14-01-23 Cv630 Daubert Hearing Transcript

8/12/2019 14-01-23 Cv630 Daubert Hearing Transcript

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UNI TED STATES COURT REPORTERS

1

UNI TED STATES DI STRI CT COURT

NORTHERN DI STRI CT OF CALI FORNI A

SAN J OSE DI VI SI ON

APPLE I NC. , A CALI FORNI ACORPORATI ON,

PLAI NTI FF,

VS.

SAMSUNG ELECTRONI CS CO. , LTD. ,A KOREAN BUSI NESS ENTI TY;

SAMSUNG ELECTRONI CS AMERI CA,I NC. , A NEWYORK CORPORATI ON;SAMSUNG TELECOMMUNI CATI ONSAMERI CA, LLC, A DELAWARELI MI TED LI ABI LI TY COMPANY,

DEFENDANTS.

)))))))))

))))))))

C- 12- 00630 LHK

SAN J OSE, CALI FORNI A

J ANUARY 23, 2014

PAGES 1-129

TRANSCRI PT OF PROCEEDI NGSBEFORE THE HONORABLE LUCY H. KOH

UNI TED STATES DI STRI CT J UDGE

APPEARANCES ON NEXT PAGE

OFFI CI AL COURT REPORTER: LEE- ANNE SHORTRI DGE, CSR, CRRCERTI FI CATE NUMBER 9595

PROCEEDI NGS RECORDED BY MECHANI CAL STENOGRAPHYTRANSCRI PT PRODUCED WI TH COMPUTER


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A P P E A R A N C E S:

FOR PLAI NTI FF MORRI SON & FOERSTERAPPLE: BY: HAROLD J . MCELHI NNY

RACHEL KREVANS

425 MARKET STREETSAN FRANCI SCO, CALI FORNI A 94105

GI BSON, DUNN & CRUTCHERBY: H. MARK LYON1881 PAGE MI LL ROADPALO ALTO, CALI FORNI A 94304

WI LMER, CUTLER, PI CKERI NG,

HALE AND DORRBY: MARK D. SELWYN950 PAGE MI LL ROADPALO ALTO, CALI FORNI A 94304

FOR SAMSUNG: QUI NN, EMANUEL, URQUHART,OLI VER & HEDGESBY: J OHN B. QUI NN SCOTT L. WATSON865 S. FI GUEROA STREET, FLOOR 10LOS ANGELES, CALI FORNI A 90017

BY: VI CTORI A F. MAROULI S KEVI N B. J OHNSON555 TWI N DOLPHI N DRI VESUI TE 560REDWOOD SHORES, CALI FORNI A 94065

BY: SEAN PAK50 CALI FORNI A STREET, FLOOR 22

SAN FRANCI SCO, CALI FORNI A 94111


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SAN J OSE, CALI FORNI A J ANUARY 23, 2014

P R O C E E D I N G S

(COURT CONVENED AT 2:28 P. M. )

THE CLERK: CALLI NG CASE NUMBER C- 12- 00630 LHK,

APPLE, I NCORPORATED VERSUS SAMSUNG ELECTRONI CS COMPANY LI MI TED,

ET AL.

COUNSEL, I F YOU COULD STATE YOUR APPEARANCES, PLEASE.

MR. MCELHI NNY: GOOD AFTERNOON, YOUR HONOR.

HAROLD MCELHI NNY AND RACHEL KREVANS OF MORRI SON & FOERSTER FOR

PLAI NTI FF APPLE.

MR. QUI NN: GOOD AFTERNOON, YOUR HONOR. J OHN QUI NN,

VI CKY MAROULI S, KEVI N J OHNSON, SCOTT WATSON, AND SEAN PAK FOR

QUI NN, EMANUEL FOR SAMSUNG.

MR. LYON: ALSO MARK LYON FROM GI BSON, DUNN &

CRUTCHER ON BEHALF OF APPLE.

MR. SELWYN: AND ALSO MARK SELWYN FROM WI LMER, HALE

ON BEHALF OF APPLE.

THE COURT: OKAY. GOOD AFTERNOON.

LET' S DO SOME SCHEDULI NG FI RST. I ' D LI KE TO ADVANCE THE

DATES FOR YOUR PRETRI AL CONFERENCE FI LI NGS RATHER THAN GOI NG BY

THE 14 AND 10 DAYS THAT ARE I N MY STANDI NG ORDER J UST BECAUSE I

THI NK THAT WOULD, I AND MY STAFF, WE WOULD BENEFI T FROM SOME

ADDI TI ONAL TI ME. OKAY?

SO LET ME FI RST ASK, WHAT RULI NGS WOULD MOST HELP WI TH

YOUR ADR PROCESS SO WE CAN PRI ORI TI ZE I SSUI NG THOSE ORDERS


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FI RST? BETWEEN, YOU KNOW, ANY OF THE POST- TRI AL MOTI ONS I N THE

FI RST CASE, THE PERMANENT I NJ UNCTI ON I N THE FI RST CASE, OR THE

DAUBERTS, WHAT SHOULD WE PRI ORI TI ZE?

MR. QUI NN: YOUR HONOR - - SPEAKI NG FOR SAMSUNG, I

THI NK THE FI RST PRI ORI TY, THE MOST HELPFUL FOR US, WOULD BE A

RULI NG ON THE DAUBERT MOTI ONS, ESPECI ALLY WI TH RESPECT TO

DR. HAUSER AND DR. VELLTURO.

THE COURT: OKAY. AND WHAT ABOUT FOR APPLE?

MR. MCELHI NNY: NOT SURPRI SI NGLY, YOUR HONOR, WE HAVE

A DI FFERENT VI EW. WE THI NK THE MOST HELPFUL RULI NG WOULD BE

THE RULI NG ON THE PRELI MI NARY I NJ UNCTI ON - - I ' M SORRY - - THE

PERMANENT I NJ UNCTI ON FROM THE FI RST CASE, AND THEN THE RULI NG

ON THE J MOL FOR THE FI RST CASE.

THE COURT: ALL RI GHT. WELL, THAT DOESN' T REALLY

HELP ME BECAUSE THEN WE HAVE TO DO EVERYTHI NG, WHI CH WE' LL TRY

TO DO.

MR. MCELHI NNY: RI GHT.

THE COURT: BUT - -

MR. MCELHI NNY: I - - AND I WOULD PRI ORI TI ZE THOSE.

I THI NK I N TERMS OF WHETHER OR NOT I T' S GOI NG TO HAVE ANY

EFFECT ON THE MARKETPLACE OR PEOPLE' S BEHAVI OR OR CHANGE THE

WAY THAT THI NGS ARE STUCK RI GHT NOW, I T' S THE PRELI MI NARY

I NJ UNCTI ON. THE REST OF I T ARE PROCESS MOTI ONS THAT WI LL LEAD

TO CONTI NUATI ONS OF LI TI GATI ON.

THE COURT: ALL RI GHT. OKAY. SO I ' D LI KE TO J UST DO


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SOME HOUSEKEEPI NG.

FOR THE VERDI CT FORM, I WOULD LI KE TO - - SO I NSTEAD OF

HAVI NG 14 AND 10 DAY DEADLI NES BEFORE THE PRETRI AL CONFERENCE,

I WOULD LI KE TO MOVE THAT UP TO FEBRUARY 18TH AND

FEBRUARY 25TH.

SO, FOR EXAMPLE, THE J OI NT PRELI MI NARY J URY I NSTRUCTI ONS

WI TH ANY COMPETI NG PROPOSALS, FEBRUARY 18TH; AND THE J OI NT

PROPOSED FI NAL J URY I NSTRUCTI ONS WI TH COMPETI NG PROPOSALS BY

FEBRUARY 25TH.

NOW, I ' M PLANNI NG TO ADOPT THE PRELI MI NARY AND FI NAL J URY

I NSTRUCTI ONS FROM THE FI RST TRI AL UNLESS YOU CAN POI NT TO

EI THER A CHANGE I N THE LAWOR SOMETHI NG ELSE THAT J USTI FI ES A

CHANGE, BUT THERE' S GOI NG TO BE A HEAVY PRESUMPTI ON THAT WHAT

WAS PREVI OUSLY GI VEN WI LL BE GI VEN THI S TI ME. OKAY?

THE J OI NT PROPOSED VERDI CT FORM FI LED BY FEBRUARY 25 - -

AND I ' LL I SSUE A CASE MANAGEMENT ORDER WI TH ALL OF THESE SET

OUT.

WE' LL HAVE TEN J URORS AGAI N, FOUR PEREMPTORI ES PER SI DE.

I ' LL ALLOW20 MI NUTES OF ATTORNEY VOI R DI RE PER SI DE.

PLEASE SUBMI T YOUR PROPOSED VOI R DI RE QUESTI ONS BY FEBRUARY 25.

WE' LL DO THE SAME TI ME LI MI TS AS LAST TI ME, ONE AND A HALF

HOURS PER SI DE FOR OPENI NG, TWO HOURS PER SI DE FOR CLOSI NG, 25

HOURS OF EVI DENCE PER SI DE.

FOR MOTI ONS I N LI MI NE, I ' M GOI NG TO LI MI T - - BLESS YOU - -

THE NUMBER TO SEVEN MOTI ONS PER SI DE. EACH SI DE WI LL BE


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LI MI TED TO A MAXI MUM OF 30 PAGES OF BRI EFI NG ON THE MOTI ONS.

THE MOTI ONS ARE TO BE FI LED ON FEBRUARY 18, AND THE

OPPOSI TI ONS, ALSO LI MI TED TO 30 PAGES, WI LL BE DUE ON

FEBRUARY 25. NO REPLI ES.

NOW, I WOULD LI KE YOU TO EXCHANGE AND FI LE WI TNESS LI STS

BY FEBRUARY 13TH AT NOON. I TRI ED TO TAKE I NTO CONSI DERATI ON

WHEN YOU' RE GOI NG TO BE NARROWI NG YOUR CASE. HOPEFULLY THI S

GI VES YOU ENOUGH TI ME.

AND THE NUMBER OF LI VE WI TNESSES WI LL BE LI MI TED TO 50,

SAME AS THE FI RST TRI AL.

NUMBER OF DEPOSI TI ON DEPONENTS WI LL BE 45. EXCHANGE AND

FI LE YOUR DEPOSI TI ON DESI GNATI ONS BY FEBRUARY 18; OBJ ECTI ONS,

COUNTER- DESI GNATI ONS, PLEASE FI LE THEM BY FEBRUARY 25; AND EACH

SI DE I S LI MI TED TO NO MORE THAN 25 HOURS OF DEPOSI TI ON

DESI GNATI ONS.

SAME EXHI BI T LI MI TS. J OI NT EXHI BI TS, NO MORE THAN 100,

AND THERE HAS TO BE COMPLETE AGREEMENT FOR I T TO BE ON THE LI ST

OF J OI NT EXHI BI TS; EACH SI DE MAY HAVE I NDI VI DUAL EXHI BI T LI STS

OF NO MORE THAN 200 EACH, FOR A TOTAL OF 500 EXHI BI TS I N THE

WHOLE TRI AL. EXCHANGE YOUR EXHI BI T LI STS BY FEBRUARY 13TH AT

NOON.

WE' LL DO THE SAME PROCEDURE WE' VE BEEN DOI NG FOR

EVI DENTI ARY OBJ ECTI ONS I N THAT THE PARTI ES WI LL FI LE THEI R

OBJ ECTI ONS AND RESPONSES TO WI TNESSES, EXHI BI TS, OR

DEMONSTRATI VES NO LATER THAN 8: 00 A. M. TWO DAYS BEFORE THE


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WI TNESS I S TO TESTI FY OR THE DEMONSTRATI VE OR EXHI BI T I S TO BE

USED.

AND I ' M GOI NG TO LI MI T I T TO THREE, THREE EXHI BI TS PER

WI TNESS MAY BE OBJ ECTED TO AND TWO OBJ ECTI ONS PER EXHI BI T, AND

THREE OBJ ECTI ONS TO THE DEPOSI TI ON TESTI MONY OF A SI NGLE

WI TNESS. THERE WI LL BE A FI VE PAGE LI MI T.

ACTUALLY, THAT DI DN' T WORK AS WELL I N THE RETRI AL. MAYBE

I SHOULD SAY A - - DI D I LI MI T I T TO FI VE ON THE RETRI AL? I

THOUGHT WE WERE UP TO SEVEN. DOES ANYONE REMEMBER?

MS. MAROULI S: YOU DI D LI MI T US.

THE COURT: WAS I T FI VE OR SEVEN? DO YOU RECALL?

MS. MAROULI S: I T WAS NOT SEVEN. I T WAS EI THER FI VE

OR SI X.

THE COURT: LET' S KEEP I T AT FI VE THEN, BUT - - LET' S

KEEP I T AT FI VE.

ANY ADDI TI ONAL OBJ ECTI ONS YOU' D LI KE TO MAKE WI LL HAVE TO

BE MADE LI VE DURI NG THE TRI AL BEYOND THESE LI MI TS I N FRONT OF

THE J URY.

OKAY. SO AT THE - -

MS. MAROULI S: YOUR HONOR, MAY WE RAI SE THE I SSUE OF

DEPOSI TI ON DESI GNATI ONS?

THE COURT: YES.

MS. MAROULI S: THEY WERE PREVI OUSLY DUE I N THE MI DDLE

OF MARCH AND THE COURT WANTS THEM FEBRUARY 18TH. CAN WE HAVE

MAYBE ANOTHER COUPLE OF WEEKS? I T' S A PRETTY VOLUMI NOUS


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ASSI GNMENT FOR BOTH SI DES.

THE COURT: THAT' S FI NE. ALL I ' M TRYI NG TO DO I S - -

ANYTHI NG FOR MARCH 5TH, I ' M TRYI NG TO GET THAT A LI TTLE BI T

SOONER. I S THERE - - I ' M NOT GOI NG TO HAVE TO DO ANYTHI NG WI TH

THE DEPOSI TI ON DESI GNATI ONS, RI GHT?

MS. MAROULI S: NO, YOUR HONOR. THOSE ARE USUALLY

SUBJ ECT TO OBJ ECTI ONS DURI NG TRI AL.

THE COURT: THAT' S FI NE. SO HOWMUCH TI ME - - THAT' S

FI NE. I DO WANT THE NUMERI CAL LI MI TS, BUT I F YOU WANT TO

CHANGE THE DEADLI NES, THAT' S FI NE. WHAT DO YOU WANT ME TO

CHANGE I T TO?

MS. MAROULI S: THE 1ST OF MARCH?

THE COURT: OKAY. I S THAT A WEEKDAY? I ' M SORRY. I

DI DN' T BRI NG A CALENDAR UP HERE.

MS. MAROULI S: THE FI RST WEEK OF MARCH, YOUR HONOR.

I ' M SORRY, I DON' T HAVE MY CALENDAR.

MR. MCELHI NNY: THAT WOULD BE MARCH 3RD.

THE COURT: OKAY. SO MARCH 3RD FOR THE DEPO

DESI GNATI ONS, AND DO YOU WANT A WEEK AFTER THAT FOR ANY

COUNTER-DESI GNATI ONS AND OBJ ECTI ONS?

MS. MAROULI S: YES, YOUR HONOR.

THE COURT: OKAY. SO I BELI EVE THAT WOULD BE

MARCH 10. THAT' S FI NE.

MS. MAROULI S: THANK YOU.

THE COURT: OKAY. SO THE SUBJ ECT FOR THE PRETRI AL


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CONFERENCE ON MARCH 5TH WI LL BE THE 14 TOTAL MOTI ONS I N LI MI NE

FI LED BY ALL SI DES, THE VERDI CT FORM, AND THE PRELI MI NARY J URY

I NSTRUCTI ONS.

FI LE YOUR J OI NT PRETRI AL STATEMENT FEBRUARY 25. I DON' T

THI NK THE TRI AL BRI EF I S NECESSARY. I MEAN, DO YOU - - I F

YOU' RE ALREADY GOI NG TO FI LE A J OI NT PRETRI AL STATEMENT. BUT

I F YOU FEEL LI KE I T WOULD BE HELPFUL, THAT' S FI NE. DOES ANYONE

WANT TO FI LE A TRI AL BRI EF?

MR. QUI NN: NOT HERE, YOUR HONOR.

THE COURT: OKAY. WHY DON' T WE - - WHY DON' T WE - -

YOU CAN I GNORE THAT. I T' S I N MY STANDI NG ORDER, BUT YOU CAN

I GNORE THAT. THE J OI NT PRETRI AL STATEMENT SHOULD SUFFI CE.

THERE WI LL NOT BE A J URY QUESTI ONNAI RE.

I WI LL ASK YOU TO PREPARE THE SAME J URY BOOKS THAT YOU' VE

ALREADY DONE FOR THE OTHER TRI ALS, AND BRI NG 14 COPI ES OF

THOSE, PLEASE, TO CHAMBERS ON FRI DAY, MARCH - - I S THAT THE

28TH?

THE CLERK: YES.

THE COURT: ON FRI DAY, MARCH 28TH. YOU KNOWWHAT

SHOULD BE I N THERE.

I ASSUME YOU WANT TO SHOWTHE FJ C VI DEO ON PATENTS.

MR. MCELHI NNY: WE DO, YOUR HONOR.

THE COURT: OKAY. ALL RI GHT. SO THAT' LL I NCLUDE

YOUR LI ST OF WI TNESSES, ATTORNEYS, TRI AL DATES AND TI ME, THE

SAMPLE PATENT FOR THE FJ C VI DEO, THE PRELI MI NARY J URY


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I NSTRUCTI ONS, THE CLAI M CHART, GLOSSARY, ALL OF THE ASSERTED

PATENTS, THE TAB FOR THE WI TNESS PHOTOS, TAB FOR THE FI NAL J URY

I NSTRUCTI ONS, AND THE BLANK LI NED PAPER.

SAME TRI AL SCHEDULE, 9: 00 TO 4: 30 WI TH A LUNCH BREAK FROM

NOON TO 1: 00 ON MONDAY, TUESDAY, FRI DAY, AND WE' LL HAVE I T I N

THI S COURTROOM.

I ' D LI KE TO ADVANCE YOUR OBJ ECTI ONS TO OPENI NG STATEMENT

DEMONSTRATI VES. COULD YOU PROVI DE THAT BY THURSDAY, MARCH 27TH

FOR THE MONDAY J URY SELECTI ON?

MR. QUI NN: YES, YOUR HONOR.

THE COURT: I S THAT OKAY?

MR. MCELHI NNY: J UST TO REMI ND YOUR HONOR, THE

PROBLEM WI TH THAT - -

THE COURT: YEAH.

MR. MCELHI NNY: - - I S THAT WE END UP GETTI NG, LI KE, A

LOAD OF 500 POTENTI AL SLI DES AND I T DOESN' T REALLY FOCUS ON

WHAT - - SO I F YOU WANT TO PUT A LI MI T ON THE NUMBER OF SLI DES

THAT COULD BE EXCHANGED, THAT MI GHT MAKE THI S MORE REALI STI C.

THE COURT: WELL, WHAT' S THAT NUMBER?

MR. MCELHI NNY: I WOULD SAY 50.

THE COURT: I THI NK THAT' S TOO LOW. THAT' S TOO LOW.

BUT I F YOU ALL CAN AGREE UPON A NUMBER - - YOU' LL HAVE AN HOUR

AND A HALF, 90 MI NUTES. DO YOU WANT TO SAY 125 SLI DES? 150

SLI DES?

MR. QUI NN: YOUR HONOR, PERHAPS THI S I S SOMETHI NG


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THAT WE CAN TALK ABOUT, YOUR HONOR. I T' S, FRANKLY, NOT

SOMETHI NG WE' VE EVEN BEGUN TO THI NK ABOUT HOWMANY SLI DES WE

MI GHT USE.

THE COURT: WHY DON' T YOU MAKE A PROPOSAL ON

MARCH 5TH AT THE PRETRI AL CONFERENCE?

MR. QUI NN: OKAY.

MR. MCELHI NNY: THANK YOU, YOUR HONOR.

THE COURT: OKAY. I ' LL GO AHEAD AND SET THE TI ME

FOR - - I ' LL SET I T FOR NOON ON THURSDAY, MARCH 27TH. I GUESS

I F THAT' S GOI NG TO BE I NCREDI BLY BURDENSOME, YOU CAN LET ME

KNOW, BUT LET' S TRY TO REACH SOME LI MI T.

I DO THI NK THE 500 WAS VERY DI FFI CULT TO GO THROUGH THE

NI GHT BEFORE THE CLOSI NGS, SO I F WE COULD LI MI T THAT, THAT

WOULD BE HELPFUL.

OKAY. AND I F YOU DON' T NOTI FY THE COURT THAT YOU HAVE

SETTLED AND RESOLVED YOUR CASE BEFORE 3: 00 P. M. ON MARCH 28TH

OF 2014, THE PARTI ES WI LL BE ORDERED TO PAY THE J UROR FEES,

MI LEAGE, AND PARKI NG FOR THE J URORS WHO DO COME FOR J URY

SELECTI ON ON THE 31ST. OKAY?

ALL RI GHT. OTHERWI SE WE' RE ON FOR MARCH 5TH AT 2: 00 FOR A

FI NAL PRETRI AL CONFERENCE, AND A J URY TRI AL ON MARCH 31 AT

9: 00.

OKAY. THOSE ARE THE ONLY - -

MR. MCELHI NNY: MAY I BE HEARD ON J UST ONE LI TTLE

PI ECE?


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THE COURT: YES.

MR. MCELHI NNY: ON THE I N LI MI NE MOTI ONS, I HAVE NO

OBJ ECTI ON TO PAGE LI MI TS.

THE COURT: YES.

MR. MCELHI NNY: BUT I F YOUR HONOR WOULD CONSI DER

I NCREASI NG THE NUMBER OF MOTI ONS TO TEN, AND THE REASON I SAY

THAT I S YOU ACTUALLY HAVE MORE TI ME THERE - - WE HAVE MORE

WI TNESSES I N THI S CASE, AND I N LI MI NE MOTI ONS ACTUALLY TURN OUT

TO BE, I THI NK, QUI TE HELPFUL. THEY HAVE PROVEN HELPFUL I N THE

TWO PRI OR CASES.

BUT THI S I S MORE LI KE THE FI RST CASE THAN THE SECOND CASE.

WE HAVE CROSS- MOTI ONS. WE HAVE CROSS- CASES. WE HAVE MORE

WI TNESSES AND I THI NK THERE WI LL BE I SSUES THAT WI LL BE

HELPFUL, NEWI SSUES THAT I T WOULD HELP TO GET YOUR GUI DANCE ON

I N LI MI NE.

I ' M PERFECTLY FI NE WI TH THE 30 PAGES. I J UST WANT - - I

THI NK THERE WI LL BE MORE I SSUES.

WE MI GHT EVEN AGREE ON THI S.

MR. QUI NN: WE DON' T HAVE ANY OBJ ECTI ON TO THAT, YOUR

HONOR.

THE COURT: WHAT ABOUT A COMPROMI SE AT EI GHT OR NI NE?

MR. MCELHI NNY: I WOULD ACCEPT A COMPROMI SE AT NI NE,

YOUR HONOR.

(LAUGHTER. )

THE COURT: I PREFER THE COMPROMI SE AT EI GHT.


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( LAUGHTER. )

MR. MCELHI NNY: I ' LL ACCEPT YOUR COMPROMI SE, YOUR

HONOR.

I ' M SORRY. I ACTUALLY THI NK THI S I S BETTER FOR YOU.

THAT' S WHY I ' M PROPOSI NG I T, BECAUSE I KNOWI T' S A LOT OF WORK,

BUT I T I S - - I T' S WEEKS - - I T' S A WEEK BEFORE THE TRI AL AS

OPPOSED TO - -

THE COURT: WELL, OKAY. I MEAN, I WI LL TELL YOU MY

PERSONAL VI EWI S THAT WE' LL GET OVERBROAD, SWEEPI NG MOTI ONS

WHI CH WI LL BE DENI ED AND WI LL HAVE TO BE DECI DED ON A CASE BY

CASE, I NDI VI DUAL OBJ ECTI ON BASI S AT TRI AL.

I T' LL BE LI KE ALL THE OTHER MOTI ONS I N LI MI NE WHI CH ARE,

YOU KNOW, EXCLUDE ALL EVI DENCE OF I NDEPENDENT DEVELOPMENT.

EXCLUDE ALL EVI DENCE OF - - I HAVEN' T PERSONALLY FOUND THE

MOTI ONS I N LI MI NE TO BE HUGELY HELPFUL I N THE EARLI ER CASES

BECAUSE THEY' RE WAY TOO GENERAL AND I T' S NOT CLEAR WHAT' S BEI NG

REQUESTED TO BE EXCLUDED.

MR. MCELHI NNY: I THI NK YOUR HONOR HAS ACCURATELY

STATED THE HI STORY.

BUT WHAT I WOULD SUGGEST I S EVEN I N THAT SI TUATI ON, I T HAS

HELPED EDUCATE YOUR HONOR TO WHAT THE I SSUES ARE AS THEY COME

UP AT TRI AL.

I F I T' S NOT, THEN WE DON' T NEED TO DO I T BECAUSE THAT' S - -

I ' M NOT TRYI NG TO J USTI FY BROAD, SWEEPI NG MOTI ONS.

THE COURT: WHY DO YOU NEED TO MAKE I T A MOTI ON? WHY


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DON' T YOU J UST MAKE A NOTI CE?

MR. MCELHI NNY: I AM NOT ATTEMPTI NG TO J USTI FY BROAD,

SWEEPI NG MOTI ONS.

THE COURT: NO, BUT I ' M J UST SAYI NG, WHY CAN' T I T

J UST BE A MOTI ON? I T COULD J UST - - I MEAN, WHY DOES I T HAVE TO

BE A MOTI ON? YOU COULD PUT I N THE J OI NT PRETRI AL STATEMENT AND

SAY "WE ENVI SI ON THE FOLLOWI NG EVI DENTI ARY I SSUES WI LL ARI SE AT

TRI AL. WE WI LL BE MAKI NG OBJ ECTI ONS TO" - -

MR. MCELHI NNY: PERFECT.

THE COURT: - - "X PARTY' S EVI DENCE OF WHATEVER. "

MR. MCELHI NNY: THAT' S PERFECT.

THE COURT: I J UST - - YOU KNOW, I FELT LI KE RULI NG ON

THESE BROAD GENERALI ZATI ONS MI GHT ACTUALLY BE MORE PROBLEMATI C

BECAUSE THEY SWEEP I N TOO MUCH BECAUSE WE' RE TAKI NG A VERY

BROAD LOOK RATHER THAN AN I NDI VI DUAL DOCUMENT OR A WI TNESS SORT

OF REVI EWAND I T MI GHT J UST BE AN OVERBROAD RULI NG.

SO, I MEAN, I WAS I NTENDI NG - - I F YOU DO THAT AGAI N, I ' M

J UST GOI NG TO DENY THEM ALL WI THOUT PREJ UDI CE AND LET YOU MAKE

I NDI VI DUAL OBJ ECTI ONS DURI NG THE TRI AL.

MR. MCELHI NNY: THI S HAS BEEN VERY HELPFUL. I

WI THDRAWMY MOTI ON. WE' LL STI CK WI TH THE SEVEN, YOUR HONOR.

THE COURT: WELL, CAN I GO DOWN TO FI VE THEN NOWTHAT

THERE' S - -

( LAUGHTER. )

THE COURT: - - AN AGREEMENT? I MEAN, I J UST KNOW- -


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NO. I REALLY APPRECI ATE I T. YOUR PUTTI NG US ON NOTI CE I N

ADVANCE I S HELPFUL.

BUT I THI NK THAT COULD BE DONE WI TH A NOTI CE I N THE J OI NT

PRETRI AL STATEMENT. I DON' T THI NK WE HAVE TO DO THI S LONG,

ELABORATE - -

MR. MCELHI NNY: I THI NK THE TRUTH - -

THE COURT: - - MOTI ON.

MR. MCELHI NNY: I THI NK THE TRUTH I S I N THE MI DDLE.

I THI NK YOUR HONOR HAS MADE SUBSTANTI VE RULI NGS I N THE I N

LI MI NE MOTI ONS. WHEN THEY' RE SERVED UP CORRECTLY I N TERMS OF

PARTI CULAR DOCUMENTS, PARTI CULAR LI NES OF ARGUMENT, PARTI CULAR

THI NGS LI KE THAT THAT HAVE, I N FACT, PROVEN VERY HELPFUL.

SO I - - I MEAN, I ' M STUCK NOWBECAUSE NOWALL OF A SUDDEN

I TOOK THAT SEVEN AND PUT I T I NTO PLAY, BUT - - I ACTUALLY - - I

WOULD PREFER TEN, BUT I UNDERSTAND YOUR HONOR' S LOGI C AND SO I

UNDERSTAND HOWYOU GOT TO SEVEN.

THE COURT: WELL, WHAT CAN WE DO TO AVOI D HAVI NG THE

SORT OF OVERBROAD MOTI ONS THAT WE' VE PREVI OUSLY HAD I N THE

PRI OR TWO TRI ALS? I DON' T THI NK THAT' S NECESSARY FOR THE

PURPOSES OF EDUCATI ON. I THI NK I F YOU J UST ALERT US TO THE

I SSUE THAT THAT' S SUFFI CI ENT.

MR. MCELHI NNY: I DON' T - -

THE COURT: WHAT CAN WE DO TO AVOI D - -

MR. MCELHI NNY: I DON' T SEE ANY WAY TO GET OUT OF

THI S CONVERSATI ON NOWTHAT WE' VE STARTED.


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THE COURT: HM?

MR. MCELHI NNY: I DON' T SEE ANY GOOD WAY FOR ME TO

GET OUT OF THI S CONVERSATI ON.

THE COURT: WELL, YOU CAN AGREE TO FI VE MOTI ONS FOR

25 PAGES.

MR. MCELHI NNY: I S MY AGREEMENT REQUI RED, YOUR HONOR?

(LAUGHTER. )

THE COURT: WELL, I - - YOU KNOW, YOU SEE MY CONCERN,

RI GHT?

MR. MCELHI NNY: I DO.

THE COURT: I FEEL LI KE I T WOULD BE I MPROPER FOR ME

TO MAKE THESE BROAD RULI NGS, WHI CH MI GHT, YOU KNOW- -

MR. MCELHI NNY: I DO - -

THE COURT: - - BE WRONG FOR AN I NDI VI DUAL DOCUMENT

OR - -

MR. MCELHI NNY: LET ME PUT I T THI S WAY. I DO SEE

YOUR CONCERN.

THE COURT: YEAH.

MR. MCELHI NNY: I DON' T I NTEND TO FI LE - - NOWWE' RE

BACK TO THI S - - ANY I N LI MI NE MOTI ONS THAT WOULD ELI CI T THAT

CONCERN, PARTI CULARLY AFTER THI S CONVERSATI ON.

BUT I - - FROM THE TI ME I ' VE BEEN I N THI S CASE, I DO SEE

THAT THERE ARE PARTI CULAR DOCUMENTS, THERE ARE PARTI CULAR

DEMONSTRATI ONS, THERE ARE PARTI CULAR I SSUES THAT I T WOULD BE

GOOD TO HAVE A RESOLUTI ON OF BEFORE WE GO FORWARD.


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THE COURT: RI GHT. BUT HI STORI CALLY, THE MOTI ONS

HAVE BEEN THEME- BASED AND LESS DOCUMENT- BASED.

MR. MCELHI NNY: I ' M THE ONE WHO WRI TES THE OBJ ECTI ONS

THAT SAY "THI S I S TOO BROAD, I T' S NOT HELPFUL, I T' S NOT GOI NG

TO GI VE GUI DANCE, PLEASE DENY I T. " I UNDERSTAND EXACTLY WHAT

YOU' RE TALKI NG ABOUT.

THE COURT: BUT YOUR SI DE HAS FI LED SOME OF YOUR OWN

OVERBROAD MOTI ONS AS WELL. MAYBE THAT WAS SOMEBODY ELSE ON

YOUR TEAM.

MR. MCELHI NNY: NO, NO. I F I T WAS FI LED, I T WAS

FI LED WI TH MY SI GNATURE.

THE COURT: ALL RI GHT. OKAY.

MR. MCELHI NNY: THAT' S THE WAY OF THE CASE.

THE COURT: I WI LL NOT GO BACK ON THE SEVEN AND 30.

BUT I WI LL ASK BOTH SI DES, I F YOU WANT TO DO EDUCATI ON,

CAN YOU PLEASE PUT I T I N THE J OI NT PRETRI AL? I MEAN, WE DO

READ EVERYTHI NG YOU FI LE, SO I F YOU GI VE US A HEADS UP, WE WI LL

BE THI NKI NG ABOUT I T I N ADVANCE. BUT PLEASE TRY TO AVOI D THOSE

OVERLY GENERAL MOTI ONS I N LI MI NE.

OKAY. WHAT OTHER HOUSEKEEPI NG? ANYTHI NG ELSE? NO?

OKAY.

MS. MAROULI S: NO, YOUR HONOR.

THE COURT: ALL RI GHT. SO I THOUGHT WHAT WOULD BE

HELPFUL I S FOR ME TO GI VE YOU A TENTATI VE RULI NG AND THEN YOU

CAN ARGUE AGAI NST THE TENTATI VE OR FOR THE TENTATI VE, HOWEVER


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YOU WANT TO COME OUT.

AND THI S I S WHAT I ' M PLANNI NG - - AND I ALSO HAVE SOME

OTHER QUESTI ONS TO ASK AS WELL.

I AMTENTATI VELY PLANNI NG TO GRANT APPLE' S MOTI ON TO

PROHI BI T OR EXCLUDE DR. CHEVALI ER' S TESTI MONY ON THE HTC

AGREEMENT FOR THE REASONS THAT I SET FORTH I N THE HTC ORDER

FROM THE RETRI AL, THE APRI L 2010 LI CENSI NG OFFER PURSUANT TO

FEDERAL RULE OF EVI DENCE 408, AND HER ACTUAL ANALYSI S OF ALL

THE OTHER LI CENSE AGREEMENTS BECAUSE THEY' RE NOT SPECI FI C TO

THE TECHNOLOGY AT I SSUE AND DON' T DO THE REQUI RED COMPARABI LI TY

ANALYSI S REQUI RED BY RESQNET OR LASER DYNAMI CS.

I ' M I NTENDI NG TO GRANT SAMSUNG' S MOTI ON TO EXCLUDE

DR. HAUSER AND DR. VELLTURO FROM RELYI NG ON DR. HAUSER' S

SURVEYS RELATED TO THE ' 414 PATENT BECAUSE DR. HAUSER' S SURVEY

DOES NOT I NFORM THE SURVEY PARTI CI PANTS OF THE LI MI TATI ONS OF

CLAI M 20.

I ' M ALSO I NCLI NED TO GRANT SAMSUNG' S MOTI ON TO EXCLUDE

DR. VELLTURO' S - - APPLE' S WI LLI NGNESS TO ACCEPT CALCULATI ONS AS

A BASI S FOR HI S REASONABLE ROYALTY CALCULATI ON BECAUSE I T' S

REALLY J UST LOST PROFI TS, WHI CH WOULD NOT BE PERMI TTED BECAUSE

I T' S OUT - - YOU KNOW, SAMSUNG WOULD HAVE A NON- I NFRI NGI NG

ALTERNATI VE AT THAT POI NT AND LOST PROFI TS WOULD NOT BE

APPROPRI ATE, SO I ' M NOT GOI NG TO ALLOWDR. VELLTURO TO SQUEEZE

I N A LOST PROFI TS CALCULATI ON UNDER THE NAME OF A REASONABLE

ROYALTY CALCULATI ON.


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THE DESI GN AROUND DATES BEGI N ON THE DATE OF I NFRI NGEMENT

AND NOT ON THE DATE OF NOTI CE, AND FOR THAT I J UST POI NT TO THE

ORDER THAT I I SSUED BEFORE THE RETRI AL. I T' S THE SAME LEGAL

ANALYSI S.

BUT FOR ALL OTHER MOTI ONS, I ' M PLANNI NG TO DENY THE

REQUEST FOR EXCLUSI ON.

NOW, I HAVE - - WHY DON' T I ASK MY SPECI FI C QUESTI ONS FI RST

AND THEN I ' LL LET THE PARTI ES GI VE YOUR BEST CASE AS TO WHY

THI S TENTATI VE I S WRONG, WHATEVER PI ECE YOU WANT TO ARGUE.

SO LET' S ASK, WI TH REGARD TO DR. CHEVALI ER, SO I F HER

MARKET APPROACH I S EXCLUDED, SHE COULD STI LL RELY ON HER I NCOME

APPROACH. SO MY QUESTI ON I S, WOULD SHE REACH THE SAME DAMAGES

RESULT?

MR. WATSON: GOOD AFTERNOON, YOUR HONOR.

SCOTT WATSON TO ADDRESS THE CHEVALI ER MOTI ON.

ACTUALLY, YOUR HONOR, THE I NTERESTI NG THI NG HERE I S THAT

THE CONSI DERATI ON OF THE LI CENSI NG DATA I N THI S CASE ACTUALLY

PUSHES DR. CHEVALI ER' S RATE UP, NOT DOWN.

AND I F YOU LOOK AT FOOTNOTE 1 I N APPLE' S BRI EF, THI S HAS

GOT TO BE A FI RST I N THE HI STORY OF DAUBERT. APPLE SAYS, "WE' D

LI KE TO EXCLUDE THI S EVI DENCE. WE DON' T TAKE I SSUE WI TH THE

RESULTS OF HER ANALYSI S. "

THEY' RE NOT ASKI NG TO EXCLUDE THE REASONABLE ROYALTY

NUMBERS THAT DR. CHEVALI ER ENDED UP WI TH, THEY J UST WANT TO

EXCLUDE THE ACTUAL LI CENSI NG DATA I N THE CASE.


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AND THEN SHE' S LOOKI NG AT LI CENSES THAT WERE PRODUCED I N

THI S CASE BY THESE PARTI ES I N DI SCOVERY. THESE ARE ALREADY

DETERMI NED TO BE RELEVANT.

THE COURT: BUT SHE' S SORT OF EXCLUDI NG SOME THAT

SEEM MOST COMPARABLE, ONES THAT I NVOLVE COMPETI TORS, ONES

THAT - - YOU KNOW, FOR EXAMPLE, THE MI CROSOFT. I T SEEMS LI KE

SHE' S PREFERRI NG THE LUMP SUM AGREEMENTS WI TH NON- PRACTI CI NG

ENTI TI ES. I MEAN, THERE' S J UST REALLY NOT A LOT OF ANALYSI S AS

TO WHAT I S THE TECHNOLOGY? I S THI S A COMPARABLE CI RCUMSTANCE?

AND WI THOUT THAT, I J UST DON' T SEE HOWI T COMES I N.

MR. WATSON: AND, YOUR HONOR, I F I MAY?

THE COURT: YEAH.

MR. WATSON: SO THERE' S AN AWFUL LOT OF LI CENSES I N

THI S CASE.

THE COURT: AGREED.

MR. WATSON: WE HAVE 46 PAGES OF SCHEDULES

I DENTI FYI NG THE LI CENSES AND I DENTI FYI NG THE MATERI AL TERMS.

WE ALSO HAVE DR. CHEVALI ER TALKI NG ABOUT THE THI NGS SHE' S

TAKI NG I NTO CONSI DERATI ON I N THE BODY OF HER REPORT.

NOW, I WOULD ASK THE COURT TO COMPARE THAT TO THE ANALYSI S

THAT APPLE I S MAKI NG. DR. VELLTURO, I N ONE PAGE, SAYS 99

LI CENSES, NOT RELEVANT, NOT GOI NG TO LOOK AT THEM, OUT.

THAT' S THEI R COMPARABI LI TY ANALYSI S.

OUR COMPARABI LI TY ANALYSI S GOES 50- PLUS PAGES. AND, YOUR

HONOR, I UNDERSTAND GI VEN THE NUMBER OF LI CENSES, YOU KNOW, TO


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TECHNOLOGY COMPARI SON.

MR. WATSON: WELL, YOUR HONOR, I F I MAY, SHE I S A

PROFESSOR WHO TEACHES I N THE TECHNOLOGY SPACE AT THE YALE

BUSI NESS SCHOOL. SHE I S THE PERSON WHO CHAI RED YALE' S

COMMI TTEE ON COOPERATI VE RESEARCH, WHI CH I S THE LI CENSI NG ARM

OF YALE. SO SHE WAS THE CHAI R FOR LI CENSI NG ALL OF YALE' S

I NTELLECTUAL PROPERTY FOR THREE YEARS. THI S I S A WOMAN WHO HAS

READ LI CENSE AGREEMENTS, WHO I S FAMI LI AR WI TH THE TECHNOLOGY.

AND, YOUR HONOR, THEY HAVEN' T PUT A SI NGLE LI CENSE I N

FRONT OF YOU I N THEI R PAPERS AND SAI D, "LOOK AT THI S LI CENSE,

THI S I SN' T COMPARABLE. LOOK AT THI S TYPE OF TECHNOLOGY, I T' S

NOT COMPARABLE. "

I F YOU LOOK AT THE BODY OF HER REPORT AT PARAGRAPH 327,

SHE' S I DENTI FYI NG THE TYPES OF PATENTS WE HAVE I N THI S CASE.

THESE ARE SMALL FEATURES ON A VERY COMPLEX PRODUCT.

AND I F YOU LOOK AT THE DI SCUSSI ON I N PARAGRAPH 327 OF HER

REPORT, SHE HAS I LLUSTRATI VE EXAMPLES.

NOW, YOUR HONOR SAI D, WELL, SHE' S EXCLUDED SOME OF THE

LARGER LI CENSES. THOSE ARE PORTFOLI O CROSS-LI CENSES.

APPLE DOESN' T DI SPUTE THAT THOSE SHOULD BE EXCLUDED.

DR. VELLTURO J UST EXCLUDES EVERY LI CENSE FROM HI S ANALYSI S

BECAUSE TO GET TO $40 A UNI T, WHI CH I S WHAT THEY WANT, THE J URY

CANNOT SEE A LI CENSI NG AGREEMENT I N THI S CASE. THERE' S NO WAY.

I T' S TOTALLY DI SPARATE TO ACTUAL MARKET I NFORMATI ON.

THE COURT: SO LET ME ASK YOU A QUESTI ON.


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MR. WATSON: THEY CAN ABSOLUTELY - - EXCUSE ME, YOUR

HONOR.

THE COURT: SORRY TO I NTERRUPT YOU.

MR. WATSON: OF COURSE.

THE COURT: SO YOU' RE SAYI NG HER, I GUESS, WHAT I S

I T, $. 35 ROYALTY RATE WOULD DECREASE I F THE MARKET APPROACH I S

TAKEN OUT AND SHE RELI ES ON HER I NCOME APPROACH ANALYSI S?

MR. WATSON: WELL, I MEAN, OBVI OUSLY WE' D HAVE TO ASK

HER.

BUT I ' D ASK THE COURT - -

THE COURT: SURE.

MR. WATSON: - - TO LOOK AT EXHI BI T 97, AND

UNFORTUNATELY, I CAN' T PUT I T UP ON THE SCREEN, BUT I T I S I N

THE RECORD I N THE FAZI O DECLARATI ON.

THE REPORTER: I ' M SORRY, I N WHI CH DECLARATI ON?

THE COURT: F-A- Z- I - O.

MR. WATSON: WE HAVE COPI ES TO HAND UP I F THAT' LL BE

HELPFUL TO THE COURT.

THE COURT: LET ME ASK YOU WHAT MY QUESTI ON WAS.

OKAY. I WI LL - - THESE ARE TENTATI VES, AND I ' LL GI VE YOU A

MI NUTE TO SPEAK FURTHER ABOUT WHY I T SHOULDN' T - - WHY THE

MARKET APPROACH SHOULDN' T BE EXCLUDED.

MR. WATSON: THANK YOU.

THE COURT: BUT I F I T I S, TELL ME, WHAT WOULD YOU

NEED? WOULD YOU NEED - - SO YOU' RE SAYI NG SHE' S NOT GOI NG TO


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RELY J UST ON HER I NCOME APPROACH ANALYSI S?

MR. WATSON: WELL, YOUR HONOR, I MEAN, THEY' RE - - SHE

OBVI OUSLY HAS A LOT OF DATA POI NTS THAT ARE GOI NG I NTO A VERY

SOPHI STI CATED, I SUBMI T, GEORGI A PACI FI C ANALYSI S AND I T' S I N

THE RECORD AND THE COURT CAN LOOK AT I T.

BUT ALL I ' M SAYI NG I S THI S I S A CASE - - I F YOU LOOK AT

RESQNET AND YOU LOOK AT THE OTHER FEDERAL CI RCUI T CASES, WHAT

ARE THEY CONCERNED ABOUT? THEY' RE CONCERNED ABOUT CHERRY

PI CKI NG LI CENSES I N YOUR FAVOR. YOU' RE GOI NG TO LOOK AT THE

BENQ LI CENSE AND NOT AT THE OTHER 29 BECAUSE I T' S SI X TI MES

BI GGER AND YOU' RE TRYI NG TO SKEWTHE NUMBERS.

THAT' S NOT WHAT' S GOI NG ON HERE. DR. CHEVALI ER I S MOVI NG

HER NUMBER UP BECAUSE OF THE LI CENSI NG DATA.

THE ONLY REASON APPLE I S BRI NGI NG THI S MOTI ON I S BECAUSE

THE LI CENSI NG DATA I S COMPLETELY I NCONSI STENT WI TH THE I DEA

THAT ANYONE WOULD PAY $40 FOR FI VE SMARTPHONE PATENTS PER UNI T.

THE COURT: WELL, I ' M NOT GOI NG TO MAKE ANY PERSONAL

COMMENT ON EI THER SI DE' S REASONABLE ROYALTY RATE. I THI NK BOTH

SI DES ARE STRETCHI NG REGARDLESS OF THAT.

HER REASONABLE ROYALTY RATE OF $. 35, HOWI S THAT ACTUALLY

CALCULATED? BECAUSE SHE HAS DI FFERENT APPROACHES, BUT

DOESN' T - - SHE DOESN' T REALLY EXPLAI N HOWSHE ARRI VED AT THAT

NUMBER.

MR. WATSON: WELL, YOUR HONOR - -

THE COURT: I T' S SORT OF LI KE, "WELL, I LOOKED AT ALL


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THI S, AND HERE' S MY RATES. "

MR. WATSON: COULD I HAND UP EXHI BI T 97? BECAUSE I

THI NK I T REALLY EXPLAI NS THAT.

THE COURT: OKAY. I MEAN, I HAVE HER REPORT. YOU

WANT TO J UST POI NT ME TO A PARAGRAPH I N HER REPORT?

MR. WATSON: WELL, I F - -

THE COURT: I ' M SORRY. I HAVE - - I HAVE - -

MR. WATSON: I THI NK THI S I S THE EASI EST WAY TO DO

THI S, YOUR HONOR, BECAUSE I T GRAPHI CALLY I LLUSTRATES WHAT' S

ACROSS MANY, MANY - -

THE COURT: OH, I HAVE EXHI BI T 97. EXCUSE ME.

MR. WATSON: THANK YOU, YOUR HONOR.

THE COURT: I ' M SORRY. I HAVE THAT CHART.

BUT WHAT I ' M SAYI NG, EVEN WI TH THI S CHART, I T SAYS, "I

LOOKED AT I NCOME APPROACH AND LOOKED AT, YOU KNOW, THESE

DI FFERENT FACTORS. HERE' S MY MARKET APPROACH. " BUT I T STI LL

DOESN' T SAY HOWSHE GOT TO THE $. 35.

MR. WATSON: WELL, YOUR HONOR, I F I MAY?

THE COURT: YES.

MR. WATSON: I T' S HARD TO SUMMARI ZE ALL OF THE

ANALYSI S THAT OCCURS I N THE GEORGI A PACI FI C, BUT WHAT YOU CAN

SEE - -

THE COURT: J UST POI NT ME TO SOME PARAGRAPHS I N HER

EXPERT REPORT WHERE SHE SAYS "THI S I S HOWI DERI VED 35. "

MR. WATSON: I MEAN, I WOULD DI RECT THE COURT TO, TO


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THE DI SCUSSI ON - - FOR EXAMPLE, AS TO COMPARABLE LI CENSES, I F WE

LOOK AT THE DI SCUSSI ON I N PARAGRAPH 334, OKAY, WE' VE GOT THE

HTC LI CENSE, WE HAVE THE 2010 PROPOSAL, WE HAVE THE COMPARABLE

LI CENSES. THAT' S THE SUMMARY OF THE OUTPUT THERE. WE' RE

GETTI NG - - WE' RE GETTI NG RANGES I N VALUES FROM EACH OF THESE

STEPS OF ANALYSI S AND THOSE ARE REFLECTED ON 97. YOU CAN SEE

THE RANGES.

AND WHAT DR. CHEVALI ER DOES THEN I S EMPLOY THE OTHER

I NCOME APPROACHES, AND WHAT YOU SEE I S THAT AFTER YOU TAKE THE

GEORGI A PACI FI C FACTORS I NTO ACCOUNT, THI NGS LI KE THE FACT THAT

APPLE OBVI OUSLY I S A COMPETI TOR OF SAMSUNG' S, YOU HAVE

DI FFERENT, YOU KNOW, DI FFERENT SI TUATI ONS, AND THI S I S WHAT

EXPERTS DO. THEY TAKE ALL OF THI S DATA AND THEN THEY, YOU

KNOW, SYNTHESI ZE I T I NTO AN EXPERT OPI NI ON.

AND APPLE' S FREE - - APPLE' S FREE TO CROSS HER ON THI S

OPI NI ON, YOUR HONOR.

BUT I F YOU LOOK AT EXHI BI T 97, YOU HAVE A REMARKABLY

CONSI STENT VALUATI ON SUGGESTED BY EI GHT DI FFERENT

METHODOLOGI ES, I NCLUDI NG THE METHODOLOGY - -

THE COURT: OKAY. SO THEN SHE - - THEN SHE SHOULD - -

THEN SHE SHOULD COME UP WI TH THE SAME REASONABLE ROYALTY RATE

WHETHER SHE' S GETTI NG I T FROM THE I NCOME APPROACH OR THE MARKET

APPROACH.

MR. WATSON: YOUR HONOR, I ABSOLUTELY AGREE THAT HER

REASONABLE ROYALTY RATE I S SUPPORTED BY BOTH.


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THE COURT: THAT WOULD BE THE SAME. OKAY.

MR. WATSON: BUT YOUR HONOR, I DO THI NK I T' S

I MPORTANT TO KEEP I N MI ND THAT THI S I S THE ONLY CASE THAT I ' M

AWARE OF WHERE A PARTY HAS SOUGHT TO THROWOUT LI CENSI NG

EVI DENCE THAT DOES NOT APPEAR TO HAVE ANY I MPACT I N A NEGATI VE

DI RECTI ON ON THEI R NUMBER.

I ' D LI KE TO ADDRESS THE HTC LI CENSE I F I COULD, YOUR

HONOR. I DON' T KNOWI F YOU' RE DONE WI TH COMPARABLE, BUT I

WOULD LI KE TO ADDRESS THAT.

THE COURT: OKAY. AND LET ME J UST CONFI RM. SO THEN

HER I NCOME APPROACH REACHES THE SAME RESULTS; CORRECT?

MR. WATSON: WELL, YOU HAVE THE SAME RANGE OF

RESULTS, YOUR HONOR. I T' S A RANGE OF VALUES THAT' S SUGGESTED

BY EACH OF THESE.

THE COURT: WELL, I MEAN, I THOUGHT SHE SAYS $. 35.

MR. WATSON: WELL - -

THE COURT: I MEAN - -

MR. WATSON: RI GHT, HER ULTI MATE NUMBER I S $. 35.

BUT I F YOU LOOK AT EACH OF THE APPROACHES, THEY SUGGEST A

RANGE, AND THAT $. 35 NUMBER, YOUR HONOR, YOU KNOW, DOES TAKE

I NTO ACCOUNT, OR HAS - - WELL, YEAH. I MEAN, I T' S TAKI NG I NTO

ACCOUNT ALL OF THESE DATA POI NTS.

I MEAN, YOU KNOW, I T' S I MPORTANT, YOUR HONOR, I THI NK TO

NOTE THAT I F THI S MOTI ON I S GRANTED I N FULL AS TO THE LI CENSI NG

ANALYSI S, THI S J URY WI LL NOT HEAR ANYTHI NG ABOUT ANY LI CENSE


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EVER I N THE SMARTPHONE SPACE, AND THAT' S A REMARKABLE - - THAT' S

A REMARKABLE THI NG.

THE COURT: WELL, SOME OF THESE LI CENSES AREN' T I N

THE SMARTPHONE SPACE THAT SHE LOOKS AT.

MR. WATSON: WELL, YOUR HONOR - -

THE COURT: SHE' S LOOKI NG AT THE - - AT SOME OF THEM

THAT I NVOLVE DESKTOP COMPUTERS AND SHE I NCLUDES THAT I N HER

LI ST.

MR. WATSON: BUT YOUR HONOR, SOME OF THESE PATENTS

WERE DEVELOPED AT DI FFERENT TI MES. SO THE PATENT MI GHT SAY

DESKTOP COMPUTER, BUT AS WE ALL KNOW, THE DESKTOP COMPUTER AND

THE HANDHELD DEVI CE HAVE CONVERGED VERY RAPI DLY OVER THE YEARS.

THE COURT: WELL, I MEAN, "A DOUBLE CLI CK I NPUT TO A

POI NT AND CLI CK USER I NTERFACE" DOESN' T REALLY SMELL

SMARTPHONEY TO ME.

MR. WATSON: WELL, YOUR HONOR, THAT' S - -

THE COURT: THAT' S A DESKTOP PATENT, I SN' T I T?

MR. WATSON: I ' M SORRY, YOUR HONOR, TO SPEAK OVER

YOU.

THE ' 647 PATENT WAS DEVELOPED FOR THE DESKTOP. I T' S NOWA

SMARTPHONE I NTERFACE.

AND OBVI OUSLY WE' RE CONSTANTLY I NTERACTI NG WI TH

SMARTPHONES I N THAT WAY.

BUT, YOUR HONOR, ORDI NARI LY WHEN YOU SEE THESE CASES, WHEN

YOU READ THE FEDERAL CI RCUI T CASES, YOU HAVE A PARTI CULAR


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LI CENSE OR HANDFUL OF LI CENSES AND THE PARTY PUTS I T I N FRONT

OF THE COURT AND SAYS, "LOOK, THI S I S DI FFERENT. THI S I S A

DI FFERENT KI ND OF THI NG. "

APPLE HASN' T MADE THAT SHOWI NG HERE. THEY HAVEN' T PUT A

SI NGLE LI CENSE I N FRONT OF YOU AND SAI D "THI S I S NOT A

COMPARABLE LI CENSE. " THEY J UST GENERALLY OBJ ECT TO THE I DEA

THAT ANY OF THESE LI CENSES ARE RELEVANT.

THE COURT: SO LET ME ASK YOU, DO YOU BELI EVE - - I F

THE TENTATI VE REMAI NS AND THE MARKET APPROACH GETS EXCLUDED,

WOULD YOU NEED TO DO ANYTHI NG ELSE? OR DO YOU HAVE - - I MEAN,

THE EXPERT REPORTS AREN' T GOI NG I N ANYWAY, SO I T' S REALLY J UST

A MATTER OF WHAT QUESTI ONS WI LL ELI CI T THE TESTI MONY DURI NG THE

TRI AL.

I MEAN, I GUESS YOU WOULD HAVE TO REVI SE EXHI BI T 97 TO

TAKE THE MARKET APPROACH OFF, BUT THE I NCOME APPROACH COULD

REMAI N THE SAME.

WOULD YOU NEED TO DO ANYTHI NG I S WHAT I ' M ASKI NG?

MR. WATSON: WELL, YOUR HONOR, I MEAN, I THI NK I ' D

WANT TO TALK TO DR. CHEVALI ER ABOUT I F SHE THI NKS THAT HER

NUMBER ACTUALLY WOULD COME DOWN AS A RESULT OF THI S. AS YOU

CAN SEE ON 97, THESE LI CENSES ARE ACTUALLY PUSHI NG THE NUMBER

UP.

BUT, YOU KNOW, THAT SEEMS TO ME TO BE THE, THE THI NG THAT

J UMPS OUT.

I ' D LI KE TO SPEAK ABOUT THE HTC LI CENSE I F I COULD.


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THE COURT: YES, NO, I WI LL LET YOU DO THAT.

BUT LET ME HEAR FROM APPLE ON THI S ONE POI NT. DO YOU

AGREE THAT I F THE MARKET APPROACH I S EXCLUDED, THAT HER,

DR. CHEVALI ER' S REASONABLE ROYALTY RATE WOULD STI LL BE $. 35?

MS. KREVANS: I T APPEARS THAT WAY TO US FROM HER

OPI NI ON, YOUR HONOR, AND WE THI NK SHE HAS ENOUGH I N HER REPORT,

I NDEPENDENT OF THAT, TO GI VE THE OPI NI ONS THAT SHE WANTS TO

GI VE. I DON' T THI NK I T WOULD CHANGE HER ULTI MATE OPI NI ON AT

ALL, AND I F I T CAUSED I T TO GO UP A LI TTLE BI T, SO BE I T.

I THI NK - - I WOULD LI KE TO J UST COMMENT BRI EFLY ON A

COUPLE OF THE THI NGS MR. WATSON SAI D.

THE COURT: OKAY. BUT LET ME ASK YOU, THEN WHAT DO I

NEED TO DO, I F THAT I S WHAT' S GOI NG TO HAPPEN, DO WE NEED TO

DO - - WELL, ALSO LET ME ASK YOU, SO I F WE EXCLUDE DR. HAUSER' S

SURVEYS RELATI NG TO THE ' 414 AND DR. VELLTURO' S, HI S

EFFECTI VELY LOST PROFI TS CALCULATI ON AND HI S REASONABLE ROYALTY

RATE CALCULATI ONS, I F THOSE ARE EXCLUDED FROM YOUR EXPERT' S

REPORTS, DO YOU NEED TO DO ANYTHI NG DI FFERENT OR NEW?

MS. KREVANS: WE WOULD HAVE TO CERTAI NLY REVI SE

THI NGS SUBSTANTI ALLY WI TH RESPECT TO THE ' 414. WHETHER WE

WOULD HAVE TO DO SOMETHI NG NEWON THE ROYALTI ES, I THI NK WE' D

HAVE TO CONFER ON THAT.

I WOULD LI KE TO BE HEARD ON THAT, THOUGH, BECAUSE I THI NK

WE HAVE CLEAR FEDERAL CI RCUI T CASE LAWTHAT SAYS THAT SAMSUNG' S

MOTI ON WAS I NCORRECT ON THAT POI NT.


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THE COURT: WELL, I ' LL LET YOU BE HEARD ON THAT.

OKAY. SO FOR BOTH SI DES THEN, I WOULD - - BECAUSE I DON' T

WANT TO MOVE MARCH 31.

MS. KREVANS: AND NEI THER DO WE, YOUR HONOR.

THE COURT: SO I NEED TO FI GURE OUT THEN, DO I NEED

TO ORDER YOU TO AMEND THE REPORTS AND GI VE YOU ALL LI MI TED

DEPOSI TI ONS WI TH EACH OTHER' S EXPERTS AGAI N?

AND THEN, UNFORTUNATELY, I KNOWWHAT' S GOI NG TO HAPPEN.

WE' LL GET THESE MOTI ONS TO STRI KE SAYI NG "THESE ADDI TI ONAL

CHANGES I N THE REPORTS WERE NOT AUTHORI ZED BY THE COURT' S

DAUBERT MOTI ON, " AND THEN WE' LL BE BACK WHERE WE' VE BEEN.

SO - -

MS. KREVANS: WE DON' T THI NK THAT WE WOULD NEED ANY

ADDI TI ONAL DEPOSI TI ON TI ME WI TH DR. CHEVALI ER I F YOU STI CK WI TH

YOUR CURRENT RULI NG, YOUR HONOR.

I THI NK WI TH RESPECT TO DR. HAUSER AND DR. VELLTURO, WE

WOULD NEED TO SEE THE FI NAL CONTOURS OF THE COURT' S RULI NG AND

THEN MAKE A PROPOSAL TO THE COURT ABOUT WHAT COULD OR COULD NOT

BE DONE.

BUT WE DEFI NI TELY DO NOT WANT TO CONTI NUE THE MARCH 31

DATE, AND WHATEVER HAS TO BE DONE TO NOT CONTI NUE, WE WI LL DO

I T.

THE COURT: NOW, THE DESI GN AROUND DATES BEGI N ON THE

DATE OF I NFRI NGEMENT, NOT ON THE DATE OF NOTI CE, SO I ASSUME

DR. VELLTURO WOULD HAVE TO UPDATE HI S - - WHAT I S THAT? - - HI S


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TABLE.

MS. KREVANS: HE WOULD, YOUR HONOR, AND WE ARE

PREPARED TO DO SO BY THE SAME DATE THAT WE' VE OTHERWI SE AGREED

TO SUPPLEMENT BOTH SI DES' REPORTS TO ACCOUNT FOR UPDATED

FI NANCI AL I NFORMATI ON WHI CH THE PARTI ES HAVE AGREED TO DO.

THE COURT: AND WHAT' S THAT DATE?

MS. KREVANS: FEBRUARY 17TH. I S THAT RI GHT?

FEBRUARY 17TH. AND I T' S A NO METHODOLOGY CHANGE UPDATE

AGREEMENT.

THE COURT: ALL RI GHT. WELL, LET' S FI GURE THI S OUT

THEN. SO I F THERE ARE EXCLUSI ONS FROM THE CHEVALI ER, HAUSER,

AND VELLTURO REPORTS, HOWMUCH TI ME DO BOTH SI DES NEED TO

ASSESS WHAT ADJ USTMENTS THEY MI GHT NEED TO MAKE TO THEI R

REPORTS?

MR. WATSON: YOUR HONOR, FROM OUR PERSPECTI VE, WE

WOULDN' T NEED ANY TI ME. I DON' T THI NK THAT THE REPORTS NEED TO

BE REDONE HERE. THERE' S A TREMENDOUS AMOUNT OF EFFORT THAT' S

GOI NG I NTO THI S AT THI S POI NT. YOU CAN SEE THAT FROM THE WORK

PRODUCT.

THE COURT: ALL RI GHT. I WOULD ALSO PREFER THAT

APPLE' S REPORT NOT BE REDONE BECAUSE I KNOWWHAT' S GOI NG TO

HAPPEN. WE' RE GOI NG TO HAVE A HUGE FI GHT ABOUT A MOTI ON TO

STRI KE UNAUTHORI ZED CHANGES TO YOUR REPORT AND I - - YOU KNOW,

THAT MI GHT MAKE THE TRI AL DATE SLI P BECAUSE THERE' S ONLY SO

MUCH WE CAN HANDLE WI TH EVERYTHI NG ELSE THAT' S BEEN SCHEDULED.


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MS. KREVANS: WELL, YOUR HONOR, WE - - I HOPE THAT WE

CAN CHANGE YOUR MI ND ABOUT SOME OF THI S TODAY.

BUT I F - - ASSUMI NG THAT YOU STAY WI TH YOUR TENTATI VE, WE

WOULD NEED FI VE DAYS, WE THI NK, TO COME BACK TO THE COURT AND

TO SAMSUNG WI TH A REPORT ON - - A PROPOSAL, A STATEMENT ABOUT

WHAT WE WOULD NEED TO DO, I F ANYTHI NG.

THE COURT: WELL, TELL ME WHAT YOU WERE THI NKI NG

ABOUT WHAT WOULD NEED TO BE DONE. I MEAN, I T' S TOO LATE. I ' M

NOT GOI NG TO ALLOWYOU TO DO ANOTHER HAUSER SURVEY ON THE ' 414.

I T' S TOO LATE. SO WHAT WOULD YOU DO?

MS. KREVANS: WE WOULD CERTAI NLY NOT BE PROPOSI NG TO

DO ANOTHER SURVEY, YOUR HONOR.

WE WOULD NEED TO GO ANALYZE WHAT DR. VELLTURO, WHO' S

GI VI NG THE ULTI MATE OPI NI ONS HERE, COULD DO GI VEN WHATEVER THE

SCOPE OF ANY EXCLUSI ON YOUR HONOR MAKES TURNS OUT TO BE.

THE COURT: WELL, I ' M TELLI NG YOU THE SCOPE. I T

WOULD BE AN EXCLUSI ON OF DR. HAUSER' S SURVEY RESULTS WI TH

REGARD TO CLAI M 20 OF THE ' 414, AND I T WOULD BE AN EXCLUSI ON OF

THE WI LLI NG TO PAY CALCULATI ON FROM HI S REASONABLE ROYALTY.

WI LLI NG TO ACCEPT, EXCUSE ME.

MS. KREVANS: AND AGAI N, YOUR HONOR, I THI NK WE WOULD

J UST - - WE NEED TO CONFER AND TALK TO DR. VELLTURO AND MAKE

SURE THAT WE CAN COME BACK WI TH SOMETHI NG ACCURATE ABOUT HOWWE

CAN GO FORWARD.

BUT WE WI LL COME UP WI TH A PROPOSAL THAT LETS US GO


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FORWARD ON MARCH 31.

MR. QUI NN: AND WE - - YOUR HONOR, WE DO SHARE THE

COURT' S CONCERNS ABOUT REDOI NG REPORTS. I T STRI KES US THAT I F

THESE TWO ELEMENTS DROP OUT, I T' S A FAI RLY SI MPLE ARI THMATI CAL,

AS WE UNDERSTAND I T, DELETI ON FROM THE DAMAGES CALCULATI ON.

BUT WE REALLY WOULD NOT LI KE - - WE' D PREFER NOT TO GO I N

THE DI RECTI ON OF SEEI NG NEWREPORTS AND HAVI NG TO DO THAT.

THE COURT: WELL, I AGREE WI TH YOU. I DON' T WANT TO

HAVE NOWA NEWSEPARATE FI GHT ON WHAT WAS AN AUTHORI ZED CHANGE.

ALL RI GHT. WELL, YOUR POSI TI ON I S YOU WOULD NEED FI VE

DAYS TO FI GURE THAT OUT?

MS. KREVANS: THAT' S RI GHT, YOUR HONOR. WE WI LL DO

I T FASTER I F WE CAN.

THE COURT: ALL RI GHT. SO LET ME GO BACK AND I ' LL

LET MR. WATSON FI NI SH WHAT HE WANTED TO SAY ON HTC.

MS. KREVANS: OKAY. COULD I BE HEARD FI RST ON THE

CHEVALI ER BI G POOL OF LI CENSES QUESTI ON, OR SHOULD I WAI T?

THE COURT: WHY DON' T YOU WAI T? I ' LL LET HI M FI NI SH

ON HTC AND THEN YOU CAN ADDRESS DR. CHEVALI ER.


SO OBVI OUSLY THE FEDERAL CI RCUI T HAS HELD THAT LI CENSES TO

THE TECHNOLOGY AT I SSUE ARE AMONG THE MOST PROBATI VE PI ECES OF

EVI DENCE AS TO A REASONABLE ROYALTY, AND THERE' S NO DI SPUTE

HERE THAT THE HTC LI CENSE I S A LI CENSE WI TH ANOTHER COMPANY I N

THE SMARTPHONE SPACE COVERI NG THE PATENTS AT I SSUE AND, YOU


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KNOW, I T' S VERY CLOSE I N TI ME - - AND THI S I S A DI STI NCTI ON FROM

THE LAST CASE - - TO THE HYPOTHETI CAL NEGOTI ATI ON HERE.

SO I F I CAN, I F I CAN SPEAK TO THE COURT' S ORDER I N THE

PRI OR CASE?

AS I COUNTED I T, THERE' S FI VE WAYS THAT WE' RE DI FFERENT

HERE. THE FI RST I S THI S CASE DOES NOT HAVE DESI GN PATENTS.

THERE' S NONE OF THOSE TYPES OF I SSUES. THAT WAS ONE OF THE

THI NGS THE COURT NOTED THERE, THAT THE HTC LI CENSE, YOU KNOW,

WAS LESS ON ALL FOURS.

HERE ALL WE' VE GOT I S UTI LI TY PATENTS, AND SO THAT I SSUE

DROPS AWAY.

I N THE LAST CASE, EXPERT - - AND REALLY THI S WAS THE - -

THI S WAS, I THI NK, THE CRUX OF THE COURT' S CONCLUSI ON. THE

EXPERTS ON BOTH SI DES SAI D, "LOOK, THI S LI CENSE DOESN' T HAVE AN

I MPACT ON MY ANALYSI S FUNDAMENTALLY. " THEY BOTH AGREED TO

THAT.

THAT' S NOT THE CASE HERE. DR. CHEVALI ER ABSOLUTELY

BELI EVES THAT THE LI CENSE I S RELEVANT AND THAT THERE ARE THI NGS

THAT WE CAN LEARN FROM THE LI CENSE ABOUT THE MARKET FOR HER

LI CENSI NG SMARTPHONE PATENTS.

THI RD, YOU HAVE THE - - YOU HAVE THE UNI QUE PROCEDURAL

POSTURE I N THE LAST CASE WHERE THE COURT I S TRYI NG TO KEEP THE

RECORD THE SAME FOR APPEAL BETWEEN TWO TRI ALS. WE DON' T HAVE

THAT I SSUE HERE.

FOURTH, AS I ALREADY MENTI ONED, THI S I S MUCH CLOSER I N


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TI ME. THE HYPOTHETI CAL NEGOTI ATI ONS HERE ARE HAPPENI NG A YEAR

OR LESS FROM THE, FROM THE HTC LI CENSE DATE.

I N THE LAST CASE, WE' VE GOT OVER TWO YEARS. THAT' S A BI G

DI FFERENCE. SMARTPHONE SPACE WAS EVOLVI NG RAPI DLY DURI NG THAT

TI ME.

AND FI NALLY, YOU KNOW, THERE WAS -- I N THE LAST CASE,

OBVI OUSLY THE HTC LI CENSE CAME LATE I N THE GAME. EXPERT

DI SCOVERY HAD CLOSED. THOSE TYPES OF I SSUES WERE RESOLVED.

THAT' S NOT A PROBLEM HERE. EVERYBODY HAS HAD A CHANCE TO

LOOK AT THI S LI CENSE. EVERYBODY HAS EXPRESSED AN OPI NI ON ON

I T.

I WOULD SUBMI T THAT, YOU KNOW, DR. VELLTURO J UST SAYS,

"YEAH, I ' M NOT GOI NG TO LOOK AT THAT. "

AND WHAT DR. CHEVALI ER SAYS I S, "LOOK, ARE THERE

DI FFERENCES? ABSOLUTELY. " THAT' S WHY - - THAT' S WHAT EXPERTS

DO. THEY TAKE A LI CENSE AND THEY MAKE ADJ USTMENTS FOR THE

DI FFERENCES.

AND I F YOU LOOK AT PARAGRAPH 312, PARAGRAPH 313, PARAGRAPH

314, PARAGRAPH 315, THERE ARE THREE PAGES PLUS OF HER REPORT,

I NCLUDI NG SUPPORTI NG MATERI ALS, OR I N ADDI TI ON TO THE

SUPPORTI NG MATERI ALS, WHERE SHE I S GOI NG THROUGH AND MAKI NG THE

KI ND OF ADJ USTMENTS THAT EXPERTS MAKE.

AND I T SEEMS TO ME THAT SAMSUNG HAS TO BE PERMI TTED TO

SHOWTO THE J URY WHAT THE CLOSEST CONCEI VABLE LI CENSI NG

EVI DENCE I S AND DR. CHEVALI ER HAS TO BE ABLE TO TAKE THAT I NTO


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ACCOUNT AND WE HAVE TO BE PERMI TTED TO CONFRONT DR. VELLTURO

WI TH HI S REFUSAL TO I NCLUDE I T AND THE MASSI VELY DI SPARATE

NUMBER THAT HE' S PUTTI NG UP I N THI S CASE.

THE COURT: WELL, WON' T THAT SHRI NK ONCE THEI R LOST

PROFI TS ANALYSI S I S EXCLUDED?

MR. WATSON: WELL, YOUR HONOR, I F THEI R LOST PROFI TS

AND THEI R REASONABLE ROYALTY NUMBERS ARE EXCLUDED, I WOULD

AGREE THAT THE NUMBER WI LL SHRI NK.

I T' S STI LL OUT OF ALL PROPORTI ON TO SMARTPHONE PATENT

LI CENSES.

I THI NK THE BEST EXAMPLE OF THI S, YOUR HONOR - - LOOK AT

THE ' 647 PATENT. I N MOTOROLA, APPLE SAYS THAT PATENT I S WORTH

$. 60. I N THI S CASE, THEY' RE ASKI NG FOR $12. 49 FOR I T.

SO WHATEVER APPLE I S GOI NG TO PRESENT AFTER THE COURT' S

RULI NGS, WE HAVE TO BE ABLE TO SHOWTHE J URY, LOOK, THERE' S A

MARKET OUT THERE FOR THESE THI NGS. THI S HAPPENS. PEOPLE

LI CENSE PATENTS ALL THE TI ME.

AND APPLE SHOULDN' T BE PERMI TTED TO J UST THROWUP A HUGE

NUMBER AND THEN SI T DOWN AND WE' VE GOT OUR HANDS TI ED AND WE

CAN' T EVEN SHOWTHE J URY THAT I T' S TOTALLY DI SPROPORTI ONATE TO

WHAT ACTUALLY HAPPENS I N THE MARKETPLACE.

AND I SUBMI T THERE' S SI MPLY NO FEDERAL CI RCUI T CASE, OR

EVEN A DI STRI CT COURT CASE, WHERE A COURT HAS EXCLUDED A

LI CENSE ON THE EXACT PATENTS AT I SSUE WHERE THERE - - WHERE

APPROPRI ATE ADJ USTMENTS HAVE BEEN MADE AND THE J URY I S NOT


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PERMI TTED TO SEE THAT AND THE DEFENDANT HAS TO GO TO TRI AL WI TH

NO LI CENSI NG EVI DENCE TO SHOWTHE J URY AT ALL.

THE COURT: ALL RI GHT. THANK YOU.

ALL RI GHT. LET ME HEAR FROM MS. KREVANS OR WHOEVER WANTS

TO SPEAK FOR APPLE.

MS. KREVANS: I T' S ME AGAI N, YOUR HONOR.

FI RST, ON - - LET' S START WI TH HTC WHERE THI S ENDED UP.

THE COURT' S REASONS FOR EXCLUDI NG THI S BEFORE ARE STI LL

TRUE, AND MANY OF THEM ARE THI NGS I CAN' T SAY OUT LOUD I N

COURT, BUT WE TALK ABOUT THEM I N OUR BRI EFS.

THE COURT: WHY DON' T YOU J UST ADDRESS THE ONES THAT

MR. WATSON DI STI NGUI SHED?

MS. KREVANS: OKAY. I T I S TRUE THAT THERE WERE

DESI GN PATENTS I N THE FI RST CASE AND NOT I N THI S CASE.

THE COURT: UM- HUM.

MS. KREVANS: BUT THAT DOES NOT MEAN THAT THE TERMS

OF THAT LI CENSE ARE I N ANY WAY COMPARABLE TO THI S CASE, I N PART

BECAUSE THERE WAS LI TI GATI ON SETTLEMENT, I N PART BECAUSE

THEY' RE DI FFERENT PATENTS, BUT MOSTLY BECAUSE, AS THE COURT

KNOWS FROM LOOKI NG AT THE DETAI LS I N THE BRI EFI NG AND FROM THE

LI CENSE I TSELF, SI GNI FI CANT ECONOMI C TERMS ARE NOT ACTUALLY

ESTABLI SHED I N THE LI CENSE. WI THOUT GOI NG I NTO WHAT THEY ARE,

THEY ARE TO BE DETERMI NED LATER.

THE COURT: OKAY. WHAT OTHER - -

MS. KREVANS: AND THAT MEANS THAT THERE - - THERE' S NO


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WAY TO SAY THAT THAT LI CENSE I S SOMETHI NG THAT CAN GI VE ANY

KI ND OF ECONOMI C ANALYSI S THAT CAN BE TRANSFERRED OVER TO THI S

CASE BECAUSE THE ECONOMI CS OF THAT LI CENSE ARE NOT YET SET.

THE COURT: WHAT ABOUT THE FACT THAT I T WAS A LI TTLE

BI T OF AN EASI ER CALL ON THE RETRI AL BECAUSE NEI THER EXPERT

RELI ED ON I T, WHEREAS HERE YOU DO HAVE AN EXPERT SAYI NG - -

MS. KREVANS: WELL, I THI NK, YOUR HONOR, I T MADE I T

EASI ER BECAUSE NO ONE WAS COMPLAI NI NG ABOUT I T QUI TE SO MUCH,

ALTHOUGH SAMSUNG CERTAI NLY FOUGHT HARD TO GET I T I N.

THE COURT: UM- HUM.

MS. KREVANS: THEY SAY NOWNO ONE RELI ED ON I T, BUT

AS YOU RECALL, THEY FOUGHT QUI TE HARD TO GET I T I N I N THE

RETRI AL.

BUT I T DOESN' T CHANGE THE BASI C FACT THAT I T I S NOT

COMPARABLE AND THERE HAS BEEN NO SHOWI NG THAT I T I S.

AND I T WOULD BE EXTREMELY PREJ UDI CI AL TO USE SOMETHI NG

THAT WAS NOT COMPARABLE AND I N WHI CH, FRANKLY, MANY OF THE

TERMS ARE NOT SET FOR REASONS I CAN' T GO I NTO I N OPEN COURT,

AND HAVE I T BE PRESENTED AS I F I T WERE A LI CENSE THAT HAD SET

TERMS THAT ACTUALLY APPLI ED, PARTI CULARLY BECAUSE I T DOES, I N

FACT, I NVOLVE ONE OF THE PARTI ES TO THE CASE.

I DON' T THI NK THAT THERE I S ANY REASON THAT I S A

COMPELLI NG DI STI NCTI ON BETWEEN YOUR DECI SI ON BEFORE AND YOUR

DECI SI ON NOW.

AND, OF COURSE, THE OTHER THI NG THAT I S TRUE THEN, TRUE


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NOW, HTC I S NOT SAMSUNG. HTC I S NOT ONE OF THE TWO HORSES I N

THE TWO- HORSE RACE. THERE I S NO SHOWI NG THAT HAS BEEN MADE

THAT ANY OF THESE TERMS WOULD HAVE BEEN TERMS THAT WOULD HAVE

BEEN ACCEPTABLE I N THE HYPOTHETI CAL NEGOTI ATI ON.

SO WE THI NK YOUR HONOR I S ABSOLUTELY RI GHT TO STI CK WI TH

YOUR ORI GI NAL RULI NG.

THE COURT: ALL RI GHT. DO YOU WANT TO ADDRESS

ANYTHI NG ELSE AS TO DR. CHEVALI ER?

MS. KREVANS: AS TO DR. CHEVALI ER, I THI NK A REALLY

BASI C POI NT THAT GOES TO A LOT OF WHAT MR. WATSON SAI D I S - -

THE MOST I MPORTANT THI NG HE SAI D I S WHAT HE SAI D FI RST, THAT

THEY NEED - - THEY, QUOTE, "NEED" THESE LI CENSES BECAUSE THEY

WANT TO USE THEM TO I MPEACH DR. VELLTURO' S ANALYSI S.

THE PROBLEM WI TH THAT I S THERE' S NOTHI NG ABOUT A

NON- COMPARABLE LI CENSE THAT COULD BE PROPER I MPEACHMENT OF

SOMEBODY' S OPI NI ON ON REASONABLE ROYALTY.

AND AS FOR THE NOTI ON THAT APPLE HASN' T COME FORWARD AND

MADE A SHOWI NG TO YOU THAT EACH OF THESE LI CENSES I S NOT

COMPARABLE, THAT J UST TURNS THE TEST ON I TS HEAD.

I T WAS SAMSUNG' S BURDEN TO HAVE I TS EXPERT DO A

COMPARABI LI TY ANALYSI S FOR ANY LI CENSE SHE WANTED TO TALK

ABOUT. THEY CHOSE TO HAVE HER I NCLUDE A HUGE GROUP OF LI CENSES

I N HER REPORT, DO THESE BI G TABLES THAT, AS YOU SAI D, GI VE

RECI TATI ONS OF A NUMBER OF THE TERMS OF EACH OF THEM, BUT DO NO

ANALYSI S AT ALL THAT SHOWS THAT THEY' RE COMPARABLE, AND I N MANY


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CASES, J UST ADMI T THAT SHE DOESN' T EVEN KNOWWHAT TECHNOLOGY I S

I N THEM.

EVEN I F SHE WERE, I N FACT, THE RI GHT PERSON TO ANALYZE THE

TECHNOLOGY AND SAY THI S I S COMPARABLE TECHNOLOGY, SHE DI DN' T DO

I T, AND SHE DI DN' T ANALYZE WHETHER THE ECONOMI CS WERE

COMPARABLE.

AND AS FOR THI S WI NNOWI NG THAT SAMSUNG SAYS THAT THEY DI D

SO THAT THEY STARTED WI TH THI S BI G GROUP, BUT THEN, THROUGH

ANALYSI S, GOT I T DOWN TO A GROUP THAT WAS THE MORE COMPARABLE

GROUP AND ONLY USED THAT SMALLER GROUP FOR HER OPI NI ONS, THAT' S

NOT TRUE.

THEY DI D USE, AND SHE DOES USE I N HER OPI NI ONS, PI ECES OF

THE LARGE GROUP OF LI CENSES, NOT J UST THE GROUP OF 35.

BUT EVEN I N THE GROUP OF 35, SHE MADE NO SHOWI NG, AS YOU

SAI D, THAT THEY WERE COMPARABLE I N TERMS OF TECHNOLOGY OR THAT

THEY WERE COMPARABLE I N TERMS OF THE KI ND OF DEAL, THE KI ND OF

STRUCTURE, THE - - WHO THE PARTI ES WERE, THE PARTI ES'

RELATI ONSHI PS TO ONE ANOTHER, ANYTHI NG THAT WOULD BE THE KI ND

OF THI NG THAT WOULD MAKE YOU SAY A RATE THAT I TAKE FROM THI S

LI CENSE, OR ANY ECONOMI C TERM I TAKE FROM THI S LI CENSE, I S

PROOF THAT BELONGS I N THI S CASE. THEY J UST DI DN' T DO I T.

AND HAVI NG NOT DONE I T, UNLESS THE COURT GI VES THEM LEAVE

TO GO NOWAND DO A MASSI VE REVI SI ON OF HER REPORT TO ADD THAT

ANALYSI S, THEY CAN' T OFFER THESE LI CENSES.

AND SO FOR ALL THOSE REASONS, WE THI NK YOUR TENTATI VE I S


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EXACTLY RI GHT.

THE COURT: ALL RI GHT. I ' M GOI NG TO GI VE MR. WATSON

THE LAST BRI EF WORD AND THEN I ' D LI KE TO MOVE ON TO DRS. HAUSER

AND VELLTURO.


BRI EFLY ON THE HTC LI CENSE, I I DENTI FI ED FI VE WAYS I N

WHI CH THE COURT' S PRI OR ORDER I S DI STI NGUI SHABLE FROM HERE. I

DI DN' T HEAR MS. KREVANS ADDRESS A SI NGLE ONE OF THOSE TO THE

COURT.

WHAT SHE I NSTEAD DI D WAS TO SAY, NOT THAT THOSE FI VE

FACTORS STI LL OBTAI N HERE - - THEY DON' T, THEY CLEARLY DO NOT - -

BUT I NSTEAD SHE FOCUSSED ON THE ECONOMI C TERMS OF THE LI CENSE,

WHI CH OBVI OUSLY WE' RE NOT GOI NG TO BE DI SCUSSI NG HERE.

BUT I WOULD ABSOLUTELY DI RECT THE COURT TO DR. CHEVALI ER' S

ANALYSI S AT PAGE 314, 315 - - EXCUSE ME - - PARAGRAPH 314 AND 315

WHERE SHE ADDRESSES EACH OF THE ECONOMI C OBJ ECTI ONS THAT

DR. VELLTURO MADE AND EXPLAI NS HOWWE HAVE TOOLS, AS

ECONOMI STS, AS LI CENSI NG EXPERTS, TO MAKE ADJ USTMENTS ON A

LI CENSE.

THERE' S NEVER AN EXACT LI CENSE. I F THAT WERE THE

STANDARD, YOU WOULD NEVER HAVE ANY LI CENSI NG EVI DENCE, OR

ALMOST NEVER HAVE ANY LI CENSI NG EVI DENCE. THAT' S NOT THE

STANDARD.

AND I SUBMI T THAT ESSENTI ALLY MS. KREVANS HAS CONCEDED

THAT THE FI VE POI NTS THAT WERE I N THE COURT' S PRI OR ORDER, NONE


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OF THEM ARE I NVOLVED HERE.

FI NALLY, I T I S REMARKABLE THAT MS. KREVANS SAYS I T' S EXTRA

PREJ UDI CI AL TO LET THI S I N BECAUSE APPLE I S A PARTY TO THE

AGREEMENT.

WHAT COULD BE MORE PROBATI VE OF WHAT APPLE THI NKS I S THE

VALUE OF THE PATENTS I N THI S CASE THAN AN AGREEMENT APPLE

ENTERED I NTO TO LI CENSE THE PATENTS I N THI S CASE? THAT' S NOT

PREJ UDI CI AL. THAT' S WHY I T' S SO CRI TI CALLY PROBATI VE.

AND FI NALLY, YOUR HONOR, ON THE COMPARABLE LI CENSES, I

J UST - - I REALLY SUBMI T THAT I F YOU LOOK AT WHAT DR. CHEVALI ER

DI D AND LOOK AT DR. - - COMPARE I T TO WHAT DR. VELLTURO DI D ON

THE OTHER COMPARABLE LI CENSES, YOU' LL SEE SHE DI D FAR MORE THAN

APPLE DI D I N WASHI NG THESE THI NGS AWAY. SHE DI D A VERY SERI OUS

ANALYSI S BY A VERY WELL QUALI FI ED PERSON AND MADE VERY

REASONABLE ASSUMPTI ONS ABOUT THE VALUE OF THE LI CENSES THAT ARE

ENTI RELY CONFI RMED BY ALL OF THE OTHER EVI DENCE I N THE CASE.

THE COURT: ALL RI GHT. THANK YOU.

LET ME ASK - - LET' S DO ONE CLEAN UP I TEM. SO I F THEY HAVE

TO - - I F APPLE HAS TO SUBMI T, WHI CH I T WI LL, A REVI SED DAMAGES

OPI NI ON BASED ON THE DESI GN AROUND PERI OD STARTI NG ON THE DATE

OF I NFRI NGEMENT RATHER THAN ON THE DATE OF NOTI CE, AND THEY DO

THI S BY THE DATE YOU ALL HAVE AGREED FOR UPDATI NG OF FI NANCI AL

DATA, FEBRUARY 17TH, YOU DON' T NEED A DEPOSI TI ON OR ANYTHI NG

ELSE ON THAT, DO YOU?

MR. WATSON: ON THAT NARROWI SSUE?


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THE COURT: UM- HUM.

MR. WATSON: NO, WE WOULDN' T NEED I T. AS LONG AS

THEY' RE APPLYI NG THE SAME METHODOLOGY, WE WOULD NOT NEED A

DEPOSI TI ON.

THE COURT: OKAY. ALL RI GHT.

OKAY. LET ME GO TO THE - - I HAVE SOME QUESTI ONS WI TH

REGARD TO VELLTURO AND HAUSER WHI CH ARE NOT ONE OF THE ONES

THAT I ' M TENTATI VELY PLANNI NG TO GRANT, BUT I DI D WANT TO ASK

SOME QUESTI ONS.

SO WI TH REGARD TO THE QUESTI ON OF WHETHER DR. VELLTURO WAS

RELYI NG ON DR. HAUSER' S CONJ OI NT SURVEY TO DETERMI NE SAMSUNG' S

MARKET SHARE, I WANTED TO ASK SAMSUNG WHERE I N DR. VELLTURO' S

REPORT HE ACTUALLY DOES THAT, BECAUSE I T SEEMS THAT

DR. VELLTURO RELI ES ON THE HAUSER SURVEYS MORE FOR PANDUI T

FACTORS 1 AND 2 AND NOT FOR PANDUI T FACTOR 4, WHI CH DOES

I NCLUDE THE MARKET SHARE DI SCUSSI ON.

SO I WANTED TO J UST FI ND OUT WHERE, WHERE I N VELLTURO' S

REPORT SHOULD I LOOK TO FI ND THAT RELI ANCE ON HAUSER' S SURVEY

FOR MARKET SHARE?

MR. QUI NN: YOUR HONOR, I ' M TOLD I T' S AT PARAGRAPHS

311 TO 317 AND 319.

AND ACTUALLY, YOUR HONOR, I T' S - - THI S I S PART OF, I

THI NK, A BROADER QUESTI ON, AND I ' M GOI NG TO MAKE A, KI ND OF A

BOLD STATEMENT THAT WHAT VELLTURO DOES WI TH RESPECT TO THE

HAUSER WI LLI NGNESS TO BUY - - AND I T' S NOT WI LLI NGNESS TO PAY - -


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WHAT VELLTURO DOES I S REALLY NOT EXPERT WORK AT ALL I N THAT ALL

HE I S DOI NG I S USI NG A CALCULATOR AND TAKI NG THE I NFORMATI ON

THAT APPLE GOT I N DI SCOVERY ABOUT SAMSUNG' S UNI T SALES AND

TAKI NG I NFORMATI ON THAT' S AVAI LABLE THROUGH A SUBSCRI PTI ON

SERVI CE AS TO WHAT THE MARKET SHARE I S, AND TAKI NG THE I NPUT

FROM HAUSER, WHO GI VES HI M THE NUMBERS ABOUT - - GI VES HI M THE

NUMBERS BY WHI CH HAUSER DETERMI NES, I N HI S SURVEY, SAMSUNG' S

SALES PERCENTAGE- WI SE WOULD DECREASE I F THE ACCUSED FEATURE

WERE ABSENT, AND HE USES THE OUTSI DE OPTI ON TO DO THAT.

THE COURT: UM- HUM.

MR. QUI NN: AND VELLTURO I S PRETTY CLEAR ABOUT THAT.

HE ACTUALLY SAI D - - THERE' S A - - WE ASKED HI M AT HI S

DEPOSI TI ON, YOU KNOW, WHAT ADDI TI ONAL I NFORMATI ON THAT HE HAD,

AND HI S ANSWER WAS THAT HE DI DN' T HAVE ANY, ANY OTHER

ADDI TI ONAL I NFORMATI ON.

THAT' S - - I F I COULD SHOWTHE COURT? I F I COULD PUT THE

DEPOSI TI ON TESTI MONY ON THE SCREEN, YOUR HONOR?

THE COURT: THAT' S FI NE.

MR. QUI NN: I T WOULD BE SLI DE 16, AND THI S I S

MR. VELLTURO' S DEPOSI TI ON, PAGE 99, LI NE 17 TO 100: 1.

"DO YOU HAVE ANY QUANTI TATI VE DATA THAT YOU USE OTHER THAN

WHAT YOU REFERRED TO AS THE OUTPUT FROM PROFESSOR HAUSER AND

THE ACTUAL SALES I NFORMATI ON?"

HE SAYS, "LI TERALLY I N THE COMPUTATI ONS, NO. " AND HE GOES

ON TO SAY, WELL, HE ALSO HAD PROFESSOR HAUSER' S WI LLI NGNESS TO


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PAY DATA, BUT HE HAD NO OTHER DATA.

THE MARKET SHARE I NFORMATI ON COMES FROM THE SUBSCRI PTI ON

SERVI CE. THE OUTPUT FROM HAUSER I S, "I PREDI CT THAT, BASED ON

MY SURVEY, THAT I F THESE ACCUSED FEATURES WERE NOT I N SAMSUNG

PHONES, THEI R SALES WOULD GO DOWN BY STATED PERCENTAGES. "

AND I F WE COULD PUT THAT SLI DE UP THAT HAS THOSE

PERCENTAGES? THAT' S THE WI LLI NGNESS TO BUY. SLI DE 2.

THAT' S THE OUTPUT FROM PROFESSOR HAUSER. HE SAYS, YOU

KNOW- - AND THE REASON THERE' S A RANGE UNDER SMARTPHONES AND

TABLETS I S HE COMES UP WI TH DI FFERENT NUMBERS FOR DI FFERENT

SCREEN SI ZES.

BUT HE SAYS, "BASED UPON THE RESULTS OF MY SURVEY I N THAT

FI NAL QUESTI ON, THE OUTSI DE OPTI ON, WOULD YOU BUY OR NOT BUY,

I F I SUBTRACT THE ACCUSED FEATURE, SAMSUNG SALES WI LL GO DOWN

BY THI S MUCH. "

THAT' S THE OUTPUT.

THAT THEN GOES TO VELLTURO. ALL HE HAS I S THEY GAVE HI M

SAMSUNG UNI T SALES, AND HE CAN DO THE ARI THMETI C, MULTI PLY I T,

GI VEN THI S X PERCENTAGE, HOWMANY OF THOSE SALES WOULD SAMSUNG

NO LONGER HAVE?

AND SO YOU' VE THEN GOT A BASKET OF SALES THAT SAMSUNG

DOESN' T HAVE I N THE BUT FOR WORLD, AND HE USES A MORE FLOW

ANALYSI S THEN TO SAY, "OKAY, I TAKE THE MARKET SHARE DATA FROM

THE SUBSCRI PTI ON SERVI CE, RUN I T THROUGH THAT, THOSE SALES

WOULD HAVE GONE TO APPLE I N THE BUT FOR WORLD, " AND HE COMES UP


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WI TH A LOST PROFI TS NUMBER.

SO, YOUR HONOR, THI S I S - - AND THI S I S AN EXTREMELY

I MPORTANT POI NT HERE. THI S I S A METHODOLOGY THAT NO COURT AS

EVER ENDORSED, NO ACADEMI C WRI TI NG, PAPER, STUDY HAS EVER

ENDORSED, AND I ' M - - THEY' VE CI TED A COUPLE OF PAPERS AND I ' M

PREPARED TO DI SCUSS THOSE I N DETAI L, BUT THERE I S ABSOLUTELY NO

AUTHORI TY.

AND THI S I S COMPLETELY DI FFERENT THAN THE WI LLI NGNESS TO

PAY. REMEMBER BACK I N N. D. CAL, THE FI RST CASE, YOU MADE A

DAUBERT MOTI ON WI TH RESPECT TO HI S WI LLI NGNESS, DR. HAUSER' S

WI LLI NGNESS TO PAY STUDY, AND WE RAI SED THE ORACLE VERSUS

GOOGLE DECI SI ON. YOU REMEMBER I N THAT CASE J UDGE ALSUP SAI D

THAT THE ORACLE - - THE CONJ OI NT STUDY DONE BY ORACLE I N THAT

CASE I MPROPERLY FOCUSSED CONSUMERS ON ARTI FI CI ALLY SELECTI VE

SMALL FEATURES WHI CH COULD NOT DETERMI NE REAL WORLD BEHAVI OR

AND HE EXCLUDED I T I N THAT CASE.

NOW, I N THE BRI EFI NG, I NTERESTI NGLY, APPLE DOES NOT

DI SPUTE THAT PROPOSI TI ON, THAT YOU SHOULD NOT BE ABLE TO USE A

CONJ OI NT SURVEY FOR A PROJ ECT - - A PRODUCT WI TH MANY FEATURES

AND ASK CONSUMERS ONLY ABOUT SMALL FEATURES AND, BASED ON THAT,

MAKE PREDI CTI ONS ABOUT MARKET SHARE. APPLE DOESN' T DI SPUTE

THAT. THEY REALLY CAN' T OR THEY RUN HEAD I NTO J UDGE ALSUP' S

DECI SI ON.

I N FACT, I N THE FI RST CASE, APPLE WENT OUT OF I TS WAY TO

TELL YOUR HONOR, "THAT' S NOT WHAT WE' RE DOI NG HERE. " AND THEY


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TOLD THE COURT - - THEY, I N DI STI NGUI SHI NG THE ORACLE DECI SI ON,

THEY TOLD THE COURT THAT ORACLE' S DAMAGES EXPERT CI TED THE

RESULTS OF THE CONJ OI NT ANALYSI S TO ESTI MATE ANDROI D' S I NCREASE

I N MARKET SHARE DUE TO I NFRI NGEMENT AND SAI D, "YOUR HONOR,

THAT' S NOT WHAT WE' RE DOI NG. "

BUT THAT' S EXACTLY WHAT THEY' RE DOI NG HERE. THAT' S

EXACTLY WHAT THEY WANT TO DO HERE.

APPLE STI LL SAYS - - AND THE I SSUE I S J OI NED ON THI S - -

APPLE STI LL SAYS, "WE ARE NOT USI NG THI S CONJ OI NT SURVEY TO

PREDI CT MARKET SHARE. "

THEY' RE NOT DI SPUTI NG THE PROPOSI TI ON THAT YOU CAN' T DO I T

FOR ONE OF THESE COMPLEX PRODUCTS WI TH SMALL FEATURES. THEY' RE

ACCEPTI NG THAT.

THEY' RE SAYI NG, "WE ARE NOT USI NG I T TO PREDI CT MARKET

SHARE. "

SO I SUBMI T, YOUR HONOR, THE I SSUE I S J OI NED. THE I SSUE

I S J OI NED ON THAT.

DOES APPLE USE THE HAUSER DATA TO PREDI CT SHI FTS I N MARKET

SHARE? THERE' S NO QUESTI ON THAT THEY DO. THEY TAKE THE HAUSER

I NPUT - - HAUSER ARRI VES AT THE DECREASE I N THE PERCENTAGE OF

SAMSUNG SALES WI THOUT THE ACCUSED FUTURES - - FEATURES, AND

VELLTURO SI MPLY APPLI ES THAT PERCENTAGE TO THE TOTAL NUMBER OF

UNI T SALES, ALLOCATES I T BASED ON MARKET SHARE DATA, AND GOES

THROUGH A MORE FLOWANALYSI S.

YOU DI DN' T NEED AN EXPERT TO DO THAT.


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AND I F WE LOOK AT THE DEPOSI TI ON TESTI MONY AND THE

REPORTS, YOUR HONOR, I T' S ABSOLUTELY CLEAR THAT THI S I S WHAT

THEY DO.

I F WE COULD LOOK AT MR. HAUSER' S DEPOSI TI ON TRANSCRI PT - -

THI S I S SLI DE 13, PAGE 256, LI NES 16 TO 24 - - AND HE SAYS THAT,

YOU KNOW- - THI S I S SLI DE 13.

HE SAYS, HAUSER SAYS, "YOU CAN USE ADDI TI ONAL DATA, AND

CHRI S VELLTURO DOES, TO SAY HOWDI D THI S RELATES TO MARKET

SHARE, AND CHRI S USES MY DATA, " AND HE SAYS, "HE' S DONE I T

PERFECTLY CORRECTLY. "

AND I N HI S REPORT - - THI S I S SLI DE 14 - - AT PARAGRAPH - -

I ' M SORRY. I T' S THE VELLTURO DEPOSI TI ON, THI S WOULD BE SLI DE

15, VELLTURO SAYS, "THI S I S WHAT I ' VE DONE. HAUSER' S SURVEY,

WHAT I T DOES I S I T I DENTI FI ES PERCENTAGE CHANGES I N" - - I T SAYS

"AND, " I THI NK I T SHOULD BE "I N" - - "WI LLI NGNESS TO BUY, AND I

USE THAT I NFORMATI ON TO EVALUATE PERCENTAGE CHANGES I N SALES,

AND PART OF WHAT I DO I S TAKE THAT PERCENTAGE CHANGE AND APPLY

I T TO THE UNI TS THAT I HAVE COLLECTED TO GET THE NUMBER OF

UNI TS THAT WOULD BE AFFECTED. "

AND THEN FI NALLY - - THERE ARE OTHER PASSAGES THAT ARE

CI TED I N OUR PAPERS, YOUR HONOR.

BUT THAT I S CLEARLY WHAT I S GOI NG ON. I T' S NO DI FFERENT

THAN - - THE EXPERT I N THE ORACLE CASE WAS A DR. SHUGAN, AND HE

DI D THE EXACT SAME THI NG AND J UDGE ALSUP, YOU KNOW, CRI TI CI ZED

HI M FOR THE WAY HE EXCLUDED THE OPI NI ON BECAUSE SHUGAN FOCUSSED


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ON MI NOR FEATURES, LI KE I THI NK VOI CE COMMAND WAS ONE FEATURE

AND BOOT UP TI ME OR WAI TI NG TI ME FOR BOOTI NG UP AN APP.

AND J UDGE ALSUP SAI D YOU J UST CAN' T MAKE CONCLUSI ONS BASED

ON A SURVEY AND LEAVE OUT THE MAJ OR FEATURES THAT PEOPLE CARE

ABOUT.

I F WE COULD LOOK AT SLI DE 21, THI S I S A COMPARI SON OF WHAT

PROFESSOR SHUGAN DI D AND WHAT PROFESSOR HAUSER DI D. THEY BOTH

COME UP WI TH A BASE CASE ABOUT THE PERCENTAGE OF RESPONDENTS,

I N SHUGAN' S CASE, THAT WOULD PREFER AN ACCUSED ANDROI D PHONE.

PROFESSOR HAUSER SAYS I F YOU HAVE ALL THE, YOU KNOW, I F

YOU HAVE ALL THE ACCUSED FEATURES, ALL THE FEATURES THAT ARE

BEI NG STUDI ED, 72 PERCENT WOULD BUY THAT.

THEN THEY DO A CALCULATI ON AFTER REMOVAL OF THE ACCUSED

FEATURES. SHUGAN SAYS, "ALL RI GHT, I F WE DON' T HAVE THE FASTER

APP START UP TI ME, " WHI CH ORACLE WAS ASSERTI NG WAS PART OF I TS

I NTELLECTUAL PROPERTY, "THAT DECREASES DOWN TO 35. 5 PERCENT.

THAT' S THE SHI FT. "

AND PROFESSOR HAUSER SAYS, "WELL, I F YOU DON' T HAVE

BACKGROUND SYNCI NG, I F YOU DON' T HAVE THAT PATENT, THE SHI FT,

YOU LOSE - - SAMSUNG LOSES SALES. I T GOES DOWN TO 64 PERCENT. "

AND AT THE BOTTOM THERE YOU HAVE THE DI MI NI SHED DEMAND

NUMBERS THAT THEY THEN FEED I N TO, I N THI S CASE, TO

PROFESSOR VELLTURO.

AND I F YOU THI NK ABOUT I T, YOUR HONOR, THI S MAKES - -

J UDGE ALSUP' S DECI SI ON MAKES PERFECT SENSE.


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I F WE COULD LOOK AT SLI DE 4, WHAT J UDGE ALSUP SAI D, "I T I S

HI GHLY LI KELY THAT STUDY PARTI CI PANTS WOULD HAVE PLACED GREATER

I MPORTANCE ON A FEATURE LI KE START UP TI ME I F I T WERE SHOWN

WI TH SI X OTHER FEATURES AS OPPOSED TO 38 OTHER FEATURES. "

THESE ARE COMPLEX PRODUCTS. PROFESSOR SHUGAN HAD FI RST

DONE A SURVEY - - ACTUALLY, I N HI S CASE, HE DI D A SURVEY TO FI ND

OUT, WHAT DO PEOPLE CONSI DER I MPORTANT I N SMARTPHONES? AND HE

CAME UP WI TH A LI ST OF 39 FEATURES.

THE PROBLEM WI TH THE SURVEY WAS HE THEN DI DN' T USE THOSE.

HE ONLY USED A COUPLE OF THEM, AND HE USED THESE SMALL

FEATURES.

AND J UDGE ALSUP I S SAYI NG YOU CAN' T - - WI THOUT SHOWI NG

PEOPLE THE DECI SI VE - - THE THI NGS THAT REALLY I NFLUENCE BUYI NG

DECI SI ONS, YOU CAN' T REACH ANY CONCLUSI ONS, BY J UST DEDUCTI NG A

SMALLER FEATURE, ABOUT WHETHER THEY WOULD HAVE BOUGHT THE PHONE

OR NOT.

AS J UDGE ALSUP SAI D - - I F WE COULD LOOK AT SLI DE 5 - - "I F

DR. SHUGAN HAD I NSTEAD SHOWED 39 DI FFERENT FEATURES TO A STUDY

PARTI CI PANT, THEN START UP TI ME, "THE PATENTED FUNCTI ONALI TY

THAT WAS CHALLENGED, "MAY HAVE BEEN DROWNED OUT BY THE

MULTI TUDE OF OTHER FEATURES THAT ARE CONSI DERED BY REAL- WORLD

CONSUMERS. I N THE REAL WORLD, A CONSUMER I S FACED WI TH MANY

FEATURES WHEN MAKI NG A DECI SI ON TO PURCHASE, NOT ARTI FI CI ALLY

FOCUSSED ON A PARTI CULAR FEATURE. "

AND THEN SLI DE 6, "THI S PROBLEM I S EXACERBATED BY THE FACT


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THAT I MPORTANT FEATURES, SUCH AS BATTERY LI FE, WI - FI , WEI GHT,

AND CELLULAR NETWORK, ALL OF WHI CH WERE NOT COVERED BY THE

PATENTED FUNCTI ONALI TI ES, WERE PURPOSELY LEFT OUT AND REPLACED

WI TH AN ARGUABLY UNI MPORTANT FEATURE, VOI CE DI ALLI NG. "

NOW, WHAT DOES APPLE SAY I N RESPONSE TO THI S? ONE THI NG

THEY SAY I S, "YOU' RE RI GHT, I T' S A COMPLEX PRODUCT WI TH MANY,

MANY DI FFERENT FEATURES. WE CAN' T POSSI BLY TEST ALL THOSE

FEATURES. YOU KNOW, YOU CAN' T GET MEANI NGFUL RESULTS WI TH A

CONJ OI NT SURVEY. "

AND I SUBMI T, YOUR HONOR, THAT MAKES OUR POI NT PERFECTLY.

BY DOI NG A SURVEY AND SHOWI NG PEOPLE PI CTURES OF PHONES AND,

YOU KNOW, SHOWI NG THEM, YOU KNOW, ALL THESE 39 DI FFERENT

FEATURES, YOU CAN' T - - OR MAJ OR FEATURES OF A PHONE, I T' S

J UST - - THAT I S NOT THE WAY TO VALUE OR MAKE DECI SI ONS ABOUT

HOWPEOPLE PURCHASE PHONES.

A CONJ OI NT SURVEY WHERE YOU' RE TESTI NG WI LLI NGNESS TO BUY,

THERE ARE LI MI TS TO THE NUMBER OF QUESTI ONS THAT YOU CAN ASK.

THERE ARE LI MI TS TO THE NUMBER OF FEATURES YOU CAN QUESTI ON

THEM ABOUT.

SO APPLE ALSO SAYS, "WELL, I T' S J UST YOUR SAY- SO, SAMSUNG,

THAT WE ONLY TESTED MI NOR FEATURES, THAT WE LEFT MI NOR FEATURES

OUT. THAT' S J UST YOUR SAY- SO. WHO ARE YOU TO SAY THAT THESE

AREN' T MAJ OR, I MPORTANT FEATURES?"

WELL, ONE ANSWER TO THAT - -

THE COURT: WRAP THI S UP, PLEASE.


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14-01-23 Cv630 Daubert Hearing Transcript

Documents

Transcript of 14-01-23 Cv630 Daubert Hearing Transcript