honor, I specifically asked --

17 THE COURT : Hold on right here.

18 Dr. Gun, according to my notes, he created software

19 for pattern recognition, motion detectionz face recognition,

20 tracking the vehicles, and anomaly detection. I wrote it down .

21 MR. FLYNN : Yes, Your Honor . And then on cross, I

t 22 asked him if the anomaly detection work that he did had

23 anything to do with the anomaly detection work that

24 Mr. Montgomery did on the government contracts, and he said no.

2l9

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1 And I asked Mr. Montgomery, and he said what Dr. Sun did had

2 noth ing to do with what he did on the government contract .

3 THE COURT: That could be. A11 right. Let's go ahead

4 and try to get through this.

5 MR . PEEK: Thank you: Your Honor. 1'11 try to move

6 on .

7 BY MR . PEEK:

8 Q. You then went to -- I think you said Barrett did

9 addltional work -- wellr first of allz let me sort of

10 backtrack. Is there a written assignment to you from

11 Computermate of these copyrights?

12 A . Yes .

13 Q. Where is that?

14 A . 1 believe I have it.

15 Q . Okay. So you could produce it to this Court at our

16 next hearing or durinq discovery?

17 A . I will surely look for it.

18 Q. Okay. And would that be -- would Mt. Mannak be the

19 one who assigned it?

20 A . I don't recall if it was or not.

21 Q. And where do you believe it exists today? Where is

22 it?

23 A . I don't know. I'd have to look for it .

24 Q. Now, you said you went to Barrett Laboratories. Did

220

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1 you, then, convey this same anomaly -- what you claim to be

2 your anomaly detection technology -- orr excuse mey copyright

3 to Barrett?

4 A . I don 't know if' it was -- I believe it was a

5 derivative and that work had continued on.

6 Q. Okay. And so you did additional work whtle you were

7 at Barreth?

8 A . Yes .

9 Q . And you had additional copyrights?

10 A . Yes .

11 Q. And those copies also were for this same derivative

12 work or blood gas analyais?

13 A . No, it covered many other areas.

14 Q . Covered other areas, but it was also anomaly

15 detection?

16 A . Yes. .

17 0. And did -- soz is there a written transfer of that --

18 a11 that work, the copyright for blood gas analysis, to

19 Barrett?

20 A . I believe so .

21 Q. You would have that as well?

22 A . I will sure look for it.

23 Q. And so then Barrett owned it after you joined Barrett

24 sometime in '85 you said?

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1 A . I believe 1 retained the rights out of Computermate to

2 do with it what I chose, whether Barrett had it or noh.

3 Q. Wellz the copyrights that you did -- that you actually

4 copyrighted at Barretto were they for the blood gas analysis or

5 derlvahives thereof?

6 A . Would it contai.n that? Yes.

7 Q. Okay. So the (ropyrtghts that you did while you were

8 at Barrett, who owns those?

9 A . I do .

10 Q. And how did you get them from Barrett?

'

11 A They were assigned to me.

12 Q. And is there another wrltten assignment of that?

13 A. I believe there is.

14 Q. You believe there is.

15 Now, are you aware that in order to make an assignment

16 effective, it has to be at the copyright office?

17 A . I don't recall kf it was or not.

18 Q . Have you transmitted these assignments to the

19 copyright office?

20 A . I don't recall.

21 MR. FLYNN: Your Honor, that calls for a legal

22 conclusion.

23 THE COURT: Well, he's asking if he's transmitted it

24 to the copyright office. Are you talking about the question

222

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l before that?

2 MR . FLYNN : g'm asking him if he is aware that that's

3 what has to be done to make tt legally effective.

4 THE COURT: And he said no, he's not, so he's answered

5 that question. And then you asked himz had he transferred it#

6 and I would assume --

7 MR . PEEK : Transmitted it in an assignment form to the

8 copyright office.

9 THE COURT I Yeah, yeah . I would assume the answer is

10 no, because he didn't know --

11 THE WITNESS : E don lh know.

12 THE COURT : -- if that is the law or isn 't the law . I

13 don 't know .

14 BY MR . PEEK :

15 Q. Would you agree with me# though, the copyrights, while

16 you were at Barrett, on whatever you claim to be an anomaly

17 detection that you devetoped at Barrett, were in the name of

18 Barrett?

19 A . I don 't recall if they were or not.

20 Q. Did the copyrights that you undertook to copyright

21 while at Barrett get copyrighted in the name of Barrett or in

22 your name ?

23 A . T believe Barrett.

24 Q. And Barrett still exists in some other iteration of an

223





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1 entity todayr does it not?

p A. I don 't know if it does or not .

3 Q. You left it after a certain ttme?

4 A . Yes.

5 Q. Now, I think you also say that your -- you claim to

6 have the right to the source code for pattern recognitionz as

7 well; is that correct?

8 A . Yes.

9 Q. Something that you developed while you were in

10 Hollywood, acting as a consultant?

11 A. No .

12 Q. Okay. From '93 to '98 you worked as an consultant,

13 and you said during that period of time, you did some work in

14 Hollywood .

15 A. Yes .

16 Q. And it's while -- it's while doing that work in

17 Hollywood that you then wrote pattern recognition source code?

18 A . No.

19 Q. When did you write that?

20 A . That was derivative work from the original work that 1

21 had done on the copyrights.

22 Q. Okay. Same thing with the blood gas analysis?

23 MR. FLYNN: Objection. I don't understand.

24 //// ////

224

CECILIA Moffz, NV CCR #246 (775) 827-0672




1 BY MR . PEEK :

2 Q . What copyright was it that covered pattern

3 recognition? Was it the blood gas analysis one?

4 A. I believe it was the one in Barrett Laboratories.

5 Q. And uhat's the name of it?

6 A. I -- 1 think j.t was the one for microbiology.

7 Q. The one for microbiology? Okay.

8 (Plaintifrîs Exhibit 24 was marked for

9 identification.)

10 BY MR . PEEK :

11 Q. Let me have you take a look aty again, a document from

12 the United Statea Copyright Office. 1'11 represent to the

13 Court and counsel thatls where this came from .

14 It's Exhibit 24?

15 THE CLERK : Thatls correct .

16 BY MR. PEEK :

17 0. Let me switch with you and give you the -- these

18 are -- I <ïll represent to your these are the copyright numbers

19 for the copyriqhts whose numbers correspond to the allegations

20 in your counterclain and in your federal court complaint. '

21 A . Okay.

22 Q. Can you tell me which of these relate to pattern

23 recognltionz if any?

24 A . T did pattern recognition orlginally in the original

225

CECILTA Voflfz NV CCR #246 (775) 827-0672




i

l HP computers. It was expanded greatly when T got into the

2 Barrett Laboratories.

3 Q. Okay. Then let's gc back -- you still have the

4 Computermate. Which one of those is related to pattern

5 recognition?

6 A . The one dated -- the one -- 117-868, titled

7 ''Evapotranspiration Software.''

8 Q. And this is ent.itled -- and you say 'fcomputermate

9 Source Code for Hewlett-paekard Model 86z Evapotranspiration

10 Irrigahion Softwaren; is; that correct?

11 A . Yes.

12 Q. And the Hewlett:-packard Model 86# was that a computers

13 or was that one of those hand-held --

14 A . No .

15 Q. What was it?

16 A . I believe they were a1l computersw the 85z 86r and 87.

17 Q. They were before the IBM XTs?

18 A . PCs.

19 Q. The XTs that ran on the 88 -- or 8800 chip?

20 A . Yes.

21 Q . And you believe that this is an HP computer, the 86?

22 A . I believe it's a computer, yes .

23 Q . And certainly not what we know today or even

24 comparable to the IBM that started a11 this, with the 8800 chip

226 '





-- 2 x.e

1 back in the mid-d8()s?

2 A . Are you askinq me --

3 Q. Tbat's not the same tbingz is it?

4 A . What do you meiln: ''the same thinge'?

5 Q. Well, it's not with the motherboardy the hard drives,

6 the chip?

7 A . It had a motherboard and a hard drive and a chip.

8 Q. And in what language did you write this code?

9 A. I think it was RPN. I'm not certain .

10 Q. Youbre not certain. Okay.

11 So then we have the blood gas analysis for anomaly

12 detection and the Evapotranspiration Irrigation for pattern

13 recognition; is that correct?

14 A . Yes.

15 Q . So the so-called copyrights at Barrett had nothing to

16 do with either anomaly detection or pattern recognition; is

17 that correct?

18 A . No .

19 Q. Okay. So which of those relates -- of the Barrett

20 relate to pattern detection and anomaly detection -- pattern

21 recognition and anomaly detection?

22 I'm trying, Your Honor.

23 A . The one that ends in 750 that speaks of microbiology

24 and the one that ends ân 009 that relates to anatomic

227





J

1 pathology.

2 Q. Have you -- is there some record of what this source

3 code would look like at the copyright office, and do you have

4 an original copy of your filing showing the source code that

5 you copyrighted?

6 A . I believe the source code is included with the

7 copyright.

8 Q . Sor at least those two anomaly detection copyrights

9 that were in some -- excuse me . The anomaly and the pattern

10 recognition were transferred to Barrett, and you continued to

11 work on them and devetoped additional -- well, developed more

12 work in pattern recognition and anomaly detection at Barrett;

13 is that correct?

14 A. Yes .

15 Q. And is the pattern recognition source eode -- was it

16 also located first -- or loaded first on your office computer?

17 A . Um, I'm not certain.

18 Q. And when did you load it on that office -- your

'

19 computer at the eTreppid office?

20 A . î03, I believe .

21 Q. What month in $032

22 A . I'm thinking sometime in August, July, August.

23 Q. July and August of :03.

24 A . I'm tired. I think that was Lhe tlme frame.

228

CECILIA Voffzz NV CCR #246 (775) 827-0672




1 Q. Okay. And then did you, after July, August of 103,

2 write any additional source coder lines of code, to add to that

3 original source code of pattern recognltion that you loaded on

4 your office computer jn July and August?

5 A . For the detection?

6 Q . Yes.

7 A . No.

8 Q . And a1l your techs wrote pattern recognition. Did you

9 write any code on that'?

10 A . For Lhe actual detection?

11 Q. The pattern recognition that you say is yours and the

12 anomaly detection which you say ls yours -- nowr am I getting

13 the phrases wrong?

14 A . What you 're asking is, has the technology thatîs

15 detecting the pattern or the anomaly been changed since it was

16 at eTreppid? I think -- is that --

17 Q. Yes.

18 A . No .

19 Q. Thank you. 5o you haven't written any additional

20 code, is that correct, to that?

21 A . For the actual detection?

22 Q. That's correct.

23 A . No .

24 Q. And are you telling this Court that the only software

229





i

l which was used to complete the government contracts was your

2 anomaly detection atnd your pattern recognition software?

3 A. I'm just looklng at something.

4 Q. Please answer my question, sir.

5 A. lem sorry. Go ahead .

6 Q . Are you telling this Court that the contracts that

7 were fulfilled by eTreppid were done -- were fulfilled solely

8 by your pattern recognition and your anomaly detection

9 software?

10 MR . FLYNN: Objection. Which contracts, Your Honor?

11 MR. PEEK: N 1y of the contracts.

12 THE COURT : Any of the contracts.

13 THE WITNESS ; You mean ever?

14 BY MR . PEEK :

15 Q. Yesr solely by your source code for anomaly deteetion

16 and pattern recognition.

17 A . Yes .

18 Q. Okay. And which contract -- tell this Court which

19 contract was fulfilled using just your anomaly detection and

20 your pattern reeognition.

21 A . The government agency that we --

22 Q . Oh: the government agency that we don't want to talk

23 about, is that the only one?

24 A . No.

230

CECILIA IJIISJ;, NV CCR #24 6 ( 7 75) 82 7-0672




i

1 Q . Okay. Whieh other one where it was the sole produet

2 or sole source code software used to fuLfill the contract?

3 A . We had a conhraet with the Department of the Navy.

4 Q. Okay. And what was the nature of that contract?

5 A . Searching for an anomaly.

6 Q. Searching for an anomaly.

7 And was your software the only software used?

8 A . The one for detection?

9 Q . To Culfill that contract.

10 A . Yes .

11 Q. So none of the other eTreppid softwares were used

12 whatsoever?

13 A . Thatïs correct.

14 Q. And did you tell this unnamed agency that lt was

15 only -- that it was your software that was being usedz as

16 opposed to eTreppâd ?s?

17 A . I don't recall if 1 did or not.

18 Q. Was the contract with this unknown agency between you

19 or between eTreppid and the others?

20 A . eTreppid.

21 Q . Was the work runninq the software for detection

22 undertaken while you were at eTreppid?

23 A . Yes.

24 Q. And Was the contract with the Navy, the contract with

231

CBCILTA VOHLr NV CCR #246 (775) 827-0672




:

1 eTreppid?

2 A . Yes.

3 Q. And was it a ccntract and the work undertaken on that

4 contract a11 performed at eTreppid?

5 MR. FLYNN: Objection. Lacks foundation.

6 THE WITNESS; You have to ask the question again.

7 THE COURT: Ask the question . I mean, I understand

8 the question .

9 BY MR. PEEK :

10 Q. Was the performance under the contract with the Navy

11 a11 undertaken by eTreppid on eTreppid premises?

12 A . Yes .

13 Q . Now, is pattern recognition a part of digital

14 compression product?

15 A . No.

16 (Plaintiff's Exhibit 25 was marked for

17 identification .)

18 BY MR . PEEK :

19 Q . Did you, from time to timez prepare Powerpoint

20 presentations?

21 A . Yes.

22 Q. Let me have you take a look at what has been marked as

23 Exhibit 25 and ask you to take a moment and examine it and tell

24 me whetherr after doing so, you can identify it as something

232





wm. ? .-.<

1 youeve seen before today.

2 THE CLERK: J 1st for the recordz Your Honor,

3 Exhibit 24 was not offered.

4 MR. PEEK: I'k1 orfer Exhibit 24.

5 Thank youz Mr. Clerk.

6 MR. FLYNN: No objection.

7 THE COURT : It's ae ïitted.

8 This is 25?

9 MR . PREK: Yes, Your Honor.

10 (Plaintifr's Rxhibit 24 was admitted into evidence.)

11 THE WITNESS : Okay. Irve looked at it.

12 BY MR . PEEK :

13 Q. And did you prepare it?

14 A . No .

15 Q. Who prepared this?

16 A . I don't know.

17 Q . Have you seen it before?

18 A . It looks familiar.

19 Q. So whoy in March of 2001, would have been preparing a

20 Powerpoint presentation?

21 A . I can't recall.

22 Q. But you say this was not prepared by you?

23 A . I don 't -- you asked me if I recall preparing it.

24 Q. Was it prepared be you?

233

CECILIA IftlSlgs NV CCR #24 6 (7 75) 8.2 7 -0672




.

1

1 A . 1 donft recall preparing it.

2 Q . Okay. But you prepared Powerpoint presentations very

3 similar to Lhiss did you not, sir?

4 A . 1 prepareci Powerpoint presentations .

5 Q. And do you know ITvimage Xpress?

6 A. I th knk it was the name that the company was coming up

7 with to name their products.

8 Q . But you're the chief technology officer at this time,

9 were you not?

10 A . Yes .

11 Q. And it was your data compression that the company was

12 using pursuant to vour contribution: was it not?

13 A . Yes.

14 Q. Okay. And you would have known what the business --

15 the technology business of the company was, would you not?

16 A . Yes.

17 Q. So you would have known about ITvdata Xpress, would

18 you not?

19 A . I donît recall seeing that particular --

20 Q. Okay. Well, ket me --

21 A . -- acronym .

22 Q. Let me have you -- let's see. One: two -- these are

23 not numbered -- two, three, four, five, six -- on page 7 of

24 this --

234

CECILIA MOSLp NV CCR #246 (775) 827-0672




1 A . What is - -

2 Q . The seventh page in.

3 A . What does it start wi/h?

4 Q. lt starts with ''TTvdata Xpress; ITvdataz' and it says

5 ''supports SAN-solutions based systems.''

6 A . Okay. 1 can't tell you .

7 Q . Okay. Thts is talking about digital compression

8 products, is it not?

9 A . Yes.

10 Q. And it's talking, on at least that seventh page, about

11 pattern-matching features, is it not?

12 A . f don /t see that .

13 THE COURT : Third down .

14 BY MR . PEEK :

15 Q. Third one down.

16 A . I must be on the wrong page, then .

17 MR . FLYNN : Itïs page 8.

18 THE WITNESS : I was on the sixth page.

19 MR . PEEK : Is it page 8, Counsel?

20 THE WITNESS: Okay. 1 got it. What's your question?

21 BY MR. PEEK :

22 Q . Pattern-matching features, that's pattern recoqnition,

23 is it not?

24 A . No.

235

CECIL TA t'off.b s NV CCR #24 6 ( 7 75) 82 7 -067.2




.

(

q

'

mee ' --

1 Q. It's not. Okay.

2 Now , 7 -- go t.o 8, 9, and then page 10 .

3 A . Got it.

4 Q. Now, does it say there ''lTvvideo has advanced features

5 like pattern and bj.t recognition''?

6 A . Yes .

7 Q. 5o eTreppido; technology: as of March 29, 2001, under

8 digital compression products, was at least saying that it had

9 pattern and bit recognttion as far as digital compressionr did

10 it not?

11 A . I see that there .

12 Q . And do you have any reason to --

13 A . I'm sorry .

14 Q. You don't agree with that, though: I would take it?

15 A . I don't recall at that time if it did or not.

16 Q. Wells you said you didn't put it on your computer

17 until sometime in 2003. This is 2001.

18 A . What ls the question?

19 Q. So: the pattern recognition addreased here came out of

20 the digital compression productx did it not?

21 A . No.

22 Q. Oh, it did not. Okay.

23 But at least it was represented or part of this

24 Powerpoint presentation as a product that eTreppid had in March

236

CECILIA UOSZ, NV CCR #246 (775) 827-0672




.

. 1

1 of 2001?

2 A . I don rt recal L if it did or not.

3 Q. Well, you see j.t here, do you not?

4 A. 1 just said 1 didnbt make this document.

5 Q. I understand that. You don't have any reason to

6 believe that this fs not a true and correct --

7 A . I don't know if. it was true or incorrect.

8 MR. FLYNN : Your Honor, we need a correction on the

9 record. Mr. Peek pointed towards the green box and said that

10 what he ls now discussing was put on Mr. Montgomerybs computer

11 back at the time. The question was with regard to the green

12 box with regard to anomaly detection?

13 THE COURT: i l:hink it was . I think it was.

14 MR . PEEK: He also said, Your Honorr that he put his

15 pattern recognition on the same computer on the same time frame

16 in 2003 . Iïl1 go back.

17 THE COURT : 1 don't remember that. Why don't you ask

18 him. I really don ît remember.

19 MR . PEEK : I understandr Your Honor . Itîs late.

20 BY MR. PEEK :

21 Q. When did you put the pattern recognition source code

22 onto your computer?

23 A . T don 't recall the exact time frame. I'm tired.

24 Q. Would it have been similar to the time you put the

237

CECILIA VOSDZ NV CCR #246 (775) 827-0672




i

. .

.,

I

l anomaly on?

2 A . lt could have been.

3 Q. Would ik have been any earlier than that?

4 A . 1 don't think so.

5 Q . Okay. So whenever you put -- whenever you testified

6 you puL the anomaly detection on would have been about the same

7 time you put the pattern recognition source code technology on,

8 again, in that little otfice, in that green block on Exhibit 1?

9 A . I'm not certain.

10 THE COURT: How much longer, Mr. Peek, do you think?

11 MR. PEEK: 1911 try to move this along: Your Honor.

12 THE COURT : 1 know, but 1'd like to have some idea how

13 much longer.

14 HR. PEEK: I'1L try to finish up, Your Honor, in a

15 half an bour.

16 THE COURT: Then there's going to be redirect: I would

17 assume?


19 THE COURT: So eeere looking at 10 o'clock, maybe?

20 It's getting kind of late. Let me just interrupt here because

21 I want to ask a question, because I don't want to be sitting

22 here, spending a11 this time and energy on this case -- wexre

23 looking at a case that actually is preempted by federal law .

24 And what T'm trying to understand -- I haven't seen the order

238

CECILIA Voffzz NV CCR #246 (775) 827-0672




. .

'

i .'

1 of remand. It's not in my fîle, anyway. And was hhis issue

2 presented to u'fudge McKibhen, and did Judge McKibben -- why did

3 Judge McKibben send tt back to state court if, in fact, it was

4 preempted?

5 MR. PEEK : That was the argument thah was made by

6 Mr. Logarz Your Honor.

7 MR. FLYNN : T wasnît there . Mr. Logar will have to

8 address it.

9 THE COURT: l direcked the question to them , so 1et

10 him answer itz and you can reply to it if you want to.

11 But do you have the order of remand? I don't.

12 THE CLERK: I don't have it.

13 THE COURT : A1t right. Mr. Logar?

14 MR. LOGAR: %he case was originally filed by the

15 plaintiffs in state court. We did a removal based on two

16 issues: One was the diversity of citizenship parties, and

17 subject matter jurisdiction. The federal court found that

18 neither applied and remanded it back to the state court.

19 THE COURT: Well, are you telling me that McKibb en

20 found that the subjeet matter, i.e., the issue of copyright,

21 was not preempted?

22 MR. LOGAR: No.

23 MR. PEEK : That's exactly what he found.

24 MR . LOGAR: N(b that is not What he found.

239

CECILIA VOSI, NV CCR #246 (775) 827-0672




I

l MR. PEEK: Your Honor --

2 MR. LOGAR: He followed the well-crafted complaint

3 rule, okay?

4 MR . FLYNN ; Your Honor, the issue that arose over in

5 federal court was real simple. When they puL in their original

6 complaint Lhat eTreppid Technologies was the California corp.,

7 we removed it on that basis that they pled it was a California

8 corp. They didn't reatâze they made a mistake . They told

9 Judge McKibben we made a mlstake, itls not a California corpw

10 it's a Nevada corp. Judge McKkbben said 1 have no choicer

11 therels no diversity.

12 In the interimr we filed a copyright claim --

13 counterclaim. So the issue of preemptkon or nonpreemption has

14 never been brought up or discussed or declded upon over in the

15 federal court.

16 MR . PEEK ; Your Honors I was there --

17 THE COURT: Hold on. What I want to know is -- I

18 mean, you know, I enjoy thts job. I get paid to do thia job.

19 But on the other hand, it troubles me that this issue that

20 where you're coming here and telling me: on February the 7th,

21 that a11 of this stuff is preempted, that the flrst time T hear

22 about that is when I'm handed this brief this evening. I don ft

23 think that 's a very diplomatic way to handle this issue with

24 this Court.

240

CECILIA VOHL, NV CCR #246 /775) 827-0672




1 MR . FLYNN : Your Honor, I agree with the Court.

2 THE COURT: I lteanr we have -- if you are correct, if

3 you are correct -- and 1 thînk the issue that really is whether

4 or not the material we're talking about was copyrighted back in

5 the e80s sometime. RtH: if youdre correct, then weeve just

6 wasted a whole 1ot of ti.me, and frankly, I would think that if

7 that was your position from way back when, 1 would have heard

8 about this before now.

9 MR. FLYNN: Your Honorr Mr. Logar and Mr. Pulver are

10 not copyright lawyers. We were just brought in. We only filed

11 our appearancesy Your Honor. You knowy we had to do all of

12 that by Federal Express. We literally have been doing this

13 research in the last aeveral days. Webve been brought in at

14 the 11th bour. An enormous amount of material is being dumped

15 in the Court's lap, and it is --

16 MR. PEEK : Your Honor, could 1 address this?

17 THE COURT: You can if you want. I mean, I've already

18 pretty much decided that what I'm going to do is, I m goinq to

19 go ahead and finish this matter. And Iïm going to hear this

20 matter and 1ïm going to make a decision in this matter, and

21 then if the federal court says I1n preempted, that's fine.

22 MR. PEEK : 1 could address why they did what they did,

23 but 1 won bt .

24 THE COURT: TL' doesn't matter.

241

CECILIA VOSA, NV CCR #246 (775) 827-0672




(.-,

) ... '

1 MR. PZEK; Okay. Thank you.

2 THE COURT REPORTER: Your Honor, 1 just want to say,

3 for khe record, T cannot go to 10 o'clock. Sorry .

4 THE COURT : You can 't or you wonlt?

5 THE COURT REPOBTER; I cannot.

6 THE COURT : How much longer do you Lhink you can go?

7 1 mean, if webre not going to go to the end, we might as well

8 stop right now .

9 THE COURT REPORTER : I'm very sorry, but the record

10 w1l1 suffer, and we 've got a criminal calendar, as you know, at

11 8:30.

12 THE COURT: 1 15ort of think I have to be here for

13 that: don't 1?

14 THE COURT REPORTER: Yes, Your Honor .

15 MR. PEEK : Your Honor, could I a5k Ms. Vohl to indulge

16 us just for a few more queations, because I want to make sure

17 that, one, the order that's currently there remains. And I

18 think the Court will do that . But 1 also want to ask for some

19 expansion of that. But may I have the Court's indulgence?

20 MR . FLYNN: I'm going Lo need to be heard on that,

21 Your Honor.

22 THE COURT: Well, T means we got a situation where

23 webve got a court reporter thatîs telling us she can lt really

24 go much further. You know' there's not much -- I can 't get out

242

CECILIA Uolfls NF CCR #246 (775) 827-0672




.w.. ) ... :

1 my whip and make her do that.

2 THK COURT RKPORTER; You have a Whip?

3 THE COURT : Yeah, I do.

4 MR. PEEK : Thanks, Cecilia.

S MR . FLYNN : You seem way too kind, Judge.

6 MR. PEEK: 1 would just ùsk some indulgence, Your

7 Honor , for fkv: minutes.

8 THE COURT: Can you hang in there for five?

9 THE COURT REPORTER: Yes.

10 THE COURT: A L) right . Let 's go flve-

11 BY MR . PEEK :

12 Q- Mr. Montgomeryv you've heard Sloanbs testimony about

13 conversations he had with you on January 3rd about why does it

14 appear that there are operations on the source server and the

15 ESA server, and you said he was cleaning up files.

16 A . I heard hiG testimony.

17 Q. Did you have that conversation with him?

18 A . No.

SA

19 Q. That never oceurred?

20 A . That's correct .

21 Q. So you were never cleaning up files on either the

22 source server or the ESA server?

' 23 A . Ever?

24 Q. In this time frame, from December through January --

243

CECILIA MOSS, NV CCR #246 (775) 827-0672




.

1

l A . I might have.

2 Q. -- of 605.

3 So you might have cleaned them up?

4 A . Yeah .

5 Q . So when Mr. Venable was askinq you questions about

6 what you were doing, you said you were cleaning up files .

7 A . No, no, I've never had a conversation with Mr. Venable

8 regarding this.

9 Q. And then you read the affidavit of Mr. Balls have you

10 not?

11 A . Yes.

12 Q. And Mr . Ball talks about the fact that you took his

13 hard drive and his workstation on or around December 19th or

14 20th?

15 A . Youfd have to show it to me.

16 Q. Wellz 1et me Just ask this question: Did you, on or

17 around December 19:h or 20tb, begin deleting certain eTreppid

18 source code files located on Barjinder Ball's hard drive?

19 A . No.

20 Q. Did you tell Barjinder Ball that you were deleting the

21 files on your -- his workstation for security reasons?

22 A . No.

23 Q. And did you tell Barjinder Ball that there remained

21 copies of those files that you were deleting on h1s server --

244

CECILIA Molff, NV CCR #246 (775) 827-0672




I

.

6

1 or, excuse me, on his hard drive, on the source server, Lhat he

2 would still be able to access?

3 A . He has a direct connection to the source server.

4 Q. Did you tell him that, sir --

5 A . No .

6 Q . -- that you were deletinq files, that he could have

7 copies from the source server?

8 A . No .

9 Q. Okay. Did you delete any eTreppid source code files

10 on Venkata Kalluri's workstation tn or about December of 2005?

11 A . No .

12 Q. Did you have a conversation with Mr. Kalluri about the

13 fact -- in December of 2005, about the fact that source codes

14 on his workstation had been deleted?

15 A . No.

16 Q. Did Mr. Kalluri ever ask you or did you ever explain

17 to Mr. Kalluri that you were backinq up the source code at

18 eTreppid in or about late December of 20052

19 A . I don lt believe so.

20 Q. Well, did you or did you notz or you Just don't

21 believe you did?

22 A . No: I didnbt.

23 Q. Now, during the period of time between Christmas and

24 New Year's, if Mr. Kalluri needed an eTreppid source code filez

245

CECILIA FOJfis NV CCR #246 /775) 827-0672




J'..

k

.

) w

1 that he would request it from you and then you would make a

2 copy of it?

3 A . Noh Lhat J recall.

4 Q. So i.t could have happened?

5 A . He didn't make a request of me. No .

6 Q. So a11 of these lndividuals who gave affidavitsz and

7 Mr. Zehang who testified and Mr. Venable who testified , are

8 lying about the fact that you deleted source code off of their

9 workstations and off of the source server?

10 MR. FLYNN; Objection, Your Honor.

11 THE COURT : Thatls argumentative. That's right out of

12 Law & Order.

13 MR. FLYNN: At that pointy 1 think an objection would

14 be best.

15 MR. PEER; That objection, Your Honors is that out oc

16 Law & Order ?

17 THE COURT : No, the question is, the one where the

18 guy -- I can't think of h1s name -- he asks that a1l the time.

19 MR . PEEK : Jack.

20 THE COURT: A11 riqht. Welre -- that was --

21 MR. PEEK: That was the end of my five minutes. I

' 22 have more questions, Your Honor. Let me ask one more . .

23 BY MR . PEEK :

24 Q. If the Court were to reconvene wiLh you at eTreppid's

246





z .1 5

u. . j

1 offices, would you be able to then show the Court and everybody

2 else where a1l this code is that eTreppid says has been

3 deleted?

4 MR. FLYNN: Objection. Your Honor, the Court cannot

5 order that.

6 MR . PEEK : T think the Court can order that .

7 THE COURT: I donft know if I could order that we

8 convene there, but 1 mkght be able to order that -- something

9 that would accomplish the same result. I 'm not sure.

10 MR. FLYNN; Objection. J do not believe, under the

11 13th Amendment, since this person has been fired, you ean make

12 him go back and do anything.

13 MR . PEEK : The Court can convene and show us where --

14 THE COURT: We dll see, when that day comes' whether I

15 can or not. I don lt know, franklyz if I can or if I canrt.

16 But I think I can order him to produce information that he may

17 have: and whether that is easier accomplished in another forumz

18 wefll just see, because I don't know the answer to that. And

19 so the questlon was that if that were a possibility: could you

20 do that?

21 BY MR . PEEK:

22 Q. Could you do that?

23 THE COURT: And 1111 let him answer that question .

24 THE WITNESS: It might be possible, but considering

247

CECILIA Vosfr NV CCR #246 (775) 827-0672




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1 the fact that they took all the drives out of the machines and

2 moved them around, 1 would have no idea.

3 MR. PEEK: Your Honor, f still have the time tbat I

4 said T would take on cross in terms of things like promissory

5 notes and dilutions and the ltke, but 1111 reserve that for

6 another day.

7 THE COURT: 1 think what weAre going to have to do,

8 Counsel , is you're goâng to have to speak with Sheila, my

9 administrative assistantz and set this mahter for the first

10 earliest time that we làave availabler which I don't really know

11 myselfy because I don't keep my own calendar, what that is .

12 T've got a hearing that's similar to this on Thursday and

13 Friday involving similar kssues that 1 can't bump . Tomorrowr I

14 have a criminal calendar in the morning , and I have a scheduled

15 a1l afternoon tomorrow, don't I -- yeah, I'm told that I have a

16 week-long jury trial on Monday. Is that right?

17 THE CLERK: : believe -- I spoke with t&e attorneys .

18 They sald three or four days.

19 THE COURT: Aàl right. Wellz the only thing I can say

20 is the best thing to do is to talk to Sheila bright and early

21 in the mornîng and find out what welve got available . 1 '11

22 give you my earliest available time.

23 MR . PEEK : Can 1 tell the Court T have a horse show

24 with my daughter that Ifm attending on the 16th. 1 would ask

248

CECILIA VO/Ze NV CCR #246 (775) 627-0672




f .. k k

1 the Court not to order me to continue this and miss my

2 daughterls horse show.

3 THE COURT: WC?LL, alL I'm saying is, youlre the people

4 that want this thtnq done expeditiously. And 11m aaying f'm

5 willing to accommodate that, and I'm wilYing -- you know, in

6 consideratkon of other counsel's calendars, as well, f'm

7 willing to schedule it after hours. Iem willing to schedule

8 it --

9 MR. PERK: This Saturday?

10 THE COURT: This Saturday? I got my kids, but I could

11 work around that if everybody else can work around 1t. Thatbrl

12 the problem. And that xncludes staffr and it includes the

13 court reporter. ft includes a11 of the attorneys --

14 MR. PKEK: Could we qo off the recordr Your Honor, for

15 Ms. Vohl, to have thls discussion, or not?

16 THE COURT: Well, al1 right. Let's do this. Letls go

17 ahead -- welll be in the recesa now until this hearing

18 reconvenes.

19 MR. PEEK: The order is contknued?

20 THE COURT; It is continued until such time as we can

21 reset it.

22 And, Cecilias you can go off the record right now,

23 unless counsel wants to put something on record, and we can

24 talk about schedultng and that sort of stuff.

249

CECILIA ï;/Sé, NV CCR #246 (775) 827-0672




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1 MR . FLYNN : 1 hate to impose on the court reporter:

2 but T have an argumenh a:s to why the order cannot continue.

3 lt's not leqally possible for this Court --

4 THE COURT : T haven 't even gotten to that.

5 MR. FLYNN : -- to continue the current TRO.

6 THE COURT : Because of the 15 days?

7 MR. FLYNN: Because of the 15 daysr because there ia

8 no record that has been created where a burden of proof has

9 been met under a11 of the elements to sustain a temporary

10 restraining order. There isn't even close to a record, as the

11 original judge found, that would warrant the kind of language

12 prepared by Counsel that is in the existing order.

13 Perhaps, Your Honor, there is some type of an order

14 about data compression technology, but the Court, under the

15 current state of the record, cannot possibly fashion an order

16 on anomaly detection when tbere is absolutely no testimony that

IR they even own it, 1et alone irreparable harm .

18 THE COURT: You said a couple of thïngs. T don't

19 think he was talking about the oriqinal ludge. I talked to the

20 original judge. He said, ''1 didn't decide anything.'' He said:

21 ''I just decided T wasn't going to hear it. I'm going to send

22 it to somebody else.'' And he decided nothing on the merits. I

23 talked to him today at noon.

24 MR. FLYNN : Your Honor, there is absolutely no showing

250

CECILIA VOSr, NV cCR #246 (775) 827-0672




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''. ) .

1 in the record of irreparable harn. There's -- the worst that

2 could possibly happen if this order were vacated, under the

3 worst-case scenarloz is Lhat Mr. Montgomery would make a deal

4 with the government or somebody, money would be created, and

5 theyld have a claim for money . That's the worst-case scenario .

6 Sor how could equity and relief for irreparable harm on this

7 record possibly exist?

8 THE COURT: Are you asking me a question?

9 MR . FLYNN : Your Honor, 1'm saying that there is

10 simply no record here. The Court cannoty on hhis record: issue

11 a temporary restraiminq order for anomaly detection software

12 that these lawyers incorporated into the order thah this Court

13 has signed, let alone the issue of restraining him from talking

14 to anyone, talking to the United state:s Government: talking to

15 the individuals he regularly communicates with on this sublect.

16 He communicated with one of them today.

17 MR. PEEK: Thatïs in violation of the order: Your

18 Honor.

19 MR. FLYNN: Your Honor specifically asked us, if the

20 government comes in here and asserts the privilege, so We

21 immediately called an individual who basically said on the

22 telephone today, he'll have an attorney in this courtroom . Soz

23 whether it's a violation of the order --

24 THE COURT: I don't see the -- 1.11 also share with

251

CECILIA Moffls NV CCR #246 (775) 827-0672




y ...p ' , -.

1 youw I talked with the United states Attorney today. And 1 was

2 told that they would get back to me, they hatAl't heard a word

3 about it, don 't know anything about it, didnlt seem to be

4 concerned about it. I gave them al1 the information that I

5 had. And like I'vf) been sayîng a11 day longr if theybre going

6 to show up, they show up, but they haven't shown up .

7 MR . FLYNN : In liqht: of what Jlve heard today: I'm

8 very confident thaï: someone is going Lo show up very shortly.

9 I doubt the U .S . Attorney's Office -- this would be an attorney

10 who normally represents this agency on confidential

11 information, from wllat we were told today.

12 THE COURT : Then 1et him show up .

13 MR. FLYNN : He'd probably be from Washington.

14 THE COURT: When we continue thls hhing, too, he can

15 show up .

16 MR. FLYNN: Well, the original order, Your Honor,

17 simply said theybve not met their shandard of proof. Of

18 course, they had al1 these declarations, all these affidavits,

19 most of which have now been shown to be extremely --

20 THE COURT: What original order? Judge Polaha's

21 original order?

22 MR. FLYNN: Yes, the original order. ''Plaintiff

23 eTreppid's application for temporary restraining order is

24 hereby denied without prejudice, and Plaintiff has not met the

252

CECILIA Vofflw NV CCR #246 (775) 827-0672




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1 standard of proof as reguired by NRCP 65B and C at the meeting

2 with the Court:.'f


4 MR. FLYNN : And, if anything, Your Honor, not only has

5 there been nothing more added: what has been brought into the

6 court today has been completely brought into question .

7 %HE COURT: A11 right . Here's what 1'm going to do .

8 Weêre going to continue this hearing until the time that will

9 be set by counsel and my administrative assistant. I am going

10 to make a determination on whether or not the TRO will

11 continue. I will get you a written order no later than

12 5 o'clock tomorrowr and 1'11 fax it to a11 the parties .

13 MR. FLYNN : And then weRll be able to comment on it,

14 Your Honor, or submit --

15 MR. PEEK: Your Honor: until you make that decision,

16 could the order that exists today remain in place?

17 THE COURT; Until 5 olclock tomorrow.

18 MR . PEEK: Yes.

19 THE COURT: Thatês the order, until 5 o'clock

20 tomorrow. so kf I can 't do ite I can 't do itz but I think I

21 can.

22 MR . PEEK: Your Honor, can the order remain in place

23 until such time as the Court --

24 THE COURT: Well, 1'11 get the order done tomorrow.

253

CECILTA MOSI, NV CCR #246 (775) 827-0672




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l 1'11 get it done if l've got to stay up tonight to do it# but

2 1'11 get it done .

3 And 1 do think that -- as f said, I had a conversation

4 with the judge. He told me he did not reach the merits on this

5 thing. And in my review of the material, I felt, when the TRO

6 was presented to me, that there was sufficient evidence to

7 support the TRO for the short period of time that we talked

8 about.

9 MR. FLYNN; Would Your Honor like a copy of this

10 order? If the clerk is willing, 1311 make a copy so you'll

11 have it.

12 THE COURT : Ifve got Judge Potahafs order. T've qo%

13 the order. It was not clear to me when he said ''without

14 prejudicezî' and so I suspected that there might be something

15 more to that, and I asked him .

16 So like 4 saidz I felt that when f reviewed itr after

17 he declined to do it, perhaps without prejudicez perhaps On the

18 merltsg perhaps not -- but when I reviewed it, I felt there was

19 enough for the TRO, and 1 granted it.

'

20 MR. FLYNN : Your Honor, I'd ask the Court, while I was

21 thinking, to seriously consider whether money damages uould be

22 adequate and whether irreparable harm has been met on these

23 facts.

24 THE COURT: If your client can't afford to feed his

254

CECILIA MOSZz NV CCR #246 (775) 827-0672




k . l

1 family, how is he going to afford to pay damages?

2 MR. FLYNN: 1 don't Lhink thatfs relevant in

3 determining whether or not a judgment uëtimately could be

4 awarded against --

5 THE CQURT: Youbre rlght. It's probably not relevant .

6 MR . FLYNN : -- Mr . M ontgomery .

7 MR. PEEK : This is a trade secret, too, in terms of

8 irreparable harm.

9 MR . FLYNN: Jt's a trade secret only in terms of

10 Mr. Montgomery; otherwiser he wouldnlt be here .

11 THE COURT: And this order is in effect unttl

12 5:00 p.m. tomorrows February 8th. That 's my decision.

13 MR. PEEK; And then youlll give us another one at that

14 time?

15 THE COURT: 1111 qive you another one at that time .

16 1111 tell you whether it's extended or whether it's not

17 extended, to what exLent.

18 We're in recess.

19 MR. PEEK: Thank you, Your Honor.

20 (Proeeedings concluded.)

21 -000-

22

23

24

255





1 STATE OF NEVADA )

) ss.

2 COUNTY OF WASHOE )

3

4 I # CECILIA VOHL, Of f icial Reporter of the Second

5 Judicial District Cotlrt of the State of N'evada , in and f or

6 the County of Washoe, tjtl hereby certi f y;

7 That as such repozter, I was present in Department

8 No. 9 of the above court on satd date, time and houry and I

9 then and there took verbatim stenotype notes of the

10 proceedings had and testkmony given therein .

11 That the foregoing transcript is a fullr true and

12 correct hranscription of my said stenotype notes' so taken

13 as aforesaid. That the foregoing transcript was taken down

14 under my direction and control, and to the besh of my

15 knowledge: skill and ability.

16 DATED: At Renoy Nevada, this day of

17 , 2006.

18 %

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19 CECILIA VOHL, NV CCR #246

20

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CECILJA VoHL, NV CCR #246 (775) 827-0672




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l 196:22 198:9, 16 Court's l l0: 13 242: 17 DAVID 2:6

92:13 97: 1

98 : l 4 100: 13 198:20 199:4,6,7 24 l : l 5 242: 19 custodian 30: 1 5 day 20: 16 22:23

10 1:8 104:5,7 199:8 200: 17,2 l cover 199:1 5 custody 106: l 38: 12, 13 67: 14

105:20 107:2,8 20l :3,4,7,9, l0, 1 1 covered 221 : 13,14 customer 109: 14 70: 12, 13 76: l,6

107: l3, 17 108:2 20l : 13, 14, 15, 1 7 225:2 customers 5: l 8 76:20 88:10

108:8:23 109: 10 20 l : 18 I 8 22 covering 95:22 cut 9 l : 18 1372 14 138: l 1, 1

09: 16,20,24 202:2,1, 1 1,24 CPA 102:8 106:6 CV06-()0l 14 1 :7 145: l 5 157: 13

l

l 1n:2:4,6,8,10,15 203:1,3 208:24 cl>A': 106: 19 - 178:7 187:15,23

24 l 1 l:6 209:5,9, ,4 210:2 create 6:22 48: 16 - D 1s8:6 247:14

l 10: 18,

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8 23 21 1: l 59:24 93:20 l 10:20 256: 16

1 15: l lal5, 19 210:1

1 16:9,12,14.17 21 l:4 11 7:22 106:9,12 damages 254:2 1 days l2: 19 16:5 1

l 16:20 117: 1,4:7 218: 1,4,7,10, 16 created 106:17 255: l 76:20 92:2, , I

1 18:16,24 l 19:5 218: 18 219:7,9 139:3 219: 18 data 31: 10 34:4 94:10 10 137: 17

l 19:2 l 120:4,8 2 l9: 17 220:3, 15 250:8 25l :4 44522 45:22,23 14a:2/) 1432)

47:5 56: 18 59: 18 I jgr 1, 1 17 I :4

20:1 5 l2l : 10 222:23 223:4,9 creatingsl :12, 16

122:2 123: l 223: 12 225: 13,20 137:1,2 139:13 B0:19 1l8:4n10 241: 13 248: 1g

124:13 127:9 229:24 230:6,12 139: 19 118: 10,10 129:22 250:6 7

129:1 l 130:2, ls 230:18 232:7 cre-st 6:9 130:2,8,11 l3l :3 day-to-day 72:24

2:2 233:7 235: 13 criminal 242:10 132: l0, 14 133:7 deal 7:8 13:8 20:231

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1 l 23:16 3'7:Ia

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142:1,4,12,16 238:12,16 19 cross l ll:s 219:21 13522 136:7,7,20 49:24 50:20,22

143:4 146:8,23 239:3,9,14,15.17 248:4 136:20 137:7,22 53:14 54:21,23

148:10,13,24 239:18,19 240:5 cross-examination 138:6.9,21 139:4 55:13 56:18,19

150:23 151:4,8 240:15, 17,24 3:4,7 36: 16 140:5,7 152:5 65:18 69:18 72

151:15 152:18,18 241 :1,2:17,21,24 77215 153:4,6 154:2 158:3,21 72:7 13 J3 73:1

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153:1.7,10, 12-1 s 242:2,4,5 6,9,12 167:11 203:8 159:3 163:2 79:17 :7:5.22

153:1k is6:4 4 242:14 lk 22 23 cross-examine 174:22 196:5 88:1g 13l:k

156:20,22 161:6 243:2.5.: . li) t16:7 ls3:g 234:1 l 250:14 133:4 l3s:13

l6l:13,1s 162.:3 246:171

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s l6s:g,11 247: 1,4-6 7,13-14 193:7 2:2:23 date38:q8,9,10 147:16,20 251

162: ï8:7

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19 cross-examined 38:10 40:13,14 dealing 14:3,4,5

65:16

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19,22 247:23 2

166:2 167:9 248:23 249:1,3 167:1 l 64:9 79:7,8 27:1 36:20 71:

170:5 7 172:1,3 249:10,13 16 20 cltu 1 :20 125:5 134:1 71:17 73:6,9

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1 I 14 23 250:1,3 4,k.111,18 cr.uise3a:lz ss:ls 143:12 144:17 76:13 80:19

1 72:7, ,

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177:4,21 1 ,

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78:s 6-23 252:12 14 20 89:9 187:4 184:20 188:4 202:1

7 17 218

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181:4,7, - l - 19 253:23,24 254:12 cumulativeiyzl:6 256:8 dealt72:23 103

1:2:12 là3:k 254:20,24 zss:s cup 129:3,4 dated27:20 debate 1p:3

lgs:2l 186: l,8 255:1 1,15 256:5 curious 186:17 123:16 226:6 December37:3

6:16 38:6,1s 71:20

186:11,12,14,23 256:8 current6zl:g 79:12 25

189:24 19t):1 1,14 courtroem 11:5-15 2st):5-15 date-s 104:1 gs:l: 18 s::1

190:18,23 191:12 30:4 4::6 54:22 currentlyzz:zl daugl1ter248:24 89:3 s g 94:6

CECEM VOHL, 'NV CCR #246 (775) 827-0672




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96:9, 10,1 l deleted 20:23,24 65:24 66:5 75:24 designated 164:5 209: 12,20 21 1:13

l 35: l 5 l 37: 13 20:24 9722 l 75:24 84:3, 14 DESIGNATION 2 12J 1 3, 14,24

160:4,

.

1 7,20 I 39:7,7 140:22 88 2 10 102:4 3J9 4:3 2 1 3:6,7, 10.22

7 164: l 5 l 7927 l 95J 1 9,23 1 1 l : 13 l 19:9 designed 1 80: 14 214:2 219: 1, 19

l 62: l

l 70:23 184:4, 13 2 15:2 l 245: 14 214: 10 2 l 7: 1 5 dasign,s 62:9 21 9:20,22,23

0 l 85:4 246:8 247:3 DENNISON 2:2 desire 7:6 22l :2, 15 223: 17

l 84 :2 ' 188

: 17 desk 39:7 214:1 l 227: 12a 16 20,20

89:3 2 1 5:2 deleting 195:24 Denni,s s q

243:24 244: l3y l 7 244:17,20,24 denying l 93:7 214: I 3 227:21 228:8 12

245: l0, 1 3, 1 8 245:6 department 8:9 desktop 215: 18 229:5, 10 12,11

decen.t 1 78: 12 deletion l 79:7 l 0J 18 7 l J 18 de-sperate 84:4 230:2,8,(5, 19

ide l l6: l 5 deletiolu l 86:2 I 165:2 l 66J 1 1 95: l 7 23 l :8,21 237: 12

dec

l 56: 10 202: 12, 19 213: 19 167: l 170: 1 9 despite 15:13 238:6 250:16

250:20 deliver 8:1 134:2 176: 13,24 l 82:5 dejtroy 139:12 25l : 1 1

decided 47:8 48: 15 136:1 l 23l :3 256:7 193: 19 194:17 detections 219:6

240: ld 24 1 : 18 delivered 135:3 depended 76:2 destroyed 139: 10 determination

250:21,22 demauding 9127 depending205:3 140:4 14l :7.8.9 206:15 253:10

decision l3: 14 96:23 deposits 1 06:1 1 194:5 determinations

25: 16 32:7 93:3 demazld: 85:9 Deqt 1:8 destroyilzg 139:16 12: 1

93:10 120:6.9 demonstrate 6:24 denvative221:5 139: 19 determine 14:7

178: 1 2 24 1 :2O l 57: 15. 17 158:2 221 2 l J 224:20 detail 78:20 29: 19 66:7 93:1

253: 15 255: 12 demtmstrated 7: 1 6 derivatives 222:5 136:22 1 l2: 16 l l 8: 14

declaration 64:18 45:5 47:4 158: 1B derives 21923 details 42:6 180:20 138:15 177:5

declarati/rl: 16:6 demonstrating describe 36:24 detecting229:l5 194:21 202:8

252:18 44: 10 49:2 l 13:20 detection 8:7 determines 205:4

5 107:20 120:20 determining 31:9

declarezl 1:7 demonstration 118:2 6,7 120:1

l 124:13 123:1 5,21 124:5 204:7,24 255:3

declined 254:17 7:13 8:22 42: 10 12321

deductions 102:7 42:2 1,24 43:2,3 126:21 129: 1, 1 l 124: 19 125:6,22 detrimental

defeudant l 1:23 43: l 5, l 7 44:5 129:19 130: 1, 17 126:8, l 1,13,15 122:1 1

Defendants 1 : 12 158:14 136:22 141: l 5 127:1 , 17 21 develop 41 :9 45:

2:8 demonstrations 180: 1 186:23 128:1,6 1J,18 49: 12,12 1 19:2

's 3:20 5:16 7:23 8:6, 18 206: 14,24 138:5 111.1:12 developed 109:5

efendant

3:21,22,23 4:4 8:21 9: 1 45: 15 described 44:21 161:3 162:24 109:20,23 120:

36:13 l 16:2 22 46:1 1 52:9 59:19,22 163:10 164:14 120:22 125:7

1 17:9 120:1i) demonstrative 60:2 100:8 101:4 167:20,23 168:11 218:15 219:1

156:5 142: 1,9 l 14:14 120:23 168:12 169:14 223:17 224:9

defense B:9 13:5 denied 146:23 l2l :2 129:22 174:5,11 176:17 228:11,11

14:18 l 14:4 ' 252:24 138:4 144:6 183:15 190:22 developing 5:14

define 52:1 1 18:20 denies 186:5 209:20 191:5,19 193:22 112:20 137:21

definitely 131:23 Dennis 1:8,9 3:6 describes 34:2 194:11,16,23 138:8 169:20

'

delinition 18:2,3 6:20 16:21 18:20 206:7 8 195:6,15 196:9 development 5:

defrauded 95:18 20:5,10 21:7 describing 62:1 1 196:13 197:8,1 1 45:13 62:14

degree 99:15 1 12:3 22:21,23 24:2,1 1 124:7 160:22 203:12 204:2,24 64:16 133:19

196:21 27:17 37:1,1 5 description 164:9 205:14 206:1,4,7 183:7

delegated 97:13 38:16,23 39: 1 desenred 83:23 206:8,14 207:1,6 develops 14:3

delete 21 :24 245:9 49:9 50:21 52:16 desenes 122:7 207:8.19 208:20 devices 132:18

CECILIA VOHL. NV CCR #246 (775) 827-0672 .




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l 79: l2, l % 19,21 64:7 77: 12 82: 19 133:8 167:22 147:8 l 59: 10 drawn 203 : 17

l 80:9 97:6,9 1 1 1 :9 168:2 182:21,21 185:5,22 206: 13 216: 16

diagram 214:9 193: 12 209:6 l83 : 1,3 210:5 217: 10 draws 2 l6: l

216: 1 245:3 disk 25:1 , 1 192: 13 DOD 7: 19,2 l 8:5,8 drew 59: l 63:6

iagram s 123: 5 directed 179:5 dislks 22: l 7 23:2 l doing 6:21 7:24 Drexel 68: 16 69: 1

differ 130:1 l 239:9 23:24 24:2,24 8:2 l 2 l : 19 22: l l 69:3,9

difference 70:9 direction 2 l6: 1 1 dismantle 192: 13 4 l : 17 42:8 48: 1 1 drib: 55:5,8

73:8 189:22 256: 14 displayed 207:7 75:23,24 76:23 drive 2:13 227:7

ifrereRt 6:6,6 directiolu 2 l6: 1 3 dispute l 83: 14 95: 16,23 97:3 244:13, l 8 2452 1

7:22 l 7:8, 10 directly 56: 1 2 disselved 125: 13 l 02:3 1 03:2,3 5 drives 18:20 23: 10

35:2 l 38:22 47:3 123:4 distiact 98:8,9 105: 17 1 14:11 140: 10 188:3, 10

5 l :5,8 65:2 74:2 director 1 1 :22 distinction 126: l 3 12l : 19 122:20 188:12 192: 1,8

83:5 95:18, 1 9 2 l 3:4 distinctlt 196: 14 124:2 128:5, 13 192:13, 17 194: 17

98: 12 1 262 18,22 directors ) 06:2 l distributlon 94:3 128:14, 14 129:17 227:5 248: 1

130: 13, 15y l 9 106:24 District 1: 1,3 129:20,21 136: 19 drove 22:16

7 2 4 6 disaster 64:24 210: l6, 16 256:5 137: 1 139: 12 due 13:22 200: 14

132: 13 13 : , p

137:10,21 140:7 disclose 8.0:8 166:9 diversit'y 239: 16 154:20 161:6 duly 110:21

140:10 158:17 166:9,23 240: 1 1 167:6 169:5 dumped 241: 14

164:21 205:5 disclosed 14:23 divulge 167:3 171:1 174:9 duplicated 123:24

difrereRtiate l6l :6 discovery 107:1 4 doctors 98:22 192:8 20 l :9 Dupont l l3: 10

162:14 220:16 Doctrine 200:21 224:16 232:24 duration 9:15

difrerentiation discuss 18:14 2 1 :8 document 27:5 24 l : 12 244:6 duties l 12: l l

133:5 80:12, 14 16 3 1 :4 32:21 36:22 dollar 175:5 duty 202:21

dimcult 13:6 93:23 101: 19 37:6 38:6, 13 19 dollau 73:22 DVIM 23:9 B7: 14

77: I6, 17 discussed l l : 14 39: 13 51:24 l9: 1 90:21,23 93:21

dim culty 193: l 5 129:20 240: 14 59:3 602 l 61 : 10 15223 Z

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digital 232: l 3 discussing 13 1 :3 61: 18 63: l 8 89: l doubt 10: l 5 55:7

235:7 23628.9,20 237:10 96:7 114:5 6 9 66:9 16 67:3,16 3:8 4:1,2 l 10:20

diluteagsl-z discussionxs:zl l ls:1: 1lk:.;-9 74:1k 252:9 110:20

diluted g1:13 so:zo s9:2l 117:6 1Is:13,l3 ooug37:7,l7 Eagle 17:23

82:lg 83:17 68:14 74:1 78:15 118:15 121:9 48:19 50:19,20 ea.rlier22: 17 43:2

46:18 102:14

154:1 1 155:8 78:18 84:10,16 127:6:7 147:10 52: 16 54:15

159:17 84:24 :5:3 87:17 147:1 1 161:17 134:16 135:18 127:15 162:21

dilutiong3tzo 88:14 91:7,10,12 166:7 185:12 143:21 154:15 163:1 198:14

144:14 148:9 92:17 94:s 95:7 1:6:5 208:20 ls5:14 ls6:2l 238:3

dilutions 83:5,6 103:20 108:3,16 22s:l1 237:4. downstairs 21 :l8 earIiest248:1q2

early 19:23 43: 1

248:5 133:9 134:23 documentation 141:1 I,l3,ls

44:16 45:5

pin 43:21 23 44:1 136: lo 149:17 62:9 2ls:l2

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4s:l8 4

31:11 169:16 171:22 3 1:19 32:1,2,13 or l9s:4 219:13 164:17 177:2,1

dioxide 204:5:8 175:7,10 ls I : 17 33:7,21 3s:l9 219:18 220:1 184:4,13 248:2

diplomatic 240:23 187:9 249:15 48:4 51:17 105:7 drab: 55:5,8 eartb 21 :l8 22:3

dire 14:20 165:7 discussions 85: 17 l 14: 16 127:7 draggirlg 193:6,6 98:2

direct 3:3,7 5:6 85:23,24 86:6,14 134:17 144:18 dramatic 5:23 eMier 108:6

CECEM VOHL, NV CCR //246 (775) 827-0672




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easy 190:2 22:1 3 25:18,20 essential 22:24 194: 18,20 195:7 evidentiary 70:17

education 196:23 25:24 3-J: 19,22 establish 61:9 195:20 196:2, 17 142:15

educational 90: 1 7 99:22 extablished 30J 13 197:5 l 98:4 21 evolving l 5: 18

l 1 1:24 103: 15 14 l : 10 103:5 1 19224 199: 18 200:1,4 exact 65:8 82:12

effeet 25:9 26: 13 euable 177:23 establishlng 200: 1 1 212:13, 14 134: l 144: 17

46:3 90:5 10l : 16 178:1,3 l 19:19 2 l3: l 2 14:2,4 145:5 l 55:7

201:22 255:1 l euabled 8724 estimate47:22 216:8,9 218:15 174:19 184:20

elrectivezzzl 16 encourage 21 l:8 et 186:22 196:23 219:2 228:19 21l :24 237:23

223:3 ended 95:23 149:3 e'Treppid 1:5 229: 16 230:7 exactly 6:23 8: 17

eight 18:5 58:24 181:23 10: 17,19 15:10 23I :1 l 19,20,22 9: 13 16:3 20:18

77:1 137:14 1m(1:227:23,24 16:21,22 17:1,4 232:1 J,1l l 1 21:4,5 6 24:6

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either8:22 13:17 engage 186:16 34:6 35:22 38:1 244: 17 245:9,18 80:24 87:12

17:20 18:9,18,20 engiue 62: 14 40:3 5l: 18 56:12 245:24 247:2 103:5 124: 12

's48:12 132:6 195:16

19:19,21 22:7 133: 19 63: 13,21 64:10 eTreppid

23:5 29:17 38:16 engineering25:22 64:12, 12 66:1 1 109213,20 167:19 239:23

41:14 44:13,14 213:4 66:20 68:11 17 174:4 199: 1 20 examination 3:3,4

50:20 55:20 engineers 45:2 68:21 72:3 13: 10 231 : 16 236:1 3:7 5:6 l0: 14

74:13 78:21 80:5 212:23 213:3 75:9,21 16L 18 24 246:24 252:23 56:3 109:1 l l 1 :

à luate 196:20,22 193:16

90:17 106:19 enjoy 240: 18 S0:18 82:22,2 eva

22: l 1 125:14 enormous 76:9 84: 14 85:9,24 evaluation 42: 11 examine 114:19

127:6 145:2 1 54:17 241: 14 86:5 14,17 89:9 Evapotranspirat... '232:23

161:15 177:24 ensuing66:17 90:1) 92:5,21 226:7,9 227: 12 examiner 186:5

184:22 187:17 enter l l3: 13 94:23 95:5,24 evening240:22 example 103:8

213:5 227:16 entered 9:9 17: 14 96:24 98:4 17,19 event 23:4 26:8 204:13 207: 1 1

243:21 188:2 199: 15 98:22 99:11 events 23:13 26:1 1 211:21

ejected 207:4 entire 1 16:6 100:21 102:20 eventually 6: 1,24 exception 1922

EKG 1 l2: 12 215: 15 103: 14 105:7, 10 everybody 63:24 22:22 97:20

l borate 51: 13 entities 7: 16 18 105:13 107:1 l 92:10 97: 13 108:21

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Eldorado 40:20 entitled 31:6 72:3 109:5,5,13,13 178:22 247:1 excerpts 206: 12,

9:1 l exchange 108:17

42:1 129:10,13 72:7 105:1 1 11l :23 118:23 24

Iectric 5:21 173:6 226:8 131:18 138:7 cvidesce 1671 1 108:20

F,

electronical entity 102: 1 3 139:5,8,22 140: 5 27:23 30:4,23 exchanges 190:2

1()4:2c 224:1 140:g 141:10 31:13 32:23 33:1 Excluded 63:9

elemestsao:7-lo equal67:2l 72:11 143:6,16 144:11 33:1.22 36:1-6 135:24

3n:11 2so:9 153:3,5 148:2: 149: 18 40:là s7:2 61:22 exclusivelytw:lg

etse's 196:20 equipment 1t)9:19 150:17 ls2:8 70:9 83:ls 100:7 86:20 138:3

emanate.s 15:16 109:21 l 12:14 l 54:3,21 157:20 108: 1 l 13:18 excuse 18:10 46:

emergency 12:18 equity 251:6 158: 1 l 159: l 1 1 18: 14 120: 1 1 77:6 152:18

employed 98:23 ERIC 2:9 160:2 162:16,16 121:8 122:6 171: 15 207:2

employee3Srz ESA 213: 12 163:3 165:6,10 127:5,7 142:10 221:2 228:9

153223 164:1,2,5 243:15,22 168:16 173:12 156:6 l6l 224 245:1

164:12 202:17 escrow 54:9,1 1 176:10 180:17 172:2 190:24 excused l 10:7

loyee.s 18:13 ESQUIRE 2:3,4,6 182:10 186:24 218:6,24 233:10 Ex'il 25:6

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CECILIA VOl1L, NV CCR #246 (775) 827-0672




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executable l9: 13 exists 220:21 255: 17 255:1 lighting 85: l

execute 166: 14 223:24 253: 16 extmordinarily l'amily'x 22:24 5gurezo: 18 23: 19

executed 6 l : l 8 exit 108:2 l 90: l 9 23: 1 140: 1 2

62: 19 63: 17 expand 202: 10 extrernely 7:23 far 132 1 l 14:23 ligured 20: 17

exercise 46:21 expauded 226:1 252: 19 36:21 71: 10 figuring 16:16

l 86: 16 expansion 242: 1 9 e-mail 89:5 96: 10 100: 12 105: 15 file 1 14: 1 1 l 30:20

exhibit 3: 10, l 1, 12 expect 3 l :22 103: l .-- 125: 1 1 127: 16, 16 130221.22 198: 16

F 1 53:6 l 96: l 4 2 1 0:3,21 239: l

3: l3, l4, l 5, 16, l 7 expected l 5 l : 14 .

3:18,19,20,21,22 expeditiously face 1672 19 219:19 1982 13 218:24 :2.4522.4

3:23 4:4,5 6 7 249:4 facets 167:18 23629 jijed 12.:19 30:1

27:3,6,24 iJ:8 expensed 90J 14 facial 174:3 j'ashion 250:15 34:7 35:22 64:18

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30:23 31:2 5, 12 l 54:24

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32:6 33:3

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60:23 61: 1,2.7 154:15 180222 191 :24 f'ar 95:4 140:14, 15 186:2

83: 14 96:7 l l5: l experience 132: 1 7 192:23 195:10,14 f'atures 235: l 1,22 194:17 195:20,2

l 15:2,9 l l6: l,2 133: 1 196:23 196220 202:8 23624 j95:24 243:1 , 2

l 16:6,22 1 I7: l,9 experienced 239:3 244: 12 February 1:17 5: l 244:6, 18,21,24

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l2l :4,7 122:15 expire l7: 10 20 254:23 198:1 1 240:20 filings 15:17

122:16,23 123:9 expired 1722) failure 56:8 25.5212 film 129:2

125:22 126:24 198:12 fairgo: 1 146:2 I-ederal 10:15 linal 171:1 1,16

175:15 178:4,6 201:9, 13 finally 42:9

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CECILIA VOI1L, lIV CCR //246 (775) 827-0672




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et v dm state # 644-21 & 22 | feb 7 2006 transcript vol 2

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