29082 – August 29th 2002 – penalty phase – David Westerfield trial – morning 2

SAN DIEGO, CALIFORNIA, THURSDAY, AUGUST 29, 2002, 9:00 A.M.


Penalty phase August 29 th 2002 – 2


Richard Coutts (orthopedic surgeon), David Petch (engineer), Judy Ray (owner of a company named Prepack)


10165

1 THE COURT: OKAY. WELCOME BACK, LADIES AND GENTLEMEN.

2 ALL RIGHT. MR. BOYCE.

3 MR. BOYCE: THANK YOU, YOUR HONOR. DOCTOR COUTTS.

4

5 -RICHARD COUTTS, +

6 DEFENDANT’S WITNESS, HAVING BEEN SWORN, TESTIFIED AS FOLLOWS:

7

8 THE COURT: PLEASE HAVE A SEAT.

9 THE WITNESS: THANK YOU.

10 THE CLERK: SIR, WOULD YOU PLEASE STATE YOUR NAME AND

11 SPELL IT FOR THE RECORD?

12 THE WITNESS: IT’S RICHARD COUTTS, C-O-U-T-T-S.

13

14 DIRECT EXAMINATION +

15 BY MR. BOYCE:

16 Q.: WHAT IS YOUR OCCUPATION, SIR?

17 A.: I’M AN ORTHOPEDIC SURGEON.

18 Q.: AND HOW LONG HAVE YOU BEEN AN ORTHOPEDIC SURGEON?

19 A.: I’VE BEEN IN PRACTICE HERE IN SAN DIEGO SINCE 1971,

20 FOR 31 YEARS.

21 Q.: ARE YOU FAMILIAR WITH SOMETHING THAT’S KNOWN AS A

22 CONTINUOUS PASSIVE MOTION DEVICE?

23 A.: VERY MUCH SO.

24 Q.: AND WHAT IS THAT DEVICE?

25 A.: IT’S A PIECE OF MOTORIZED MACHINERY THAT IS

26 DESIGNED TO FIT THE ANATOMY OF THE EXTREMITIES. THE MOTOR

27 DRIVES THE MACHINE SO AS TO MOVE THE JOINTS OF THE EXTREMITY

28 THROUGH A RANGE OF MOTION, AND IT’S USED AFTER SURGERY OR AFTER

10166

1 INJURY TO JOINTS PRINCIPALLY.

2 Q.: DID YOU CONTACT A COMPANY KNOWN AS SUTTER

3 CORPORATION IN RELATION TO THE DEVELOPMENT OF THE CONTINUOUS

4 PASSIVE MOTION DEVICE?

5 A.: I DID.

6 Q.: WHEN WAS THAT?

7 A.: I DON’T REMEMBER EXACTLY. IT WAS IN AROUND 1980,

8 1980 TO ’81.

9 Q.: WHY DID YOU CONTACT THE SUTTER CORPORATION?

10 A.: I HAD HEARD A LECTURE FROM AN ORTHOPEDIC SURGEON

11 FROM TORONTO, A FELLOW BY THE NAME OF ROBERT SAULTER, AND HE HAD

12 DONE RESEARCH SHOWING THAT YOU COULD CONTINUOUSLY MOVE A JOINT

13 AND THAT IT AIDED THE HEALING OF CARTILAGE.

14 AND I WAS SCRAPPLING WITH THE PROBLEMS OF GETTING

15 PATIENTS’ KNEES TO MOVE AFTER KNEE REPLACEMENT, AND THOUGHT THAT

16 ON THE BASIS OF WHAT HE WAS REPORTING, THAT THIS WOULD BE A GOOD

17 MODALITY TO USE IN GETTING KNEE REPLACEMENT PATIENTS ON THE ROAD

18 TO RECOVERY.

19 A GOOD FRIEND OF MINE WHO WORKED FOR AN ORTHOPEDIC

20 COMPANY BACK EAST WAS MOVING OUT TO SAN DIEGO TO TAKE OVER THE

21 PRESIDENCY OF SUTTER BIOMEDICAL, AND HE WAS ASKING IF I HAD ANY

22 IDEAS FOR A PRODUCT, AND I TOLD HIM ABOUT CONTINUOUS PASSIVE

23 MOTION AND HOW IT MIGHT BE A USEFUL MODALITY TO TREAT TOTAL KNEE

24 PATIENTS, AND THAT WAS THE BEGINNING.

25 THE COMPANY MADE AN INITIAL PROTOTYPE DEVICE. WE

26 TESTED IT IN PATIENTS AND FOUND THAT IT WAS QUITE HELPFUL, AND

27 THE REST IS HISTORY, AS THEY SAY.

28 Q.: WHEN YOU CONTACTED SUTTER DID YOU MEET WITH

10167

1 SOMEBODY BY THE NAME OF DAVID WESTERFIELD?

2 A.: YES.

3 Q.: AND WAS THAT IN CONJUNCTION WITH THE DEVELOPMENT OF

4 THIS CONTINUOUS PASSIVE MOTION DEVICE?

5 A.: YES.

6 Q.: SHOWING YOU EXHIBIT 218, DO YOU RECOGNIZE THAT?

7 A.: I DO.

8 Q.: AND WHAT IS EXHIBIT 218?

9 A.: THIS IS A CONTINUOUS PASSIVE MOTION DEVICE FOR THE

10 LOWER EXTREMITY. IT’S ABOUT A THIRD GENERATION DEVICE IN THE

11 HISTORY OF SUTTER BIOMEDICAL’S INVOLVEMENT.

12 THERE WAS THE INITIAL PROTOTYPE. THEN THEY MADE

13 ANOTHER ONE THAT PRECEDED THIS WHICH WAS REALLY QUITE GOOD BUT

14 APPARENTLY WAS VERY EXPENSIVE, AND THEY NEEDED TO MAKE ONE THAT

15 WAS LESS EXPENSIVE TO MAKE AND SO THIS MODEL WAS PRODUCED.

16 Q.: WHEN WOULD YOU OR WHEN WOULD A DOCTOR LIKE YOURSELF

17 USE THE — RECOMMEND THAT A PATIENT USE ONE OF THESE DEVICES?

18 A.: WELL, AS THEY SAY, I INITIALLY LOOKED AT IT AS A

19 DEVICE FOR FACILITATING THE REHABILITATION OF PATIENTS AFTER

20 KNEE REPLACEMENT, WHICH IS A FAIRLY COMMON PROCEDURE. ALMOST

21 300,000 OF THESE ARE DONE EVERY YEAR IN THIS COUNTRY. IT’S ALSO

22 PARTICULARLY HELPFUL WHEN THERE’S BEEN INJURY TO JOINT SURFACES.

23 JOINTS ARE WHERE TWO BONES COME TOGETHER AND THE

24 ENDS OF THE BONES ARE COVERED WITH CARTILAGE. AND IF THERE’S

25 BEEN DAMAGE TO CARTILAGE, IT CAN BE VERY DEVASTATING TO AN

26 INDIVIDUAL BECAUSE CARTILAGE HAS A VERY POOR CAPACITY TO HEAL.

27 AND THE MAJOR PART OF THE WORK THAT THIS DR.

28 SAULTER HAD DONE WAS TO SHOW THAT BY USING CONTINUOUS PASSIVE

10168

1 MOTION YOU COULD FACILITATE THE HEALING OF CARTILAGE. AND THIS

2 DEVICE IS USED NOW IN A NUMBER OF PROCEDURES WHICH HAVE EVOLVED

3 FOR HEALING OF DAMAGE TO JOINT SURFACES.

4 FRACTURES AROUND JOINTS ALSO ARE AIDED BY EARLY

5 MOTION, AND THIS IS BASICALLY A WAY OF GETTING EARLY MOTION TO

6 THE JOINTS.

7 Q.: SO IF A PERSON WOULD HAVE THEIR KNEE REPLACED THEY

8 WOULD BE SENT HOME WITH THIS DEVICE TO AID IN THE REHABILITATION

9 PROCESS?

10 A.: NOT ROUTINELY. I MAKE THE DECISION BASED UPON HOW

11 THEY’RE DOING IN THE HOSPITAL. THEY GO INTO ONE OF THESE

12 IMMEDIATELY AFTER THE SURGERY, AND IT’S STARTED MOVING RIGHT

13 AWAY AND THEN, DEPENDING UPON THEIR PROGRESS WHILE THEY’RE IN

14 THE HOSPITAL, WE MAKE THE DECISION AS TO WHETHER TO SEND THEM

15 HOME WITH ONE.

16 Q.: SO BASICALLY THAT DEVICE IS FOR THE REHABILITATION

17 OF SOMEONE THAT’S INJURED OR AFTER SURGERY?

18 A.: THAT’S CORRECT.

19 Q.: DO YOU HAVE ANY IDEA HOW MANY PEOPLE HAVE BENEFITED

20 FROM THE USE OF THIS DEVICE?

21 A.: OH, I WOULD GUESS IT’S BEEN USED IN THE MILLIONS BY

22 NOW.

23 Q.: THAT SAME DEVICE THAT’S BEING USED IN HOSPITALS

24 TODAY, ISN’T IT?

25 A.: A DEVICE LIKE THIS, NOT NECESSARILY THIS DEVICE.

26 THERE WERE A NUMBER OF OTHER MANUFACTURERS OF

27 DEVICES THAT BECAME QUITE POPULAR, SO THERE HAVE BEEN A NUMBER

28 OF OTHER DESIGNS OUT THERE.

10169

1 Q.: IN OTHER WORDS, AFTER THIS DEVICE WAS DEVELOPED

2 THERE WERE COPIES OF THIS DEVICE —

3 A.: YES.

4 Q.: — THAT ARE STILL BEING USED TODAY?

5 A.: YES.

6 Q.: WOULD YOU SAY THIS DEVICE IS VERY BENEFICIAL?

7 A.: I THINK SO.

8 MR. BOYCE: THANK YOU. NOTHING FURTHER.

9 THE COURT: CROSS-EXAMINATION.

10

11 CROSS-EXAMINATION +

12 BY MR. DUSEK:

13 Q.: DOCTOR, THE IDEA FIRST CAME I THINK YOU SAID FROM A

14 DR. SAULTER IN TORONTO?

15 A.: THAT’S CORRECT.

16 Q.: AT LEAST THAT’S THE FIRST YOU HEARD OF IT?

17 A.: THE CONCEPT OF CONTINUOUS PASSIVE MOTION.

18 Q.: DID HE HAVE A BABY VERSION OF IT AT THAT TIME?

19 A.: HE — I SPOKE TO HIM AFTER HIS LECTURE, AND I SAID

20 WHERE CAN I GET ONE OF THESE DEVICES, AND HE SAID THERE ISN’T

21 ONE. IT’S ONLY AN EXPERIMENTAL WORK THAT HE HAD DONE IN RABBITS

22 AT THAT POINT.

23 Q.: PEOPLE THAT HAD THE JOINT REPLACEMENT BACK BEFORE

24 THESE THINGS WERE INVENTED OR DESIGNED, WERE YOU DOING THE

25 REPLACEMENTS DURING THAT TIME?

26 A.: YES.

27 Q.: AND PEOPLE WERE RECOVERING FROM THEM?

28 A.: THEY WERE BUT IT WAS A LONGER, SLOWER AND MORE

10170

1 DIFFICULT PROCESS.

2 Q.: THE INDIVIDUAL THAT YOU TALKED ABOUT BEING A GOOD

3 FRIEND THAT WAS COMING OUT HERE, WHO IS THAT?

4 A.: HIS NAME IS BILL ISENECKER.

5 Q.: IS A DR. RICHARD STEBBIN INVOLVED IN ANY OF THIS

6 PROCESS?

7 A.: DR. STEBBIN WAS CONTACTED BY SUTTER BECAUSE THEY

8 FOUND OUT THAT HE WAS USING THESE DEVICES TO FACILITATE THE

9 HEALING OF CARTILAGE. DOCTOR STEBBIN IS A INNOVATOR OF A

10 TECHNIQUE FOR GETTING CARTILAGE TO HEAL WHERE HE TAKES A LITTLE

11 ICE PICK AND ICE PICKS THE BONE WHERE THE CARTILAGE HAS BEEN

12 REMOVED BECAUSE OF INJURY OR DAMAGE, AND THEN HE USES THE DEVICE

13 TO FACILITATE THE FORMATION OF A NEW TISSUE IN THAT AREA.

14 Q.: THAT WAS A PREDECESSOR TO WHAT WE’RE TALKING ABOUT

15 HERE?

16 A.: IT WAS MORE OR LESS CONCURRENT.

17 Q.: THAT DEVICE THAT HE WAS USING CAME FROM SOME OTHER

18 COMPANY?

19 A.: NO. I THINK HE WAS USING SUTTER’S DEVICE.

20 Q.: THE FIRST DEVICE YOU TOLD US ABOUT WAS A FIRST

21 GENERATION DEVICE?

22 A.: YES.

23 Q.: WHEN WAS THAT?

24 A.: IT WAS AROUND 1980 OR ’81.

25 Q.: WHERE DID THAT COME FROM?

26 A.: SUTTER.

27 Q.: DO YOU KNOW WHO WAS WORKING ON IT AT THAT TIME?

28 A.: COULDN’T TELL YOU. I DON’T REMEMBER.

10171

1 Q.: WERE YOU INVOLVED WITH IT AT THAT TIME?

2 A.: I WAS.

3 Q.: WAS THE DEFENDANT INVOLVED WITH IT AT THAT TIME?

4 A.: I DON’T REMEMBER.

5 Q.: WHAT WAS WRONG WITH THAT ONE?

6 A.: IT WAS A RATHER CUMBERSOME AFFAIR. IT WAS A LARGE

7 ELECTRIC MOTOR THAT WE MOUNTED ONTO AN OVERHEAD FRAME ON THE

8 BED, AND THEN WE HAD ROPES AND PULLEYS TO LIFT THE FRAME. IT

9 WAS RATHER AWKWARD TO USE.

10 Q.: THE GENERAL CONCEPT WAS IN EXISTENCE AT THAT TIME?

11 A.: THAT DEVICE WAS USED BASICALLY FOR PROOF OF

12 CONCEPT.

13 Q.: FOR HOW LONG?

14 A.: ALMOST IMMEDIATELY AFTER THAT PROTOTYPE HAD BEEN

15 DEVISED THEY WERE WORKING ON DEVELOPING A COMPUTERIZED

16 SELF-CONTAINED MOTORIZED DEVICE.

17 Q.: HOW LONG WAS THAT DEVICE BEING USED?

18 A.: WHICH DEVICE?

19 Q.: THE FIRST, FIRST GENERATION?

20 A.: MAYBE A COUPLE OF YEARS.

21 Q.: THE SECOND GENERATION WAS WHEN?

22 A.: ABOUT THAT TIME, AFTER TWO YEARS, SO ’83, ’82, ’83.

23 I’M GUESSING AT THIS. NOW DON’T HOLD ME TO THAT.

24 Q.: THAT’S FINE.

25 WERE OTHER COMPANIES WORKING ON THIS DEVICE ALSO?

26 A.: YES.

27 Q.: WHAT OTHER COMPANIES?

28 A.: THERE’S ONE CALLED DANNICK THAT MAKES THESE

10172

1 DEVICES. THERE HAVE BEEN A NUMBER THAT HAVE COME AND GONE. I

2 DON’T REMEMBER THEIR NAMES NOW.

3 Q.: THE SECOND GENERATION, WERE YOU INVOLVED WITH

4 THE — ANY OF THE PRODUCTION OF THAT ONE?

5 A.: ONLY IN TERMS OF CONCEPTS.

6 Q.: WAS THE DEFENDANT INVOLVED IN THAT ONE?

7 A.: COULD WELL HAVE BEEN.

8 Q.: DO YOU REMEMBER IF HE WAS?

9 A.: NOT SPECIFICALLY.

10 Q.: AND THE THIRD GENERATION IS WHAT WE HAVE A PICTURE

11 OF HERE IN COURT?

12 A.: YES.

13 Q.: WHEN WAS THAT?

14 A.: THAT WAS PROBABLY AROUND 1985, ’86. I’M GUESSING

15 AGAIN.

16 Q.: AND THERE WERE STILL OTHER DEVICES SIMILAR TO THAT

17 BEING MARKETED?

18 A.: YES.

19 Q.: YOU PICKED A COMPANY TO TAKE YOUR IDEA TO, IS THAT

20 RIGHT?

21 A.: YES.

22 Q.: DID YOU HAVE A FINANCIAL INVOLVEMENT IN THE

23 PRODUCTION OF THIS?

24 A.: I HAD A ROYALTY AGREEMENT WITH THE COMPANY.

25 Q.: WHICH MEANS WHAT?

26 A.: THAT BASED ON SALES I WOULD GET A PERCENTAGE.

27 Q.: WHAT PERCENTAGE?

28 A.: IT WAS SEVEN PERCENT.

10173

1 Q.: WHAT DO THESE THINGS COST?

2 A.: I DON’T REMEMBER.

3 Q.: GIVE US AN ESTIMATE, IF YOU WOULD.

4 A.: $2,000.

5 Q.: AND ONCE THE THIRD GENERATION WAS DESIGNED AND

6 STARTED TO BE USED HAS THERE BECOME A FOURTH GENERATION?

7 A.: YES.

8 Q.: IS THERE A FIFTH?

9 A.: NO.

10 Q.: WHY WAS THERE A FOURTH GENERATION?

11 A.: THERE WAS A DESIRE TO DESIGN A DEVICE SPECIFICALLY

12 FOR THE HOSPITAL, AND THEY MADE A DEVICE THAT WAS MOUNTED TO THE

13 FRAMING THAT GOES OVER THE BED OF A HOSPITAL BED AND IT GIVES

14 YOU MORE CONTROL OF THE LEG.

15 Q.: WAS THE DEFENDANT INVOLVED IN THE FOURTH

16 GENERATION?

17 A.: I DON’T REMEMBER.

18 Q.: THE FOURTH GENERATION IS BETTER THAN THE THIRD?

19 A.: IT’S A MORE SPECIALIZED DEVICE AND IT WORKS VERY

20 WELL IN THE HOSPITAL. IT CAN’T BE USED AT HOME. IT REQUIRES AN

21 ATTACHMENT TO THE HOSPITAL BED.

22 Q.: DID YOU CONSULT WITH CARMEN GENOVESE REGARDING THE

23 WORK THE COMPANY DID?

24 A.: HE WAS MY MAIN CONTACT.

25 Q.: HE’S THE ONE THAT BASICALLY HIRED YOU AS A

26 CONSULTANT?

27 A.: NO. MY RELATIONSHIP WITH THE COMPANY WAS

28 ESTABLISHED BY VIRTUE OF BEING THE — USE THE WORD SURGEON

10174

1 INNOVATOR, SO I WAS INVOLVED PRINCIPALLY BECAUSE I BROUGHT THE

2 IDEA TO THE COMPANY.

3 Q.: THIS IDEA WAS PATENTED?

4 A.: YES.

5 Q.: HOW — WITH THE FIRST GENERATION, WAS THAT

6 PATENTED?

7 A.: NOT THE DEVICE.

8 Q.: WHAT WAS?

9 A.: THE CONCEPT.

10 Q.: THE SECOND GENERATION WAS THERE ANY PATENTS?

11 A.: I DON’T KNOW. I DIDN’T — I HAD NOTHING — MY NAME

12 WAS ON THE FIRST PATENT AND I DON’T KNOW ABOUT ANY PATENTS SINCE

13 THEN.

14 Q.: ALL RIGHT.

15 BY YOUR ARRANGEMENT AND INVOLVEMENT IN THIS CASE,

16 DOES THAT MEAN THAT EVERY TIME YOU PRESCRIBE IT TO BE USED BY

17 YOUR PATIENT OR ANYONE ELSE’S PATIENT THAT YOU GET A — DO YOU

18 GET PAID FOR THAT?

19 A.: NO.

20 MR. FELDMAN: OBJECTION, MISSTATES THE EVIDENCE,

21 INVOLVEMENT IN THIS CASE, YOUR HONOR.

22 THE COURT: WE’RE NOT TALKING IN THIS CASE. WE’RE

23 TALKING ABOUT THE DEVICE HE’S WORKING WITH.

24 LET’S HAVE IT READ BACK, OPHELIA, SO THE DOCTOR CAN

25 ANSWER THE QUESTION.

26 (RECORD READ)

27 THE WITNESS: NO.

28 ///

10175

1 BY MR. DUSEK:

2 Q.: DO YOU WORK AT A HOSPITAL?

3 A.: I DO.

4 Q.: IS THIS THE ONLY DEVICE BEING USED FOR THIS TYPE OF

5 WORK OR ARE THERE OTHER MODELS BEING USED ALSO?

6 A.: AT THE HOSPITAL WHERE I WORK THERE’S ONLY ONE

7 DEVICE CURRENTLY BEING USED, AND IT’S THE SUTTER DEVICE. SUTTER

8 IS A COMPANY — ACTUALLY DOESN’T EXIST ANYMORE.

9 Q.: THE OTHER COMPANIES THAT MARKET THIS SAME PRODUCT,

10 THAT’S WHAT I’M LOOKING AT, ARE THOSE USED IN OTHER HOSPITALS?

11 A.: YES.

12 Q.: WHICH HOSPITALS ARE THEY USED IN?

13 A.: I CAN’T TESTIFY TO THAT. I DON’T WORK IN OTHER

14 HOSPITALS, SO I’M JUST AWARE OF THE FACT THAT OTHER DEVICES ARE

15 USED.

16 Q.: AND WHEN YOU TALK ABOUT THE PEOPLE THAT HAVE

17 BENEFITED FROM THIS DEVICE, IT’S ALL THE DEVICES THAT ARE BEING

18 USED TO HELP THE REHABILITATION THAT YOU’RE TALKING ABOUT?

19 A.: SURE.

20 MR. DUSEK: THANK YOU, DOCTOR.

21 THE COURT: ANYTHING FURTHER, MR. BOYCE?

22 MR. BOYCE: NO, YOUR HONOR.

23 THANK YOU.

24 THE COURT: ALL RIGHT.

25 DOCTOR, THANK YOU VERY MUCH FOR COMING IN. YOU’RE

26 FREE TO LEAVE THESE PROCEEDINGS. REMEMBER, HOWEVER, YOU’RE

27 UNDER AN ADMONITION NOT TO DISCUSS YOUR TESTIMONY UNTIL THE

28 MATTER’S CONCLUDED, OKAY?

10176

1 THE WITNESS: SURE.

2 THE COURT: WOULD YOU MIND HANDING THAT TO ONE OF THE

3 BAILIFFS ON YOUR WAY OUT SO WE DON’T LOSE TRACK OF IT?

4 THE WITNESS: SURE.

5 THE COURT: OKAY.

6 MR. BOYCE.

7 MR. BOYCE: WE CALL DAVID PETCH.

8

9 -DAVID PETCH, +

10 DEFENDANT’S WITNESS, HAVING BEEN SWORN, TESTIFIED AS FOLLOWS:

11

12 THE COURT: PLEASE HAVE A SEAT, SIR.

13 THE CLERK: SIR, WOULD YOU PLEASE STATE YOUR NAME AND

14 SPELL IT FOR THE RECORD?

15 THE WITNESS: DAVID BRIAN PETCH, P-E-T-C-H FOR THE LAST

16 NAME.

17

18 DIRECT EXAMINATION +

19 BY MR. BOYCE:

20 Q.: GOOD MORNING, MR. PETCH.

21 A.: GOOD MORNING.

22 Q.: WHAT IS YOUR OCCUPATION?

23 A.: I’M A PRINCIPAL ENGINEER AT TORREY PINES RESEARCH.

24 Q.: HOW LONG HAVE YOU BEEN AN ENGINEER?

25 A.: ABOUT 20 YEARS PLUS, 22 YEARS.

26 Q.: WHAT KIND OF ENGINEER ARE YOU?

27 A.: MECHANICAL.

28 Q.: DO YOU KNOW A PERSON BY THE NAME OF DAVID

10177

1 WESTERFIELD?

2 A.: YES, I DO.

3 Q.: DO YOU RECOGNIZE HIM IN COURT?

4 A.: YES, RIGHT THERE.

5 Q.: THE GENTLEMAN BETWEEN THE LADY AND THE GENTLEMAN AT

6 THE END OF COUNSEL TABLE?

7 A.: YES.

8 Q.: WHEN DID YOU MEET MR. WESTERFIELD?

9 A.: AT SUTTER BIOMEDICAL, I THINK IT WAS ’82 OR ’83

10 TIMEFRAME, 1983.

11 Q.: AND WHAT WAS YOUR JOB AT SUTTER AT THAT TIME?

12 A.: I WAS A MECHANICAL ENGINEER AT SUTTER.

13 Q.: HOW ABOUT MR. WESTERFIELD, WHAT WAS HIS JOB AT

14 SUTTER?

15 A.: SAME. I THINK DESIGN ENGINEER WAS — WAS THE

16 ACTUAL TITLE, THAT WAS A LITTLE DIFFERENT THAN MECHANICAL

17 ENGINEER, BUT WE EFFECTIVELY WORKED ON THE SAME THING.

18 Q.: YOU TWO WORKED TOGETHER AT SUTTER?

19 A.: YES, WE DID.

20 Q.: DURING THAT PERIOD OF TIME WAS ONE OF THE DEVICES

21 YOU WORKED ON CALLED A CONTINUOUS PASSIVE MOTION DEVICE?

22 A.: YES, IT WAS.

23 Q.: WHEN DID YOU BEGIN WORKING ON THAT WITH MR.

24 WESTERFIELD?

25 A.: AS SOON AS HE — HE CAME ON BOARD, ACTUALLY. WE

26 HAD A PRODUCT THAT HAD BEEN DEVELOPED PRIOR TO DAVE’S ARRIVAL AT

27 SUTTER AND IT WAS A LITTLE BIT DIFFICULT TO MAKE, HARD TO

28 MANUFACTURE, AND SO SOME LIABILITY ISSUES, AND DAVE WAS

10178

1 BASICALLY BROUGHT INTO TRY TO MAKE THAT A BETTER PRODUCT.

2 Q.: DID YOU WORK WITH HIM ON THE PRODUCT?

3 A.: YES.

4 Q.: WHAT WERE YOUR RESPECTIVE ROLES?

5 A.: MY ROLE WAS IN THE MECHANISM SORT OF DESIGN, DRIVE

6 TRAINING, POWER REQUIREMENTS, THAT SORT OF THING, AND DAVE WAS

7 THE PACKAGING, IF YOU WILL, THE STRUCTURE OF THE THING, HOW THE

8 THING WAS SORT OF PUT TOGETHER, BUILT.

9 Q.: DID YOU WORK ON IT TOGETHER IN THE SAME OFFICE?

10 A.: YES. WE SHARED AN OFFICE AT SUTTER.

11 Q.: HOW BIG WAS THIS OFFICE?

12 A.: JUST ABOUT BIG ENOUGH FOR TWO DRAFTING BOARDS AND

13 OUR DESKS BUT NOT MUCH ELSE.

14 Q.: WAS THERE A TIME CRUNCH THAT YOU WERE FACING WITH

15 THIS DEVICE?

16 A.: YEAH, IT WAS — WITH ANY PRODUCT DEVELOPMENT

17 THERE’S ALWAYS A TIME CRUNCH. YES.

18 Q.: SO THE TWO OF YOU WERE WORKING TOGETHER ON THIS

19 PARTICULAR ITEM IN THE SAME OFFICE?

20 A.: YEAH, YEAH. WE SPENT MANY HOURS WORKING TOGETHER

21 ON THIS, YES.

22 Q.: WHAT PERIOD OF TIME DID THIS PROJECT LAST?

23 A.: IT WAS A GOOD COUPLE YEARS, YOU KNOW, TWO YEARS. I

24 THINK WE SHARED AN OFFICE FOR TWO OR THREE YEARS THERE.

25 Q.: DID YOU EVENTUALLY GET A PATENT ON THIS PRODUCT?

26 A.: I BELIEVE THE COMPANY DID, YES.

27 Q.: AND IS YOUR NAME ON THE PATENT?

28 A.: NO, I DON’T BELIEVE IT IS.

10179

1 Q.: WELL, LET ME SHOW YOU EXHIBIT 216. THEY MAY HAVE

2 MISSPELLED YOUR NAME BUT —

3 A.: THAT’S — YES, I GUESS THAT’S SUPPOSED TO BE A

4 PETCH. IT’S A PATCH, YES.

5 Q.: AND ALSO MR. WESTERFIELD’S NAME APPEARS ON THIS

6 PATENT?

7 A.: YES.

8 Q.: IT SAYS FOR THE CONTINUOUS PASSIVE MOTION DEVICE?

9 A.: YES, IT IS.

10 Q.: MR. GENOVESE’S NAME ALSO APPEARS THERE; IS THAT

11 CORRECT?

12 A.: YES, IT DOES.

13 Q.: AND THAT’S THE DEVICE YOU WERE TELLING US ABOUT

14 THAT YOU AND MR. WESTERFIELD WERE WORKING ON FOR AT LEAST A

15 COUPLE YEARS AT —

16 A.: IT IS, YES.

17 Q.: — THE COMPANY, RIGHT?

18 A.: RIGHT.

19 Q.: HOW LONG DID YOU WORK AT SUTTER?

20 A.: FIVE, FIVE YEARS I THINK, FIVE OR SIX YEARS.

21 ACTUALLY, IT WAS ACROSS OVER FROM CUTTER BIOMEDICAL WHICH

22 ACTUALLY TURNED INTO SUTTER, SO I WORKED AT CUTTER BEFORE IT

23 BECAME SUTTER, AND SUBSEQUENTLY AT SUTTER FOR ABOUT FIVE YEARS

24 Q.: WHEN DID YOU LEAVE SUTTER?

25 A.: I DON’T KNOW THE EXACT YEAR, ’85, ’86 TIMEFRAME.

26 Q.: BEFORE THAT WAS THERE A PERIOD OF TIME WHEN YOU

27 WERE LAID OFF FROM SUTTER?

28 A.: YES, IT WAS.

10180

1 Q.: HOW DID YOU GET YOUR JOB BACK AT SUTTER?

2 A.: DAVE WAS ACTUALLY INSTRUMENTAL IN DOING THAT. I

3 WAS LAID OFF FOR SOME ATTENDANCE REASONS, IF YOU WILL, AND I

4 HAD — DAVE I THINK HAD TALKED TO CARMEN AND SAID THAT IT WOULD

5 BE WORTHWHILE GIVING DAVE A SECOND CHANCE HERE.

6 MR. BOYCE: THANK YOU, MR. PETCH.

7 THE COURT: ALL RIGHT. CROSS-EXAMINATION.

8

9 CROSS-EXAMINATION +

10 BY MR. DUSEK:

11 Q.: WHO WAS AT SUTTER FIRST, YOU OR THE DEFENDANT?

12 A.: I WAS.

13 Q.: AND WERE YOU WORKING ON THIS PROJECT BEFORE THE

14 DEFENDANT SHOWED UP AT SUTTER?

15 A.: I MYSELF WAS NOT. JIM CHRISTENSEN WAS — HAD

16 ACTUALLY HELPED AND ANOTHER ENGINEER HAD HELPED DEVELOP THE VERY

17 FIRST MATTER OF THAT C. P. M. DEVICE. AND THEN I WAS — I HAD

18 BEEN WORKING ON SOME OTHER PRODUCTION EQUIPMENT FOR THEIR

19 ORTHOPEDIC DEVELOPMENT LINE FOR — IT’S ACTUALLY A MOLD MAKING

20 DEVICE THAT HELPS MAKE IMPLANTS FOR THE FINGER. THAT JOB

21 BASICALLY GOT ACCOMPLISHED AND THEN WE WERE ALL — WE WERE

22 PULLED TOGETHER ONTO THE SAME TEAM TO BUILD THE NEXT GENERATION

23 OF C. P. M. DEVICE.

24 Q.: SO THE WORK ON THE C. P. M. DEVICE WAS ALREADY

25 STARTED BEFORE THE DEFENDANT JOINED THE TEAM?

26 A.: THAT IS TRUE.

27 Q.: AND YOU TALKED ABOUT THERE BEING A TIME CRUNCH.

28 WHAT DO YOU MEAN BY A TIME CRUNCH?

10181

1 A.: WELL, I THINK COMMITMENTS WERE MADE, YOU KNOW, BY

2 THE COMPANY THAT THE DEVICE WOULD BE AVAILABLE TO THE PUBLIC FOR

3 USE AT A CERTAIN POINT IN TIME, AND SO IT WAS UP TO US TO MAKE

4 SURE THAT PRODUCT WAS THERE AND AVAILABLE WITHIN THE TIME LIMITS

5 SET BY THE COMPANY.

6 Q.: THAT WOULD BE BASICALLY AN ECONOMIC CRUNCH,

7 WOULDN’T IT?

8 A.: IT WOULD BE AN ECONOMIC CRUNCH, YES.

9 Q.: IF YOU DIDN’T GET IT DONE IN TIME THE COMPANY WOULD

10 LOSE THE CONTRACT?

11 A.: I DON’T THINK THAT WAS AN ISSUE. I THINK THERE WAS

12 A DEVICE — OUR FIRST DEVICE WAS OUT THERE AND SORT OF

13 ACCOMPLISHING SOME OF THE — OR MOST OF WHAT THE DEVICE WAS

14 ATTEMPTED TO ACCOMPLISH IN THE FIRST PLACE.

15 HOWEVER, WE COULDN’T GET ENOUGH OF THOSE MACHINES

16 BUILT TO REALLY — TO GET THE MARKET — TO GET IT TO THE PEOPLE

17 THAT NEEDED TO USE THEM SO WE, YOU KNOW — THERE WAS AN ISSUE OF

18 GETTING ENOUGH MACHINES OUT THERE SO THAT THE C. P. M. THERAPY

19 COULD BE SPREAD OVER MORE PEOPLE.

20 Q.: AND AT THAT TIME IF YOU DID NOT MEET YOUR

21 COMMITMENTS THERE WERE OTHER COMPANIES THAT WERE WORKING ON A

22 SIMILAR TYPE DEVICE, WEREN’T THERE?

23 A.: AT THAT POINT IN TIME I DON’T THINK THERE WERE. I

24 THINK WE WERE THE ONLY ONES ACTUALLY DEVELOPING THE C. P. M.

25 DEVICE AT THAT POINT IN TIME. I’M NOT SURE.

26 Q.: SO AT LEAST THERE WOULD BE A TIME CRUNCH TO GET IT

27 OUT BEFORE ANY OTHER COMPANIES STARTED THIS?

28 A.: THAT WOULD BE GOOD, YES, DEFINITELY.

10182

1 Q.: AND THERE ARE OTHER COMPANIES THAT HAVE JOINED THE

2 FIELD, HAVEN’T THEY?

3 A.: YES, RIGHT.

4 Q.: WE HAVE HEARD THAT THERE WERE SEVERAL GENERATIONS

5 OF THIS DEVICE.

6 A.: RIGHT.

7 Q.: YOU WERE INVOLVED IN WHICH GENERATIONS?

8 A.: I BELIEVE IT’S THE — THAT WOULD BE THE SECOND

9 GENERATION, WHICH IT WAS DEEMED THE C. P. M. 2000 I THINK WAS

10 THE PRODUCT MODEL NAME THAT WE GAVE IT.

11 Q.: WAS THAT THE FIRST ONE THAT YOU WERE INVOLVED IN?

12 A.: YES.

13 Q.: AND YOU WERE INVOLVED IN THAT BEFORE THE DEFENDANT

14 GOT INVOLVED?

15 A.: RIGHT. YEAH, FROM A DESIGN STANDPOINT I WOULD SAY.

16 I WAS A PRETTY GREEN ENGINEER AT THE TIME AND WAS INVOLVED IN

17 THE FIRST MODEL BASED ON SOME DRAFTING SUPPORT ASSEMBLY

18 DRAWINGS, THAT SORT OF THING, BUT AS FAR AS ACTUAL DESIGN OF THE

19 PRODUCT ITSELF, IT WASN’T UNTIL THE SECOND GENERATION MACHINE.

20 Q.: WHEN WAS THIS?

21 A.: ’83.

22 Q.: TWENTY YEARS AGO?

23 A.: YES.

24 Q.: THE DEFENDANT, WAS HE ALREADY IN THE COMPANY BEFORE

25 HE JOINED YOUR TEAM OR DID HE COME FROM SOME OTHER COMPANY?

26 A.: AS FAR AS I KNOW — NO, HE WAS — HE CAME ON

27 SPECIFICALLY TO JOIN THAT TEAM, TO ACTUALLY DEVELOP THAT TEAM.

28 Q.: WAS THERE SOMEBODY ELSE DOING THE WORK BEFORE HE

10183

1 GOT THERE?

2 A.: YES.

3 Q.: AND WHEN DID HE LEAVE?

4 A.: I LEFT BEFORE HE LEFT, SO I DON’T KNOW.

5 Q.: ALL RIGHT.

6 THE WORK THAT YOU DID, WHAT DO YOU DO?

7 A.: I DESIGN — MY SPECIALTY IS IN MECHANISM AND

8 MACHINE DESIGN, THINGS THAT MOVE, THINGS REQUIRING MOTORS AND

9 GEARS AND PULLEYS AND THINGS THAT ARE DYNAMIC. THINGS IN MOTION

10 BASICALLY.

11 Q.: WOULD YOU INVENT THE IDEAS OF HOW THIS MACHINE’S

12 GOING TO LOOK AND WORK?

13 A.: YES. WE INVENT — WE’RE GIVEN CERTAIN PARAMETERS

14 BY — I THINK DR. COUTTS WAS UP HERE — AND THEY GIVE US

15 PARAMETERS, OBJECTIVES FOR THE MACHINE, THE ANATOMIC ABILITY, IF

16 THAT’S SUCH A WORD, OF THE MACHINE ITSELF AND CERTAIN PARAMETERS

17 OF WEIGHT AND SIZE AND POWER REQUIREMENTS AND THAT SORT OF

18 THING. SO — AND THERE’S MANY WAYS TO ACCOMPLISH THOSE GOALS.

19 AND SO WE INVENT THE MEANS TO ACCOMPLISH THE GOALS SET OUT BY

20 THE REQUIREMENTS FOR THE MACHINE.

21 Q.: AND WHEN YOU DO YOUR WORK DO YOU THEN SOMEHOW

22 CONVEY YOUR WORK TO THE DEFENDANT OR SOMEONE IN HIS POSITION?

23 A.: YEAH, ABSOLUTELY. I MEAN, THERE’S MANY DIFFERENT

24 ENGINEERS ON A GIVEN PRODUCT THAT DESIGN PARTS OF THE MACHINE

25 AND SOMEONE’S RESPONSIBLE FOR BRINGING ALL THOSE SUBSYSTEMS, IF

26 YOU WILL, TOGETHER INTO A COMMON MACHINE.

27 Q.: IS THIS WORK THAT HE DOES ON A COMPUTER?

28 A.: IT WOULD BE NOW, YES. ALL DONE ON A COMPUTER NOW,

10184

1 YES.

2 Q.: ALL RIGHT.

3 WHEN DID YOU LEAVE THE COMPANY?

4 A.: ’85 I THINK. ’85, ’86 TIMEFRAME.

5 Q.: AND HE WAS STILL WITH THE COMPANY?

6 A.: YES.

7 Q.: DID YOU EVER GO BACK?

8 A.: NO.

9 Q.: EVEN AFTER HE TRIED TO MAKE EFFORTS TO GET YOU

10 BACK?

11 A.: NO. I DID COME BACK FOR — AFTER — FOR ABOUT A

12 YEAR OR TWO, AND THEN I THINK THERE WAS A DOWNSIZING OF THE

13 COMPANY AT THAT POINT IN TIME AND THAT’S WHEN I MOVED ON AFTER

14 THAT.

15 MR. DUSEK: THANK YOU, SIR.

16 THE COURT: ANYTHING FURTHER?

17 MR. BOYCE: NO, YOUR HONOR.

18 THE COURT: ALL RIGHT.

19 THANK YOU, SIR FOR COMING IN. PLEASE REMEMBER

20 YOU’RE UNDER AN ADMONITION NOT TO DISCUSS YOUR TESTIMONY WITH

21 ANYONE TILL THE MATTER’S CONCLUDED. OKAY?

22 THE WITNESS: OKAY.

23 THE COURT: NOW, WOULD YOU KINDLY TAKE THAT EXHIBIT AND

24 GIVE IT TO MR. BOYCE ON YOUR WAY OUT THERE?

25 THE COURT: ALL RIGHT.

26 MR. BOYCE.

27 MR. BOYCE: DEFENSE CALLS JUDY RAY.

28 ///

10185

1 -JUDY RAY, +

2 DEFENDANT’S WITNESS, HAVING BEEN SWORN, TESTIFIED AS FOLLOWS:

3

4 THE COURT: PLEASE HAVE A SEAT, MA’AM.

5 THE CLERK: MA’AM, WOULD YOU PLEASE STATE YOUR NAME AND

6 SPELL IT FOR THE RECORD?

7 THE WITNESS: JUDY RAY, J-U-D-Y, R-A-Y.

8

9 DIRECT EXAMINATION +

10 BY MR. BOYCE:

11 Q.: GOOD MORNING, MS. RAY.

12 A.: GOOD MORNING.

13 Q.: WHAT IS YOUR OCCUPATION?

14 A.: I’M THE OWNER OF A COMPANY NAMED PREPACK PRODUCTS,

15 INC.

16 Q.: WHAT DOES PREPACK PRODUCTS DO?

17 A.: WE MANUFACTURE MEDICAL DEVICES FOR THE PHYSICAL

18 THERAPY MARKET.

19 Q.: CAN YOU — MAYBE IF YOU LEAN FORWARD A LITTLE BIT

20 IN THE MICROPHONE SO IT COULD PICK YOUR VOICE UP A LITTLE BIT.

21 DO YOU KNOW A PERSON BY THE NAME OF DAVID

22 WESTERFIELD?

23 A.: YES, I DO.

24 Q.: DO YOU RECOGNIZE HIM HERE IN COURT?

25 A.: YES.

26 Q.: THE GENTLEMAN I GOT MY HAND ON RIGHT NOW?

27 A.: RIGHT.

28 Q.: HOW DO YOU KNOW DAVID WESTERFIELD?

10186

1 A.: HE DID SOME WORK FOR US.

2 Q.: WHEN DID YOU MEET MR. WESTERFIELD, FIRST CONTACT?

3 A.: HE WAS REFERRED TO US BY A GENTLEMAN BY THE NAME OF

4 RON LAWRENCE TO DO SOME DESIGN ENGINEERING WORK FOR US BACK IN

5 AUGUST OF ’97.

6 Q.: WHAT WAS THE DESIGN ENGINEERING WORK THAT YOU

7 CONTACTED HIM ABOUT INITIALLY?

8 A.: INITIALLY IT WAS A PRODUCT THAT WE NOW ARE CALLING

9 THE KNEE SLIDE. IT’S A PRODUCT THAT WE HAD DONE SOME WORK ON

10 IN-HOUSE AND HAD GOTTEN IT TO A CERTAIN STAGE OF DEVELOPMENT,

11 AND THE GENTLEMAN THAT WE WERE WORKING WITH WAS NOT AN ENGINEER.

12 HE JUST KNOWS A LOT ABOUT HOW THINGS WORK. AND SO HE HAD GOTTEN

13 IT TO A POINT WHERE HE FELT LIKE HE COULDN’T GO ANY FURTHER WITH

14 THE PRODUCT, AND HE ASKED ME TO CONTACT SOMEBODY WITH MORE

15 KNOWLEDGE AND EDUCATION THAN HE HAD. AND SO I FOUND DAVE AND

16 ASKED HIM IF HE’D WORK WITH US ON THIS PRODUCT.

17 Q.: WHAT WAS THE KNEE SLIDE? WHAT’S THE PURPOSE OF THE

18 KNEE SLIDE?

19 A.: THE PURPOSE OF THE KNEE SLIDE WAS TO INCREASE RANGE

20 OF MOTION FOR SOMEONE OUT OF SURGERY OR HAD LIMITATION WITH

21 THEIR KNEE FROM AN ACCIDENT, AND IT WAS A DEVICE ORIGINALLY

22 DESIGNED TO BE USED IN THE HOME SETTING FOR SOMEONE WHO COULD

23 ACTUALLY GET FULL RANGE OF MOTION BY EXERCISING WITH THE KNEE OR

24 THE LEG.

25 Q.: DID YOU WORK WITH MR. WESTERFIELD ON ANOTHER

26 DEVICE?

27 A.: YES.

28 Q.: WHAT WAS THAT?

10187

1 A.: IT’S OUR HOME RANGER SHOULDER PULLEY.

2 Q.: WHEN DID YOU CONTACT MR. WESTERFIELD ABOUT A

3 ASSISTANCE IN DESIGNING THAT DEVICE?

4 A.: DAVE WAS WORKING WITH US ON THE KNEE SLIDE AT THE

5 SAME TIME. ABOUT A YEAR INTO THAT PROJECT, THE PULLEY THAT WE

6 HAVE RIGHT NOW, WE HAD DECIDED TO MAKE ANOTHER MODEL, AND THE

7 MODEL ON THE SECOND PULLEY UTILIZED A VERY STIFF CORD TO GO OVER

8 THE WHEEL, AND THE PULLEY THAT WE WERE UTILIZING AT THE TIME

9 WOULDN’T WORK FOR THAT CORD. THE CORD WAS TOO STIFF. IT WOULD

10 JUMP OFF THE TRACK. AND SO WE ASKED DAVE IF HE COULD HELP US

11 DESIGN A PULLEY WHEEL THAT WOULD ACCOMMODATE THE STIFFER ROPE.

12 Q.: AND SPECIFICALLY WHAT WAS HIS JOB, DO YOU KNOW, IN

13 DESIGNING THAT PRODUCT?

14 A.: WELL, HE CAME UP WITH THE IDEA THAT MADE THAT STIFF

15 ROPE WORK FOR US, WHICH WAS A FENDER ON THE PULLEY. SORT OF

16 LIKE A FENDER ON A BICYCLE THAT SITS A LITTLE BIT ABOVE THE

17 PULLEY AND THE CORD SITS UNDERNEATH IT AND THE CORD LAYS ON THE

18 WHEEL, AND THERE’S LIKE A LITTLE — A FENDER THAT SITS ON TOP OF

19 THAT, AND THAT WAS DAVE’S IDEA.

20 Q.: HOW IS THIS PULLEY BENEFICIAL?

21 A.: THE PULLEY IS USED BY PEOPLE WHO HAVE SHOULDER

22 INJURIES. IT WAS DESIGNED ORIGINALLY FOR PEOPLE WITH FROZEN

23 SHOULDERS.

24 A FROZEN SHOULDER IS A CONDITION WHERE YOU

25 LITERALLY CAN’T — PARDON ME — YOU CAN’T RAISE YOUR SHOULDER

26 ALL THE WAY UP IN THE AIR. YOU HAVE LIMITATION OF SOME TYPE OF

27 MOTION. YOU DON’T HAVE FULL RANGE.

28 AND THIS IS A DEVICE THAT A PATIENT WOULD USE AT

10188

1 HOME TO RESTORE RANGE OF MOTION.

2 Q.: DID YOU EVENTUALLY MARKET MR. WESTERFIELD’S PRODUCT

3 HE DESIGNED?

4 A.: YES, WE DID.

5 Q.: AND HOW DID YOU DO THAT?

6 A.: THE FLEX RANGER, WHICH IS THE PRODUCT THAT ACTUALLY

7 HAS THE STIFF ROPE, THAT PRODUCT IS BEING MARKETED LIKE THE REST

8 OF OUR PRODUCT; PRIMARILY THROUGH THE PHYSICAL THERAPY,

9 CHIROPRACTICAL/SURGEON MARKET. WE DON’T SELL DIRECTLY TO THE

10 END USER. WE SELL TO THE MEDICAL PROFESSION BECAUSE THEY’RE THE

11 ONES THAT RECOMMEND OUR DEVICE TO THEIR PATIENTS.

12 Q.: ABOUT HOW MANY PEOPLE HAVE BENEFITED FROM THIS

13 PRODUCT?

14 A.: THE ONE ON THE TOP IS THE ONE THAT’S OUR BEST

15 SELLER. WE USE THE SAME PULLEY THAT DAVE DESIGNED FOR BOTH

16 PRODUCTS. WE DIDN’T HAVE THE VOLUME FOR A NEW PRODUCT TO MAKE

17 IT COST EFFECTIVE, SO WE ADDED THAT SAME PULLEY THAT DAVE

18 DESIGNED TO OUR EXISTING PRODUCT, WHICH IS OUR COMPANY’S BEST

19 SELLING PRODUCT. WE SOLD AT LEAST SIX HUNDRED THOUSAND OF THEM,

20 PROBABLY MORE.

21 Q.: SIX HUNDRED THOUSAND?

22 A.: YES.

23 Q.: IN THE UNITED STATES?

24 A.: YES, BUT WE SELL THEM ABROAD AS WELL.

25 Q.: INTERNATIONALLY, TOO?

26 A.: YES.

27 (MARKED FOR ID: = TRIAL EX. 232-BLUE BOX/SHOULDER PULLEY)

28 Q.: MS. RAY, SHOWING YOU A BOX WITH SHOULDER PULLEY

10189

1 MARKED AS EXHIBIT 232, DO YOU RECOGNIZE THAT?

2 A.: YES.

3 Q.: WHAT IS EXHIBIT 232?

4 A.: IT’S OUR HOME RANGER SHOULDER PULLEY.

5 Q.: IS THE PRODUCT ACTUALLY IN THE BOX HERE?

6 A.: IT SHOULD BE. I ASKED THEM TO PACKAGE IT FOR US,

7 YES.

8 Q.: AND THIS IS — THIS USES — IT’S SHOWN ON THE

9 OUTSIDE OF THE BOX, IS THAT RIGHT?

10 A.: THAT’S EXACTLY RIGHT. IT’S SHOWN BEING USED AND

11 THERE’S A PICTURE HERE OF THE PRODUCT.

12 Q.: AND WHAT ROLE DID MR. WESTERFIELD’S PRODUCT THAT HE

13 DESIGNED HAVE IN THAT SHOULDER PULLEY?

14 A.: THIS PULLEY HERE, WHAT DAVE DESIGNED FOR US WAS

15 THIS FENDER ON THE PULLEY WHEEL. HE ACTUALLY DESIGNED THE WHOLE

16 PULLEY BUT WE HAD A PULLEY PREVIOUS TO THIS THAT WAS WORKING

17 FINE FOR THIS PARTICULAR PRODUCT. SO IT’S GOT LIKE THAT LITTLE

18 FENDER ON IT THAT KEEPS THE ROPE FROM SLIPPING OFF WHILE YOU’RE

19 USING IT.

20 (MARKED FOR ID: = TRIAL EX. 233-TAN BOX/SHOULDER PULLEY)

21 Q.: SHOWING YOU EXHIBIT 233, DO YOU RECOGNIZE EXHIBIT

22 233?

23 A.: YES. THIS IS OUR FLEX RANGER. THIS IS THE PRODUCT

24 THAT ACTUALLY DAVE DESIGNED THE PULLEY FOR. IT’S GOT A VERY

25 STIFF — STIFF CORD IF YOU CAN SEE IT. IT’S SORT OF STRETCHY.

26 Q.: YOU CAN PULL IT OUT.

27 A.: IT’S GOT A REAL STIFF STRETCH AND, IF YOU CAN SEE,

28 IF IT DIDN’T HAVE THIS WHEEL, THIS FENDER HERE, THIS IS THE PART

10190

1 THAT WAS DAVE’S, IF IT DIDN’T HAVE THAT, THEN WHEN YOU WERE

2 USING THIS AT HOME IT WOULD BE VERY INCONVENIENT TO USE BECAUSE

3 IT WOULD JUMP OFF THE TRACK, AND THE WHOLE IDEA OF THESE

4 PRODUCTS ARE TO MAKE THEM EASY AND CONVENIENT TO USE IN THE HOME

5 SO THAT PATIENTS WILL USE THEM. YOU KNOW, IF THEY’RE ANNOYING,

6 THEN PATIENTS WON’T DO IT.

7 (MARKED FOR ID: = TRIAL EX. 223-PATENT/PULLEY)

8 Q.: SHOWING YOU WHAT’S BEEN MARKED AS EXHIBIT 223, A

9 PATENT, CAN YOU TELL ME IF THAT’S THE PATENT FOR THE PULLEY THAT

10 MR. WESTERFIELD DESIGNED THAT YOU INCORPORATED INTO YOUR

11 PRODUCT?

12 A.: YES. YES, IT IS.

13 Q.: AND IT HAS HIS NAME UNDER INVENTOR; IS THAT

14 CORRECT?

15 A.: THAT’S CORRECT.

16 Q.: WHAT IS THE DATE OF THE DEVELOPMENT OF THAT PATENT?

17 I BELIEVE IT TELLS YOU.

18 A.: IT HAS AN ISSUE DATE OF OCTOBER 10TH, 2000.

19 MR. BOYCE: THANK YOU, MS. RAY.

20 I HAVE NOTHING FURTHER.

21 THE COURT: ALL RIGHT. CROSS-EXAMINATION.

22

23 CROSS-EXAMINATION +

24 BY MR. DUSEK:

25 Q.: I THINK YOU’VE TOLD US THE SALES OF THE PULLEY THAT

26 YOU HAVE THERE. THE DEFENDANT ALSO WORKED ON A KNEE SLIDE

27 DEVICE, IS THAT RIGHT?

28 A.: THAT’S CORRECT.

10191

1 Q.: FOR HOW MANY YEARS?

2 A.: THE KNEE SLIDE WAS ABOUT A YEAR AND A HALF.

3 Q.: THAT’S HOW LONG HE WORKED ON IT?

4 A.: YES.

5 Q.: HOW MANY DID YOU SELL OF THOSE?

6 A.: WE DIDN’T SELL ANY. WE NEVER BROUGHT THEM TO

7 MARKET.

8 Q.: WHY NOT?

9 A.: BECAUSE WHEN WE HIRED DAVE WE HAD A PRICE POINT AND

10 WE NEEDED TO BRING THE PRODUCT IN FOR A CERTAIN PRICE POINT

11 BASED UPON OUR RESEARCH SO THAT IT WOULD SELL IN THE

12 MARKETPLACE. AND WHEN WE HIRED DAVE WE HAD — WE HAD THE BELIEF

13 THAT WE COULD BRING IT IN FOR THAT PRICE.

14 Q.: DID YOU TELL HIM WHAT PRICE IT WAS SUPPOSED TO BE

15 BROUGHT IN UNDER?

16 A.: YES.

17 Q.: DID HE BRING IT IN UNDER THAT?

18 A.: NO.

19 Q.: SO HIS WORK ON THAT DIDN’T RESULT IN ANY SALES?

20 A.: NO.

21 Q.: WHAT HAPPENED TO THAT DEVICE?

22 A.: WE JUST DIDN’T PROCEED WITH IT. WE ABANDONED IT.

23 Q.: IS THERE SUCH A DEVICE OUT ON THE MARKET NOW?

24 A.: THERE ARE SIMILAR DEVICES OUT IN THE MARKET THAT

25 SELL FOR QUITE A BIT MORE ACTUALLY.

26 Q.: THEY’RE MAKING A PROFIT?

27 A.: PERHAPS.

28 Q.: THAT ARE HELPING PEOPLE THAT HAVE NEEDS FOR THAT

10192

1 DEVICE?

2 A.: UM-HMM.

3 Q.: YOU HAVE TO ANSWER TO ANSWER WITH WORDS.

4 A.: YES, SORRY.

5 Q.: WAS HE WORKING EXCLUSIVELY ON THAT PROJECT FOR THE

6 TIME HE WAS WORKING WITH YOU FOLKS THE KNEE SLIDE?

7 A.: WHEN YOU SAY EXCLUSIVE YOU MEAN WITH OTHER PEOPLE

8 AS WELL AS OUR COMPANY?

9 Q.: YES.

10 A.: NO, I DON’T BELIEVE SO.

11 Q.: WAS ANYONE ELSE HELPING HIM WITH THAT KNEE SLIDE

12 DEVICE?

13 A.: YES.

14 Q.: WHAT WERE THEY, WHAT TYPE OF POSITIONS DID THEY

15 HAVE?

16 A.: WE WORK WITH A GENTLEMAN IN OUR COMPANY THAT HELPS

17 US WITH TESTING, AND HE WAS THE GENTLEMAN THAT ACTUALLY HAD

18 BROUGHT THE DEVICE TO THE POINT THAT IT WAS AT BEFORE WE HIRED

19 DAVE TO HELP US WITH IT.

20 Q.: SO IT WAS MARKETABLE BEFORE IT CAME TO YOUR

21 COMPANY?

22 A.: NO, NO. THE PRODUCT WASN’T MARKETABLE AT ALL. IT

23 WAS A NEW IDEA. IT WAS AN IDEA THAT WE CAME UP WITH WITH THE

24 GENTLEMAN THAT I WAS JUST MENTIONING THAT HAD GOTTEN IT TO A

25 CERTAIN POINT OF DEVELOPMENT AND HAD SAID HE COULDN’T GET IT ANY

26 FURTHER AND HE NEEDED HELP AND THAT’S WHEN WE HIRED DAVE.

27 Q.: AND HE COULDN’T DEVELOP IT TO THE SENSE THAT IT WAS

28 MARKETABLE?

10193

1 A.: NO.

2 Q.: THE OTHER DEVICE THAT YOU HAVE THERE, THE PULLEY?

3 A.: YES.

4 Q.: WHAT DOES THAT SELL FOR?

5 A.: IT SELLS FOR $14.50 DOWN TO $10.99.

6 Q.: AND THE DEFENDANT WORKED ON THAT LITTLE RIDGE OR

7 WHAT DID YOU CALL IT TO KEEP THE PULLEY?

8 A.: I CALLED IT A FENDER.

9 Q.: FENDER?

10 A.: UM-HMM.

11 Q.: SO THE PULLEY DEVICE WAS IN EXISTENCE WHEN IT CAME

12 TO YOUR COMPANY?

13 A.: THE PULLEYS HAVE BEEN AROUND FOR YEARS, BUT WE WERE

14 THE FIRST PEOPLE ON THE MARKET TO DESIGN A HOME DEVICE THAT WAS

15 EASY TO USE.

16 Q.: WHO DESIGNED THAT?

17 A.: MY FORMER PARTNER. HE’S A PHYSICAL THERAPIST.

18 Q.: HE’S THE ONE THAT DESIGNED IT?

19 A.: ORIGINALLY.

20 Q.: AND INVENTED IT?

21 A.: YES.

22 Q.: AND PRODUCED IT?

23 A.: THAT’S CORRECT.

24 Q.: AND HELPED SELL IT?

25 A.: YES.

26 Q.: AND THEN YOUR COMPANY WANTED TO CHANGE IT A LITTLE?

27 A.: WELL, WE CHANGED IT FOR THIS PRODUCT. WE DIDN’T

28 REALLY CHANGE IT ORIGINALLY FOR THIS PRODUCT.

10194

1 Q.: WHY DID YOU WANT TO CHANGE IT?

2 MR. FELDMAN: YOUR HONOR, I’M SORRY. FOR THE RECORD,

3 SHE’S USING THE WORD “THIS.”

4 THE COURT: RIGHT. AND I THINK YOU WANT TO CLARIFY, MR.

5 DUSEK, SO THE RECORD’S STRAIGHT.

6

7 BY MR. DUSEK:

8 Q.: YOU HAVE A BOX — ACTUALLY TWO BOXES HERE IN FRONT

9 OF YOU, EACH OF THEM CONTAINING A PULLEY. ONE OF THEM IS MARKED

10 232 AND IT’S IN A BLUE BOX?

11 A.: RIGHT.

12 Q.: ONE OF ‘EM’S MARKED 233 AND IT’S A ORANGE OR YELLOW

13 OR TANNED COLORED BOX?

14 A.: YES.

15 Q.: WHICH ONE WAS THE ORIGINAL PULLEY?

16 A.: THIS IS THE ORIGINAL PULLEY.

17 Q.: WHICH IS EXHIBIT NO. 232 IN THE BLUE BOX?

18 A.: THAT’S CORRECT.

19 Q.: ALL RIGHT.

20 AND THAT DOES NOT HAVE THE FENDER ON IT?

21 A.: IT DOES NOW BUT IT DIDN’T ORIGINALLY.

22 Q.: HOW DOES THE BLUE BOX, 232, DIFFER FROM THE YELLOW

23 OR TAN BOX IN 233?

24 A.: THE CORD IS DIFFERENT AND THE HANDLE IS DIFFERENT

25 ON THE PRODUCT. SO THEY’RE USED A LITTLE BIT DIFFERENTLY.

26 Q.: WHO DECIDED TO CHANGE IT?

27 A.: MY FORMER PARTNER WHO DEVELOPED THIS PRODUCT.

28 Q.: IN THE BLUE BOX?

10195

1 A.: IN THE BLUE BOX.

2 Q.: NO. 232?

3 A.: NO. 232 IS — THE MAN THAT HAD THE IDEA ORIGINALLY

4 FOR THIS. BUT HIS —

5 Q.: IN THE TAN BOX — WE HAVE TO USE THE NUMBERS SO

6 SOMEBODY READING THIS —

7 A.: I’M SORRY, YES.

8 Q.: — WILL KNOW WHICH ONE WE’RE TALKING ABOUT.

9 A.: SO HE HAD THE ORIGINAL IDEA, BUT THE IDEA THAT HE

10 HAD WAS NOT WHAT THIS LOOKS LIKE.

11 Q.: IN 233?

12 A.: IN 233.

13 BECAUSE IN RESEARCH, WHAT YOU START WITH OFTEN IS

14 NOT WHAT YOU END UP WITH, AND SO THIS IS THE EVOLUTION OF WHAT

15 MY FORMER PARTNER — HIS IDEA.

16 Q.: 233 IN THE TAN BOX?

17 A.: YES.

18 Q.: AND TO MAKE THAT WORK WITH THE CHANGED CORD —

19 A.: YES.

20 Q.: — THE DEFENDANT CAME UP WITH A FENDER?

21 A.: THAT’S CORRECT.

22 Q.: HOW LONG DID IT TAKE HIM? HOW LONG WAS HE WORKING

23 ON THAT?

24 A.: HE WORKED ABOUT A YEAR AND A HALF, BUT THE FENDER

25 PART OF IT AND THE PULLEY PART OF IT WAS A VERY SMALL PART OF

26 THAT TIME. ORIGINALLY, WHEN WE HIRED DAVE FOR THIS PRODUCT WE

27 HAD HIM DESIGN A HANDLE, AND WE WERE TRYING TO COME UP WITH A

28 MECHANISM THAT WOULD LOCK THIS STIFF CORD INTO THE HANDLE, AND

10196

1 SO HE CAME UP WITH A DESIGN THAT WAS REALLY QUITE ELABORATE AND

2 ACTUALLY QUITE LOVELY BUT IT WAS EXPENSIVE. AND OUR PRODUCTS

3 ARE VERY LOW COST AND PULLEYS ARE VERY LOW COST, AND SO WE

4 COULDN’T USE THAT HANDLED DESIGN, SO WE CAME UP WITH ANOTHER

5 DESIGN. SO HE — DAVE DID A LOT OF THINGS FOR THIS PRODUCT THAT

6 WE NEVER BROUGHT TO MARKET. SO IN THAT TIME PERIOD THAT’S WHERE

7 THE TIME WAS SPENT.

8 Q.: THESE DECISIONS THE COMPANY WAS MAKING WERE BASED

9 UPON THE PROFITABILITY OF THIS MERCHANDISE?

10 A.: THAT’S CORRECT.

11 Q.: WAS THE DEFENDANT BEING PAID FOR HIS TIME AND HIS

12 EFFORTS?

13 A.: YES.

14 Q.: HOW MUCH DID HE GET FOR THIS, DOING THIS WORK?

15 A.: WE WERE PAYING HIM $500 I BELIEVE EVERY OTHER WEEK.

16 I THINK IT WAS EVERY OTHER WEEK.

17 Q.: HOW LONG DID HE WORK FOR YOU TOTAL?

18 A.: ABOUT TWO YEARS, A LITTLE OVER TWO YEARS.

19 Q.: AND THIS WAS BACK IN 1997?

20 A.: 1997 TO ’99.

21 Q.: SO HE REALLY DIDN’T INVENT THE DEVICE THAT WE HAVE

22 HERE IN COURT?

23 A.: NO.

24 MR. DUSEK: THANK YOU, MA’AM.

25 THE COURT: ANYTHING FURTHER, MR. BOYCE?

26

27 ///

28 ///

10197

1 REDIRECT EXAMINATION +

2 BY MR. BOYCE:

3 Q.: HE DID INVENT THE PART OF THE DEVICE, THOUGH, THAT

4 HE HAS THE PATENT ON, THOUGH?

5 A.: THAT’S CORRECT.

6 Q.: THE PROCEDURE AND THE DEVELOPMENT OF A PROJECT, IS

7 THAT UNUSUAL, AT LEAST THE WAY THAT MR. WESTERFIELD DEVELOPED

8 THIS PROJECT, WAS THERE ANYTHING UNUSUAL ABOUT THAT?

9 A.: NO. IN FACT, WE HAD NEVER DONE RESEARCH AND

10 DEVELOPMENT BEFORE. IT’S A VERY LONG PROCESS, BECAUSE YOU HAVE

11 TO WORK DOWN SEVERAL PARALLEL PATHS AT THE SAME TIME, NOT

12 KNOWING WHAT YOU’RE REALLY GOING TO END UP WITH AT THE END A LOT

13 OF TIMES, BECAUSE YOU’RE WORKING WITH CONCEPTS AND YOU HAVE TO

14 MAKE MODELS AND SEE IF THEY WORK AND FIND OUT HOW EXPENSIVE

15 THEY’RE GOING TO BE TO MANUFACTURE AND ALL THAT STUFF.

16 Q.: WHEN YOU WERE WORKING ON THIS PROJECT YOU DON’T

17 KNOW WHETHER HE WAS WORKING ON OTHER PROJECTS FOR OTHER

18 COMPANIES, DO YOU?

19 A.: I BELIEVE HE WAS. HE NEVER WORKED IN OUR OFFICE.

20 HE WORKED AT HOME.

21 Q.: HE WASN’T YOUR EMPLOYEE, WAS HE?

22 A.: NO.

23 Q.: YOU SUBCONTRACTED WITH HIM SPECIFICALLY FOR CERTAIN

24 PROJECTS?

25 A.: THAT’S CORRECT.

26 Q.: NOW, THE KNEE SLIDE, ALTHOUGH IT WAS NEVER

27 MARKETED, THAT WAS A FINANCIAL ISSUE, WASN’T IT?

28 A.: THAT’S CORRECT.

10198

1 Q.: THE QUALITY OF THE PRODUCT, WHAT WAS THE QUALITY OF

2 THE PRODUCT?

3 A.: QUALITY WAS ACTUALLY GREAT. AND THE ORIGINAL

4 PERSON THAT BROUGHT THE IDEA TO US HAS WANTED US TO CONTINUE TO

5 GO BACK WITH IT. ONE OF THE FINANCIAL DECISIONS THAT I HAD TO

6 MAKE, THE CO-OWNER THAT HAD BEARING ON THAT, WAS THAT WE’RE A

7 RELATIVELY SMALL COMPANY, AND THIS WAS THE FIRST TIME WE HAD

8 SPENT A LOT OF MONEY IN THE RESEARCH AND DEVELOPMENT AREA. AND

9 I WAS REALLY NAIVE IN THE FACT THAT I DIDN’T RECOGNIZE HOW LONG

10 IT WOULD TAKE TO BRING SOMETHING TO FRUITION, THE COSTS

11 INVOLVED. AND SO BY THE TIME WE HAD GOTTEN THROUGH THE RESEARCH

12 AND DEVELOPMENT PHASE OF IT WE WERE PRETTY TAXED AS A COMPANY

13 AND IT WOULD HAVE BEEN A HUGE INVESTMENT FOR US TO GO OUT AND

14 MAKE MORE OF THE PRODUCT, AND KNOWING THAT IT WAS GOING TO BE

15 MORE THAN OUR MARKET THAT WE WERE WILLING TO BEAR. SO IT WAS A

16 FINANCIAL DECISION FOR ME AS THE OWNER SAYING I’M NOT WILLING TO

17 PUT MYSELF ON THE LINE, RISK SO MUCH MONEY ON THE PRODUCT.

18 Q.: AND WE’RE TALKING ABOUT THE PRODUCT THAT MR.

19 WESTERFIELD HAD A HAND IN DESIGNING?

20 A.: YES. THAT WAS THE KNEE SLIDE.

21 MR. BOYCE: THANK YOU, MS. RAY.

22 THE COURT: ANYTHING FURTHER, MR. DUSEK?

23 MR. DUSEK: NO, THANKS.

24 THE COURT: ALL RIGHT.

25 MA’AM, THANK YOU VERY MUCH FOR COMING IN. YOU’RE

26 FREE TO LEAVE. HOWEVER, REMEMBER THAT YOU’RE NOT TO DISCUSS

27 YOUR TESTIMONY WITH ANYONE UNTIL THE MATTER’S CONCLUDED. IF YOU

28 DON’T MIND HANDING THOSE THREE ITEMS TO THE BAILIFF ON THE WAY

10199

1 OUT SO THAT WE DON’T LOSE THEM, OKAY.

2 MR. FELDMAN: YOUR HONOR, JUST GIVEN SCHEDULING, WOULD

3 THIS BE AN APPROPRIATE TIME TO BREAK EARLY AND WE CAN BE BACK

4 EARLY?

5 THE COURT: OH, THAT’S FINE. I HAVE NO PROBLEM WITH THAT

6 AT ALL.

7 ALL RIGHT. COUNSEL HAVE ASKED FOR AN EARLY LUNCH

8 BREAK, LADIES AND GENTLEMEN. WE MIGHT AS WELL. SUN’S OUT.

9 MIGHT AS WELL GET YOUR HEAD START ON THE DELI OR WHEREVER YOU’RE

10 GOING.

11 PLEASE REMEMBER THE ADMONITION OF THE COURT NOT TO

12 DISCUSS ANY OF THE EVIDENCE OR TESTIMONY, OR FORM OR EXPRESS ANY

13 OPINIONS ON THE MATTER TILL IT IS SUBMITTED TO YOU. PLEASE BE

14 OUTSIDE THE DOOR AT 1 O’CLOCK, PLEASE. 1 O’CLOCK.

15 MR. FELDMAN: THANK YOU.

16 (AT 11:32 A.M. THE JURY WAS EXCUSED
AND THE FOLLOWING PROCEEDINGS WERE HAD:)
17

18 THE COURT: OKAY. THE RECORD SHOULD REFLECT THE JURORS

19 AND ALTERNATES HAVE LEFT THE COURTROOM.

20 I’M ASSUMING, MR. FELDMAN, EITHER YOU OR MR. BOYCE

21 WILL GIVE ME A HEADS UP WHEN YOUR LAST WITNESS ARRIVES THIS

22 AFTERNOON.

23 MR. FELDMAN: YES, YOUR HONOR.

24 THE COURT: AND THEN THAT WILL BE IT —

25 MR. FELDMAN: YES, YOUR HONOR.

26 THE COURT: — UNTIL TUESDAY MORNING?

27 MR. FELDMAN: YES, YOUR HONOR.

28 THE COURT: ALL RIGHT.

10200

1 WE’LL BE IN RECESS TILL 1 O’CLOCK.

2 (AT 11:33 A.M. THE NOON RECESS WAS
TAKEN UNTIL 1:00 P.M. OF THE SAME DAY.)
3

4 –O0O–

29081 - August 29th 2002 - penalty phase - David Westerfield trial - morning 1
29083 - August 29th 2002 - penalty phase - David Westerfield trial - afternoon 1