ET V DM State # 644-21 & 22 - Feb 7 2006 Transcript Vol 2

Case 3:06-cv-00056-PMP-VPC Document 644-21 Filed 05/28/08 Page 1 of 207
M ONTG OM ERY v.ETREPPID, DEPT OF DEFENSE

Case No.CV-N -06-056
SEA LED TR AN SCIUPT OF HEARING ON
PRELIM INARY LNJIJNCTION DATED 2-7-2006
(VOLU VIE 11OF11),IN 2NDJtyolctAl-DISTRICT COURT

OF NEVZYD A, COIJNTY OF W ASHOE,
CASE NO .CV06-()0l14, DEPT.9
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SECOND JUDICIAL DISTRICT COURT O THE TATE OF NEVADA
.
(EN ANJI l?OR THE COIJNTY OF WASHOE

BEFORE THE HONORABLE ROBERT H . PERRY, DISTRICT JUDGE
znj
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ETREPPID TECH.7OLOG IES r t..L .C ., a

Nevada Limited
Lialility Company,
Pl1irttiff#
Case No . CV0 6-0Ol 14
V5 .
Dep t . No . 9
DENNIS MONTGOMERY, an individual;

THE HONTGOM ERY FAM ILY TRU SX ;
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

l
CECILIA Fa/l, NV CCR #246 (775) 827-0672
y/ P P E A R A N C E S
For the P kainti.ff:

3
IIALEZ LANE, PEEK , DENNISON

AN D HOWAR D
E!Y : STEPHEN J . PEEK, ESQUIRE

M d JERRY M . SNYDER, ESQU TRE
5441 Kietzke Lane; Second Floor
Reno , Nevada 89511
M d
4
5
6
PILLSBURY W INTHRO P SHA W P ITTM AN
RY : DAVTD A . JAKOPIN, ESQUIRE

7
2475 Hanover Street

Palo A lto, Calj. fornia 94304- l114
For the Defenl

:iants :
12
LAW OFFICES OF LOGAR & PULW R , A PC

BY : RONM D J . LOGAR, ESQU IRE
M d ERIC A . PULVER, ESQU IRE
2 25 S;. Arlington Avenue r Sui te A
Reno, Nevada 89501
An d
FLYNN & ST lLLMRN
BY : M ICHA EL J . FLYNN, ESQUIRE
13
And PHILIP H . ST ILLMAN, ESQUIRE

224 Birmingham Drive
14
Suite lA4
Cardi ff , California 92007
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-000 -
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CFCTJ/TJI %DIjL, NV CCR #246 (775) 827-0672
1 N D F )g
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WITNESS FOR !qjr PLAII

jLEJ'
.j(
WARREN TREPP
PAGE
Direct Examination (Continued) by Mr. Jakopin
Cross-Examination by Mr . F'lynn
Redirect Examinat kon by Mr . Jakopin
36
109
WITNESSES F()R THE EIJON NTIFF
PAGE
..
DENN IS L . M ON '
PGOMERY
Direct Examination by Mr . Flynn
111
Cross-Examination by M z-. Peek
203
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E X 11 I B I T S;
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DES IGNA TTON
MA RKE D A DM ITI'ED
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Plaintiff fs Kxhibtt 8
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Plaintiff 1s Exhib it 9
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Plaintiff 's Kxhibit l0
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Plainti ff s Kxhibit 12.
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Plaintiff 1s Zxhib it 12
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Plaintiff 's Zxhibi1: 13
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Plaintiff 's 'Zxhibit 14
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Plaintiff 's Zxhibit 15
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Plaintiff 1s Exhibit 16
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Plaintiff 's Exhibit 17
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De fendant 's Exhibit 18
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De fendant #s Exhibit 19
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Defendant 's Exhibit 20
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Defendant 's Exhibit 2 l
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CLICILIA VOHL r NV CCR #246 (775) 827-0672
; : D E X (CONTINURD)
4XH IB IT4
DES IGNATION
MJGAKED ADM ITTED
De fendant 's Kxhib lt 22
156
156
Plaintift 1s Kxhib i.t 23
216
2 18
Plaint iff 1s '

Zxhib tt. 24
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Plainti ff 's 'Zxhib.

tt 25
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CkICILIA V()Sf,, NV CCR #246 (775) 827-6672

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RENO, IAJEVADA, T'UFSDAY: FEBRUARY 7 , 2O0 6, 3 :25 P . M .
-000 -
THE COURT :
liltlase be seated . Go ahead .
DIREC'r EXAMINAT ION (CONTINUED)
BY MR . JAKOPIN :
Q.
Thank you . Mr . Trepp, could you talk a l ittle bit
10
about, from the format:ion ot the business in 1998w activities
11
that the company dtd t.o sort of grow the business .
12
A.
As I said berore : we basically started out as an R&D
13
development company . 'Et. took us, 1 'd say, at least a year and
14
a half to two years or developing before 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 sel1 .
20
The first contract that we were able to secure after
21
an awfu l long time of negotiatkons was w ith 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 originally builtw which they .

5
CECILIA VOHLr NV CCR #246 (775) 827-0672
eventually licensed from us to use in Lheir lnterlogic company,
which was their surveitlance company.
3
4
Other than GE , were there other companies to whom
presentations were made?
A.
Absolutely. Quite a few . lntel was one, which we had
gone over a1l of the d tfrerent -- or some of the different
potential applications that we could offer to them for their
u se .
Los Angeles, Crest International, whlch was a company which
10
11
12
Ko dak wa s ano th er .
Th ere was a comp an y b ased ou t o f
related to Hollywood post-production business, and others .
Q.
Were there meetings that you had with peop le from each
of the companes 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
p rototypes that you h ad ta lked about b e fo re to show these
19
companies what, you could do?
20
.
Q.
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

6
CECILIA M5S=, NV CcR #246 (775) 82 7-0672

4mx
we
whatever that company might have been .
Q.
And i
Rt that meetingz were test protocols shown?
A.
i belg your pa rdon?
Q.
At those meet ings z were those test protocols shown?
A.
Yes . M d therL we would leave literaturez a Powerpoint
or something, relating to whatever their speci fic des ire would
be .
8
9
10
Q.
So# then f'rom the GE deal that the company had, how
did the compally sort of progress from there?

A.
Durillg the GE processr we -- I had a relationship with
11
the managemenlr at M GM in Las Vegas, and we asked if we could
12
use the surve:.llance rooms in the MGM .
13
cameras# obvitlusly: it would be a good demonstration place .
Having abotlt 5,000
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 entities are you referring to?
19
A.
DOD lleople ; also people from Compaq .
20
Q.
Did l'
-here come a time when your relationship with the
21
22
DOD people wert to another level?
A.
Yes . We had clone a nllmloer of different
23
demonstrationi;. The A ir Force particularly was extremely
24
interested in doing work relating to our ab ility to capture and

7
CECILIA VOHL, NV CCR #246 (775) 827-0672
deliver video transm Lssions from predator or unmanned vehicle
aircrafts down to wherever they needed to geL Lo .
3
4
5
Q.
Did you have -- froa that interest to that -- did that
go anywhere?
A.
Yes, we were able to show the DOD, as well, a number
of demonstratj-ons that would relate to our ability to do
pattern detection or ATR, automatic tracking and recognition .
8
9
Q.
Department of Defense?
10
11
And ''DODH in your last few answers, you meant
MR. FLYNN :
Your Honor: could we have some timelines?
I thin k it would be a little helpful.
12
THE COURT :
13
put this in context .
14
BY MR . JAKOPIN :
15
Q.
16
Mr . Trepp?
17
A.
Yes, it would be a little help ful if you
The GE contract, do you remember when that was,

'
I don lt remenler exactly, but we clearly did a number
18
o f d em ons tratio ns for a numb er o t the oth er compan ies wh ich I
19
m entioned to '-- prior to getting the GE contract .
20
contract kzas at leas t a year in the making: so I would say we
2l
were in -- I would say we started doing demonstrations in 2000
22
for 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
forw I would say, at 2east a year .
The GE
CZCILIA VCISI,, NV CCR #24 6 (775) 82 7-0672

:
1
2
3
4
5
6
9
10
Q.
How lbout the demonstrations at the MGM you were
re ferring to?
A.
That would have been in the -- 1 believe, again, the
end of 2000-2()01 time frame .
Q.
Okay . And so the heightened interest by the
A ir Fo rce , wab; Lha t, then r sho rtly therea fte r?
A.
Yeahp. that wotlld have been 1n: I would say, end o f
2 001-2002 i1k .
Q.
Did lnhere come a time that you entered into a contract
with the Air Iporce?
11
A.
Yes .
12
Q.
When was that?
13
A.
1 dol't remember exactly, but 1 believe it was the end
14
of 20 02 .
15
Q.
M d lfas that contract for 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
l8
wa s s ix m onthl; or n ine mo nths .
19
A ir Force had asked us to work with another governmental agency
20
where that agency basically picked up that contract and went
21
forward with (Lt for approxim ately another year to 15 months .
22
Q.
M d at tha t po in t , th e
What was the contract for?
23
MR . LOCG R : Which one, Counsel? Air Force?
24
THE COIJRT :
Yeah .
9
CECILIA kr ffffs NV CCR #246 (775) 82 7-0 672

J
MR . JAKOPCN :
The contract with the Air Force .
THE WITNESS :
This js going to get into what -- there
3
4
w111 be a debate as to what 's classified and to what's not.

THE COURT : Well, here 's my concern, is that
everything that's been submitted to me in terms of authority --
and my clerk and I did some zesearch on this issue too -- talks
about the government being the party that objects to thngs
that are classified ancl not the persons that are involved .
And :
50, unless somebody can convince me otherwisez il
10
there ls a question asked, and unless there's som e 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 .
16
Mr . Trepp is.
17
I doubt
Whether eTreppid Technologies is under the contracts
18
tha t signed w tth th is other d ep artm ent o K th e gov ernm ent ,
19
whether eTreppid Technologies is an agent, frankly, I have
20
nothing to ofrer, because these contracts are taken by the
21
agency and they bre not given to the individual.
22
But the contract -- in this instance particularly,
23
M r. Montgomerg has the highest security clearance you can get.
24
He is under tNat contract, undoubtedly an agent, and

10
C,b;CILIA br()lf.L, NV CcR #246 (775) 8.

27-0672

?
Mr. Montgomer'g has spoken to an individual w ithin the
government who --
MR . LOGAR : Wait.
4
5
Somebody walked in .
(Whereupon, a man is instructed to leave the

courtroom .)
THE COURT :
G() aheacl -- as soon as this gentleman
leaves, go ahead and linlsh what you were golng to say, but 1
have a question. Maybe 111 just ask it now, if you don't
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.
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 .
16
Then I
I haven 't seen that.
MR . FLYNN ;
J believe we gave you the Cheney case .
17
gave you variaus cases from the Supreme Court which clearly
18
says he canno t .
19
THE WITNESS : Your Honor --
20
THE COURT:
We
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

11
CECILIA 7OS=z NV CCR #246 (775) 827-0672

re
>-
conduct a heazing to make determinations concerning the
relevant use c'r admisskb lity of classified material . United
States ain 't here .
MR . FLYNN : You 're right, Your Honor.
And our ability
to bring in the United States in the next 48 hours is limited .
I w ill rep resen t to the Cou rt , b ecau se 1 wa s pre sent w ith
Mr. Montgomery when he had the conversation with a ranking
United States government official who instructed him do not
teskify about any classified makerial or you will be in breach
10
of the agreement and it 's treasonous.
11
he was given .
12
frankly, caught between Mr. Trepp and Mr . Montgomery. And what
13
they choose to do is up to them .
14
15
That ts the instruction
Now, what they choose to do -- because they are,
THE COURT : Do they know this hearing is being held

today?
16
MR . FLYNN : Yes, they know as of today .
17
THE COURT : Well, I mean: I1m assum ing, being that it
18
19
was such an erlergency, they 'd be here .
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 they lve known about this, and
22
this was a ma'nter of some urgency to them .
23
24
THE COURT : I mean , we can get real silly. My

classmate and roommate at the Naval Academy is now the chairman
12
CECILIA vcsf's NV CCR #246 (775) 827-0672

)
of the Joint Chiefs ot Staff, Peter Pace.
the phone.
1 can call him on
You want me to do that?
MR . FLYNN :
Sure . And 1 will represent to the Court
that I have contacted, prior to the TRO going in place, the
former Gecretary of Defense and others .
THE COURT :
l 'm not trying to be difficult about this,
but I'm being placed jn a very uncom fortable situation because
1 'm being asked to deal with an issue about which I have some
sensitivity.
You might infer from my background that 1 do . A t
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 w ebve taLked about anything thatls necessary to this
13
hearing in term s 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 ths information is, and
18
I 'm hop in g tha t we fre going to get the re p retty quic k .
19
MR . FLYNN : Your Honorz 1et me say this . If M r. 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 h is direct so we can get to the core issues --
24
is going to assert the goverl= ental privilege .

13
CECILIA l& lfi,s NV CCR #246 (775) 82 7-0672

.e g
w e
Now, if it rclquires the goverrr ent coming in within
the next 48 hours ho talk to the Court, we bll see what
develops.
Your Honor, you rre not dealing on the level of Mr . Hennessey .
You rre dealing on a level that is so compartmentalized, as I
understand itr that there are very few indivduals --
Mr . Hennessey wouldn 't even know who to contact to dekerm ine
relevant issues on some of Lhese issues . Bu* if Mr . T repp --
9
10
11
12
13
14
1 Lhink at this level, what you 're dealing with,
THE COURT : Wabt a minute. Hold on . Sit down .

Sir, you need t.o sit down too .
I can 't hear when
there 's a11 this conversation .
Now, go ahead and fjnish what you were going to say,

and then 1111 1et Mr. Peek speak.
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
M r. Montgomery, hopefully, w ll be able to give the Court
17
enough so that won 't be necessary .
18
If th e d efense wants to then ask quest ions abo ut it ,
19
if the goverm aental privilege has to be asserted, m aybe we ll
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

14
CECILIA VGHL, NV CCR #246 (775) 827-0672

:..-.z)
-...-
regard to it.
And i f youtre concerned about the contents, I
don lt th ink 1 need to know about that.
But Leh 's go ahead.
with this thing.
privilege to invoke.
I 'm with you . We 'll go ahead
We bll see when we get there if hels got a
MR . PEEK :
Your Honor, so there 's no m isunderstanding
with the Courl: and at least the plaintiff, this source code has
no classificallion to it .
to it. It certainly was used in conjunction with classified
Ih has no top secret classification
10
material that was provded 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 M r. 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
th at h as som e super-secre t aspect to it .
19
keeps morphintp it keeps changing every time we knock down the
20
straw man tha'z he puts up .
21
22
It keep s evo lv in g: it
THE COURT: Al1 right.

.
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.

15
CECILIA krff.L, NV CCR #246 (775) 827-0672

'
THE COURT:
1 understand that's your position .
just -- when you hear two thinqs from people that have
information, 1 don 't know exactly how to balance it out until T
hea r it all .
MR . PEEK :
I Lhvnk you should hear it based upon sworn
declarations as opposed to anecdotal comments from counsel.
THE COURT :
MR . PEEK : And we have testimony .
I understand .
We have only
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: A 1l right.
Well, we dll 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
B Y M R . JAKO PIN :
19
Q.
20
21
Strike the question . 1'11 try to start again .

The contract that we 've been talking about, was that
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 m ean .

16
CECILIA V'
IXJ.L, NV CCR #246 (775) 827-0672

kw- )
'
1
2
Q.
> .
What were the services that eTreppid was providing
under the contract?
A.
To p rocess video information and give outputs.
Q.
And did e'I'reppd fulfill that contract?
A.
Yes.
Q.
And ik was fulfillecl when?
A.
I believe the A ir Force contract was for six or nine
months, and then il. was given off to a different governmental
agency .
10
11
Q.
And did it expire with respect to this different
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
15
16
eTreppid has entered bnto as well?
A.
Yesz there was another contract we got with Socom to
do testing for an ATR project.
17
Q.
And when that was?
'
18
A.
1 b e Lieve it w as abou t a year ago .
19
Q.
Does that contract continue today?
20
A.
It 's either expired or it fs 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
17
CMCILIA Mofff/, NV CCR #246 (775) 827-0672

Lx ..- /
w .
on hold because, since we don t have the source code, we can 't
do the work.
stream , by deflnition, is on hold until we can get it back .
Rut in theory, we were supposed to have another -- about seven
or eight months lelit on that contract .
Q.
So the ccntract, by definition, and our revenue
You refer to the source code being gone . When did you
first find out about the source code being removed at the
company?
A.
It would either have been on Sundayp January 6th --
10
no, excuse me .
11
January 9th .
That would be Sunday, January 8th, or Monday,
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
exp lained to rRe th at there were - - eith er he knew spe ciftca lly
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
23
24
MR. FLYNN: Objection. Move to strike. Hearsay, Your

Honor .
.
THE COURT:
I'm going to permit it .
I<m going to
18
CECILIA MOST, NV CCR #246 (775) 827-0672
'

.
listen to hearsay to a fairly large extent during this hearing
under the general exception to the hearsay rule .
BY M R . JA KO PIN :
Q.
Mr. Trepp : before we continue with the source codez a
couple questions about the government contracts .
Were those
government contracts fulfilled using a proprietary eTreppid
source code?
A.
Yes .
Q.
And how djd you fulfill them? Did you provide results
10
11
to th e go verN aen t?
A.
Yes, in every case .
Or, in one of the contracts, we
12
actually gave them -- 1 don 't know the number -- a number o f
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 n ight at hom e and satd w hat w as 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 ether thought a substantial or all of the
22
source code was gone .
23
early the nex'z morning to give me an update as to what was
24
going on relaLive to that .
I told him it was imperative he came in
19
CECILIA Flffr, NV CCR #246 (775) 827-0672

l
t.. ,)
'
..
..
Q.
Did he do that?
A.
Y es .
Q.
What did you do then?
A.
1 asked if he could give me a better assessment as to
what was going on, and 1 immediately went to Cind Dennis.
Q.
Did you?
A.
Yes .
Q.
W ith respect -- when you found out what was going on,
9
10
11
what did you find out?

A.
I basically said to Dennis, 'There 's obviously
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 .
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
figu re out exactly wh at wa s goin g on .
19
the airport to see off the people that we were supposed to be
20
traveling on this trip with .
I was
So l d id , in fact, go to
21
When I cam e back in , I got a great deal more
22
inform ation 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
2
3
4
., ?
and I was perplexed , to say the least .
Q.
Did you direct the employees to do anything in finding
that out?
A.
To fjnd otlt exactly: to the best o f their knowledge,
exactly what happened.
get together to cumulatively to come up w ith exactly where
everything stood . 1 asked Sloan to call Dennis and ask him to
come back into the office so that I could discuss with htm
again what was going on. And he said that he would come back
10
And I asked them a11 so that we cou ld
in r but he didn lt .
11
Q.
Okay . That was on Monday, correct?
12
A.
That is correct.
13
Q.
Anyth ing else happen on Monday w ith M r. 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 said r ''What on earth are
19
you doing?
20
we don lt have the source code, how can you have people work?
21
What did you do with it?''
The people can 't work. We've got 20 employees .
If
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

--
....
al1 of those?''
And he said, ''We11, I didn 't do it.''
So I said, ''Who on earth did?''
And he sad to me, ''We11y Patty did it.''
N ow , it w as prepos terou sy tha t statem en t, b ecause I
had found out from Sloan that morning that the only two people
that had access to be able to access either the source serverw
the 1SA serverz or a L1 of the individual workstations, were
Mr . Montgomery and Sloan .
10
11
1 said , ''Please 1et me help you get through this.
don t 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.
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
18
Q.
He went running out the
There was reference earlier to backup disks . Are you
famillar with those?
19
A.
Yes .
20
Q.
Could you tell us about those.
21
A.
Denn is had told Sloan to back up everything in the
22
building, with the exception of the source server stuff .
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
I had

;'
--/
z
N'
interest and his family 's best interest for me ho personally
keep a copy orL a regular basis of the source code .
to do that at a minlmum. of annually, and certainly, anytime
Lhere was a major event that would have occurred, we would
eltber have a new project or new projectz that I would be able
to keep a copy outside of the building, outside of the -- what
was in control ot eTreppid .
I asked him
And 7, over a seven-year period, kept getting -- they
were first CDs, they became E'

V DS, and then they became hard
10
drives .
11
only two people who hacl access to the safe-deposit boxes was my
12
wife and myself.
13
14
15
Q.
I kept all of those in safe-deposit boxes. And the
After the events that youfve just talked about took
place, did you get those retrieved?

A.
Yes.
I asked -- I ctidn 't want to leave the building
16
because there was obviously a great deal of turm oil, and people
17
were worried about any number of things, obviously .
18
trying to keep -- get some klnd of stability, at least on an
19
interim basis, until we coulcl figure out what w as going on . I
20
asked my w ife 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
I was

(
. ..+
A.
1 iv tediately brought them into Sloan 's office .
And
Sloan -- 1 said to him , Lhese are the disks that Dennis had
given me over Lhe years with al1 of the source codes for a11 of
the projects that weld been working on from Lhe beginning of
time, and that this will be the answer; please look on these,
and tell me exactly what 's on there, hoping that, obviously,
a11 of the source code for a11 of the projects that weld been
working on over the years was there.
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?
12
me he used to give them to you every two weeks.''
13
14
Dennis told
MR . FLYNN : Your Honor: I lve got a continuing
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
Case 3:06-cv-00056-PMP-VPC Document 644-21 Filed f05/28/08 Page 26 of 207

1
im
t.t--.
1
A.
Yes.
Sloan then went through , disk by disk, and went
through the whole thinq and basically started to laugh and
said, ''There ls nothing here.'' He did say there was some
reference to one compression project, but that it was totally
worthless by vlrtue of the fact that there wasn 't source code
there for it; it was just an EXE. He said the bulk of it --
the rest of the junk on it was a bunch of imagery, just bitmap
im ages of stuff.
9
10
11
Q.
What has the effect of the loss of the source code
been on the company?
A.
Wellj we have no ability to generate revenue . We bve
12
told the two governmental agencies that we have pending
13
contracts w ith that we can 't perform on them . We bve asked for
14
an extension , if that wou ld 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 1m going to be able to sustain paying
18
th e 2 0 fam ilie s who are emp lo yees .
19
come out of m'g pocket at some point.
That 's g oin q to have to
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 #246 (775) 827-0672

$ -'
''* '3
sign agreements such that the work that they do is the
company bs?
A.
Absolutely.
Q.
Is the company currently in the process of trying to
nego tlate n ew contracts?
A.
Absolutely .
Q.
Was llhe office software to be --
A.
We were -- up until this evenk, we were on the verge
9
10
of getting a very substantial contract -- or multiple

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
20
A.
Owning what?
21
Q.
Any of -- any software relating to pattern
19
22
23
24
it?
recognition .
A.
No, absolutely not .

MR . JAKOPIN :
What 's our next number?

26
CECILIA voHLr NF cCR #246 (775) 827-0672

(<Mt.
1
2
MR . IPLYNN :
1 think we 're dealing w ith 8 now .
I think
it's 8 .
3
4
(Pla Lntiff 's Exhibit 8 was marked for ldentification.)

BY MR . JAKOPIN :
Q.
Hand tng you a copy of a document that has been marked
as Exhibit 8, do you recognize this as a business record of the
company, M r . Trepp?
A.
Yes .
Q.
And what is it?
10
A.
It 's an assiglw tent of a U .S. patent .
11
Q.
And on the foilowing page, is a copy of that patent
12
attached?
13
A.
Ye s .
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.
Y es .
19
Q.
And does this assignment reflect that he assigned this
20
21
patent to the company on this assignment dated M arch 7th# 20022

A.
Yes, it is .
22
MR . JAKOPTN ;
Thank you.
23
Can I get this offered into evidence?
24
THE COURT : A re you offering Exhibit 82

27

r'
rr7
'%v
MR . JA KOP TN :
MR . FLYNN :
M ay 1 have one mom en t , Your Ho nor?
THE COURT :
Yes.
Ye s .
lsn ft this attached to one of the
pleadings?
MR . JAKOPIN : There were three patent applications
attached to th e pleadings, Your Honor . Wedve actually got more
patenk applications than the three that were aktached to the
reply.
Fran kly, if they would stipulate, 1 could get a11 of
10
these marked together and we could move ths along more
11
quickly .
12
13
THE COURT :
So the answer to my question is ''no,''
right? M y question was, isn 't this --
14
MR . JAKOPIN :
This particular one?
15
THE COURT :
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
Yes.
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 . Montgomery ls signature was
24
obviously forged .
28
CECILIA Mos2'
w NV CCR #246 (775) 827-0672

y'
q-.)
1
2
'.'
.-
MR. PEEK: Your Honor, will they just say or do

anything?
THE COURT : Waj.t, wait, waitz wait.
M R . PEEK ;
THE COURT : Ilold on, hold onz hold on .
Well, I haven 't heard -- maybe I have, but it 's been
You know --
lost in a11 of the conversation here. Has a foundational
question with regard to Exhibit 8 been asked of the witness?
MR . JAKOP EN :
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 . Montgom ery and
12
that this was the assgnment that related to that invention .
13
14
THE COURT : And he 's seen it before?
and correct capy of what he ls seen before; is that right?
15
16
And it's a true
MR . JAKOPIN : Whether he has seen this particular -- I
meanr what is --
17
MR . PEEK : Ether he has or he hasn t.
18
THE NITNESS :
19
THE O
wOURT : Al1 right. And how does he determ ine that
'
I don 't believe 1 ever havez Your Honor .
20
it s a business record of th'

e company, simply because of its
21
content?
22
MR . JAKOPIN : Correct: Your Honor . Further, the
23
published app lication 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
t-J
rrr'
'
o ffice .
with the patent office and published by them .
A nd 150 , that 's a record o f w ha t h as b een filed from --
MR . FLYNN :
Your Honor, in order to authenticate and
admit into evidence in any courtroom that I know of in the
United Statesg you neecl a certified copy from the patent
office, number one ; nunl er two, in order to prove it ds a
business record y heds got to go through the four elements of
bu sin ess reco rd s .
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 fou r 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
20
My inclination is to -- M r. Trepp, does that appear to

be Mr . Montgomery 's signature on the bottom?
21
THE W ITNESS :
Yes.
22
THE COURT :
23
(Plaintiffls Exhibit 8 was admitted into evidence .)
24
MR . FLYNN : This will be 92
I 'm going to adm it it .
It 's adm itted .
30
CECILIA UOfff/z NV CCR #246 (775) 827-0672

i
'.-,
t. ....)
l
M R . JA KOP IN :
(PlaC-ntiff's Exhib it 9 was marked for identification .)
4
5
.
This w ill be 9 .
BY M R . JAKO PIN :
Q.
Handg.ng you a copy of a document that 's been marked as
Exhibit 9, is this a business record of the company, M r. Trepp?
A.
It looks ike it .
Q.
Is this a true and correct copy of an assignment
signed by M r. Montgomery and the attached published patent
application entitled ''Method and Apparatus For Determin ing
10
11
12
13
Pattern Within Adjacent Blocks of Data''?

A.
Yes .
MR . JAKOPIN : M ay I have Exhibit 9 marked into
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 h.s signatures on these
19
documents, at least for the purpose of this hearing.
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 he lll be a witness in
23
this case before too long .
24
The issue
I think, for the purpose of authentication and for

31
CSCILIA VOHL, NV CCR #246 (775) 827-0672

(
relevance and for allowing these documents to be adm itted, that
by looking at the contents of the documents themselves,
M r. Trepp 's testimony, his fam iliarity with M r. Montgomery 's
signature, this appears to be his signature, is enough for me
to allow these to be admtted .
So Exhibit 9 is admtted . And then if you have
testimony down the roacl, I can certainly reverse my decision on
that .
authentication, that there 's been enough to allow it for the
10
11
But I lhink, in terms of relevance and admissibility and
purpose of th is hearing.
MR . FLYNN : 'm d, Your Honor, just so therels some
12
clarlty here, we don 't necessarily agree that this is
13
Mr . Montgomerys signature. Th 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 ;
19
THE COURT : Stop , stop, stop . There will be a time
1'm giving --
20
when that can be addressed. L mean, you know, if you object to
21
the document as fraudulent, then there s 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
t'-rz
r
/'=
evidence at some polnt in time, 1 '11 consider that evidence.
But just to say it's fzaudulent when we've got testimony to Lhe
contrary -- I'm gong to admit the exhibit .
M R . FLYNN :
Fine y Your H onor .
MR . PEEK : And , respectfully, what troubles me is that
M r. Flynn can come here from Massachusetts and do and say
anything abou- me# who has submltted these doeuments, and say
what I subm it led was fraudulent . That fs outrageous to me .
just think that is -- you don't just come in here one time,
10
one shotz and take cheaip shots at people .
11
12
MR . FLYNN :
Stevep assume it has got nothing to do
with you .
13
14
%HE COURT :
ilold on, gentlemen .
Don 't get your
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.
18
to be personal as to you, and I'm not reading them that way .
19
r don't take any of these things
So let 's get back to what we were talking about.
20
Exhibit 9 is admitted.
21
documentsz go ahead and offer themz and we:ll go from there .
22
(Plaintiff's Exhibit 9 was admitted into evidence.)
23
24
lf you have some other similar
BY MR . JAKOPIN :
Q.
Mr . Trepp , with respect to Exhibit 9, do you see in

33
txTfz
(.N
the abstract -- it's the seccnd page -- the first sentence
talks about f'ahe present invention describes methods and
apparatus for providing pahtern recognition between adjacent
sequential fritmes o f data''?
A.
Yes.
Q.
Were those activities that were going on at eTreppid
7
8
9
10
in the 2001 t:Lme frame when this application was filed?

A.
Yes .
(Pla kntiff 's Exhtbit 10 was marked for

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 :
15
THE COURT : Why don 't you take -- well, I don 't want
16
17
18
Five, Your Honor .
t/ tell you how to do this -MR . JAKOPIN :
Welll look at them all and save a few
m inut esz th at 's fin e, Y ou r Honor .
19
THE COURT :
20
MR . LOGAR : Counsel: for the record, will you identify
21
Yotl read my mind .
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
/
1
MR . JAKOPjN :
MR. FLYNN : Maybe you could just --
THE COURT : You marked Exhibits 11 through what?
MR . JAKOPEN :
THE CLERK : Yes, Your Honor, that ts what I have .
THE COURT : A11 right.
MR . PEEK :
THE COURT :
This is 11, 12r 13 and 14 and 15 .
Oh, there rs one more .

So 11 through 16# then?
ls that rght:
sir?
10
11
Top one is 11.
MR . JAKOPIN : Actually, it will be two more, 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
B Y MR . JA KOP IN :
19
Q.
Mr . Trepp , I've handed you copies of documents that
20
have been m arked 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
24
A.
Yes.
MR . JAKOPIN :
T ask that each of these be admitted

35
CECILIA V(lSIs NV CCR #246 (775) 827-0672
t.v
t
-rsv
1
into evidence .
MR. FLYNN : Same objection, Your Honor.
THE COURT: A11 right. The objection with regard to
Exhibits 10 through 17 is noted .
5
6
(Plal.ntiff's Elxhibits 10 through 17 were admitted into

evidence .)
7
8
They lll be adm ithed .
MR . JAKOPIN :
That's al1 1 have of this witnessr Your
Honor .
THE COURT : A 11 right.
Mr . Flynn?
10
MR . FLYNN :
11
The iast one was 17?
12
THE COURT : Yes, sir .
13
(Defendant's Exhibit 18 was marked for
14
Thank youz Your Honor .
identification .)
15
16
CROSS-EXAM INATION
17
18
19
BY M R . FLYNN :
Q.
Mr. Trepp, before we get into the nuts and bolts of
20
what we 're dealing w ith here, I 've given you what -- a copy of
21
what has been identifed thus far as Exhibit 18.
22
recognize this document, sir?
23
A.
Yes.
24
Q.
Describe to the Court what it is .
Do you
36
CECILIA ketlsfzz NV CCR #246 (775) 827-0672
(r/
(/- .
..
A.
It's an amendment to a loan which 1 gave to Dennis
starting in 1999 . And I think the last loan 1 gave to h1m was
on December loth .
Q.
Of what year, sir?
A.
105 .
Q.
And who prepared this document?
A.
Dou g Frye .
Q.
He 's your lawyer?
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.
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-r onth
37
CECILIA VOSL, NV CCR *246 (775) 827-0672
C.!!-1
t-.-.-...
-
period , being paid by eTreppid Technologies?
A.
As cclrporate counsel or as an employee?
0.
In any way.
A.
lf he had a legal bill and he was corporate counsel,
6
7
I'm sure he was being paid .
Q.
The date of this document is December 28th ; is that
correct ?
A.
Well , thatts the date it was signed .
Q.
Now, what date did you Sign it?
10
A.
What date did 1 sign it?
11
12
13
1 signed it the same date he
did.
Q.
And gour testimony is, what day is that, sir?
ls that
the day that Ls recited on the front of the docum ent?
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 hm I wanted -- he and Brenda
18
sign ed the no tes .
19
10th , whenever 1 gave him the original document, and he said
20
Brenda wouldn 't algn it. And I sald, ''That 's preposterous.
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
He cam e bac k to m e after the 8 th or Lhe
Go I got frustrated after two weeks -- or whatever the

38
r
'
time frame was, and 1 said r ''Dennis, sign this thing .''
Q.
Or else?
A.
Or e.
'-se, what?
Q.
Did he sign this in your presence?
A.
Y es, o f c ou rse .
Q.
A nd so the two -- where did the two of you sign it?
A.
He s.Lgned it at the front desk of our building, in the
reception area .
Q.
And '/ou were right there too?
10
A.
I handed it to him . He got the pen and he signed t,
11
and then 1 had our receptlonist sign as a witness that he saw
12
him sign it .
13
14
Q.
So tNis docr terft was signed out in the reception area
of the company; is that correct?
15
A.
Cor rec t .
16
Q.
And eho was this indlvidual, M r. Bora?
17
A.
He's our receptioniat.
18
Q.
And what relatonship 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 s signature?
22
A.
Did I see him sign t?
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
( re
(
.
' '!-
Y.
2
3
Yes, I saw htm sign t.
Q.
Have you compared th Ls signature to any of
Mr . Montgomery 's pr ior szgnatures at eTreppid?
A.
Itls irrelevant . 1 saW him sign it.

MR . FLYNN : Your Honor, 1 move to admit Exhiblt l8.
And I believe Exhibit 18 was given -- previousYy given to the
Cou rt as part of the papers .
MR. PEEK: No objection, Your Honor.
THE COURT;
10
11
12
16 is admitted .
(Plaintiff's Exhibit 18 was admitted into evidence .)

BY M R . FLYNN :
Q.
Now, Mr . Trepp, let s 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 .
16
Q.
Was it September?
17
A.
When was the first time I met him?
18
f think --
I think I met him
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
t
/..v
(.:x
Q.
In 19 96?
A.
Yes .
Q.
What was ie propos j-ng to you .n l996?
A.
He w.
anted to :start a business .
Q.
And '
Jhat d.d you say?
A.
''I don ft know enough about it.''
Q.
What did he tell you the business was?
A.
That he had tkhe ability -- he thought he had the
9
10
ability over time to develop something that could have a major

impact on the comp ressLon 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
W ere 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
A.
The Eldorado.
Q.
Were you there gambling?
A.
I don 't know .
Q.
Okay . Now, what was sald in that conversation , as
Its possible .
T cou ld have been .
much as you can currentiy recall?
A.
I don 't remeyler at this -- specific details, but it
was more of the same . He had said that he had continued to
make progress on the work that he was doing . And I sadw
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
bu sinea s?
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.
A 11 right . Did you ask him to do a demonstration?

42
CECILIA Mosls NV CCR #246 (775) 827-0672
(.e'
(Jr>-
..
A.
He said that he would like to put together a
demon stration and we could get together at some point and he
would give me a demonstration .
4
5
Q.
Okay . Anci then when is the next time that you met
him?
A.
Sometime in :98. Beginning of 798.
Q.
Where?
A.
I think it. was at my home . 1'm not a hundred percent
sure, but I think t 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 Dn pattern recognition ?
24
A.
Yes.
43
CECILIA V(lSZ, NV CCR #246 (775) 827-0672
(.rr
(.-..
.
..
Q.
How c id he show you the Gunga Din pattern recognition'?
A.
He played a C?), and it played on a monitor or a
laptop .
I don 't remember exactlg what it was .
Q.
A CD of what?
A.
Of the demonstration of the conversion o f a
black-and-white series of frames into a colored serles of
frames .
8
9
10
11
Q.
So at this point, in your mind: what was your
understanding of what tbe technology was tbat M r . Montgomery

was demonstrating to you?
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
17
18
19
20
Q.
So at this point in early 1998, you, as the investor
in this company, 50/50 with Mr. Montgomery -A.
We didn't even start the company, just to make sure
weAre on track here .
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
24
A.
Well, to the point, that is correct . He also told me
about a11 these other wonderful things that potentially he

44
CECILIA VOSZ, NV CCR #246 (775) 827-0672
(-.
( r.
would like to qrow and develop over time if he had the
engineers and the capital to do it.
Q-
But at least, we're clear on those two?
A.
Yeah .
Q.
Thost) are demonstrated to you in early '98?
A.
Y eah ,
Q.
And what did you say to M r. Montgomery at that time?
A.
That it seemed like it was interesting .
Q.
1 beq your pardon?
10
A.
It seemed like it was interesting and that I thought
11
uhat migh t 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.
Y es .
20
Q.
Unquestionably?
21
A.
Unquestionably .
22
Q.
And there clearly was one on data compression, but you
23
24
don 't recall how he showed you the data compression?

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

45
CECILIA 7(),rfz'
u, NV CCR #246 (775) 82 7-O672
i
k s.
(
.
have showed me a movie and said this is the size of a normal
movie: this is the size I made t, or a section of the movie or
something to that effect .
Q.
Okay, Was tt the same movie?
A.
Was the movte Gunga Din that he compressed?
Q.
Yes .
A.
I don 't really remember .
Q.
Okay . You do remember, a1l these years later: there
w ere two ?
10
A.
Two what?
11
Q.
Two demonstrations --
12
A.
No - -
13
14
THE COURT RRPOPTER :
Excuse me . One person at a time,
please .
15
THE COURT : Hold on . Stop .
16
THE WITNESS :
17
I apologize, Your Honorw but he keeps
asking --
18
THE COURT :
l understand .
L ke I said earlier , th is
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 you bre
22
not talking oeer qach other, because the court reporter can 't
23
get that down .
24
////
////
46
CECILIA Vclffpz NV CCR #246 (775) 827-0672

)
(
> c;/
.v
1
BY M R . FLYNN :
Q.
Irl1 rephrase, Mr. R'repp . You dre very sure, as you
sit here today under oath, there were two different things that
you talked about wth Mr . Trepp (sic), that he demonstrated to
you, data compressjon and pattern recognltion ?
A.
Yes.
Q.
When is the next tinte you meet M r. Montgomery?
A.
A t the end of '98 when we decided we were going to go
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 '9 8 .
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 M r . Hontgomery and made an agreement to form the
24
company?
47
CECILIA 7(?Sfp NV CCR #246 (775) 827-0672
('
.>
..y.,,
A.
About a month, month and a half, something like that.
Q.
So sometime in September?
A.
Okay.
Q.
Now, a1l these documents that your counsel,
Mr . Jakopinz showed you, did you review them before you come
into the courtroom?
A.
Did : revjew these?
Q.
Any of those .
A.
No .
10
Q.
How kong has Mr. Jakopin been your lawyer?
11
A.
Whenever we started doing the -- I mean -- are you
12
13
saylng my lawver or eTreppid ls lawyer?
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?
20
Q.
And -- and when you asked him to create the paperwork,
Mine . Doug Frye .
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, let ls go back -- wedre going to go back

48
CECILIA VOHL, NV CCR #246 (775) 82 7-0672
t.ry
.- - .
there, but let 's go back to your conversation with
M r. Montgomery . Describe to the Court, as best you can, what
you said to hl.m and what he said to you about forming a
company .
A.
Who said t.o who and who said to who?
Q.
What you said to M r. Montgomery and what
7
8
9
A.
I th tnk I've already said this before, but the best
that I can retzall js, Dennis was going to contribute everything
10
he had done, put it into the pot.
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
16
'
Mr . Montgomery saicl Lo you .
Q.
I would contribute money
Well, let 's fkrst take the part of your testimony
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'+
were going to be partners qoing forward w ith .
Q.
Did you take notes?
A.
Did l what?
Q.
Did you take any notes of what he would be
contributing?
A.
No .
Q.
Did you ask hiD whether he had anv copyrights?
A.
No .
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 M r. Montgomery over what Mr. Montgomery was
17
contributing And what you were contributing?
18
A.
I -- 1 don 't recall h av ing a m eet ing w ith th e 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
24
Q.
Now: you 'd consider yourself a sophisticated
businessman?
50
CECILIA Vtlffiz NV CCR #246 (775) 82 7-0672
'
('r ..,'
('N
A.
Yes .
Q.
How many companes do you own?
A.
I don 't know .
Q.
But you don 't know?
A.
No, q don 't know .
inves tm en ts .
Q.
.
,
More than five.
I have a 1ot of different
W ould you kike m e to thin k ab out it ?
Well, 1et me ask you this: A s a sophisticated
businessman wjth a)l your different investmen ts, you bre
familiar w ith legally binding contracts?
10
A.
Yes.
11
Q.
And M r. 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
15
16
A.
Yes . And if he wasnlt satisfied with it: he 'd find
another attorney that could help him with it.
Q.
Did Pillsbury Madison play any role in creating the
17
documents, the contribution aqreement or the operating
18
agreem en t , fo r eTrepp id ?
19
20
A.
I don ft know specifically, but I find it hard to
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
(w-J
(
''v
A.
lf you could deftne what -- is that a legal term?
Q.
Well, you undfarstand a simple little contracL -- two ,
three, four pages -- as opposed to something like this
contribution agreement here?
A.
Well, 1 would say --
Q.
ltls Exhibit 4 .
A.
1 would say, typcally, most of the contracts we do
are like that; not a two-, three-page, whatever you just
described.
10
Q.
Typically, most of them are like th is?
11
A.
Yes.
12
Q.
Nowz did you nstruct Mr. Frye to go meet with
13
14
Mr . Montgomery?
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.
No t tha t I can recall .
19
Q.
Well, obviously, it's a key issue to you , is -- you
20
know you lre putting ln 1.3 million, and you want some type of a
21
writing as to what M r . Montgom ery is putting in , correct?
22
23
24
A.
Sure. Or I would like an understanding as to what
that would be .
Q.
Now , 1 know this is an irrelevant question , but was

52
CECILIA V()SJw NV CCR #246 (775) 827-0672
..- )
1
.
.v z
.,
$1.3 million a 1ot of nloney to you?
MR . PEEK :
If he 's going to say it's irrelevant, then
we know it's irrelevant, and 1'm going to object to it as being
irrelevant .
THE COURT : You know, I think it probably is relevant.
Let him answer the question .
BY MR . FLYNN :
Q.
In SepteO ler 1998 .
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 .
12
13
lt certainly
is -- yes, it's a lot of money.
Q.
So iL was a lot of money to you when you made your
14
deal with M r. Montgomery because you knew you were putting in a
15
1t 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
p lace?
20
A.
No.
21
Q.
You don lt 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
(
1
Q.
Do you know how long it lasted ?
A.
No.
Q.
Was anyone present?
A.
T don 't recall.
Q.
Did you write out a check for $1.3 million on
September 28th --
A.
I don lt know .
Q.
-- 1998?
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 n 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 w ire or transfer any laonies into Doug Frye 's
16
(-
account?
17
A.
It 's very poss kble .
18
Q.
Did you write a check for $1.3 m illion? You don 't
19
know , do you?
20
A.
I don t 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
r.-)
(w
Q.
HoW cLid it get there?
A.
1 hav e no idea .
Q.
When did it get there?
A.
f don 't know .
Q.
Did it get there in dribs and drabs over the next year
o r so ?
A.
1 don 't know, but I doubt that strongly .
Q.
Did J.t get. -- w ell, dribs and drabs . Did it get there
9
10
in more than one check or wlre transfer over the next year or
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 month s?
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
24
Q.
And who d id you leave in charge of the money part of
the business between September 28th and the time you got back
55
CECILIA VGSZS NV CCR #246 (775) 827-0672

r
(yr.
..)
in M ay or June?
M R. PEEK :
Is Lhere some relevance of this line of
exam ination that relates to Lhe issues Lhat llave been framed in
a preliminary injunction?
MR . FLYNN :
Yes, Your Honor .
THE COURT :
What is the relevance?
MR . FLYNN : He has the burden of proving that he will
p revail on the merlts. if there 's a failure of consideration
under the contraet, if theres a breach of the contract, then
10
11
he can lt possg-bly prevail on the merits.
'
THE COURT: Well, 1et me ask this question just
12
directly: Are you sayng that M r. Trepp didn 't -- or eTreppid
13
didn 't pay the money?
14
MR . FLYNN :
There are no books and records that m y
15
client has ever been privy to.
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
It's highly unlikelyr from what
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
A s the record stands right nowz there 's testimony.in

56
CECILIA VOHL , NF CCR #246 (775) 82 7-0672
(x x...e
.,-../
whatever form and under whatever circumstances, the money was
paid .
be presented. And so, the objection to relevance is overruled.
If you have evdence that it wasn 't paid, then that can
Bu t go ah ead .
that.
BY M R . FLYNN :
Q.
I 'm sorry 1 too k so long to rule on
Go ahead .
Mr. Trepp, but just to clarify this and then welll
move on, you don 't know when the money or how much actually got
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
16
17
18
19
20
21
22
23
24
A.
I coald have done a 1ot of thingsw but what is the
point of showing hlm?
Q.
Rf the money is there, it 's there.
Well, when you went on your cruise, did you know
whe th er the 1 .3 was there or not?
A.
A t this moment, 1 don bt . But I prom ise you , in a
phone call, I could tell you .
Q.
The CD -- let 's look at the contribution agreement.
Paragraph 1 .2.1, Your Honor: which -THE COURT : We 're talking about Exhibit 3,
paragraph 1.2 .12
57
CZCILIA VOHL, NV CCR #246 (775) 827-0672

r -...)
(' ,
.
T
1
MR . FLYNN :
Yes, Your Honor.
THE COURT:
By the way, while we bre talking about that
exhib it, where is -- i:5 there -- there's reference to
Schedule 1.2.2, and then when 1 go back to that, it indicates
that it 's to be completed .
MR . FLYNN :
Correct, Your Honor.
THE COURT :
Is there a completed Sehedule 1 point --
8
9
I 'm sorry, 1.2.2?

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
M ontgom ery .
19
THE COURT :
1 understand .
20
MR . PEEK J So he was to provide the 1.2 .2 . So, for
21
M r. 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 b it by the way
24
this has gone on now eight years later .

58
CECILIA VElf.
fz'
ar AJV CCR #246 (775) 827-0672

r
(
.
kr
.--?
MR . I'LYNN :
The lawyer drew up the document .
THE COURT : M y question was simply, is there a
completed document?
1?m understanding, from uhat 's been said ,
that there is not, so let 's go ahead .
BY M R . FLYNN :
Q.
Mr . Trepp'
?
A.
Ye s?
Q.
Would you look at paragraph 1.2.1.
A.
Is this about the CD?
10
Q.
Yes, CD 1.
11
A.
I looked at it before.
12
Q.
You dre familjar with it?
13
A.
Yes .
14
Q.
You lre comfoltable w ith your familiarity with this
15
paragraph?
16
A.
Yes.
17
Q.
Now, that CD, clid you have any conversation with
18
M r. 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 M r. Fryer as your attorney: to create

59
CECILIA VJS.
Ds NV CCR #246 (775) 827-0672

,
(y> .
.-,
a document whcrein the contribution by Mr. Montgomery would be
properly deseribed?
A.
Yes .
Q.
And where is CD Number 1, Mr. Trepp?
A.
1 have no idea.
Q.
Have you asked Mr. Frye for CD Number 12
A.
I think I asked him if he had it.
Q.
When Lhe 1.3 million was puL 1n, did you kno- where
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 :
17
THE WITNESS : l think I said I was fam iliar with the
18
CD.
19
BY MR . FLYNN :
20
21
22
23
24
3.
I 'm not familiar with the paragraph you were alluding to .
Q.
I'm sorryz I thought you said you were fam illar with
the paragraph .
A.
No, 1 said I was familiar with the CD 1 -- which
exhib it?
MR . FLYNN : The record speaks for itself.
60

,
? .s.
THE WITNESS: Exhibit what?
MR . FLYNN :
Exh ibit 3, paragraph 1.2.1.
THE COURT :
Pc
age 1 .
BY M R . FLYNN :
Q.
It's actually the last two or three lines of page 1 .
A.
Okay .
Q.
Page 1: Exhibit 3 .
A.
Yep .
Q.
Last few pages . LetAs, first of all, establish your
I'm sorry.
Page what?
10
signature on this document: which is at the end, on page
11
numb er --
12
%HE COURT :
13
MR . TLYNN : I believe t 's 12 . I've got to eheck .
14
Page number 12 .
15
12?
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 IX SF/z A?V' CCR #246 (775) 827-0672
....x)
f
....)
'x M'
..
the record .
.-.
Follow me as I read it .
Okay, sir?
A.
U h-huh .
Q.
This is what Mr. Montgomery is contributing :
f'A 1l of
Contributorls know-how ; trade secrets; patent rights,
copyrights, Lrademarks, licenses and perm its, registered or
unregistered, pendng or approved; software programs and al1
programming and sotlrce codes used in connection therewith or
otherwise required to operaLe any component thereof; and a1l
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.
Ye s .
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 month s,
23
howeverr was Lhat he was also contributing something you bre
24
calling today Hpattern recognition technology''; is that

62
CECILIA /rtlfff/z NV CCR #246 (775) 827-0672

'
co rr ect?
A.
Y es .
Q.
And you don ft see the term ''paetern recognltlon
technology'' there: do you?
A.
No, J do not.
Q.
And it Was your lawyer who drew this up?
A.
Y es .
Q.
Now , let 's go over to the next pager paragraph 1 .3,. '.
.
''Excluded A ssflts 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
eTrepp id 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.
W as Lhat your understanding when you executed this
18
document prepared by your lawyer?
19
A.
Yes.
20
G.
Now y did you consider CD Number l an asset of
21
eTrepp id, then Intreptd?
22
A.
Yes .
23
Q.
And going back to Mr . Frye again, M r. Frye was signing
24
the checks fcr everybody?

63
CECILIA VOSL, NV CCR #246 (775) 827-0672

v
yy
A.
1 have no idea.
Q.
Do you know if Mr. Frye -- strike that .
Did you ever
have a conversation with Mr. Frye about whether or not he ever
got CD Number 1?
A.
Not that 1 can reca l .
Q.
Nowz let's move forward .
1 believe your testimony was
on direct, and having bn mind Mr. Venab le 's testimony, that you
repeatedly: over the years, asked for CDs to bring you up to
date so you would possess the current technology being worked
10
11
12
on at eT repp id .
A.
Is th at correct?
Copies of the source code that were generated by
eTreppid Technologes 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 tm 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 M r . Montgomery
21
for the CDs so you 'd have a copy of what the company was
22
working on?
23
A.
24
Yes, to protect his fam ily and m ine in case there Was
a disaster .
64
CECILIA MOSZS NV CCR #246 (775) 827-0672
6?
1
2
Q.
And Lhen -- feeling the importance of this technology,
you then went and put them in how many different safes?
A.
One .
Q.
In a safe-deposit box?
A.
Y es .
Q.
And how many CDS, or whatever, did you put in this
7
8
9
10
safe-deposit box?
A.
1 don't know the exact number . It was probably around
a dozen .
Q.
Because you hacl in m ind 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 comp any's best
16
in terests .
17
Q.
18
But as you s1t here today, the number one source code
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 #246 (775) 827-0672
fr
,.
have just put it onLo our workstations or servers: or whatever
it was. and that was the start of the business that we bad .
0.
Oh, so -- buL then as the years went on , you wanted
a1l these other CDs, but the Number 1 CD, you just assumed --
you trusted Dennis that he put it nto the company?
A.
Well, why wouldn't 12
Q.
Well/ Mr. Trepp, webre going to determine that.
8
9
But xet me ask you thisz sir: Did you have any reason
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 .
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
Is there any
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 .
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
It wen t

.i.
1
2
r)
THE COURT :
)..
-
I understand .
BY MR . FLYNN :
Q.
Did llou have any doubt that the company got -- when
you put the 1 .3 in some form over some time in, and so the
company was using that technology that was on CD Number 12
A.
7
8
Do i believe?
Can ( ask a question, Judge, because 1'm not sure I
understand .
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
13
14
15
THE WITNESS:
Can you p lease reword it .
BY MR . FLYNN :
Q.
Yeah . Sometimes as the day goes on, given my advanced
agee my questtons get worse, but I b11 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 m iAlion,
18
the compression technology that was on CD Number 12
19
20
21
22
A.
Yes .
I believe we got -- if there was a CD 1, I
believe we got what we bargained for .
Q.
Now, you do not have a security clearance equal to
Mr . Montgomery bs: do you?
23
A.
At this time?
24
Q.
Corlect .
67
CECILIA Mof, NV CCR #246 (775) 827-0672

% .4
''
.
.r7
A.
No .
Q.
Do ytlu know wtka t h1s security clearance is?
A.
Y es r T SSC 1*
..
Q.
M d what securty clearance do you have?
A.
TS , dRnd my SCf is pending .
Q.
Have you ever had any conversations wi th
Mr . M ontgomerg in the presence of any government official --
just yes or no --
A.
Y es .
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 discusson 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 . M illiken -- strike that.
20
21
Did you tell M r. M ontgomery that Mr . M illiken was
putting $12 rlillion into eTreppid for 5 percent of the company?
22
A.
No .
23
Q.
Mr. Milliken s a friend of yours?
24
A.
I wouldn 't ca1.l him a friend .

68
CECILIA vrrrf,z NV C(?R #246 (775) 827-0672
>-'
.-
Q.
Well, you were b0th at Drexel together?
A.
We worked toqether, that ts correct .
Q.
AL Drexel'?
A.
Yes .
Q.
Did you tell Mr . Montgomery that M r . M illiken gave you
$30 million to go on an extended -- a cruise to avoid being a
witness?
A.
Wh at ?
Q.
During the Drexel period .
10
11
MR . PEEK :
Your Honor, this is way out of line and
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
som e of it wizl stick, wthout it really coming from the

69
CECILIA VOHL. NV CCR #246 (775) 827-0672

....,
c.
)
witness stand?
MR. FLYNN : Mr . Montgomery will so testify .
MR . FEEK : This gen tleman has done business with the
government. The contracks are with him . He's the majority
owner or has the most stock in it, and he has relationships
with General Bath , Conqressman Gibbonsy w ith John Hennessey and
others .
So this is --
THE COURT : Will you trust me that I know the
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 b it 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 we dre 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 igh t h ave .
19
20
MR. PEEK: Againr I1m going to object to the same

thing .
21
THE COURT : I understand . I understand .
22
MR . PEEK:
23
THE COURT: The objection is overruled. I think if
24
Is it overruled or sustained?
you use the standard for relevancez there might be som e

70
CECILIA 7052,, NV CCR #246 (775) 827-0672
.>..p
.';
u -,
relevance, but let 's not spend too much more time on this .
2
3
M R . FLYNN :
I won 't, Your Hono r .
B Y MR . FLYNN :
Q.
Mr . Trepp, how many years has it been since the
governmentz Oa certain types of highly ckasskfied technology ,
has been dealing w tth you and Mr. Montgomery?
sir?
How many years ,

'
A.
lt's been months .
Q.
No# starting from the beginning, with the first
10
government contract.
11
present, from January -- from now, February 20062
12
A.
Okay.
How far back does that go, from tbe
Can you ask the question again: please .
13
THE COURT : You want to have t read back?
14
MR . FLYNN : No, that's okay .
15
faster .
16
BY MR . FLYNN :
17
Q.
1 think it would be
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 tim e framer you never got the highest

71
CECILIA MOSZP NV CCA #246 (775) 827-0672

!
h >IF
security clearance, but Mr . Montgomery did, correct?
A.
Yes.
There was a reason for t'hat , but yes .
Q.
That entitled him, within eTreppid, to deal with the
government on these hbghly ckassfked materiaks with thks
highly classified technology: but not you?
A.
That's nonsense.
Q.
What weren 't 'gou entitled to deal with?
A.
Anything Lhat was Scl-rated, until I got my SCI
clearance .
10
Q.
11
'
Wellz as we sit here today, dc) you have a clearance
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 he s 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.
24
No : '
.E -Ilve dealt with the government on -- on a
contractual basis or on a day-to-day basis as to asking usw

72

w -.e '
* ''
meaning the company, what they would lkke to do for ther .
Q.
A11 right . Let's take the time frame, September .04.
A.
Y es .
Q.
Just yes or no : Did a certain agency of the
government want to purchase certain technology that
M r. Montgomery had been dealing with, with the government on?
7
8
A.
a difference .
9
10
11
12
Can 1 ask you a question: Your Honor: because it makes
A re you saying the government was dealing with

Mr . Montgomery on a deal that had nothing to do with eTrepp id?
Q.
I1m saying thall Mr . Montgomery was working w ith the
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 content'bf that technology?
16
A.
Yes .
17
Q.
You did tell the government how much you wanted for
18
19
20
the technologyz correct?

A.
I told the government what we would be happy to sell
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?
..
73
CSCILIA v()Sl, Nv ccR #246 (775) 827-0672
A.
There was a specific discussion relative to three
different pieces of this conversation. One was, we would
license the Lechnology to them for 10 laillion .
the technology to them for 100 million . And we wanted to have
a bond posted relative to having our technology secured in the
sense that it wouldn lt get out of the government 's hands .
We wou ld se ll
Q.
How much was the bond?
A.
A z they never offered us a penny; B, we got a
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 p f a bond did you ask for?
13
A.
How much of a bond?
14
500 million .
lt was elther 100 million or
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 ont remenl er. A11 right.
18
19
Now , in the context of this conversation r which yDu
say is 100 m iklion 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 t 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
some bond somewhere -- behween 100 million or 500 million or
possibly a billion, at. some point, did you tell Mr . Montgom ery
not to process any more of the things the government wanted him
to process?
A.
Absolutely not .
Q.
At same pointu did the government stop paying for what
7
8
Mr. Montgomerg was processing?

A.
T don't understand what that question means .
The
government was only payng eTreppid . They were never paying
10
Mr. Montgomerg anything.
11
government terminate our contract, is that the question?
12
Q.
Bul: I don rt understand .
Did the
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) 82 7-0672
Q.
How m any hours a day was he working?
A.
It depended upon what was the time frame and what they
were asking h tm to do .
end, veryy very little .
In the -- the beginning, a lot; in the
Q.
Did Ae generally work seven days a week at 18 hours a
A.
No .
Q.
Now -- but you know that -- how often were you there?
A.
In the beginning, we were b0th there an enormous
10
11
12
13
14
day?
amount of time .
Q.
In the first six months or four months until June
of 199 / you were gone?

A.
You pre talking about a contract that was dealing in
2002, not in 1999.
'
15
16
Q.
I understand that. And you were there a11 during that
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
24
for the work Mr . Montgomery was doing?
A.
The government paid eTreppid a contract of -- I think

76

.
it was a mill Lon eight .
Q.
government?
A.
5
6
Was 'lhe ftrst check two and a half million from the
There was no chance that the first check was two and a
half mllion, no chance .

THE COURT:
Excuse me .
I need to make a phone call at
5 o 'clock .
longer are we going to take to get done?
9
10
11
12
.I
I'z's now about one minute after that.
MR . PEEK :
How much
Your Honor, this is our last witness: so I
can 't speak for Mr. Flynn .

MR . FLYNN : > d l'm going to put M r. Montgomery on .
M y direct is probably 30 to 40 minutes .
13
THE COURT : A1i right .
14
MR . PEEK :
15
cross-examina Lion .
1 w ill try to restrain myself on
16
MR . LOGAR : Which will be difficult.
17
MR. PEEK : Which is going to be difficult .
18
THE COUR T :
19
Mr . Logar make that comment .
20
21
was go ing to comm ent on that .
1'11 1et
A 11 right . Letls be in recess until 20 minutes after,

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: A 11 right . Please be seated. Al1 right .
24
Please continue .
77
CECILIA ltl.
H7a, NV CCR #246 (775) 827-0672
1
2
3
4
MR . FLYNN :
BY MR . FL YN N :
Q.
Agaia, M r. Trepp, letls go back to September '04 . Was
a certain government contract ending in September '04?
A.
Y es .
Q.
And 5id the government want to extend it?
A.
They asked ij w could do a small amount of additional
9
10
11
12
13
14
work relating to that contract.
Q.
16
And :id they want to extend it for a m inimum period of
th ree m onths ?
A.
I don't recall if that was exactly what it was, but
they did want to extend it for a limited period of time.

Q.
Were you in the presence of Mr . Montgomery -- strike
that .
15
Did you and Mr . Montgomery have a discussion about

extending it?
'
17
A.
Probably .
18
Q.
Do you recall anything about that discussion?
19
yes or no .
20
A.
Not in detail.
21
Q.
Did either one of you say no to the governm ent, you
22
23
'
Thank you, Your Honor .
24
Just
wouldn lt extend it?
A.
At some point, we -- we both agreed we weren 't going
to continue it.
78
CWCILIA &r()J.
f2,z NV CCR #246 (775) 827-0672
Q.
You and the government or you and Mr . Montgomery?
A.
M e and th e gove rnmen t .
Q.
Agreed you Wouldn't continue it; is that your
testimony?
A.
They wanted to terminate the contract and said there
were -- were some other things that they would like us to do up
u'ntil some specific date, and I don lt remember what that
specific date was.
Q.
Did M r. Montgomery want to extend the contract?
10
A.
I donlt think that option was available to us to
11
extend it .
12
Q.
13
issue in September 104'?
14
15
Just yes or no: Was this a national security current
MR. PEEK: Objection. What is ''thisn?

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.
20
Can you imagine a higher priority than what these
interests involved?
21
A.
Yes.
22
Q.
Is this when you told the government 100 m illion?
23
A.
Absolutely not.
24
Q.
When did you tell the government 100 million?

79
1
2
3
4
A.
We had been negotiating for a protracted period o f
time prior to September of 604
Q.
Okay . When did you first tell the government
l00 million?
A.
Either the end of 903 or the beginning of 104. And
when you say ''i00 milllonz'' that was the price we had offered
to sell a11 of our technology to them for.
8
9
Q.
Under the oath that you signedy you cannot disclose
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 wasn lt the question, M r. 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 eTrepp id
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
24
M r . Montgomery then owns?

A.
llm not exactly sure in September of '04 # but I

80
CECILIA MOSZ, NV CCR #246 (775) 827-0672

...w-
- )
believe he owns approximately 30 percent right now .
it was the salae thenz but I'ut not positive of that fact.
3
4
Q.
I believe
He got somehow -- he somehow went from 50 to
3o-something percent?
A.
Yes .
Q.
Now, I1m not going to spend a 1ot of time on this
because I think, at some point, it 's going to become the core
of the case. But 1et me just ask you this: In the first stock
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 .
13
how he was diluted over time.
14
15
Q.
I believe I have a Cairly good understanding of
Was some of his stockr when it went from 50 to 4Oz
sold for l.5 m illion to one of your friends?
16
A.
No .
17
Q.
To someone that you know?
18
A.
No .
19
Q.
Who ds Wayne Primm?
20
A.
Wayne Primm is a good friend of m ine .
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 M r. Montgomery wrote a check back to you?

81
CECILIA Uofffrs NV CCR #246 (775) 827-0672
A.
B ack to whom?
Q.
Well, Friendly Capital .
A.
To repay a oan that he borrowed .
Q.
Let me finish the question.
A.
Okay .
Q.
Friendly Caapital is you?
A.
I am the president of the general corporate partner of
Friendly Capital LP.
Q.
And when Mr. Primm , your friend, paid the 1 .5 millionz
10
M r . Montgomery paid back Friendly Capital $975,000 .297 is that
11
correct?
12
13
A.
I don 't know that that 's the exact number, but I
b elieve thatfs very possible .
14
Q.
And t 's your testimony that was for loans?
15
A.
The repaF nent 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 w ith 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
Case 3:06-cv-00056-PMP-VPC
Document 644-21 Filed 05/28/08
Page 84 of 207
J
1
A.
Yes, but you -- if you would like to ask me how he got
from where he was to where he is: 1'd be happy to go through
that, if 1 can .
with -- anyth kng to do with his sale to Wayne Primm .
He did not go from 50 to 40 having to do
Q.
How many different alleged dilutions took place?
A.
Thera weren rt any alleged dilutions.
or gifts or capitaL raises.
9
10
There were sales
Q.
1'm not going to spend much more time on this, but
when you -- your company was originally 50/50, just the two of
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
tha t co rrect?
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 weren t paying -- th e company
23
wasn t paying him what he deserved to be paid?
24
A.
Absolutely not.
83
1
2
3
4
Q.
Okay ' And did money become the subject of contention
between the two of you throughout 2004 and 2005?

A.
Yes, it was a big issue for Dennis because he was
desperate for money .
Q.
So it was an jssue of contention between the two of
A.
lt was no contention for me. He just kept asking me
fo r mon ey .
Q.
you?
Okay . Noku it 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
21
MR. PEEK: Objection . Compound. There's two

questionsz abaut him bei.ng owed money or --
22
23
24
THE COURT : Agreed, agreed . Break the question down .

BY MR . FLYNN :
Q.
In the context of any discussion between you and

84
CECILIA ysfw NF CCR #246 (775) 827-0672

% ...
.
... .
M r. Montgomerll, were you fighting over money?
A.
No .
Q.
Was there a discussion about who owned the technology
that was fueling the government contracts?
A.
Abso Lutely not .
Q.
Never?
A.
Nev e r.
Q.
Now , did Mr . Montgomery -- between 2004 and throughout
9
10
11
12
13
2005, was he making demands on you, eTxeppid or whatever, for

money in connection with moni.es paid by the government?
A.
Absolutely not. He asked me for money because he
needed to borrow more money than he had borrowed in the past.

Q.
I understand your testimony. Com ing 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 Sep tember 05 and
18
December 'O5 -- the end of December 05, about governm ent
19
contracts: sales ta the government of technology Mr . Montgomery
20
claimed that he owned?
21
MR. JAKOPIN : Objection . Foundation.
22
THE COURT :
23
24
1 think -- no, thatls a question . Were
you having discussions.
I'm going to allow that.
THE WITNESS : eTreppid was having discussions with the

85
Case 3:06-cv-00056-PMP-VPC Document 644-21 Filed 05/28/08

Page 87 of 207
l
government about four potential contracts that the government
was interested in pursuing.
BY MR . FLYNN :
Q.
Okay. And I don bt mean to be contradictory: but
didn't you just say a mlnute ago that eTreppid was not having
discussions with -- w j.th the government about government
contracts in the fall or. 20052 Didn't you just say that in the
question before that?
THE COURT :
1 think that ls argumentative .
10
MR . FLYNN :
lt is, Your Honor .
11
argumentative .
12
BY MR . FLYNN :
13
Q.
It is adm ittedly
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. M r. 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
23
24
MR . PEEK:
Is there a question there, Your Honors or
lust a whole series of predicates?

THE COURT :
I would like a question, if you couldz

86
please.
B Y M R . FLYNN :
Okay . Mr. Trepp, did -- in the fall of 2005, d id you
have the source codes that would have enabled you or
Mr . M ontgomerg to make a deal with the government?
A.
Yes .
Q.
You had them personally?
A.
No.
Q.
Who had them?
10
A.
The company.
11
Q.
Where were they?
12
A.
1 don 't know exactly .
13
'
Q.
14
15
I could tell you where I
believe they Jere .
Q.
Were they on any of the CDs or DVDS or whatever you
had in your safes?
16
A.
Of course not .
17
Q.
Did you have discussion with Mr. Montgom ery 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 million r 50 million, a licensing deal, whatever, how
23
those revenues would be split, did you have those conversations
24
with Mr . Montgomery?
'
87
A.
Absolutely not.
Q.
Now, before we get to whatever it was that broke you
two folks apart -- I take it from your testimony, it wasn 't
money?
A.
It was -- it was greed .
Q.
Or it was money? Greed: money?
7
8
9
10
11
It was money?
Did those -- clid that greed arise during the fall of

20052
A.
I think what Ilve learned in the last three weeks,
Dennis has had greed since the day I met him beyond belief.
Q.
Itm talking about your discussions with him in the
12
fall of 2005. Did that, what you bre 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 .
17
in the business . And that was our deal.
18
Q.
He got a salary . He had a 30 percent interest
It didn 't change .
Yet, on December 28tb, you had hm sign a -- just
19
before you sp it 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'
a, NV CCR #246 (775) 827-0672
1
2
2005, you had him sign bhis document; is that correct?

A.
Yes, because he borrowed -- he borrowed an additional
150,000 on December 10th, and I said, ''You gonna sign a new
note for the monies you just borrowed?''
On December ilthz he had sent me an e-mail asking me
for $275,000. He saicl, ''I know I borrowed a 1ot of money from
you in the past .
8
9
Q.
lt rs very, very important .''
Now , sir, how much money , as of December 28th , 2005,
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 5, 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

'
'> .)
->
benefit o f the value of up to 12 percent, which was a fair
market value.
Without my salary, it was 8-point-som ething .
And it was suggested by the attorneys and by myself
that we should a1l get together, give me this money so we could
at least get the G&A out of it. The net effect of that G&A
payment of a grossed-up value was that, yes, 1 was getting a
$400,000 salary, but there was more money going to the company
because of that.
Q.
During this period the company didn rt have any moneyz
10
how much were you chargng 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
15
expensed against eTreppld and your partner, M r. Montgomery?

A.
There was no money charged for the use of the
16
Gulfstream jet other than when I used iL to go on busness
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 #246 (775) 8a

?7-O672
1
2
A.
1 have no idea . 1 could certainly look it up and give
you an answer to that.
Q.
ln 2000, was it one million?
A.
Itts inconceivable.
Q.
Now, back to the fall of 2005, I understand from your
testimony that it was Mr . Montgomery's greed for money,
demanding money from you, that was the subjeet of discussion;
is that correct?
A.
That is not what T said.
10
Q.
I be Lieve 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
16
17
18
in the fall of 2005?

A.
I believe 1 found out the level o f greed in the last
three weeks: not in the fall of 2005 .

Q.
A gain: 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
A.
In the b an k accoun t .
Q.
How nuch did you take out in the last 60 days:
M r. Trepp?
A.
Where?
Q.
Out af eTreppid .
A.
Nothing .
Q.
ln the last 90 days?
A.
Nothing .
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 :
15
THE NITNESS :
16
Q.
18
this issue?
19
21
Zero .
BY MR . FLYNN :
17
20
Other than a salary .
Did you have a discussion with M r. Montgomery about
MR. PEEK: Objection. Which issue?

BY MR . FLYNN :
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
Q.
The money in the bank accounts .
A.
Nobody was going to get it.
Q.
Who Iaade that decision?
A.
Me.
Q.
Because then you were 50 percent owner with your
friends and Mr . Montgomery was only 30 percent?
A.
I don t know .
Q.
Yeah .
A.
But what was the queston?
10
Q.
Is that why you had the right to make the decision as
11
12
Is that a question?
to what was going to be done with that money?
A.
There is a management committee we have . The
13
management colnmittee has the right to determ ine what tc do with
14
the money in the company.
15
least two years' worth of operating expenses in the bank
16
account, not use it for other than that.
17
I felt it was prudent to leave at
So, on a going-forward basis -- we only have $700,000
18
worth of contracts for the year 2006 in the company.
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
24
Q.
I didn 't
M r . Trepp , did you discuss with M r. Montgomery what
was going to happen to uhat you say is the 5 million?

93
CECILIA VOHL, NF CCR #246 (775) 827-0672
A.
Yeah, 1 told him we were going to leave it in the
bu siness until we have enough money where we can m ake a
distribution when it's sub stantial enough where we don 't have
to worry about operatng expenses going forward .
Q.
And when did you have that discussion?
A.
Novele er: December .
Q.
What did Mr . Montgomery say to you?
A.
I don 't rem eo ler him even coDrlenting .
Q.
Did Qe say something like, ''Ibve been working l8-hour
10
days for seven days a week for years wth technology that I
11
own, and 1 want my share of that money''?
12
A.
Absolutely not .
13
Q.
And so then the fight you got into that 1ed to him
14
15
16
being -- was Ne fired?

A.
I didn 't get into a fight with him .
1 have never
gotten into a fight with M r. Montgomery .
17
Q.
Was he fired?
18
A.
Y es, h e wa s fired .
19
Q.
Who fired him?
20
A.
I did .
21
Q.
Naw, when did you become concerned that
22
M r . Montgomery, by some trick or artifice or thievery, was
23
going to steal eTrepp id technology?
24
A.
He had already stolen it by the time I found out about

94

/
-<'
xrz
1t .
Q.
So when was that, Mr. Trepp?
A.
January 10th or 11th .
Q.
So yclu haci no fear before then that he was going to
steal eTrepptl technology before January 10th ; is that correct?
A.
That 's correct .
Q.
And l/ou had no discussion with him prior to
January 10th which you would characterize as a conflict in
wh ich he said . ''I own Lhe technology, I want my money, give it
10
to m e''; is that your testimony?
11
A.
Yeah . If that rs what he said, it 's a b latant 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 numb er 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
your testimonyp because he needed money?
A.
Yes .
Q.
Now , when did you first find out that he needed money?
A.
We11,, he 's needed money for a11 the years he 's been
borrowing it from me.
Q.
When you had him sign the document: Exhibit 18 --
A.
Yep .
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 am ended .''
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 -- there ls 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
'
A.
Abso.
kutely not .
Q.
Mr . Irepp , dd you have any control over
M r. M ontgomery in his doing his work in his workstation in
connection with these contracts?
A.
I'm not sure 1 understand what that question m eans .
Q.
Well , did you direct him in any way, did you supervise
him in any waxp as to how to do the work?
A.
Supervise him y no .
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
16
Q.
The source codes that you re in court for that you re
trying to get --
17
A.
Yes.
18
Q.
-- is it your testimony that only Mr. M ontgomery has
19
those source codes?
20
A.
With the exception of what we lve been ab le to
21
re-create out of what 's been deleted . Otherwise, I believe
22
M r . Montgomely has those source codes.
23
24
Q.
And he's the only one, is that correct, that you know
of?
97

f''
A.
That I know of, yes.
Q.
No one else on earth has them that you know of?
A.
That I -- that 1 know of# yes, thatls true .
Q.
No one at eTleppid Technologies has them that you know
A.
Correct .
Q.
So those source codes that you want are a very
of?
distinct set of codes that are required for a very specific and
distinet business purpose in connection w ith these classified
10
11
12
13
government contracts?
A.
very vast groap of different contraets .
Q.
14
15
16
17
18
19
20
Well, not just them. They could be used for a very,
Mr. Prepp, please .

THE COURT : Well --
BY MR . FLYNN :
Q.
That es what they 've been used for in the past at
eTreppid; is that correct?

A.
Theylve been used for them and other things for
eTreppld in the past, that 's correct .
Q.
Now -- and only Mr . Montgomery, aacording to youz has
21
the codes. A11 o f the work that's been -- belng done at
22
eTreppid and all of these doctors and sophisticated programmers
23
that you #ve ot employed, none of them have it; is that
21
correct?
98
Page 100 of 207
I
.
.
A.
--.
>1
I do not betjeve they have anything other than what 's
been recovered through our recovery process: and I bekieve
M r. Montgomer'/ has it .
4
5
Q.
So we could call him a specialist in these particular
source codes; is that crorrect?
A.
T be tieve there are plenty of people that would have
the ability to understand the analysis, to understand what the
sou rce co des a re .
Q.
But ao one has in 30 years; is that correct?
10
A.
Well, how wou ld 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
20
correct?
A.
I did not say that. He has -- I believe what you
21
asked me wasr does he have som e knowledge of. And my response
22
to that is yes. Do I believe other employees have some
23
knowledge of it?
24
kept it undeE his Wing in his private cubbyhole, not on a
I believe the answer to that is yes . Who
99
CECILIA 75S.D, NV CCR #2 46 (775) 82 7-0672

.
source server?
Q.
(.....J
... .
That was Mr. Montgomery .
Than k you . Who else that you know of, other than
Mr . Montgomery, has the skill in the next year to put a11 these
source codes Logether so that these government contract items
can be processed?
MR . PEEK : Objection, Your Honor. Hes assuming facts
not in evidence that Mr . Montgomery has the skill to actually
write the C++ code or the MET code that 's being described here.
10
MR . FLYNN : 'l3hat ls absolutely correct, Your Honor.
Itls what he ;id for two-plus years .
11
12
MR . PEEK :
That 's maybe what his testimony is, but
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
24
A.
Is that a question about hardware, software?
understand the question .

l00
CECILIA VOSDZ NV CCA #146 (775) 827-0672
I don 't
l
2
Q.
Do you have arty idea how he d1d 1t, how he would take
things and process them?
A.
Well , T certainly can tell you what T believe that
he 's described to me . 1 also totally believe now that he 's
lied to me .
Q.
sit here under oath, how he did it?
8
9
10
11
Wellr let's just take -- do you have any idea, as you
THE COURT : How he dtd what?

BY M R . FLYNN :
Q.
How ae would process -- see, how he would process
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
18
19
20
the tool by which these contracts were done?

A.
I don 't think 1 have the knowledge to be able to
answer that question .
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?
24
A.
How was he being treated?
Thete was a period of time where he was being paidz T

11
guess you would call bt as an independent contractor: because
he wasn lt getlling a W-Q from me; he was getting a 1099.
'
And 'zhere were various reasons for doing thatp one of
which was his attorney said, ''We11, this is what Dennis told
me.'' His accountant had told him that he had tax loss
carry-forwards front pri.or lawsuits where he had losses in them
and that he d kdn 't need to get the deductions because --
whatever the CPA said .
Q.
10
1099s?
11
A.
Who was -- do you know when he got K-ls, when he got

Do you know?
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.
14
neither the first year -- earlier years because of this tax
15
thing that he had told me .
16
That 's not a W-2 .
I believe that was in
But he 's gottert a W-2 certainly in -- well, to the
17
best of m y knowledge, in 103, 104, and 05 . 1 don 't know
18
ab out '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
24
A.
Well, Im not sure that is correct.
I mean, if I told
him to do somethinq relative to the government contract, I

102
CECILIA voHL, NV ccR #246 (775) 827-0672

w u'
2
3
4
'
would cer'tainly expect he was going to do it .
Q.
Well; you don 't even know what he was doing or how he
was doing it, do you?

A.
That 's abso lut:ely not true.
I certainly knew the end
result. He knew exactly what he was doing . He established the
contract that our company received and we performed on .
Q.
What you knew -- without gettng into content, what
you knew, for example, was if a certain item was processed for
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 .
12
you were told that by Mr. Montgomery; isn't that correct?
That s what you knew , and
13
A.
No .
14
Q.
Isn '! it true that at a certan time at eTreppid:
15
there was a certain governmental agency with certain employees
16
or agents who had nothinq to do w ith you, they only dealt with
17
Mr . M ontgomery?
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 inform ation that

103
CECILIA VOS1,, NV CCR #246 (775) 827-0672
Page 105 of 207
'
)
:.u.2
.-
Mr . Montgomer'g procluced , the dates, the contentsz what they
related to, and how otten they were confirmed?
3
4
MR . PEEK:
back?
Youz Honor, could 1 have that question
1 have no idea what was asked.
THE COURT :
I think there were a 1ot of questions.
MR . FLYNN : 1 111 try it again , Your Honor.
THE COURT:
You might want to break it down a little
bit beeause it's a little confusing to me too .
BY MR . FLYNN :
10
11
Q.
When Mr . Montgomery would process information for the
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
18
have?
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, ream s of it, in paper form at .
22
23
24
Q.
Is this classified information that you claim you
have?
A.
Is it classified information today?
I believe it is
104
CECILIA Vosfz NV CCR #246 (775) 827-0672

)
u..>
.- '
not, although I:d like to check to see 1f, in fact, it was .
personally do not beljeve it is classified today .
3
4
Q.
Let rs take 01162 aspect of one contract with the speeial
agency .
A.
Uh-hah .
Q.
In terms of confirmation of Mr. Montgomery 's results,
is it your testimony you have eTreppid documents relating to
that conflrmation?
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 nformation 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
indiv idually .
19
MR . FLYNN : M ay I have a moment, Your Honor?
20
THE COURT : Certainly.
21
22
23
24
BY MR . FLYNN :
Q.
Who currently has the books and records of the
company?
A.
TheyRre in the building .

105

j
'
l
2
Q.
And who has custody of them?
Is there a bookkeeper,
an accountant?
A.
Y es .
Q.
Who JLs the individual?
A.
We have -- we have a bookkeeper . Her name is
Su Perez. We have a CPA firD , which is Ashley Quinn . 1
certainly have access to anything I want whenever I wank it .
0.
And wbat books and records are there?
A.
Whatever we need to do to create our K-ls at the end
10
of th e year, Rnything relating to tax information .
We
11
certainly have our checkbooks, our deposits, our withdrawalsz
12
our wires, all of the expenses.
13
return, you have to have everything.
1 mean, to create a tax
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 they pre in the company?
19
A.
Well, they 're either at the CPA 'S or at the company
20
21
22
23
24
or -- I don Rt. know, frankly, which .
Q.
How many meetings of the board of directors have taken
p lace since 1.9982
MR . PEEK : Your Honor, this doesn 't have a board of

directors. This j.s a limited llability company.
Tt has member
l06

.
ee
'
crrz
m anagers .
%HE COURT :
You might want to rephrase thatl.
But 1
just have a glneral questton, and that is, I don 't understand
the relevance o f a lot. of these questionsz so you could maybe
try to tie thdltl in so that 1 do .
6
7
MR . FLYNN : A lot of it has to do with

Mr . Montgomer grs testimony .
8
9
10
l1
THE OOURT : A12 rj.ghtr. A11 right .

BY MR . F'LYNN ;
Q.
Have there ever been any minutes kept of any meetings:
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 j.ke discovery than anything else to me#
15
but go ahead .
16
MR . FLYNN :
17
THE COUIW : A1l right .
18
19
E'11 move on, Your Honor .
BY M R . FLYNN :
Q.
Did you ever discuss w ith Mr . Montgom ery the intrusion
20
detection sof'tware that h e had incorporated into certain parts
21
of the softwetre?
22
MR. PEEK: Objedtion . Lacks foundation, Your Honor,
23
that there wEts such a technology incorporated into the
24
software . H() already asked Sloan if whether there was . We

l07
CECILIA VOHrg NV CCR #246 (775) 827-0672

?
have Mr. Hennessey's ev.dence that suggests that there was not .
THE COURT:
I think he could ask the question did you
ever have a discussion about whether or not there was any
intrusion technology inserted into the software .
MR. PEEK :
1 don 't have a problem with that kind of a
questionz Your Honor, and it would be a lot easier if he could
just ask it that way.
THE COURT: 2 understand your oblectonz and if there
were a jury sitting herez Id 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 beleve 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
21
A.
A , Ilve never had a heated exchange with him , with the
exception of the January 10th exit; and B, absolutely not.
22
MR. FLYNN : Thatls a11 I havez Your Honor.
23
THE COURT: A l1 right.
24
////
////
l08

.'
- )
vi> .* ',
RED IRE CT EXAM INA T 1ON
2
3
4
5
6
BY M R . JAKO P I.
31:
Q.
One question . Was the source code used for processing
on the eTreppid goverlm tent contracts developed at e'

Freppid?
A.
M solutely .
MR . JAKOPIN : No further questions.
MR. FLYNN : J object. Move to strike. Lacks
10
11
12
foundation .
THE COURT : Wel.l, 1et me ask this question : Do you

know whether it was or not?
THE KITNESS:
Well, I firmly believe a11 of the source
13
code at eTreppid was er

freppid ts. 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
17
18
19
20
21
22
23
24
THE COURT : A1l right. 1 understand that that's your

belief, but do you have any actual knowledge about that?
THE WITNESS :
That there was a source code run to
operate the government equipment?
THE COURT : And that it was developed on eTreppid 's

equipment .
THE WITNESS: Well, I don 't see how it could be
developed anyplace else, Your Honor.
THE COURT : A1l right. A 11 right. I understand .
109
CECILIA M()sfw NV CCR #246 (775) 827-0672
...,.,
... -.
MR . FLYNN : That's a11 1 have, Your Honor .
THE O
wOURT :
THE HITNESS : Am I done?
THE COURT :
THE WITNE SS :
THE COURT : You can step down .
A L1 r igh t .
J believe so .
Than k you .
(Witness excused .)
THE COURT :
MR . JAKOPTN : That concludes our casey Your Honor .
Ts that --
10
THE COURT : A 1l right . Do you have one witness?
11
MR . FLYNN : do, Your Honor.
I have one witness . 1
12
want to make a motion, but 1111 reserve on the motion, with the
13
Court s permission -- with regard to burden of proof, and 1'11
14
reserve on the motion .
15
THE COURT : A 11 right. Go ahead .
16
MR . FLYNN : We would call Mr. Montgomery to the stand .
17
MR . PEEK :
18
THE COURT : Until we're done.
Your Honorz hoW late are you going to go?
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
.
--
' --*)
can 't imagine that welLl be going later than I would be willing
to go .
MR . PEEK ;
Wel1., I understand that Mr. Flynn said he
was going to have M r. Montgomery for 3O, 40 minutes.
wouldn t anticipate a lengthy, lengthy, lengthy cross .
THE COURT :
MR . PEEK :
1 think you 're safe.

Okay .
D (RECT EXAM INATION
l0
11
BY MR . FLYNN :
12
Q.
State your name , please, sir .
13
A.
Dennis L . Montgomery .
14
Q.
Your age?
15
A.
Fifty-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?
A.
Chief technology officer at e'

freppid Technologies .
Q.
What's your educational backgroundz Mr . Montgomery?
23
24
'
l1l
A.
I got. a bachekor -- an associaLe of science in
cardiopulmonaly technotogy, and I did uot complete a bachelor's
degree in biology .
4
5
6
7
Q.
And with regard to your career history, what type of
work have you done since college?

A.
I went to work in a hospital for two years as a
perfusionist .
Q.
What 's a perfusionist?
A.
I f11 restate that .
I went to work as a
10
cardiopulmonary technieian in a hospital, and as a
11
cardiopulmonary techncian, 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 s blood gas analysis?
16
A.
It 's a process by which you determine the gas levels
17
18
19
20
inside the b lood .
Q.
And what specifically was the nature of your work in
b lood gas analysis when you were working at the hospital?

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.
24
At that time, what was your background in computer
prograamlng?
1l2
CECILIA VOA'
Z r NV CCR #246 (775) 827-0672

p. .
t* t
A.
Um, i was just learning it as I was going along.
Q.
And at some point, did you form a company?
A.
Yes: in '81 or :82, called Coyputermate .
Q.
And whatfs the business purpose ef Lhat company?
A.
To do -- write medical software for medical
instrumentation .
Q.
And did the company have clients?
A.
Yes.
Q.
Who were t:he clients?
10
A.
Corn tng, (-'orning Medical, Kodak, Dupontz American
11
12
Hospital, so lorth .
Q.
And at some point in connection with your work with
13
Corning and Computermate, did Corning enter into a licenslng
14
agreement with Computerm ate in connection with spectral
15
analysis of blood gasses?
16
A.
Yes.
17
Q.
And What was the nature of that agreement?
18
19
20
21
22
23
24
MR . PEEK :
Your Honorz best evidence is the agreement
itself.
THE COURT : Oh, I think he can deacribe the nature of

it . This is al1 background, isn 't it?
MR . FLYNN : Yes, Your Honor, but it 's the background
in regards tcI -MR . PEEK : It ls b ackground , Your Honor, related to
113

!
% ><
v '
what the claila is as lramed by the opposition of certain
copyrights in this time frame .
cautious in mg objectjons more than -- itls not just
background .
they own -- there we go (being shown document).
6
7
It goes to the substance of their defense that
THE COURT: 1 think he's just showed you the document,

has he not?
MR . PEEK :
it s certainlg the document.
10
11
So that's why I am very
1 don lt believe so .
It ls an agreement, but
BY MR . FLYNN :
Q.
M r. 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
15
16
17
A.
That was the manual that described the software that
was used on tQe instrumentation .
Q.
And let me show you several documents that have been
taken out of that manual. And I'd ask you --
18
MR . PEEK :
19
I can at least examine it --
20
21
22
23
24
Your Honorz if hefs going to offer this so
THE COURT: Yeah.

BY M R . FLYNN :
Q.
And I'd just ask you if those pages come out of the
manual .
A.
Yes .
1l4
CRCILIA 7OS;,, NV CCR #246 (775) 827-0672
MR . PEEK :
This is Exhibit 19:'
MR . FLYNN :
MR . PEEK : Has that even been offered yet?
THE CLERK :
MR. PEEK :
MR . FLYNN :
MR . PEEK :
MR . FLYNN : And then 1'm qoing to offer it.
MR. PEEK : Can you mark it first.
i'.xhibih 19.
Hasn't been marked .

Hasn 't been marked?
l 'nl going to offer it .
You bve got bo mark it.
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
13
14
have a conversation?
MR . FLYNN : Do you want to read it first, or do you
want me to mark it?
15
16
17
18
THE COURT : Well, I think it might he up to me. Mark

it, and let 's go from there .
MR . PEEK : What I ask -- Ys he going to mark this

d ocum ent?
19
THE COURT :
Yes.
20
MR . PEEK : That's what I didn rt 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
24
MR . FLYNN : I have a copy of the pages which are

relevant.
115
'

'-'.
THE CLERK :
3
4
Jt 's Exhibit 19 .
identification.)
MR . PEEK :
You r Honor , resp ect fu lly , th is is wh at we
asked for las! week . And if he 's known about it and he's going
to use it as an exhibt, it 's lmportant that 1 have the entire
document to be able to cross-examine, as opposed to just
lim ited pages .
10
v ')
THE COURT :
.
'
It appears that you have the document
itself right Lhere in front of you --
11
MR . PEEK :
12
THE COURT : -- and you 're holcling it --
13
MR . PEEK :
14
THE COURT : -- and he 's letting you look at it . And
15
1 do .
I dc).
we bll decide tater about getting you a copy.
16
MR. PEEK: lve just now seen it: Your Honor.
17
THE COURT : A Ll right.
18
MR . FLYNN :
19
I understand .
Let's mark for identification, first, the
pages that the witness is going to testify about.
20
THE COURT : Mark those 20 .
21
MR . FLYNN :
2O, Your Honor .
q
1
.
22
23
24
(Defendant's Exhibit 20 marked for identification.)

MR . FLYNN : And the record will reflect I gave a copy
of those pages to Plaintiff's Counsel .
116
CECILIA VOS/Z NV CCR #246 (775) 827-0672

.-. ''
MR . FLYNN : Whlle he 's looking at that, why don 't we
THE COURT : How are we going to mark thoser 21 through

what ?
THE CLERK: He just gave me one document.
THE COURT : Mark it 21, then.
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 :
14
MR . FLYNN : Tell me when you rre ready.
15
MR . PEEK :
16
Let me see the exhibit .
mark the copyrights for identification .
N ..)
Okay .
I'm ready.
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.
They rre copies thereof?

117
CECILIA MOSJJS NV CCR #246 (775) 827-0672

.
..
b
,
1
A.
Y es .
Q.
Describe what they are .
A.
It's a series of program s that patient identification
in form ation was put inr or calibration data, and the system
analyzed the blood and then produced the results .
Q.
Can you describe to me, from a computer programming
point of view, how these pages describe the technology used to
do th ings like gas analysis?
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: A1 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.

l18
It seems

*
unrelated . But 1 beleve that under their theory of the case,
that it's not . And T'm goinq to allow him to develop that, so
I 'm go ing to allow the exhibit .
MR . PEEK :
The other concern 1 have , Your Honor, is
that what we have, which is Exhibit 21 -- and f the Court
would look at the seeond page of that, it relates, if you will,
Your Honor, to apparently who the owners are o f the various
copyrights .
Dennis Montgonery or the Montgomery trust.
Fou w ill see here that the owner is not

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?
14
fact, owns them, if that 's what the Library of Congress says
15
the ownership of the copyrights is today .
16
The Montgomery trust r in
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 .
23
think: in terms of relevancep the relevance has been at least
24
established enough to my satisfaction r I'm going to admit

l19
CECILIA VOSXS NV CCR #246 (775) 827-0672
Exhibits 20 and 21 . And then --
MR. PEEK ;
though , Your Honor.
THE COURT:
He 's not the o-ner of the copyrightg,
J admitted them . And whether he 's hhe
owner or not wll i)e developed in the testimony, and then I 11
make a decision as to --
MR. PEEK :
THE COURT :
Whether to strike them or not?
I don 't know about striking themz but
whether or no L 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 Exhib it 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
M ,,/
..
.
Q.
And the copyrighting of that technology to do the work
that 's described ilt Exhibit 2O, which is the blood gas spectral
analysis, is based on the copyrights that are marked in
Exhibit 21; is that your testimony?
A.
Yes.
Q.
Now , today: who owns the copyrights that are reflected
on Exhibit 21?
8
9
MR. PEEK: Objection . The best evidence is the

document itself showinq ownership .
10
11
THE COURT : Overruled .

BY MR . FLYNN I
12
Q.
Who owns them , sir?
13
A.
The original copyrights were filed on behalf of
14
15
16
Computermate, which 1 was the owner .
Q.
And subsequently, was Lhere an assignment from
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

121
CECILIA 7JS.ns NF CCR #246 (775) 827-0672

..-
'-
is the assignment back to Computermate?
THE COURT :
'
( don 't know . Maybe wedre getting there .
Let's see .
but I'm not asking it right now: so let's let this go forward a
little bit .
That was a question that I intended to ask myself,
Trust me that l'm going to give this evidence the
weight that 1 think t deserves: but I need to hear it before I
can understand its relationship and its relevance .
staring to these transactions, 1 need to get a11 the
So as a
10
nformation 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 :
14
15
16
17
Thank you, Your Honor .
BY M R . FLY NN :
Q.
Is there anything in Exhibit 20 that in some way shows
how the copyrights n Exhibit 21 work?

A.
Well, I own Computermate, and the copyrights -- I was
18
the au thor , and I retain ed r ights to tho se copyright s svnce the
19
beginning of time .
20
21
Q.
And after Computermate ceased doing businessz did you
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?

122
Is

'
.. ,
1
2
there anyth ing the Court can look at?

A.
Well, the source code was filed with the original
work.
And I mean, otler than the names, there's nothing
directly on here .
1 mean, I know the work .
Q.
readouts --
A.
Uh-huh .
Q.
-- printouts, are those based on the copyrights that
9
10
11
12
13
14
15
16
17
If you look at these various diagrams or 1ab report
are in Exhibit 21?

A.
A 11 of the software on that system reflects those
copyrights .
Q.
Now , what is the terminology that you use to describe
those copyrights?
A.
Well, they contain the anomaly and the pattern
detection work. That was the beginning of the work .
Q.
Now , those copyrights, 1 believer are dated in
May 1982, is it?
18
A.
Co rrec t, I th lnk up until Feb ruar y 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?

123
CECILIA VOSS, NV CCR #246 (775) 827-0672

,.xe
A.
'
w e )
Well, I -- I don 't know about Corning , be cause 1
didnft continue do ing work for them at some point .
know, we had moved on to other things: so 1 reakly wouldn lt
know whether that's the case or not.
5
6
Q.
9
10
11
12
Al1 right . But kn terms of the anomaly detectkon
aspect of the software thats in these -- these copyrights?
7
8
We -- you
A.
Ive never seen anything in the literature describing
Q.
And at some time after 1982, did you improve on the
it .
technology that's n these copyrights?

A.
Yesy I believe in '86 or 187 .
1 can 't remember
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 .
17
first becoming available.
18
19
20
Q.
This was the beginning when the IBM PC was
And in what way did that improve or refine the anomaly
detection software that you had proprietary rights in?

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
Barrett Labs?
A.
Y es .
Q.
When was that, slr?
A.
I think around '85 or :86.
6
7
1'm not certain of the
date .
Q.
And did you us() the anomaly detection software that
you had developed between '82 and '87 in Barrett Labs?
A.
Yes.
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 t 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 le tter reta inin g the rights to the origin al
19
20
work.
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?
125
CECILIA VOSIfz NV CCR #246 (775) 827-0672

N'o#r'
1
2
A.
I don 't remerdaer if it was in 3Net or not .
Surely
a fte r 3N et I d id .
Q.
Okay . When was 3Net?
A.
180- -- 1 thjnk it was '87 to '92, '93.
Q.
And what was 3hlet?
A.
3Net was a company that had built large-scale clinical
8
9
10
information systems in the hospital.
Q.
And did any part of your anomaly detection software
play any role with reqpard to your involvement with 3Net?

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
14
15
Q.
And what Ls the dlstinction between anomaly detection
and pattern recognition?
A.
Anomaly detection is looking for anyth ing 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,

126
CECILIA M(?SZS NV CCR #246 (775) 827-0672
used in connection with your company, Barrett Labs?
A.
Yes.
Q.
And in what way did you license that technology to
your clients?
MR. PEEK ;
Best evidence is the license itself.
Everything here lacks iather an assignment document, a license
7.
document or anything else.
themselves to address the assignment or the licensing.
9
10
11
12
The best evidence are the documents
THE COURT: Objection ls overruled. Go ahead.

BY MR . FLYNN :
Q.
In what w ay was the technology -- anomaly detection
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
so ftw are .
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
23
24
A.
Since our work was in mediciner I did not know of
anyone.
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
2
'..
occasion to use your copyrights for anomaly detection?

A.
1 did some cortsulting work for Kaiser in '94 # I
believe . And I was building some instrumentation control
unit -- I don 't remember specifically what it was, but I was
doing work for them .
Q.
And so you d5d further work on anomaly detection?
A.
Yes .
Q.
Okay . Now, between '93 and 98, how were you -- what
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
16
17
in Los Angeles in motjon pictures.
Q.
And did anomaly detection software -- was that
involved in any of your consulting work at that time?
18
A.
N ot anom aly de tection .
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
24
trying to database assets out of live -- video -- movies.
Q.
And what type of pattern recognition -- how would you

128
CECILIA M&Jff,s NV CCR #246 (775) 82 7-0672

..->m
7* '
describe that type of pattern recognition?
A.
Well, that was looking for a known object in a film .
So if they were looking for a cup: they would try to tell the
computer, and they needed software to say in -- this cup , is it
in any of bhese frames, and it would go look for it .
Q.
Now, at som e pcd nt, you met Mr . Trepp?
A.
Yes.
0.
When did you first meet Mr . Trepp?
A.
It might have been jn #96 or 697.
10
11
I don 't recall .
The time 1 do recall is when I met him at the Eldorado in 198 .
Q.
Okay. And describe to the Court everything that you
12
can recall in connection wikh your meeting with M r . 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 m ight have somebody
18
that might be interested in 1t .
19
20
21
Q.
Okay . Describe the conversation about what you and
M r . Trepp discussed with regard to the work you were doing .'
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

12 9
CECILIA UOSL, NV CCR #246 (775) 827-0672

.m
1
remember word for word, but as best you can recall, describe to
the Court what you were tellkng Mr . Trepp about data
compression .
I was simply telling h im that I had the ability to
shrink a mo'vie much smaller at the time than the common
compressors worked .
video
Q.
Okay . What Ls that, Mr. Montgomery?
A.
It 's a form (3f lossy data compression , where you take
9
10
11
12
13
14
15
information and add a certain amount of loss into it and shrink

it .
Q.
And how does that differ from data -- strike that --
from pattern recogniton?
A.
It's totally different . Pattern recognition is
actually looking for something in the video .

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 .
18
the Court in a layman 's way how they are two completely
19
different animals?
20
A.
Is there some way you can describe to
Well, video compression is looking to shrink a file
21
and trying to keep the file intact, mostly .
22
recognition is looking through the file and trying to find
23
things .
24
'
A.
Q.
Pattern
Okay. Now, you obviously were in the courtroom during

130
CECILIA MOSZZ NV CCR #246 (775) 827-0672

.
.--
v ;-
Mr . Trepp 's testimony about Gunga Din and --
A.
Right .
Q.
-- discussing 130th pattern recognition and data
compression before the deal was signed on September 28th
1 998 .
A.
Yes, I heard .
Q.
And you heard it --
A.
Y es .
Q.
-- is that correct?
A.
Yes .
10
Q.
Was it truthful?
11
A.
1 don't recall anything to do with Gunga Din .
12
Q.
Do you recal anything about pattern recognition?
13
A.
No .
14
Q.
Is it possible that you had that conversation?
15
A.
No .
16
Q.
What was jn 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 .
21
THE COURT : Go ahead .
22
MR. PEEK: My objection is to intent
1 apologize .
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
opposed to his understanding .
THE COURT : WeLl, I think that there are some claims
here as to what the contract says and what it means and what
the parties intended . 2G d 1 know M r . Trepp talked about what
h is intent was, and I think it will aid me in understanding
exactly what we're dealing with .
objection. I think ik%5 not necessarily to contradict the
terms of the contract, but to explain them .
So, go ahead.
10
11
12
I#m going to overrule the
THE WITNESS :
Daha compression .
B Y M R . FLYNN :
Q.
And at this point in timez September 1998, how many
13
different technologies did you have sophisticated know ledge 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 ckin ical 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 soph kstication?
23
A.
Yes.
24
Q.
What other sophisticated knowledge did you have?

l32
A.
Well, obviousty: 1 had a 1ot of experience in pattern
and anomaly recognttion because it was used n those
technologies.
Q.
So when you macle this deal with Mr . Trepp , again , what
was your understanding, understanding the differentiation
between these technologies, as to what you were putting in?
A.
Data compression .
Q.
A t any time: tn any discussions with Mr . Trepp prior
10
to September 28th, do you recall any discussion about putting
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 you re aware of its provisions?
16
A.
Y es .
17
Q.
You 're aware of that provision, 1 .2.1, which says that
18
the o n ly th ing b e ing given is the techno logy -- th e softw are
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?

l33
'
CECILIA MOVZ, NV CCA #246 (775) 827-0672

*e -
..e
A.
I don 't know the exact date, but in that time frame .
Q.
Did you deliver it?
A.
Yes .
Q.
You wanted to form this company; isn t that correct,
A.
Yes .
Q.
You wanted to !7ut the data compression technology you
sir?
knew into that company; isn 't that rightr sir?
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 .
tt 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.
Y es .
23
Q.
Did you have any discussion with Mr . Frye about the
24
provisions: the language, in the contribution agreement?

134
CECILIA 7OSIr NV CCR #246 (775) 827-0672

-<
1
2
3
4
A.
Yes.
*-#
1 mean, they wanted the CD Number 1, which
contained the software for data compression .
Q.
lf you hadn dt clelivered CD Number 1, would the company
have started?
A.
No .
Q.
How could the company have started if it didn 't have
CD Number 12
A.
Noz it did . That was the point .
Q.
So, you gave the CD Number 1 to Mr . Frye?
10
A.
Y es .
11
Q.
Do you know what he did with t?
12
A.
No .
13
Q.
And thereafter, after the deal was made, you gave
14
15
16
Mr . Frye CD Number 1. Shortly thereafter, did Mr . Trepp leave?

A.
Yes . He teft, I believe, in November or December
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 M ay or June and that he was the one that was in charge of
22
the company.
23
24
Q.
Now , 1et me refer you to the contribution agreement,
which has been marked as Exhibit 3, to paragraph 1.3s ''Excluded

135
CECILIA Uolf, NV CCR #246 (775) 827-0672
t.
w.
,....
1--- - Asaet.s and-Liab i-l-i-tlre.s .i Do you recall tha U prew i-sionv .-s i-l=Z?- --
.- - --
A.
Yes.
Q.
And does that provision accurately set forth the
agreement thaL you made w1th Mr. -- w ith Mr. Trepp?
A.
Yes .
Q.
And it was your understanding that you weren 't giving
any technology other than data compression and the data
compression on CD Number 1; is that correct?
A.
Yes .
10
Q.
Did you and Mr . Frye have any discussion about that?
11
A'
Well
12
Q.
So it was a given?
13
A.
Yes .
14
Q.
Now, what type of work did M r. Trepp do in running
15
16
I had to deliver the CD to him .
then Intrepid Technologies after Mr . Trepp left?

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.
23
24
Describe, if you can, in som e detail -- see if you can
flesh that out a little bit. Were you working on a computer?

A.
Yes .
13 6
CECILIA MOSSS NV CCR #246 (775) 827-0672
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2
3
A.
I mean, 1 was generating code and creating different
varieties o f that particular technology.
Q.
For different applications?
A.
Ye s .
Q.
What types of different applications?
A.
Well, data compressbon inside of Windows, and video
and audio requires a specific interface so you can hook to the
hardware devices in Windows.
10
11
So, I was building those
interfaces for those different hardware devices.
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?

137
CECILIA 7OS1> NV CCR #246 (775) 827-0672
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x
Q.
Until you were fired?
Okay .
Now, between the time you were working exclusively in
building those models that you described, forgetting, for the
moment, any anomaly detection in connection with government
classified issues, did you do any other type of data
compression work al: e7'reppid Technologies?
8
9
10
A.
Welly we were cleveloping an audio and a video and a
data Kodak in multiple forms .
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 personaly or collectively?
14
Q.
Well, let's f'trst talk you personally .
15
A.
That s 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.
Y es .
23
Q.
At this -- and for -- and that continued a1l the way
24
up until the time you were fired?

138
CECILIA MOSSZ NV CCR #246 (775) 827-0672

.
Iw )
1
A.
That 's correct.
Q.
Now , where isr today: a11 of those -- before we get to
the source codes -- all of the lines of. code tha: were created
over all of those years for the data compression?
A.
In eTreppid .
Q.
And you lve heazd this testimony saying this has been
deketed and that has been deketed . lf you walked over to
eTreppid tomorrow Inorning, could you find the source codes,
first, for a11 of those lines of code?
10
A.
Assuming it hasn t been destroyed, yes.
11
Q.
Okay . Now, let's talk a little bit about the -- what
12
you cally what, ''copy and destroyr'' when you re doing a -- when
13
you 're creating som ething on a server.
14
A.
1 think what you 're asking is, when people are writing
'
1$
computer programs, the computers are contihfsly 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
w rites code?
21
A.
That ls correct.
22
Q.
And that has always been the way at eTreppid
23
24
Technologies; is that correct?

A.
The nature of building complex programs, that is an

139
CECILIA VOAJA, NF cCR #246 (775) 827-0672
ukx, .
1
!'- )
inherent -- you know , a task in it .
Q.
Okay-
A.
Things are buiLt and taken apart .
Q.
Now, have you ever destroyed tn any way or taken any
data compression technology from eTreppid?
A.
No.
Q.
On how many different computers a: eTrepp id does data
compression technology appear?
A.
Over a hundred.
10
Q.
On how many different hard drives?
11
A.
Hundreds.
12
Q.
And we heard a figure of about 150 million bytes of
13
Three or four hundred , probably.
information, was it?
14
A.
Files.
15
Q.
Files?
16
A.
Yes .
17
Q.
And M r . Venable testified that there's still
18
80 percent or that that he 's found there .
19
testimony?
20
A.
Yes .
21
Q.
And with regard to the other 20 percent, have you done
22
Have you heard that
or taken or deleted any of that 20 percent?
23
A.
No.
24
Q.
And if Mr . Venable cannot find this alleged purported

140
CECILIA Volfzz NV CCR #246 (775) 827-0672
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Page 142 of 207
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.-.
20 percent, do you have any explanation as to where it might
be?
A.
bu ilding, um , so they dre obviously not looking in the right
spots, I presume.
6
7
Well, ik was on the computers when I left the
Q.
And as the chief technology officer, unless someone
else has destroyed it, if you went in there, could you find it?
A.
If it hadu 't been destroyed: yes .
Q.
Now: is there any reason it would have been destroyed
10
by other eTreppid Technologies employees?
11
A.
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
The stuff 1 was working on downstairs had intrusion
or how it was configured .
17
A.
There was abotlt l00 computers that were in cabinets
18
an d abo ut 20 compute rs that w ere no t ln cab inet s .
19
computers were a11 hooked together in what rs called one
20
cluster, and information was, obviously, on those computers .
21
A nd tho se
MR . FLYNN : Your Honor, I have a chronology that will
22
simply aid the Court. 1 would just simply ask that it be
23
m arked at this point in time .
24
it.
I don 't know if 1:11 ever offer
I think it would help the Court to follow it.

14l
CECILIA VOSI', NV CCR #246 (775) 827-0672

Page 143 of 207
1
1. xw.. )
.p...
THE COURT:
Is this going to be for demonstrative
M R . FLYNN :
Y es, Your Honor .
THE COURT :
1 don 't think it needs to be marked,
.
pu rp oses?
unless somebody wants i.t to be marked .
something you can write on the board, if you wanted to take the
time to write it on the board --
MR . FLYNN :
MR . PEEK :
1 mean, if it 's
lt would be time-consuming .
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
13
THE COURT : That ls why 1 fm saying: let's use the

chrono logy .
14
15
MR . PEEK : But let fs not assume that every one of
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 M R . FLYNN :
19
20
Q.
Nowr at some point in time, sir, during 1998, did you
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
t
I
Page 144 of 207
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kx .
r
worked about five or sx days a week.
2
3
THE WITNESS: That was at the very beginning .

not moved up here.
4
5
6
7
1 had
THE COURT :
That was what he said .
BY MR . FLYNN :
Q.
How were you being treated by eTreppid Technologies i.n
term s of your status?
A.
I was an independent contractar.
Q.
And how much were you being paid?
10
A.
W ell, 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.
Y es .
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 f the 1.3 million had been paid in?
24
A.
Yeah . He said wedre out of money .

143
CECILIA vorls NV CcR #246 (775) 827-0672

(
1
2
3
4
Q.
And did he tell you whether the 1.3 million had been
pad in?
A.
1 don ': believe he said it had been paid in, but he
said we were out of money .
Q.
And did he tell you how much the airfare bill was
that -- that he described to you was the reason you were out of
money?
A.
I believe it w'as around 500,000.
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 regardng the initial dilution 1 had to give
15
the s to ck up for .
16
Q.
How did that occurz M r. Montgomery?
17
A.
I don lt 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
22
Q.
This is the same Steve Sands who was the finder who
connected you to Mr . Montqomery (sic); is that correct?
23
A.
lTrepp,'' yes.
24
Q.
Mr. Trepp .
144
Page 146 of 207
h
i
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h-e .f
1'
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A.
Yes .
Q.
And did you have a conversation with either Mr . Sands
or M r . Yrepp about why your 10 percent should be given to
Mr. Sands?
A.
1 -- I don 't know the exact date, so my date may be
off.
1 thlnk Mr . Trepp was still out of the country wben I was
approached by M r. Sands initially, and 1 cou ldn ft contact him
because he was on a ship .
Q.
10
owned?
11
A.
Yes .
12
Q.
And then did you subsequently meet with Mr . Trepp on
13
this issue?
14
A.
15
16
17
day .
And -- but Mr . Sands wanted 10 percent of what you
We -- I know : -- I had to sign the documents that
I was given no choice.
Q.
When you say you were given no choice, who gave you no
choice?
18
A.
M r . Sand s .
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
A.
Roughly, yes .
Q.
And is it fair to say you were basically living hand
to mouth at that time with regard to that salary, supporting
your family?
A.
6
7
MR. PEEK: Objectionr Your Honor. ''Hand to mouthe'?

12 ,000 a month ?
8
9
Yes .
144,000?
THE COURT: 1 mean, youdre objecting as to whether or

not that 's hand to mouth?
10
MR . PEEK : But that's also leading .
11
MR . FLYNN :
12
MR . PEEK ; Alscu 1 was a little b1t slow on the gun
T'1l withdraw it.
13
because I wasn ft 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 W arren Trepp . 1 move to strike a11 of
20
that as hearsay.
21
22
MR. FLYNN : I am just offering this as to the state of

mind, Your Honor.
23
24
THE COURT; A1l right. The motion is denied .
////
//Z/
l46
CECILIA v()S%, NV CcR #246 (775) 827-0672
l
Document 644-21 Filed 05/28/08 Page 148 of 207
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BY M R . FLYNN :
Q.
Mr. Montgomery, did you sign the documents?
A.
Yes .
Q.
Now , are you marriecl, sir?
A.
Yes .
Q.
How long have you been marriecl?
A.
Thirty-three years .
Q.
And what documents did you sign?
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 prob lem 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 M r. 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

$
Page 149 of 207
xgxw:l
h...Lr..'
0.
Did you hand another assignment to Mr. Frye?
A.
Yes .
Q.
And do you know -- you don 't recall the specific
percentagez but it was --
A.
remember .
1 think iI: might have been 4 percent.
1 don 't really
MR. PEEK: Your Honor, I'm going to object to this
line of questioning as being irrelevant related to the
dilution .
I don lt know where welre gojwng here, Your Honor .
10
THE COURT : Well, 1'm not sure .
11
MR . PEEK :
12
tonight.
13
I want to try to finishz as you did,
We lre already past 40 minutea .

THE COURT : 1 have a concern ikbout where it ls going
14
too. But 1 would like to allow it to continue just for a
15
little bit, and we rll 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 M R . FLYN N :
19
Q.
Now z 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
23
24
MR. PEEK : Objectionp Your Honor. Characterized as

loss of stock.
THE COUR%': Yesz if you could just ask the question

148
'
;
Document 644-21 Filed q05/28/08
Page 150 of 207
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4.
without characterization .
BY M R . FLYNN :
Q.
Sands?
A.
Yes .
Q.
And were you given access to the records?
After, the stock ended up in the hands of Frye and
NO .
'
*
8
9
Q.
Did you ask Mr . Trepp at that point how ntuch money had
been put into the company?
10
A.
I believe so.
11
Q.
What did h e say?
12
A.
Several m llion .
13
Q.
Did you ask to see it to verify it?
14
A.
1 believe I wanted some form of proof.
15
Q.
And were you glven any form of proof?
16
A.
No .
17
Q.
Did you tken 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
1,
1...
1'
21
22
23
24
A.
I had never been around anybcdy where the airfares
were like this. This is unbelievable .
Q.
And what were you told the airfares were in the year
20002
MR . PEEK : Do we have by Whom , Your Honor?

149
CECILIA MOSTZS NV CCR #246 (775) 82 7-0672

x
)
Document 644-21 Filed ('05/28/08 Page 151 of 207
1
.
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7*!. '
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B Y M R . FLYNN :
Q.
By whom?
A.
By whom?
I mean, it was obvious, because I had seen a
few of the billsy that, you know, they were high .
talking fj.ftyy sixty thousand a trip .
You fre
Q.
And where were the trips, to your knowledge?
uew York, LA .
Q.
On what type ()f airplane?
A.
Gulfstream , usually I11 or IV .
10
Q.
Privately chartered?
11
A.
Y es .
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?
15
plane was ever used for.
16
Q.
Yes. But 1 can 't vouch for every trip that that
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 .
21
BY MR . FLYNN :
'
''
1
kk
.
22
23
24
Q.
Where did you get the understanding from?

THE COURT: Well, first of all, did he have an
understanding.
150

):
21
.
.

1r.,.e.)
lwx.
..
I
v.
qz.
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--
BY MR . FLYNN :
Q.
Did you have an understanding, yes or no?
A.
Yes .
4
5
THE COURT : Where did you get the understanding?

BY M R . FLYN N :
Q.
Where did you get it?
A.
Zr' TrOPP '
8
9
10
11
THE COURT : A 11 right. Go ahead .

BY MR . FLYNN ;
Q.
And what was your understanding as to approximately
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?
14
foundation that Mr . Flynn expected of us.
Same
(.1
15
16
THE COURT :
he 's asking is what did M r. Trepp tell him about that .
17
>
''
i understand . But I think -- what I think
So if you could just ask him that question, then we're
18
not talking about hs 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

k
)
!--.,
1
2
company?
1 believe he said it was a million dollars .
Q.
Now , let 's move forward into November of 2001.
to November of 2001, was a11 your work still data compression?

A.
Yes .
Q.
And in November of 2001, did you have a conversation
with Mr . Trepp abotlt sharing the profits of eTreppid
Technologies?
A.
Welly I was cortcerned how I was going to get profit
out o f the company .
12
Q.
And what did you say to him?
13
A.
''How am I gojng to get profit out of the company?'
14
Q.
What did he say?
15
A.
''We haven 't made any money yet .''
16
Q.
M d did you bring up the airfare expenses?
17
A.
Yes .
18
THE COIJRT : Excuse me. I just wanted to ask my court
19
reporter how she was holding up . I didnt mean to -- 1et me
20
just interrupt for 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 :
24
MR . FLYNN : 1 m thinking 20 minutes, Your Honor .
Don 't take all my timez Mr . Flynn .
152
CECILIA MOS.D, NV CCR #246 (775) 827-0672

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Prior
11
And did he tell you how much it was costing the
A.
10
tr.
.,
r
.1?
Q.
7
)
Page 154 of 207
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THE COURT:
- ?
Well, perhaps this would be a good point
in time to take a break. We've been going since a little after
5 :00.
cross-examination?
Would you antcipate an equal amount of Lime on
5
6
MR . PEEK : I would anticipate an equal amount of time

on cross-examlnatlon . So farr he s gone 40 minutes: almost 50.
.1
THE COURT : I said a1l of it was irrelevant z so what
are you going to cross-examine him about? I'm just kidding.
.,
I understand, Your Honor.
That rs a nice
10
yank.
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.
I appreciate the yank. But by the same tokenz the Court
15
16
m inutes, so quarter after 7:00.
Let's be in recess for 15
17
(A brief recess was taken at the bour of 7:00 p .m .)
18
THE COURT:
19
'i
MR . PEEK :
20
21
Be seated .
BY M R . FLYNN :
Q.
November 2001, prior to November 2001, who paid for
your m edical insurance?
22
A.
I did .
23
Q.
Did you qet any other employee benefits?
24
A.
No.
153
CECILIA VOHL. NV CCR #246 /775) 827-0672

,,rt-)
Q.
In November 2001 -- or, strike that .

Prior to 2001, was anything other than data
compression work being done at eTreppid Technologies?
A.
The video game -- the video game was.
Q.
And are you -- you dre not making any claim of any
ownership of any aspect of khe video game; is that correct?
A.
No.
Q.
In November 2001, did you have a meeting with
10
11
'
tx-.
-
Mr . Trepp regarding your stock?
A.
Well, 1 was being -- they needed to raise money, and 1
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 Frye ls 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
CECILIA VOSLZ NV CCR #246 4775) 827-0672
)
I
Page 156 of 207
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company?
A.
Ye s .
Q.
Were you given access?
A.
No .
Q.
And what happened in connection with -- with the stock
transaction in November 20012
7
8
A.
250:000 so I would not be diluted .
9
10
'
I don 't remeH ler the exact datey but I had to borrow
Q.
And at that times did you also sell 2 percent of your
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 carred 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
21
22
g8o-som e-thousand and one for 100,000.
Q.
And, in fact, wa3 the cheek in the amount of
$975,000.29:
23
A.
Yes.
24
Q.
And is that a copy of the check?

155
CECILIA BSSZ, NV CCR #246 (775) 827-0672
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't:T*'')
A.
-,.,,,.
Yes.
MR . FLYNN :
MR. PEEK: No cbjection, Your Honor.
THE COURT :
(Defendant's Exhibit 22 was marked and adm itted into
l1d offer this: Your Honor .
lt 's admitted .
evidence.)
MR . PEEK ;
Is this 22?
THE CLERK : Yes, Exhibit 22 .
THE COURT:
J'nt still not sure how this is al1 tied
10
into the issue we lre trying to decide here today.
11
tied into some potential counterclaimsr I suppose, but T don lt
12
see - -
13
It might be
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 Frye ls legal fees?
22
THE COURT : %ry not t spend a whole 1ot of time on
23
24
this.
MR . FLYNN :
T won 't
Your Honor .
156
CECILIA VOSZP NV CCR #246 (775) 827-0672

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BY M R . FLYN N :
Q.
And then did you have to pay taxes?
A.
Y es .
Q.
How much did you pay in taxes?
A.
I b e liev e 282 ,000 .
Q.
How much did you net?
A.
1 believe a hundred grand .
Q.
Nowr in February 2002, where did you go?
A.
To a location in Florida .
10
Q.
And was that a government location?
11
A.
Yes.
12
Q.
And who went w Lth 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 : Cou d we have the ''wey'' Your Honor?
17
THE WITNESS :
18
compression .
19
BY MR . FLYNN ;
1'm sorry .
I went to demonstrate video
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?

l57
CECILIA UOSZ, NV CCR *246 (775) 827-0672
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.
Page 159 of 207
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A.
I believe five daysr four or five days .
Q.
What type of video compression did you demonstrate?
A.
1 took data off of an aircraft, and 1 streamed it at a
very 1ow kilobit rate .
Q.
A re we getting into classified information?
A.
Y es .
Q.
A fter you dicl this, did you go back and bave a
discussion w ith Mr . Trepp?
A.
Y es .
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
18
Q.
5o there were Lwo different technologies being
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?

158
'
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A.
Not really.
Q.
What did he say?
A.
He was very rterest.ed in the data compression .
Q.
And thereafter, during the year 2002, what were you
working on , as the chii?f technology officer?
A.
Video compresson.
Q.
And during the year 2002, who was paying your m edical
insurance?
A.
I w as .
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.
A 1l right-
16
Now: in November 2002, did something
happen with your stock?
17
A.
18
question .
Well, I believe I was diluted again , if that 's your
19
Q.
20
M r . Trepp?
21
A.
22
........
And dtd you have to, again, pay back money to
l don 't believe at that time -- I'm -- Ifm not
certain .
23
Q.
At som e point, did you pay back money for --
24
A.
Yes, yes .
159
CECILIA T/offis NV CCR #246 (775) 827-0672
Page 161 of 207
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2
Q.
and M r. Milliken on the premises of eTreppid Technologies?
3
4
And in 2002, did you have occasion to see Mr. Trepp
A.
Yes . They came to our building.
1 don l: remember if
it was December, but they had come to our building.
Q.
And did you have a conversation with M r. Trepp about
A.
Yes .
Q.
And what was that conversation?
A.
I was surprised that that was going to happen .
10
Q.
And what did you say to him about Mr . M illiken?
11
A.
I don 't know how we would ever get clearance in the
12
it?
government w ith him as an investor .
13
Q.
Did he tell you what Mr . M illiken 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.
2 002 or 3?
20
Q.
December 2002.
21
A.
Yes.
22
Q.
What tests did you complete? Without describing the
23
24
contents, just what, generically, was the nature of the test?

A.
We, once again, did some tests on aircraft w ith the

l60
CECILIA VOSLS NV CCR #246 /775) 827-0672
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2
3
bop
video comp ression .

Q.
And did any of those -- aspects of those tests involve
anomaly detection?
A.
Yesy I believe it was pattern recognition .
Q.
And without getting into the contents of or what you
were actually doingy can you differentate for the Court?
MR . PEEK : Your Honor, could 1 ask if the witness is
just reading from his tmeline or actually is testlfying from
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 :
16
MR . PEEK :
17
MR . LOGAR : If the witness is using a document to
I don 't either .

Your Honor, I think I1m --
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 it come contemporaneous from notes?
Did he
21
prepare it?
Where did
22
it come from? I tink I do have a right to know, and 1 don't
23
think the witness should be using it to testify from .
24
going to come into evidence, Your Honor .
It's not
It 's not his notes,
161
CECILIA VOSLZ NV CCR #246 (775) 827-0672
kp.
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it's not contemporaneous, and I don 'h think he should be ustng
t, respec tfu lly , Your H onor .
THE COURT :
MR. PEEK :
THE COURT :
Jt looks kind of like a script to me .

It does look like a script .
4 hhink perhaps it's a good idea not to
refer to it, at least rght now .
you can tt remember or want to refresh your recollectionz we rll
see about it.
MR . PEEK : We dll put it aside, then, Your Honor?
10
11
If you have som ething that
MR . FLYNN :
Turn it over, Mr . Montgomery.
BY M R . FLYNN :
12
0.
A t 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 eTrepp id 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

162
CECILIA MOSLZ NV CCR #246 (775) 827-0672
v-.
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earlier . I had used that on occasion to test with also, and
video and data compression continued .
Q.
And was e'rreppid paid for these tests?
A.
Yes, yes.
Q.
How much?
A.
I believe 280,000.
Q.
And after these teshs were completed -- strike that.
A t the end of 2002, when these teats were complete -- and as 1
understand your testimony, based in part on your anom aly
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 .

it?
18
A.
Y es .
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 M r. Trepp about the change of your status?

163
CECILIA VOSis NV CCR #246 (775) 827-0672
Page 165 of 207
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A.
Yes . They told me I was qoing Lo become an employee .
Q.
He told your you weze now going to be an emp loyee?
A.
That's correct .
Q.
Nowy with regard to your routine work in the company,
after you were supposecily designated ''employee,t' did anything
change with regard to how you supervised yourself, conducted
yourself, and did your work?
A.
No .
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
contrac t?
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 -164
CECILIA voHm' NV ccR #246 (775) 827-0672
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Yes .
Q.
-- with that department o f the government?
A.
Yes .
Q.
And just generically, under that agreement --
MR . PEEK :
Your Honor, could we have the agreement, f
this is separate and apart from eTreppid, and maybe -- may 1
have the witness a little bit on voir dire?
THE COURT :
MR . PEEK :
10
Hold on a second .
I'm trying to understand, is this a
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
15
MR . FLYNN : This is the oath of secrecyz Your Honor .

We 're not into the --
16
THE COURT : A11 right .
17
MR . FLYNN : But --
18
MR . PEEK :
19
THE COURT ; He sald an oath of secrecy .
20
MR . PEEK : Your Honor, hiding behind the so-called
21
national security --
22
23
24
Well, I didn't hear the answer .
THE COURT : Welly he hasn t -- a11 he said is, did you

sign --
MR. PEEK : Wellr this is the oath of secrecy . That 's

l65
CECILIA VOHZ, NV CCR #246 (775) 827-0672
-.
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the agreement --
2
3
THE COURT : Did he sign iL?
That's fine.
MR . PEEK :
1 apologize, Your Honor.
talking about a separate contract for work.
BY MR . FLYNN :
I think he
can answer that .
Q.
1 thought he was
Did you s tgn a document, you personally, with the
government with regarcl to your seeurity clearance in connection
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
(
xax
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.
Y es .
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

166
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2
3
with the March 2003 contract for this department?

A.
cannot divulge the nature of the work or who the clients are .
Q.
or classified project at that time frame than what you were
doing?
MR. PEEK: Your Honor, 1 would object to that

because --
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
14
MR . FLYNN : Fine. Thank you : Your Honor.

BY M R . 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
And can you imagine any higher governmental security
'
Well, we -- we signed -- the agreement states that 1
Q.
And in connection with this particular project, did
22
you have dscussions -- just yes or no -- with governmental
23
agents with regard to the anomaly detection aspect of the
24
software?
167
CECILIA MOSIS NV CCR #246 (775) 827-0672
'
Page 169 of 207
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.
(...)
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,
A.
At that time, no .
Q.
At some point, did you have these discussions?
A.
Yes .
Q.
And when?
A.
September of '03 .
Q.
And did you complete the project to the satisfaction
of the government?
A.
Y es .
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
13
A.
Well, it was catlled the anomaly detection or pattern
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

168
Page 170 of 207
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umbrella.
Q.
Under the umbrella of SA P?
A.
Yes .
Q.
How much was being paid by the government -- this
governmental agency for the work you were doing during this
time frame?
A.
Roughly, 350,000 a month .
Q.
And for how long did you do it?
A.
I think about a year.
10
Q.
Up until what time?
11
A.
September, October of 2004.
12
Q.
Now, in SepteM ner -- strike that . ln February of 103,
13
did you have a discuasion with Mr. Trepp about the ownership of
14
anomaly detection?
15
A.
Yes .
16
Q.
What was that discussion?
17
A.
I wanted to know how l was going to be compensated for
Q.
And this was during the period where this governmental
18
19
20
it .
contract was developing?
21
A.
Yes .
22
Q.
23
A.
He would work it out .
24
Q.
Did you -- did you tell him who owned the technology
169
CECILJA VOHL, NV CCR #246 (775) 827-0672
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that was being usecl?
A.
He knew w ho d id .
Q.
M d What did 116, Say?
MR . PEEK : Ob'jection, Your Honor . Nonresponsive .
THE COURT :
THE W ITNESS:
THE COURT : What did you tell him ?
Did you tell him?

: 'm sorry . Yes .
BY M R . FLYNN ;
Q.
What did you say to him?
10
A.
I owned it .
11
Q.
12
A.
I think, initially, nothing. He just kept saying he
13
14
15
would work it out.
Q.
And then at some point, did the -- did he acknowledge
your ownership?
16
A.
Yes .
17
Q.
When?
18
A.
M iddle -- 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

l70

!t..-,-.----)
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--
when we started dojng the work in 2003, they accelerated it,
the other group .
Q.
Okay . Ancl what is an interim clearance?
A.
Well, you apply for a clearance, and within 90 days,
they usually give you a temporary clearance .
Q.
And how many plogranr ers got a temporary clearance?
A.
One .
Q.
And who was that?
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.
16
Q.
And when did you get your final?
17
A.
I believe it was sometime in the summer of 2004 .
18
Q.
Okay.
19
Excuse me .
In August of 2003, were you given certain tapes
by the government?
20
A.
Yes, yes .
21
Q.
And did those tapes and what was on them precip itate a
22
23
24
1ot of discussion with M r. Trepp?
MR. PEEK: Objection, Your Honor. Again, it's leading

and, I think, lacks foundation .
171
js
(..
THE CO URT :
MR . PEEK : Assumes facts not n evidence .
THE COURT : He asked him did it precipitate a
conversation . That may be a little bit. leading.
5
6
MR . PEEK :
THE COURT : D id you give him the tapes: and was there
a conversation about the tapes after you gave him the tapes?
9
10
THE W ITNESS :
I received tapea, and there was
something on the tapes that was of interest .
11
12
ft ls also speculative as to whether the
tapes themselves --
7
8
W ell - -
THE COURT : A11 right. And did you have a

conversation with Mr . Trepp about that?
13
THE WITNESS :
14
THE COURT: A l1 right.
15
16
Yes.
Go ahead .
BY MR . FLYNN :
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-exam ine 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
24
THE COURT: Wellr we don 't know if hels going to say

that . I want to see what he says, and then we 'll see where we
172
7
)
Page 174 of 207
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go wlth that.
1 mean, one of the things that occurs ko me is that
where one side of a case or the other relies upon a privilegez
then I can take that into consideration with regard to whether
or not the other side has been provided with the information
they fre entitled to be provided with .
BY MR . FLYNN :
8
9
Q.
Having that jn mind, Your Honor -- did you share what
was on the tapes w ith 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.
17
Q.
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.
That ls correct .
21
Q.
22
A.
He would work it out .
23
Q.
D1d you go ahead and do the work on the tapes?
24
A.
Yes .
l73
CECILIA VOSEZ NV CCR #246 (775) 827-0672
Page 175 of 207
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tapes?
A.
V..
w
And whose technology was used to do the work on the
Well, there were two pieces. The plece o f facial
recognition and video recognition was eTrepp id 's.
detection was mine .
The anomaly
Q.
And how much was being paid during that time frame?
A.
Wellz f think t.hey -- f think that was close to
2O0w000.
Q.
A fter 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 :
15
THE WITNESS :
16
17
18
19
20
I'm sorry .
What?
.
Lt was very reliable .
BY M R . FLYNN :
Q.
Did you have any conversation with Mr . Trepp about
that reliability?
A.
I don 't think initially at that exact time frame .
Later on r I think we did .
21
Q.
22
A.
He wanted to know how con fident 1 was that the data
23
was correctz and 1 told him that 1 believed it was .very
24
accurate.
l74
cscILIA voHL, Nv ccR #J46 (775) 827-0672
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Q.
And did you ever have a conversation about :he value
of your technology at that point?
A.
Sometime in 2004, is that --
Q.
Yes.
A.
Yeah .
7
8
Wekl, he told me he asked for a billion dollar
bond from the U .S . Government .
Q.
And did you have a discussion with him about how mueh
he wanted to sell the tecbnology for?
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 m illion would belong to you and what part would
12
belong to him?
13
A.
Yes .
14
Q.
15
A.
T was concerned that I wBs qoknq to get my fair share
16
17
of that .
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
21
22
23
24
A.
I believe at September 31str that -- the next phase
was going to be completed .
Q.
And did you have a conversation with Mr . Trepp abouh
extending the contract for another three months?
A.
The people that were here from the governmenk stated

175
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they wanted to extend it .
Q.
And did you have a conversation w ith Mr . Trepp about
extending it?
A.
Yes .
Q.
What was that conversation?
A.
He wasn 't gong to .
Q.
And did you have a conversation w ith him as to why he
wouldn 't?
A.
10
money .
11
Mr . Trepp wanted to move on to some other work.
12
Q.
At the time -- the initial time is that we wanted more

We, meaning eTreppid, had wanted more money and
And so did you go forward and do -- continue -- did
13
you continue processing work for this particular department of
14
the government?
15
16
A.
We continued processing, I believe, until after
Thanksgiving of 2004.
17
Q.
And were you using your anomaly detection software?
18
A.
Y es .
19
Q.
And did you a conversation with M r. Trepp in the fall
20
of 2004 about the fact that it was your software that you
21
owned?
22
A.
Yes.
23
Q.
Now z at some time, did you have a conversation w ith
24
'
the government from this particular department about protecting

176
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the software with jntrusion devices?

A.
Well, early oru they told us --
MR. PEEK: Objection, Your Honor. Hearsay.
THE COURT :
Well, I1m going to allow it .
Ive allowed
quite a bit of hearsay in this case anyway.
whether or not itls been being offered for the truth of it or
not, or whether it's being orfered to explain the question that
was asked .
Go ahead .
10
11
11l determine
THE WITNESJS:
2 belleve, in early 2004, they suggested
what they wanted to do to protect the systems.
12
MR . PEEK : Could We have who the ''they'' is .
13
THE W ITNESS :
14
MR . PEEK :
15
The government.
Can we have Air Force, person, individualz
nam e .
16
THE W ITNESS : Not the Air Force, the other group .
17
MR . PEEK : What was the name of the other group?
18
THE W ITNESS :
19
MR . PEES ;
20
I1m not going to say .
That's my problem agaln, Your Honorr hiding
behind the privilege .
21
THE COURT :
I understand .
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

177
CECILIA 7OS.Ds NV CCR #246 (775) 827-0672
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level, which is called for under tbe act, or we lll enable
Mr . Montgomeryz Mr . Trc3pp to go into chambers so the Court can
verify it, or we bll enable -- we All allow it ho go over to
federal court. Your Honor, we rre not Kidlng behlnd anything.
THE COURT :
l don 't know how jt's going to go over to
federal court . It's already been bumped out once . Al1 I1m
saying al1 day is cite me the statute that says that he can
say, HIm not going to answer the question .'' I 'm perfectly
happy with the idea that if he possesses information that 's
10
classified, he probably shouldn 't, and has probab ly 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
19
A.
I believe so.
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
24
THE COURT : 1#m not even sure that this relates to any
of the issues in the case . And 1dm not -- you know, I'm not
178
CECILIA VO%Zr NV CCR #246 (775) 827-0672
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going to tell you how to try your case . But to me, I'm not
concerned about what it says or what it doesn 't say.
even care what agency it is .
MR . PEEK :
I don 't
I care, Your Honor, because of the
inference here that 1 was directed to put intrusion software,
and it is the intrusion software that, if there was any
deletion, that deleted a11 of tbis.
affidavit from the Air Torce, who is m anaging this, a 1ot of
these contracts --
10
11
When we and get an
BY M R . FLYN N :
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
18
MR. PEEK: Same objection, Your Honor.

BY M R . 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?
22
Court how they work .
23
A.
24
with you .
Explain to the
ls that classified?
I don 't really know whether it is or not, to be honest
179
CECILIA VOSIS NV CCR #246 (775) 827-0672
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2
3
Q.
Well, generically, can you describe to the Court what
happens if someone tres to access it?

A.
The government group was very concerned that someone
would walk in and take a computer out of the building,
physically take it out. And since the room that we had in the
building was not big enough to hold a1l the computers, they
wanted some form of protection so that those computers coulz
not be taken out of the building and accessed .
Q.
And how -- and did you load these devices onto these
10
compu ters ?
11
A.
Yes.
12
Q.
And how does the software, basically, work? Does
13
14
It 's software .
it -- what does it do ?
A.
Well, it ls des kgned 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 w ill purge itself.
17
18
Q.
And did anyone at eTreppid know that thatfs how this
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
24
existed, did M r. Trepp know?
A.
1 don 't know if he did or not.
I suspect he talked to
18O
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the same government people that I did: that he m ight have
kn own .
Q.
Now --
THE COURT: Let me just stop and ask a question.
Do the lawyers know what agency we're talklng about?
M R . FLYNN :
Y es .
THE COURT :
Do you know?
MR . PEEK :
THE COURT : Your client has not told you?
10
know?
No , 1 don ft .
You don 't
You don 't know?
11
MR . PEEK :
1 -- I don 't know .
12
MR. FLYNN :
f doz Your Honor.
13
(Whereupon, Mr . Peek has a conversation with Mr . Trepp
14
I will ask Mr . Trepp .
off the record .)
15
MR . PEEK ; Yes: I do know .
16
THE COURT : A l1 right . Approach .
17
18
(A discussion was held at the bench out of the hearing

of the reporter.)
19
20
THE COURT : A11 right. Go ahead .

interruption .
21
22
23
24
I'm sorry for the
MR . FLYNN : Thank you, Your Honor .

BY MR . FLYNN :
Q.
Let 's fast-forward a little bit . The work ended with
this particular agency at some point in time; is that correct?

181
CECILIA Voffls NV CCR #246 (775) 827-0672
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A.
Y es .
Q.
And that was after Thanksgiving of 2004?
A.
Yes .
Q.
And were there conttnued negotkations w ith that
departm ent thereafter?
A.
My undersLanding was that that group wanted the
Air Force to get involved .
Q.
And during 2004 -- just yes or no -- were there
individuals in the U .S . Government at the highest levels at
10
eTreppid Technologies?
11
A.
12
Yes .
THE COURT:
What is ''the highest levels''?
13
mean was President Bush there?
14
me .
15
BY MR . FLYNN :
Does that
That doesn 't mean anything to
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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.-
.- - .. - .
.- .........
.
.-
182
CECILIA MOS2'
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iqlr:
''heated .'' They had dscussions .
B Y M R . FLY NN :
Q.
Okay. Did you have discussions?
THE COURT : A ll right.
T HE W ITNE SS :
Yeah .
Yes .
BY M R . FLYNN :
Q.
And how would you characterize the development of the
relationship towards the end o f 2004 and going into 2005, with
M r . T repp ?
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
14
15
and t never gets worked out .
Q.
And did Mr. Trepp ever dispute that you owned the
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 m illion .
23
Q.
What was your -- your understanding of how much had
24
been paid?
183

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(XO--
MF-2
A.
In the two years?
Q.
Yes.
A.
I think more closer to 18 mil Lion .
Q.
And in early December of 2005, did you have a
conversation of how much was in the bank and you wanted to see
the bank statements?
Y e5
Q.
What did you say to him?
A.
''l want to see the bank statements.''
10
Q.
11
A.
He never showed it . He didn 't say anything . He never
12
showed it .
13
Q.
14
15
16
And after this conversation in early Deeember of 2005,
did he say anything about giving you any money?
A.
Well, T told him I needed a couple hundred grand . Is
that the question?
17
Q.
Yeah .
18
A.
Y es .
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 som ething, he
22
gave me either 125 or l50 thousand .
23
24
Q.
And what was your understanding as to what that was
for?
184
CECILIA 7OSZz NV CCR #246 (775) 827-0672
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A.
Once again, he said he 'll work it out.
Q.
And 1et me show you Exhibit 18. Did you have a
conversation about Exhibit 18 with Mr . Trepp ln the end of
December of 1052
A.
He brought me two documents, this being one of them --
1 don 't remember the other one -- and told me that he wanted me
to sign it .
Q.
And what did you saA

g?
A.
HI won lt sign it.''
10
Q.
And is that your s.gnature on Exhibit 18?
11
A.
No .
12
Q.
Did you ever sign any document like that in front of
13
this individual, M r. 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
19
20
that signature forged?
A.
Tt's not m ine.
I didn 't sign it .
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 M r . Montgomeryls handwriting that have
23
been introduced .
24
MR . PEEK : Your Honorr I think that -l85
CECILTA MOSZ, NF CCR #246 (775) 827-0672

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THE COURT :
I've already done that .
But my question
is, where is the original?
MR . PEEK :
We have the original, Your Honor .
I guess
wedre going to have to submit it to forensics now , questioned
document examiner, now that Mr . Flynn 's client denies, contrary
to the testimony of Mr. Treppz signing it and that of the
witness who witnessed it.
THE COURT : Wel, I can 't tell you what to do .
MR . PEEK :
10
I'm not going to dc) it today . l don t
thin k I need to do it for this purpose.
11
THE COURT :
12
MR . PEEK :
13
J know what I would do .
1 certainly wouldn 't ask the Court to
compare it to others.
14
THE COURT :
i think it's within the layperson ls
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
19
20
'
-?
MR . PEEK ; Are we about done here?

BY MR . FLYNN :
Q.
Mr . Montgomery, you bve 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 o f 2006 in

186

p-..l
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connection w ith any of the software that was presen: in the
company .
A.
I got called -- Mr . Trepp was getting ready to leave
on a cruise .
I don 't zemember which week that wasr if it rs the
week of the 8tb . And J planned on taklng the week off because
he was going to be gone also .
And 1 got a call on, 1 think, Monday morning from
Mr . Trepp saying that I need to come down to the building .
9
10
11
12
Q.
that?
And what was the nature of that discussion other than

Was there anything else?
A.
No, he just sasd, ''You need to come down here right
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 .
187
CECILIA VOSLZ NV CCR #246 (775) 827-0672
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Q.
And then what happened?
A.
1 entered thrtlugh the warehouse, and I saw a11 of
these people going through a11 the hard drkves.
Q.
Okay . What date was Lhat?
A.
It's the -- it would be the Tuesday .
1 don 't know --
I don 't know which day lt is . January.
Q.
The Tuesday -- the second week in January?
A.
Yes, the second week in January .
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
Yes
15
Q.
-- on Exhibit l --
16
A.
Yep . Yes .
17
Q.
-- which webve called Dennisrs, Mr. Montgomery's, work
18
yes .
'
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.
M y guess, 350,000-plus .
24
Q.
And when w ere those computers brought in to eTreppid?

188
CBCILIA vOSz, NV CCR #246 (775) 827-0672
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MR . PEEK :
January 2004.
BY MR . FLYNN :
8
9
Q.
December 2003, I believe, or
And did a particular braneh of the government bring
those in?
A.
T -- we ptlrchased them on behalf of the government .
They were government computersr and we purchased tbemw one from
10
each group .
11
Q.
12
Counselx I can't see the witness answer the
THE WITNEE;S:
....
question .
k...
So 1 don 't know which group belonged to wh ich one.
Did -- at some point, did the government bring in
computers that you didn lt 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
23
24
MR . LOGkR : What difference does it make?
That's not
an oblection.
THE COURT : Hold on . Hold on . Hey, guys: listen to
189

(
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1
me . Hey, no, listen . Wefre getttng late here tonight.
easy to get carried away and have exchanges, but I want to
m aintain reasonable order in here . So if you have something to
say, say it to me.
5
6
lt 's
And likewise to you, if you have something to say, say

lt to me .
So wbat we 'll do --
MR. PEEK: My objection, Your Honor, was lack of
9
10
11
12
'
foundation and qualification as to what the value is, as well

as the relevance here.
THE COURT: A1l right. Well, first of all, what is
the basis for your knowledge o f the value of the computers?
13
THE W ITNEGS: You bre asking me, Your Honor?
14
THE COURT :
15
THE W ITNESS;
16
Yes .
I Gas told that was the price by the
government.
17
MR. PEEK: Objection. Hearsayr Your Honor.
18
THE COURT :
19
20
I don 't know that I see the relevance .
What s the relevance?
MR . FLYNN : The relevance, Your Honor, is that the
21
government b rought those computers in because of
22
M r. Montgomery 's ownership of the anomaly detection software .
23
24
THE COURT: Well, that 's your conclusion . But 1 meanz
I don 't know that there's any evidence here from which we can
l90
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conclude thaL that's noL hearsay.
BY MR . FLYNN :
3
4
5
6
Q.
Mr . Montgomery, why did the qovernment bring the
computers in?
A.
They wanted us to run the anomaly detection software
on a11 the computers.
MR. PEEK : Again, Your Honor, objection. That's
hearsay.
That calls for hearsay from the government as to why
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.
14
question 1 was concerned about was: why is it -- the cost of
15
those programs, why is that relevant?
16
had .
17
BY MR . FLYNN :
18
Q.
But the
That was the question I
The m agnitude of the work that was being done with
19
regard to anom aly 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

191
CECILIA MOSDZ NV CCR #246 (775) 827-0672
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the hard drives?
A.
No .
Q.
And were they also in this area called the private
4
5
6
-1
room (indicating)?
A.
Not that 1 know of.
I only walked in through the
warehouse up the back stairs to Mr. Trepp 's office.
Q.
And did you have a conversation with Mr . Trepp about
what these people are doing w'ith these hard drivesz would do
w ith 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 s looking for the software .
16
Q.
And who d id you see working on this -- on these hard
17
18
19
drives?
A.
M ichael Salvetek, Jim Bauder, Jesse Anderson ,
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.
24
And when you confronted them w ith the fact that they
weren 't allowed or permitted under the contract with the

l92
CECILIA vog.nz NV ccR #246 (775) 827-0672
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government to do that, what d id he say?
A.
That he 's orderLng them to do it, Mr. Trepp is.
Q.
And did he tell you why?
A.
No .
MR . PEEK :
Your Honorw can We move on?
11m going to
object. This is just dragging on and dragging on to be a
filibuster, and denying me the opportunity to eross-examine .
It 's now 8 o 'clock .
9
10
MR . LOGAR: Is there an objection, Counselr to your

statement?
11
12
THE COURT : Again, conversation -- 1 want conversation

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
We rre almost at an hour now for your zo-minute examinationz so
17
please hurry up .
18
BY MR . FLYNN ;
19
20
Q.
Did what they do destroy any of the softuare in any of
the source codes?
21
A.
Possibly, yes.
22
Q.
The source codes with regard to anomaly detection
23
24
software, where are they?
A.
In the building .
193

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2
Q.
q.
w
And how many lines of code do they -- exist,
Mr . Montgomery?
A.
Half a m iltion-plus .
Q.
And do you know whether, when they tried to access the
software, any of those lines of code were destroyed?
A.
It could have been .
Q.
And are those lines -- are the source cddes to access
those lines of code also in your head?
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
15
16
17
18
that theyere identical.
A.
Wellr I meanr Tfm the one that did a1l the original
work on the anomaly detection software.
Q.
Did you destroy or take any files or hard drives or
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 isn ft there in connection with the government
23
contract on anomaly detection?
24
A.
I don 't think so .

194
CECILTA VO1fZ, NV CCR *246 (775) 827-0672
0.
So they wouldn 't even know how to do it?
A.
That's correct.
Q.
Have you heard any testimony from Mr. Venable or
Dr. Sun or anyone else that would indicate they have any
knowledge or expertise whatsoever, or the expert that was
calledz as to how to access the anomaly detection codes inside
eTreppid today?
'
A.
No .
Q.
Are you the only one?
10
A.
I don 't know that for a fact, but I would suspect
11
12
that s probably the ease .
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
20
21
22
23
24
Q.
Do you know of anyone else that, you knowz deleted
files at eTreppid Technologies?

A.
Well, a11 the programmers, from time to time, did that
on their own .
Q.
But do you know of anyone Who deleted files who
shouldn 't have been deleting files?

l95
CECILIA VOS.L, NV CCR #246 (775) 827-0672

. .,
)
(. m z
(
u. .
.
A.
No .
Q.
Did anyone contcol your work, ever, at eTreppid
Technologies?
A.
What do you meaa by that?
Thatls --
Q.
With regard to Bour -- first, your data compression
type of work, did, say, anyone instruct you or supervise you on
how to do that type of work?
A.
No, no .
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
19
Technologies to do the --
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

196
CECILIA vollL, NV ccp #246 (775) 827-672
tt-?
1
was?
B Y MR . FLYNN :
(-.
r.,
.
Thates the thing f?m concerned about.
Q.
Based on al1 your years in working with all these
peoplez are you aware what skill levels these various
individuals had that were computer programmers at eTreppid?
A.
Yes .
Q.
Did anyone have the sklll level other than you to do
anomaly detection?
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 .
16
Q.
With regard to the intrusion technology,
17
Yes .
M r. Montgomery --
18
A.
Ye s .
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
l97
CECILIA VO11fp NV CCR #246 (775) 827-0672
t?
():,,.
.--
that period of time frame . And if you didn rt, it would purge
itself.
Q.
And as you sit here today, do you have any
understanding as tc) whether that may have occurred at eTreppid
Technologies?
A.
Well, since I was locked out of the building and 1
could never go into it, 1 suspect it probably happened .
MR. FLYNN :
That's all 1 have, Your Honor .
THE COURT: Al1 right. Let me just stop and ask a
10
question, which is p robably going to not make any sense. But
11
therels been an amended eomplaint filed on the 1st o f February.
12
Obviously, time to answer it hasn 't expired, but there hasn rt
13
been an Answer filed, at least as far as I can see .
14
15
16
17
18
19
MR . PEEK :
There's an Answer to the earlier, but not
to the am ended one, that's correct .

THE COURT : 1 didn lt find that in my file, but was -were there any counterclaim s'
?
MR . PEEK :
There is a counterclaim , Your Honor, for
copyright infringement contained within the counterclaim .
20
THE COURT: A 11 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,

198
CECILIA MOSiw NV CCR #246 (775) 827-0672
,-.)
qvu
that ls not eTreppid's m aterial?
THE WITNESS:
not .
THE COURT : Well, go ahead, Mr . Peek.
MR . PEEK :
1'> happy to hear from the Court .
If ih
will shorten the proceeding, 1fm happy 'to hear from the Court .
8
9
f was going to
open my big mouth abou: something .
6
7
L don 't recall, Your Honor, if 1 did or
THE COURT ; Wetl, 1et me tell you, counsel for both

sides, kind of how I th knk 1m seeing this: but 1'm prepared to
10
be persuaded otherwtse. But maybe that will b e helpful . 1
11
know , when I was a practicing lawyerz I kind of lked to know
12
sometimes what that judge was thinking about. Not always happy
13
to know, but I kind o f 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 agreem ent, oral or by conduct and b y 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

199
CECILIA Voffiz NV CCR #246 (775) 827-0672
t.:rr?
(v?,,-
or not, 1 have no idea. But I don 't -- at this point in time,
I1m not -- it would appear to me that the technology was indeed
conveyed to eTreppd to market and sell to the government and
that the government paid eTreppid for that.
Now, if there was an agreement that there would be
compensation for it later and that agreement wasn ft honored,
that 's part of the counterclaim . If there ls an agreem ent that
copyrights were infringed, that's part of the counterclaim .
But as to the ownership of it, it would seem to me:
10
like I said, b y 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 .
13
in . So tell me where I !m wrong about that.
14
That's where the counterclaim s come
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 :
19
20
-- no copyright can be given under these
circum stances without a written assignment .
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

200
r'
.)
(.m2
.-
nonexclusive, oral license under the conduct .
And as I say, Your Honor: we have the brief.
ready to subm it the brj-ef to the Court.
4
5
We 're
THE COURT : Olu it hasn 't been subm itted to me yet?

I 'm familiar with Title 17.
MR . FLVN-N :
TL hasn't been submitted.
THE COURT : And 1 think l knov' the section that you rre
talking about.
are we doing in state court?
10
But 1 mean, if that's the case, what the heck
Why aren 't you guys in federal
cou rt ?
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 we fve already filed over in the federal court.
14
Sor no matter what this Court does --
15
THE COURT :
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
I'm wasting my time?
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 Morlz NV CCR #246 (775) 827-0672
)
r-..
q;w
..
contrary . Based on a11 the case 1a< and the brief we lve got
for the Court, it siutpky cannot be done .
THE CGURT : A 11 right . See, 1'11 have to consider
that .
the section you 're talklng about.
I meanz 1lm aware of Title 17.
I'm aware, 1 thtnk, of
1'm just zooking at this from the standpoint of
regular contract . If it can 't be done, then we go back to the
issuez and I determine whether or not, in fact, it was in
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
we bre -- 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 you lre not dealing with an employee, you 're dealing with
18
a founder and a principal and an independent contractor.
19
20
21
22
THE COURT : Well, that 's something 1:11 have to decide

when I take that into consideration .
MR . PEEK : And a fiduciary duty as a membr of the
LLC , Your Honor, with partnership fidueiary responsibilities .
23
May I go ahead and cross-examine?
24
THE COURT : Yeah, go ahead .

202
CECILIA VOHLz W
CCR #246 (775) 827-D672
'- -
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(
x
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1
2
MR . PEEK ;
I unclerstand where the Court is . I may b e
able to shed some liqht c)n this , as well .
3
4
THE COURT REPORTER : May I say, for the recordz I 'm

getting really tired .
5
6
MR . PEEK : l 'Ll be slow , Ms . Vohl .
1 don 't agree wit.h
that , but -- T don 't bel ieve that .
7
8
CROSS'-EXAMINAT I()N
10
11
BY MR . PEEK :
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 .
l7
Q.
M d the blood gas -- the blood is being drawn from
18
time to tkme by techs and teshed as to what its gases are?
l9
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 w rong wth the patient?
23
A.
Is that a question?
24
Q.
Yes. Is that correct?

203
CECILIA lz
r fffzs NV CCE 11246 (775) 827-0672
'
-- -

(
'w4,.y
j
u
..
tsT
A.
Yes .
Q.
And your anomals' detection portion of the blood gas
was, you said that lqhe range for certain levels of blood gases
would be a percentage for hydrogen, oxygen, nitrogen, carbon
dioxide, th ings o f that nature?
A.
1 don 't understand your questlon .
Q.
Well, you tre determiningr are you not, whether or not
a person 's blood gases contain more hydrogen, carbon dioxide,
or oxygen than they are supposed to?
10
A.
No .
11
Q.
What are you testing for, then?
12
A.
I've never tested for hydrogen. You lust used
13
14
15
What is the anomaly?
hydrogen as an example.
Q.
Okay. But you were testing for other blood gasesr are
you not?
16
A.
Yes .
17
Q.
And there are medical ranges Eor b locd 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

(.. ,...
.
1
2
k)
tx.gyyyy
gas analysis?
A.
You lme shooting light through bloodz and a spectrum is
being produced . Am d that spectrum, depending on which value
you fre lookinq for, determines the spec- -- you look for each
of the variab les in a different range in the spectrum .
Q.
You dre looking for, as 1 understand it, certain gases?
A.
Patherns .
Q.
Patterns?
A.
Patterns .
10
Q.
What are the patterns?
11
A.
Well, a gas shows up at a certain spectrum and has a
12
13
14
certain appearance .
Q.
Can you show me within Exhibit 19 where it talks about
anom aly detection?
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
205
' - ' - ' - - -
CECILIA UO:rZs NV CCR #246 (775) 827-0672
(
'-$
l
phrase ''anomaly detection'' anywhere within 1t?
A.
I donlt recall if 1 did or not .
Q.
Is there anything in there that you would characterize
as anomaly detection?
1(
E it is, point us to it .
A.
The software .
Q.
Well, point us to someplace in that book that
describes anomaly detection.
A.
I'm not sure this book describes anomaly detection .
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 d etection?
15
16
17
18
A.
The center screen is the output of the determination
of that anomaly .
Q.
Okay . Can you then tell me -- point me, thenz to that
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

20 6
CECILTA VOJ/ZZ NV CCR #246 (775) 827-0672
-- - -

---4
.
u .-;
detection?
A.
Excuse me .
Q.
Okay .
A.
Wellz the hlood hadn't been ejected yet.
Q.
Oh: okay. So on 32z there is something there that you
6
7
32 .
I apologlze . 32 . Well, what 's on 22?
say relates to anomaly detection . Where do we see that?

A.
You -- you see the value that is displayed, tells you
the peak of the detection of the anomaly, and that peak has a
qualifying amount .
10
Q.
Where am 1 reading that?
11
A.
Welly see: a number like 29z as an examp lez 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.
Y eah .
19
Q.
That's a detection of an anomaly?
20
A.
That gives you the size of the anomaly, that 's
21
()rrry
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.

20
CECILIA VOSZZ NF CCR #246 (775) 827-0672
'- .-
J
1
It saysz over herer if 1 read across the column on
Exhibit 20 -- the middle column has no heading; iL just says
''Corning 178-3 1/1/-j6 '' Is ,'1/1/76'1 Lhe date?
Is hhat a date?
A.
1 believe jt looks like a date .
Q.
Okay . And then HCO 2 -- what does HCO 3 stand for?
A.
Blcarbonate.
Q.
And then it says ''29.1.N How do we know that's an
anomaly?
A.
Well, were looking for --
10
Q.
Tell me this --
11
A.
Do 1 geL to answer?
12
13
Q.
A.
Yeah .
We dre 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
23
24
A.
I don't remember from the book. We put the
original -- what the original patterns looked like .
Q.
So how is the Court going to tell from -- without aid
CECIL FA V'
OJM r NV CCR #246 (775) 827-0672
of this exhibik, that there was a spectral analysis taken on
thls patlent 's b lood gas showng an anomaly of apparently a
bicarbonate 29 .12
MR . LOGAR ; Other than Lhe witness 's testimony?
THE COURT : M r . Logar, please .
6
'
If you have an
objection, direct it to rcte, would you, please.
W1l1 you?
MR . LOGAR :
THE COURT: A11 right. Mr. Peek, where are you going
I w 21l.
10
with this?
11
12
what was -MR . PEEK:
13
It's just more stuff --
14
15
Is your point that the stuff that was patented and
The copyright is noh anomaly detection .
THE COURT : I get it .

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.
1 111 look again .
>
CECILIA UOSZS NV CCR #246 (775) 827-0672
(
x.y
z
(...
.
Q.
Okay .
THE COURT :
Wli Le we 're taking thi.s little break,
according to my review o E the file, 1 do not have an Answer to
the complaint . Do you have a copy of the Answer?
5
6
MR. LOGAR J
Your Honorz did you not get the documents
that were filed in federa1 court Dn remittitur?
THE CO UR T :
MR . PEEK:
'
I'HE COURT : 091, ''on remittitur .'' Yeah , when they sent
10
''C?n rem ova l''?
''C)n rem iLtitur .''
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 :
19
MR . PEEK :
20
MR . LOGAR :
Do you have a copy 1 could look at?
I've got oner Your Honor .

It was unclear, when we were in federal,
21
when the remittitur would occur.
22
been sent back by now .
1 assumed that the fike had
23
THE COURT:
It may have . Who knows.
24
MR . LOGAR : But you don 't have it?
?y.. )
1
THE COURT : 1 dont have itz no .
MR . PEEK :
We a1l assume tha: because Judge McKibben
ordered it that way .
THE COURT: Let me just see a copy. A11 I?m saying,
Mr . Peek, is, 1 th jnk 1 know where you dre going with this . And
ultim atelyy if we don 't get finished: then 1fm going to have to
ultimately declare some kind of a recess, and God knows when
welre going to come back. So I encourage you to use your
Uim e --
10
11
12
13
MR . PEEK : Wisely?
Ifkl move onr Your Honor .
BY MR . PEEK :
Q.
ln the brief moment youfve had to look, you find
nothing in there about anomaly detection, do you?
14
A.
No .
15
Q.
And you were not the only founder of Computermate,
16
(m,
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

(1pl
-'
date.
Q.
And was it in 1982?
A.
It was like a year after -- I1m just --
Q.
A year afher you had what?
A.
Started Computermate .
Q.
When did you start Computermate?
A.
I thought it was '81 .
Q.
So about a year laterz he joined you.
9
10
And the source code that you wrote for blood gas
analysis, that was written in what language?
11
A.
I believe RPN .
12
Q.
RPN . And in what language were you wrting 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 V isual C .
21
Q.
V isual 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

t. -..
(x.
M
servers at eTreppid?
A.
No .
Q.
So, there were no -- none of :he engineers in Zehang 's
group , as he is directcr of engineering, did any additions
whatsoever in writjng source code or writing code, either in
MET 1ab or C++ , to the anomaly detection ; is that right?
A.
To my anomaly detection?
Q.
That's right .
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

(..- - )
1
2
Q.
(x-,
..J
Okay. And when did you put it on -- when did you put
the anomaly detecton software onto the computers at eTreppid?
A.
Which computers?
Q.
The computers at eTreppid .
A.
July or August of 2003, I believe.
Q.
And which computer -- on which computer did you put
it?
'
A.
The one in my office .
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?
14
Show us -- actually: why don 't you
do it in green . Do it in green, pleasib sir.
15
A.
(Witness comp lles.)
16
Q.
So it 's not in the warehouse?
17
A.
Thats correct.
18
Q.
Okay . And do you have any other identfying
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?

2l4
CECILIA VOS.
L, NV CCR #246 (775) 827-0672
(X-y
j.
..n
A.
And what time frame was that?
Q.
Let s say in Deeember of 2005 .
A.
1 thought you said originally --
Q.
No, I wanted to know --
A.
You said originally 2003 .
Q.
You put it there. You put it there, in 2003, on your
A.
That 's correct.
Q.
Did it go anyp'Lace after that?
10
A.
Yes.
11
Q.
Where did it go after that?
12
A.
Downstairs .
13
Q.
Thats 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
19
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?
215
Page 10 of 87
i
1
j...)
A.
(Witness draws on diagram .)
Q.
Is there any identifying characteristic o f that
computer, location, type: manufacturer'?
A.
Well, when I saw it last, it was still sitting there .
Q.
What 's the manu facturer of 1t?
A.
It was a clone . There was no manufacturer of it .
Q.
It was a clone built by --
A.
eTreppid .
Q.
eTreppid .
10
Is it the first computer as you walk into
the warehouse on the left-hand side?
11
A.
From which direction?
12
Q.
As you rre walking into it from the -- I don t 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 th is draw ing, isn lt it?
17
A.
Welly that drawing didn 't actually represent the way
18
19
.
kzy
'
the computers were set up in the warehouse .
Q.
20
Okay .
(Plaintiff's Exhibit 23 was marked for
21
identification .)
22
BY MR . PEEK :
23
24
Q.
Now , again with respect to Computerm ate, 1 think you
said that that company, at some timez went out of business?

216
CECIL?A VOSLZ NV CCA #246 (775) 827-0672
Page 11 of 87
,
1
>-
V'
r;J
..
A.
I don 't remember if it did or not or we sold it .
Q.
And did it merge into Barrett Laboratories?
A.
I don ': think so .
Q.
And did Barrett Laboratories merge into 3Net?
A.
That is a possibility.
Q.
Let me hand you what has been marked as Exhibit 23 and
11m not certain .
ask you to tell me whether or not you can idenkify whether or
not that 's anything you have seen before today.
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
19
20
21
that you made?
A.
I could look -- 1'11 trust you . Yes.
MR . PEEK : You recognize Mr. Mannak as being somebody

who was -- 1:11 offer itz then z Your Honor .
22
THE COURT : What's the number?
23
THE CLERK :
24
MR . PEEK :
23.
It 's 23 .
217
CECILIA VOHL, Nv ccA #246 (775) 827-0672

t.- .)
k=-'
THE COURT: Any objectlon?
MR . FLYNN : He has no foundaton, Your Honor, for
3
4
5
authentication purposes.
THE COURT :
admit it .
1 Uhink it has enough that 1m going to
lt 's admitted .
(Plaintiff's Exhibit 23 was admitted into evidence .)
THE COURT : Where are we going with this? A re we back
8
9
10
11
12
to wKo really owned it?

M R . PEEK :
THE COURT :
to your clients?
Ye s, Your H ono r .
If he didn 't own itz how could he sell it
He shouldn 't even be here.
MR . PEEK ; That may very well be# Your Honor, as to
13
who should be here . What we maintain is, whatever he did w ith
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 :
18
THE COURT:
19
MR . PEEK : I understand it may be that I'm dealing
There's two prongs.

Ownership has got a back side to it.
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 position r there
24
isn 't an iota of evidence so far that they have presented that
218
CECILIA VOSZ, M ? CCR #246 (775) 827-0672

EL-''#
$
:.
'
**.el
this anomaly detection software was developed, produced, worked
on, anythingr by eTrepp kd Technologies other than
Mr . Montgomery . A nd the only state of the record is it derives
from the copyrights .
'
Your Honor, that 's untrue . Mr . Zehang
testified that he did anomaly detections in MET lab --
THE COURT :
He did . He did .
MR . FLYNN :
Nop Your Honor -- well --
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. M aybe not . But 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 .
15
notes .
1'11 look back at my
I1m not going to take the time --
16
MR . FLYNN :
17
THE COURT : Hold on right here.
18
Dr . Gun, acco rding to m y notes, h e created so ftw are
19
for p attern recognition, motion detectionz face recognition,
20
tracking the vehicles, and anomaly detection .
21
MR . PEEK :
There is nothing to the contrary.
MR . FLYNN :
Your Honor, I specifically asked --
I wrote it down .
Yes, Your Honor . And then on cross, I
22
asked him if the anomaly detection work that he did had
23
anything to do with the anomaly detection work that
24
M r. Montgomery did on the government contracts, and he said no .

2l9
CECILIA VOSES NV CCR #246 (775) 827-0672
'
;
j.p..j
(
..yy'
m.
..
And I asked M r. Montgomery, and he said what Dr. Sun did had
noth ing to do with what he did on the government contract .
3
4
THE COURT : That could be . A 11 right. Let 's go ahead

and try to get through this .
MR . PEEK :
on .
BY M R . PEEK :
8
9
Q.
Thank you: Your Honor.
1'11 try to move
You then went to -- I think you said Barrett did
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?
23
A.
I don 't know .
24
Q.
Now , you said you went to Barrett Laboratories. Did
22
Where is
it?
I'd have to look for it .
22 0
CECILIA VOAZZ NV CCR #246 (775) 827-0672

. yf'
x.-.. -
you, then, convey this same anomaly -- what you claim to be
your anomaly detection technology -- orr excuse mey copyright
to Barrett?
A.
I don 't know if'

. it was -- I believe it was a
derivative and that work had continued on .
Q.
at Ba rret h?
A.
Yes .
Q.
And you had additional copyrights?
10
A.
Yes .
11
Q.
And those copies also were fo r this same derivative
12
Okay. And so you did additional work whtle you were
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 '85f you said?

221
CECILLA Uoffiz NV CCR #246 (775) 827-0672

$
'x-
I believe 1 retained the rights out of Computermate to
do with it what I chose, whether Barrett had it or noh .
Q.
Wellz the copyrights that you did -- that you actually
copyrighted at Barretto were they for the blood gas analysis or
derlvahives thereof?
A.
Would it contai.n that?
Q.
Okay . So the (ropyr tghts that you did while you were
'
A.
Yes.
at Barrett, who owns those?
A.
I do .
10
Q.
And how did you get them from Barrett?
11
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
16
Now , are you aware that in order to make an assignment

e ffective, 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
20
21
22
23
24
copyright office?
A.
I don 't recall.
MR . FLYNN : Your Honor, that calls for a legal

conclusion .
THE COURT : Well, he's asking if he 's transmitted it
to the copyright office . Are you talking about the question

222
CECILIA VOfrZ, NV CCR #246 (775) 827-0672

..+ .
'
before that?
MR . FLYNN :
g'm asking him if he is aware that that's
what has to be done to make tt legally effective .
THE COURT: And he said no, he's not, so he 's answered
that question . And then you asked himz had he transferred it#
and I would assume --
MR . PEEK :
Transmitted it in an assignment form to the
copyright o ffice .
THE COURT I
Yeah, yeah .
10
no, because he didn 't know --
11
THE WITNESS :
12
THE COURT :
13
don 't know .
14
BY M R . PE EK :
15
Q.
I would assume the answer is
E don lh know .
-- if that is the law or isn 't the law .
Would you agree w ith 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
you r nam e ?
23
A.
T believe Barrett.
24
Q.
And Barrett still exists in some other iteration of an

223

>*
=-<
entity todayr does it not?
A.
I don 't know if it does or not .
Q.
You left it after a certain t tme?
A.
Y es .
Q.
Now, I think you also say that your -- you claim to
have the right to the source code for pattern recognition z as
well; is that correct?
A.
Yes .
Q.
Someth ing 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
22
h ad done on the copyrights.
Q.
23
24
Okay . Same th ing with the blood gas analysis?
MR. FLYNN: Objection. I don't understand.

////
////
224
CECILIA Moffz, NV CCR #246 (775) 827-0672
2
3
BY MR . PEEK :
Q.
What copyright was it that covered pattern
recognition? Was it the b lood gas analysis one?
A.
I believe it was the one in Barrett Laboratories.
Q.
And uhat 's the name of it?
A.
I -- 1 think j.t was the one for microbiology .
Q.
The one for microbiology?
8
9
10
11
Okay .
(Plaintifrs Exhibit 24 was marked for

identification .)
BY MR . PEEK :
Q.
Let me have you take a look aty again, a document from
12
the United Statea Copyright Office.
13
Court and counsel that ls where this came from .
14
It 's Exhibit 24?
15
THE CLERK : Thatls correct .
16
17
1'11 represent to the
BY MR . PEEK :
0.
Let me switch with you and give you the -- these
18
are -- I <ll 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
24
'
recognltionz if any?
A.
T did pattern recognition orlginally in the original

225
CECILTA Voflfz NV CCR #246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filedi 05/28/08 Page 20 of 87
HP computers.
Barrett Laboratories.
Q.
It was expanded greatly when T got into the
Okay.
Then let's gc back -- you still have the
Computermate . Which one of those is related to pattern
recognition?
6
7
8
9
10
A.
The one dated -- the one -- 117-868, titled
''Evapotransp iration Software.''
Q.
And this is ent.itled -- and you say 'fcomputermate
Source Code for Hewlett-paekard Model 86z Evapotransp iration

Irrigahion Softwaren; is; that correct?
11
A.
Y es .
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 th is 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
back in the mid-d8()s?
A.
Are you askinq me --
Q.
Tbat's not the same tbingz is it?
A.
What do you meiln: ''the same thinge'?
Q.
Well, it's not with the motherboardy the hard drives,
the chip?
A.
It had a motherboard and a hard drive and a chip .
Q.
And in what language did you write this code?
A.
I think it was RPN . I'm not certain .
10
Q.
You bre 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
23
24
I 'm trying, Your Honor .
A.
The one that ends in 750 that speaks of microb iology
and the one that ends n 009 that relates to anatomic

227

J
pathology .
Q.
code would look like at the copyright office, and do you have
an original copy of your filing showing the source code that
you copyrighted?
A.
copyright .
Q.
I believe the source code is included with the
Sor at least those two anomaly detection copyrights
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
'
Have you -- is there some record of what this source
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.
03, 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 fram e.

228
CECILIA Voffzz NV CCR #246 (775) 827-0672
Q.
Okay . And then did you, after July, August o f 103,
write any additional source coder lines of code, to add to that
original source code of pattern recognltion that you loaded on
your office computer jn July and August?
A.
For the detection?
Q.
Yes.
A.
No .
Q.
And a1l your techs wrote pattern recognition . Did you
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 -- now r am I getting
13
the phrases wrong?
14
A.
What you 're asking is, has the technology thats
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
which was used to complete the government contracts was your
anomaly detection atnd your pattern recognition software?
A.
I'm just looklng at something.
Q.
Please answer my question, sir.
A.
lem sorry . Go ahead .
Q.
A re you telling this Court that the contracts that
were fulfilled by eTreppid were done -- were fulfilled solely
by your pattern recognition and your anomaly detection
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
15
16
BY MR . PEEK :
Q.
Yesr solely by your source code for anomaly deteetion
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
24
about, is that the only one?

A.
No .
230
CECILIA IJIISJ;, NV CCR #246 (775) 82 7-0672
1
2
Q.
Okay . Whieh other one where it was the sole produet
or sole source code software used to fu Lfill the contract?
A.
We had a conhraet with the Department of the Navy .
Q.
Okay . And what was the nature of that contract?
A.
Searching for an anomaly.
Q.
Searching for an anomaly.
And was your software the only software used?
A.
The one for detection?
Q.
To Culfill that contract .
10
A.
Y es .
11
Q.
So none of the other eTreppid softwares were used
12
whatsoever?
13
A.
Thats 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 eTreppd ?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 eTrepp id?
23
A.
Yes .
24
Q.
And Was the contract with the Navy, the contract with
231
CBCILTA VOHLr NV CCR #246 (775) 827-0672

:
eTrepp id?
A.
Yes .
Q.
And was it a ccntract and the work undertaken on that
contract a11 performed at eTreppid?
MR. FLYNN: Objection. Lacks foundation.
THE W ITNESS ; You have to ask the question again .
THE COURT : Ask the question . I mean, I understand
the question .
BY MR . PEEK :
10
11
Q.
Was the performance under the contract with the Navy
a11 undertaken by eTreppid on eTreppid premises?
12
A.
Yes .
13
Q.
Now , is pattern recognition a part of digital
14
15
compression product?
A.
16
No .
(Plaintiff's Exhibit 25 was marked for
17
identification .)
18
BY M R . PEEK :
19
20
Q.
Did you, from time to timez prepare Powerpoint
presentation s?
21
A.
Yes.
22
Q.
Let me have you take a look at what has been m arked 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. ?
you eve seen before today.
THE CLERK : J!1st for the recordz Your Honor,
Exhibit 24 was not offered.
MR . PEEK:
Thank youz Mr. Clerk.
MR. FLYNN: No objection.
THE COURT : It 's ae itted .
This is 25?
MR . PREK :
I'k1 orfer Exhibit 24.
Yes, Your Honor .
10
(Plaintifr's Rxhibit 24 was adm itted into evidence .)
11
THE WITNESS : Okay.
12
'
.-.<
Irve looked at it .
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 #246 (775) 8.27-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed1 05/28/08 Page 28 of 87

.
A.
1 don ft recall preparing it.
Q.
Okay. But you prepared Powerpoint presentations very
similar to Lhiss did you not, sir?
A.
1 prepareci Powerpoint presentations .
Q.
And do you know ITvimage Xpress?
A.
I th knk it was the name that the company was coming up
8
9
with to name their products.
Q.
But you 're the chief technology officer at this time,
w ere you no t?
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.
Y es .
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 don t recall seeing that particu lar --
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
A.
What is --
Q.
The seventh page in.
A.
What does it start wi/h?
Q.
lt starts with ''TTvdata Xpress; ITvdataz' and it says
''supports SAN-solutions based systems.''
A.
Okay.
Q.
Okay . Th ts is talking about digital compression
1 can 't tell you .
products, is it not?
A.
Ye s .
10
Q.
And it's talking, on at least that seventh page, about
11
12
pattern-matching features, is it not?

A.
13
14
f don /t see that .

THE COURT : Third down .
BY MR . PEEK :
15
Q.
Third one down .
16
A.
I must be on the wrong page, then .
17
MR . FLYNN :
18
THE W ITNESS :
19
MR . PEEK :
20
THE W ITNESS : Okay . 1 got it . What's your question?
21
Its page 8.
I was on the sixth page .
Is it page 8, Counsel?
BY MR . PEEK :
22
Q.
Pattern-matching features, that's pattern recoqnition ,
23
is it not?
24
A.
No.
235
CECIL TA t'off.
bs NV CCR #246 (775) 827-067.2
Document 644-22 Filed( 05/28/08 Page 30 of 87
.
'
qmee
Q.
!
'
--
It's not. Okay .

Now , 7 -- go t.o 8, 9, and then page 10 .
A.
Got it.
Q.
Now , does it say there ''lTvvideo has advanced features
like pattern and bj.t recognition''?
A.
Yes .
Q.
5o eTreppid o; technology: as of March 29, 2001, under
digital compression products, was at least saying that it had
pattern and bit recognttion as far as digital compression r 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
24
But at least it was represented or part of this
Powerpoint presentation as a product that eTreppid had in March

236
CECILIA UOSZ, NV CCR #246 (775) 827-0672

..
of 2001?
A.
I don rt recal L if it did or not.
Q.
Well, you see j.t here, do you not?
A.
1 just said 1 didnbt make this document.
Q.
I understand that . You don 't have any reason to
6
7
believe that this fs not a true and correct -A.
I don 't know if. it was true or incorrect .

MR . FLYNN :
Your Honor, we need a correction on the
record. Mr . Peek pointed towards the green box and said that
10
what he ls now discussing was put on Mr. Montgom erybs computer
11
back at the time.
12
box with regard to anomaly detection?
The question was with regard to the green
13
THE COURT :
14
MR . PEEK :
i l:hink it was . I think it was.

He also said, Your Honorr that he put his
15
pattern recognition on the same computer on the same tim e frame
16
in 2003 . Il1 go back.
17
18
THE COURT :
him .
21
22
Why don 't you ask
I really don t remember.
19
20
1 don 't remember that.
MR . PEEK :
I understandr Your Honor .
Its late.
BY MR . PEEK :
Q.
When did you put the pattern recognition source code
onto your computer?
23
A.
T don 't recall the exact tim e frame .
I 'm tired.
24
Q.
Would it have been similar to the tim e you put the

237
CECILIA VOSDZ NV CCR #246 (775) 827-0672

.
.. ., I
anomaly on?
A.
lt could have been .
Q.
Would ik have been any earlier than that?
A.
1 don 't think so .
Q.
Okay . So whenever you put -- whenever you testified
you puL the anomaly detection on would have been about the same
time you put the pattern recognition source code technology on,
again , in that little otfice, in that green block on Exhibit 1?
A.
I'm not certain .
10
THE COURT : How much longer, Mr. Peek, do you think?
11
MR . PEEK :
12
THE COURT : 1 know, but 1'd like to have some idea how
13
much longer.
14
15
HR . PEEK :
I'1L try to finish up, Your Honor, in a
half an bour.
16
17
1911 try to move this along: Your Honor .
THE COURT: Then there's going to be redirect: I would

assum e?
18
MR . FLYNN :
Yes, Your Honor.
19
THE COURT: So ee ere 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 wh at T'm trying to understand -- I haven 't seen the order

238
CECILIA Voffzz NV CCR #246 (775) 827-0672

i
.'
'
. .
of remand . It 's not in my fle, anyway. And was hhis issue
presented to u'fudge McKibhen, and did Judge McKibben -- why did
Judge McKibben send tt back to state court if, in fact, it was
preempted?
5
6
7
8
9
MR . PEEK : That was the argument thah was made by

Mr . Logarz Your Honor.
MR . FLYNN :
T wasn t there . Mr. Logar will have to
address it .
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?
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
I don 't.
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
Case 3:06-cv-00056-PMP-VPC Document 644-22 FiledI 05/28/08 Page 34 of 87
MR . PEEK :
MR . LOGAR : He followed the well-crafted complaint
3
4
Your Honor --
rule, okay?
MR . FLYNN ; Your Honor, the issue that arose over in
federal court was real simple. When they puL in their original
complaint Lhat eTreppid Technologies was the California corp .,
we removed it on that basis that they pled it was a California
corp . They didn't reatze they made a mistake . They told
Judge McKibben we made a mlstake, it ls not a California corp w
10
it's a Nevada corp . Judge McKkbben said 1 have no choicer
11
there ls no diversity .
12
In the interim r 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 .
23
think that 's a very diplomatic way to handle this issue with
24
th is Court.
240
CECILIA VOHL, NV CCR #246 /775) 827-0672
I don ft
MR . FLYNN : Your Honor, I agree with the Court.
THE COURT :
I ltean r we have -- if you are correct, if
you are correct -- and 1 thnk the issue that really is whether
or not the material we're talking about was copyrighted back in
the e80s sometime. RtH: if youdre correct, then weeve just
wasted a whole 1ot of ti.me, and frankly, I would think that if
that was your position from way back when, 1 would have heard
about this before now .
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 Im going to hear this
20
m atter and 1m going to make a decision in this matter, and
21
then if the federal court says I1n preempted, that's fine .
22
23
24
MR . PEEK : 1 could address why they did what they did ,

but 1 won bt .
THE COURT:
TL' doesn 't matter .

241
CECILIA VOSA, NV CCR #246 (775) 827-0672

(. -,
... '
MR . PZEK ; Okay . Thank you .
THE COURT REPORTER: Your Honor, 1 just want to say,
for khe record, T cannot go to 10 o'clock. Sorry .
THE COURT : You can 't or you won lt?
THE COURT REPOBTER ; I cannot .
THE COURT : How much longer do you Lhink you can go?
1 mean, if webre not going to go to the end , we might as well
stop right now .
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 :3 0 .
12
13
THE COURT:
1 15ort of think I have to be here for
that: don 't 1?
14
THE COURT REPORTER :
15
MR . PEEK :
Yes, Your Honor .
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.
18
think the Court will do that . But 1 also want to ask for some
19
exp ansion of that . But may I have th e Court's indulgence?
20
21
22
And I
MR . FLYNN : I 'm going Lo need to be heard on that,

Your Honor .
THE COURT : Well, T means we got a situation where
23
webve got a court reporter thats 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.
THK COURT RKPORTER ; You have a Whip?
THE COURT :
MR . PEEK : Thanks, Cecilia.
MR . FLYNN : You seem way too kind, Judge .
MR. PEEK: 1 would just sk some indulgence, Your
Honor , for fkv: minutes .
THE COURT : Can you hang in there for five?
THE COURT REPORTER :
10
11
12
Yes.
THE COURT : A L) right .
Let 's go flve-
BY MR . PEE K :
Q-
M r. Montgomeryv you've heard Sloan bs 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 .
19
Q.
That never oceurred?
20
A.
That's correct .
21
Q.
So you were never cleaning up files on either the
22
'
Yeah, I do .
SA
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

.
A.
I might have.
Q.
-- of 605.
So you might have cleaned them up?
A.
Yeah .
Q.
So when Mr. Venable was askinq you questions about
6
7
8
9
10
what you were doing, you said you were cleaning up files .
A.
No, no, I've never had a conversation with M r. Venable
regarding this.
Q.
And then you read the affidavit of Mr . Balls have you
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.
You fd 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
cop ies of those files that you were deleting on h1s server -244
CECILIA Molff, NV CCR #246 (775) 827-0672

I
or, excuse me, on his hard drive, on the source server, Lhat he
would still be able to access?
A.
He has a direct connection to the source server.
Q.
Did you tell him that, sir --
A.
No .
Q.
-- that you were deletinq files, that he could have
copies from the source server?
A.
No .
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 M r. 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 M r . 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 didn bt.
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
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filedk 05/28/08 Page 40 of 87

J'..
.
that he would request it from you and then you would make a
copy of it?
A.
Noh Lhat J recall.
Q.
So i.t could have happened?
A.
He didn 't make a request of me . No .
Q.
So a11 of these lndividuals who gave affidavitsz and
M r. Zehang who testified and Mr . Venab le who testified , are
lying about the fact that you deleted source code off of their
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
14
MR. FLYNN: At that pointy 1 think an objection would

be best .
15
16
MR. PEER; That objection, Your Honors is that out oc

Law & Order ?
17
18
'
THE COURT : No, the question is, the one where the
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.
22
have more questions, Your Honor. Let me ask one more .
23
BY MR . PEEK :
24
Q.
I
.
If the Court were to reconvene wiLh you at eTreppid 's

246
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed!' 05/28/08 Page 41 of 87

z .1
u.u.5j
offices, would you be ab le to then show the Court and everybody
else where a1l this code is that eTreppid says has been
deleted?
4
5
MR. FLYNN : Objection. Your Honor, the Court cannot

order that.
MR . PEEK :
THE COURT :
T think the Court can order that .
I donft know if I could order that we
convene there, but 1 m kght be ab le to order that -- something
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 :
14
THE COURT: We dll see, when that day comes' whether I
The Court can convene and show us where --
15
can or not.
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 possib ility: could you
20
do that?
21
BY MR . PEEK :
22
Q.
I don lt know, franklyz if I can or if I can rt .
Could you do that?
23
THE COURT: And 1111 let him answer that question .
24
THE WITNESS: It might be possib le, but considering

247
CECILIA Vosfr NV CCR #246 (775) 827-0672
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filed

05/28/08 Page 42 of 87
f
.
/,
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>
the fact that they took all the drives out of the machines and
moved them around, 1 would have no idea.
MR. PEEK :
Your Honor, f still have the time tbat I
said T would take on cross in terms of things like promissory
notes and dilutions and the ltke, but 1111 reserve that for
another day .
THE COURT :
1 think what weAre going to have to do,
Counsel , is you 're gong to have to speak with Sheila, my
adm inistrative assistantz and set this mahter for the first
10
earliest time that we lave 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 :
18
They sald three or four days.
19
: believe -- I spoke with t& e attorneys .
THE COURT : A l 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 mornng and find out what we lve got available . 1 '11
22
give you my earliest available time .
23
24
MR . PEEK : Can 1 tell the Court T have a horse show
with my daughter that Ifm attending on the 16th. 1 would ask

248
CECILIA VO/Ze NV CCR #246 (775) 627-0672
Document 644-22 Filed
05/28/08 Page 43 of 87
f.. k
k
the Court not to order me to continue this and m iss my
daughterls horse show .
THE COURT : WC?LL, alL I 'm saying is, you lre the people
that want this thtnq done expeditiously . And 11m aaying f'm
willing to accommodate that, and I'm wilYing -- you know , in
consideratkon of other counsel 's calendars, as well, f'm
willing to schedule it after hours.
it --
9
10
Iem w illing to schedule
MR . PERK : This Saturday?

THE COURT : This Saturday?
I got my kids, but I could
11
work around that if everybody else can work around 1t.
12
the problem . And that xncludes staffr and it includes the
13
court reporter . ft includes a11 of the attorneys --
14
15
16
That brl
MR . PKEK: Could we qo off the recordr Your Honor, for

M s. Vohl, to have thls discussion, or not?
THE COURT : Well, al1 right. Let's do this . Letls go
17
ahead -- we lll 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
22
reset it.
And, Cecilias you can go off the record right now ,
23
unless counsel wants to put someth ing on record, and we can
24
talk about schedultng and that sort of stu ff.

249
CECILIA ;/S, NV CCR #246 (775) 827-0672
Document 644-22 Filed( 05/28/08 Page 44 of 87
t'
. -.
f
q
.M T
z
1
MR . FLYNN :
1 hate to impose on the court reporter:
but T have an argumenh a:s to why the order cannot continue .
lt 's not leqally possible for this Court --
THE COURT :
T haven 't even gotten to that.
MR . FLYNN : -- to continue the current TRO .
THE COURT : Because of the 15 days?
MR . FLYNN : Because of the 15 daysr because there ia
no record that has been created where a burden of proof has
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 th ngs . 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 som ebody 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
/'...
)
t.
in the record of irreparable harn . There's -- the worst that
cou ld possibly happen if this order were vacated, under the
worst-case scenarloz is Lhat Mr. Montgomery would m ake a deal
w ith the government or somebody, money would be created, and
theyld have a claim for money .
Sor how could equity and relief for irreparable harm on this
record possibly exist?
That 's the worst-case scenario .
THE COURT : A re you asking me a question?
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 restraim inq 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 h im from talking
14
to anyone, talking to the Un ited state:s Government: talking to
15
the individuals he regularly communicates with on this sublect.
16
He communicated with one of them today.
17
18
19
MR . PEEK : Thats in violation of the order: Your

Honor.
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)
',- .
youw I talked with the United states Attorney today . And 1 was
told that they would get back to me, they hatAl't heard a word
about it, don 't know anything about it, didn lt seem to be
concerned about it.
had . And like I'vf) been sayng a11 day longr if they bre going
to show up , they show up , but they haven't shown up .
MR . FLYNN :
I gave them al1 the information that I
In liqht: of what Jlve heard today: I'm
very confident tha: someone is going Lo show up very shortly .
I doubt the U .S . A ttorney'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 :
13
MR . FLYNN : He 'd probably be from W ashington .
14
THE COURT : When we continue thls hhing, too, he can
15
16
Then 1et him show up .
show up .
MR . FLYNN : Well, the original order, Your Honor,
17
simp ly said they bve not met their shandard of proof.
18
course, they had al1 these declarations, all these affidavits,
19
most of which have now been shown to be extremely --
20
21
22
THE COURT : What original order?
Of
Judge Polaha 's
original order?
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
Case 3:06-cv-00056-PMP-VPC Document 644-22 Filedt 05/28/08 Page 47 of 87

s.
-)
w,
standard of proof as reguired by NRCP 65B and C at the meeting
with the Court:.'f
THE COURT : Well --
MR . FLYNN : And, if anything, Your Honor, not only has
there been nothing more added: what has been brought into the
court today has been completely brought into question .
%HE COURT : A11 right . Here's what 1'm going to do .
We re going to continue this hearing until the time that will
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 .
12
5 o 'clock tomorrowr and 1'11 fax it to a11 the parties .
13
14
MR . FLYNN : And then weRll be able to comment on it ,
Your Honor, or subm it --
15
16
I will get you a written order no later than
MR . PEEK : Your Honor: until you make that decision,

could the order that exists today remain in place?
17
THE COURT ; Until 5 olclock tomorrow .
18
MR . PEEK :
19
THE COURT : Thats the order, until 5 o 'clock
Yes.
20
tomorrow . so kf I can 't do ite I can 't do itz but I think I
21
can .
22
23
24
MR . PEEK : Your Honor, can the order remain in p lace

until such time as the Court --
THE COURT: Well, 1'11 get the order done tomorrow .

253
CECILTA MOSI, NV CCR #246 (775) 827-0672

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1'11 get it done if l've got to stay up tonight to do it# but
2
3
1'11 get it done .

And 1 do think that -- as f said, I had a conversation
with the judge. He told me he did not reach the merits on this
thing . And in my review of the material, I felt , when the TRO
was presented to me, that there was sufficient evidence to
support the TRO for the short period of time that we talked
8
9
about.
10
order?
11
12
have it .
13
the order.
14
prejudicez' and so I suspected that there might be something
15
more to that, and I asked him .
MR. FLYNN ; Would Your Honor like a copy of this
THE COURT : Ifve got Judge Potaha fs order.
16
'
If the clerk is willing, 1311 make a copy so you 'll
T've qo%
It was not clear to me when he said ''without
So like 4 said z 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
thin king, to seriously consider whether money damages uould be
22
adequate and whether irreparable harm has been met on these
23
24
facts .
THE COURT:
If your client can 't afford to feed his

254
CECILIA MOSZz NV CCR #246 (775) 827-0672
Document 644-22 Filed
k .
l 05/28/08 Page 49 of 87
fam ily, how is he going to afford to pay damages?
MR . FLYNN :
1 don 't Lhink thatfs relevant in
determining whether or not a judgment utimately could be
awarded against --
THE CQURT: You bre rlght . It 's probably not relevant .
MR . FLYNN :
MR . PEEK : This is a trade secret, too, in terms of
irreparable harm .
9
10
MR . FLYNN :
Jt's a trade secret only in term s of
M r. Montgomery; otherwiser he wouldnlt be here .
11
12
-- Mr . M ontgomery .
THE COURT: And this order is in effect unttl
5:00 p .m . tomorrow s February 8th.
13
That 's my decision .
MR . PEEK; And then you lll give us another one at that
14
15
tim e?
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 :
20
21
THE COURT : 1111 qive you another one at that time .
Thank you , Your Honor .
(Proeeedings concluded.)
-000-
22
23
24
255
STATE OF NEVADA
COUNTY OF WASHOE
) ss.
)
I # CECILIA VOHL, Official Reporter of the Second
Judicial District Cotlrt of the State of N'

evada , in and for
the County of Washoe, tjtl hereby certify;
Th at as such repozter, I was present in Department
No. 9 of the above court on satd date, time and houry and I
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
17
DATED : At Renoy Nevada, this

, 2006.
18
19
day of
?$r > =
CECILIA VOHL , NV CCR #246
20
21
22
23
24
256
CECILIA VOHLr NV CCR #246 (775) 82 7-0672

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ET V DM State # 644-21 & 22 - Feb 7 2006 Transcript Vol 2

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Case 3:06-cv-00056-PMP-VPC Document 644-21 Filed 05/28/08 Page 1 of 207

M ONTG OM ERY v.ETREPPID, DEPT OF DEFENSE

(VOLU VIE 11OF11),IN 2NDJtyolctAl-DISTRICT COURT

Case 3:06-cv-00056-PMP-VPC Document 644-21 Filed 05/28/08 Page 2 of 207

(EN ANJI l?OR THE COIJNTY OF WASHOE

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

DENNIS MONTGOMERY, an individual;

Tuesday, February 7, 2006

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

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

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

For the P kainti.ff:

IIALEZ LANE, PEEK , DENNISON

E!Y : STEPHEN J . PEEK, ESQUIRE

PILLSBURY W INTHRO P SHA W P ITTM AN

RY : DAVTD A . JAKOPIN, ESQUIRE

2475 Hanover Street

For the Defenl

LAW OFFICES OF LOGAR & PULW R , A PC

And PHILIP H . ST ILLMAN, ESQUIRE

CFCTJ/TJI %DIjL, NV CCR #246 (775) 827-0672

Case 3:06-cv-00056-PMP-VPC Document 644-21 Filed 05/28/08 Page 4 of 207

WITNESS FOR !qjr PLAII

Direct Examination (Continued) by Mr. Jakopin

WITNESSES F()R THE EIJON NTIFF

Direct Examination by Mr . Flynn

Cross-Examination by M z-. Peek

Plaintiff 's Kxhibit l0

Plainti ff s Kxhibit 12.

Plaintiff 's Zxhibi1: 13

Plaintiff 's 'Zxhibit 14

Plaintiff 's Zxhibit 15

Plaintiff 's Exhibit 17

De fendant 's Exhibit 18

Defendant 's Exhibit 20

Defendant 's Exhibit 2 l

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Case 3:06-cv-00056-PMP-VPC Document 644-21 Filed 05/28/08 Page 5 of 207

MJGAKED ADM ITTED

De fendant 's Kxhib lt 22

Plaintift 1s Kxhib i.t 23

Plaint iff 1s '

Plainti ff 's 'Zxhib.

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Case 3:06-cv-00056-PMP-VPC Document 644-21 Filed 05/28/08 Page 6 of 207

RENO, IAJEVADA, T'UFSDAY: FEBRUARY 7 , 2O0 6, 3 :25 P . M .

liltlase be seated . Go ahead .

DIREC'r EXAMINAT ION (CONTINUED)

Thank you . Mr . Trepp, could you talk a l ittle bit

about, from the format:ion ot the business in 1998w activities

that the company dtd t.o sort of grow the business .

As I said berore : we basically started out as an R&D

a half to two years or developing before we could actually get

into a quasi-zonmterciial mode where we could actually start

giving demons trations 01' putting together a Powerpoint or

something of Lhat ilk, but we started showing commercial

customers the type of business that we potentially were trying

The first contract that we were able to secure after

an awfu l long time of negotiatkons was w ith General Ekectric

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

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

or upgrades t.o the system that we originally builtw which they .

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