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15-10-15 Oracle Motion to Disqualify Damages Expert

October 15, 2015 motion by Oracle to disqualify the court-appointed damages expert in the Android-Java copyright case against Google

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Case 3:10-cv-03561-WHA Document 1340 Filed 10/15/15 Page 1 of 9

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ORRICK, HERRINGTON & SUTCLIFFE LLP
KAREN G. JOHNSON-MCKEWAN (SBN 121570)
kjohnson-mckewan@orrick.com
ANNETTE L. HURST (SBN 148738)
ahurst@orrick.com
GABRIEL M. RAMSEY (SBN 209218)
gramsey@orrick.com
405 Howard Street, San Francisco, CA 94105
Tel: 1.415.773.5700 / Fax: 1.415.773.5759
PETER A. BICKS (pro hac vice)
pbicks@orrick.com
LISA T. SIMPSON (pro hac vice)
lsimpson@orrick.com
51 West 52nd Street, New York, NY 10019
Tel: 1.212.506.5000 / Fax: 1.212.506.5151
BOIES, SCHILLER & FLEXNER LLP
DAVID BOIES (pro hac vice)
dboies@bsfllp.com
333 Main Street, Armonk, NY 10504
Tel: 1.914.749.8200 / Fax: 1.914.749.8300
STEVEN C. HOLTZMAN (SBN 144177)
sholtzman@bsfllp.com
1999 Harrison St., Ste. 900, Oakland, CA 94612
Tel: 1.510.874.1000 / Fax: 1.510.874.1460
ORACLE CORPORATION
DORIAN DALEY (SBN 129049)
dorian.daley@oracle.com
DEBORAH K. MILLER (SBN 95527)
deborah.miller@oracle.com
MATTHEW M. SARBORARIA (SBN 211600)
matthew.sarboraria@oracle.com
500 Oracle Parkway,
Redwood City, CA 94065
Tel: 650.506.5200 / Fax: 650.506.7117
Attorneys for Plaintiff
ORACLE AMERICA, INC.
UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

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ORACLE AMERICA, INC.,
Plaintiff,
v.

Case No. CV 10-03561 WHA
NOTICE OF MOTION AND MOTION
TO DISQUALIFY THE RULE 706
EXPERT

GOOGLE INC.,
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Defendant.

Date: November 19, 2015
Time: 8:00 a.m.
Dept.: Courtroom 8, 19th Floor
Judge: Honorable William H. Alsup

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MOTION TO DISQUALIFY
THE RULE 706 EXPERT
CV 10-03561 WHA

Case 3:10-cv-03561-WHA Document 1340 Filed 10/15/15 Page 2 of 9

NOTICE OF MOTION AND MOTION

TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE

THAT the following Motion to Disqualify the Rule 706 Expert will be heard on November 19,

2015 at 8:00 a.m., or as soon thereafter as counsel may be heard, in Courtroom 8, 19th Floor of

this Court, located at 450 Golden Gate Avenue, San Francisco, California, the Honorable William

H. Alsup presiding. Plaintiff Oracle America, Inc. will and hereby does move to disqualify the

Court’s Rule 706 expert on the grounds that it is no longer appropriate for Dr. Kearl to serve as a

neutral expert based on his work since the last trial, and that no other Rule 706 expert is needed in

light of the reduced scope of the case.

This motion is based on the Notice of Motion and Motion to Disqualify the Rule 706

Expert, the following Memorandum of Points and Authorities, the Declaration of Peter A Bicks,

the pleadings and papers on file in this action, and such other and further papers and argument

presented prior to or at the hearing on the Motion.

Dated: October 15, 2015

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/s/ Peter A. Bicks
PETER A. BICKS

Attorney for Plaintiff
ORACLE AMERICA, INC.

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MOTION TO DISQUALIFY
THE RULE 706 EXPERT
CV 10-03561 WHA

Case 3:10-cv-03561-WHA Document 1340 Filed 10/15/15 Page 3 of 9

MEMORANDUM OF POINTS AND AUTHORITIES

INTRODUCTION

It is no longer appropriate for Dr. Kearl to serve as a neutral expert in this case. When he

was hired by Samsung in Apple v. Samsung, he sided with Google in a highly-publicized case

where the patents at issue involved technology that is part of Android. The case, still ongoing in

this district, was effectively Apple v. Google: Google agreed to indemnify Samsung, the very

same attorneys represented Google and Samsung, and Google had control and authority over

Samsung’s defense. And one of the issues in that case was whether, as Apple argued, Samsung

used Dr. Kearl’s analysis to give the jury a low damages number in an attempt to make all patents

appear to have little value. Or, as Apple asked the jury, why else would Samsung pay experts $5

million to pursue a $6 million claim if not to try to devalue patents? Having an expert wear the

hat of a neutral party in this case when he previously wore an Android hat is prejudicial to Oracle

and risks injecting complications into the case that should be avoided.

Nor should the Court replace Dr. Kearl because a Rule 706 expert is no longer necessary

in this case. The damages analysis will not have the same complexity now that the patent claims

are out of the case. The parties’ experts in the normal adversary process will sufficiently present

the issues to the Court and the jury. If the Court nevertheless concludes that an expert is

necessary to assist the Court in evaluating the reports of the parties’ experts, the parties should

jointly select a neutral expert who should not testify in front of the jury.

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ARGUMENT
I.

It Is Inappropriate For Dr. Kearl To Remain As A Neutral Expert.

Because a Rule 706 expert is appointed by the Court, he must remain neutral throughout

the proceedings. See Students of California Sch. for the Blind v. Honig, 736 F.2d 538, 549 (9th

Cir. 1984) (“Rule 706 allows the court to appoint a neutral expert on its own motion.”); vacated

on other grounds, 471 U.S. 148, 149-50 (1985); Gorton v. Todd, 793 F. Supp. 2d 1171, 1177

(E.D. Cal. 2011) (“The Rule only allows a court to appoint a neutral expert.”). This Court has

also recognized a Rule 706 expert’s neutrality, stating that the expert should provide a “neutral

explanation and viewpoint,” ECF 236 at 2, have “no conflicts,” ECF 610 at 4, and be
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Case 3:10-cv-03561-WHA Document 1340 Filed 10/15/15 Page 4 of 9

“unimpeachable,” ECF 350 at 23.

Since Dr. Kearl testified in Apple v. Samsung—not as a neutral expert but, as we now

know, one hired by Samsung1—it is no longer appropriate for him to serve in this neutral role.

Samsung is a leading Android device maker. And while Samsung was named as the defendant in

Apple v. Samsung, Samsung argued that the case was “really about Apple versus Google’s

Android.” Samsung Tr. 367.2 This was not an offhand remark, it was one of Samsung’s major,

oft-repeated themes: “It’s an attack on Android. It’s an attack, it’s an attack . . . It’s the truth.

It’s an attack on Android, and that’s what this case is.” Id. at 358-59; see also, e.g., id. at 372 (“A

holy war on Android.”); id. at 359 (Apple is “trying to limit consumer choice and to gain an

unfair advantage over its one major competitor, Google’s Android.”); id at 3267 (“[W]e have a

holy war with Google”). Samsung made this argument because the patents at issue dealt with

software features that are in Google’s Android, not hardware that is part of Samsung’s equipment.

Id. at 356-57. For example, one patent involved technology that allowed a user to run a search

both on the internet and locally on the phone. Id. at 1929. Even Apple’s counsel quoted an article

describing the search ability as “an awesome feature for Android.” Id. at 323.

On top of that, one of Samsung’s main defenses was that Google’s engineers are so

skilled, they would never copy. See, e.g., id. at 356 (“[The] accused features on [the Samsung]

phone were developed independently by . . . the software engineers at Google . . . .”); id. at 368

(Google’s engineers “don’t need to copy Apple.”); id at 370 (“the hard work and the ingenuity of

the engineers at Google”); id. at 356 (“most sophisticated and creative minds in the smartphone

industry”); id. at 368 (“they can do just about anything”); id. at 3258 (“brilliant engineers, [at]

Google, right up the street”); id. at 3265 (“these independent geniuses at Google”). That defense

made by the party who hired Dr. Kearl undermines his neutrality. In our case, it has already been

determined that Google did copy thousands of lines of Oracle’s code rather than create its

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See Declaration of Peter A. Bicks (“Bicks Decl.”) Ex. 5 (Dr. Kearl Apple v. Samsung Corrected
Expert Report) at 3.
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Citations to the trial transcript from Apple v. Samsung will be “Samsung Tr. __.” See Bicks
Decl. Ex. 1, 3-4. Citations to docket entries from that case will be “Samsung ECF __.” See
Bicks Decl. Ex. 3. The Apple v. Samsung docket number is 12-CV-00630-LHK (N.D. Cal.).
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libraries entirely from scratch.
Dr. Kearl argues that the Apple v. Samsung case’s emphasis on Android is not relevant

because Dr. Kearl was involved with Samsung’s counterclaims against Apple, which meant his

“analysis focused on the value of the asserted patents in the Apple products.” ECF 1313 at 4.

Accordingly, Dr. Kearl claims, “to the degree that a mobile operating system or platform was

relevant, that operating system would have been the Apple iOS operating system and not

Android.” ECF 1313 at 4. But that point fails to appreciate Oracle’s concerns with Dr. Kearl

serving as a neutral expert. The issue is not whether his analysis specifically dealt with Android.

A jury may well not appreciate that fine parsing of Dr. Kearl’s role. The issue is that Dr. Kearl

was on the Android/Google side of an extremely significant case, no matter whether he was on

offense, defense, or special teams.

Indeed, Google was involved in that case even more than being a focal point of the trial.

Google “agreed to indemnify Samsung,” as one Google lawyer testified in a 30(b)(6) deposition.

Samsung ECF 1920 at 13; Samsung Tr. 2785. As part of that indemnity, Google had the authority

to “control the litigation and defense.” Samsung ECF 1920 at 16; see also id. at 17 (noting that

Google has “control and authority over the defense” of at least two of the patents at issue).

The Google-Samsung connection was so strong that Google and Samsung were even

represented by the same attorneys in Apple v. Samsung. For some “third party” discovery issues,

Google itself filed briefs, rather than acting through Samsung. See, e.g., Samsung ECF 142. On

the Apple v. Samsung docket, all the attorneys representing Google are also attorneys representing

Samsung. See Samsung docket 12-CV-00630-LHK. There was effectively no difference

between Samsung and Google.

Dr. Kearl nevertheless contends that he was not part of any “strategy of defending

Android” because he was involved in Samsung’s counterclaims against Apple. ECF 1313 at 4.

This is at best a superficial approach. Apple laid bare the real strategy: that those counterclaims

were a key part of Samsung’s defense. Apple asked for over $2 billion in damages, Samsung Tr.

337. (It had just secured a $1 billion award against Samsung, see Apple Inc. v. Samsung

Electronics Co., 786 F.3d 983, 989 (Fed. Cir. 2015)). Samsung asserted patent counterclaims
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Case 3:10-cv-03561-WHA Document 1340 Filed 10/15/15 Page 6 of 9

and, based on Dr. Kearl’s analysis, asked for only approximately $6 million. Samsung Tr. 3321.

Apple argued that Samsung was using Dr. Kearl to make all patents in the smartphone space seem

like they have a low value. Apple told the jury that it only made sense for Samsung to pay its

experts over $5 million to pursue a $6 million claim in one circumstance: “[I]f you’re trying to

devalue patents, all patents.” Id. at 3350-51; see also id. (“To devalue, to cheapen, to convince

you that patents are not worth that much.”); id. at 343 (“They want you to believe that patents are

not worth much.”).

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Apple also suggested that Dr. Kearl artificially lowered his calculations, pointing to a part
of Dr. Kearl’s report where he stated that “[t]he value that . . . users placed on Facetime [an

allegedly infringing Apple feature] is likely higher, and likely many times higher, than the $.99

amount I used in my calculations.” Samsung Tr. 2673-74.

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See Bicks Decl. Ex. 5 (Dr. Kearl Apple v.

Samsung Corrected Expert Report) at Tables 17a-f. Samsung, for its part, told the jury that

Apple’s “billion dollar numbers are completely unsupported,” and that it would “show [the jury]

how properly to calculate a royalty,” by demonstrating how “Dr. Kearl calculated these

damages.” Samsung Tr. at 412. In other words, Samsung’s lawyers directly offered Dr. Kearl’s

analysis as a rebuttal approach on the Android claims, not just as an affirmative calculation on

Samsung’s counterclaims.

Because Dr. Kearl was on the Android side of Apple v. Samsung, it is no longer proper for

him to serve as a neutral expert here. A Rule 706 expert is cloaked in the authority of the Court.

Cf. 29 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 6302 (2015)

(“[B]ecause of the expert’s link to the court, a jury may fail to scrutinize his testimony to the

same extent it would the testimony of party experts. Thus, the testimony of a court-appointed

expert may undermine rather than promote accurate factfinding.”). Both Dr. Kearl and Samsung

appeared to recognize the power of a court endorsement. Of all the times that Dr. Kearl has

served as an expert witness, Samsung asked Dr. Kearl only about his role in this case during the
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Case 3:10-cv-03561-WHA Document 1340 Filed 10/15/15 Page 7 of 9

Samsung trial. Dr. Kearl answered by highlighting that he was hired neither for a plaintiff nor for

a defendant, but for the Court in this case: “I’ve been an expert witness in a lot of cases, both for

plaintiffs and defendants. But a few years ago, I was hired by Judge William Alsup of the

Northern District of California to be a court expert, to be his expert.” Samsung Tr. 2657. During

closing statements, Samsung emphasized Dr. Kearl’s neutrality in our case as a reason for his

reliability: “[He] even was retained by the court to serve as a neutral expert for the court in

another case.” Samsung Tr. 3319.

Given Dr. Kearl’s participation in Samsung/Google’s defense, he should not remain as

this Court’s expert. Retaining him as a “neutral” expert is inviting real prejudice to Oracle and

confusion for the jury. As previously discussed, Dr. Kearl’s testimony at trial would force Oracle

to steer between Scylla and Charybdis. See ECF 1311 at 5. Normally, a party could cross-

examine an expert about his ties to the opposing side. But because Dr. Kearl is the Court’s

expert, that approach risks suggesting to the jury that the Court has in some way endorsed

Google’s side. And the jury may already be confused about why it’s hearing from a third expert

on the damages issue. The other option, not raising the Apple v. Samsung case at all, means not

being able to expose to the jury potential biases as would be possible with any other expert.

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Dr. Kearl should no longer serve as a Rule 706 expert in this case.
II.

A Rule 706 Expert Is No Longer Necessary.
The Court should not appoint any Rule 706 expert to replace Dr. Kearl because—as

Oracle previously explained, see ECF 1311 at 5-7—a Rule 706 expert is no longer necessary

(though Oracle acknowledges that the Court previously stated that it would reevaluate the need

for a Rule 706 expert after the parties submit their expert damages reports, July 30, 2015 Tr. at

48-50).

“Rule 706 should be invoked only in rare and compelling circumstances.” Monolithic

Power Sys., Inc. v. O2 Micro Int’l Ltd., 558 F.3d 1341, 1348 (Fed. Cir. 2009). That appointment

is generally reserved for “complex scientific, medical or technical matters,” Armstrong v. Brown,

768 F.3d 975, 987 (9th Cir. 2014); see, e.g., Walker v. Am. Home Shield Long Term Disability

Plan, 180 F.3d 1065, 1071 (9th Cir. 1999) (involving “contradictory evidence about an elusive
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Case 3:10-cv-03561-WHA Document 1340 Filed 10/15/15 Page 8 of 9

disease of unknown cause”).

The damages calculations are not as complex as they were when the patent claims were

still in the case. In November 2011, the Court explained that an important reason why the

damages issue “was particularly involved” was that “[d]amages from patent infringement are

governed by different legal standards than damages from copyright infringement, [and] some

accused products and acts are relevant to both parts of the action.” ECF 610 at 2. This

complication no longer exists. Whatever may be said of the significantly more complex first trial,

Oracle does not intend to assert “complicated damage theories” at the retrial. See ECF 1321 at

13. And the Court will be able to decide for itself once it has the opportunity to review the

parties’ expert reports.

III.

A Rule 706 Expert Should Not Testify At Trial.
Even if the Court determines that it still requires a Rule 706 expert, the parties should

jointly select a neutral expert who should not testify in front of the jury. As Google previously

explained: “If the jury also hears testimony from a third, neutral expert, that will further

complicate the jury’s decision on damages. Moreover, if the jury is aware that the Court’s expert

was appointed by the Court and is not a representative of the parties, that expert will have a

powerful stamp of Court approval and objectivity that will lend a disproportionate weight to that

expert’s opinions and testimony.” ECF 235 at 3. Oracle agrees. Any Rule 706 expert should not

testify at the trial.

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CONCLUSION
Dr. Kearl should no longer serve as a Rule 706 expert in this case, and the Court should
not appoint a new expert.

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Case 3:10-cv-03561-WHA Document 1340 Filed 10/15/15 Page 9 of 9

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Dated: October 15, 2015
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KAREN G. JOHNSON-MCKEWAN
ANNETTE L. HURST
GABRIEL M. RAMSEY
PETER A. BICKS
LISA T. SIMPSON
Orrick, Herrington & Sutcliffe LLP

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By: /s/ Peter A. Bicks
PETER A. BICKS
Attorneys for Plaintiff
ORACLE AMERICA, INC.

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Case 3:10-cv-03561-WHA Document 1340-1 Filed 10/15/15 Page 1 of 3

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

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ORACLE AMERICA, INC.
Plaintiff,
v.
GOOGLE INC.
Defendant.

Case No. CV 10-03561 WHA
DECLARATION OF PETER A. BICKS
IN SUPPORT OF ORACLE’S MOTION
TO DISQUALIFY THE RULE 706
EXPERT
Dept.: Courtroom 8, 19th Floor
Judge: Honorable William H. Alsup

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DECLARATION OF PETER A. BICKS
CV 10-03561 WHA

Case 3:10-cv-03561-WHA Document 1340-1 Filed 10/15/15 Page 2 of 3

I, Peter A. Bicks, declare and state as follows:

I am a partner with the law firm of Orrick, Herrington & Sutcliffe LLP (“Orrick”),

attorneys of record for plaintiff Oracle America, Inc. (“Oracle”). I am a member of the bar of the

State of New York and have been admitted pro hac vice in this action. I am familiar with the

events, pleadings and discovery in this action and, if called upon as a witness, I could and would

testify competently to the matters stated herein of my own personal knowledge.

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I submit this declaration in support of Oracle’s Motion to Disqualify the Rule 706

On September 10, 2015, Oracle submitted to this Court Dr. James Kearl’s trial

Expert.

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testimony in Apple v. Samsung, 12-CV-00630-LHK (N.D. Cal.) See ECF 1311-10, 1311-11.

Attached as Exhibit 1 is a true and correct copy of the April 1, 2014 trial transcript

from Apple v. Samsung. This transcript includes the opening statements from Apple and

Samsung.

Attached as Exhibit 2 is a true and correct copy of Exhibit 3010 in Apple v.

Samsung. It is ECF 1920 in that case. This exhibit includes a transcript of a video deposition of

James Maccoun.

Attached as Exhibit 3 is a true and correct copy of an excerpt of the April 22,

2014 trial transcript from Apple v. Samsung. This excerpt indicates when James Maccoun’s

videotaped deposition was played to the jury.

Attached as Exhibit 4 is a true and correct copy of the April 29, 2014 trial

transcript from Apple v. Samsung. This transcript includes the closing arguments from Apple and

Samsung.

Attached as Exhibit 5 is a true and correct copy of excerpts from the Corrected

Expert Report of Dr. James R. Kearl in Apple v. Samsung as produced by Quinn Emanuel.

///

///
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DECLARATION OF PETER A. BICKS
CV 10-03561 WHA

Case 3:10-cv-03561-WHA Document 1340-1 Filed 10/15/15 Page 3 of 3

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I declare under penalty of perjury under the laws of the United States that the foregoing is
true and correct.
Executed this 15th day of October, 2015, at New York, New York.

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/s/ Peter A. Bicks
Peter A. Bicks

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DECLARATION OF PETER A. BICKS
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EXHIBIT 1

Case
Case5:12-cv-00630-LHK
3:10-cv-03561-WHA Document
Document1622
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Filed 10/15/15Page1
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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

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APPLE INC., A CALIFORNIA
CORPORATION,

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PLAINTIFF,
VS.
SAMSUNG ELECTRONICS CO., LTD.,
A KOREAN BUSINESS ENTITY;
SAMSUNG ELECTRONICS AMERICA,
INC., A NEW YORK CORPORATION;
SAMSUNG TELECOMMUNICATIONS
AMERICA, LLC, A DELAWARE
LIMITED LIABILITY COMPANY,
DEFENDANTS.

)
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)
)
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C-12-00630 LHK
SAN JOSE, CALIFORNIA
APRIL 1, 2014
VOLUME 2
PAGES 268-497

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TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE LUCY H. KOH
UNITED STATES DISTRICT JUDGE

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APPEARANCES ON NEXT PAGE

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OFFICIAL COURT REPORTERS:

LEE-ANNE SHORTRIDGE, CSR, CRR
CERTIFICATE NUMBER 9595
IRENE RODRIGUEZ, CSR, CRR
CERTIFICATE NUMBER 8074

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PROCEEDINGS RECORDED BY MECHANICAL STENOGRAPHY
TRANSCRIPT PRODUCED WITH COMPUTER

UNITED STATES COURT REPORTERS

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

FOR PLAINTIFF
APPLE:

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MORRISON & FOERSTER
BY: HAROLD J. MCELHINNY
RACHEL KREVANS
425 MARKET STREET
SAN FRANCISCO, CALIFORNIA

94105

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WILMER, CUTLER, PICKERING,
HALE AND DORR
BY: WILLIAM F. LEE
60 STATE STREET
BOSTON, MASSACHUSETTS 02109

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BY: MARK D. SELWYN
950 PAGE MILL ROAD
PALO ALTO, CALIFORNIA

94304

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QUINN, EMANUEL, URQUHART & SULLIVAN
BY: JOHN B. QUINN
WILLIAM PRICE
865 S. FIGUEROA STREET, FLOOR 10
LOS ANGELES, CALIFORNIA 90017

BY:

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FOR SAMSUNG:

VICTORIA F. MAROULIS
KEVIN B . JOHNSON
555 TWIN DOLPHIN DRIVE
SUITE 560
REDWOOD SHORES, CALIFORNIA

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UNITED STATES COURT REPORTERS

94065

Case
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INDEX OF PROCEEDINGS

OPENING STATEMENT BY MR. MCELHINNY

P. 298

OPENING STATEMENT BY MR. LEE

P. 338

OPENING STATEMENT BY MR. QUINN

P. 351

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INDEX OF WITNESSES

PLAINTIFF'S

PHILIP SCHILLER
DIRECT EXAM BY MR. MCELHINNY
CROSS-EXAM BY MR. PRICE

P. 417
P. 475

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INDEX OF EXHIBITS
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MARKED

ADMITTED

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PLAINTIFF'S
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118
135A
180
1441
113A
127A
133
134
143
123

428
429
432
436
437
439
440
441
445
461

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DEFENDANT'S

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UNITED STATES COURT REPORTERS

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SAN JOSE, CALIFORNIA

APRIL 1, 2014
P R O C E E D I N G S

(JURY OUT AT 9:02 A.M.)

(JUROR ANDERSON PRESENT TELEPHONICALLY.)

JUROR ANDERSON:

THE CLERK:

HI, MS. ANDERSON.

JUROR ANDERSON:

THE COURT:

WE'RE CALLING FROM THE

COURTROOM.

THIS IS LAURA ANDERSON.

HELLO.

HI, MS. ANDERSON.

TELL US WHAT IS

HAPPENING TODAY.
JUROR ANDERSON:

I'M NOT FEELING WELL.

I WOKE UP

EARLY THIS MORNING WITH VOMITING AND DIARRHEA, AND IT'S BEEN

GOING ON THROUGHOUT THE MORNING.

MONTEREY TO SAN JOSE.

15
16

THE COURT:

I HAVE BEEN RIDING FROM

I'VE HAD TO PULL OVER MULTIPLE TIMES.
OKAY.

ALL RIGHT.

THEN I -- IS THERE ANY

OBJECTION TO EXCUSING MS. LAURA ANDERSON FOR HARDSHIP?

MR. LEE:

NONE FOR APPLE, YOUR HONOR.

MR. QUINN:

NOR FOR SAMSUNG.

THE COURT:

ALL RIGHT.

THEN, MS. ANDERSON, THANK YOU

VERY MUCH FOR YOUR SERVICE.

AND YOU HAVE FULFILLED YOUR JURY DUTY.

JUROR ANDERSON:

THE COURT:

JUROR ANDERSON:

THE COURT:

WE HOPE THAT YOU RECOVER QUICKLY,

OKAY.

ALL RIGHT.

THANK YOU.

FEEL BETTER.

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JUROR ANDERSON:

THE COURT:

3
4
5

THANK YOU.

OKAY.

THEN LET'S BRING IN MS. GALONJA,

NUMBER 7.
(JUROR GALONJA PRESENT.)
THE COURT:

MS. GALONJA, WELCOME.

ANYWHERE THAT'S COMFORTABLE FOR YOU.

WHAT ISSUE YOU'RE HAVING?

8
9
10

JUROR GALONJA:

TAKE A SEAT

CAN YOU PLEASE TELL US

FIRST, I HAVE TO APOLOGIZE, AND THEN

I HAVE TO TELL, IT'S AN HONOR FOR ME TO BE CHOSEN HERE.
BUT YESTERDAY WHEN I CAME HOME AND I LOOKED FOR ALL PROS

AND, YOU KNOW, AGAINST THE DUTIES, DUTY, I REALIZED I HAVE SOME

ISSUE TO ASK YOU TO DISMISS ME BECAUSE YESTERDAY YOU ASKED IF

SOMEBODY HAD SOME HARDSHIP FOR THE, LIKE FINANCIAL SIDE, AND

FIRST, I HAVE TO APOLOGIZE.

IS STILL LIMITED.

16
17
18
19
20

I'M HERE 16 YEARS, BUT MY ENGLISH

FIRST TIME I RAISED THE HAND AND THEN AFTER THAT, BECAUSE
I REALLY DIDN'T THINK I WOULD BE CHOSEN 100 PERCENT.
AND THEN I SAID, OKAY, I'M NOT GOING TO TELL MY REASON
BECAUSE IT'S FINANCIAL SIDE, HARD FOR ME.
BUT WHEN I CAME HOME AND I LOOK ON THAT, YOU KNOW, I'M

WORKING TWO PART-TIME JOBS, NOT WELL PAID.

WORK FOR FOUR YEARS.

23
24
25

MY HUSBAND DOESN'T

WE HAVE SOME FINANCIAL ISSUE.

AND I LOOK IN MY HANDBOOK, THE SCHOOL DISTRICT WHERE I'M
WORKING, THEY PAY ME, LIKE I WOULD BE PAID $40 PER DAY.
TODAY I LEARNED SOMETHING MORE, AND I WILL BE PAID ONE

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MONTH LATER BECAUSE WE HAVE TO GIVE THE PROOF UNTIL THE 10TH OF

THE MONTH, AND THEN WE'LL BE PAID, YOU KNOW, THE FOLLOWING

MONTH.

4
5

IT MEANS ONE MONTH I WILL BE LATE, AND I LIVE PAY CHECK TO
PAY CHECK.

THE COURT:

JUROR GALONJA:

8
9
10
11
12
13

OKAY.
THERE WILL BE ISSUE FOR ME

FINANCIALLY.
AND THEN I'M NOT DRIVING.

MY HUSBAND GIVE ME RIDE RIGHT

NOW, AND HE WILL PICK ME UP.
THAT MEANS, YOU KNOW, I DON'T HAVE PROOF, I DON'T PARK THE
CAR, I DON'T HAVE MILEAGE.
THE COURT:

OH, WELL, YOUR HUSBAND WOULD STILL GET

REIMBURSED FOR THE MILEAGE, EVEN IF YOU'RE NOT DRIVING, WHOEVER

IS DRIVING WILL GET REIMBURSED FOR THE MILEAGE.

SO YOU WILL GET REIMBURSED FOR THAT.

DIFFERENCE, YOU CAN LET ME KNOW.

JUROR GALONJA:

IF THAT WOULD MAKE A

AND THEN THIS MORNING I CALL MY

JOB -- I WORK IN THE KITCHEN IN THE SCHOOL.

HAVE TO FIND SUBSTITUTE FOR ME.

FIND, AND THEY TOLD ME THAT.

22
23

YOU KNOW, THEY

IT'S NOT EVERY TIME EASY TO

YOU KNOW, I TOLD MAYBE WHOLE MONTH AND MY SUPERVISOR WAS,
LIKE, OH, YOU KNOW, HOW WE CAN FIND FOR ONE-MONTH SUBSTITUTE?

THE COURT:

UM-HUM.

JUROR GALONJA:

AND IT'S ALSO ISSUE --

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THE COURT:

DO YOU THINK THAT MIGHT PUT YOUR JOB AT

RISK?

JUROR GALONJA:

THE COURT:

YEAH, I THINK SO.

ALL RIGHT.

IS THERE ANY OBJECTION TO

EXCUSING MS. GALONJA FOR HARDSHIP?

MR. LEE:

NOT FOR APPLE, YOUR HONOR.

MR. QUINN:

NOT FOR SAMSUNG.

THE COURT:

OKAY.

MS. GALONJA, I WANTED TO THANK YOU

SO MUCH FOR YOUR WILLINGNESS TO SERVE, AND I REALLY APPRECIATE

THAT YOU TRIED TO SERVE ON THIS JURY AND YOU'VE FULFILLED YOUR

DUTY.

12
13
14

SO THANK YOU.
JUROR GALONJA:

OKAY.

I THANK YOU, EVERYBODY, FOR

UNDERSTANDING.
THE COURT:

CAN YOU GO TO THE SECOND FLOOR TO THE

JURY ASSEMBLY ROOM, AND THEY CAN WORK OUT ALL OF YOUR

PAPERWORK.

JUROR GALONJA:

THE COURT:

THANK YOU.

THE CLERK:

LET ME GO CHECK.

MISSING ONE OR TWO.

THE COURT:

WE'RE STILL MISSING A JUROR.

THE CLERK:

WHEN SHE CAME OUT.

THE COURT:

WE HAD BEEN MISSING ONE OR TWO JURORS,

24
25

OKAY.

THANK YOU.

I THINK WE'RE STILL

BUT LET'S SEE IF THEY'VE NOW ARRIVED.
WAIT ONE SECOND.

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(PAUSE IN PROCEEDINGS.)

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3

THE COURT:

MR. MCELHINNY:

THE COURT:

JUST TWO, ACTUALLY NOT EVEN

OKAY.

YOU'RE SETTLING?

(LAUGHTER.)

8
9

I DID.

ISSUES, WE'VE REACHED AGREEMENT ON SOMETHING.

6
7

THE DOOR IS CLOSED.

I ASSUME YOU STOOD UP FOR AN ISSUE?

4
5

OKAY.

MR. MCELHINNY:

LET'S SEE.

WHAT'S THE CALENDAR DATE?

MR. QUINN AND I WOULD JOINTLY MOVE THE COURT FOR AN ORDER

EXCLUDING PERCIPIENT WITNESSES FROM THIS COURTROOM AND THE

OVERFLOW COURTROOM DURING THE TRIAL.

THE COURT:

MR. MCELHINNY:

THAT'S GRANTED.
WITH EACH SIDE TO POLICE THEIR OWN

WITNESSES.

THE COURT:

THAT'S GRANTED.

MR. MCELHINNY:

THAT MOTION IS GRANTED.

AND, SECONDLY, WITH THE COURT'S

PERMISSION, AS WE DID IN THE FIRST TRIAL, MR. LEE AND I WOULD

LIKE TO SPLIT OUR OPENINGS WITHIN THE TWO CASES WITHIN THE TIME

LIMIT THAT YOUR HONOR HAS SET.

20
21
22
23

THE COURT:

THAT'S FINE.

(DISCUSSION OFF THE RECORD BETWEEN THE COURT AND THE
CLERK.)
THE COURT:

LET ME INFORM THE PARTIES THAT

MS. NGUYEN, WHO IS JUROR NUMBER 1, HAS JUST INFORMED

MS. PARKER BROWN THAT SHE IS GOING ON VACATION AS OF THE

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EVENING OF WEDNESDAY, MARCH 7TH.

THE CLERK:

MAY 7TH.

THE COURT:

MAY 7TH.

SHOULD BE A FULL WEEK OF JURY DELIBERATIONS.

5
6

I'M HOPING THAT THE JURY MAY BEGIN DELIBERATING ON
TUESDAY, APRIL 29TH.

BE HEARD ON THAT?

NOW.

MR. LEE:

DO YOU WANT TO

I'M NOT ANXIOUS TO LOSE ANOTHER JUROR RIGHT

I'M ACTUALLY PETRIFIED ABOUT LOSING ANOTHER

JUROR.

12
13

CERTAINLY BY APRIL 30TH, WEDNESDAY.

SO I DON'T PERCEIVE THAT TO BE A PROBLEM.

SO THAT WOULD BE, YOU KNOW,

BUT I DON'T THINK IT'S A PROBLEM.

WE SHOULD BE DONE BY

THEN.

THE COURT:

OKAY.

MR. QUINN:

IT DOESN'T SEEM TO BE A PROBLEM, YOUR

THE COURT:

OKAY.

16
17

MR. QUINN?

HONOR.
SO WHEN SHE COMES OUT, I'M JUST

GOING TO REASSURE HER THAT I'VE CONSULTED WITH YOU ALL, AND WE

DON'T PERCEIVE THAT TO BE A PROBLEM.

OKAY.

THEN I THINK WE HAVE EVERYONE NOW.

MS. PARKER BROWN?

IS THAT RIGHT,

THE CLERK:

WE DO.

THE COURT:

ALL RIGHT.

THE CLERK:

I'M GOING TO TAKE A SECOND AND TELL THEM

THEN LET'S START.

THAT THEY DON'T HAVE TO SPREAD ALL THE WAY, THEY CAN --

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THE COURT:

I'M SORRY.

HAVE YOU ALREADY DISTRIBUTED THE JURY BINDERS?

THE CLERK:

SURE, THAT'S FINE.

NO.

(DISCUSSION OFF THE RECORD BETWEEN THE COURT AND THE
CLERK.)

THE COURT:

LET ME ASK THE PARTIES, WOULD YOU LIKE

THEM TO GET THEIR JURY BINDERS NOW?

BECAUSE THE JURY INSTRUCTIONS ARE IN THERE.

9
10

AND I THINK MR. SWARUUP CONFIRMED THAT THEY HAVE THE
LATEST VERSIONS.

THE COURT:

ALL RIGHT.

WELCOME.

PLEASE TAKE A SEAT.

UNFORTUNATELY, MS. ANDERSON WAS VERY, VERY ILL, HAS HAD A
LOT OF VOMITING.

16
17

THANK YOU.

WELCOME AND GOOD MORNING.

14
15

OKAY.

(JURY IN AT 9:12 A.M.)

12
13

I THINK IT MAKES SENSE

SO SHE HAD TO BE EXCUSED.

AND MS. GALONJA AS WELL HAD SOME PRETTY SEVERE HARDSHIPS.
SO SHE HAD TO BE EXCUSED.

SO I HAVE EIGHT OF YOU LEFT AND YOU ARE EACH PRECIOUS, AND

I AM GOING TO BE PUTTING IMMUNE ENHANCING POWDERS AND VITAMIN C

DRINKS IN THE JURY ROOM.

ONE OR TWO EVERY DAY.

I'M GOING TO ASK YOU TO EACH DRINK

OKAY.

NO BUNGEE JUMPING, NOTHING CRAZY IN THE NEXT MONTH, REALLY

CAUTIOUS, BECAUSE I NEED TO HAVE ALL OF YOU REMAIN ON THE JURY.

OKAY?

ALL RIGHT.

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I'M NOW GOING TO READ TO YOU THE PRELIMINARY JURY
INSTRUCTIONS.
AND, MS. NGUYEN, I UNDERSTAND THAT YOU HAVE A VACATION

PLANNED THE EVENING OF MAY 7TH, WEDNESDAY.

BE FINE.

JUROR NGUYEN:

THE COURT:

I THINK THAT SHOULD

OKAY.

WE DO HOPE THAT THE JURY WILL BEGIN

DELIBERATING SOME TIME ON EITHER TUESDAY, APRIL 29TH, OR

WEDNESDAY, APRIL 30TH.

10
11
12
13

SO THAT SHOULD BE SUFFICIENT TIME.

BUT IF IT'S NOT, THEN WE CAN ALWAYS DISCUSS AT THAT POINT
HOW TO PROCEED.
OKAY.

YOU NOW HAVE JURY BINDERS WHICH YOU CAN LOOK

THROUGH THAT HAVE HELPFUL INFORMATION ABOUT THE CASE.

I WANT TO POINT YOU TO THE PRELIMINARY JURY INSTRUCTIONS

WHICH, EVEN THOUGH YOU HAVE A HARD COPY, I AM REQUIRED TO READ

THEM TO YOU.

SO IF YOU WOULD PLEASE TURN TO YOUR PRELIMINARY JURY

INSTRUCTIONS IN YOUR BINDERS.

EVERYONE THERE?

ALL RIGHT.

SO IT'S THE THIRD BIG TAB.

THANK YOU.

ALL RIGHT.

LADIES AND GENTLEMEN, YOU ARE NOW THE JURY IN THIS CASE.

22
23

DUTY OF THE JURY.

IT IS MY DUTY TO INSTRUCT YOU ON THE LAW.
THESE INSTRUCTIONS ARE PRELIMINARY INSTRUCTIONS TO HELP

YOU UNDERSTAND THE PRINCIPLES THAT APPLY TO CIVIL TRIALS AND TO

HELP YOU UNDERSTAND THE EVIDENCE AS YOU LISTEN TO IT.

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YOU WILL BE ALLOWED TO KEEP THIS SET THROUGHOUT THE TRIAL

TO WHICH TO REFER.

HOME.

THIS SET OF INSTRUCTIONS IS NOT TO BE TAKEN

ACTUALLY, YOUR JURY BINDERS ARE ALSO NOT TO BE TAKEN HOME.

PLEASE LEAVE THEM IN THE JURY ROOM DURING BREAKS AND IN THE

EVENINGS.

THANK YOU.

THIS SET OF INSTRUCTIONS MUST REMAIN IN THE JURY ROOM WHEN

YOU LEAVE IN THE EVENINGS.

GIVE YOU A FINAL SET OF INSTRUCTIONS.

AT THE END OF THE TRIAL, I WILL
IT IS THE FINAL SET OF

INSTRUCTIONS WHICH WILL GOVERN YOUR DELIBERATIONS.

YOU MUST NOT INFER FROM THESE INSTRUCTIONS OR FROM

ANYTHING I MAY SAY OR DO AS INDICATING THAT I HAVE AN OPINION

REGARDING THE EVIDENCE OR WHAT YOUR VERDICT SHOULD BE.

IT IS YOUR DUTY TO FIND THE FACTS FROM ALL THE EVIDENCE IN

THE CASE.

TO YOU.

17
18
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20
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23

TO THOSE FACTS YOU WILL APPLY THE LAW AS I GIVE IT

YOU MUST FOLLOW THE LAW AS I GIVE IT TO YOU WHETHER YOU
AGREE WITH IT OR NOT.
DO NOT LET PERSONAL LIKES OR DISLIKES, OPINIONS,
PREJUDICES, BIAS OR SYMPATHY INFLUENCE YOUR DECISION.
BIAS INCLUDES BIAS FOR OR AGAINST ANY PARTY OR ANY WITNESS
BASED UPON NATIONALITY, RACE OR ETHNICITY.
THAT MEANS THAT YOU MUST DECIDE THE CASE SOLELY ON THE

EVIDENCE BEFORE YOU.

DO SO.

YOU WILL RECALL THAT YOU TOOK AN OATH TO

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IN FOLLOWING MY INSTRUCTIONS, YOU MUST FOLLOW ALL OF THEM

AND NOT SINGLE OUT SOME AND IGNORE OTHERS.

IMPORTANT.

THEY ARE ALL

WHAT IS EVIDENCE?

THE EVIDENCE YOU ARE TO CONSIDER IN DECIDING WHAT THE

FACTS ARE CONSISTS OF:

THE SWORN TESTIMONY OF ANY WITNESS;

THE EXHIBITS WHICH ARE RECEIVED INTO EVIDENCE; AND,

ANY FACTS TO WHICH THE LAWYERS HAVE AGREED.

WHAT IS NOT EVIDENCE?

IN REACHING YOUR VERDICT, YOU MAY CONSIDER ONLY THE

12
13
14
15

TESTIMONY AND EVIDENCE RECEIVED INTO EVIDENCE.
CERTAIN THINGS ARE NOT EVIDENCE, AND YOU MAY NOT CONSIDER
THEM IN DECIDING WHAT THE FACTS ARE.
NUMBER 1.

I WILL LIST THEM FOR YOU.

ARGUMENTS AND STATEMENTS BY LAWYERS ARE NOT

EVIDENCE.

IN THEIR OPENING STATEMENTS, WILL SAY IN THEIR CLOSING

ARGUMENTS, AND AT OTHER TIMES IS INTENDED TO HELP YOU INTERPRET

THE EVIDENCE, BUT IT IS NOT EVIDENCE.

20
21
22

THE LAWYERS ARE NOT WITNESSES.

WHAT THEY WILL SAY

IF THE FACTS AS YOU REMEMBER THEM DIFFER FROM THE WAY THE
LAWYERS HAVE STATED THEM, YOUR MEMORY OF THEM CONTROLS.
NUMBER 2.

QUESTIONS AND OBJECTIONS BY LAWYERS ARE NOT

EVIDENCE.

ATTORNEYS HAVE A DUTY TO THEIR CLIENTS TO OBJECT

WHEN THEY BELIEVE A QUESTION IS IMPROPER UNDER THE RULES OF

EVIDENCE.

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YOU SHOULD NOT BE INFLUENCED BY THE OBJECTION OR BY THE

COURT'S RULING ON IT.

NUMBER 3.

TESTIMONY THAT HAS BEEN EXCLUDED OR STRICKEN OR

THAT YOU HAVE BEEN INSTRUCTED TO DISREGARD IS NOT EVIDENCE AND

MUST NOT BY CONSIDERED.

IN ADDITION, SOMETIMES TESTIMONY AND EXHIBITS ARE RECEIVED

ONLY FOR A LIMITED PURPOSE.

INSTRUCTION, YOU MUST FOLLOW IT.

NUMBER 4.

WHEN I GIVE A LIMITING

ANYTHING YOU MAY HAVE SEEN OR HEARD WHEN THE

COURT WAS NOT IN SESSION IS NOT EVIDENCE.

YOU ARE TO DECIDE

THE CASE SOLELY ON THE EVIDENCE RECEIVED AT THE TRIAL.

EVIDENCE FOR A LIMITED PURPOSE.

SOME EVIDENCE MAY BE ADMITTED FOR A LIMITED PURPOSE ONLY.

WHEN I INSTRUCT YOU THAT AN ITEM OF EVIDENCE HAS BEEN

ADMITTED FOR A LIMITED PURPOSE, YOU MUST CONSIDER IT ONLY FOR

THAT LIMITED PURPOSE AND FOR NO OTHER.

DIRECT OR CIRCUMSTANTIAL EVIDENCE.

EVIDENCE MAY BE DIRECT OR CIRCUMSTANTIAL.

DIRECT EVIDENCE

IS DIRECT PROOF OF A FACT, SUCH AS TESTIMONY BY A WITNESS ABOUT

WHAT THAT WITNESS PERSONALLY SAW OR HEARD OR DID.

21
22
23

CIRCUMSTANTIAL EVIDENCE IS PROOF OF ONE OR MORE FACTS FROM
WHICH YOU COULD FIND ANOTHER FACT.
YOU SHOULD CONSIDER BOTH KINDS OF EVIDENCE.

THE LAW MAKES

NO DISTINCTION BETWEEN THE WEIGHT TO BE GIVEN TO EITHER DIRECT

OR CIRCUMSTANTIAL EVIDENCE.

IT IS FOR YOU TO DECIDE HOW MUCH

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WEIGHT TO GIVE TO ANY EVIDENCE.

NUMBER 6.

RULING ON OBJECTIONS.

THERE ARE RULES OF EVIDENCE THAT CONTROL WHAT CAN BE

RECEIVED INTO EVIDENCE.

OFFERS AN EXHIBIT INTO EVIDENCE AND A LAWYER ON THE OTHER SIDE

THINKS THAT IT IS NOT PERMITTED BY THE RULES OF EVIDENCE, THAT

LAWYER MAY OBJECT.

8
9
10
11
12

WHEN A LAWYER ASKS A QUESTION OR

IF I OVERRULE THE OBJECTION, THE QUESTION MAY BE ANSWERED
OR THE EXHIBIT RECEIVED.
IF I SUSTAIN THE OBJECTION, THE QUESTION CANNOT BE
ANSWERED AND THE EXHIBIT CANNOT BE RECEIVED.
WHENEVER I SUSTAIN AN OBJECTION TO A QUESTION, YOU MUST

IGNORE THE QUESTION AND MUST NOT GUESS WHAT THE ANSWER MIGHT

HAVE BEEN.

SOMETIMES I MAY ORDER THAT EVIDENCE BE STRICKEN FROM THE

RECORD AND THAT YOU DISREGARD OR IGNORE THE EVIDENCE.

THAT

MEANS THAT WHEN YOU ARE DECIDING THE CASE, YOU MUST NOT

CONSIDER THE EVIDENCE THAT I TOLD YOU TO DISREGARD.

CREDIBILITY OF WITNESSES.

IN DECIDING THE FACTS IN THIS CASE, YOU MAY HAVE TO DECIDE

WHICH TESTIMONY TO BELIEVE AND WHICH TESTIMONY NOT TO BELIEVE.

YOU MAY BELIEVE EVERYTHING A WITNESS SAYS, OR PART OF IT, OR

NONE OF IT.

24
25

PROOF OF A FACT DOES NOT NECESSARILY DEPEND ON THE NUMBER
OF WITNESSES WHO TESTIFY ABOUT IT.

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IN CONSIDERING THE TESTIMONY OF ANY WITNESS, YOU MAY TAKE
INTO ACCOUNT:

3
4

NUMBER 1.

THE OPPORTUNITY AND ABILITY OF THE WITNESS TO

SEE OR HEAR OR KNOW THE THINGS TESTIFIED TO;

NUMBER 2.

THE WITNESS'S MEMORY;

NUMBER 3.

THE WITNESS'S MANNER WHILE TESTIFYING;

NUMBER 4.

THE WITNESS'S INTEREST IN THE OUTCOME OF THE

CASE AND ANY BIAS OR PREJUDICE;

NUMBER 5.

WHETHER OTHER EVIDENCE CONTRADICTED THE

WITNESS'S TESTIMONY;

NUMBER 6.

THE REASONABLENESS OF THE WITNESS'S TESTIMONY

IN LIGHT OF ALL THE EVIDENCE; AND,

NUMBER 7.

ANY OTHER FACTORS THAT BEAR ON BELIEVABILITY.

THE WEIGHT OF THE EVIDENCE AS TO A FACT DOES NOT

NECESSARILY DEPEND ON THE NUMBER OF WITNESSES WHO TESTIFY ABOUT

IT.

IMPEACHMENT EVIDENCE -- WITNESS.

THE EVIDENCE THAT A WITNESS LIED UNDER OATH OR GAVE

DIFFERENT TESTIMONY ON A PRIOR OCCASION MAY BE CONSIDERED,

ALONG WITH ALL OTHER EVIDENCE, IN DECIDING WHETHER OR NOT TO

BELIEVE A WITNESS AND HOW MUCH WEIGHT TO GIVE THE TESTIMONY OF

THE WITNESS AND FOR NO OTHER PURPOSE.

NUMBER 9.

CONDUCT OF THE JURY.

I WILL NOW SAY A FEW WORDS ABOUT YOUR CONDUCT AS JURORS.

FIRST, KEEP AN OPEN MIND THROUGHOUT THE TRIAL, AND DO NOT

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DECIDE WHAT THE VERDICT SHOULD BE UNTIL YOU AND YOUR FELLOW

JURORS HAVE COMPLETED YOUR DELIBERATIONS AT THE END OF THE

CASE.

SECOND, BECAUSE YOU MUST DECIDE THIS CASE BASED ONLY ON

THE EVIDENCE RECEIVED IN THE CASE AND ON MY INSTRUCTIONS AS TO

THE LAW THAT APPLIES, YOU MUST NOT BE EXPOSED TO ANY OTHER

INFORMATION ABOUT THE CASE OR TO THE ISSUES IT INVOLVES DURING

THE COURSE OF YOUR JURY DUTY.

THUS, UNTIL THE END OF THE CASE, OR UNLESS I TELL YOU

OTHERWISE, DO NOT COMMUNICATE WITH ANYONE IN ANY WAY, AND DO

NOT LET ANYONE ELSE COMMUNICATE WITH YOU IN ANY WAY, ABOUT THE

MERITS OF THE CASE OR ANYTHING TO DO WITH IT.

THIS INCLUDES DISCUSSING THE CASE IN PERSON, IN WRITING,

BY PHONE OR ELECTRONIC MEANS VIA E-MAIL, TEXT MESSAGING OR ANY

INTERNET CHAT ROOM, BLOG, WEBSITE OR ANY OTHER FEATURE.

THIS APPLIES TO COMMUNICATING WITH YOUR FELLOW JURORS

UNTIL I GIVE YOU THE CASE FOR DELIBERATION, AND IT APPLIES TO

COMMUNICATING WITH EVERYONE ELSE, INCLUDING YOUR FAMILY

MEMBERS, YOUR EMPLOYER, AND THE PEOPLE INVOLVED IN THE TRIAL,

ALTHOUGH YOU MAY NOTIFY YOUR FAMILY AND YOUR EMPLOYER THAT YOU

HAVE BEEN SEATED AS A JUROR IN THIS CASE.

BUT IF YOU ARE ASKED OR APPROACHED IN ANY WAY ABOUT YOUR

JURY SERVICE OR ANYTHING ABOUT THIS CASE, YOU MUST RESPOND THAT

YOU HAVE BEEN ORDERED NOT TO DISCUSS THE MATTER AND TO REPORT

THE CONTACT TO THE COURT.

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BECAUSE YOU WILL RECEIVE ALL OF THE EVIDENCE AND LEGAL

INSTRUCTION YOU PROPERLY MAY CONSIDER TO RETURN A VERDICT:

NOT READ, WATCH OR LISTEN TO ANY NEWS OR MEDIA ACCOUNTS OR

COMMENTARY ABOUT THE CASE OR ANYTHING TO DO WITH IT; DO NOT DO

ANY RESEARCH, SUCH AS CONSULTING DICTIONARIES, SEARCHING THE

INTERNET OR USING OTHER REFERENCE MATERIALS; AND DO NOT MAKE

ANY INVESTIGATION OR IN ANY OTHER WAY TRY TO LEARN ABOUT THE

CASE ON YOUR OWN.

THE LAW REQUIRES THESE RESTRICTIONS TO ENSURE THE PARTIES

HAVE A FAIR TRIAL BASED ON THE SAME EVIDENCE THAT EACH PARTY

HAS HAD AN OPPORTUNITY TO ADDRESS.

RESTRICTIONS JEOPARDIZES THE FAIRNESS OF THESE PROCEEDINGS AND

A MISTRIAL COULD RESULT THAT WOULD REQUIRE THE ENTIRE TRIAL

PROCESS TO START OVER.

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16

A JUROR WHO VIOLATES THESE

IF ANY JUROR IS EXPOSED TO ANY OUTSIDE INFORMATION, PLEASE
NOTIFY THE COURT IMMEDIATELY.

NUMBER 10.

DURING DELIBERATIONS YOU WILL HAVE TO MAKE YOUR DECISION

BASED ON WHAT YOU RECALL OF THE EVIDENCE.

TRANSCRIPT OF THE TRIAL.

THE TESTIMONY AS IT IS GIVEN.

YOU WILL NOT HAVE A

I URGE YOU TO PAY CLOSE ATTENTION TO

IF AT ANY TIME YOU CANNOT HEAR OR SEE THE TESTIMONY,

EVIDENCE, QUESTIONS OR ARGUMENTS, LET ME KNOW SO THAT I CAN

CORRECT THE PROBLEM.

IF YOU WISH, YOU MAY TAKE NOTES TO HELP YOU REMEMBER THE

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EVIDENCE.

IF YOU DO TAKE NOTES, PLEASE KEEP THEM TO YOURSELF

UNTIL YOU AND YOUR FELLOW JURORS GO TO THE JURY ROOM TO DECIDE

THE CASE.

DO NOT LET NOTE-TAKING DISTRACT YOU.

WHEN YOU LEAVE, YOUR NOTES SHOULD BE LEFT IN THE JURY

ROOM.

THE CONCLUSION OF THE CASE.

8
9

NO ONE WILL READ YOUR NOTES.

THEY WILL BE DESTROYED AT

WHETHER OR NOT YOU TAKE NOTES, YOU SHOULD RELY ON YOUR OWN
MEMORY OF THE EVIDENCE.

NOTES ARE ONLY TO ASSIST YOUR MEMORY.

YOU SHOULD NOT BE OVERLY INFLUENCED BY YOUR NOTES OR THOSE OF

YOUR FELLOW JURORS.

NUMBER 11.

THE PARTIES HAVE AGREED TO CERTAIN FACTS THAT WILL BE READ

TO YOU.

PROVED.

YOU SHOULD THEREFORE TREAT THESE FACTS AS HAVING BEEN

NUMBER 12.

A DEPOSITION IS THE SWORN TESTIMONY OF A WITNESS TAKEN

BEFORE TRIAL.

TRUTH, AND LAWYERS FOR EACH PARTY MAY ASK QUESTIONS.

QUESTIONS AND ANSWERS ARE RECORDED.

THE WITNESS IS PLACED UNDER OATH TO TELL THE
THE

YOU SHOULD CONSIDER DEPOSITION TESTIMONY, PRESENTED TO YOU

IN COURT IN LIEU OF LIVE TESTIMONY, INSOFAR AS POSSIBLE, IN THE

SAME WAY AS IF THE WITNESS HAD BEEN PRESENT TO TESTIFY.

NUMBER 13.

EVIDENCE MAY BE PRESENTED TO YOU IN THE FORM OF ANSWERS OF

UNITED STATES COURT REPORTERS

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ONE OF THE PARTIES TO WRITTEN INTERROGATORIES SUBMITTED BY THE

OTHER SIDE.

BEFORE THE ACTUAL TRIAL IN RESPONSE TO QUESTIONS THAT WERE

SUBMITTED IN WRITING UNDER ESTABLISHED COURT PROCEDURES.

5
6

THESE ANSWERS WERE GIVEN IN WRITING AND UNDER OATH

YOU SHOULD CONSIDER THE ANSWERS, INSOFAR AS POSSIBLE, IN
THE SAME WAY AS IF THEY WERE MADE FROM THE WITNESS STAND.

14.

SOME WITNESSES, BECAUSE OF EDUCATION OR EXPERIENCE, ARE

9
10

PERMITTED TO STATE OPINIONS AND THE REASONS FOR THOSE OPINIONS.
OPINION TESTIMONY SHOULD BE JUDGED JUST LIKE ANY OTHER

TESTIMONY.

YOU MAY ACCEPT IT OR REJECT, AND GIVE IT AS MUCH

WEIGHT AS YOU THINK IT DESERVES, CONSIDERING THE WITNESS'S

EDUCATION AND EXPERIENCE, THE REASONS GIVEN FOR THE OPINION,

AND ALL THE OTHER EVIDENCE IN THE CASE.

15.

LANGUAGES OTHER THAN ENGLISH MAY BE USED DURING THIS

17
18

TRIAL.
WITNESSES WHO DO NOT SPEAK ENGLISH OR ARE MORE PROFICIENT

IN ANOTHER LANGUAGE TESTIFY THROUGH AN OFFICIAL COURT

INTERPRETER.

IMPORTANT THAT ALL JURORS CONSIDER THE SAME EVIDENCE.

THEREFORE, YOU MUST ACCEPT THE INTERPRETER'S TRANSLATION OF THE

WITNESS'S TESTIMONY.

ALTHOUGH SOME OF YOU MAY KNOW KOREAN, IT IS

YOU MUST DISREGARD ANY DIFFERENT MEANING.

16.

YOU MUST NOT MAKE ANY ASSUMPTION ABOUT A WITNESS OR A

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PARTY BASED SOLELY UPON THE USE OF AN INTERPRETER TO ASSIST

THAT WITNESS OR PARTY.

17.

FROM TIME TO TIME DURING THE TRIAL, IT MAY BECOME

NECESSARY FOR ME TO TALK WITH THE ATTORNEYS OUT OF THE HEARING

OF THE JURY, EITHER BY HAVING A CONFERENCE AT THE BENCH WHEN

THE JURY IS PRESENT IN THE COURTROOM, OR BY CALLING A RECESS.

8
9

PLEASE UNDERSTAND THAT WHILE YOU ARE WAITING, WE ARE
WORKING.

THE PURPOSE OF THESE CONFERENCES IS NOT TO KEEP

RELEVANT INFORMATION FROM YOU BUT TO DECIDE HOW CERTAIN

EVIDENCE IS TO BE TREATED UNDER THE RULES OF EVIDENCE AND TO

AVOID CONFUSE AND ERROR.

13
14
15

OF COURSE, WE WILL DO WHAT WE CAN TO KEEP THE NUMBER AND
LENGTH OF THESE CONFERENCES TO A MINIMUM.
I MAY NOT ALWAYS GRANT AN ATTORNEY'S REQUEST FOR A

CONFERENCE.

DO NOT CONSIDER MY GRANTING OR DENYING A REQUEST

FOR A CONFERENCE AS ANY INDICATION OF MY OPINION OF THE CASE OR

OF WHAT YOUR VERDICT SHOULD BE.

18.

THIS CASE INVOLVES DISPUTES RELATING TO UNITED STATES

PATENTS.

BEFORE SUMMARIZING THE POSITIONS OF THE PARTIES AND

THE LEGAL ISSUES INVOLVED IN THE DISPUTE, LET ME TAKE A MOMENT

TO EXPLAIN WHAT PATENTS ARE AND HOW THEY ARE OBTAINED.

PATENTS ARE GRANTED BY THE UNITED STATES PATENT AND

TRADEMARK OFFICE (SOMETIMES CALLED "THE PTO.") IN GENERAL

UNITED STATES COURT REPORTERS

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TERMS, A PATENT PROTECTS THE WAY AN ARTICLE IS USED OR WORKS.

IT ALSO PROTECTS A METHOD OR PROCESS OF MAKING OR DOING

SOMETHING.

A VALID UNITED STATES PATENT GIVES THE PATENT OWNER THE

RIGHT TO PREVENT OTHERS FROM MAKING, USING, OFFERING TO SELL OR

SELLING THE PATENTED INVENTION WITHIN THE UNITED STATES, OR

FROM IMPORTING IT INTO THE UNITED STATES, DURING THE TERM OF

THE PATENT WITHOUT THE PATENT HOLDER'S PERMISSION.

A VIOLATION OF THE PATENT OWNER'S RIGHTS IS CALLED

INFRINGEMENT.

THE PATENT OWNER MAY TRY TO ENFORCE A PATENT

AGAINST PERSONS BELIEVED TO BE INFRINGERS BY A LAWSUIT FILED IN

FEDERAL COURT.

A PATENT INCLUDES WHAT IS CALLED A "SPECIFICATION."

SPECIFICATION MUST CONTAIN A WRITTEN DESCRIPTION OF THE CLAIMED

INVENTION TELLING WHAT THE INVENTION IS, HOW IT WORKS, HOW TO

MAKE IT, AND HOW TO USE IT SO OTHERS SKILLED IN THE FIELD WILL

KNOW HOW TO MAKE OR USE IT.

THE

THE SPECIFICATION CONCLUDES WITH ONE OR MORE NUMBERED

SENTENCES.

EVENTUALLY GRANTED BY THE PTO, THE CLAIMS DEFINE THE BOUNDARIES

OF ITS PROTECTION AND GIVE NOTICE TO THE PUBLIC OF THOSE

BOUNDARIES.

THESE ARE THE PATENT "CLAIMS ."

WHEN THE PATENT IS

THE PROCESS OF OBTAINING A PATENT IS CALLED PATENT

PROSECUTION.

TO OBTAIN A PATENT, ONE MUST FILE AN APPLICATION

WITH THE PTO.

THE PTO IS AN AGENCY OF THE FEDERAL GOVERNMENT

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AND EMPLOYS TRAINED EXAMINERS WHO REVIEW APPLICATIONS FOR

PATENTS.

AFTER THE APPLICANT FILES THE APPLICATION, A PTO PATENT

EXAMINER REVIEWS THE PATENT APPLICATION TO DETERMINE WHETHER

THE CLAIMS ARE PATENTABLE AND WHETHER THE SPECIFICATION

ADEQUATELY DESCRIBES THE INVENTION CLAIMED.

IN EXAMINING A PATENT APPLICATION, THE PATENT EXAMINER

REVIEWS RECORDS AVAILABLE TO THE PTO FOR WHAT IS REFERRED TO AS

"PRIOR ART."

10
11

THE EXAMINER ALSO WILL REVIEW PRIOR ART IF IT IS SUBMITTED
TO THE PTO BY AN APPLICANT.

PRIOR ART IS DEFINED BY LAW AND I WILL GIVE YOU, AT A

LATER TIME, SPECIFIC INSTRUCTIONS AS TO WHAT CONSTITUTES PRIOR

ART.

HOWEVER, IN GENERAL, PRIOR ART INCLUDES THINGS THAT EXISTS

BEFORE THE CLAIMED INVENTION, THAT WERE PUBLICLY KNOWN OR USED

IN A PUBLICLY ACCESSIBLE WAY IN THIS COUNTRY, OR THAT WERE

PATENTED OR DESCRIBED IN A PUBLICATION IN ANY COUNTRY.

THE EXAMINER CONSIDERS, AMONG OTHER THINGS, WHETHER EACH

CLAIM DEFINES AN INVENTION THAT IS NEW, USEFUL, AND NOT OBVIOUS

IN VIEW OF THE PRIOR ART.

THE EXAMINER CONSIDERED; THIS LIST IS CALLED THE "CITED

PREFERENCES."

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25

A PATENT LISTS THE PRIOR ART THAT

AFTER THE PRIOR ART SEARCH AND EXAMINATION OF THE
APPLICATION, THE PATENT EXAMINER THEN INFORMS THE APPLICANT IN

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WRITING WHAT THE EXAMINER HAS FOUND AND WHETHER ANY CLAIM IS

PATENTABLE, AND THUS WILL BE "ALLOWED."

3
4
5

THIS WRITING FROM THE PATENT EXAMINER IS CALLED AN "OFFICE
ACTION."
IF THE EXAMINER REJECTS THE CLAIMS, THE APPLICANT THEN

RESPONDS AND SOMETIMES CHANGES THE CLAIMS OR SUBMITS NEW

CLAIMS.

8
9

THIS PROCESS, WHICH TAKES PLACE ONLY BETWEEN THE EXAMINER
AND THE PATENT APPLICANT, MAY GO BACK AND FORTH FOR SOME TIME

UNTIL THE EXAMINER IS SATISFIED THAT THE APPLICATION AND CLAIMS

MEET THE REQUIREMENTS FOR A PATENT.

THE PAPERS GENERATED DURING THIS TIME OF COMMUNICATING

BACK AND FORTH BETWEEN THE PATENT EXAMINER AND THE APPLICANT

MAKE UP WHAT IS CALLED THE "PROSECUTION HISTORY."

MATERIAL BECOMES AVAILABLE TO THE PUBLIC NO LATER THAN THE DATE

WHEN THE PATENT ISSUES.

ALL OF THIS

THE FACT THAT THE PTO GRANTS A PATENT DOES NOT NECESSARILY

MEAN THAT ANY INVENTION CLAIMED IN THE PATENT, IN FACT,

DESERVES THE PROTECTION OF A PATENT.

NOT HAVE HAD AVAILABLE TO IT ALL THE INFORMATION THAT WILL BE

PRESENTED TO YOU.

FOR EXAMPLE, THE PTO MAY

A PERSON ACCUSED OF INFRINGEMENT HAS THE RIGHT TO ARGUE

HERE IN FEDERAL COURT THAT A CLAIMED INVENTION IN THE PATENT IS

INVALID BECAUSE IT DOES NOT MEET THE REQUIREMENTS FOR A PATENT.

19.

UNITED STATES COURT REPORTERS

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THERE ARE SEVEN PATENTS ASSERTED IN THIS CASE.

APPLE ACCUSES SAMSUNG OF INFRINGING UNITED STATES PATENT

NUMBERS 5,946,647; 6,847,959; 7,761,414; 8,046,172.

PATENTS ARE OFTEN REFERRED TO BY THEIR LAST THREE DIGITS,

SO APPLE'S PATENTS MAY BE REFERRED TO IN SHORTHAND AS THE '647,

'959, '414, '721, AND '172 PATENTS.

7
8
9
10
11

SAMSUNG ACCUSES APPLE OF INFRINGING UNITED STATES PATENT
NUMBERS 6,226,445 AND 5,579,239.
SAMSUNG'S PATENTS MAY BE REFERRED TO IN SHORT HAPPENED AS
THE 449 AND 239 PATENTS.
TO HELP YOU FOLLOW THE EVIDENCE, I WILL NOW GIVE YOU A

SUMMARY OF THE POSITIONS OF THE PARTIES WITH RESPECT TO THE

PATENT CLAIMS.

THE PARTIES IN THIS CASE ARE APPLE, INCORPORATED, WHICH WE

WILL REFER TO AS "APPLE" AND SAMSUNG ELECTRONICS COMPANY

LIMITED, SAMSUNG ELECTRONICS AMERICA, INCORPORATED, AND SAMSUNG

TELECOMMUNICATIONS AMERICA LIMITED LIABILITY CORPORATION, WHICH

I WILL REFER TO COLLECTIVELY AS "SAMSUNG" UNLESS I THINK IT IS

IMPORTANT TO DISTINGUISH BETWEEN THESE ENTITIES FOR THE

PURPOSES OF A SPECIFIC INSTRUCTION.

YOU MUST DECIDE THE CASE AS TO SAMSUNG ELECTRONICS

COMPANY, SAMSUNG ELECTRONICS AMERICA, AND SAMSUNG

TELECOMMUNICATIONS AMERICA SEPARATELY REGARDLESS OF WHETHER I

REFER TO THEM COLLECTIVELY AS "SAMSUNG" OR INDIVIDUALLY.

THE CASE INVOLVES FIVE UNITED STATES PATENTS OWNED BY

UNITED STATES COURT REPORTERS

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APPLE AND TWO UNITED STATES PATENTS OWNED BY SAMSUNG.
APPLE FILED THIS LAWSUIT AGAINST SAMSUNG SEEKING MONEY

DAMAGES FROM SAMSUNG FOR ALLEGEDLY INFRINGING THE '647, '959,

'414, '721, AND '172 PATENTS BY MAKING, IMPORTING, USING,

SELLING, AND/OR OFFERING FOR SALE THE TABLET AND SMARTPHONE

PRODUCTS THAT APPLE ARGUES ARE COVERED CLAIM 9 OF THE '647

PATENT, CLAIM 25 OF THE '959 PATENT, CLAIM 20 OF THE '414

PATENT, CLAIM 8 OF THE '721 PATENT, AND CLAIM 18 OF THE '172

PATENT.

APPLE ALSO ARGUES THAT SAMSUNG ELECTRONICS COMPANY

ACTIVELY INDUCED SAMSUNG ELECTRONICS AMERICA, INC. AND SAMSUNG

TELECOMMUNICATIONS AMERICA LLC TO INFRINGE.

13
14
15

APPLE CONTENDS THAT SAMSUNG'S INFRINGEMENT HAS BEEN
WILLFUL.
SAMSUNG DENIES THAT IT HAS INFRINGED THE ASSERTED CLAIMS

OF THE '647, '959, '414, AND '721 PATENTS AND ARGUES THAT, IN

ADDITION, THE ASSERTED CLAIMS ARE INVALID.

DEFENSE TO INFRINGEMENT.

INVALIDITY IS A

YOUR DUTY FOR APPLE'S '172 PATENT IS DIFFERENT FROM THE

OTHER PATENTS.

THE COURT HAS ALREADY FOUND THAT THE ADMIRE,

GALAXY NEXUS, GALAXY NOTE (EXCLUDING ONE RELEASE), GALAXY SII

(EXCLUDING ONE RELEASE), GALAXY SII EPIC 4G TOUCH (EXCLUDING

ONE RELEASE), GALAXY SII SKYROCKET (EXCLUDING ONE RELEASE), AND

STRATOSPHERE INFRINGE CLAIM 18 OF THE '172 PATENT.

ONLY DETERMINE WHETHER CLAIM 18 IS INVALID.

UNITED STATES COURT REPORTERS

YOU NEED

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SAMSUNG HAS ALSO BROUGHT CLAIMS AGAINST APPLE FOR PATENT

INFRINGEMENT.

ALLEGEDLY INFRINGING THE '449 AND '239 PATENTS BY MAKING,

IMPORTING, USING, SELLING AND/OR OFFERING FOR SALE APPLE'S, 1,

CERTAIN IPHONE AND IPOD TOUCH PRODUCTS THAT SAMSUNG ARGUES ARE

COVERED BY CLAIM 27 OF THE '449 PATENT; AND, NUMBER 2, CERTAIN

IPHONE AND IPAD PRODUCTS THAT SAMSUNG ARGUES ARE COVERED BY

CLAIM 15 OF THE '239 PATENT.

9
10
11

SAMSUNG SEEKS MONEY DAMAGES FROM APPLE FOR

SAMSUNG ALSO CONTENDS THAT APPLE'S INFRINGEMENT HAS BEEN
WILLFUL.
APPLE DENIES THAT IT HAS INFRINGED THE CLAIMS ASSERTED BY

SAMSUNG.

APPLE DOES NOT ARGUE THAT SAMSUNG'S PATENTS ARE

INVALID.

THEREFORE, YOU NEED ONLY DETERMINE WHETHER THE '449

AND THE '239 PATENTS ARE INFRINGED AND WHETHER THAT

INFRINGEMENT HAS BEEN WILLFUL.

IN THIS CASE, APPLE DOES NOT CONTEND THAT IT PRACTICES THE

'414, '172 OR '959 PATENTS, AND SAMSUNG DOES NOT CONTEND THAT

IT PRACTICES THE '449 PATENT.

FOR EACH PARTY'S PATENT INFRINGEMENT CLAIMS AGAINST THE

OTHER, THE FIRST ISSUE YOU WILL BE ASKED TO DECIDE IS WHETHER

THE ALLEGED INFRINGER HAS INFRINGED THE CLAIMS OF THE PATENT

HOLDER'S PATENTS.

TO DECIDE WHETHER THOSE PATENTS ARE VALID.

24
25

FOR APPLE'S PATENTS, YOU WILL ALSO BE ASKED

IF YOU DECIDE THAT ANY CLAIM OF EITHER PARTY'S PATENTS HAS
BEEN INFRINGED AND, FOR APPLE'S PATENTS, IS NOT INVALID, YOU

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WILL THEN NEED TO DECIDE ANY MONEY DAMAGES TO BE AWARDED TO THE

PATENT HOLDER TO COMPENSATE IT FOR THE INFRINGEMENT.

3
4
5

YOU WILL ALSO NEED TO MAKE A FINDING AS TO WHETHER THE
INFRINGEMENT WAS WILLFUL.
IF YOU DECIDE THAT ANY INFRINGEMENT WAS WILLFUL, THAT

DECISION SHOULD NOT AFFECT ANY DAMAGE AWARD YOU GIVE.

TAKE WILLFULNESS INTO ACCOUNT LATER.

8
9

I WILL

BEFORE YOU DECIDE WHETHER EITHER PARTY HAS INFRINGED THE
OTHER'S PATENTS, OR WHETHER APPLE'S PATENTS ARE INVALID, YOU

WILL NEED TO UNDERSTAND THE PATENT CLAIMS.

PATENT CLAIMS ARE NUMBERED SENTENCES AT THE END OF THE PATENT

THAT DESCRIBE THE BOUNDARIES OF THE PATENT'S PROTECTION.

13
14
15

AS I MENTIONED, THE

IT IS MY JOB AS JUDGE TO EXPLAIN TO YOU THE MEANING OF ANY
LANGUAGE IN THE CLAIMS THAT NEEDS INTERPRETER.
I HAVE ALREADY DETERMINED THE MEANING OF CERTAIN TERMS OF

THE CLAIMS OF SOME OF THE PATENTS AT ISSUE.

TO APPLY MY DEFINITIONS OF THESE TERMS IN THIS CASE.

YOU WILL BE ASKED

HOWEVER, MY INTERPRETATION OF THE LANGUAGE OF THE CLAIMS

SHOULD NOT BE TAKEN AS AN INDICATION THAT I HAVE A VIEW

REGARDING ISSUES, SUCH AS INFRINGEMENT (EXCEPT FOR APPLE'S '172

PATENT) AND INVALIDITY.

THOSE ISSUES ARE YOURS TO DECIDE.

I WILL PROVIDE YOU WITH MORE DETAILED INSTRUCTIONS ON THE

MEANING OF THE CLAIMS BEFORE YOU RETIRE TO DELIBERATE YOUR

VERDICT.

FINAL INSTRUCTION.

UNITED STATES COURT REPORTERS

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THE TRIAL WILL NOW BEGIN.

FIRST, EACH SIDE MAY MAKE AN

OPENING STATEMENT.

IS SIMPLY AN OUTLINE TO HELP YOU UNDERSTAND WHAT THAT PARTY

EXPECTS THE EVIDENCE WILL SHOW.

AN OPENING STATEMENT IS NOT EVIDENCE.

THE PRESENTATION OF EVIDENCE WILL THEN BEGIN.

WITNESSES

WILL TAKE THE WITNESS STAND AND THE DOCUMENTS WILL BE OFFERED

AND ADMITTED INTO EVIDENCE.

8
9

THERE ARE TWO STANDARDS OF PROOF THAT YOU WILL APPLY TO
THE EVIDENCE, DEPENDING ON THE ISSUE YOU ARE DECIDING.

ON SOME

ISSUES, YOU MUST DECIDE WHETHER SOMETHING IS MORE LIKELY TRUE

THAN NOT.

DECIDE WHETHER IT IS HIGHLY PROBABLE THAT SOMETHING IS TRUE.

ON OTHER ISSUES, YOU MUST USE A HIGHER STANDARD AND

APPLE WILL START BY PRESENTING ITS EVIDENCE ON ITS

CONTENTIONS THAT SAMSUNG HAS INFRINGED APPLE'S PATENTS.

WILL ALSO PRESENT ITS EVIDENCE THAT SAMSUNG'S INFRINGEMENT HAS

BEEN WILLFUL.

17
18
19
20
21

APPLE

THESE WITNESSES WILL BE QUESTIONED BY APPLE'S COUNSEL IN
WHAT IS CALLED DIRECT EXAMINATION.
AFTER THE DIRECT EXAMINATION OF A WITNESS IS COMPLETED,
SAMSUNG HAS AN OPPORTUNITY TO CROSS-EXAMINE THE WITNESS.
TO PROVE INFRINGEMENT OF ANY CLAIM, APPLE MUST PERSUADE

YOU THAT IT IS MORE LIKELY THAN NOT THAT SAMSUNG HAS INFRINGED

APPLE'S PATENTS.

24
25

AFTER APPLE HAS PRESENTED ITS WITNESSES, SAMSUNG WILL CALL
ITS WITNESSES, WHO WILL ALSO BE EXAMINED AND CROSS-EXAMINED.

UNITED STATES COURT REPORTERS

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SAMSUNG WILL PRESENT ITS EVIDENCE ON ITS CONTENTIONS THAT APPLE

HAS INFRINGED SAMSUNG'S PATENTS.

3
4
5

SAMSUNG WILL ALSO PRESENT ITS EVIDENCE THAT APPLE'S
INFRINGEMENT HAS BEEN WILLFUL.
TO PROVE INFRINGEMENT OF ANY CLAIM, SAMSUNG MUST PERSUADE

YOU THAT IT IS MORE LIKELY THAN NOT THAT APPLE HAS INFRINGED

SAMSUNG'S PATENTS.

8
9

SAMSUNG WILL ALSO PRESENT ITS EVIDENCE THAT ASSERTED
CLAIMS OF APPLE'S PATENTS ARE NOT INFRINGED AND ARE INVALID.

TO PROVE INVALIDITY OF ANY CLAIM, SAMSUNG MUST PERSUADE YOU

THAT IT IS HIGHLY PROBABLE THAT THE CLAIM IS INVALID.

APPLE WILL THEN RETURN AND WILL PUT ON EVIDENCE RESPONDING

TO SAMSUNG'S CONTENTION THAT THE APPLE PATENTS ARE INVALID.

APPLE WILL THEN PRESENT ITS EVIDENCE THAT ASSERTED CLAIMS OF

SAMSUNG'S PATENTS ARE NOT INFRINGED.

BECAUSE THE EVIDENCE IS INTRODUCED PIECEMEAL, YOU MAY NEED

TO KEEP AN OPEN MIND AS THE EVIDENCE COMES IN AND WAIT FOR ALL

THE EVIDENCE BEFORE YOU MAKE ANY DECISIONS.

YOU SHOULD KEEP AN OPEN MIND THROUGHOUT THE ENTIRE TRIAL.

IN OTHER WORDS,

AFTER THE EVIDENCE HAS BEEN PRESENTED, I WILL GIVE YOU

FINAL INSTRUCTIONS ON THE LAW THAT APPLIES TO THE CASE, AND THE

ATTORNEYS WILL MAKE CLOSING ARGUMENTS.

NOT EVIDENCE.

24
25

CLOSING ARGUMENTS ARE

AFTER THE INSTRUCTIONS AND CLOSING ARGUMENTS, YOU WILL
THEN DECIDE THE CASE.

UNITED STATES COURT REPORTERS

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WOULD EVERYONE JUST LIKE A MINUTE TO JUST STAND UP.

WHY

DON'T WE ALL JUST TAKE A STAND UP MOMENT BEFORE THE LIGHTS GO

OFF FOR THE VIDEO.

THE COURT:

WE'RE NOW GOING TO WATCH A VIDEO.

ABOUT 17 MINUTES.

WOULD DIM THE LIGHTS, PLEASE.

I'M GOING TO ASK MS. PARKER BROWN IF YOU

(A VIDEOTAPE WAS PLAYED IN OPEN COURT OFF THE RECORD.)

8
9

IT'S

THE COURT:
STATEMENTS.

ALL RIGHT.

WE ARE NOW READY FOR OPENING

EACH SIDE MAY MAKE ONE, BUT THEY'RE NOT REQUIRED

TO DO SO.

I REMIND YOU THAT AN OPENING STATEMENT IS NOT EVIDENCE.

WE ARE GOING TO KEEP OUR REGULAR SCHEDULE OF TAKING A

BREAK AT 10:30 FOR AT LEAST 15 MINUTES.

LUNCH BREAK FROM NOON TO 1:00 AND HAVE OUR REGULAR AFTERNOON

BREAKS.

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17
18
19
20
21

OKAY?

ALL RIGHT.

GO AHEAD, PLEASE.

MR. MCELHINNY:

THANK YOU, YOUR HONOR.

PLAINTIFF.)
MR. MCELHINNY:

MAY IT PLEASE THE COURT.

GOOD MORNING.
JURORS:

MR. MCELHINNY:

TIME IS NOW 10:00 O'CLOCK.

(MR. MCELHINNY GAVE HIS OPENING STATEMENT ON BEHALF OF

WE'LL STILL TAKE OUR

GOOD MORNING.
WHERE WERE YOU ON JANUARY 9TH, 2007?

THERE ARE A LOT OF PROBLEMS WITH LAWSUITS, AND I THINK BY
THE TIME WE'RE DONE, YOU'LL HAVE YOUR OWN LITTLE LIST OF ALL

UNITED STATES COURT REPORTERS

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PLAINTIFF'S
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2

THE PROBLEMS WITH LAWSUITS AND IMPORTANT TRIALS.
BUT ONE OF THEM THAT I WANT TO ILLUSTRATE FOR YOU IS THAT

IT TAKES A WHILE TO GET TO COURT.

DISPUTE TO A JURY LIKE YOU, AND DURING THAT TIME, TIME PASSES

AND LIFE CHANGES AND THINGS THAT WERE NEW BEFORE NOW SEEM

COMMON.

IT TAKES A WHILE TO BRING A

AND SO ONE OF THE TESTS HERE, ONE OF THE THINGS THAT YOU

SORT OF HAVE TO DO IS PUT YOURSELF BACK IN TIME WHEN THESE

EVENTS OCCURRED AND REMEMBER WHAT LIFE WAS LIKE THEN.

10
11
12

SO THAT'S WHY I STARTED WITH THAT QUESTION.

WHERE WERE

YOU ON JANUARY 9TH, 2007?
WE KNOW THAT ON THAT DATE HUNDREDS OF PEOPLE IN THE BAY

AREA WERE IN THE MOSCONE CONVENTION CENTER IN SAN FRANCISCO AT

THE MACWORLD CONVENTION BECAUSE THAT IS THE DATE THAT THE

IPHONE WAS INTRODUCED.

16
17
18
19

AND WE KNOW THAT BECAUSE WE HAVE A VIDEOTAPE OF THAT
PRESENTATION WHICH I WOULD LIKE TO SHOW YOU.
(A VIDEOTAPE WAS PLAYED IN OPEN COURT OFF THE RECORD.)
MR. MCELHINNY:

MY NAME IS HAROLD MCELHINNY.

YOU MET

MY GOOD FRIEND, BILL LEE, YESTERDAY.

SELWYN AND MY PARTNER, RACHEL KREVANS, AND OTHER MEMBERS OF OUR

TEAM, IT IS OUR PRIVILEGE AND HONOR TO BE REPRESENTING APPLE IN

THIS LITIGATION AGAINST SAMSUNG ELECTRONICS AND ITS

SUBSIDIARIES.

AND ALONG WITH MARK

IT IS OUR JOB TO BRING YOU THE EVIDENCE THAT YOU'RE GOING

UNITED STATES COURT REPORTERS

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TO NEED IN ORDER TO DO YOUR JOB, WHICH IS TO DECIDE THE ISSUES

THAT JUDGE KOH WILL GIVE YOU AT THE END OF THIS CASE.

WHILE I'M MAKING INTRODUCTIONS, I WOULD LIKE TO INTRODUCE

TWO OTHER PEOPLE TO YOU.

WHO'S THE GENERAL COUNSEL OF APPLE, AND NOREEN KRALL, WHO'S THE

VICE-PRESIDENT AND IN CHARGE OF LITIGATION FOR APPLE.

NOREEN IS MY BOSS.

8
9
10

IN THE AUDIENCE WE HAVE BRUCE SEWELL,

AND

ON BEHALF OF ALL OF APPLE'S EMPLOYEES, WE WOULD LIKE TO
THANK YOU FOR SERVING ON THIS JURY.
ALMOST SEVEN YEARS AGO, THE INTRODUCTION OF THE IPHONE

LITERALLY CHANGED THE NATURE OF THE TELEPHONE.

APPLE INVENTED A WAY TO PUT THE COMPUTING POWER OF A MAC

COMPUTER ON A HANDHELD COMMUNICATIONS DEVICE.

14
15
16

THE PEOPLE AT

THEY ALSO MOVED THE WORLD FROM A PHYSICAL KEYBOARD TO
TAPPING ON AN INTERACTIVE GLASS FACE.
THOSE WERE TWO DRAMATIC CHANGES THAT HAPPENED AT THAT

MOMENT, AND THAT'S WHY TODAY, WHEN EVERYBODY DOESN'T --

SOMEBODY THE OTHER DAY JUST SAID TO ME, DO YOU REMEMBER WHEN

PEOPLE USED TO TALK ON TELEPHONES?

USED TO HAVE THOSE BIG BACK TELEPHONES?

THERE USED TO BE PAY TELEPHONE BOOTHS ON EVERY CORNER?

22
23
24
25

DO YOU REMEMBER WHEN THEY
DO YOU REMEMBER WHEN

THAT WORLD IS GONE, AND IT CHANGED ON THAT DAY IN JANUARY
OF 2007.
YOU DON'T NEED TO TAKE MY WORD FOR THE EFFECT THAT THE
IPHONE HAD.

DURING THIS TRIAL, YOU'LL SEE A NUMBER OF

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CONTEMPORANEOUS ARTICLES AND REVIEWS THAT WILL REMIND YOU OF

THOSE EFFECTS.

SO, FOR EXAMPLE, YOU WILL SEE PLAINTIFF'S EXHIBIT 135A.

WE WILL USE SOME TERMINOLOGY, PLAINTIFF'S EXHIBIT, YOU CAN SEE

THAT THE LOWER RIGHT-HAND CORNER, IT SAYS PDX, PLAINTIFF'S

EXHIBIT 135A, AS WE REFER TO THOSE, IF YOU WANT TO TAKE NOTES,

YOU WILL HAVE THESE IN THE JURY ROOM WHEN YOU'RE DONE.

THIS EXHIBIT WAS AN ARTICLE THAT APPEARED IN THE

"NEW YORK TIMES" THE DAY AFTER THE ANNOUNCEMENT.

IT WAS

WRITTEN BY A GENTLEMAN BY THE NAME OF DAVID POGUE, WHO IS A

WELL-KNOWN TECHNOLOGY REPORTER.

AND AMONG OTHER THINGS HE SAID IN THE ARTICLE, HE SAID

"THIS MACHINE IS SO PACKED WITH POSSIBILITIES THAT THE CELL

PHONE MAY ACTUALLY BE THE LEAST INTERESTING PART."

YOU WILL SEE THIS DOCUMENT, WHICH IS PX 133.

IN 2007,

"TIME MAGAZINE" NAMED THE IPHONE THE TIME BEST INVENTIONS OF

2007.

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19
20

ON THE COVER, IT SAID, "FROM THE PHONE THAT HAS CHANGED
PHONES FOREVER."
AND AS WE NOW KNOW, THAT TURNED OUT TO BE PROPHETICALLY

CORRECT.

PRODUCT ITSELF ON THE COVER OF "TIME MAGAZINE" AND SPELLED OUT

"BEST INVENTIONS" USING APPLE'S NEW ICONIC ICONS.

24
25

IT ACTUALLY SPELLED OUT, THEY PUT THE COVER, THE

THE ARTICLE ITSELF SAID THAT THE PHONE WAS TOUCHY FEELY.
IT WAS A TOUCHSCREEN DEVICE.

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IT SAID, "APPLE'S ENGINEERS USED THE TOUCHSCREEN TO

INNOVATE PAST THE GRAPHICAL USER INTERFACE (WHICH APPLE HELPED

PIONEER WITH MACINTOSH IN THE 1980S) TO CREATE A WHOLE NEW KIND

OF INTERFACE."

5
6
7
8
9

AND, FINALLY, IT SAID "THIS IS, AS ENGINEERS SAY,
NONTRIVIAL."
THAT LAST QUOTE I HOPE YOU WILL FIND, AS I DO, THAT IT'S
PARTICULARLY IMPORTANT AND RELEVANT.
IN THIS CASE, SAMSUNG'S LAWYERS AND WITNESSES WILL TRY TO

TELL YOU EXACTLY THE OPPOSITE.

THEY WILL TRY TO TELL YOU THAT

OUR INVENTIONS ARE AND WERE TRIVIAL AND THAT THEY ARE NOT

VALUABLE.

BUT THAT'S NOT WHAT THE WORLD WAS SAYING IN 2007.

YOU WILL ALSO SEE THIS ARTICLE, WHICH IS PLAINTIFF'S

EXHIBIT 134.

ARTICLE FROM THE "NEW YORK TIMES" REPORTING THAT THE U.S.

PATENT AND TRADEMARK OFFICE, THE OFFICE THAT YOU JUST HEARD

ABOUT THAT ISSUES PATENTS, PUT TOGETHER A DISPLAY FOR THE

PUBLIC TO EXPLAIN PART OF ITS WORK, AND IT PUT TOGETHER A

DISPLAY BASED ON THE INVENTIONS OF STEVE JOBS.

THIS IS SEVERAL YEARS LATER IN 2011.

HERE IS AN

AND IN THIS ARTICLE BY MR. BRIAN CHEN, A FAMOUS REPORTER

FOR THE "NEW YORK TIMES," IT SAID "PATENTS ON TECHNOLOGICAL

DEVICES DO NOT ALWAYS RESULT IN REAL PRODUCTS THAT HIT THE

CONSUMER MARKET, BUT THEY DOCUMENT AN INVENTOR'S RESEARCH AND

METHODOLOGY IN DIFFERENT AREAS OF DESIGN AND ENGINEERING."

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THAT'S HOW THE WORLD HAS REACTED TO THIS INVENTION.

BUT AT THE SAME TIME, AT THIS SAME KEYNOTE ADDRESS WHEN

MR. JOBS INTRODUCED THE IPHONE, HE ALSO WARNED APPLE'S

COMPETITORS THAT APPLE HAD APPLIED FOR PATENT PROTECTION TO

PROTECT THE MANY INVENTIONS THAT HAD BEEN DEVELOPED AS PART OF

THE IPHONE PROJECT.

YOU WILL HEAR EVIDENCE FROM PEOPLE WHO WERE THERE DURING

THIS TRIAL, THAT THE IPHONE WAS THE RESULT OF A THREE YEAR, TOP

SECRET RESEARCH AND DEVELOPMENT PROJECT THAT HAPPENED AT APPLE,

THOUSANDS AND THOUSANDS OF PEOPLE -- OF ENGINEERING HOURS THAT

WENT INTO THE DEVELOPMENT OF THIS PROGRAM.

YOU WILL ALSO HEAR -- AND, FRANKLY, AGAIN, TIME CHANGES

EVERYTHING.

YOU WILL HEAR THAT AT THE TIME, IN 1974 WHEN THIS PROJECT

STARTED, IT WAS CONSIDERED AN EXTRAORDINARILY RISKY PROJECT.

SEVERAL YEARS BEFORE THEN, APPLE AS A COMPANY HAD ALMOST GONE

OUT OF BUSINESS.

18
19
20

THIS -- THIS MAY SEEM INCONCEIVABLE TO YOU, BUT

AND YET, THEY WERE GOING TO TAKE ON THIS CHALLENGE OF A
PHONE.
IN 2004, APPLE WAS A COMPUTER COMPANY.

IT HAD NO PHONE

EXPERIENCE.

WITH A PRODUCT TO COMPETE AGAINST SOME OF THE LARGEST COMPANIES

IN THE WORLD:

ESTABLISHED IN THE PHONE BUSINESS.

AND IT WAS GOING TO INVEST THIS TIME TO COME UP

MOTOROLA, NOKIA, SAMSUNG.

THEY WERE ALL

BUT APPLE, FRESH FROM THIS NEAR DEATH EXPERIENCE, WAS

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PUTTING ITS TIME AND ITS MONEY AND ITS INVESTMENT AND ITS

PEOPLE TO WORK ON A PHONE TO COMPETE IN THIS MARKET.

SO APPLE WAS NOT WILLING TO GIVE AWAY ITS INVENTIONS TO

ITS COMPETITORS.

THEM.

IT SOUGHT AND IT OBTAINED PATENTS TO PROTECT

THIS CASE IS ABOUT FIVE OF THE PATENTS THAT APPLE WAS

AWARDED IN CONNECTION WITH THAT PROJECT AND WORK THAT WAS DONE

AT APPLE.

THE FIRST IS THE '721 PATENT.

YOU SAW PICTURES OF IT IN

THE MOVIE.

ISSUED BY THE PATENT AND TRADEMARK OFFICE.

PRINTING, THE COVER, THE GOLD SEAL.

ROOM YOU'LL ONLY HAVE A COPY OF THIS BECAUSE THIS IS THE

ORIGINAL, BUT THIS IS WHAT A PATENT LOOKS LIKE (INDICATING).

THIS IS WHAT A PATENT ACTUALLY LOOKS LIKE WHEN IT'S

UNFORTUNATELY, IN YOUR

THIS PATENT, WHICH YOU'LL SEE WE'VE BLOWN UP, WAS APPLIED

FOR IN 2009.

IT DIDN'T ISSUE UNTIL OCTOBER 2011.

YOU SAW THE

BUT, AGAIN, GIVEN THE DELAY IN THE PATENT OFFICE,

SO I WANT TO TALK ABOUT THIS PATENT, BUT BEFORE I DO, I

WANT TO REPEAT SOMETHING THAT YOU'VE NOW HEARD TWICE AND SO

INDULGE ME, PLEASE, ONCE SO THAT YOU HAVE THIS ONCE AND THEN WE

WON'T HAVE TO TALK ABOUT IT AGAIN, BUT THAT'S HOW TO READ A

PATENT.

YOU WANT TO LOOK AT IT.

24
25

YOU HAVE A COPY OF THIS PATENT ALSO IN YOUR BINDER IF
YOU DON'T HAVE TO.

I HAVE THE SLIDES.

MUCH OF THE BASIC INFORMATION THAT'S IMPORTANT ABOUT A
PATENT IS ON THE FIRST PAGE.

THAT INCLUDES THE PATENT NUMBER,

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WHICH IN THIS CASE IS 8,046,721.
AS YOU HEARD, WE DON'T SAY THE WHOLE NUMBER.

WE SAY WE'LL

CALL THIS THE '721 PATENT.
THE FIRST PAGE ALSO CONTAINS THE FORMAL NAME OF THE

PATENT, AND IN THIS CASE, THAT IS "UNLOCKING A DEVICE BY

PERFORMING GESTURES ON AN UNLOCK IMAGE."

IT CONTAINS THE NAMES OF THE INVENTORS AND THE COMPANY

THAT OWNS THE PATENT, AND IN THIS CASE THAT, OF COURSE, IS

APPLE.

AND THEN FINALLY -- NOT FINALLY, BUT IT ALSO CONTAINS THE

DATE ON WHICH IT WAS ISSUED, IN THIS CASE OCTOBER 25TH, 2011.

AND ALSO ON THE FRONT PAGE YOU'LL FIND SOMETHING CALLED

13
14

THE ABSTRACT, WHICH IS A SUMMARY OF THE INVENTION.
THE FIRST PAGE OF THE PATENT AND THE REMAINING PAGES UP TO

THE END ARE FREQUENTLY CALLED THE SPECIFICATION.

INCLUDE PICTURES WHICH LAWYERS CALL FIGURES.

SEE THEM NUMBERED, FIGURE 1, FIGURE 2, FIGURE 3.

18
19
20

AND THEY

THAT'S WHY YOU'LL

AND THEN THERE ARE PAGES OF TEXT THAT EXPLAIN THE
INVENTION IN DETAIL.
AND THEN FINALLY, EACH PATENT CONTAINS WHAT IS CALLED THE

CLAIMS.

THE CLAIMS COME AT THE END OF THE PATENT, AND EACH

CLAIM IS AN ATTEMPT TO CAPTURE IN WORDS THE IDEA OF THE

INVENTION THAT THE INVENTOR IS CLAIMING IN HIS PATENT.

THEY ARE, LIKE YOU'VE NOW HEARD THREE TIMES, THEY GIVE YOU THE

BOUNDARIES OF THE CLAIM.

AND

THEY'RE LIKE THE WORDS THAT YOU USE

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IN A DEED TO EXPLAIN THE PROPERTY LINES.

TO TAKE AN IDEA AND CAPTURE IT IN WORDS SO THAT PEOPLE

UNDERSTAND WHAT IS YOUR PROPERTY.

BUT IT'S THIS ATTEMPT

TO MAKE IT EVEN TOUGHER, BECAUSE IT IS A CHALLENGE,

PATENTS DON'T HAVE PAGE NUMBERS.

AND SO WHEN YOU LOOK AT THE TEXT OF THE PATENT, YOU'LL SEE

COLUMN NUMBERS.

THE TOP OF EACH COLUMN THERE WILL BE A COLUMN NUMBER.

9
10
11

INSTEAD, THEY HAVE COLUMNS.

EACH PAGE IS DIVIDED INTO TWO COLUMNS.

AND THEN THEY HAVE LINES.

AND AT

AND RUNNING DOWN THE MIDDLE OF

THE PAGE THERE ARE REFERENCES FOR LINE NUMBERS.
SO IF YOU WANT TO REFER SOMEBODY -- AND THIS'LL HAPPEN TO

YOU IN THIS CASE -- IF WE SAY WE WANT YOU TO SEE WHAT WAS

WRITTEN, WE'LL SAY LOOK AT COLUMN WHATEVER AT LINES SO AND SO,

SO YOU GO TO THE COLUMN, THE TOP OF THE PAGE, RUN DOWN THAT

INDEX IN THE MIDDLE AND FIND THE LINES THAT YOU'RE LOOKING FOR,

AND THAT'S THE WAY THAT YOU REFERENCE A PATENT.

IN THE '721 PATENT, THE CLAIMS START AT COLUMN 19, LINE

22, AND THEY START WITH ONE OF THE PHRASES THAT'S TYPICAL IN

PATENTS, IT SAYS AFTER -- "WHAT IS CLAIMED IS."

SO WE'VE GIVEN YOU THE DESCRIPTION.

WE'RE NOW DOWN TO THE

END, AND IT SAYS THIS IS WHERE THE CLAIMS START FROM HERE ON.

AND AS YOU HEARD FROM JUDGE KOH, IN THIS CASE WE ARE

ASSERTING CLAIM 8 OF THE '721 PATENT, AND AS YOU WILL SEE, THIS

IS A KIND OF PATENT -- CLAIM 8 IS WHAT -- WE HAVE TWO KINDS OF

CLAIMS.

WE HAVE A CLAIM THAT'S CALLED AN INDEPENDENT CLAIM,

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WHICH MEANS IT JUST STANDS ON ITS OWN, AND WE HAVE A CLAIM

THAT'S CALLED A DEPENDENT CLAIM.

REQUIRES YOU TO LOOK AT SOME OTHER CLAIM TO PUT IT ALL

TOGETHER.

AND A DEPENDENT CLAIM

SO IF YOU LOOK AT THE LANGUAGE OF CLAIM 8 THAT STARTS WITH

ANOTHER ONE OF THESE MAGIC PHRASES, IT SAYS "THE DEVICE OF

CLAIM 7 FURTHER COMPRISING INSTRUCTIONS."

8
9
10
11

SO THAT TELLS YOU THAT IN ORDER TO UNDERSTAND WHAT IS IN
CLAIM 8, YOU READ EVERYTHING THAT IS IN CLAIM 7 AND YOU INCLUDE
CLAIM 8.
SO IT'S A, IT'S A DIFFERENT WAY OF EXPRESSING THE

INVENTION.

CALL A LIMITATION IN ORDER TO EXPLAIN IT IN GREATER DETAIL.

14
15

CLAIM 7 IS ONE WAY, CLAIM 8 ADDS ANOTHER WHAT WE

BUT THE BOUNDARIES OF CLAIM 8 INCLUDE ALL OF THE LANGUAGE
IN CLAIM 7 AND THE EXTRA LANGUAGE IN CLAIM 8.

WE CALL THE '721 PATENT THE SLIDE TO UNLOCK PATENT.

THAT'S OUR NAME FOR IT INSTEAD OF THE FORMAL NAME THAT I SHOWED

YOU BEFORE.

THIS PATENT RESPONDED TO PROBLEMS THAT WE'RE ALL FAMILIAR

WITH CALLED POCKET DIALLING.

IF YOU WOULD PUT THEM IN YOUR POCKET, EVERY ONCE IN A WHILE YOU

WOULD END UP CALLING SOMEBODY OR SOMEBODY WOULD CALL YOU OR

THERE WOULD BE A PROBLEM, AND IT WAS AN UNINTENDED CALL.

24
25

OLD CELL PHONES THAT HAD BUTTONS,

I'VE HAD A NUMBER OF THOSE WHERE I COULD LISTEN TO MY
GRANDCHILDREN BECAUSE THEY WERE PLAYING WITH THE PHONE, AND I'M

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LISTENING AND THEY DON'T KNOW THAT I'M ON IT.

UNINTENDED CALL.

IT'S AN

THERE WAS A CONCERN THAT ON A TOUCHSCREEN PHONE, THESE

UNINTENDED CALLS WOULD BE MORE COMMON BECAUSE YOU DIDN'T EVEN

HAVE TO HIT BUTTONS.

AFRAID YOU COULD SEND E-MAILS, YOU COULD DELETE THINGS.

WERE CONCERNED ABOUT THAT SO THEY WANTED A MECHANISM THAT WOULD

MAKE IT POSSIBLE TO LOCK THE PHONE AND THEN TO UNLOCK THE

DEVICE, LIKE A SMARTPHONE, BY CONTINUOUSLY MOVING AN UNLOCKED

YOU JUST TOUCH THE SCREEN -- THEY WERE
PEOPLE

IMAGE FROM ONE PREDEFINED LOCATION TO ANOTHER.

THE DEVICE ALSO DISPLAYS VISUAL CUES -- THIS IS ALL PART

OF THE CLAIMS -- TO SHOW YOU HOW TO MOVE THE UNLOCKED IMAGE IN

ORDER TO UNLOCK THE DEVICE.

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15
16

THE DEVICE WAS -- THE INVENTION WAS IMPORTANT FOR TWO
REASONS:

ONE, IT SOLVED THIS PROBLEM OF UNINTENDED USES.

BUT IT DID IT IN A PARTICULARLY ATTRACTIVE WAY.

THE

UNLOCKING DEVICE, IF YOU THINK ABOUT IT, IS THE FIRST WAY YOU

EVER APPROACH ONE OF THESE DEVICES.

DO ON THE PHONE.

IT'S THE FIRST THING YOU

AND THE APPLE UNLOCKING DEVICE ATTRACTED PEOPLE'S

ATTENTION, ATTRACTED PEOPLE'S INTEREST.

THAT TALK ABOUT THE SLIDE BEING FUN AND WHIMSICAL.

APPLE INTRODUCED THIS NEW PROJECT TO THE WORLD.

24
25

YOU'LL SEE REVIEWS
IT WAS HOW

THIS PARTICULAR INVENTION WAS SO SIGNIFICANT THAT MR. JOBS
ACTUALLY DEMONSTRATED IT AT THE ORIGINAL KEYNOTE, AND I'LL SHOW

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YOU THAT.
(A VIDEOTAPE WAS PLAYED IN OPEN COURT OFF THE RECORD.)

MR. MCELHINNY:

ANYBODY WHO HAS SEEN AN APPLE DEVICE

IS FAMILIAR WITH THAT WAY OF UNLOCKING IT.

IT'S BECOME A

SIGNATURE MOVEMENT FOR APPLE AND ITS PHONES AND PRODUCTS.

THE SECOND PATENT THAT WE'RE ASSERTING IS A PATENT CALLED

THE '172 PATENT, AND WE CALL THAT THE AUTOMATIC WORD CORRECTION

PATENT.

AND IN THE '172 PATENT, WE ARE ASSERTING CLAIM 18, AND

THAT COVERS AN EFFECTIVE WAY TO DISPLAY AND ACCEPT WORD

CORRECTIONS WHEN TYPING ON A MOBILE DEVICE WITH A TOUCHSCREEN.

PEOPLE WERE MOVING FROM KEYBOARDS TO TOUCHSCREENS.

IT WAS

A NEW WAY OF APPROACHING THINGS.

TOUGHER BECAUSE THE TARGETS ARE SMALLER.

WHETHER OR NOT YOU COULD TYPE ACCURATELY, AND IN ORDER TO

ASSIST THAT, IN ORDER TO MAKE IT USABLE, AN AUTOMATIC

CORRECTION INVENTION GAVE PEOPLE THE CONFIDENCE THAT THEY COULD

DO CORRECT AND ACCURATE TYPING ON THE TOUCHSCREEN DEVICE.

THE TOUCHSCREEN IS A LITTLE
THERE WAS A CONCERN

THIS INVENTION IN THE '172 DISPLAYS AS A PARTICULAR WAY OF

DOING THAT, DISPLAYS THE TEXT THAT YOU ARE ACTUALLY TYPING IN

ONE PLACE AND ON A SECOND PLACE ON THE PHONE IT SHOWS ONE OR

MORE WORD SUGGESTIONS AND THE EXACT TEXT THAT YOU HAVE TYPED.

THE PHONE WILL AUTOMATICALLY ACCEPT THE CORRECTION AND PUT

IN THE CORRECTED WORD IF YOU TAP ON THAT WORD OR IF YOU PRESS

THE SPACE KEY.

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SO IF YOU ARE A TYPIST AND YOU GO ON, THE SOFTWARE IS, IN

FACT, CORRECTING YOUR TYPING AS YOU GO AHEAD SO THAT YOU CAN DO

IT WITH SPEED AND WITH CONFIDENCE.

4
5
6

THE THIRD PATENT, THE '647 PATENT, IS WHAT WE CALL THE
QUICK LINKS PATENT OR THE DATA CONNECTORS PATENT.
THIS IS ANOTHER PART YOU WILL RECOGNIZE IT AS SOON AS I

TELL YOU WHAT IT IS, BUT IT'S ANOTHER PART OF BEING A VERY

EFFECTIVE AND USEFUL COMMUNICATIONS DEVICE.

UNDER THIS PATENT, A PHONE THAT USES THIS INVENTION

RECOGNIZES THE PATTERNS OF CERTAIN KIND OF DATA THAT HAVE BEEN

ENTERED INTO THE PHONE.

PHONE NUMBER, OR IT RECOGNIZES THAT SOMETHING IS AN E-MAIL

ADDRESS, OR IT RECOGNIZES SOMETHING IS A RESIDENTIAL ADDRESS.

SO IT RECOGNIZES THAT SOMETHING IS A

AND WHEN IT SEES THAT FORMAT, IT PRESENTS IT TO YOU ALONG

WITH A MENU THAT ALLOWS YOU TO USE THAT INFORMATION IN AN

EFFECTIVE AND EFFICIENT WAY.

IN OTHER WORDS, IF I SENT YOU -- WELL, I WON'T DO IT FOR

ME BECAUSE YOU WOULDN'T CALL ME BACK.

BUT IF SOMEONE YOU LIKED

CALLED YOU, SENT YOU A PHONE NUMBER IN AN E-MAIL, INSTEAD OF

YOU HAVING TO REMEMBER WHAT THAT PHONE NUMBER WAS OR PUT YOUR

PHONE DOWN AND WRITE IT DOWN AND THEN GO BACK AND ENTER IT INTO

THE PHONE, WHAT THIS INVENTION DOES IS IT RECOGNIZES THAT IT'S

A PHONE NUMBER AND IT PRESENTS YOU A MENU THAT ALLOWS YOU TO

SAY CALL THE NUMBER BACK, PUT IT INTO MY CONTACTS, RESPOND TO

AN E-MAIL, AND YOU CAN DO THAT ALL ON A TOUCHSCREEN WITHOUT

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EVER LOSING YOUR ATTENTION TO THE DEVICE THAT'S IN FRONT OF

YOU, AN EFFICIENT, FUN, AND USEFUL WAY TO COMMUNICATE BETTER.

THE FOURTH PATENT IS SOMETHING THAT IS CALLED THE

UNIVERSAL SEARCH PATENT.

THEY WERE COMBINING AN INTERNET BROWSER WITH A TELEPHONE.

AGAIN, REMEMBER WHAT MR. JOBS SAID,

AND WHAT UNIVERSAL SEARCH, THE IDEA BEHIND THIS INVENTION

WAS TO ALLOW A USER OF A PHONE TO SEARCH FOR DATA

SIMULTANEOUSLY ON THE PHONE ITSELF AND ON THE INTERNET.

I'LL SHOW YOU EXAMPLES OF THESE A LITTLE BIT LATER.

AND

BUT WHAT IT MEANS IS YOU COULD ADD SEARCH TERMS, AND THEY

WOULD COME BACK TO YOU WITH A SEARCH THAT SEARCHED EVERYTHING

THAT WAS ON YOUR PHONE BUT ALSO THE INTERNET.

BUT BETTER THAN THAT, IT USED SMART SOFTWARE SO THAT IT

PRESENTED THE RESULTS OF THOSE SEARCHES TO YOU NOT RANDOMLY,

BUT BASED ON YOUR USAGE OF THE PHONE, IT PRESENTED THE

SUGGESTIONS TO YOU IN A WAY THAT THEY THOUGHT THAT YOU WOULD

FIND USEFUL.

THE LAST PATENT, THE '414 PATENT, IS WHAT WE CALL THE

BACKGROUND SYNC PATENT.

CERTAIN APPLICATIONS ON YOUR PHONE, SUCH AS THE CALENDAR AND

THE CONTACTS APPLICATION, TO SHARE INFORMATION EITHER WITH EACH

OTHER OR WITH OTHER COMPUTERS IN THE BACKGROUND WHILE YOU ARE

STILL USING YOUR PHONE.

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25

AND THIS IS A PROGRAM THAT ALLOWS

SOME OF YOU MAY BE FAMILIAR WITH OLDER PHONES WHERE TO
SYNC THIS INFORMATION, YOU WOULD HAVE TO STOP USING IT OR YOU

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WOULD GET A SIGNAL ON THE PHONE THAT SAY WAIT UNTIL WE'RE

THROUGH SYNCING OR I HAD AN OLD BLACKBERRY WHERE YOU HAD TO PUT

IT ON THE STAND AND THAT WAS INTERRUPTING, YOU COULDN'T KEEP

USING YOUR PHONE, AND THIS INVENTION ALLOWS THE PHONE TO DO IT

AT THE SAME TIME SO THAT THE USER IS NEVER DISRUPTED AND NEVER

UNDERSTANDS ACTUALLY THAT THE SYNCING IS HAPPENING IN THE

BACKGROUND.

SO THERE ARE FIVE APPLE PATENTS INVOLVED IN THIS TRIAL.

BUT I NEED TO MAKE ONE THING CLEAR.

10
11

THE EVIDENCE IN THIS

CASE WILL BE THAT SAMSUNG COPIED THE IPHONE.
AND IT ALSO TOOK MANY OTHER NOVEL APPLE INVENTIONS THAT

MAY NOT YET HAVE APPEARED IN APPLE PRODUCTS.

MANY FEATURES.

IT COPIED MANY,

BUT THERE ARE LIMITS ON WHAT WE CAN ACCOMPLISH IN A SINGLE

TRIAL.

TRY 50 PATENTS IN THIS CASE, SO WE ARE TRYING 5.

YOU'RE ALREADY GIVEN US A MONTH OF YOUR TIME.

MR. QUINN:

YOUR HONOR, I OBJECT.

THE COURT:

OVERRULED.

MR. MCELHINNY:

WE CAN'T

THIS IS NOT

PROPER.

I HAVE ALREADY SHOWN YOU HOW

CRITIQUES AND THE WORLD IN GENERAL REACTED TO THE INTRODUCTION

OF THE IPHONE.

REACTION, WE'RE HERE TODAY BECAUSE OF HOW ONE PARTICULAR

COMPETITOR, SAMSUNG ELECTRONICS, CHOSE TO REACT TO THE IPHONE.

BUT WE ARE HERE TODAY, NOT BECAUSE OF A GENERAL

AS I PREVIOUSLY MENTIONED, SAMSUNG WAS ALREADY A PLAYER, A

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HUGE PLAYER IN THE PHONE FIELD IN 2007.
BUT ONCE THE IPHONE WENT ON SALE, SAMSUNG PRETTY QUICKLY
RECOGNIZED TWO THINGS.
FIRST, THAT THE IPHONE WAS TAKING THE WORLD BY STORM.

CONSUMERS LOVED IT.

IPHONES FOLLOWED BY THE IPADS WERE

LITERALLY FLYING OFF THE SHELVES OF STORES.

BUT THE OTHER THING THAT SAMSUNG RECOGNIZED WAS THAT IT

SIMPLY DID NOT HAVE A PRODUCT THAT COULD COMPETE SUCCESSFULLY

AGAINST THE IPHONE.

AND SO BY FEBRUARY 10TH, 2010, SAMSUNG HAD REACHED A

CRISIS POINT, A CRISIS POINT.

"CRISIS" IS SAMSUNG'S WORD.

13
14
15

"CRISIS" IS NOT MY WORD.

LET ME GIVE YOU A LITTLE BACKGROUND FOR THOSE OF YOU WHO
ARE NOT FAMILIAR WITH LITIGATION.
PART OF THE PROCESS HERE, AS THIS LAWSUIT HAS BEEN

PENDING, IS THAT EACH SIDE HAS TO TURN OVER TO THE OTHER ITS

INTERNAL DOCUMENTS, ITS INTERNAL E-MAILS, ITS INTERNAL HISTORY

OF DOCUMENTS.

AND BECAUSE WE HAVE OBTAINED SAMSUNG'S INTERNAL DOCUMENTS,

WE HAVE BEEN ABLE TO RECONSTRUCT WHAT SAMSUNG WAS ACTUALLY

THINKING, WHAT WAS REALLY HAPPENING.

SAME AS WHAT YOU GET TOLD IN THIS TRIAL, BUT WE HAVE THE

DOCUMENTS TO SHOW YOU WHAT WAS REALLY HAPPENING AT A PARTICULAR

PERIOD OF TIME.

AND IT MAY NOT BE THE

AND SO IN THIS CASE WE WILL BE ABLE TO SHOW YOU THE

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FOLLOWING EXHIBIT:

THAT WAS HELD ON FEBRUARY 10TH, 2010.

J.K. SHIN, WHO WAS THE HEAD OF THE ENTIRE PHONE DIVISION AT

SAMSUNG, CALLED A HUGE MEETING OF ALL THE SAMSUNG'S SENIOR

MANAGERS.

SUFFERING, IN HIS WORDS, "A CRISIS OF DESIGN."

THIS IS AN E-MAIL THAT REFLECTS A MEETING

HE SCOLDED THEM.

AND AT THAT MEETING,

HE TOLD THEM THAT SAMSUNG WAS

HE SAID "THE DIFFERENCE IN USER EXPERIENCE" -- UX STANDS

FOR USER EXPERIENCE IN THE SAMSUNG TERMINOLOGY -- "THE

DIFFERENCE IN USER EXPERIENCE BETWEEN THE IPHONE AND SAMSUNG

PHONES WAS," QUOTE, "'THE DIFFERENCE BETWEEN HEAVEN AND

EARTH.'"

AND HE TOLD HIS MANAGERS THAT U.S. PHONE CARRIERS -- AND

THE UNITED STATES, AS YOU KNOW, THEY ARE THE LARGEST SELLERS OF

PHONES IN THE UNITED STATES, U.S. PHONE CARRIER COMPANIES,

MR. SHIN TOLD HIS MANAGERS THAT THE U.S. PHONE CARRIERS WERE

TELLING HIM TO, QUOTE, "MAKE SOMETHING LIKE THE IPHONE."

17
18
19

BECAUSE -- AND, AGAIN, I QUOTE HIM, "THE IPHONE HAS BECOME
THE STANDARD."
IF WE MOVE FORWARD TO TODAY, WHAT WE ALL KNOW IS THAT THIS

IS EXACTLY WHAT SAMSUNG HAS PROCEEDED TO DO.

THE PHONES THAT WE ARE ACCUSING IN THIS CASE LOOK LIKE.

THESE ARE WHAT

WE ALL KNOW NOW THAT SAMSUNG CHOSE TO MAKE AND SELL IN THE

UNITED STATES PHONES AND A TABLET THAT INFRINGED THE FIVE

PATENTS I SHOWED YOU EARLIER.

THIS CASE IS ABOUT THE FOLLOWING LIST OF PHONES AND

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TABLETS.

SIMILAR TO THIS.

WILL HAVE A LIST THAT LISTS THE VARIOUS SAMSUNG PHONES THAT WE

ARE ACCUSING.

ALL FIVE PHONES, SOME OF FOUR, AND SO ON.

WHEN YOU DO YOUR VERDICT, YOU WILL HAVE A LIST
YOU WON'T HAVE THE X'S FILLED IN, BUT YOU

AND IN THESE CASES WE ACCUSE SOME OF INFRINGING

BUT OUR EXPERTS AND OUR -- AS THE EVIDENCE COMES IN, YOU

WILL GET MORE DETAIL ABOUT THIS.

PHONES THAT WE'RE ACCUSING IN THIS CASE OF INFRINGING THESE

FIVE PATENTS.

WOULD NOW BE A GOOD TIME FOR A BREAK?

THE COURT:

MR. MCELHINNY:

THE COURT:

14
15

BUT THIS IS THE LIST OF

THAT'S FINE.

IT'S 10:30.

THANK YOU, YOUR HONOR.

ALL RIGHT.

AGAIN, PLEASE DON'T RESEARCH

OR DISCUSS THE CASE.
THERE ARE A LOT OF PEOPLE HERE, SO I THINK THERE MIGHT BE

A LENGTH OF TIME TO USE THE RESTROOM.

BREAK.

WE'LL TAKE A 20 MINUTE

BUT PLEASE BE READY TO GO RIGHT IN 20 MINUTES.

PLEASE DON'T RESEARCH OR DISCUSS THE CASE.

(RECESS FROM 10:30 A.M. TO 10:51 A.M.)

(JURY IN AT 10:51 A.M.)

22
23
24
25

THE COURT:

OKAY.

WELCOME BACK.

ALL RIGHT?

THANK YOU.

TIME IS NOW 10:51.

GO AHEAD, PLEASE.
MR. MCELHINNY:

THANK YOU.

WE ALSO KNOW NOW FROM THE DOCUMENTS THAT WE HAVE OBTAINED

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THAT SAMSUNG SPECIFICALLY CHOSE TO COPY THE FEATURES THAT WE'RE

ASSERTING IN THIS CASE.

IN FACT, WHAT YOU'LL SEE FROM THE DOCUMENTS IS THAT

COPYING THE IPHONE WAS LITERALLY BUILT INTO THE SAMSUNG

DEVELOPMENT PROCESS.

DURING THE TRIAL, YOU WILL SEE THIS DOCUMENT, PLAINTIFF'S

EXHIBIT 119.

GROUP IN EUROPE.

THIS IS A 2009 DOCUMENT FROM THE SAMSUNG DESIGN

THE TITLE OF THE DOCUMENT IS "MIEUX."

THAT'S A FRENCH

WORD THAT MEANS -- I'VE BEEN WAITING FOR 35 YEARS IN A

COURTROOM TO SAY PARDON MY FRENCH -- BUT THAT IS A FRENCH WORD

THAT I AM TOLD MEANS "BETTER."

SO IT SAID "MIEUX, EMOTIONAL UX," WHICH IS USER

EXPERIENCE, AND THEN IT SAID "MAKE IT EMOTIONAL UX," WHICH IS

M-I-E-U-X.

ON THE NEXT PAGE, THEY TELL US THAT WHAT THEY WERE

STUDYING WAS "CREATING A MORE INTUITIVE AND EMOTIONAL SAMSUNG

MOBILE INTERFACE."

AND ON THE THIRD PAGE, THEY SAY THAT WHAT THEY WERE

LOOKING AT "SMALL, YET FUNDAMENTAL, PARTS OF THE USER INTERFACE

REMEMBER THAT WORD, FUNDAMENTAL.

YOU WILL NOT BE HEARING

FUNDAMENTAL FROM ANY SAMSUNG WITNESS OR EXPERT OR ANYONE WHO

TESTIFIES ON THEIR BEHALF AT THIS TRIAL.

BUT THIS IS WHAT THEY WERE CALLING THESE INTERFACES IN

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THEIR INTERNAL DOCUMENTS, DOCUMENTS THAT THEY NEVER EXPECTED TO

SEE PUBLICLY IN A COURTROOM.

FUNDAMENTAL.

SO LET'S SEE WHAT THEY SAID ABOUT SLIDE TO UNLOCK.

ON PAGE 11, THEY HAD A PAGE THAT WAS CALLED "APPLYING

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6

MEANINGFUL CREATIVITY."
AT THE TOP, IN THE PICTURES AND THE TWO BOXES ON THE LEFT,

THEY TALK ABOUT THE EXISTING UNLOCK FUNCTIONS ON THE SAMSUNG

PHONES, WHAT THEY HAD AT THE TIME.

AN UNLOCK SCREEN OR AN OKAY BUTTON, AND THE OTHER WAS WHERE YOU

10
11

ONE WAS WHERE YOU PRESSED

HELD DOWN THE HOLD KEY.
AND SAMSUNG'S OWN DESIGNERS SAID THAT THOSE WAYS OF

UNLOCKING THE PHONE "DO NOT EVOKE EMOTION," AND FOR THE OTHER

ONE, "IS NOT APPEALING."

IN CONTRAST, AT THE BOTTOM HALF OF THE PAGE, THE DESIGNERS

CALLED OUT WHAT THEY CALLED, QUOTE, "A CREATIVE WAY TO SOLVE

USER INTERFACE COMPLEXITY," AND THE EXAMPLE THAT THEY SHOWED

WAS THE IPHONE.

AND WHAT THEY SAID WAS "SWIPING UNLOCK ON THE SCREEN

ALLOWS TO PREVENT ERRONEOUS UNLOCK EVEN WITHOUT USING A HARD

KEY AND USERS FIND IT FUN TO SWIPE."

21
22
23

THIS IS ONE OF THEIR EXAMPLES OF A FUNDAMENTAL PART OF THE
USER INTERFACE.
NOW, SAMSUNG IS GOING TO TELL YOU THAT THERE'S NOTHING

WRONG WITH THEM LOCKING AT THE IPHONE.

THEY'RE GOING TO SAY

EVERY COMPANY KEEPS AN EYE ON THEIR COMPETITORS.

UNITED STATES COURT REPORTERS

IT'S CALLED

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COMPETITIVE INTELLIGENCE.

THAT.

DOING AND THERE'S NOTHING WRONG WITH THAT.

AND TO A POINT, ALL OF THAT IS TRUE.

BUT THE EVIDENCE IS GOING TO SHOW YOU THAT SAMSUNG DID NOT

6
7

THEY'RE GOING TO SAY APPLE DOES

ALL COMPANIES KEEP AN EYE ON WHAT THEIR COMPETITORS ARE

STOP WITH COMPETITIVE INTELLIGENCE.
YOU WILL SEE ALSO THIS DOCUMENT.

THIS IS PLAINTIFF'S

EXHIBIT 121.

ORIGINAL KOREAN AND WITH AN ENGLISH TRANSLATION, SO IT'S NOT

QUITE THIS THICK, BUT IT'S HALF THIS THICK, AND I'M GOING TO

SHOW YOU SOME PAGES OF IT.

12
13
14

THIS IS ACTUALLY TWO COPIES OF IT.

IT'S IN THE

AND IT'S DATED MAY 31ST, 2010, AND IT WAS CALLED VICTOR
USABILITY EVALUATION RESULTS.
AND THE EVIDENCE WILL BE THAT VICTOR WAS A CODE NAME FOR A

TELEPHONE THAT THEY HAD UNDER DEVELOPMENT.

SO THIS WAS A

SURVEY THAT WAS DONE USING THE VICTORY TO DETERMINE WHAT

CHANGES THEY NEEDED TO MAKE.

THE DOCUMENT IS 219 PAGES LONG.

THE THIRD SECTION WAS CALLED "MAIN USER EXPERIENCE

USABILITY ISSUES."

AND IT BEGINS ON PAGE 22.

THE DOCUMENT THEN SETS OUT 88 OF THE MAIN ISSUES OR

PROBLEMS THAT HAD BEEN IDENTIFIED BY A SURVEY GROUP WHO IT

TESTED THIS VICTORY PROTOTYPE, AND EACH OF THOSE ISSUES IS

PRESENTED IN EXACTLY THE SAME KIND OF FORMAT.

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SO LET'S LOOK AT PAGE 30 -- 29 OF THE EXHIBIT.
WANT TO SHOW YOU THE FORMAT.

AT THE TOP OF THE PAGE IS THE NAME OF THE PARTICULAR ISSUE

THAT THEY'RE LOOKING AT.

"EFFICIENCY_BROWSING."

I JUST

IN THIS CASE, IT SAID

THEN IT DESCRIBED THE PROBLEM, AND IN THIS CASE THE

PROBLEM WAS THAT THE PROTOTYPE DOES NOT PROVIDE A FOLDER

FUNCTION IN THE ADD TO FAVORITES.

AND THEN THERE'S A COMPARISON WITH THE VICTORY ON THE LEFT

SIDE AND THE IPHONE ON THE RIGHT SIDE AND A DESCRIPTION OF THE

DIFFERENCES.

AND THEN AT THE BOTTOM OF EACH PAGE, THERE IS AN ENTRY

THAT SAYS "DIRECTION OF IMPROVEMENT" TO THE DESIGN.

EXAMPLE, THE DIRECTION WAS TO ADD A FOLDER FUNCTION TO ALLOW

THE USER TO ORGANIZATION THEIR FAVORITES.

16
17

SO IN THIS

"MODIFY TO ADD THE FOLDER FUNCTION TO THE WEBSITE
FAVORITES."

88 IN THIS DOCUMENT ALONE OF THESE SIMILAR COMPARISONS.

IT TURNS OUT THAT SEVERAL OF THE 88 ISSUES IN THIS

20
21
22
23

DOCUMENT INVOLVED THE UNLOCKING FUNCTION.
ON PAGE 27, WE SEE THIS ONE, NUMBER 5, "EFFICIENCY_SCREEN
LOCK."
THE PROBLEM WAS THAT THE VICTORY FREQUENTLY COULDN'T BE

UNLOCKED WITH ONE SWIPE.

BUT THEY NOTED THAT THE IPHONE,

HOWEVER, WAS EASILY UNLOCKED BY SLIDING A FIXED DISTANCE.

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SO THE DIRECTION OF IMPROVEMENT FOR THE NEW SAMSUNG

PHONES -- THINK ABOUT IT.

PHONES.

THIS IS HOW THEY ARE DESIGNING THE

AND THE DIRECTION OF IMPROVEMENT IS "MODIFY THE DEFAULT

UNLOCKING METHOD SO AS TO ALLOW EASY UNLOCKING WITH ONE MOTION,

BY MAKING THE TOUCH DISTANCE CLEAR SUCH AS WITH SLIDING OR

MOVING A PUZZLE (PIECE)."

8
9
10
11

BUT IF THAT'S NOT CLEAR ENOUGH FOR YOU, IF THAT LEAVES ANY
DOUBT IN YOUR MIND, TURN TO PAGE 100 OF THE EXHIBIT, AND THERE
WE COME BACK TO LOCK, "SATISFACTION LEVEL_LOCK SCREEN."
HERE THE PROBLEM WAS THAT THE VICTORY PROTOTYPE WAS TOO

EASY TO UNLOCK WITH A SIMPLE FLICK MOTION.

THE IPHONE WAS DESCRIBED AS "PRECISE."

SO READ THE DIRECTION OF IMPROVEMENT.

CLARIFY THE UNLOCKING STANDARD BY SLIDING."

16
17
18

THE UNLOCKING IN

"SAME AS IPHONE,

THE DIRECTION OF IMPROVEMENT IN THEIR INTERNAL DOCUMENTS,
SAME AS IPHONE.
SAMSUNG WENT FAR BEYOND THE WORLD OF COMPETITIVE

INTELLIGENCE AND THEN CROSSED INTO THE DARK SIDE OF INTENTIONAL

COPYING.

YOU WILL FIND THAT THE SAME IS TRUE WITH THE QUICK LINKS

OR DATA DETECTORS.

DOCUMENT, WHICH IS PLAINTIFF'S EXHIBIT 106.

24
25

THERE WE'LL SHOW YOU THIS EXHIBIT -- THIS

WHAT THIS IS, AND YOU'LL HERE MORE ABOUT IT IN TRIAL, IS
THAT THIS IS A COPY OF AN ARTICLE THAT HAD BEEN WRITTEN IN 1998

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AND THEN POSTED ON AN APPLE -- THE INVENTOR, ONE OF THE

INVENTORS OF THE APPLE PATENT AND THEN IT HAD BEEN POSTED IN

2010, I BELIEVE, ON THE APPLE WEBSITE.

SO I JUST WANT YOU TO SEE THIS ARTICLE.

ON THE SECOND

PAGE OF THE ARTICLE, IT HAD A FIGURE -- IT HAS A SECTION CALLED

APPLE DATA DETECTORS, WHICH AS YOU'LL RECALL IS THE OTHER NAME

FOR OUR PATENT, WHAT WE CALL THE QUICK LINKS PATENT.

8
9

ON THE NEXT PAGE, IT HAD A FIGURE THAT ILLUSTRATED, AND AS
YOU SEE THE TITLE AT THE BOTTOM, IT SAYS FIGURE 1, APPLE DATA

DETECTORS IN ACTION.

FOR A MOMENT.

DETECTORS IN ACTION.

AND JUST HOLD THIS PICTURE IN YOUR MIND

THAT'S THE FIGURE DESCRIBED AS APPLE DATA

NOW WE'RE GOING TO JUMP FORWARD TO 2011, AND WE'RE GOING

TO LOOK AT THIS SAMSUNG DOCUMENT, WHICH IS PLAINTIFF'S EXHIBIT

107, WHICH WAS CALLED A USER EXPERIENCE ROADMAP.

16
17
18

THERE, ON PAGE 52, WE HAVE SOMETHING WHICH THEY CALLED A
PROJECT PROPOSAL FOR A SMART ORGANIZER.
AND IT DESCRIBES THE PROPOSAL AND IT SAYS THAT IT, QUOTE,

"AUTOMATICALLY APPLIES TO CALENDAR SCHEDULE IN THE E-MAIL

CONTENTS ACCORDING TO THE USER'S INTENT."

AND THERE, LO AND BEHOLD, SAMSUNG SIMPLY CUT AND PASTED

THE ILLUSTRATION FROM THE APPLE ARTICLE INTO ITS OWN ROADMAP,

BUT TOOK SPECIAL CARE TO CHANGE THE CAPTION SO THAT IT NOW SAYS

"E-MAIL CONTENT RECOGNITION, ARROW, CALENDAR."

THIS IS NOT COMPETITIVE INTELLIGENCE.

THIS IS CUT AND

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PASTE COPYING OF A PATENTED INVENTION.
THE COURT ALREADY TOLD YOU, IT'S IN THOSE INSTRUCTIONS AND

I HOPE IT JUMPED OUT AT YOU, BUT THE COURT HAS ALREADY TOLD YOU

THAT SAMSUNG INFRINGES THE AUTOMATIC WORD CORRECTION PATENT.

THAT IS A DETERMINATION THAT THE COURT HAS ALREADY MADE.

SO LET'S TALK ABOUT BACKGROUND SYNC.

IN BACKGROUND SYNC, YOU'LL SEE THIS ARTICLE, WHICH IS

EXHIBIT 115.

NOVEMBER 5, 2009 DESCRIBING PRODUCTS THAT WERE UNDER

10
11

AND THIS IS AN INTERNAL SAMSUNG E-MAIL DATED

DEVELOPMENT.
ON PAGE 3, IT HAS A SECTION THAT EXPRESSLY DESCRIBES

BACKGROUND SYNC.

PROGRESS."

IT SAYS "ACCESS TO PHONEBOOK WHILE SYNC IS IN

IT DESCRIBES THAT INVENTION AS SOMETHING THAT IS

MANDATORY, AND AT THE END, IN TERMS OF WHAT IT INTENDS TO DO,

IT SAYS "THIS MUST BE SUPPORTED FOR THE NEXT DEVICE OR

PLATFORM."

18
19

WITH RESPECT TO UNIVERSAL SEARCH, THE EVIDENCE IS A LITTLE
BIT DIFFERENT.

IN UNIVERSAL SEARCH, THE EVIDENCE WILL BE THAT AFTER WE

FILED THIS CASE, SAMSUNG TURNED THE UNIVERSAL SEARCH FUNCTION

OFF IN ITS PHONES.

BUT WHEN ITS USERS COMPLAINED ABOUT IT, IT MADE THE

DECISION TO TURN THE FUNCTION BACK ON BECAUSE THEIR USERS'

RESPONSE TO USING UNIVERSAL SEARCH WAS NEGATIVE AND STRONG.

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YOU WILL SEE THIS ARGUMENT -- THIS ARTICLE, PLAINTIFF'S

EXHIBIT 137, WHICH IS A CLIPPING FROM AN ARTICLE, A NEWSPAPER

CALLED "TMO NEWS," AND ON THE SECOND PAGE DESCRIBING THIS

HISTORY, THE NEWSPAPER SAYS, "IN WHAT APPEARS TO BE A LITTLE

KNOWN DEVELOPMENT FROM YESTERDAY'S GALAXY S III JELLY BEAN

UPDATE," THAT WAS A SOFTWARE UPDATE, "SAMSUNG LOOKS TO HAVE

SNUCK LOCAL SEARCH BACK INTO THEIR TOUCHWIZ SOFTWARE.

SEARCH, IF YOU'LL RECALL, WAS REMOVED TO THE GALAXY S III IN

RESPONSE TO APPLE'S LAWSUITS COURTESY OF A MAINTENANCE UPDATE

10
11

LOCAL

THIS PAST AUGUST."
IT GOES ON TO SAY, "WE'RE THRILLED TO SEE ITS RETURN.

LOCAL SEARCH ALLOWS FOR THE SEARCH APP TO LOOK FOR FILES ON THE

PHONE, LIKE CONTACTS OR APPS, WHEN USERS ATTEMPT A WEB SEARCH

FROM A PRELOADED SEARCH APP.

ANDROID AND ITS REMOVAL BACK IN AUGUST WAS DISHEARTENING.

SEEING IT RETURN IS WONDERFUL."

THIS IS AN AWESOME FEATURE FOR

FINALLY, YOU'LL SEE MORE OF THESE IN TRIAL, BUT FINALLY

FOR MY OPENING, I WANT TO SHOW YOU THIS DOCUMENT, WHICH IS

PLAINTIFF'S EXHIBIT 147.

THE IMPACT OF THE IPHONE 3G ON THE U.S. MARKET.

21
22

THIS IS A 2008 DOCUMENT THAT ASSESSED

ON PAGE 2, AS ITS OVERALL CONCLUSION, SAMSUNG NOTED "3G
IPHONE IS REDEFINING THE U.S. MARKET DYNAMICS."

IT CONCLUDES, "WHILE TRADITIONAL OEM'S," WHICH STANDS FOR

ORIGINAL EQUIPMENT MANUFACTURERS, "ARE BUSY FIGHTING EACH OTHER

IN THE FEATURE PHONE SPACE" YOU HEARD THAT WAS THE BUTTON

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PHONES, "IN THE FEATURE PHONE SPACE APPLE IS BUSY MAKING THE

CATEGORY OBSOLETE."

THIS IS A SAMSUNG DOCUMENT.

ON PAGE 9 THEY SAID "SAMSUNG STRENGTHS DO NOT TRANSLATE

5
6

WELL TO TOUCH."
THEY CONCLUDE -- IT'S INTERESTING, YOU WILL HEAR FROM

SAMSUNG, "WE'RE SUCCESSFUL BECAUSE WE MAKE A HUNDRED DIFFERENT

KINDS OF PHONES AND APPLE ONLY MAKES ONE," ET CETERA.

BUT IN THEIR INTERNAL DOCUMENT, THEY SAY "IN THE TOUCH

SEGMENT DIFFERENTIATED ID'S" IN THE INDUSTRIAL DESIGNS "HAVE

LITTLE UTILITY.

VARIETY OF UNIQUE ID'S" FOR INDUSTRIAL DESIGNS "SERVES IT VERY

WELL IN THE FEATURE PHONE SEGMENT.

IS ALMOST IRRELEVANT."

15
16
17
18
19

SAMSUNG'S COMPETITIVE ADVANTAGE TO PROVIDE A

FOR TOUCH, THIS CAPABILITY

I WANT TO SHOW YOU THEIR CONCLUSION, WHICH IS PARTICULARLY
COMPELLING FOR THIS CASE, AND THAT'S ON PAGE 13.
THE CONCLUSION AT THE TOP SAID "SOFTWARE IS THE NEW VALUE
DRIVER."
AND THEY SAY, "WHAT MAKES THE IPHONE UNIQUE IS SOFTWARE

(APPLICATIONS) AND SERVICES, BEAUTIFUL HARDWARE IS JUST A

BONUS."

IN THIS CASE, AS YOU HEAR LAWYERS, AS YOU HEAR THE

WITNESSES FOR SAMSUNG GET UP THERE AND SAY OUR SOFTWARE PATENTS

ARE NOT VALUABLE, THEY'RE TRIVIAL, THEY DON'T MAKE A

DIFFERENCE, CUSTOMERS DON'T CARE, REMEMBER WHAT THEIR INTERNAL

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DOCUMENTS SAID.
THEY CHOSE TO USE OUR INVENTIONS BECAUSE THEY BELIEVED

THOSE INVENTIONS WERE FUNDAMENTAL TO HAVING A SUCCESSFUL

PRODUCT.

ALSO KEEP IN MIND THAT WHILE EVIDENCE OF COPYING MAKES

INFRINGEMENT MORE LIKELY, AND HELPS SHOW SAMSUNG'S STATE OF

MIND -- YOU'VE HEARD ABOUT WILLFULNESS -- WE DON'T HAVE TO

PROVE COPYING TO PROVE INFRINGEMENT.

THAT SAMSUNG IS ACTUALLY USING OUR PATENTED INVENTIONS.

ALL WE NEEDED TO SHOW IS

SO LET'S TALK ABOUT INFRINGEMENT.

IN THIS CASE, YOU WILL

MEET SOME OF THE INVENTORS WHO CREATED THESE FEATURES.

FRANKLY, WE'RE ON A TIME CLOCK.

THAT TO YOU.

WILL SEE SOME OF THEM.

15
16
17

I THINK THE JUDGE MENTIONED

YOU WILL NOT SEE ALL OF THE INVENTORS, BUT YOU

BUT WE WILL ALSO BRING EXPERT EVIDENCE THAT SAMSUNG
INFRINGES EACH OF THE FIVE CLAIMS THAT WE'RE ASSERTING.
YOU WILL HEAR FROM PROFESSOR ANDREW COCKBURN, WHO WILL

TALK ABOUT THE '172 AND '721 PATENTS.

EXPERT IN SOFTWARE RELATING TO HUMAN COMPUTER INTERFACES.

AGAIN, WE WON'T TALK ABOUT INFRINGEMENT OF THE '172

21
22

PROFESSOR COCKBURN IS AN

BECAUSE SAMSUNG INFRINGES AND THAT'S ALREADY BEEN DETERMINED.
PROFESSOR COCKBURN WILL WALK US THROUGH THE SLIDE TO

UNLOCK PATENT AND SHOW HOW EASY IT IS TO USE IN THE SAMSUNG

DEVICES, HOW IT IS USED IN THE SAMSUNG DEVICES.

LET'S LOOK AT THIS VIDEO.

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THIS IS ONE EXAMPLE OF THE WAY SAMSUNG HAS IMPLEMENTED

APPLE'S SLIDE TO UNLOCK TECHNOLOGY.

PHONE.

PLAY WITH, BUT THIS IS THE ADMIRE PHONE.

THIS IS AN ACCUSED ADMIRE

THEY ALL HAVE THESE TITLES WHICH WE'RE GOING TO HAVE TO

ON THE LOCK SCREEN -- I'M SHOW YOU THE VIDEO IN A MINUTE.

LET ME TELL YOU WHAT HAPPENS.

ON THE LOCK SCREEN, THERE'S A

GREEN PADLOCK ICON ON THE LEFT-HAND SIDE OF THE PHONE.

YOU ARE READY TO UNLOCK THE PHONE, YOU TOUCH THAT GREEN PADLOCK

ICON.

THE ICON ON THE RIGHT SLIDE OF THE SCREEN SLIDES OUT OF

VIEW AND A SMALL DOT APPEARS IN ITS PLACE.

ICON OVER TO THE DOT AND THAT UNLOCKS THE PHONE.

YOU SUPPLIED THE

(A VIDEOTAPE WAS PLAYED IN OPEN COURT OFF THE RECORD.)

MR. MCELHINNY:

DR. TODD MOWRY WILL TALK ABOUT THE

'647 PATENT.

MELLON UNIVERSITY, AGAIN, AN EXPERT IN HIS FIELD.

WHEN

PROFESSOR MOWRY IS A PROFESSOR FROM CARNEGIE

HERE IS AN EXAMPLE OF HOW SAMSUNG HAS IMPLEMENTED THE

QUICK LINKS TECHNOLOGY IN THE '647 PATENT INTO ITS PRODUCTS.

WE'RE GOING TO SHOW YOU WHAT'S CALLED THE MESSAGING APPLICATION

IN THE SAMSUNG EPIC 4G PHONE.

SO YOU'LL SEE HERE IN THIS VIDEO THAT THE USER HAS

RECEIVED A TEXT MESSAGE WITH A PHONE NUMBER AND AN E-MAIL

ADDRESS.

WITH VARIOUS ACTIONS APPEARS.

ACTIONS, SUCH AS CALLING THE NUMBER, AND THE PHONE APPLICATION

COMES UP AUTOMATICALLY TO MAKE THE CALL.

WHEN THE USER SELECTS THE PHONE NUMBER, A POP-UP MENU
THE USER CAN SELECT ONE OF THOSE

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AND, FINALLY, DR. ALEX SNOEREN WILL PRESENT THE '959

UNIVERSAL SEARCH PATENT AND THE '414 BACKGROUND SYNC PATENT.

DR. SNOEREN IS A PROFESSOR OF COMPUTER SCIENCE AND ENGINEERING

AT U.C. SAN DIEGO.

THIS IS A VIDEO FOR THE '959 PATENT, AGAIN, USING THE

EPIC 4G PHONE.

ON THE SAMSUNG PHONE.

THIS IS THE USER -- HOW UNIVERSAL SEARCH WORKS

(VIDEO PLAYING.)

MR. MCELHINNY:

A USER IS GOING TO LAUNCH A GOOGLE

SEARCH APPLICATION FROM THE HOME SCREEN, AND YOU CAN SEE THE

USER START TYPING IN A QUERY, AND HE PUT IN THE LETTERS APP.

THE SEARCH IMMEDIATELY RETURNS BOTH LOCAL RESULTS, JOHN

APPLESEED COMES FROM THE PHONE'S CONTACTS APPLICATION, AND

INTERNET RESULTS, AND YOU CAN SEE APPLE AND APPLE STORE HERE.

15
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THE USER THEN SELECTS ONE OF THE INTERNET RESULTS, APPLE,
TO LAUNCH THAT RESULT IN THE BROWSER.

UNIVERSAL SEARCH ON A SAMSUNG PHONE.

AND, FINALLY -- AND I APOLOGIZE, THIS TAKES A MINUTE.

WE'RE GOING TO BE TALKING ABOUT BACKGROUND SYNC, AND IF WE

THINK ABOUT THE TECHNOLOGY ON BACKGROUND SYNC, A MESSAGE HAS TO

GO FROM THE PHONE TO A SERVER AND THEN BACK TO ANOTHER PHONE.

SO IT'S GOING TO TAKE A MINUTE FOR THAT SYNCING TO HAPPEN, BUT

YOU'LL SEE IT.

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ON THE LEFT WE'VE GOT LARRY AND ON THE RIGHT WE'VE GOT
AARON.

BOTH OF THEM HAVE GMAIL ACCOUNTS.

SO THE E-MAILS SENT

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TO THEM GO FROM THEIR PHONES TO THE GMAIL SERVER BEFORE SYNCING

TO THE SMARTPHONE THAT YOU SEE HERE.

E-MAIL.

SO WE SEE AARON TYPING AN

MEANWHILE, LARRY SENDS AARON A MESSAGE.

AS AARON CONTINUES TO TYPE, YOU WILL SEE PRETTY SOON AFTER

IT GOES TO THE SERVER AND COMES BACK, AT THE TOP LEFT OF

AARON'S PHONE THE NAME LARRY ANDERSON WILL POP-UP, SHOWING THAT

AARON RECEIVES A NEW MESSAGE WHILE HE WAS USING THE PHONE.

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WE'VE FROZEN IT THERE SO YOU CAN SEE THE NAME COMING UP
HERE.

WE KNOW WHILE HE WAS USING THE PHONE TYPING, SYNCING WAS

GOING ON IN THE BACKGROUND BECAUSE THE MESSAGE CAME AND THE

PHONE WAS ABLE TO SYNC THE INCOMING MESSAGE WITHOUT ANY

INTERRUPTION OR DELAY.

LADIES AND GENTLEMEN, WE'RE GOING TO MOVE A LITTLE BIT TO

NUMBERS.

BUT YOU'RE GOING TO HEAR IN THIS CASE THAT SAMSUNG

HAS SOLD MORE THAN 37 MILLION INFRINGING PHONES AND TABLETS IN

THE UNITED STATES.

37 MILLION.

SO WHAT IS SAMSUNG GOING TO SAY IN ITS DEFENSE?

OBVIOUSLY WE DON'T KNOW EXACTLY.

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THEY HAVEN'T TOLD ME

EXACTLY WHAT THEY'RE GOING TO SAY.
BUT IN GENERAL YOU CAN EXPECT TO HEAR THE FOLLOWING
THINGS:
THEY'RE GOING TO SAY THAT THEY DON'T INFRINGE; THEY'RE

GOING TO SAY THAT THE EVIDENCE THAT THEY COPIED THE IPHONE IS

SIMPLY LAWFUL COMPETITION, LOOKING AT COMPETITOR'S PRODUCT.

BUT YOU WILL HAVE THE DOCUMENTS I SHOWED YOU.

UNITED STATES COURT REPORTERS

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HAVE OTHER DOCUMENTS, AND YOU WILL HAVE THE TESTIMONY OF

EXPERTS SO YOU WILL DETERMINE THAT INFRINGEMENT DISPUTE.

SAMSUNG IS ALSO GOING TO SAY THAT EVEN IF THEY DO

INFRINGE, IT DOESN'T REALLY MATTER BECAUSE APPLE ISN'T USING

SOME OF THESE INVENTIONS IN ITS PRODUCTS.

THE FIRST PROBLEM WITH THAT ARGUMENT IS A LITTLE BIT

OBVIOUS.

I MEAN, YOU CAN'T TAKE SOMEONE'S PROPERTY BECAUSE

THEY'RE NOT USING IT.

BEGINNING.

SO IT'S SORT OF A PROBLEM AT THE

BUT IF YOU THINK ABOUT IT, IT HAS AN EVEN MORE DEEP

SIGNIFICANCE BECAUSE WHEN SAMSUNG HAS TAKEN AN APPLE INVENTION

AND THEN INTRODUCED IT INTO THE MARKETPLACE, APPLE -- OR

SAMSUNG HAS BEEN TELLING THE MARKETPLACE THAT IT'S ITS

INVENTION AND THAT IT'S ITS CREATIVITY AND IT'S ALLOWED TO GIVE

THE IMPRESSION THAT IT ISN'T FROM APPLE BECAUSE IT IS USING

THESE APPLICATIONS THAT APPLE DOESN'T USE, EVEN THOUGH IT WAS

APPLE'S ENGINEERS WHO ACTUALLY ARE MAKING THAT CONTRIBUTION TO

THE IMPROVEMENT OF THIS WORLD.

THEY USE OUR INVENTIONS TO COMPETE AGAINST US.

YOU'RE ALSO GOING TO HEAR SAMSUNG POINT THE FINGER AT

GOOGLE.

SOME OF THESE PATENTS INVOLVE SOFTWARE.

THIS A LITTLE BIT IN THE VOIR DIRE YESTERDAY.

SOFTWARE.

THEY'RE GOING TO SAY, HEY, THIS IS ANDROID SOFTWARE.
AND YOU ACTUALLY HEARD
THIS IS ANDROID

WE GET IT THROUGH GOOGLE.

BUT DON'T, DON'T BE MISLED BY THAT.

THIS CASE IS NOT

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ABOUT GOOGLE.

AS YOU SAW FROM THESE DOCUMENTS AND AS YOU'LL SEE FROM

MORE, IT IS SAMSUNG THAT HAS MADE THE DECISION TO COPY THESE

FEATURES.

FEATURES INTO ITS PHONES.

6
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IT IS SAMSUNG, NOT GOOGLE, THAT CHOSES TO PUT THESE

AND IT IS SAMSUNG, NOT GOOGLE, THAT IS SELLING THESE
PHONES FOR A PROFIT.

AND, FINALLY, IT IS SAMSUNG THAT HAS MADE THE CORPORATE

DECISION TO KEEP ON INFRINGING APPLE'S INTELLECTUAL PROPERTY.

NEXT, SAMSUNG IS GOING TO SAY EVEN IF THEY DID COPY AND

EVEN IF THEY DO INFRINGE, THAT'S OKAY BECAUSE EVERY ONE, EACH

OF THESE FIVE PATENTS IS INVALID.

CONVINCE YOU THAT THE PATENT AND TRADEMARK OFFICE MADE A

MISTAKE NOT ONCE, NOT TWICE, BUT ON EVERY ONE OF THE FIVE

PATENTS THAT WE CHOSE TO ASSERT IN THIS CASE.

THEY'RE GOING TO TRY TO

AS YOU HEARD FROM THE VIDEO, TO PROVE THAT DEFENSE,

SAMSUNG HAS A HIGHER BURDEN OF PROOF, WHICH JUDGE KOH WILL

EXPLAIN TO YOU AT THE END OF THE TRIAL.

AND THEN SAMSUNG IS GOING TO SAY, OKAY, EVEN IF WE DID

COPY, AND EVEN IF WE DID INFRINGE VALID PATENTS, IT'S NOT

REALLY A VERY BIG DEAL BECAUSE THESE INVENTIONS ARE TRIVIAL.

THEY'RE NOT IMPORTANT.

THAT WE COULD HAVE DONE THE SAME THING THAT AREN'T COVERED BY

YOUR PATENTS.

AND THERE'S A LOT OF DIFFERENT WAYS

THIS HAS A TECHNICAL NAME.

THE LAWYERS CALL IT

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ACCEPTABLE, NON-INFRINGING ALTERNATIVES.

I CALL IT THE

SHOULDA, COULDA, WOULDA LAW DEFENSE, BUT THAT'S NOT LEGAL.

BUT WHAT THEY'LL SAY IS EVEN THOUGH YOU'LL SEE DOCUMENT

AFTER DOCUMENT FROM SAMSUNG SAYING IT WAS THESE FEATURES THAT

WERE IMPORTANT TO CONSUMERS AND EVEN THOUGH SAMSUNG CHOSE TO

COPY THESE FEATURES, NOT SOME OTHER WAY, THAT BECAUSE THEY

COULD HAVE DONE IT SOME OTHER WAY, MAYBE THEY SHOULD HAVE DONE

IT SOME OTHER WAY, MAYBE THEY CAN DO IT SOME OTHER WAY, THESE

PATENTS HAVE NO VALUE.

BUT THE TRUTH IS, AND YOU CAN TELL FROM THE DOCUMENTS,

THAT IF SAMSUNG HAD EVEN SUSPECTED FOR A MOMENT THAT A JURY

WOULD BE ORDERING THEM TO PAY A FAIR PRICE FOR USING OUR

INVENTIONS, THEY MIGHT HAVE MADE DIFFERENT DECISIONS.

DIDN'T, BECAUSE THEY WENT WITH WHAT THEY THOUGHT WOULD SELL

THEIR PRODUCTS.

BUT THEY

SO, FINALLY, YOU WILL HEAR EVIDENCE ABOUT DAMAGES.

THINK ACTUALLY THIS PART WILL MAKE MORE -- IF ANYTHING I'VE

SAID TO YOU MAKES SENSE, I'M GLAD ABOUT THAT.

PART WILL MAKE MORE SENSE AFTER YOU'VE HEARD ALL THE EVIDENCE,

BUT I WANT TO GIVE YOU A HIGH OVERVIEW OF WHAT'S GOING TO

HAPPEN.

BUT I THINK THIS

IF YOU FIND INFRINGEMENT, AND AS I MENTIONED, WE ALREADY

KNOW THAT AT LEAST ONE OF THESE PATENTS IS INFRINGED, AND IF

YOU DECIDE THAT THE PATENT AND TRADEMARK OFFICE ACTUALLY WAS

CORRECT WHEN IT ISSUED THESE PATENTS, THEN YOU WILL BE CALLED

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UPON TO DECIDE THE ISSUE OF DAMAGES, AND YOU'RE GOING TO HEAR

TESTIMONY ABOUT TWO DIFFERENT KINDS OF DAMAGES.

THE FIRST ONE IS ACTUALLY PRETTY STRAIGHTFORWARD.

IT'S

CALLED LOST PROFITS.

IS PROPER THAT IF SAMSUNG HAD NOT BEEN ABLE TO SELL BECAUSE IT

COULDN'T USE OUR PROPERTY, IF IT HAD NOT BEEN ABLE TO SELL ITS

37 MILLION INFRINGING PHONES AND TABLETS, THAT SOME OF THOSE

CONSUMERS, SOME OF THEM WHO COULD NOT BUY AN INFRINGING PHONE

WOULD HAVE, INSTEAD, PURCHASED AN APPLE PRODUCT.

WE WILL PRESENT EVIDENCE TO YOU THAT IT

AND IF YOU BELIEVE THAT, YOU WILL HEAR THAT WE'RE ENTITLED

TO RECOVER LOST PROFITS ON THE SALES AND WE WILL PRESENT THAT

NUMBER TO YOU.

SAMSUNG IS GOING TO TELL YOU THAT NOT ONE, I'M NOT

EXAGGERATING HERE, THEY'RE GOING TO TELL YOU THAT NOT ONE OF

THOSE 37, OVER 37 MILLION BUYERS WOULD NOT HAVE BOUGHT AN APPLE

PRODUCT, EVEN IF THEY COULDN'T GET THEIR SAMSUNG PRODUCT.

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FRANKLY, WE THOUGHT WE WERE BEING CONSERVATIVE BECAUSE OUR
EXPERT IS GOING TO TELL YOU IT'S A NUMBER UNDER 10 PERCENT.

BUT SAMSUNG SAYS NOT ONE.

NOT ONE.

THIS IS GOING TO BE ANOTHER SITUATION WHERE WHAT SAMSUNG

TELLS YOU HERE WILL NOT MATCH WHAT YOU SEE IN THEIR INTERNAL

DOCUMENTS.

THIS IS A DOCUMENT THAT WAS CREATED BY -- YOU HEARD ONE OF THE

SUBSIDIARIES, SAMSUNG TELECOMMUNICATIONS AMERICA.

CALLED "2011 SUMMARY AND LESSONS LEARNED" AND A BUSINESS

FOR EXAMPLE, YOU'LL SEE PLAINTIFF'S EXHIBIT 154.

UNITED STATES COURT REPORTERS

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FORECAST FOR 2012.
AND ON PAGE 7 WHAT THEY TELL US, THEIR "HIGH LEVEL

INITIATIVES - BEAT APPLE."

ONE PRIORITY (EVERYTHING MUST BE IN THE CONTEXT OF BEATING

APPLE.)"

THEY SAY "BEATING APPLE IS A NUMBER

AND THEY SAY "THE THREAT FROM APPLE IS EXTREMELY REAL AND

URGENT, UP TO A 12.5 MILLION SELLING IN THE FOURTH QUARTER

VENDOR."

AND IN THE NEXT YEAR, IN A TOP SECRET REPORT FROM SAMSUNG

TELECOMMUNICATIONS AMERICA BACK TO HEADQUARTERS, YOU'LL SEE

THIS DOCUMENT WHERE THEY TALK ABOUT A PARADIGM SHIFT, AND

YOU'LL SEE PAGE 156 WHERE SAMSUNG DESCRIBED THE U.S. MARKET AS

"BECOMING A TWO HORSE RACE BETWEEN APPLE AND SAMSUNG."

DESPITE THESE INTERNAL DOCUMENTS, DESPITE CALLING IT A

"TWO HORSE RACE" AND DESPITE SAYING THAT THE THREAT FROM APPLE

IS, TO USE THEIR WORDS, "EXTREMELY URGENT AND REAL," THEY WILL

STAND HERE AND TELL YOU, THEIR WITNESSES WILL TELL YOU UNDER

OATH THAT IF THOSE 38 MILLION PHONES HADN'T BEEN ON THE MARKET,

NOT ONE OF THE PURCHASERS WOULD HAVE PURCHASED AN APPLE

PRODUCT.

THAT'S LOST PROFITS.

THE SECOND TYPE OF DAMAGES IS, FRANKLY, A LITTLE MORE

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LESS THAN 10 PERCENT OF THE SALES.

COMPLICATED.
FOR THE SALES, FOR THE OTHER 90 PERCENT OF THIS 38 MILLION
FOR WHICH WE DO NOT GET LOST PROFITS, THE LAW SAYS, I BELIEVE

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THE JUDGE WILL INSTRUCT YOU AT THE END OF THE CASE THAT WE'RE

ENTITLED TO RECOVER -- YOU HEARD IT ON THE VIDEO -- WHAT IS

CALLED A REASONABLE ROYALTY.

AND AS THEY MENTIONED ON THE VIDEO, YOU THINK A REASONABLE

ROYALTY IS THE SAME AS RENT, YOU USE SOMEONE'S REAL PROPERTY,

YOU PAY THEM RENT.

YOU PAY THEM A REASONABLE ROYALTY.

8
9
10

IF YOU USE SOMEONE'S INTELLECTUAL PROPERTY,

SO THE CONCEPT THAT SOMEBODY WOULD PAY RENT FOR USING
THESE, THAT'S NOT HARD.
BUT THE TRICKY QUESTION IS HOW DO YOU, AS A JURY, DECIDE

WHAT THAT REASONABLE ROYALTY SHOULD BE.

REALLY IMPORTANT QUESTION.

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AND THAT'S OBVIOUSLY A

AS SHE TOLD YOU, AT THE END OF THE TRIAL JUDGE KOH WILL
GIVE YOU THE ACTUAL INSTRUCTIONS.
BUT IN A BROAD SENSE SHE WILL TELL YOU, I BELIEVE, TO USE

SOMETHING WHICH IS CALLED A HYPOTHETICAL NEGOTIATION, THE

PROCESS BY WHICH YOU GET TO THE ROYALTY IS YOU CREATE A

NEGOTIATION THAT NEVER HAPPENED AND PROBABLY NEVER WOULD HAVE

HAPPENED IN THE REAL WORLD.

SO WHAT YOU DO IS YOU PUT APPLE AND SAMSUNG IN A ROOM AND

YOU PUT YOURSELF IN THEIR HEADS AND YOU FORCE THEM TO NEGOTIATE

OVER THE VALUE OF THESE FIVE PATENTS.

AND YOU WILL HEAR TESTIMONY AND AT THE END OF THAT

TESTIMONY, YOU DECIDE WHERE THEY WOULD HAVE ENDED UP IN THAT

NEGOTIATION, AND THAT'S THE REASONABLE ROYALTY.

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SO WE'RE GOING TO PRESENT EVIDENCE TO HELP YOU WITH THAT

PROCESS.

MR. HAUSER IS ONE OF THE WORLD'S EXPERTS IN THE AREA OF

CONDUCTING SURVEYS TO DETERMINE HOW CONSUMERS VALUE OPTIONS

THEY MAY BE GIVEN IN PARTICULAR PRODUCTS.

YOU WILL GET THE EVIDENCE OF MR. JOHN HAUSER.

IN THIS CASE, DR. HAUSER, CONDUCTING ONE OF THE SURVEYS,

IT'S CALLED A CONJOINT SURVEY, AND YOU'LL GET A LOT OF

EXPLANATION ABOUT THAT, TO DETERMINE THE DEGREE TO WHICH

CONSUMERS VALUE THE FIVE SPECIFIC FEATURES THAT WE'RE TALKING

10
11

ABOUT IN THIS CASE.
WE WILL ALSO PRESENT THE TESTIMONY OF DR. CHRIS VELLTURO.

DR. VELLTURO IS AN EXPERT IF IN THE FIELD OF CALCULATING

DAMAGES IN INTELLECTUAL PROPERTY CASES, PARTICULARLY IN THIS

PROCESS OF CARRYING ON A HYPOTHETICAL NEGOTIATION.

WHAT I WANT YOU TO UNDERSTAND NOW, SO THAT IT WILL HELP

YOU WITH THE EVIDENCE, IS THAT THIS NEGOTIATION WOULD HAVE

TAKEN PLACE IN AUGUST OF 2011.

DATE BECAUSE THAT'S THE DATE ON WHICH SAMSUNG FIRST INFRINGED

THE '647, '414, AND '959 PATENTS.

AND IT WOULD HAVE BEEN THAT

AND IT'S A CRITICALLY IMPORTANT DATE BECAUSE THE EVIDENCE

WILL BE THAT THE PHONES IN THIS CASE REPRESENTED THE SECOND

WAVE OF PRODUCTS THAT SAMSUNG HAD STARTED TO SELL IN THE

UNITED STATES.

APPLE HAD ALREADY SEEN THE EFFECT OF THE FIRST WAVE, AND

APPLE HAD FIGURED OUT SAMSUNG'S STRATEGY OF COPYING THE IPHONE

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AND SELLING ITS OWN COPIES AT LOWER PRICES.
SO THE EVIDENCE WILL BE THAT IN AUGUST OF 2011, APPLE

WOULD HAVE BROUGHT THE FOLLOWING KNOWLEDGE TO THE HYPOTHETICAL

NEGOTIATION:

ADOPTED A STRATEGY OF COPYING ITS PRODUCTS; IT WOULD HAVE KNOWN

THAT SAMSUNG WAS UNDERSELLING IT IN THE MARKETPLACE; IT WOULD

HAVE KNOWN THAT LARGE NUMBERS OF CONSUMERS WERE PLANNING, IN

THAT YEAR AND THE YEAR FOLLOWING, TO MAKE THEIR FIRST PURCHASE

OF A SMARTPHONE; AND APPLE WOULD HAVE BELIEVED, FROM WHAT IT

IT WOULD HAVE BEEN FULLY AWARE THAT SAMSUNG HAD

HAD SEEN, THAT SAMSUNG DID NOT HAVE THE ABILITY TO CREATE ITS

OWN DESIGNS THAT COULD HAVE COMPETED.

AND ON THE OTHER SIDE OF THAT NEGOTIATING TABLE WILL BE

SAMSUNG.

AUGUST 2011 BECAUSE YOU WILL HAVE SEEN THEIR INTERNAL

DOCUMENTS.

YOU WILL KNOW WHAT THEY WOULD HAVE BEEN THINKING IN

THEY WOULD HAVE BEEN DEEPLY AWARE OF THEIR OWN CRISIS OF

DESIGN; THEY WOULD HAVE KNOWN FROM THE DOCUMENT I SHOWED YOU,

AND ABOUT FIVE OTHERS THAT YOU'RE GOING TO SEE, THAT THE

DESIGNERS FELT THAT THEY HAD TO HAVE THESE FIVE SPECIFIC

FEATURES IN ORDER TO BE ABLE TO COMPETE AGAINST APPLE; AND THEY

WOULD HAVE BEEN THINKING THAT COMPETING AGAINST APPLE WAS THEIR

NUMBER 1 PRIORITY.

SO UNDER THESE CIRCUMSTANCES, IN THIS NEGOTIATING ROOM, WE

THINK YOU WILL AGREE THAT SAMSUNG WOULD NOT HAVE BEEN -- THAT

APPLE WOULD NOT HAVE BEEN WILLING TO LICENSE THESE PATENTS

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CHEAPLY, IF IT WOULD HAVE BEEN WILLING TO LICENSE THEM AT ALL.
DR. VELLTURO WILL GIVE YOU MUCH MORE DETAIL ABOUT THIS,

BUT HE'LL EXPLAIN TO YOU THAT IN HIS OPINION UNDER THESE

CIRCUMSTANCES APPLE WOULD HAVE ASKED FOR AN AVERAGE ROYALTY OF

ABOUT $33 PER PHONE, $40 AT THE TOP END FOR EVERY PHONE THAT

INFRINGED ALL FIVE OF THE PATENTS.

GIVEN THE YEARS OF RESEARCH, GIVEN THE RISK THAT APPLE HAD

TAKEN, GIVEN THE SUCCESS OF THESE FEATURES IN THE MARKETPLACE,

AND GIVEN THE IMPORTANCE OF THE IPHONE TO APPLE'S SUCCESS,

APPLE WOULD NOT HAVE AGREED TO LICENSE THESE PATENTS TO THIS

COMPANY FOR LESS.

BUT BECAUSE YOU'RE GOING TO BE MULTIPLYING THIS AVERAGE

TIMES MILLIONS AND MILLIONS OF INFRINGING PHONES, YOU PROBABLY

HAVE ALREADY RECOGNIZED BUT YOU WILL CERTAINLY GET THERE, THAT

ALTHOUGH THE ROYALTY PER PHONE IS REASONABLE, THE TOTAL DAMAGES

THAT WE'RE GOING TO ASK YOU TO AWARD IS HIGH.

BILLION.

IT'S OVER $2

BUT I HOPE AT THE END OF THE TRIAL YOU WILL UNDERSTAND

THAT THE REASON THAT THE DAMAGES IN THIS CASE ARE HIGH IS

BECAUSE THE SCOPE OF SAMSUNG'S INFRINGEMENT HAS BEEN MASSIVE.

IT IS NOT A SECRET THAT APPLE IS PROUD OF ITS INTELLECTUAL

PROPERTY.

IT'S NOT A SECRET THAT IT WAS THE ABILITY OF APPLE'S

DESIGNERS AND ENGINEERS TO CREATE AND INVENT THAT HAS BEEN

RESPONSIBLE FOR MAKING APPLE, WHAT CAN BE CALLED YESTERDAY THE

BIG COMPANY, THE SUCCESSFUL COMPANY, THE WEALTHY COMPANY THAT

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IT IS TODAY, THAT WAS NOT A FOREORDAINED CONCLUSION.

THEY GOT

THERE THROUGH HARD WORK, THROUGH INTRODUCING PRODUCTS THAT THE

WORLD HAD NOT SEEN, AND BY BEING RIGHT IN THEIR DESIGN CHOICES.

AND IT WILL NOT BE A SECRET, AFTER YOU'VE HEARD THE

EVIDENCE, THAT APPLE HAS BEEN HURT VERY, VERY BADLY BY THE

INFRINGEMENT STRATEGY THAT SAMSUNG INTENTIONALLY ADOPTED IN

THIS CASE AND WHICH IT HAS USED SO EFFECTIVELY TO CARVE OUT ITS

CURRENT PLACE IN THE MARKETPLACE.

I SPENT A MINUTE LAYING OUT FOR YOU WHAT SAMSUNG WAS GOING

TO SAY IN THIS CASE, BUT I LEFT OUT ONE PARTICULARLY CYNICAL

ARGUMENT THAT THEY INTEND TO MAKE, AND FOR A PREVIEW OF THAT

ARGUMENT, I'M GOING TO GIVE YOU BACK TO MY GOOD FRIEND

BILL LEE.

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15

THE COURT:

MR. LEE:

THE COURT:

MR. LEE:

YOU HAVE

22 MINUTES.
YES.

THANK YOU, YOUR HONOR.

(MR. LEE GAVE HIS OPENING STATEMENT ON BEHALF OF
PLAINTIFF.)

MR. LEE:

TO SEE YOU AGAIN.

TIME IS 11:27.

UNTIL 11:49.

ALL RIGHT.

GOOD MORNING, LADIES AND GENTLEMEN.

GOOD

MR. MCELHINNY HAS JUST DISCUSSED WITH YOU THE EVIDENCE

THAT WILL DEMONSTRATE THAT IT WAS APPLE THAT INVESTED,

INNOVATED AND TOOK THE RISK OF BRINGING TO MARKET REVOLUTIONARY

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PRODUCTS, PRODUCTS THAT HAVE CHANGED THE WAY THAT WE

COMMUNICATE WITH EACH OTHER ON A DAILY BASIS.

HE HAS ALSO DESCRIBED TO YOU THE EVIDENCE THAT

DEMONSTRATES THAT SAMSUNG NOT ONLY INFRINGED ON APPLE'S

INTELLECTUAL PROPERTY, BUT INTENTIONALLY COPIED THAT

INTELLECTUAL PROPERTY TO GAIN A POSITION IN THE MARKETPLACE.

BUT AS HER HONOR EXPLAINED TO YOU, SAMSUNG HAS ALSO

ASSERTED TWO PATENTS AGAINST APPLE.

OPENING, IN LESS THAN 22 MINUTES, I'M GOING TO DESCRIBE TO YOU

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IN MY PORTION OF THE

THOSE CLAIMS AGAINST APPLE.
AND LET ME BEGIN BY TELLING YOU A LITTLE BIT ABOUT THE
THOSE PATENTS.
IN A FEW MINUTES, WE ANTICIPATE THAT SAMSUNG WILL TELL YOU
THAT IT INVESTS ENORMOUS AMOUNTS IN RESEARCH AND DEVELOPMENT.
WE EXPECT THAT THEY'LL TELL YOU THAT THEY HAVE TENS OF
THOUSANDS OF PATENTS.
BUT, LADIES AND GENTLEMEN, YOU WILL NOT HEAR ABOUT ONE OF

THOSE PATENTS HERE.

RESULTED FROM THE WORK OF ANY SAMSUNG ENGINEER.

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YOU WILL NOT HEAR ABOUT ONE PATENT THAT

YOU WILL NOT HEAR OF ONE PATENT THAT RESULTED FROM ANY
WORK, ANY INNOVATION THAT SAMSUNG DID BY ITSELF.
AND WHY?

BECAUSE FOR SMARTPHONES AND TABLETS, IT WAS

APPLE THAT WAS THE INVENTOR, THE INNOVATOR.

SAMSUNG THAT WAS THE INTENTIONAL FOLLOWER.

LATER IT WAS

INSTEAD WHAT THE EVIDENCE WILL DEMONSTRATE TO YOU IS THIS:

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IN AUGUST OF 2010, APPLE MET WITH SAMSUNG.

MR. MCELHINNY HAS SAID, APPLE KNEW THAT SAMSUNG WAS COPYING.

IT ASKED TO MEET WITH SAMSUNG.

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5
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7
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AND IT SAID TO SAMSUNG, "YOU ARE COPYING OUR PRODUCTS,
YOU'RE INFRINGING OUR PATENTS.

STOP."

WE DIDN'T RUN OFF TO COURT.

WE DID WHAT GROWNUPS SHOULD

DO AND ASKED TO MEET AND SAID "WOULD YOU STOP?"
BUT SAMSUNG DIDN'T STOP COPYING.

AS YOU WILL LEARN, THEY

DIDN'T STOP INFRINGING.
INSTEAD, THEY KEPT ON DOING WHAT THEY HAD BEEN DOING,
INTENTIONAL COPYING AS YOU'VE NOW SEEN FROM INTERNAL DOCUMENTS.
AND THEY DID TWO OTHER THINGS.

HAVING BEEN ACCUSED OF

INFRINGING AND COPYING, THEY WENT OUT AND BOUGHT TWO PATENTS,

TWO PATENTS AFTER THEY'D BEEN ACCUSED OF INFRINGING.

THE TWO PATENTS THAT YOU'RE GOING TO HEAR ABOUT HERE, ONE

CALLED THE '449 PATENT, ONE CALLED THE '239 PATENT, BOTH

PURCHASED BY SAMSUNG FROM SOMEBODY ELSE AFTER APPLE HAD SAID

"PLEASE STOP COPYING."

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THOSE ARE

THESE ARE THE PATENTS THAT SAMSUNG WILL ASSERT, NOT
PATENTS THAT COME FROM ITS OWN WORK.
NOW, AT THIS TRIAL YOU WILL NOT HEAR APPLE ARGUE, AS HER
HONOR HAS SAID, THAT THESE TWO PATENTS ARE INVALID.

AS YOU LEARNED FROM THE VIDEO FROM THE FEDERAL JUDICIAL

CENTER, THERE'S AN APPLICATION PROCESS WHERE EXAMINERS INVEST

ENORMOUS AMOUNTS OF TIME IN REVIEWING THE APPLICATIONS FOR THE

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PATENTS.
APPLE IS NOT GOING TO COME HERE AND SAY FOR THESE TWO

PATENTS THAT SAMSUNG PURCHASED FROM A THIRD PARTY WHO

PROSECUTED THE PATENTS THAT THE PATENT OFFICE MADE A MISTAKE.

WE'RE NOT GOING TO SAY THAT.

ONLY SAMSUNG IS GOING TO TELL YOU THAT THE PATENT OFFICE

MADE A MISTAKE.

ONLY SAMSUNG IS GOING TO TELL YOU THEY MADE A

MISTAKE FIVE TIMES.

THEY MADE A MISTAKE EVERY SINGLE TIME RELEVANT TO THIS CASE.

ONLY SAMSUNG IS GOING TO TELL YOU THAT

WHAT YOU WILL LEARN IS THE TWO PATENTS THAT SAMSUNG

ASSERTS HERE, IN FACT, DESCRIBE TECHNOLOGY THAT IS VERY OLD AND

VERY OBSOLETE.

IN FACT, ONE OF THESE PATENTS IS SO OLD THAT IT'S EXPIRED.

DO YOU REMEMBER ON THE VIDEO TODAY WHEN THEY TOLD YOU THAT A

PATENT HAS A TERM FOR 20 OR 17 YEARS?

THE 20 YEARS IS OVER.

17
18

FOR ONE OF THOSE PATENTS

WHY THEN DID SAMSUNG -- WHY THEN IS SAMSUNG ASSERTING
THESE PATENTS AGAINST APPLE?

WELL, LET ME BEGIN WITH TWO REASONS THAT IT IS NOT.

THE EVIDENCE WILL DEMONSTRATE TO YOU THAT IT'S NOT BECAUSE

SAMSUNG THOUGHT THESE PATENTS DESCRIBED IMPORTANT INVENTIONS.

YOU WILL SEE NO SAMSUNG DOCUMENT THAT SAYS SO.

23
24
25

THE LAWYERS MAY TELL YOU SOMETHING DIFFERENT TODAY, BUT
YOU WON'T SEE ANYTHING FROM SAMSUNG.
AND THE EVIDENCE WILL DEMONSTRATE THAT APPLE'S PRODUCTS,

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THE RESULTS OF ITS INNOVATIONS AND INVENTIONS, ARE, IN FACT,

VERY, VERY DIFFERENT FROM THESE OLD TECHNOLOGIES.

YOU WILL LEARN, AND YOU WILL HEAR FROM THE PEOPLE WHO DID

THIS, THAT APPLE'S ENGINEERS INVESTED ENORMOUS AMOUNTS OF TIME

AND EFFORT TO DEVELOP THE PRODUCTS THAT SAMSUNG ACCUSES OF

INFRINGING.

YOU WILL LEARN, LADIES AND GENTLEMEN, THAT THERE IS NOT A

SINGLE PIECE OF EVIDENCE, NOT A SINGLE SHRED OF EVIDENCE, THAT

APPLE COPIED THESE PATENTS.

IN FACT, YOU WILL LEARN THAT THE PEOPLE WHO DID THE WORK

FOR APPLE DIDN'T EVEN KNOW ABOUT THESE PATENTS WHEN THEY

DESIGNED THE PRODUCTS THAT NOW HAVE BEEN ACCUSED OF

INFRINGEMENT.

14
15
16

AND WE'LL ASK YOU AT THE END OF THE CASE TO COMPARE THAT
TO WHAT YOU'VE SEEN FROM SAMSUNG.
SO WHY THEN DOES SAMSUNG ASSERT THESE PATENTS?

THE

ANSWER, THE EVIDENCE WILL DEMONSTRATE, IS IN THE DAMAGE CLAIM

THAT SAMSUNG IS GOING TO OFFER YOU FOR THESE TWO PURCHASED

PATENTS.

20
21
22
23

FOR THE '239 PATENT, THE PATENT THAT'S EXPIRED, THEY'RE
ASKING YOU FOR AROUND $6 MILLION.
FOR THE '449 PATENT, THE PATENT THAT HASN'T EXPIRED,
THEY'RE GOING TO ASK YOU FOR $158,000.

YOU WILL LEARN FROM THE EVIDENCE THAT THEY'VE HIRED

MULTIPLE EXPERTS TO COME AND SIT IN THAT STAND AND TALK TO YOU

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ABOUT THIS PATENT, AND THEY'VE PAID THEM MORE THAN THE AMOUNT

OF MONEY THAT THEY'RE ASKING FOR IN DAMAGES.

WHY WOULD THEY DO THAT?

HERE'S WHAT THE EVIDENCE WILL SHOW:

THE EVIDENCE WILL

SHOW THAT THEY PURCHASED THESE PATENTS THAT THEY'RE ASSERTING

WITH LOW DAMAGES CLAIMS BECAUSE THEY WANT YOU TO BELIEVE THAT

PATENTS DON'T HAVE MUCH VALUE.

PATENTS ARE NOT WORTH MUCH.

THEY WANT YOU TO BELIEVE THAT

THEY ARE HOPING THAT WHEN YOU TURN THE 37 MILLION ACTS OF

INFRINGEMENT, THAT YOU'LL COMPROMISE BECAUSE THE PATENTS ARE

NOT WORTH MUCH.

THAT IS WHAT THE INFRINGER, THAT IS WHAT THE FOLLOWER,

THAT IS WHAT THE COPIER WANTS YOU TO BELIEVE.

WORTH MUCH.

BUT THE INNOVATORS KNOW BETTER.

PATENTS ARE NOT

THEY KNOW THE RISK THEY

TOOK.

HOW DIFFICULT IT IS TO COME UP WITH AN IDEA TO MAKE A PRODUCT

BETTER.

THEY KNOW THE INVESTMENT OF TIME THEY MADE.

THEY KNOW

THEY KNOW WHAT AN INVENTION IS, AND THEY KNOW WHAT THE

VALUE OF A PATENT THAT REALLY IS THE RESULT OF HARD WORKING

INVENTIONS.

LAWYERS TO PATENTS PURCHASED FROM OTHERS.

23
24
25

IN CONTRAST TO THE VALUE OF THE PATENT ASSIGNED BY

SO LET ME QUICKLY TELL YOU ABOUT THE TWO PATENTS.

THE

FIRST ONE IS CALLED THE '449 PATENT, AS I SAID.
YOU WILL HEAR FROM AN APPLE ENGINEER TIMED TIM MILLET,

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WHO'S ON THE LEFT-HAND SIDE OF THE SCREEN THERE, AND HE'S GOING

TO EXPLAIN TO YOU THE VERY DIFFERENT AND NEW HARDWARE

COMPONENTS IN APPLE'S PRODUCTS AND HOW THOSE COMPONENTS WORK.

YOU WILL ALSO HEAR FROM PROFESSOR JAMES STORER FROM

BRANDEIS UNIVERSITY IN BOSTON, A RECOGNIZED EXPERT IN THE FIELD

OF VIDEO COMPRESSION, AND HE, TOO, WILL EXPLAIN TO YOU HOW THE

NEW TECHNOLOGIES IN THE APPLE PRODUCTS HAVE NOTHING TO DO WITH

THE OLD TECHNOLOGIES OF THE '449 PATENT.

9
10
11
12
13

LET ME GIVE YOU A QUICK EXAMPLE.

I'M GOING TO PUT ON THE

SCREEN CLAIMS 25 AND 27 OF THE '449 PATENT.
WE'RE NOT GOING TO GO THROUGH IT ALL NOW.

MR. MCELHINNY SAID, THE CLAIMS ARE WHAT ARE IMPORTANT.
CLAIMS 25 AND 27 TELL YOU WHAT THE INVENTION OF THE '449

PATENT IS, AND YOU WILL SEE IT HAS NOTHING TO DO WITH

SMARTPHONES.

HAS NOTHING TO DO WITH A MOBILE DEVICE.

17
18

IT HAS NOTHING TO DO WITH A TABLET COMPUTER.

INSTEAD IT DESCRIBES A DIGITAL CAMERA USING OLDER HARDWARE
COMPONENTS, COMPONENTS THAT ARE NOT NECESSARY ANY LONGER TODAY.

SO LET ME GIVE YOU AN EXAMPLE.

ONE OF THE SPECIFIC REQUIREMENTS OF THE '449 PATENT IS

THAT IT THE DIGITAL CAMERA DISPLAY A LIST, AND THAT THAT LIST

BE IN A SEARCHABLE FORM.

THEY EVEN GAVE AN EXAMPLE OF WHAT THE LIST WOULD LOOK

LIKE, AND THAT IS FIGURE 7 OF THE PATENT, WHICH IS ON THE

SCREEN NOW.

IT IS A LIST OF THE PHOTOS YOU'VE TAKEN.

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A FORM THAT CAN BE SEARCHED.

THEY DID IT BECAUSE THE TECHNOLOGY OF THAT DAY WOULDN'T

ALLOW YOU TO DISPLAY ALL OF THE PHOTOS YOU HAD TAKEN IN A WAY

WHERE YOU COULD SIMPLY LOOK AT THEM AND SCROLL THROUGH THEM.

5
6

BUT THAT'S NOT WHAT THE IPHONE OR THE IPAD DO.
NO LIST.

THERE IS

THERE IS NO SEARCH MODE.

INSTEAD, THE APPLE -- APPLE'S INVENTORS CAME UP WITH

SOMETHING CALLED THE CAMERA ROLL, AND I'M GOING TO PUT THE

CAMERA ROLL ON THE SCREEN RIGHT NOW ON THE LEFT-HAND SIDE.

USING MODERN TECHNOLOGY AND NEW INNOVATIONS, THE APPLE

TECHNOLOGY SIMPLY ALLOWS YOU TO PUT THUMBNAILS OF THE PHOTOS IN

A GRID FORMAT WHERE YOU CAN SIMPLY SCROLL THROUGH THEM.

DON'T NEED A LIST.

THE PHOTO.

THROUGH THE PHOTOS.

YOU DON'T HAVE TO GO TO THE LIST TO FIND

YOU DON'T NEED TO SEARCH IT.

AND I'VE PUT IT ON THE RIGHT.

SEARCHES FOR WORDS.

YOUR CONTACTS.

21
22
23
24
25

YOU JUST SCROLL

NOW, THE APPLE PHONES ACTUALLY DO HAVE A SEARCH FEATURE,

YOU

WHY?

BUT THAT SEARCH FEATURE ONLY

IT SEARCHES YOUR E-MAILS.

IT SEARCHES

IT DOESN'T SEARCH PHOTOS OR VIDEOS.

BECAUSE THE NEWER AND MODERN TECHNOLOGY OF THE APPLE

PRODUCTS, OF THE APPLE CAMERA ROLL, DOESN'T REQUIRE IT.
NOW, LET ME MAKE ONE MORE POINT ABOUT THE '449 PATENT THAT
I'LL ASK YOU TO KEEP IN MIND.
YOU WILL LEARN THAT SAMSUNG ACTUALLY SELLS PRODUCTS TO
APPLE FOR INCLUSION IN THE IPHONE AND THE IPAD, COMPONENTS.

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YOU WILL LEARN THAT IT ACTUALLY SUPPLIES TWO OF THE

COMPONENTS THAT IT'S NOW ACCUSING OF INFRINGING.

SO LET ME PAUSE ON THAT FOR A SECOND.

SINCE 2010, SAMSUNG

HAS BEEN SELLING AND MAKING BILLIONS OF DOLLARS SELLING

COMPONENTS TO APPLE.

COMPONENTS.

DID IT SAY, "WE'RE SELLING YOU THESE COMPONENTS, BUT YOU OUGHT

TO KNOW THERE'S A PATENT OUT THERE THAT'S GOING TO BE A

PROBLEM."

SINCE 2010, IT'S BEEN SELLING THESE TWO

NEVER ONCE, BEFORE IT WAS ASKED TO STOP COPYING,

NEVER ONCE.

BUT THEN AFTER APPLE SAID, "WOULD YOU PLEASE STOP

COPYING," SAMSUNG SAID, "WE HAVE THIS PATENT.

THE COMPONENTS YOU'RE BUYING FROM US ARE NOW INFRINGING IT, AND

WE'D LIKE YOU TO PAY US."

14
15

WE PURCHASED IT.

THAT IS A QUESTION WE WILL ASK YOU TO BRING YOUR COMMON
SENSE TO BEAR ON WHEN YOU DECIDE THE CASE.

LET ME TURN QUICKLY TO THE OTHER PATENT, THE '239 PATENT.

THIS IS A PATENT WHERE SAMSUNG CLAIMS THAT THREE FEATURES

IN APPLE'S IPHONE, MAIL, MESSAGES, FACETIME, INFRINGE.

OF YOU MAY HAVE SEEN ON TV, SOME OF YOU ON YOUR OWN PHONES,

THAT ALLOWS YOU TO SEND E-MAIL, SEND TEXT MESSAGES, AND DO A

TWO-WAY VIDEO CALL ON FACETIME.

AS MANY

AGAIN, YOU'RE GOING TO HEAR FROM THE FOLKS WHO DESIGNED

THESE PRODUCTS AND MADE THESE INNOVATIONS.

YOU'LL HEAR FROM

TIM MILLET, WHO I'VE IDENTIFIED PREVIOUSLY, BUT YOU'LL ALSO

HEAR FROM ROBERTO GARCIA, WHO'S IN THE MIDDLE.

UNITED STATES COURT REPORTERS

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ENGINEER WHO HELPED DEVELOP AND WILL DESCRIBE THE TIME AND

EFFORT AND INNOVATION THAT WENT INTO FACETIME.

3
4

PROFESSOR STORER WILL AGAIN TELL YOU JUST HOW DIFFERENT
THEY ARE.

LET ME EXPLAIN VERY QUICKLY HOW DIFFERENT THEY ARE.

THE '239 PATENT YOU WILL SEE DOES NOT DESCRIBE A

SMARTPHONE, DOES NOT DESCRIBE A TABLET COMPUTER.

TO WHAT SAMSUNG WILL TELL YOU, IT IS NOT THE INVENTION OF

SENDING VIDEO OVER SLIDER.

AND CONTRARY

INSTEAD IT DESCRIBES A VERY OLD DEVICE THAT HAD -- FOR

CAPTURING A VIDEO THAT HAD ALREADY BEEN TAKEN SOMEWHERE ELSE.

THIS IS AN INVENTION OF THE VCR BETAMAX DAYS IF ANY OF YOU ARE

AS OLD AS I AM AND CAN REMEMBER, RIGHT?

14
15

SOMEBODY ELSE HAS TO CAPTURE THE VIDEO.

YOU HAVE TO TAKE

THE VIDEO, THEN YOU HAVE TO CAPTURE IT.

THAT'S WHY, WHEN YOU LOOK AT THE CLAIMS AGAIN, AND I'LL

PUT THE CLAIM ON THE SCREEN, THIS CLAIM REQUIRES SOMETHING

CALLED A VIDEO CAPTURE MODULE.

SAMSUNG CLAIMS WE INFRINGE.

THIS IS IN CLAIM 15, WHICH

BUT WHAT YOU WILL LEARN IS THIS PATENT CAME INTO BEING AT

A TIME WHEN VIDEO WAS ANALOG, NOT DIGITAL, AND THE ONLY WAY TO

GET IT INTO A DIGITAL COMPUTER WAS TO HAVE SOMEONE TAKE IT,

RECORD IT, AND THEN CAPTURE IT ON THAT COMPUTER IN DIGITAL

FORM.

YOU WON'T HAVE TO GUESS AT IT BECAUSE THAT'S EXACTLY WHAT

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THE PATENT DESCRIBES, AND I'M GOING TO SHOW YOU FIGURE 1 FROM

THE PATENT.

NOW, THE FOCUS OF CLAIM 15 IS THE GREEN REMOTE UNIT, AND

I'M GOING TO FOCUS ON THAT.

IS THE VIDEO IS TAKEN FIRST BY THE VIDEO CAMERA, AND THEN IT'S

CAPTURED BY THE REMOTE UNIT, SOMETHING THAT YOU HAD TO DO 20

YEARS AGO, SOMETHING THAT YOU DON'T HAVE TO DO TODAY.

8
9
10

BUT WHAT THE PATENT WILL TELL YOU

YOU WILL LEARN THAT THE INVENTORS ACTUALLY BUILT A
COMMERCIAL PRODUCT USING THE '239 PATENT.
NOW, AT THE TIME THIS WAS SOMETHING THAT WAS INTERESTING

AND SIGNIFICANT.

VCR'S, AND THEY GOT AWARDS FOR IT, AND THIS IS THE PRODUCT THAT

THEY PUT ON THE MARKETPLACE.

IT WAS USEFUL IN THE ERA OF BETAMAXES AND

IT IMPROVED THE LAPTOP THROUGH CELLULAR MODEMS AND THROUGH

CELL PHONES.

TRANSMIT A 15 SECOND VIDEO CLIP.

IT WEIGHED 28 POUNDS AND TOOK 16 MINUTES TO

BUT YOU WILL LEARN THAT THE IPHONE AND THE IPAD DON'T NEED

A VIDEO CAPTURE MODULE.

CAPTURING VIDEO TAKEN SOMEWHERE ELSE.

THE IPAD CAPTURE THE VIDEO, RECORD THE VIDEO THEMSELVES.

THERE'S NO NEED TO RECORD IT SOMEWHERE ELSE AND THEN CAPTURE IT

IN THE IPAD OR THE IPHONE.

THEY DON'T NEED IT BECAUSE THEY'RE NOT
IN FACT, THE IPHONE AND

FOR THAT REASON THE TECHNOLOGY IS FUNDAMENTALLY DIFFERENT.

THEY'RE OF DIFFERENT TIMES.

AND THE OLDER HARDWARE AND THE

OLDER TECHNOLOGY OF THIS PATENT IS SIMPLY NOT USED.

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SO LET ME RETURN -- WE'RE CLOSE TO THE END OF OUR

OPENING -- TO THE CHRONOLOGY THAT MR. MCELHINNY STARTED WITH

YOU ON.

RISK THAT APPLE TOOK.

HE STARTED WITH YOU ON THE YEARS OF INVESTMENT AND THE

HE TOLD YOU ABOUT -- AND IT'S HARD TO REMEMBER TODAY --

ABOUT THE ENORMOUS RISK THAT APPLE TOOK AS A COMPANY, BUT ALSO

AS PEOPLE, AND YOU WILL HEAR FROM SOME OF THESE PEOPLE, TO

BRING TO THE WORLD DEVICES THAT WOULD FUNDAMENTALLY

REVOLUTIONIZE COMMUNICATIONS.

10
11

THEY DID NOT KNOW WHETHER THEY WOULD BE A SUCCESS OR A
FAILURE.

THEY ONLY KNEW THAT THEY WERE TAKING A RISK.

BUT THAT RISK PAID OFF.

YOU NOW KNOW THAT AFTER STEVE JOBS INTRODUCED THE IPHONE,

IT BECAME THE INVENTION OF THE YEAR.

15
16

IT'S PAID OFF WELL.

AND WE KNOW THAT APPLE DID IT AGAIN WHEN APPLE INTRODUCED
THE IPAD THREE YEARS LATER.

IT, TOO, WAS AN ENORMOUS SUCCESS.

NOW, FOCUS ON THE TWO CLAIMS, THE TWO PATENTS THAT THEY'RE

NOW ASSERTING AGAINST US.

DOCUMENTS THAT MR. MCELHINNY WAS SHOWING TO YOU WERE BEING

GENERATED, SAMSUNG SAID, OH, BY THE WAY, YOU'RE INFRINGING SOME

PATENTS.

THERE THAT YOU'RE INFRINGING FOR THE IPHONE?

IPAD?

24
25

WHEN THIS STARTED, WHEN ALL THESE

HEY, YOU OUGHT TO STOP.

NO.

FOR THE IPOD TOUCH?

THERE ARE SOME PATENTS OUT
NO.

FOR THE

NO.

NOW, AT THAT MOMENT IN TIME, IN 2010, APPLE AND SAMSUNG
HAD A MAJOR BUSINESS RELATIONSHIP.

THEY STILL DO TODAY.

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BUT APPLE'S INTELLECTUAL PROPERTY IS SO IMPORTANT THEY

COULD NOT STAND BY AND JUST LET SOMEONE TAKE IT.

IT COULD NOT

STAND BY WITHOUT RAISING ITS HAND AND SAYING, "STOP.

TO STOP."

YOU NEED

EVEN FOR ITS BUSINESS PARTNER, IT SAID, "PLEASE STOP."

AT THAT POINT IN TIME SAMSUNG HAD TWO CHOICES.

IT COULD DO WHAT A GOOD BUSINESS PARTNER WOULD DO AND IT

8
9

COULD HAVE STOPPED.
IT COULD HAVE INVESTED ITS OWN MONEY IN INVENTION AND

INNOVATION AND IT COULD HAVE COME OUT WITH ITS OWN PRODUCTS,

WITH ITS OWN INVENTIONS AND INNOVATIONS.

OR IT COULD HAVE REFUSED TO STOP COPYING.

IT COULD HAVE

CONTINUED TO BRING INFRINGING PHONES TO MARKET 37 MILLION

TIMES, AND IT COULD HAVE GONE OUT AND BOUGHT TWO PATENTS AND

SAID "YOU NOW INFRINGE.

MONEY BECAUSE THE PATENTS AREN'T WORTH A WHOLE LOT."

BUT WE'RE NOT GOING TO ASK FOR MUCH

NOW, WE ARE AT THE END OF OUR OPENING.

I WANT TO END

WHERE MR. MCELHINNY STARTED, BY THANKING YOU FOR YOUR TIME AND

ATTENTION ON BEHALF OF MR. MCELHINNY, ME, OUR COLLEAGUES, BUT

MOST OF ALL, BY APPLE AND THE EMPLOYEES AND THE INVENTORS AT

APPLE.

OVER THE NEXT FEW WEEKS, WE'LL BE ASKING YOU TO LISTEN

CAREFULLY TO A LOT OF EVIDENCE AND EVIDENCE THAT BEARS ON THE

ISSUE THAT HER HONOR INSTRUCTED YOU ON TODAY.

AT TIMES, IT WILL SEEM LIKE YOU'RE DRINKING WATER FROM A

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FIREHOSE.
BUT IF WE DO OUR JOB, WE WILL MAKE THAT TECHNOLOGY AND
THAT EVIDENCE UNDERSTANDABLE TO YOU.
IF WE DO OUR JOB, YOU WILL KNOW WHO THE TRUE INVENTORS AND
INNOVATORS ARE.

IF WE DO OUR JOB, YOU WILL KNOW WHO THE COPIER IS.

IF WE DO OUR JOB, YOU WILL KNOW WHO THE INFRINGER IS.

AND, LADIES AND GENTLEMEN, IF WE DO OUR JOB AND WE FOCUS

YOU ON THE RISK THAT APPLE TOOK TO REVOLUTIONIZE THE WORLD, WE

WILL BRING YOU THE EVIDENCE TO DETERMINE WHAT PATENTS AND

INNOVATION ARE REALLY WORTH.

THANK YOU.

13
14

THE COURT:
NOON.

OKAY?

OKAY.

TIME IS NOW 11:46.

THANK YOU.

MR. QUINN:

OKAY.

THE COURT:

11:47.

MR. QUINN:

THANK YOU, YOUR HONOR.

18
19

OPENING.
GO AHEAD, PLEASE.

(MR. QUINN GAVE HIS OPENING STATEMENT ON BEHALF OF
DEFENDANTS.)
MR. QUINN:

20
21

WE'LL STOP AT

WOW.

GOOD MORNING, FOLKS.

IT'S STILL MORNING.

I CAN WONDER WHY SOME OF YOU MIGHT BE LOOKING A

LITTLE SIDEWAYS AT ME RIGHT NOW AFTER HEARING THAT PRESENTATION

OF APPLE'S CASE FROM TWO VERY SKILLED LAWYERS.

24
25

BUT DURING JURY SELECTION, YOU PROMISED US THAT YOU'D KEEP
AN OPEN MIND UNTIL YOU HEARD ALL THE EVIDENCE, AND I'M SURE

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THAT YOU APPRECIATE THAT YOU'VE ONLY HEARD A SMALL PART OF THE

STORY AT THIS POINT.

SO I'D LIKE TO TALK TO YOU ABOUT SOME IMPORTANT FACTS THAT

NEITHER MR. MCELHINNY NOR MR. LEE SPOKE ABOUT IN THEIR

STATEMENTS TO YOU.

BEFORE I SIT DOWN, I'M GOING TO PROVE TO YOU, DURING THE

COURSE OF THIS TRIAL, WE WILL PROVE TO YOU THAT, YES, APPLE IS

A GREAT COMPANY, BUT THEY DON'T OWN EVERYTHING.

THE ONLY WAY TO SEARCH ON PHONES.

TO SYNC.

ON A PHONE.

THEY DON'T OWN

THEY DON'T OWN THE ONLY WAY

THEY DON'T OWN THE ONLY WAY TO HAVE AN UNLOCK SCREEN

WE WILL PROVE TO YOU THAT THEY VASTLY OVERSTATED THE

SCOPES OF THOSE PATENT CLAIMS AND THAT THEY'RE COUNTING ON YOU

TO BE CONFUSED AND NOT UNDERSTAND THAT, YES, INDEED, THESE ARE

VERY, VERY NARROW SOFTWARE CLAIMS THAT COVER ONE ABILITY, ONE

WAY TO DO SOMETHING THAT A LOT OF DIFFERENT COMPANIES DO

DIFFERENT WAYS.

AND WE WILL PROVE TO YOU -- RIGHT NOW I'M JUST GOING TO BE

BLUNT RIGHT NOW.

THEY FINALLY -- I WAS WAITING.

WOULD SAY IT TO YOU, THE "B" WORD, BILLIONS.

22
23
24
25

THEIR REQUEST, THEY FINALLY SAID THE WORD,
I WAS WONDERING WHETHER THEY

AND THEY PUT THAT NUMBER OUT THERE TO PUT IT IN YOUR HEADS
SO THAT THAT'S THE DAMAGES HORIZON THAT YOU'RE THINKING OF.
FOLKS, I'LL PROVE TO YOU IN MY OPENING STATEMENT THAT THAT
IS A GROSS, GROSS EXAGGERATION AND AN INSULT TO YOUR

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INTELLIGENCE.

AS APPLE TOLD YOU, THE IPHONE WAS INNOVATIVE BACK IN 2007.

IT WAS THE INVENTION OF THE YEAR ALL THOSE YEARS AGO BACK IN

2007.

BUT THIS CASE IS REALLY NOT ABOUT THAT IPHONE OR ANY

IPHONES THAT COME AFTER IT.

INSTRUCTED YOU, I'M SURE IT WENT PAST YOU BECAUSE IT WAS SO

QUICK, THE PRELIMINARY INSTRUCTIONS AND MR. MCELHINNY

ACKNOWLEDGED IT, APPLE ADMITS THAT THREE OF THE FIVE PATENT

CLAIMS THAT IT IS SUING ON WERE NOT IN THAT IPHONE AND HAVE

NEVER BEEN IN ANY IPHONE SINCE.

VALUABLE ENOUGH TO EVEN USE.

APPLE ADMITS, THE JUDGE HAS

APPLE DOESN'T CONSIDER IT

THERE'S A FOURTH ONE, SLIDE TO UNLOCK THAT IN THEIR LATEST

PRODUCTS OPERATING SYSTEM, IOS 7, THEY'VE ABANDONED ALSO.

WE'LL PROVE THAT TO YOU AS WELL.

16
17
18

THIS CASE REALLY IS NOT -- ALSO IT'S NOT ABOUT SAMSUNG
COPYING APPLE.
THE FEATURES THAT APPLE ACCUSES IN THIS CASE ARE ALL

SOFTWARE FEATURES, SOFTWARE THAT RUNS ON THE SMARTPHONES AND

TABLETS OF MANY, MANY COMPANIES IN THE WORLD.

APPLE AGREES, APPLE AGREES THAT THAT SOFTWARE AND THOSE

FEATURES WERE PUT ON THAT SOFTWARE -- OR THOSE FEATURES WERE

PUT IN THAT SOFTWARE THAT'S USED BY MANY DIFFERENT COMPANIES BY

ENGINEERS, SOFTWARE ENGINEERS AT ANOTHER COMPANY, NOT BY

SAMSUNG.

AND I'M NOT POINTING THE FINGER AS THEY'VE SAID.

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WE'LL PROVE TO YOU THAT, IN FACT, THE ENGINEERS AT THAT

OTHER COMPANY DID INDEPENDENTLY DEVELOP THOSE SOFTWARE

FEATURES, AND THEY DID NOT COPY APPLE.

LET ME SHOW YOU WHAT I MEAN.

THIS IS ONE OF THE PHONES

THAT'S ACCUSED IN THIS CASE.

CALLED THE SAMSUNG GALAXY NEXUS.

EXHIBIT 29K FOR THE RECORD.

LITTLE BIT MORE THAN TWO YEARS AGO.

IT'S A SAMSUNG PHONE.

IT'S

YOU CAN SEE THAT IT'S JOINT

THIS CAME OUT IN DECEMBER 2011, A

SAMSUNG ENGINEERED ALL THE HARDWARE ON THIS PHONE, EVERY

BIT OF IT, AND IT OFFERS, THIS PHONE OFFERS CONSUMER,

SMARTPHONE USERS, MANY THINGS THAT THE IPHONE DOESN'T JUST IN

TERMS NOW OF THE HARDWARE.

13
14
15

IT HAS A -- YOU CAN'T SEE IT VERY WELL, BUT IT HAS KIND OF
A CURVED SHAPE TO IT.

IT FITS VERY WELL IN THE HAND.

IT HAS A 4.65 INCH SCREEN, WHICH IS LARGE -- A THIRD

LARGER THAN, YOU KNOW, THE SAMSUNG -- THE IPHONE SCREEN WAS AT

THE TIME THIS CAME OUT.

IPHONE TO THIS DAY.

IT'S LARGER THAN ANY SCREEN ON ANY

IT HAS A REALLY, A HIGH DEFINITION, VERY, VERY CLEAR

SCREEN, A SUPER AMOLED SCREEN WHICH IS CLEAR.

THINGS BETTER IN BRIGHT LIGHT.

YOU CAN SEE

IT'S GOT A BATTERY IN IT THAT'S SWAPPABLE.

EXTRA BATTERY AND SWAP IT OUT WHENEVER YOU WANT.

HAVE TO TAKE YOUR PHONE BACK TO THE STORE TO REPLACE THE

BATTERY.

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YOU CAN BUY AN
YOU DON'T

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IT HAS SOMETHING CALLED NEAR FIELD COMMUNICATIONS, REALLY

COOL.

TRANSFER FILES, INFORMATION, DATA, PHOTO FILES.

WITH A COMPATIBLE PHONE, YOU CAN CLICK THEM TOGETHER AND

IT USES THE VERY HIGH SPEED FOR 4G LTE NETWORK, WHICH

WASN'T INTRODUCED ON THE IPHONE UNTIL MUCH TIME LATER.

CAME OUT WITH A FASTER NETWORK SPEED.

THE TRUTH OF THE MATTER IS, PEOPLE AT SAMSUNG ARE VERY

PROUD OF THE HARDWARE THAT THEY DEVELOPED.

SMARTPHONES AND HARDWARE IN THE WORLD.

10
11
12
13
14
15
16

THIS

THEY BUILT THE BEST

AND TECHNOLOGY REVIEWERS NOTICED WHAT SAMSUNG HAS ACHIEVED
WITH ITS PHONES.
HERE'S ONE UP HERE FROM "LAPTOP MAGAZINE."
WHAT IT SAYS.

YOU CAN SEE

THE BEST HD SCREEN ON THE MARKET.

"WIRED MAGAZINE," THE BEST ANDROID PHONE TO DATE.

THE

TRUEST REPRESENTATION OF ANDROID.
YOU'RE GOING TO LEARN IN THIS CASE THAT WHAT -- WHY DO

PEOPLE BUY PHONES?

THEY WANT YOU TO BELIEVE WHAT THEY ARE

TRYING TO SELL YOU IN THIS CASE IS THAT PEOPLE BUY PHONES

BECAUSE OF FIVE, YES, SMALL SOFTWARE FEATURES, PARTICULAR WAYS

OF ACCOMPLISHING THINGS LIKE SYNCING AND SEARCHING.

THAT'S WHAT THEY WANT YOU TO BELIEVE.

AND THAT BECAUSE OF THOSE FIVE SOFTWARE FEATURES, PEOPLE

BOUGHT A LOT MORE SAMSUNG PHONES, AND INSTEAD, IF SAMSUNG

DIDN'T HAVE THEM, PEOPLE WOULD HAVE BOUGHT A LOT MORE IPHONES.

BUT YOU'LL LEARN THAT IT IS THESE FEATURES THAT I SHOWED

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YOU ON THIS PHONE, HARDWARE FEATURES, AND OTHERS LIKE IT THAT

CAUSED CONSUMERS TO BUY THIS PRODUCT, THINGS LIKE A HIGH

QUALITY SCREEN, A HIGH QUALITY CAMERA, CONNECTIVITY, BATTERY

LIFE, WEIGHT, SHAPE, THINGS LIKE THAT.

THESE ARE THE REASONS, NOT THESE PARTICULAR VARIANTS IN

BACKGROUND OF SOFTWARE FEATURES THAT YOU CAN'T EVEN SEE, THE

THINGS THAT THEY ARE SUING SAMSUNG OVER.

8
9

NOW, ALL OF THIS HARDWARE IN THE NEXUS WAS CREATED BY
SAMSUNG.

EVERY BIT OF IT.

AND THEY'RE SUING OVER THIS.

IT DOES NOT ACCUSE -- APPLE DOES NOT ACCUSE ANY OF THAT

HARDWARE OF INFRINGING ANY OF ITS RIGHTS, AND MR. MCELHINNY

SHOWED YOU A SCREEN OF A NUMBER OF SAMSUNG PRODUCTS.

THOSE ARE ACCUSED.

THAT YOU SEE THERE.

INFRINGING ANY OF THE RIGHTS.

NONE OF THAT HARDWARE.

NONE OF

NONE OF THE SHAPES

NONE OF THOSE ARE ACCUSED IN THIS CASE OF

YOU MIGHT BE SURPRISED TO LEARN ONE UNDISPUTED FACT.

NOT

A SINGLE SOFTWARE FEATURE IN THIS NEXUS PHONE, WHICH I'M

HOLDING IN MY HAND, WAS CONCEIVED BY SAMSUNG, WAS DEVELOPED BY

SAMSUNG, OR WAS CODED BY SAMSUNG.

FEATURES ON THIS PHONE WHICH BRINGS US ALL HERE TODAY WAS

DESIGNED, MUCH LESS COPIED, BY ANYONE AT SAMSUNG.

NOT ONE OF THE ACCUSED

THE ACCUSED FEATURES ON THIS PHONE WERE DEVELOPED

INDEPENDENTLY BY SOME OF THE MOST SOPHISTICATED AND CREATIVE

MINDS IN THE SMARTPHONE INDUSTRY, THE SOFTWARE ENGINEERS AT

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GOOGLE UP THE ROAD IN MOUNTAIN VIEW, WHO CREATED THE ANDROID

OPERATING SYSTEM USED BY ALL SMARTPHONE ENGINEERS, MEMBERS OF

THE JURY, EXCEPT FOR APPLE, USED BY ALL HARDWARE COMPANIES, ALL

HANDSET MANUFACTURERS, EXCEPT FOR APPLE.

P.C. MAKERS USE THE MICROSOFT WINDOWS OPERATING SYSTEM, ALMOST

ALL, EVERYBODY BUT APPLE, IN THE SMARTPHONE INDUSTRY USES

ANDROID SOFTWARE, NOT JUST SAMSUNG.

8
9

IN THE WAY THAT MOST

AND IN THIS TRIAL, YOU WILL HEAR FROM THOSE GOOGLE
ENGINEERS.

AND MR. MCELHINNY SAID WE'RE GOING TO POINT THE

FINGER AT GOOGLE.

GOOGLE.

WILL HEAR FROM IN THIS TRIAL, WILL EXPLAIN TO YOU HOW THEY

INDEPENDENTLY DEVELOPED THIS SOFTWARE WITHOUT COPYING.

WE'RE NOT GOING TO POINT THE FINGER AT

GOOGLE DIDN'T COPY.

THOSE GOOGLE ENGINEERS, WHO YOU

THIS CASE IS REALLY NOT ABOUT THESE FIVE MINOR SOFTWARE

FEATURES AND PATENT CLAIMS THAT APPLE IS ASSERTING.

IT'S NOT

ABOUT THEM CAUSING PEOPLE NOT TO BUY IPHONES AND INSTEAD TO BUY

SAMSUNG PHONES.

IPHONE DOESN'T EVEN USE FOUR OUT OF THESE FIVE FEATURES.

SMARTPHONES INVOLVE HUNDREDS OF DIFFERENT FEATURES, SOME

20
21

OF THEM BIG, SOME OF THEM SMALL.
YOUR COMMON SENSE -- AND SEVERAL EXPERTS WHO WILL COME IN

AND TESTIFY AND WILL TELL YOU THAT CONSUMERS DON'T CHOOSE ONE

PHONE OVER ANOTHER BECAUSE OF THE PARTICULAR WAY WORD

CORRECTION SUGGESTIONS ARE PRESENTED ON THE SCREEN, WHICH IS

WHAT THEIR PATENT COVERS.

THERE'S A LOT OF DIFFERENT WAYS TO

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DO THAT.
THEY DON'T BUY A PHONE BECAUSE OF THE PARTICULAR WAY THAT

THE SOFTWARE SYNCS IN BACKGROUND.

DO THAT.

5
6
7

THERE'S MORE THAN ONE WAY TO

OR THE PARTICULAR DESIGN OF THE UNLOCK SCREEN.

THAT'S NOT

WHY CONSUMERS BUY PRODUCTS.
APPLE'S CLAIMS ARE ALL THAT NARROW.

FOLKS.

RESEARCH THAT THEY DO.

APPLE DOES THIS, TOO,

WE'LL SHOW YOU, WE WILL SHOW YOU APPLE'S REAL WORLD
THEY KNOW WHY PEOPLE BUY PHONES.

GO OUT AND THEY DO RESEARCH.

REAL WORLD RESEARCH THAT THEY DO FOR BUSINESS EVERY SINGLE, YOU

KNOW, EVERY DAY, OR HOWEVER OFTEN THEY DO IT, NOT FOR COURT

CASES, NOT FOR HIRED EXPERTS, NOT FOR LAWYERS, BUT WHAT THEY DO

IN THEIR BUSINESS SHOWS THAT PEOPLE DON'T BUY -- THEY DON'T

EVEN ASK SMARTPHONE PURCHASERS, IPHONE PURCHASERS, DID YOU BUY

IT FOR THIS FEATURE OR DID YOU BUY IT FOR THAT FEATURE?

KNOW THEY DON'T.

SHOW THAT TO YOU FROM APPLE'S OWN SURVEYS.

THEY SURVEY THEM.

THEY

AND THEIR OWN

THEY

THEY KNOW THAT'S NOT WHAT MATTERS, AND WE'LL

YET APPLE IS HERE LITERALLY SEEKING BILLIONS OF DOLLARS

FOR PARTICULAR SOFTWARE CONFIGURATIONS THAT ARE UNDER THE HOOD

IN THE PHONE THAT MOST CONSUMERS ARE NOT EVEN AWARE THAT IT'S

THERE, AND THEY WANT TO TAKE THAT BIG NUMBER NOT ONLY TO THE

BANK, NOT ONLY TO THE BANK, BUT TO GET AN ORDER SAYING THAT

NONE OF THESE PHONES CAN BE SOLD IN THE UNITED STATES ANYMORE.

IT'S AN ATTACK ON ANDROID.

IT'S AN ATTACK, IT'S AN ATTACK --

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MR. MCELHINNY:

OBJECTION, YOUR HONOR.

ARGUMENT.

THE COURT:

OVERRULED.

MR. QUINN:

IT'S THE TRUTH.

THIS IS

OVERRULED.
IT'S AN ATTACK AN

ANDROID, AND THAT'S WHAT THIS CASE IS.

EVEN THOUGH MOST OF THESE PATENT CLAIMS ARE NOT VALUABLE

ENOUGH FOR APPLE TO USE ITSELF, IT CLAIMS THAT ANDROID USES

THEM AND THAT THIS CAUSES CUSTOMERS TO BUY SAMSUNG PHONES.

IF SAMSUNG DIDN'T HAVE THESE FEATURES, THEY'D SELL MORE APPLE

AND

PHONES EVEN THOUGH A CUSTOMER LOOKING FOR FOUR OF FIVE OF THESE

FEATURES COULDN'T FIND THEM IN AN APPLE PHONE, THEY DON'T USE

THEM.

AS TO THREE OF THEM, THAT'S UNDISPUTED.

SLIDE TO UNLOCK, WE'LL PROVE THAT TO YOU.

THE ONLY WAY THAT APPLE CAN MAKE THIS CLAIM FOR BILLIONS

OF DOLLARS IS -- WHICH CONFLICTS WITH ALL THE REAL WORLD

EVIDENCE YOU'RE GOING TO SEE -- IS TO COME UP WITH A STUDY

WHICH THEY DID SPECIALLY FOR YOU BY THE MAN WHOSE NAME WAS

INTRODUCED TO YOU, DR. JOHN HAUSER.

SOME TIME TALKING WITH YOU THIS AFTERNOON ABOUT DR. HAUSER AND

THE SURVEY, AND I WILL SHOW YOU THAT STUDY.

AND I'M GOING TO SPEND

WHAT THIS CASE IS REALLY ABOUT IS APPLE TRYING TO LIMIT

CONSUMER CHOICE AND TO GAIN AN UNFAIR ADVANTAGE OVER ITS ONE

MAJOR COMPETITOR, GOOGLE'S ANDROID, A COMPETITOR THAT HAS

PASSED APPLE IN SOME RESPECTS.

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DON'T GET ME WRONG, APPLE IS AN AMAZINGLY INNOVATIVE
COMPANY.
BUT IN SOME RESPECTS YOU'LL SEE GOOGLE'S ANDROID HAS
PASSED APPLE.
AND IN THIS CASE, APPLE HAS SUED -- THIS IS WHAT'S GOING

ON HERE -- THE BIGGEST USER OF GOOGLE'S ANDROID SOFTWARE AND

THE MOST SUCCESSFUL MANUFACTURER OF ANDROID PHONES, SAMSUNG, TO

TRY TO PREVENT IT FROM SELLING PHONES WITH THAT LEADING ANDROID

SOFTWARE AND TO GET THE PROFITS THAT SAMSUNG HAS EARNED SELLING

10
11
12
13

ANDROID PHONES.
IT IS TRYING TO GAIN FROM YOU IN THIS COURTROOM WHAT IT
HAS LOST IN THE MARKETPLACE.
YOUR HONOR, WOULD THIS BE A GOOD PLACE TO BREAK?

14
15

THE COURT:
LUNCH.

IT'S 12:01.

LET'S GO AHEAD AND BREAK FOR

WE'LL SEE EVERYONE BACK AT 1:00 O'CLOCK.

PLEASE DON'T RESEARCH OR DISCUSS THE CASE.

THANK YOU FOR YOUR PATIENCE AND YOUR SERVICE.

(JURY OUT AT 12:02 P.M.)

THE COURT:

THE JURORS HAVE LEFT THE COURTROOM.

THANK YOU.

(THE LUNCH RECESS WAS TAKEN FROM 12:02 P.M. TO 12:59 P.M.)

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AFTERNOON SESSION
(JURY OUT AT 12:59 P.M.)

THE COURT:

WELCOME.

TAKE A SEAT, PLEASE.

UNDERSTAND THERE'S A SEALING ISSUE.

AN ISSUE?

MR. MCELHINNY:

THE COURT:

MR. SELWYN:

IS THAT RIGHT?

I
IS THERE

THERE IS, YOUR HONOR.

OH, OKAY.
GOOD AFTERNOON, YOUR HONOR.

WITH THE

FIRST WITNESS THIS AFTERNOON --

THE COURT:

MR. SELWYN:

YES.
-- MR. SCHILLER, SAMSUNG, WE UNDERSTAND,

EXPECTS TO USE CERTAIN CONFIDENTIAL BUSINESS INFORMATION OF

APPLE THAT DISCUSSES FUTURE BUSINESS STRATEGY, CAPACITY

INFORMATION, FINANCIAL INFORMATION.

OUR SUGGESTION TO SAMSUNG WAS THAT WE HANDLE THOSE

DOCUMENTS MUCH THE WAY WE'VE HANDLED SOURCE CODE IN THE PAST,

WHICH IS SHOW IT TO THE JURY AND COUNSEL, NOT PUT IT UP ON THE

SCREEN, AND HAVE COUNSEL REFER TO LINES OF THE DOCUMENT RATHER

THAN READING ALOUD THE DOCUMENTS TO THE PUBLIC.

20
21
22

THAT WOULD BE ACCEPTABLE TO APPLE, THAT'S WHAT WE'VE DONE
IN THE PAST, AND THEN APPLE WOULD MOVE TO SEAL THE DOCUMENT.
WE UNDERSTAND THAT THERE ARE PORTIONS OF CERTAIN DOCUMENTS

THAT SAMSUNG WOULD LIKE TO READ ALOUD THAT RELATE TO

CONFIDENTIAL BUSINESS INFORMATION OF APPLE'S CONCERNING FUTURE

STRATEGY.

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IF SAMSUNG INTENDS TO DO THAT, THAT'S AN ISSUE FOR US.

THESE ARE DOCUMENTS THAT SAMSUNG HAS NEVER SEEN BEFORE.

SAMSUNG IS NOT ENTITLED TO SEE, VERY SENSITIVE INFORMATION

ABOUT APPLE'S ROADMAP AND FUTURE PRODUCT STRATEGY.

THE COURT:

ALL RIGHT.

SO YOUR REQUEST IS THAT WE,

WHAT, SEAL THE COURTROOM?

WE'VE USED IN THE PAST AND I DON'T SEE WHY A PARTICULAR PIECE

OF INFORMATION HAS GOT TO BE STATED OUT LOUD.

MOVE ALL THESE PEOPLE OUT TO THE HALLWAY.

MR. SELWYN:

I WOULD LIKE TO USE THE PROCEDURE

I DON'T WANT TO

THAT IS OUR STRONG PREFERENCE AS WELL,

TO DO IT AS WE'VE DONE IN THE PAST, REFERRING THE WITNESS TO

PARTICULAR PORTIONS OF THE DOCUMENT, ASKING THE QUESTIONS ABOUT

THOSE PORTIONS, BUT NOT READING IT ALOUD AND NOT PUTTING IT UP

ON THE SCREEN.

MR. PRICE:

THE REASON, YOUR HONOR, THE REASON THEY

WANT TO DO THAT IS SO THAT WE CAN'T DO AN EFFECTIVE

CROSS-EXAMINATION.

THESE DOCUMENTS DON'T HAVE ANYTHING TO DO --

THE COURT:

JUST LET ME SEE THE DOCUMENTS.

MR. PRICE:

SURE.

THE COURT:

PLEASE.

MR. PRICE:

I'LL GIVE YOU AN EXAMPLE.

YOU EXHIBIT 411.

SHOW ANY OF THE NUMBERS IN THE DOCUMENT.

IT'S AN EXAMPLE.

MR. SELWYN:

I'LL SHOW TO

THEY'RE NOT GOING TO SAY OR

YOUR HONOR, 411 IS AN IPHONE REVIEW FROM

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THE SPRING OF LAST YEAR.

'678 AND -9, THERE'S DISCUSSION ABOUT CARRIER SUBSIDIES,

SPECIFIC CARRIER SUBSIDIES.

IF YOU LOOK AT, BEGINNING AT PAGES

WE GET INTO FROM 13, 14, AND THEN MOST OF THE REMAINDER OF

THE DOCUMENT, 21, 22, 18 AND 19, 26 THROUGH 32, 36 THROUGH 39

AS FINANCIAL FORECASTS, DISCUSSIONS ABOUT SELLING --

7
8
9

THE COURT:

OKAY.

I'M SORRY TO INTERRUPT YOU.

HAVE A JURY WAITING.
SO JUST GIVE ME THE PAGE NUMBERS THAT ARE IN DISPUTE, AND

I'M GOING TO GIVE YOU A RULING, NOT RIGHT NOW, AND WE'RE GOING

TO GO AHEAD WITH THIS OPENING STATEMENT.

OKAY.

SO WHAT ARE THE NUMBERS IN DISPUTE?

I'LL TAKE A

LOOK, AND I'LL LET YOU KNOW WHAT MY RULING IS BEFORE

MR. SCHILLER TESTIFIES.

MR. SELWYN:

THE COURT:

WHAT ARE THE PAGE NUMBERS THAT ARE IN

MR. PRICE:

I CAN MAKE IT EASIER BY TELLING YOU THE

17
18
19

THANK YOU.

DISPUTE?

PAGES I WOULD USE.

THE COURT:

OKAY.

MR. PRICE:

IT'S IN A DOCUMENT LIKE THIS, THE VERY

22
23

SAME INFORMATION.
THE COURT:

NO, NO.

I WANT TO SEE THE DOCUMENT YOU

WANT TO USE.

I WANT TO SEE THE PAGES THAT ARE IN DISPUTE.

DON'T WANT IT'S LIKE THIS KIND OF REPRESENTATION.

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MR. PRICE:

413, 413 THEN, YOUR HONOR.

THE COURT:

413.

MR. PRICE:

YES, YOUR HONOR, DX 413.

THE COURT:

AND ANY PARTICULAR PAGES, OR THE WHOLE

MR. PRICE:

YES.

THE COURT:

OKAY.

MR. PRICE:

PAGE 14.

THE COURT:

ALL RIGHT.

YOU MEAN DX 413?

THING.
IN PARTICULAR, YOUR HONOR, PAGE 8.

ALLOW YOU TO DO THIS OPEN.

ALL RIGHT.

WHAT ELSE?

PAGE 8, I'M NOT GOING TO

THESE ARE PROJECTIONS FOR FUTURE.

MR. PRICE:

NO.

THE COURT:

WHEN IS YOUR FISCAL YEAR?

MR. SELWYN:

THE COURT:

MR. SELWYN:

THE COURT:

OCTOBER IS THE END OF THE FISCAL YEAR.
SO IT RUNS FROM NOVEMBER TO OCTOBER?
CORRECT.
SO ARE YOU IN FISCAL YEAR 2014 OR 2013?

OR WHAT'S YOUR CURRENT FISCAL YEAR RIGHT NOW?

MR. SELWYN:

THE COURT:

OKAY.

MR. PRICE:

PAGE 14.

THE COURT:

OKAY.

MR. PRICE:

AND PAGE 46.

THE COURT:

OKAY.

WHEN DOES

APPLE'S FISCAL YEAR BEGIN AND END?

THESE ARE CURRENT, YOUR HONOR.

2014.
SO YOU WANT PAGE 8.

IS THAT IT?

WHAT ELSE?

IS THERE ANY OTHER

DISPUTE?

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MR. PRICE:

MR. SELWYN:

ONE MOMENT, YOUR HONOR.
YOUR HONOR, THE PARTIES JUST -- WE MET

AND CONFERRED FOR A LENGTHY AMOUNT OF TIME ABOUT AN ENTIRELY

DIFFERENT DOCUMENT, WHICH IS THE ONE THAT WE HAD BEEN TOLD THAT

THEY WERE GOING TO USE.

SO THESE THREE PAGES ARE NEW TO US AND HAVEN'T BEEN

DISCUSSED SPECIFICALLY BEFORE.

MR. PRICE:

THEY'RE IN THE OTHER DOCUMENT AS WELL.

THE COURT:

OKAY.

WHAT HAPPENED?

I RULED ON THE

OBJECTIONS THAT YOU ALL FILED YESTERDAY DURING LUNCH AND LAST

NIGHT.

WAITING FOR AN OPENING STATEMENT?

SO WHY AM I GETTING HIT WITH THIS WHEN I HAVE A JURY

DID YOU CHANGE YOUR MIND --

MR. PRICE:

NO.

THE COURT:

-- AS TO WHAT EXHIBIT YOU WANTED TO USE?

MR. PRICE:

OH, NO, YOUR HONOR.

THESE WERE

DISCUSSED.

MR. SELWYN:

YOUR HONOR, WE'VE BEEN DISCUSSING THIS

FOR THREE DAYS AND TRYING TO GET SPECIFICITY ABOUT WHAT WILL BE

OFFERED.

THIS IS THE FIRST TIME WE'VE HEARD ABOUT THESE THREE PAGES

IN PARTICULAR, AND WE'VE BEEN ASKING TO UNDERSTAND WHAT PAGES

WOULD BE USED.

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25

WE WERE DISCUSSING BEFORE EXHIBIT 411.
RESOLVE THESE THREE PARTICULAR PAGES.

WE MAY BE ABLE TO

THIS IS THE FIRST TIME

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WE'RE HEARING ABOUT THESE.

THE COURT:

ALL RIGHT.

WITH AN OPENING STATEMENT.

LONGER.

WELL, WE'RE GOING FORWARD

I'M NOT HAVING THIS JURY WAIT ANY

SO WHY DON'T YOU MEET AND CONFER, AND LET ME KNOW IF YOU

STILL HAVE A PROBLEM.

THESE THREE DOCUMENTS.

OTHERWISE I'LL GIVE YOU MY RULING ON
OKAY.

MR. SELWYN:

THE COURT:

BUT I'M GOING TO KEEP THIS BINDER.

MR. PRICE:

THANK YOU, YOUR HONOR.

THE COURT:

AND IN THE FUTURE, I WANT YOUR SEALING

12
13
14

THANK YOU.

OBJECTIONS IN THE OBJECTIONS THAT YOU'RE FILING, OKAY?
SO WHEN YOU IDENTIFY AN EXHIBIT THAT YOU INTEND TO USE,
YOU NEED TO IDENTIFY THE PAGE NUMBERS, OKAY?

MR. PRICE:

I HEAR YOU, YOUR HONOR.

THE COURT:

ALL RIGHT.

(JURY IN AT 1:06 P.M.)

18
19
20

THANK YOU.

THE COURT:

ALL RIGHT.

WELCOME BACK.

SEAT.
MR. QUINN, IF YOU WOULD PLEASE CONTINUE.

MR. QUINN:

THANK YOU, YOUR HONOR.

THE COURT:

THE TIME IS NOW 1:07.

MR. QUINN:

THANK YOU, YOUR HONOR.

24
25

PLEASE TAKE A

GO AHEAD, PLEASE.

BEFORE LUNCH I SHOWED YOU THIS NEXUS PHONE, WHICH IS ONE
OF THE ACCUSED PHONES HERE.

AS I TOLD YOU, ALL THE HARDWARE IN

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HERE IS MADE BY SAMSUNG.

ANDROID.

NONE OF THE SOFTWARE.

IT'S PURE

THERE ARE SOME PHONES, SOME SAMSUNG PHONES WHERE THE

ANDROID SOFTWARE IS SLIGHTLY MODIFIED BY SAMSUNG WHEN WE GET IT

AND PUT IT IN THE PHONE.

BUT JUST SO YOU KNOW, APPLE'S POSITION IS THAT THOSE

MODIFICATIONS DON'T MAKE ANY DIFFERENCE, THAT THE MONEY IS OWED

ANYWAY.

SO THIS IS REALLY ABOUT APPLE VERSUS GOOGLE'S ANDROID, AND

I WANT TO TALK TO YOU A LITTLE BIT ABOUT THAT COMPETITION.

I'M GOING TO -- AND WHAT THE EVIDENCE IS GOING TO SHOW ABOUT

THAT COMPETITION AND ABOUT WHAT APPLE HAS CALLED IN ITS OWN

INTERNAL E-MAILS THE INNOVATOR'S DILEMMA.

AND

NOW, THE INNOVATOR'S DILEMMA IS ACTUALLY A PRETTY WELL

UNDERSTOOD CONCEPT IN ACADEMIC RESEARCH AND TECHNOLOGY.

INNOVATOR'S DILEMMA OCCURS WHEN, AND THESE ARE APPLE'S WORDS,

THEY'RE STEVE JOBS' WORDS, WHEN A MARKET LEADER HANGS ON TO AN

OLD PARADIGM FOR TOO LONG.

MARKET LEADER HANGS ON TO AN OLD PARADIGM FOR TOO LONG, IT

BECOMES VULNERABLE TO INNOVATION BY OTHERS.

THE

AND WHEN THAT HAPPENS, WHEN A

APPLE WAS AN INNOVATOR, BUT IN 2011, THERE WAS ANOTHER

COMPANY THAT GOT INTO THE SMARTPHONE WORLD, WHICH WAS ALSO VERY

INNOVATIVE, AND THAT'S GOOGLE.

WE ALL KNOW GOOGLE.

INTRODUCING GOOGLE TO YOU.

I DON'T NEED TO SPEND MUCH TIME
IT STARTED AS A SEARCH COMPANY

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HERE, TWO GUYS, STANFORD UNIVERSITY, IN A GARAGE.

OF YOU KNOW THE STORY.

I THINK MANY

IT STARTED OUT DOING SEARCH, BUT NOW SO MANY DIFFERENT

APPLICATIONS, HUNDREDS OF PEOPLE USE IT EVERY DAY, MAPS, GPS,

YOUTUBE, GOOGLE DOC, GOOGLE VOICE, GOOGLE NEWS.

DIFFERENT THINGS WHICH PEOPLE FIND VERY, VERY USEFUL IN THEIR

EVERY DAY LIVES.

8
9
10

LOTS OF

THEY HAVE THE FINEST SOFTWARE ENGINEERS IN THE WORLD.
SEEMS ON LINE THEY CAN DO JUST ABOUT ANYTHING.
TO COPY PEOPLE.

THEY DON'T NEED

THEY DON'T NEED TO COPY APPLE.

LET ME TELL YOU ABOUT THE ANDROID STORY AND HOW THE

DEVELOPMENT OF THE ANDROID OPERATING SYSTEM HAPPENED AT GOOGLE.

BACK IN 2005, TWO YEARS BEFORE THE IPHONE CAME OUT, EIGHT

PEOPLE WHO HAD EXPERIENCE DEVELOPING SMARTPHONES GOT TOGETHER,

THEY JOINED GOOGLE, AND SET OUT TO SOLVE A PROBLEM IN THE PHONE

INDUSTRY.

THE PROBLEM WAS THAT HISTORICALLY THE PHONE INDUSTRY HAD

BEEN VERY CLOSED.

MANUFACTURERS WHAT PHONES HAD TO DO, WHAT THEY HAD TO LOOK

LIKE.

CARRIERS BASICALLY TOLD HANDSET

AND ALL THE DIFFERENT HANDSET MANUFACTURERS, THE PHONE

MAKERS WERE MAKING THEIR OWN HARDWARE AND TRYING TO MAKE THEIR

OWN SOFTWARE AT THE SAME TIME, AND IT TURNS OUT THAT THE

HANDSET MANUFACTURERS WEREN'T THE BEST IN THE WORLD AT MAKING

CUTTING EDGE SOFTWARE.

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AND BY THE TIME THEIR SOFTWARE GOT TO MARKET, OFTEN THEY
WERE BEHIND.

SO THESE EIGHT PEOPLE WHO JOINED GOOGLE HAD THE IDEA THAT

WHAT THE INDUSTRY REALLY NEEDED WAS A SHARED, OPEN PLATFORM

THAT EVERYONE COULD USE AND CUSTOMIZE AND USE TO INNOVATE AND

IMPROVE.

AND THEY THOUGHT IT WOULD BE BEST IF THIS SOFTWARE, THIS

PLATFORM, WAS NOT CONTROLLED BY JUST ONE COMPANY.

INSTEAD,

THEY WANTED TO GIVE MANUFACTURERS, PHONE MANUFACTURERS,

APPLICATION DEVELOPERS, CARRIERS A PLATFORM WHICH THEY COULD

ALL USE, ADJUST, INNOVATE WITH, ADAPT TO THEIR OWN USES, DEEPLY

BRAND IT, AND TO GIVE THEM THE FREEDOM TO DO WITH THIS COMMON

PLATFORM WHAT THEY WANTED TO DO, OR WHAT THEY COULD DO.

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15

THE IDEA WAS TO CREATE THIS OPEN SOURCE PLATFORM, ANDROID,
AND GIVE IT AWAY.

THEY SPENT THREE YEARS BUILDING IT AT GOOGLE AND GAVE IT

AWAY.

ANYBODY CAN DOWNLOAD IT IF YOU GO TO SOURCE.ANDROID.COM,

AND PEOPLE IN THE INDUSTRY CAN DOWNLOAD THIS OPEN SOURCE

PLATFORM.

FROM ABOUT 2005 TO 2008, THIS GROUP WORKED TOGETHER

BUILDING ANDROID, WORKING LIKE KIND OF A STARTUP INSIDE A MUCH

BIGGER COMPANY.

CARRIERS TO SEE IF THEY WOULD BE INTERESTED IN THIS OPEN SOURCE

PLATFORM, AND IT TURNED OUT THEY WERE.

THEY CONTACTED MANUFACTURERS, THEY CONTACTED

AND SINCE THEN, YOU KNOW, IT CAME TO MARKET.

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EXTREMELY SUCCESSFUL.
IN ADDITION TO BEING ON HUNDREDS OF MILLIONS OF PHONES AND

TABLETS, ANDROID IS NOW IN THE DASHBOARD OF SOME CARS.

YOU KNOW, THE AMAZON KINDLE RUNS ON ANDROID.

DOESN'T KNOW ALL THE DEVICES IN THE WORLD THAT RUN ON ANDROID.

IT'S BEEN A HUGE SUCCESS.

IT'S --

EVEN GOOGLE

AND THAT SUCCESS IS A TESTAMENT TO THE HARD WORK AND THE

INGENUITY OF THE ENGINEERS AT GOOGLE AND THE ANDROID

MANUFACTURERS.

IT IS CLEAR THAT GOOGLE'S VISION WAS RIGHT.

INNOVATION HAPPENS WHEN EVERYONE IS ABLE TO CONTRIBUTE THEIR

OWN IDEAS.

AND GOOGLE IS A HIGHLY INNOVATIVE COMPANY.

THEY'RE

PERFECTLY CAPABLE OF DEVELOPING THEIR OWN SEARCH FEATURE ON A

PHONE WITHOUT COPYING APPLE.

BUT THE END OF 2010, THE TOP OF GOOGLE'S MANAGEMENT,

STEVE JOBS HIMSELF, RECOGNIZED THAT APPLE ITSELF FACED THE

INNOVATOR'S DILEMMA AND THAT GOOGLE INNOVATION WAS DISRUPTING

THE SMARTPHONE INDUSTRY THAT APPLE HAD DOMINATED SINCE 2007.

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25

IN RESPONSE TO THIS, STEVE JOBS DECLARED, IN 2011, THAT
APPLE WOULD START A HOLY WAR, A HOLY WAR ON GOOGLE.
APPLE KNEW THAT GOOGLE WAS FURTHER ALONG IN SOME IMPORTANT
TECHNOLOGY SO -MR. MCELHINNY:
TO OBJECT.

EXCUSE ME, YOUR HONOR.

AGAIN, I HAVE

THERE'S MOTIONS IN LIMINE ON THIS.

THE COURT:

THERE WAS A MOTION IN LIMINE THAT THAT

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WOULD NOT BE PERMITTED, SO THAT'S STRICKEN.

MR. QUINN:

THAT WAS --

THE COURT:

GO AHEAD, PLEASE.

MR. QUINN:

THAT'S NOT MY UNDERSTANDING, YOUR HONOR.

THE OBJECTIONS TO THIS WERE OVERRULED.

EXHIBIT, DEFENSE EXHIBIT 489.

THE COURT:

GO AHEAD, PLEASE, WITH THE REST OF YOUR

MR. QUINN:

SO MR. JOBS DRAFTED THIS AGENDA IN

THIS DOCUMENT.

IT'S

OPENING.

9
10

OCTOBER 2010 FOR APPLE'S ANNUAL RETREAT OF THE TOP 100

EXECUTIVES AT APPLE WHERE THEY GET TOGETHER AND THEY TALK

AMONGST THEMSELVES ABOUT WHAT IS MOST IMPORTANT TO THE COMPANY.

WE HAVE STEVE JOBS'S AGENDA.

AUTHORITATIVE ABOUT WHAT MATTERS TO APPLE.

HERE IS THAT AGENDA.

THERE'S NOTHING MORE

IT'S IN DEFENSE EXHIBIT 489, AND YOU

CAN SEE UP AT THE TOP HERE -- I DON'T KNOW IF WE CAN ENLARGE

THIS.

18
19
20

STEVE JOBS, OCTOBER 2010, IT'S HIS CUT FOR THE AGENDA.

AND THEN IF WE GO FORWARD, GO DOWN BELOW, WHAT DOES HE
WRITE?

"2011 HOLY WAR WITH GOOGLE."

BELOW THAT.

"APPLE IS IN DANGER OF HANGING ON TO THE OLD

PARADIGM TOO LONG (INNOVATOR'S DILEMMA) GOOGLE AND MICROSOFT

ARE FURTHER ALONG ON THE TECHNOLOGY.

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24
25

"TIE ALL OUR PRODUCTS TOGETHER SO WE CAN FURTHER LOCK
CUSTOMERS INTO OUR ECOSYSTEM."
AND THEN IF WE CAN GO FORWARD, COMPARISONS WITH GOOGLE,

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SAMSUNG.
FORWARD.

CATCH UP TO ANDROID WHERE WE ARE BEHIND,

NOTIFICATIONS, TETHERING, SPEECH.
AND THEN NEXT, "STRATEGY:

CATCH UP TO GOOGLE CLOUD

SERVICES.

WAY AHEAD OF APPLE IN CLOUD SERVICES FOR CONTACTS, CALENDARS,

AND MAIL."

8
9

ANDROID DEEPLY INTEGRATES GOOGLE CLOUD SERVICES.

DON'T HAVE TIME TO GO THROUGH THE COMPLETE DOCUMENT NOW,
BUT THIS WILL COME INTO EVIDENCE.

YOU WILL HAVE THIS DOCUMENT.

A HOLY WAR ON ANDROID.

FROM APPLE'S POINT OF VIEW, GOOGLE'S ANDROID WAS TOO

12
13

SUCCESSFUL.

THAT WAS APPLE'S STRATEGY.

PEOPLE WERE BUYING TOO MANY ANDROID PHONES.

GOOGLE HAD ALWAYS BEEN A CLOUD COMPANY, AND ITS CLOUD

TECHNOLOGY, WHICH AMONG OTHER THINGS, ENABLED PEOPLE TO

WIRELESSLY SYNC, SYNC THEIR CALENDARS, CONTACTS, AND MAIL AND

SAVE THEIR FILES ON A CLOUD SERVER WAS FAR AHEAD OF APPLE'S AND

APPLE'S MISSION FOR 2011 WAS TO CATCH UP AND GET AHEAD OF

GOOGLE AND ANDROID, AND THIS LAWSUIT IS PART OF THAT STRATEGY.

SAMSUNG -- LET ME TURN NOW TO TALK ABOUT SAMSUNG.

SAMSUNG, AS MR. MCELHINNY SAYS, HE'S RIGHT, HE'S BEEN A

MOBILE PHONE INDUSTRY LEADER SINCE THE EARLY 1990S, LONG BEFORE

APPLE LAUNCHED THE IPHONE JUST SEVEN YEARS AGO.

BEEN MANY FIRSTS THAT SAMSUNG HAS CONTRIBUTED TO THE CELL PHONE

WORLD.

IF WE COULD LOOK AT SLIDE 14.

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YOU CAN SEE SOME OF THEM UP THERE.

FIRST 3G PHONES, FIRST

3G WINDOWS SMARTPHONE, FIRST CAMERA PHONE, MORE 4G LTE PRODUCTS

IN THE YEAR BEFORE APPLE DID, RECOGNITION SOFTWARE, HIGH DEF

DISPLAYS.

SAMSUNG HAS CONTINUED THAT INNOVATION TO THIS DAY, OFFERED

LARGER SCREENS, PHONES THAT WORK WITH STYLUSES, AND PHONES THAT

CAN TRANSFER PHOTOS, VIDEOS AND OTHER DOCUMENTS JUST BY

CLICKING THE PHONES TOGETHER.

THE PATENT OFFICE HAS RECOGNIZED SAMSUNG'S HARD WORK, AND

I FIND IT VERY IRONIC THAT APPLE'S COUNSEL WOULD SAY THAT

SAMSUNG DOESN'T CARE ABOUT PATENTS.

LAST YEAR THE UNITED STATES PATENT AND TRADEMARK OFFICE

AWARDED SAMSUNG THE SECOND HIGHEST NUMBER OF PATENTS IN THE

WORLD OF ANY COMPANY IN THE WORLD.

CARES ABOUT PATENTS.

SAMSUNG

LET ME SHOW YOU ANOTHER PHONE, ANOTHER EXAMPLE OF ONE OF

SAMSUNG'S MOST INNOVATIVE PHONES.

APPLE IS SUING OVER HERE.

NUMBER 1 WAS IBM.

THIS IS THE GALAXY NOTE II.

IT'S ANOTHER PHONE THAT

THIS PHONE HAS -- IT WAS

RELEASED IN OCTOBER 2012.

SAYS WE WOULDN'T HAVE SOLD SO MANY OF THEM IF WE DIDN'T HAVE

THESE PARTICULAR VERSIONS OF THESE SOFTWARE FEATURES.

IT'S ONE OF THE PHONES THAT APPLE

THIS PHONE HAS JUST A TON OF UNIQUE FEATURES.

SOME OF

THEM UP ON THE SCREEN THERE, THE MULTI WINDOW BROWSING, THE

VERY HIGH SPEED PROCESSOR, TWO GIGABYTES OF MEMORY.

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MANY THINGS ON THIS PHONE THAT YOU CAN'T GET ON THE

IPHONE.

OF SMALL FEATURES THAT APPLE IS SUING OVER THAT CAUSED THESE

PEOPLE TO BUY THE PHONES.

SOME PEOPLE WANT THESE FEATURES.

IT'S NOT THESE KINDS

SAMSUNG AND APPLE'S HARDWARE WENT IN VERY DIFFERENT

DIRECTIONS IN 2013.

PRODUCTS UP THERE ON THE SCREENS, SOME COMPARISONS OF SOME OF

THE MORE RECENT PRODUCTS.

YOU CAN SEE A BIG DIFFERENCE IN THEIR

WE WILL PROVE TO YOU IN THIS CASE THAT IT'S THESE

FEATURES, THE KIND OF FEATURES I'M SHOWING YOU ON THE NEXUS, ON

THE GALAXY NOTE, THINGS LIKE LARGE SCREENS, REPLACEABLE

BATTERIES, VERY HIGH QUALITY CAMERA AND SPEED, USE OF STYLUSES,

THEY ARE THE KINDS OF THINGS THAT DISTINGUISH SAMSUNG PRODUCTS

AND CAUSE PEOPLE TO BUY THOSE PHONES.

THAT'S THE REASON WHY SAMSUNG IS THE LEADING MANUFACTURER

OF ANDROID POWERED PHONES.

ALL THE OTHER PHONES THAT USE THIS SAME OPEN SOURCE ANDROID

PLATFORM.

IT'S WHAT SETS SAMSUNG APART FROM

ANOTHER IMPORTANT REASON THAT SAMSUNG SELLS PHONES IS IT'S

BEEN ABLE TO DO SOME VERY SUCCESSFUL ADVERTISING AND

DEVELOPMENT OF ITS BRAND.

IN 2011 SAMSUNG HIRED A NEW U.S. MARKETING CHIEF, A MAN BY

THE NAME OF TODD PENDLETON.

AND THEY HIRED HIM FROM NIKE.

HE APPROACHED ADVERTISING FOR SAMSUNG IN KIND OF A VERY

DIFFERENT WAY.

AND

HE STARTED LOOKING AT SOCIAL MEDIA, TWITTER,

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FACEBOOK, WEBSITES, AND TRACKING WHAT PEOPLE WERE SAYING ABOUT

SAMSUNG'S PHONES.

AND THEN HE USED WHAT HE LEARNED FROM SOCIAL MEDIA TO

CREATE ADS, AND THEY SOUNDED REAL TO PEOPLE BECAUSE THEY'RE NOT

ADS THAT WERE WRITTEN BY AD EXECUTIVES, BUT ADS, THINGS THAT

PEOPLE WERE, REAL PEOPLE WERE SAYING ABOUT THEMSELVES AND ABOUT

REAL PHONES.

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9

AND AROUND THE TIME THAT SAMSUNG WAS DOING THAT AND
CHANGING ITS SHIFT AND ITS APPROACH TO ADVERTISING, THERE WAS

AN ARTICLE THAT CAME OUT IN THE "WALL STREET JOURNAL,"

OCTOBER 5, 2011, ABOUT THE LAUNCH OF THE IPHONE 4S.

AND BASICALLY THE GIST OF THE ARTICLE WAS THAT THE IPHONE

4S WAS A REALLY GOOD PHONE, BUT IT WAS MORE, AS THE ARTICLE

SAID, MORE FIZZLE THAN POP.

AND IN THE MIDDLE OF THIS ARTICLE WAS A BOX, AND THE BOX

COMPARED THE IPHONE 4S, APPLE'S NEW PHONE, WITH THE SAMSUNG

GALAXY S II.

THE TWO OF THEM WERE COMPARED FEATURE BY FEATURE.

AND IN THIS BOX, IN THE "WALL STREET JOURNAL,"

AND FROM THAT COMPARISON, THE UPSHOT WAS PRETTY CLEAR THAT

ALTHOUGH THE IPHONE 4S WAS A VERY FINE PHONE, THE SAMSUNG PHONE

WAS ACTUALLY BETTER.

AND TODD PENDLETON, THE NEW HEAD OF MARKETING FOR SAMSUNG,

SEIZED ON THIS TO START A NEW ADVERTISING CAMPAIGN, THE NEXT

BIG THING IS ALREADY HERE.

AND THIS ADVERTISING CAMPAIGN USED THE VOICE OF THE

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CONSUMER, PRESENTED IN KIND OF AN AMUSING WAY, AND THIS THEME

OF THE NEXT BIG THING IS ALREADY HERE TO CREATE A DISTINCTIVE

BRAND PERSONALITY FOR SAMSUNG, AND IT CAUGHT ON, AND IT WAS

POWERFUL.

SUCCESSFUL IN SELLING PHONES.

AND THAT'S ANOTHER REASON SAMSUNG HAS BEEN VERY

AND SAMSUNG'S BRAND BECAME AS STRONG AS APPLE'S.

HERE'S

AN INTERNAL DOCUMENT FROM APPLE SHOWING SOME RESEARCH RESULTS.

YOU CAN SEE THIS IS AN APPLE DOCUMENT -- AS MR. MCELHINNY SAID,

WE EXCHANGED DOCUMENTS IN DISCOVERY -- AND THIS IS WHAT

APPLE -- IT SAYS "SAMSUNG'S BRAND IMPRESSION IS JUST AS STRONG

AS APPLE'S IN THE U.S.," AND HERE YOU SEE APPLE HERE AND

SAMSUNG HERE.

13
14

SO THIS NEW, EDGY MARKETING STRATEGY WAS CLEARLY PAYING
OFF AND, FRANKLY, IT DROVE APPLE CRAZY.

WE WILL SHOW YOU INTERNAL APPLE DOCUMENTS, DOCUMENTS THAT

HAVEN'T BEEN MADE PUBLIC BEFORE, DOCUMENTS THAT YOU WILL BE THE

FIRST TO SEE THAT SHOW HOW APPLE WAS REALLY CONCERNED ABOUT THE

COMPETITION IT WAS GETTING FROM ANDROID AND IN PARTICULAR FROM

SAMSUNG.

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21

THE "WALL STREET JOURNAL" PUBLISHED AN ARTICLE, THE TITLE
OF WHICH WAS "HAS APPLE LOST ITS COOL TO SAMSUNG?"

AND APPLE'S HEAD OF WORLDWIDE MARKETING, PHIL SCHILLER,

WHO APPLE SAYS WILL BE THE FIRST WITNESS WHO WILL TESTIFY TO,

FORWARDED THIS TO HIS ADVERTISING AGENCY SAYING "WE HAVE A LOT

OF WORK TO DO TO TURN THIS AROUND."

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MR. SCHILLER BECAME MAYBE OBSESSED IS THE RIGHT WORD WITH

SAMSUNG'S CAMPAIGN THAT PORTRAYED SAMSUNG AS THE YOUNGER,

HIPPER CHOICE, AND HE WAS FRUSTRATED THAT APPLE SEEMED

UNWILLING TO RESPOND.

APPLE HAS HAD ONE ADVERTISING COMPANY THAT THEY'VE USED

EXCLUSIVELY FOR YEARS.

CLIENT.

MR. SCHILLER WROTE AN E-MAIL TO TIM COOK SAYING I THINK WE'VE

GOT TO START LOOKING FOR ANOTHER ADVERTISING AGENCY.

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11

IT'S APPLE.

THAT ADVERTISING COMPANY HAS ONLY ONE

THEY MEET EVERY SINGLE WEEK.

THAT

WE'RE

JUST NOT GETTING WHAT WE NEED.
IT BECAME A SUBJECT OF DISCUSSION AT THE BOARD OF DIRECTOR

AT APPLE, WHAT ARE YOU GOING TO DO ABOUT THIS BRANDING PROBLEM?

SO THEY INTRODUCED THEIR FIRST BRAND CAMPAIGN SINCE 1997,

IT WAS A BRAND CAMPAIGN.

IN CALIFORNIA.

SINCE 1997 WHEN IT WAS ON THE VERGE OF BANKRUPTCY.

THE TITLE WAS SOMETHING LIKE DESIGNED

THE FIRST TIME APPLE HAD DONE A BRAND CAMPAIGN

WHY ALL THIS?

WHY WAS -- WHAT WAS THE SOURCE OF APPLE'S

CONCERN?

MORE -- A YOUNGER, MORE PLAYFUL TAKE ON SMARTPHONES AND

CONSUMERS WERE LISTENING.

CLEARLY SAMSUNG WAS OFFERING CONSUMERS A CHOICE, A

NOW, I WANT TO TALK TO YOU ABOUT THE INFRINGEMENT AND

ISSUES -- INFRINGEMENT ISSUES AND VALIDITY ISSUES RELATED TO

EACH OF THE APPLE PATENTS IN THIS CASE.

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25

BUT BEFORE I DO THAT, I WANT TO DISCUSS THE DAMAGES, WHICH
I'VE TOLD YOU, FRANKLY, ARE ABSURD, MULTI BILLION NUMBER OF

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DAMAGES THAT THEY'RE SEEKING IN THIS CASE.

I WANT TO TALK ABOUT DAMAGES FIRST BECAUSE I THINK WHEN

YOU UNDERSTAND WHAT APPLE IS SEEKING AND HOW THEY WENT ABOUT

IT, IT'LL SHED SOME LIGHT ON THE CREDIBILITY OF APPLE'S WHOLE

CASE.

AS I'VE TOLD YOU, THESE PATENTS ARE VERY NARROW SOFTWARE

PATENTS THAT COVER -- THAT COVER ONE WAY TO HAVE A FEATURE THAT

CAN BE DONE MORE THAN ONE WAY, FEATURES -- THAT IS TO SAY, WHAT

A DEVICE CAN DO, SEARCH, SYNC IN BACKGROUND, THE OTHER THINGS.

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12
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14

IT'S NOT THE SAME THING AS A PATENTED CLAIM.

A CLAIM MAY

BE ONE WAY TO ACCOMPLISH THAT FEATURE.
AND MANY COMPANIES, SAMSUNG, GOOGLE, OTHER COMPANIES HAVE
DIFFERENT WAYS OF ACCOMPLISHING THE SAME THING.
WE WILL SHOW YOU THAT APPLE HAS TAKEN WHAT REALLY ARE VERY

NARROW FEATURES AND OVERSTATED WHAT THEY DO AND WHAT THEY OWN

IN THEIR PATENTS TO CLAIM RIDICULOUS DAMAGES NUMBERS.

LET ME BEGIN AT THE END.

I'M GOING TO SHOW YOU SOME

NUMBERS, AND YOU'LL SEE THE SOLE SUPPORT, THE ONLY WAY THEY

COME UP WITH THESE NUMBERS IS FROM A STUDY DONE BY DR. HAUSER.

AND I WANT TO TALK TO YOU ABOUT DR. HAUSER'S STUDY AT

LENGTH, BUT LET ME BEGIN AT THE END WITH SOME OF HIS

CONCLUSIONS.

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24
25

AND I'VE PUT UP ON THE SCREEN WHAT HE'S CONCLUDED, OR SOME
OF HIS CONCLUSIONS.
AND HE CONCLUDED BASED ON HIS STUDY THAT PEOPLE WHO WOULD

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PURCHASE A $149 PHONE WOULD BE WILLING TO PAY AN ADDITIONAL

10$2 FOR APPLE'S FORM OF WORD SUGGESTION FOR A CORRECTION; THAT

THEY WOULD PAY AN EXTRA $44 FOR AN ABILITY TO SEARCH THE PHONE

AND THE INTERNET AT THE SAME TIME IN THE WAY, PARTICULAR WAY

THAT APPLE DOES.

TO GET JUST THESE FOUR FEATURES HE SAID THAT PEOPLE WOULD

BE WILLING TO PAY ALMOST DOUBLE THE PRICE OF THE PHONE, $271 ON

TOP OF THE $149 PHONE.

9
10

YOU CAN TELL THERE'S SOMETHING, SOMETHING FISHY HERE.
ANOTHER EXAMPLE OF THEIR OVERREACHING, ANOTHER FORM OF

DAMAGES THEY SEEK AS WAS MENTIONED IS A ROYALTY ON THESE

PATENTS, AND DR. -- APPLE'S OTHER EXPERT, DR. VELLTURO, TOOK

DR. HAUSER'S SURVEY RESULTS AND, YOU KNOW, SORT OF SAID, OKAY,

LET'S SUPPOSE THERE WAS A HYPOTHETICAL NEGOTIATION BETWEEN

APPLE AND SAMSUNG, WHAT WOULD THEY HAVE AGREED TO AS A ROYALTY?

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18

AND HE CONCLUDED THAT SAMSUNG WOULD HAVE AGREED TO PAY
$40.10 FOR THE SMARTPHONE PATENTS IN THIS CASE.
$40.10 JUST FOR THESE FIVE SMART, SMALL SOFTWARE FEATURES.

JUST BY WAY OF COMPARISON, A SMARTPHONE COSTS, YOU KNOW, AT THE

HIGH END, SAY $199 TO THE CUSTOMER.

FROM THE CARRIERS.

22
23
24
25

YOU HAVE THE SUBSIDIES

THE $40 PER PHONE APPLE IS ASKING FOR THESE 5 SMALL
SOFTWARE FEATURES IS 20 PERCENT OF THE PRICE.
NOW, THEIR EXPERT, DR. VELLTURO, ACKNOWLEDGES THAT SAMSUNG
REALLY WOULDN'T AGREE TO DO THIS BECAUSE IT WOULD TAKE UP MOST

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OF THE PROFIT MARGIN ON THE ACCUSED PHONES IN THIS CASE, BUT NO

MATTER.

APPLE ALSO CLAIMS THAT THERE IS, ON SMARTPHONES, THEY

CLAIM TO HAVE 3,500 PATENTS.

WORTH $8 A PHONE, WHICH IS BASICALLY AN AVERAGE OF THE 5, YOU

KNOW, DIVIDED INTO THE 40 THEY'RE SEEKING HERE, THAT MEANS THAT

ONE SMARTPHONE, IF YOU WANTED TO MAKE A PHONE TO COMPETE WITH

APPLE AND USE THEIR PATENTS, IT WOULD COST $28,000.

MORE THAN THE ACTUAL COST OF THE PHONE.

10
11
12
13
14

IF EACH OF THOSE PATENTS WAS

140 TIMES

SO, YOU KNOW, THESE ARE THE KIND OF RESULTS THAT
DR. HAUSER'S STUDY LED TO.
AND LET'S SEE NOW HOW HE GETS TO THESE CRAZY NUMBERS, AND
LET ME TALK ABOUT THAT STUDY.
REMEMBER, DR. HAUSER, THE WAY HE DOES HIS STUDY, HE'S

SUPPOSED TO BE DECIDING HOW MUCH PEOPLE CARE ABOUT THESE

FEATURES, WOULD THEY CHANGE THEIR PHONE PURCHASE DECISIONS IF

THE FEATURES WERE THERE OR IF THEY WEREN'T THERE.

THE WHOLE POINT IS TO PROVIDE THE VALUE OF THE PATENT, THE

DIFFERENCE BETWEEN WHAT YOU HAVE WITH THE PATENT CLAIM AND WHAT

YOU WOULD HAVE WITHOUT THE PATENTED CLAIM.

IN OTHER WORDS, IF YOU HAD ANOTHER WAY TO DO IT THAT APPLE

DIDN'T OWN, IT'S CALLED A NON-INFRINGING ALTERNATIVE, WHAT'S

THE DIFFERENCE BETWEEN THE TWO OF THEM.

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25

IF YOU HAVE -- IF THERE ISN'T ANOTHER WAY TO DO IT, THEN
THE PATENT MAY BE REALLY, REALLY VALUABLE.

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BUT IF THERE'S ANOTHER WAY TO ACCOMPLISH THE SAME THING,

IT'S VERY SIMILAR AND IT'S PERFECTLY ACCEPTABLE, THE PATENT

REALLY MAY NOT HAVE MUCH VALUE AT ALL.

SO WHAT DR. HAUSER IS TRYING TO DO IS MEASURE WHAT'S THE

VALUE OF WHAT APPLE CLAIMS VERSUS WHAT THE ALTERNATIVE WOULD

BE, WHAT APPLE DOESN'T OWN.

AND, AGAIN, BEFORE I GO INTO THIS, LET ME EMPHASIZE HOW

IMPORTANT DR. HAUSER'S STUDY IS TO APPLE'S CASE.

IT IS THE

ONLY EVIDENCE, THE ONLY EVIDENCE APPLE HAS TO SUPPORT ITS

CLAIMS THAT CONSUMERS MAKE SMARTPHONE PURCHASE DECISIONS BASED

ON THESE FIVE SMALL FEATURES.

HIS CONCLUSION IS, AS I'VE TOLD YOU, IF SAMSUNG DIDN'T

HAVE THEM, WE'D SELL A LOT FEWER AND APPLE WOULD SELL AN AWFUL

LOT MORE.

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17

IF HE'S WRONG ABOUT THAT, THEN THEY DON'T HAVE ANY
EVIDENCE ON THIS AND THERE AREN'T REALLY ANY DAMAGES.
IF IT IS THE CASE THAT -- IF IT'S TRUE THAT PEOPLE REALLY

AREN'T MOTIVATED, THAT'S NOT WHY YOU BUY SAMSUNG PHONES, THEN

APPLE DOESN'T HAVE ANY DAMAGES.

SO WHAT DID DR. HAUSER DO?

HE FOUND PEOPLE WHO HAD

PURCHASED SAMSUNG PHONES BEFORE AND ASKED THEM SOME QUESTIONS.

NOW, ONE OF THE THINGS HE DIDN'T ASK THEM IS WHY DID YOU

BUY YOUR SAMSUNG PHONE?

SOMETHING THAT YOU WOULD ASK.

YOU WOULD THINK THAT MIGHT BE

INTERESTINGLY, HE SAID IN HIS REPORT THAT HE DIDN'T ASK OR

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CARE WHETHER THE SAMSUNG CUSTOMERS WERE EVEN AWARE THAT THESE

FIVE FEATURES WERE IN THEIR PHONES.

THAT.

HE WASN'T INTERESTED IN

HE HAS THE SUBJECTS COME IN, AND HE DOESN'T GIVE THEM

PHONES.

MOCK -- THEY LOOK ON THE COMPUTER SCREEN.

PHONES WITH DESCRIPTIONS OF FEATURES AND THEY ARE ASKED TO MAKE

A SERIES OF DECISIONS BASED ON THE DESCRIPTIONS OF THE FEATURES

ABOUT WOULD YOU BUY THIS PHONE OR WOULD YOU BUY THAT PHONE?

HE GIVES THEM DESCRIPTIONS.

BASICALLY THEY LOOK AT
THEY SEE IMAGINARY

IN ADDITION TO THE DESCRIPTION OF THE FEATURE, WHICH IS

SUPPOSED TO MATCH APPLE'S PATENTED CLAIMS, WHAT IT OWNS, HE

ALSO ASKS -- HE TELLS THEM, IF YOU DIDN'T HAVE THAT, YOU WOULD

HAVE TO DO THIS.

14
15
16

THIS IS YOUR ALTERNATIVE.

IN OTHER WORDS, HERE'S THE APPLE FEATURE.

IF YOU DIDN'T

HAVE THAT, YOU WOULD HAVE TO DO THIS.
NOW, YOU KNOW, IF THERE'S A BIG DIFFERENCE BETWEEN THE

TWO, YOU'RE GOING TO GET A LOT OF PEOPLE SAYING THIS IS REALLY

VALUABLE.

BUT THE PEOPLE AREN'T GETTING PHONES.

THIS IS ALL JUST

TEXT AND THEY GET TO WATCH A VIDEO AND THEN IN THESE

DESCRIPTIONS GETTING THEM ACCURATE IS REALLY, REALLY IMPORTANT

TO THE INTEGRITY OF THE SURVEY.

SO LET'S START WITH THE -- LET'S SEE WHAT HE DID.

LET'S

TAKE A LITTLE BIT OF TIME TO WALK THROUGH THIS.

START WITH THE WORD CORRECTION OR WORD SUGGESTION PATENT, WHICH

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AS MR. MCELHINNY TOLD YOU IS ONE THAT THE COURT HAS FOUND

INFRINGEMENT ON THIS ONE.

ONE FIRST, IT'LL TAKE ME A LITTLE WHILE TO WALK THROUGH THIS,

BUT I THINK YOU'LL SEE THAT THE DESCRIPTIONS THAT PEOPLE WERE

GIVEN WERE, FRANKLY, DISHONEST.

AND I WANT TO PROVE THAT TO YOU NOW.

SO I THOUGHT I WOULD TALK ABOUT THAT

THAT'S THE PUNCH LINE HERE,

THIS PATENT RELATES TO THE KEY WORD SOFTWARE.

ON ANDROID

PHONES USERS CAN CHOOSE BETWEEN ANY NUMBER OF DIFFERENT

KEYBOARDS.

KEYBOARDS ARE CONTAINED IN THE SOFTWARE FROM

DIFFERENT COMPANIES, FROM GOOGLE, FROM SAMSUNG, FROM A COMPANY

CALLED NUANCE, WHICH IS ANOTHER COMPANY THAT, YOU KNOW,

SUPPLIES THESE KEYBOARDS, AND THEY'RE IN SOME OF THE SAMSUNG

PHONES.

INTELLECTUAL PROPERTY FROM NUANCE.

NUANCE IS A WELL-KNOWN COMPANY.

APPLE ALSO BUYS

THE KEYBOARD SOFTWARE ARE CREATED BY SAMSUNG WHICH IS ON

MANY OF ITS PHONES APPLE ADMITS DOES NOT INFRINGE.

SWIPE KEYBOARD FROM NUANCE AND THE ANDROID, ONE OF THE ANDROID

KEYBOARDS THAT HAVE BEEN FOUND TO INFRINGE.

BUT SAMSUNG HAS A KEYBOARD WHICH APPLE ADMITS DOES NOT

INFRINGE.

AN ALTERNATIVE TO APPLE'S PATENTED CLAIM.

APPLE DOESN'T OWN.

IT'S THE

SO, IN OTHER WORDS, THAT'S AN ALTERNATIVE.

THAT'S

IT'S SOMETHING THAT

THIS -- APPLE'S CLAIM -- LET ME TAKE A LOOK AT IT.

IT'S

THE '172 PATENT.

YOU'LL SEE IT'S A VERY, VERY NARROW CLAIM

ABOUT A PARTICULAR WAY OF SUGGESTING WORD CORRECTIONS ON A

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SMARTPHONE.

WORDS."

THE TITLE OF THE PATENT IS NOT "HOW TO SUGGEST

IT'S "HOW SUGGESTED WORDS ARE PROVIDED AS YOU TYPE," JUST

LIKE THE TITLE SAYS.

IT'S A METHOD FOR PROVIDING WORD

RECOMMENDATIONS.

IT'S ABOUT HOW SUGGESTED WORDS ARE PROVIDED AS YOU TYPE.

THAT'S THE APPLE PATENT.

OKAY?

IT'S NOT ABOUT WHAT WORDS TO SUGGEST.

IN JUNE 2011, BEFORE APPLE'S PATENTED CLAIM ISSUED,

SAMSUNG PUT ITS OWN NON-INFRINGING KEYBOARD ON THE SAMSUNG DART

PHONE, AND IT'S SINCE BEEN INSTALLED ON MANY SAMSUNG PHONES,

SOMETIMES AS THE PRIMARY KEYBOARD, AND SOMETIMES AS AN

ALTERNATIVE KEYBOARD WHICH THE USER CAN SELECT.

NON-INFRINGING KEYBOARD WAS INCLUDED AS AN OPTION ON FIVE OF

THE PHONES THAT APPLE ACCUSES IN THIS CASE.

15
16
17

LET'S TAKE A LOOK AT IT IN SLIDE 63.

IF YOU TYPE ON THIS KEYBOARD, IT AUTOMATICALLY CORRECTS
TYPING ERRORS.

THIS TEXT AREA UP HERE AS YOU TYPE.

21
22

THIS IS THE SAMSUNG

DART NON-INFRINGING KEYBOARD.

THIS

IT ALWAYS SHOWS THE RECOMMENDED CORRECTIONS IN

IF YOU TYPE, IT WILL JUST CORRECT.

IT AUTOMATICALLY

CORRECTS.
IF YOU WANT TO KEEP ONE OF THE SUGGESTED SPELLINGS, THEY

APPEAR HERE IN THIS MESSAGE BAR DOWN HERE, YOU HAVE TO ACTUALLY

TOUCH ON IT.

SO IF YOU, IF YOU -- IF YOU'RE SENDING AN E-MAIL TO A

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MR. MESSAF AND WANT TO KEEP THAT, AND NOT MESSAGE, YOU CAN

TOUCH ON THIS AND YOU'LL GET MESSAF UP ABOVE.

UP HERE, AUTO CORRECTION IS NOT SOMETHING YOU NEED APPLE'S

PATENTED CLAIM FOR.

AND WATCH WHAT HAPPENS WHEN THE WORD MESSAGE IS MISS TYPED.

SO YOU CAN SEE

WATCH, I'M GOING TO SHOW YOU A VIDEO NOW,

IF WE COULD PLAY THAT.

(A VIDEOTAPE WAS PLAYED IN OPEN COURT OFF THE RECORD.)

8
9
10
11

MR. QUINN:
EVERY SINGLE LETTER.

IT WAS AUTOMATICALLY CORRECTED AFTER
YOU END UP AUTOMATICALLY WITH THE

CORRECTION UP ABOVE, MESSAGE.
NOW, LET'S COMPARE THAT TO THE INFRINGING SWIPE KEYBOARD.

THIS IS SLIDE 65.

NON-INFRINGING SAMSUNG DART KEYBOARD, WHICH WE JUST DISCUSSED.

14
15
16
17
18
19

ON THE LEFT-HAND SIDE YOU HAVE THAT

ON THE RIGHT-HAND SIDE YOU HAVE THE NUANCE SWIPE KEYBOARD
WHICH HAS BEEN FOUND TO INFRINGE.

IT PRACTICES APPLE'S PATENT.

YOU CAN SEE THEY BOTH LOOK SIMILAR.

WE'RE NOT TALKING

ABOUT BIG DIFFERENCES.
THEY BOTH HAVE A TEXT AREA THAT YOU CAN SEE ABOVE AND A
SUGGESTIONS AREA, A SUGGESTIONS BAR BELOW.

IF WE COULD GO TO SLIDE 67.

YOU CAN SEE THEY BOTH HAVE THIS SUGGESTION BAR.

AND ON BOTH OF THEM, IT WILL TYPE, YOU KNOW, MESSAF, THE

MISSPELLING ON THE LEFT-HAND SIDE, AND THEN THERE WILL BE SOME

SUGGESTIONS AND IF YOU WANT TO TAKE ONE OF THOSE SUGGESTIONS,

YOU CAN JUST TAP ON IT.

BOTH OF THEM WORK IDENTICALLY, THE

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NON-INFRINGING SAMSUNG DART KEYBOARD AND THE KEYBOARD THAT

PRACTICES -- THAT INFRINGES APPLE'S PATENT.

HERE IS THE INFRINGING SWIPE KEYBOARD, THE ONE THAT WAS ON

THE RIGHT, IN ACTION.

I WANT TO SHOW THAT TO YOU.

THAT AUTOMATICALLY CORRECTS.

ON APPLE'S KEYBOARD.

YOU'RE TYPING, IT'S NOT UNTIL YOU FINISH AND HIT WHAT'S CALLED

A DELIMITER, EITHER A PERIOD OR A COLON OR A SPACE BAR, THAT IT

POPS UP WHAT THE SUGGESTED WORD IS.

BUT THE WAY IT WORKS IS DIFFERENT

INSTEAD OF CONTINUOUSLY CORRECTING AS

YOU WOULDN'T KNOW WHAT'S

GOING TO POP UP UNLESS YOU LOOK DOWN.

DOWN BLOW IN THAT SPACE BAR.

COME UP WITHOUT ACTUALLY LOOKING DOWN.

YOU SEE

THE SUGGESTED WORD IS

YOU WON'T KNOW WHAT'S GOING TO

AND SOME PEOPLE MIGHT SAY THAT THAT, YOU KNOW, APPLE, THAT

PATENT, THAT WAY THAT MAKES YOU HAVE TO LOOK DOWN TO SEE IF

WHAT YOU REALLY INTENDED TO TYPE IS DOWN THERE IS NOT AS GOOD,

IT'S INCONVENIENT, YOU HAVE TO LOOK DOWN.

THE WAY YOU KNOW THAT APPLE THINKS THAT'S A NUISANCE,

BECAUSE IN THE IPHONE, THEY DON'T USE THAT PATENT, NEVER HAVE.

HAVE NEVER USED IT.

THE IPHONE DOES IT DIFFERENTLY.

LET'S TAKE A LOOK AT SLIDE 72.

THE IPHONE, THE WORD SUGGESTION IS FLOATED IN A BOAT UP IN

THE TEXT AREA SO THAT YOU KNOW BY LOOKING UP THERE, YOU DON'T

HAVE TO LOOK DOWN, YOU KNOW WHAT'S GOING TO HAPPEN IF YOU HIT

THE SPACE BAR OR THE DELIMITER.

SO WHAT ARE THE DAMAGES THAT APPLE SEEKS FOR USE OF ITS

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OWN PARTICULAR FORM OF WORD CORRECTION, WHICH IT DOESN'T EVEN

USE, AND WHICH SOME PEOPLE MIGHT CONSIDER INFERIOR?

3
4
5

ACCORDING TO DR. HAUSER'S SURVEY, WHAT SHOULD SAMSUNG PAY?
$206.4 MILLION OF THE 2 BILLION-PLUS DOLLARS.
OF THE -- DR. HAUSER'S STUDY SAID, THAT CHART WE LOOKED AT

BEFORE, SUPPOSEDLY HIS CONCLUSION IS PEOPLE WOULD PAY $102 MORE

PER PHONE TO HAVE THIS FEATURE WHERE YOU HAVE TO LOOK DOWN AND

MAKE YOUR CHOICE, WHICH APPLE DOESN'T EVEN USE.

HOW DID HE ARRIVE AT THAT NUMBER?

SURVEY WAS SERIOUSLY FLAWED.

ABOUT THE DESCRIPTIONS THEY'RE GIVING.

PHONES.

WELL, DR. HAUSER'S

REMEMBER, I TOLD YOU, IT'S ALL
THEY DON'T GET ANY

THEY'RE JUST GETTING DESCRIPTIONS.

AND LET ME TELL YOU WHAT THEY WERE TOLD ABOUT THESE WORD

SUGGESTION FEATURES, AND THIS IS WHAT THEY WERE TOLD ABOUT

APPLE'S PATENTED METHOD.

THE SURVEY PARTICIPANTS WERE PRESENTED WITH.

TOP AUTOMATIC WORD CORRECTION.

YOU'LL SEE IT UP HERE.

THIS IS WHAT

IT SAYS AT THE

NOW, YOU KNOW THAT'S NOT THE TITLE OF THEIR PATENT.

JUST LOOKED AT THAT.

IS "A METHOD, SYSTEM, AND GRAPHICAL USER INTERFACE FOR

PROVIDING WORD RECOMMENDATIONS."

IF WE GO BACK TO SLIDE 60, THEIR PATENT

BUT PARTICIPANTS AREN'T TOLD THAT WHAT THEY'RE BEING

PRESENTED HERE, THE DESCRIPTION IS JUST OF A METHOD.

TOLD THAT THE FEATURE IS AUTOMATIC WORD CORRECTION, PERIOD, IN

BIG BOLD LETTERS ON A PICTURE, AN ICON UP HERE, TWO PIECES OF

UNITED STATES COURT REPORTERS

THEY'RE

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PAPER.
THE ONE IN THE BACK SAYS X, MISTAKE, BEING REPLACED WITH
ANOTHER PIECE OF PAPER, CHECK, CORRECT.
NO METHOD.

ONLY AUTOMATIC WORD CORRECTION.

ONLY WRONG

SPELLING MADE RIGHT.
THAT ICON IS THE SYMBOL FOR THIS PATENT CLAIM IN

DR. HAUSER'S TEST.

THAT ICON TELLS SURVEY PARTICIPANTS THAT

THEIR ONLY CHOICE -- YOU KNOW, THE CHOICE THAT YOU'RE MAKING,

YOU'RE TRYING TO VALUE WHAT THE DIFFERENCE IS BETWEEN SAMSUNG,

THE APPLE PATENT AND WHAT WOULD OTHERWISE HAVE TO DO, THEY'RE

TOLD THE ONLY CHOICE IS BETWEEN WORD CORRECTION AND NO WORD

CORRECTION.

NOW, CLEARLY THE DIFFERENCE BETWEEN HAVING AUTOMATIC WORD

CORRECTION IS VERY DIFFERENT FROM THE VALUE OF HAVING IT BY ONE

METHOD RATHER THAN ANOTHER.

HAVE IT OR YOU DON'T OR YOU HAVE IT BY ONE METHOD OR YOU HAVE

IT BY ANOTHER, THERE'S A BIG DIFFERENCE.

THE DIFFERENCE BETWEEN YOU EITHER

THERE IS NO SUBTLETY IN DR. HAUSER'S DESCRIPTION.

OF COURSE APPLE HAS NO RIGHT TO A MONOPOLY UNDER ITS

PATENT CLAIM TO AUTOMATIC WORD CORRECTION BECAUSE, AS YOU HAVE

SEEN FROM SAMSUNG'S NON-INFRINGING DART KEYBOARD, YOU ALREADY

KNOW THERE'S AT LEAST ONE NON-INFRINGING ALTERNATIVE THAT DOES

PROVIDE AUTOMATIC WORD CORRECTION, AND SOME WOULD SAY IT'S

BETTER.

HAPPENS WHILE YOU ARE TYPING IN THE TEXT AREA.

YOU DON'T HAVE TO LOOK DOWN.

THE CORRECTION, IT

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SAMSUNG HAD THAT ON ITS PHONES BEFORE APPLE'S PATENT
ISSUED.
SAMSUNG DOES NOT -- WELL, APPLE DOES NOT OWN AUTOMATIC

WORD CORRECTION.

BE PAID FOR IT.

6
7
8
9
10

APPLE DOESN'T INVENT IT.

IT HAS NO RIGHT TO

THE ASSERTION THAT APPLE OWNS AUTOMATIC WORD CORRECTION IS
UNTRUE, AND THAT UNTRUTH INFECTED DR. HAUSER'S SURVEY.
AND, AGAIN, THAT SURVEY IS THE ONLY BASIS IN THIS LAWSUIT
THAT'S GOING TO BE PRESENTED TO YOU FOR THOSE VERY, VERY LARGE
NUMBERS.

THIS STUDY IS THE ONLY EVIDENCE OF CONSUMERS' PREFERENCES

AND FEATURE VALUE IN THIS LAWSUIT FOR CELL PHONES, FOR TABLETS,

FOR EVERY SINGLE CLAIM, ALL FIVE OF THEM, IT ALL COMES BACK TO

DR. HAUSER.

THIS WASN'T JUST AN INSTANCE OF A CAREFULLY -- CARELESSLY

CHOSEN ICON.

MISLEAD YOU.

IT WAS DELIBERATELY AND CAREFULLY DESIGNED TO

HERE'S THE PART OF THE EXPLANATION THAT WAS GIVEN TO TEST

SUBJECTS THAT WAS MEANT TO DESCRIBE WHAT THE ALTERNATIVE WOULD

BE, IF YOU DON'T USE APPLE'S PATENTED CLAIM, WHAT'S THE

ALTERNATIVE?

AND WHAT PEOPLE ARE TOLD, YOU CAN SEE IT HERE, "WITHOUT

THIS FEATURE, PRESSING SPACE OR A PERIOD WOULD RETAIN YOUR

ORIGINAL TEXT," AND WHAT HE'S TOLD THEM HERE IS IF YOU'RE

TRYING TO TYPE BIRTHDAY AND INSTEAD YOU TYPE BIRFDAY WITH AN F,

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IT TELLS THEM "WITHOUT THIS FEATURE, PRESSING SPACE OR A PERIOD

WOULD RETAIN YOUR ORIGINAL TEXT, BIRFDAY.

REPLACE YOUR ORIGINAL TEXT, YOU NEED TO SELECT THE SUGGESTED

BIRTHDAY YOURSELF.

YOU WOULD HAVE TO GO DOWN AND SELECT IT."

THAT'S SIMPLY WRONG.

WRONG.

CORRECTS IN THE SCREEN.

8
9
10

IF YOU WANT TO

APPLE MADE THAT UP.

YOU'VE SEEN THE DART KEYBOARD.

YOU KNOW THAT'S

IT AUTOMATICALLY

IT'S -- THAT'S HOW APPLE COMES UP WITH THESE NUMBERS THAT
THIS IS WORTH $206 MILLION.
APPLE MAKES A VERY, VERY SERIOUS DAMAGES CLAIM, BUT THEY

DIDN'T GO ABOUT STUDYING DAMAGES IN ALL SERIOUSNESS.

DR. HAUSER'S STUDY, YOU WILL SEE, IS COMPLETELY REMOVED FROM

REALITY.

IN FACT,

LET ME GIVE YOU ANOTHER EXAMPLE OF AN UNTRUTHFUL

DESCRIPTION OF ANOTHER ONE OF THESE PATENTED FEATURES THAT THEY

GAVE TO SURVEY PARTICIPANTS, WHICH IS THE WHOLE BASIS FOR THEIR

CLAIM THAT FOLKS PREFERRED -- YOU KNOW, WOULD BUY FEWER SAMSUNG

PHONES AND WOULD BUY MORE APPLE PHONES.

AND THIS IS THE BACKGROUND SYNCING CLAIM.

THIS IS THE

DESCRIPTION THAT PEOPLE WERE GIVEN.

AND AT THE TOP IT

DESCRIBES THE APPLE PATENT, AND THEN IT DESCRIBES WHAT THE

ALTERNATIVE, WHERE IF YOU DON'T PRACTICE THE APPLE PATENT, THIS

IS WHAT WOULD HAPPEN TO YOU.

"WITHOUT THIS FEATURE, YOU WOULD HAVE TO WAIT TO USE THE

APP, FOR EXAMPLE, THE CONTACTS APP, WHILE THE DATA FOR THE APP

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IS SYNCHRONIZING WITH A REMOTE COMPUTER, AND THAT WAIT MAY BE

LONG OR SHORT."

SO IN OTHER WORDS, THE SURVEY PARTICIPANTS ARE TOLD, "YOU

EITHER USE APPLE'S PATENT" WHICH, AGAIN, THIS IS ANOTHER ONE,

APPLE DOESN'T USE THIS, IT'S NOT IN ANY IPHONE, NEVER HAS BEEN,

THEY'RE TOLD, "YOU EITHER USE APPLE'S PATENT, OR YOUR PHONE

WILL FREEZE FOR A PERIOD OF TIME, AND THAT MAY BE A LITTLE

PERIOD OF TIME, OR IT MAY BE A LONG PERIOD OF TIME."

AND THAT IS ALSO, FRANKLY, NOT TRUE.

APPLE DID NOT CREATE

THE ONLY WAY TO SYNC DATA WITHOUT THE DEVICE FREEZING.

ANOTHER EXAMPLE OF APPLE EXAGGERATING THE SCOPE OF ITS PATENTED

CLAIMS.

THIS IS

THAT SYNCING, THAT ABILITY, HAD BEEN DEVELOPED USING

DIFFERENT PROCESSES BY OTHER INVENTORS AT LEAST SEVEN YEARS

BEFORE APPLE'S PATENT ISSUED.

PROCESSES IN A LITTLE BIT.

I'LL SHOW YOU THOSE OTHER

SO WHEN MR. HAUSER ASKED THEM, YOU KNOW, THE PUNCH LINE IS

AFTER THEY'RE GIVEN THESE CHOICES, HE ASKED THEM, HOW IMPORTANT

IS THAT FEATURE THAT KEEPS YOUR PHONE FROM FREEZING UP?

COURSE WHAT DID THEY SAY, THEY SAID THAT WAS IMPORTANT.

THAT

WAS BASED ON A MISREPRESENTATION BECAUSE PHONES CAN USE THOSE

OTHER PROCESSES THAT APPLE DOESN'T OWN.

EVERYTHING WHEN IT COMES TO SYNCING OR WORD CORRECTION OR ANY

OF THESE OTHER FEATURES.

APPLE DOESN'T OWN

THE DESCRIPTION ON SYNCING IS WRONG IN ANOTHER RESPECT.

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ALL THE PARTIES AGREE THAT APPLE'S PATENT REQUIRES THAT YOU

HAVE THREE SYNCING COMPONENTS IN THE BACKGROUND.

SO -- IN OTHER WORDS, IT'S NOT JUST ABOUT FREEZING AND SYNCING

GENERALLY.

THREE SYNCING COMPONENTS.

THIS PATENT IS A VERY SPECIFIC ONE.

AND IT'S NOT

IT REQUIRES

DR. HAUSER'S DESCRIPTION TO THE SURVEY PARTICIPANTS DIDN'T

MENTION THIS AT ALL, AND, IN FACT, THE ANDROID SOFTWARE PROCESS

SAMSUNG USES AND APPLE ACCUSES HERE CONTAINS ONLY TWO

COMPONENTS THAT ACTUALLY ARE DOING THE SYNCING.

WITHOUT A TRUTHFUL DESCRIPTION OF APPLE'S CLAIMS AND WHAT

THE ALTERNATIVES WOULD BE, THE SURVEY, DR. HAUSER'S SURVEY IS

WORTHLESS.

AS I TOLD YOU, CLEARLY THESE DESCRIPTIONS ARE REALLY

IMPORTANT SINCE THAT'S WHAT THE SURVEY PARTICIPANTS ARE BASING

ALL THEIR JUDGMENTS ON ABOUT THEIR PREFERENCES AND WHAT'S THIS

WORTH.

SO YOU MIGHT ASK, WHO WROTE THESE DESCRIPTIONS THAT WERE

SO IMPORTANT AND CENTRAL TO THIS SURVEY?

IT WAS APPLE'S LAWYERS.

IT WASN'T DR. HAUSER.

AND GUESS WHAT?

THEY WEREN'T EXACTLY EVEN-HANDED.

LET'S LOOK AT WHAT DR. HAUSER SAID IN HIS REPORT.

IN THE

FIRST SENTENCE THERE HE ACKNOWLEDGES THAT TO GET RELIABLE

RESULTS FROM THE SURVEY, YOU HAVE TO HAVE CLEAR DESCRIPTIONS.

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25

THEN HE GOES ON TO ADMIT THAT THEY WERE "PROVIDED TO ME BY
COUNSEL."

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AND HE SAID "I HAVE NOT REVIEWED OR INTERPRETED THE PATENT

CLAIMS MYSELF AND DO NOT HAVE A PROFESSIONAL OPINION ON THAT

MATTER."

4
5
6

HE'S WASHING HIS HANDS OF IT.

HE'S NOT TAKING ANY

RESPONSIBILITY FOR THIS.
SO HE GIVES -- WHAT HAPPENS WITH THESE SURVEY RESULTS?

THEY'RE GIVEN TO ANOTHER APPLE EXPERT, DR. VELLTURO, AND LET'S

JUST TALK FOR A MOMENT ABOUT DR. VELLTURO.

YOU KNOW, UNLIKE MANY EXPERTS YOU'RE GOING TO SEE WHO ARE

FACULTY MEMBERS AT UNIVERSITIES, DR. VELLTURO IS NOT A MEMBER

OF A FACULTY ANYWHERE.

HE'S BASICALLY APPLE'S HOUSE PAID EXPERT WITNESS.

HE BASICALLY TESTIFIES FOR A LIVING.

HE SAYS HE CANNOT REMEMBER EXACTLY HOW MANY TIMES HE'S

BEEN HIRED BY APPLE TO COME INTO COURTROOMS AND TESTIFY AND HE

THINKS IT'S MAYBE 10 TO 12 TIMES.

BUT HE TOOK DR. HAUSER'S SURVEY RESULTS AND RAN SOME

NUMBERS, AND HE SAID THAT SYNCING COMPONENT CLAIM WHERE PEOPLE

WERE TOLD YOU EITHER USE THE APPLE, YOU KNOW, PATENT OR, YOU

KNOW, YOU'RE GOING TO HAVE TO WAIT AND THE WAIT COULD BE LONG

OR SHORT, HE TOOK THE RESULTS OF THE SURVEY AND HE SAID, WELL,

THAT SYNCING CLAIM IS WORTH $724.9 MILLION.

SO THAT'S WHERE PART OF THAT OVER 2 BILLION THEY'RE

SEEKING COMES FROM THAT CLAIM.

AND ALL THE STEPS LEADING TO

THAT NUMBER COLLAPSE BECAUSE THEY'RE ALL BASED ON DESCRIPTIONS

WHICH ARE COMPLETELY UNFAIR AND INACCURATE.

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WE HAVE -- WE'VE RETAINED AN EXPERT, DR. DAVID REIBSTEIN,

WHO'S A PROFESSOR AT THE WARD SCHOOL OF BUSINESS AT THE

UNIVERSITY OF PENNSYLVANIA.

SURVEY, THEY'RE CALLED CONJOINT SURVEYS, AND HE SAYS IT'S

COMPLETELY INAPPROPRIATE TO USE THIS TYPE OF SURVEY, A CONJOINT

SURVEY, FOR A COMPLEX PRODUCT WHICH HAS LOTS AND LOTS OF

FEATURES, THAT IT'S JUST A -- THEY SHOULDN'T HAVE USED IT IN

THE FIRST PLACE.

HE'S AN EXPERT IN THESE TYPES OF

HE HAD A REAL QUESTION:

DID THE SURVEY PARTICIPANTS

ACTUALLY UNDERSTAND WHAT THEY WERE BEING TOLD, UNDERSTAND THESE

DESCRIPTIONS?

SO HE DID HIS OWN STUDY.

HE RECRUITED SOME OTHER PEOPLE,

JUST LIKE DR. HAUSER HAD, WHO HAD SAMSUNG PHONES.

THEM THE SAME VIDEOS, WE HAD THEM, SHOWED THEM THE SAME

DESCRIPTIONS, AND, YOU KNOW, HAD THEM TAKE THE SAME TEST.

16
17
18
19
20

HE SHOWED

AND AFTERWARDS HE ASKED THEM, DID YOU UNDERSTAND?
UNDERSTAND THE DESCRIPTIONS IN THE VIDEOS?

DID YOU

THEY ALL SAID, YES.

BUT THEN HE INTERVIEWED THEM AND IT TURNED OUT THEY DIDN'T
UNDERSTAND AT ALL.
MANY OF THE PARTICIPANTS THOUGHT THAT WHEN IT DESCRIBED

WORD CORRECTION, THEY THOUGHT THAT MEANT THE CHOICE WAS BETWEEN

APPLE'S PATENT CLAIM AND HAVING TO GO BACK AND COMPLETELY

RETYPE THE MISSPELLING.

24
25

SOME THOUGHT THE CHOICE WAS BETWEEN USING APPLE'S THREE
PATENT SYNC CLAIM AND NOT HAVING ANY SYNCING AT ALL AND HAVING

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TO GO TO ANOTHER DEVICE AND RE-ENTER THE INFORMATION.
SO THERE'S A REAL QUESTION.

I THINK IT'LL BE IN YOUR

MINDS WHEN YOU HEAR THE EVIDENCE AS TO WHETHER PEOPLE REALLY

UNDERSTOOD THIS AT ALL.

5
6

I TOLD YOU BEFORE, APPLE ON ITS OWN DOES SURVEYS AS TO WHY
PEOPLE BUY PHONES.

IF WE COULD LOOK AT SLIDE 50.

THIS IS AN INTERNAL APPLE STUDY, AND IF YOU LOOK AT THE

U.S. ON THE LEFT-HAND SIDE, THE WHOLE THEORY OF APPLE'S CASE

HERE IS PEOPLE BUY SAMSUNG PHONES BECAUSE OF THESE FIVE

FEATURES AND THEY'RE SO IMPORTANT.

WHEN IT COMES TO IPHONES, PEOPLE WHO WANT AN IPHONE MODEL

OR A SPECIFIC FEATURE, IT'S ONLY 16 PERCENT OF THE PEOPLE WHO

BUY PHONES ACCORDING TO APPLE'S OWN DATA.

AND THEN IN THEIR DATA, THEIR SURVEY, THEY DRILL DOWN IN

THE 16 PERCENT TO SEE WHAT IS THE FEATURE THAT THEY'RE MOST

INTERESTED IN.

SYNCING, OR WHAT IS IT?

IS IT OUR PHONE WITH WORD CORRECTION?

IS IT

IF WE CAN LOOK AT SLIDE 51.

THOSE 16 PERCENT, AS I'VE BEEN TELLING YOU, THEY'RE

INTERESTED IN THINGS LIKE BIG FEATURES, WHAT'S THE WEIGHT, THE

DISPLAY, THE THINLESS, IS THERE LTE, WHAT'S THE BATTERY LIFE?

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24
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APPLE KNOWS THESE ARE THE KINDS OF THINGS THAT DRIVE SALES
OF PHONES.
ANOTHER EXAMPLE OF AN IMPORTANT PHONE FEATURE IS THE MAPS

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APPLICATION.

ITS MAPS APPLICATION.

DEVELOPED THEIR OWN MAP, APPLE MAPS FEATURE AND THEY PUT IT IN

THE PHONE AND IT WAS A DISASTER.

CIRCLES TO DEAD ENDS.

APPLE MAPS FEATURE COULD KILL BECAUSE IT WOULD SEND PEOPLE INTO

THE BARREN OUTBACK WHERE THERE WAS NO WATER.

8
9

IN THE FALL OF 2012, APPLE HAD A BIG PROBLEM WITH
THEY USED TO HAVE GOOGLE MAPS AND THEY

I MEAN, IT SENT PEOPLE IN

POLICE IN AUSTRALIA WARNED THAT THE

THE PR FALLOUT FROM THAT WAS SO BAD THAT APPLE HAD TO
APOLOGIZE TO CONSUMERS, AND TIM COOK WROTE A LETTER TO

CONSUMERS ASKING FORGIVENESS AND SUGGESTED THAT THEY ALL SOLVE

THE PROBLEM BY REINSTALLING GOOGLE MAPS.

12
13
14

BUT YET THAT PHONE THAT HAD THAT APPLE MAPS FEATURE, THE
IPHONE 5, WAS THE HIGHEST SELLING IPHONE EVER.
WHAT DOES THAT SHOW US?

A PHONE WITHOUT A WORKING MAPS

APPLICATION CAN SELL.

A PHONE WITHOUT THESE FIVE SMALL

FEATURES, THAT WOULD SELL, TOO.

DRIVE SALES.

THESE AREN'T THE THINGS THAT

I NOW WANT TO TURN TO APPLE'S INFRINGEMENT CLAIMS.

WILL SHOW YOU THAT SAMSUNG DID NOT USE OR INFRINGE FOUR OF THE

CLAIMS AND THAT, IN FACT, IN ANY EVENT ALL FIVE ARE INVALID.

THEY SHOULDN'T HAVE BEEN ISSUED IN THE FIRST PLACE.

OTHER PEOPLE WHO THOUGHT OF THE IDEAS.

23
24
25

THERE WERE

LET'S BEGIN WITH THE '414, THE BACKGROUND SYNCING.

WE'VE

SPOKEN ABOUT THIS SOME ALREADY.
AS I SAID, THIS REQUIRES THAT YOU HAVE THREE SEPARATE SYNC

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COMPONENTS THAT ARE CONFIGURED TO DO SYNC.
YOU WILL HEAR IN THIS TRIAL FROM DR. CHASE, OUR EXPERT

WITNESS, AND A GOOGLE ENGINEER PAUL WESTBROOK, WHO WAS INVOLVED

IN DEVELOPING THIS, WHO WILL TELL YOU THAT ANDROID DOES THIS

DIFFERENTLY, DOES NOT USE THIS THREE SYNC PROCESS.

DONE BEFORE.

THE NAME OF GARY HALL, WHO YOU WILL HEAR FROM, WHO'S A WINDOWS

DEVELOPER WHO CALLED BACKGROUND SYNCING A DESIGN PILLAR OF

WINDOWS MOBILE.

IT WAS DONE AT WINDOWS MOBILE.

IT HAD BEEN

THERE'S A MAN BY

AND YOU WILL SEE THAT HE -- WINDOWS, MICROSOFT HAD THE

ABILITY TO SYNC IN BACKGROUND, AND IT WOULDN'T FREEZE UP.

THAT WAS ALL BEFORE APPLE'S PATENT.

13
14
15

AND

AND THEY ALSO SYNCED WITH THREE SYNC COMPONENTS IN THE
BACKGROUND, JUST LIKE APPLE CLAIMS TO DO.
YOU KNOW, THE PATENT AND TRADEMARK OFFICE, YES, THEY

ISSUED A PATENT ON THIS.

WHEN IT WAS ISSUED.

WINDOWS MOBILE IN FRONT OF THEM WHEN THEY ISSUED THIS PATENT.

BUT THEY DIDN'T HAVE THIS INFORMATION

THEY DIDN'T HAVE THE INFORMATION ABOUT THE

YOU'LL HEAR THAT ANOTHER GREAT COMPANY WHO WAS DEVELOPING

BACKGROUND SYNC BEFORE APPLE EVEN FILED FOR ITS PATENT, AND

THAT COMPANY WAS USING BACKGROUND SYNC BEFORE APPLE'S PATENT

EVEN ISSUED, AND THAT COMPANY IS GOOGLE.

DEVELOPING A SYNCING FEATURE BEFORE THE IPHONE EVER HIT THE

MARKET.

IT JUST STARTED

AS A CLOUD COMPANY, GOOGLE IS WELL AHEAD OF APPLE IN

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WIRELESS SYNCING.

E-MAIL.

REMEMBER, YOU SAW THAT IN THE STEVE JOBS

HE SAID CATCH UP IN SYNCING.

AND, YOU KNOW, GOOGLE HAD THE ABILITY FROM THE BEGINNING,

AS A CLOUD COMPANY, TO SYNC YOUR CONTACTS AND WIRELESS -- YOUR

CONTACTS AND YOUR CALENDAR WIRELESSLY IN THE FIRST ANDROID

PHONE.

THAT'S SOMETHING YOU COULDN'T DO IN THE FIRST IPHONE.

HAD TO PLUG IT INTO A COMPUTER TO SYNC UNTIL IOS 5 IN 2011.

YOU

THE '647 PATENT, THE ANALYZER SERVER PATENT, SOMETIMES

CALLED QUICK LINKS OR LINKS TO STRUCTURES, THIS IS THE PATENT

THAT, YOU KNOW, YOU CAN -- IT WILL HIGHLIGHT A PHONE NUMBER OR

AN E-MAIL ADDRESS AND YOU CAN TAP ON IT AND IT'LL DO -- YOU

KNOW, EXECUTE AN ACTION.

THIS DOES NOT COVER EVERY WAY OF DOING A CLICKABLE LINK.

THE SIMPLE ABILITY TO CLICK ON A PHONE NUMBER AND MAKE A CALL,

OR CLICK ON AN E-MAIL ADDRESS AND SEND AN E-MAIL, THAT HAS BEEN

AROUND FOR A LONG TIME.

SOMETHING THAT APPLE OWNS.

APPLE DIDN'T INVENT THIS.

THIS ISN'T

GOOGLE DESIGNED THE ANDROID SOFTWARE THAT RUNS ON THE

BACKGROUND -- IN THE BACKGROUND DIFFERENTLY FOR ITS ANALYZER

SERVER.

PATENT THAT APPLE HAS ON THIS PARTICULAR FEATURE REQUIRES

SOMETHING CALLED AN ANALYZER SERVER, AND I WON'T GO INTO THE

DETAILS ABOUT WHAT THAT'S ABOUT NOW, BUT IF YOU ONLY REMEMBER

ONE THING I SAY ABOUT THIS PATENT, IT'S ANALYZER SERVER.

YOU'LL HEAR THE EVIDENCE THAT GOOGLE -- THAT THE

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AND THE APPLE PATENT REQUIRES THAT THERE BE AN ANALYZER

SERVER TO ACCOMPLISH THIS IN THE SOFTWARE.

WHAT GOOGLE DOES, WHAT ANDROID DOES, YOU'LL SEE THAT THERE IS

NO ANALYZER SERVER.

AND WHEN YOU SEE

APPLE TRIES TO SAY IT'S SOMETHING ELSE, THEY KNOW THERE

NEEDS TO BE AN ANALYZER SERVER.

SO APPLE TRIES TO SAY IT'S

SOMETHING ELSE.

SAY, WELL, THAT'S REALLY AN ANALYZER SERVER.

TO SEE THAT THAT'S SOMETHING VERY, VERY DIFFERENT.

I THINK THEY CALL IT A SOFTWARE LIBRARY.

THEY

BUT YOU'RE GOING
IN FACT,

THEIR OWN INVENTOR WILL TELL YOU THAT SOFTWARE LIBRARIES ARE

VERY DIFFERENT THAN AN ANALYZER SERVER.

YOU'LL ALSO HEAR IN THIS PATENT THAT THERE WAS PRIOR ART,

THAT IT HAD BEEN DONE BEFORE.

EMBEDDED BUTTONS THAT HAD BEEN INVENTED AT A VERY FAMOUS

INSTITUTION HERE IN PALO ALTO CALLED XEROX PARK, PALO ALTO

RESEARCH CENTER IN 1991 WHERE THEY -- THIS SAME TECHNOLOGY

EXISTED.

HAVE BEEN ISSUED.

IT'S NOT NEW.

THERE'S SOMETHING CALLED

IT'S NOT A PATENT THAT EVER SHOULD

THE '721, THE SLIDE TO UNLOCK, YOU KNOW, YOU WILL SEE THAT

SAMSUNG, ANDROID HAVE USED LOTS OF DIFFERENT LOCK INTERFACES,

VERY DIFFERENT KINDS OF MECHANISMS.

ONE IS CALLED THE PUZZLE DESIGN UNLOCK INTERFACE.

I MEAN, THE WAY IT WORKS, THE PIECES START UP IN THE

CORNER AND YOU CAN MOVE THIS PIECE, THIS PIECE HERE, YOU CAN

MOVE IT ALL AROUND.

IT'S NOT LIKE THE SLIDE TO UNLOCK WHERE

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THERE'S A TRACK AND YOU GO FROM THIS POINT TO THIS POINT ALONG

THE TRACK.

THIS PUZZLE PIECE, YOU CAN MOVE IT WITH YOUR FINGER ALL

AROUND.

VERY DIFFERENT.

IT'S AN EFFORT TO COME UP WITH SOMETHING PLAYFUL, FUN.

FOLKS AT SAMSUNG WERE TRYING TO DISTINGUISH THEMSELVES.

8
9

IT UNLOCKS WHEN YOU GO INTO THE HOLE THERE.

THIS IS

THIS IS NOT AN EFFORT TO COPY THE IPHONE.
THE

ANOTHER UNLOCK SCREEN THAT SAMSUNG USES IS A GALAXY 3
RIPPLE WHICH YOU WILL SEE.

UNFORTUNATELY, YOU CAN'T REALLY --

THIS DOESN'T REPRODUCE IN A PHOTOGRAPH, BUT IT'S A REALLY COOL

DESIGN WHERE IF YOU PUT YOUR FINGER ON THE SCREEN AND MOVE IT,

IT'S LIKE WATER RIPPLES ACROSS THE FACE OF THE SCREEN AND YOU

CAN MOVE UP, DOWN, ONE WAY OR ANOTHER, AND IT'S LIKE A LITTLE

WAVE OF WATER GOING ACROSS THE STREET.

NO SLIDE TO UNLOCK, YOU KNOW, APPLE'S SLIDE TO UNLOCK.

THEY DON'T ACCUSE THAT.

GS III, GALAXY 3, BEST SELLING PHONES.

THESE PHONES WITHOUT USING ANY APPLE SLIDE TO UNLOCK FEATURE.

THIS IS A BEST SELLING, YOU KNOW, THE
WE'RE SELLING LOTS OF

AND THEN YOU'RE GOING TO SEE THAT APPLE ITSELF HAS MOVED

AWAY FROM THAT ORIGINAL SLIDE TO UNLOCK DESIGN IN THE LATEST

IOS 7 SOFTWARE, YOU CAN GO FROM ANYWHERE ON THE LEFT-HAND SIDE

OF THE SCREEN TO THE RIGHT-HAND SIDE OF THE SCREEN, ANYWHERE AT

ANY POINT.

HAVE THAT LITTLE CHANNEL DOWN AT THE BOTTOM.

THERE'S MUCH MORE FREEDOM OF MOVEMENT.

YOU DON'T

THE WORDS SLIDE TO UNLOCK ARE STILL ON THE PHONE, BUT

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THEY'RE NOT CLAIMING THEY OWN THE WORDS.

THEY'VE GONE IN A DIFFERENT DIRECTION ALTOGETHER.

3
4
5
6
7
8
9

YOU CAN SEE THAT

IS THIS SOMETHING THAT'S REALLY WORTH MILLIONS AND
MILLIONS OF DOLLARS?

IS THIS WHY PEOPLE BUY SMARTPHONES?

THOSE ARE SOME OF THE DECISIONS THAT YOU'RE GOING -- THAT
YOU WILL HAVE TO DECIDE.
WE'LL ALSO SHOW YOU OTHER PRIOR ART.
BEEN SLIDE TO UNLOCK MECHANISMS BEFORE.

YOU KNOW, THERE HAVE

IT'S BEEN DONE BEFORE.

WHAT THEY CALL UNIVERSAL SEARCH, THIS INVOLVES THE -- THE

APPLE PATENT ON UNIVERSAL SEARCH INVOLVES A VERY SPECIFIC WAY

OF COMBINING LOCAL SEARCH RESULTS THAT ARE ON THE PHONE FROM,

LIKE, YOUR CONTACTS OR YOUR CALENDAR AND THINGS LIKE THAT WITH

RESULTS THAT COME FROM THE INTERNET.

NOW, I THINK IT'S FAIR TO SAY GOOGLE KNOWS SEARCH.

THE ENGINEERS AT GOOGLE DON'T NEED TO TURN TO APPLE, YOU KNOW,

WHEN THEY'RE BUILDING THEIR ANDROID SOFTWARE TO FIGURE OUT HOW

TO DO SEARCH ON A PHONE.

SINCE 1997.

DOING LOCAL SEARCH ON THE DESKTOP DEVICE CLEAR BACK TO 2004.

20
21
22

AND

THEY'VE BEEN DOING SEARCH AT GOOGLE

THEY'VE BEEN DOING, ON THE DESKTOP, THEY'VE BEEN

THE FUNCTIONS THAT APPLE IS CHALLENGING HERE IN ANDROID ON
PHONES, THEY WERE ADDED TO ANDROID AND SAMSUNG PHONES IN 2009.
BUT, AGAIN, THIS SEARCH CAPABILITY THAT, YOU KNOW, THEY

CLAIM TO HAVE A PATENT ON, IT'S NOT SOMETHING THAT THEY HAVE

EVER USED.

IT'S NEVER BEEN DONE ON THE IPHONE.

WE ASKED THE INVENTOR IN HIS DEPOSITION, AND HE SAYS HE

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DOESN'T KNOW ANYONE WHO'S EVER USED THIS.
YOU KNOW, YOU HEARD SOMETHING THAT MR. MCELHINNY SAID THAT

AFTER WE SUED THEM, THEY REMOVED IT.

DO YOU REMEMBER THIS?

AFTER WE SUED THEM, THEY REMOVED IT.

CUSTOMERS COMPLAINED;

THEY PUT IT BACK.

THAT WAS A COMPLETE DISTORTION, FRANKLY.

WHAT HAPPENED IS THEY SUED ON A DIFFERENT SEARCH PATENT.

THEY SUED ON THE '604 PATENT, NOT THIS ONE, AND THEY WENT TO

COURT AND THEY GOT AN INJUNCTION AGAINST OUR DOING THIS TYPE OF

SEARCH.

COMPLIED.

TURNED THAT OFF.

WE DIDN'T THINK IT WAS RIGHT.

WE DIDN'T AGREE, BUT WE

AND SO WE -- IT WASN'T HARD TO DO.

I MEAN, WE

WE APPEALED IT, AND THE COURT OF APPEALS REVERSED AND SAID

WE WERE RIGHT, APPLE WAS WRONG, WE'RE ENTITLED TO DO IT, AND

THEN DROPPED THAT PATENT.

16
17
18

NOW, MR. MCELHINNY LEFT THAT OUT.

HE DIDN'T TELL YOU THAT

PART OF THE STORY.
NOW, WE DID PUT THAT FEATURE BACK IN THE PHONE, BACK IN

ANDROID.

A WILD, WILDLY POPULAR FEATURE THAT PEOPLE NEED TO SEARCH THE

PHONES AND THE INTERNET AT THE SAME TIME.

GOOGLE DID THAT.

SAMSUNG DID THAT, NOT BECAUSE IT'S

IT TURNS OUT, YOU KNOW, GOOGLE CAN TRACK THIS.

THE FOLKS

AT GOOGLE WILL TELL YOU THAT WHEN YOU GET RESULTS FROM BOTH, ON

THE INTERNET AND USING THIS PHONE AND THE FEATURE, IT'S

SOMETHING LIKE ONE OUT OF 50 TIMES THAT PEOPLE TAP ON SELECT

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THE PHONE RESULT.

MANY, MANY FEATURES AND WE INCLUDE IT AND WE THINK WE'RE

ENTITLED TO INCLUDE IT.

IT'S JUST NOT THAT BIG A DEAL.

IT'S ONE OF

WE DO IT IN A VERY, VERY DIFFERENT WAY THAN THEIR PATENT

REQUIRES.

THERE'S SOMETHING CALLED A HEURISTIC, WHICH I NEVER

HEARD OF BEFORE I GOT IN THIS CASE, BUT THERE'S A RULE CALLED A

HEURISTIC WHICH MEANS, IT'S AN ENGINEERING OR SOFTWARE TERM

WHICH MEANS BASICALLY A RULE OF THUMB OR SOMETHING THAT'S GOOD

ENOUGH.

IT'LL GIVE YOU AN ANSWER TO THIS, GOOD ENOUGH, KIND OF

RULE OF THUMB, AND THEIR PATENT REQUIRES THAT YOU MUST SEARCH

IN TWO PLACES AND YOU MUST USE HEURISTICS TO SEARCH IN TWO

PLACES, BOTH LOCALLY AND ON THE INTERNET.

AND THEY WILL POINT TO A HEURISTIC ON THE LOCAL SEARCH IN

ANDROID, BUT THERE ISN'T ONE ON THE INTERNET BECAUSE GOOGLE

USERS, NOT SURPRISINGLY, THE RESULTS ARE GOOGLE'S SUGGESTIONS

THAT COME TO THE PHONE AND THAT'S NOT A HEURISTIC AT ALL.

YOU'LL SEE THERE REALLY ISN'T INFRINGEMENT THERE.

THERE IS PRIOR ART, SOMETHING CALLED WAIS, W-A-I-S, WHERE

AN M.I.T. PROFESSOR, DR. MARTIN RINARD, WILL TESTIFY ABOUT HOW

THIS HAD BEEN DONE BEFORE.

21
22
23

AGAIN, WHEN THIS PATENT ISSUED, THE PATENT OFFICE DID NOT
KNOW ABOUT WAYS.
FINAL CATEGORY OF DAMAGES I HAVEN'T HAD A CHANCE TO

MENTION YET -- I'VE MENTIONED AT VARIOUS POINTS THE LOST

PROFITS WHERE THEY SAY THEY WOULD HAVE SOLD MORE PHONES, AND WE

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WOULD HAVE SOLD LESS BUT FOR THE USE OF THESE FEATURES.

MENTIONED THE REASONABLE ROYALTY.

I'VE

ANOTHER CATEGORY OF DAMAGES THEY'RE SEEKING IS THEY CALL

BLACKOUT PERIOD OR OFF THE MARKET DAMAGES.

AND BASICALLY THE

THEORY OF THIS IS THEY SAY THEY'RE ENTITLED TO $508 MILLION OF

THE 2 BILLION BECAUSE THEY SAY, WELL, SAMSUNG WOULD HAVE TO

TAKE UP TO FOUR MONTHS TO FIGURE OUT ANY ALTERNATIVE TO THREE

OF THESE PATENTED FEATURES.

WE WOULD HAVE TO TAKE OUR PHONES OFF THE MARKET.

IT WOULD TAKE US FOUR MONTHS, AND
WE COULDN'T

BE SELLING THESE PHONES FOR FOUR MONTHS, AND WHILE SAMSUNG IS

GONE, APPLE WILL SELL A LOT MORE PHONES.

HOW THEY GET THE $508 MILLION.

ALL RIGHT.

SO THAT'S

WELL, LET ME TELL YOU SOMETHING.

IF WE LOOK AT SLIDE 109.

THE IDEA THAT WE NEED FOUR MONTHS TO COME UP WITH SOME

ALTERNATIVE IF, IN FACT, WE INFRINGE THESE AND THEY WERE

INVALID -- THAT THEY WERE VALID IS JUST NONSENSE.

YOU HAVE SEEN THAT WE HAVE A WORD SUGGESTION FEATURE,

WHICH THEY ADMIT IS NOT INFRINGING.

DART PHONE, WHICH IS AVAILABLE AND COULD BE USED AT ANY TIME.

WE DON'T NEED FOUR MONTHS TO PUT THAT IN PHONES.

22
23
24
25

IT'S BEEN ON THE SAMSUNG

WE HAVE OTHER VERSIONS OF LOCK SCREENS, YOU KNOW, THE
RIPPLE.

YOU SAW THAT, THE ONE THAT'S LIKE THE WATER.

IT WOULD TAKE US, THE TESTIMONY WILL BE, AT MOST FOUR DAYS
TO IMPLEMENT AN ALTERNATIVE TO THE ANALYZER SERVER PATENT.

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SO THERE REALLY IS -- THERE WOULD BE NO BASIS OF ANY AWARD
FOR OFF THE MARKET OR BLACKOUT PERIOD DAMAGES.
YOU'RE GOING TO HEAR, WITH RESPECT TO REASONABLE ROYALTY,

WHICH I TALKED ABOUT A LITTLE BIT EARLIER, REMEMBER THE $40.10

A PHONE THEY'RE ASKING FOR WHICH TRANSLATED, IF YOU COUNT ALL

THE PATENTS, TO SOMETHING LIKE A $24,000 PHONE.

YOU'LL HEAR FROM DR. CHEVALIER, OUR EXPERT, AND SHE DID AN

ANALYSIS ABOUT WHAT IS THE APPROPRIATE METHOD OF FIGURING OUT,

IF ANY ROYALTY, REASONABLE ROYALTY, IF ANY ROYALTY WAS OWING

10
11

HERE, WHAT IT WOULD BE.
AND SHE DID A STUDY.

YOU'LL HEAR FROM HER, AND SHE

CONCLUDES THAT FOR ALL FIVE OF THESE, 35 CENTS ALL OF THEM

ALTOGETHER.

WEBSITES ON AMAZON AND SHE SAYS THERE'S NO MENTION OF THESE

FEATURES.

ABOUT THEM.

SHE LOOKS AT REVIEWS OF SAMSUNG PRODUCTS AND

IT'S NOT LIKE PEOPLE ARE WILDLY POPULAR -- EXCITED

SHE COMPARED THE PROFITABILITY OF THE PRODUCTS WITH THE

FEATURES AND WITHOUT THE FEATURES AND CONCLUDED THAT, YOU KNOW,

AT LEAST THE WORD SUGGESTION IN SLIDE TO LOCK CLAIMS HAVE NO

VALUE AT ALL BECAUSE SAMSUNG'S MOST PROFITABLE PHONES, THE

S III AND THE GALAXY NOTE, DON'T -- AREN'T EVEN ACCUSED.

SHE LOOKS AT WHAT APPLE TOLD THE GOVERNMENT ITS SOFTWARE

WAS WORTH.

WAS COMPLETELY INCONSISTENT.

AND WHAT DID APPLE TELL THE GOVERNMENT IT TURNS OUT

AM I RUNNING OUT OF TIME?

THANK YOU.

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SO YOU'RE GOING TO HEAR FROM HER THAT WHAT APPLE TELLS THE

GOVERNMENT THE SOFTWARE IS WORTH IS VERY INCONSISTENT.

LOOKS AT APPLE'S OWN PRIOR REPRESENTATIONS TO COURTS ABOUT WHAT

ITS SOFTWARE IS WORTH.

MARKETPLACE, WHAT ARE PEOPLE PREPARED TO PAY FOR APPLICATIONS

ON SMARTPHONES.

7
8
9

SHE

SHE LOOKED AT, YOU KNOW, WHAT'S THE

THE MOST POPULAR ANDROID APPLICATION IS SOMETHING CALLED
SWIFT KEY.

PEOPLE PAY 24 CENTS A UNIT FOR THAT.

SO AFTER CONSIDERING ALL THOSE FACTORS, SHE SAYS 35 CENTS

A UNIT, AND IF THERE'S A LUMP SUM ROYALTY PAYMENT, IF ONE WERE

OWING -- AGAIN, WE DON'T THINK THERE'S ANY INFRINGEMENT, FOR

FOUR OF THE FIVE PATENTS, WE DON'T THINK THEY'RE VALID, BUT IF

THERE WERE INFRINGEMENT, IF THEY'RE VALID AND IF A ROYALTY WAS

OWING, $39.2 MILLION IS WHAT SHE SAYS IS THE MAXIMUM.

SO IN THE BRIEF TIME I'VE GOT LEFT, LET ME TALK A LITTLE

BIT ABOUT SAMSUNG'S PATENT CLAIMS AGAINST APPLE.

NORMALLY WE AT SAMSUNG DON'T SUE OVER PATENTS LIKE THESE.

COUNSEL, I AGREE WITH MR. LEE ON THAT, WE DON'T ORDINARILY SUE

ON PATENTS LIKE THESE.

AND, FRANKLY,

YOU KNOW, IN THE PRE-HOLY WAR DAYS, WHAT WOULD HAPPEN IN

THIS INDUSTRY IS THAT COMPANIES WOULD GET TOGETHER AND ENTER

INTO CROSS-LICENSE AGREEMENTS FOR THEIR ENTIRE PORTFOLIOS.

THEY WOULD WORK OUT A DEAL AND LEARN TO CO-EXIST.

THAT'S WHAT USED TO HAPPEN.

BUT WE DID GET SUED, AND SO WE THOUGHT IT WAS APPROPRIATE

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TO DEFEND OURSELVES.

BUT WE UNDERSTAND HOW THIS HAPPENS SOMETIMES.

PEOPLE END

UP STEPPING ON EACH OTHER TOES WITH SIMILAR SOLUTIONS TO

PROBLEMS.

I'M SORRY.

I'M LOSING MY VOICE.

YOU HAVE ENGINEERS FOR THOSE SAME SCHOOLS, MAYBE STANFORD,

BERKELEY, THEY STUDY ENGINEERING.

BUSINESS.

THEY FACE THE SAME PROBLEM.

THEY OWN THE SMARTPHONE

THEY GO TO WORK FOR COMPANIES LIKE GOOGLE AND APPLE.
THEY'RE TRYING TO MAKE A PHONE

EASY TO USE, TRYING TO MAKE IT EFFECTIVE, FAST, ADDRESSING THE

SAME PROBLEMS, AND SOMETIMES THEY MAY END UPCOMING UP WITH

SIMILAR SOLUTIONS AND END UP STEPPING ON EACH OTHER TOES.

SOMETIMES HAPPENS.

14
15
16

THAT

AND IN THAT SAME WAY, APPLE HAS STEPPED ON SAMSUNG'S TOES
BY USING SAMSUNG'S VIDEO TRANSMISSION AND VIDEO ALBUM PATENTS.
AND WHEN THAT HAPPENS, AND IT DOES HAPPEN, IT'S NOT A HOLY

WAR, OR IT SHOULDN'T BE.

REMEDY AND IT'S A SIMPLE ECONOMIC TRANSFER, THAT THERE SHOULD

BE A PAYMENT FROM THE COMPANY THAT WAS USING THE TECHNOLOGY

THAT DIDN'T HAVE A RIGHT TO, TO THE COMPANY THAT OWNED THE

TECHNOLOGY AND DID HAVE A RIGHT TO IT.

22
23

IT'S A SIMPLE THAT THE LAW PROVIDES A

IT'S NOT ABOUT PUNISHING.

IT'S NOT ABOUT PUNISHING THE

WRONG DOER.

BUT HERE YOU'LL SEE APPLE IS DOING SOMETHING DIFFERENT.

IT'S SEEKING MASSIVE DAMAGES ON THE FICTION THAT THEY'VE LOST

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SALES BECAUSE OF VERY SMALL FEATURES THAT YOU WILL LEARN HAVE

NO IMPACT ON SALES AT ALL.

NOW, I'M GOING TO SHOW YOU HOW WE CALCULATE THE ROYALTY

THAT IS OWING FOR THEIR INFRINGEMENT OF OUR TWO PATENTS, AND WE

WILL DO IT REASONABLY.

AND I'LL JUST NOTE, THEY'RE NOT CHALLENGING THE VALIDITY

OF EITHER ONE OF THEIR PATENTS.

DEEMED VALID FOR PURPOSES OF ALL YOUR DECISION MAKING.

BOTH OF THOSE PATENTS ARE

SO FIRST THE FACETIME PATENT FROM THE '239, AND THIS

RELATES TO TRANSMITTING COMPRESSED VIDEO FOOTAGE.

A PATENT THAT WAS WAY AHEAD OF ITS TIME.

AND THIS IS

LONG BEFORE MOST PEOPLE EVEN HAD MOBILE PHONES, THE

INVENTORS OF THIS PATENT FIGURED OUT A WAY TO TRANSMIT VIDEO

FROM REMOTE LOCATIONS BY COMPRESSING VIDEO IN REAL TIME SO IT

COULD TRANSMIT QUICKLY WITHOUT INTERRUPTION.

AND YOU WILL HEAR FROM OUR EXPERT, DR. SCHONFELD, DR. DAN

SCHONFELD FROM THE UNIVERSITY OF CHICAGO WHO WILL EXPLAIN TO

YOU THAT APPLE HAS, IN FACT, INFRINGED THIS PATENT.

THERE ARE TWO KEY TERMS IN THIS PATENT.

IT -- IT SAYS IT INCLUDES A COMPUTER WITH A VIDEO CAPTURE

MODULE TO CAPTURE THE COMPRESSED VIDEO IN REAL TIME.

PRODUCTS, AS WELL AS SAMSUNG PRODUCTS, INCLUDE BOTH CAMERAS AND

COMPONENTS THAT CAPTURE VIDEO.

24
25

YOU KNOW,

THE FIRST IS THAT

APPLE'S

THE SECOND TERM IS THERE MUST BE A MEANS FOR TRANSMISSION
OF THE VIDEO.

DR. SCHONFELD WILL SHOW YOU THAT THERE WAS A

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MEANS FOR -- THAT BOTH THOSE TERMS ARE SATISFIED.
THE APPLE FUNCTIONALITIES THAT INFRINGE INCLUDE FACETIME,

FACETIME FEATURE INFRINGES VIDEO, THROUGH VIDEO CONFERENCING.

BY THE WAY, A FEATURE THAT APPLE HAS PROMOTED VERY, VERY

HEAVILY, UNLIKE, YOU KNOW, THE FIVE MINOR SOFTWARE FEATURES

THAT THEY'RE SUING SAMSUNG ON.

AND IT ALSO INFRINGES BY THE ABILITY ON APPLE -- THE

FUNCTIONALITY THAT PERMITS YOU TO TAKE VIDEOS AND TRANSMIT THEM

USING E-MAIL AND MESSAGING ON THE IPHONE.

NOW, MR. LEE MADE A BIG TO DO ABOUT THE FACT THAT WE

BOUGHT THIS PATENT.

BOUGHT IT FROM A VERY CREATIVE FAMILY, THE FREEMANS WHO LIVE IN

TULSA, OKLAHOMA.

IT'S TRUE.

WE DID BUY THIS PATENT.

IT'S KIND OF AN INTERESTING STORY BEHIND IT.

THEY

ORIGINALLY INVENTED THIS IN ORDER TO, YOU KNOW -- THEY LIVE IN

AN AREA WHERE THERE'S LOTS OF TORNADOS, AND THEY HAD THE

ABILITY TO TRANSFER VIDEO OF TORNADOS TO TV STATIONS AND THINGS

LIKE THAT.

WHAT'S IMPORTANT TO KNOW IS IT'S NOT IMPORTANT.

IT'S NOT

A DEFENSE IN A PATENT CASE THAT A PATENT HAS BEEN PURCHASED.

APPLE PURCHASES PATENTS, VOICE RECOGNITION SOFTWARE FROM SIRI.

I MEAN, THAT'S ABSOLUTELY IRRELEVANT WHETHER OR NOT THE PATENT

WAS PURCHASED.

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25

SAMSUNG CHOSE THIS PATH BECAUSE OF HOW IMPORTANT AND
INNOVATIVE IT WAS.

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THEY ALSO TOLD YOU THAT THE PATENT HAS NOW EXPIRED.

THAT'S TRUE.

FOR THE PERIOD WHEN THE PATENT WAS ACTIVE, WHICH IS PERFECTLY

APPROPRIATE, PERFECTLY RIGHT.

THAT ALSO DOESN'T MATTER.

WE'RE SEEKING DAMAGES

WE'RE ENTITLED TO DO THAT.

THE OTHER PATENT, THE '449, VIDEO ALBUMS PATENT, THIS

RELATES TO AN INVENTION THAT THE COMPANY HITACHI CAME UP WITH

BACK IN 1997 WHERE THEY CAME UP WITH A REVOLUTIONARY DIGITAL

CAMERA THAT WOULD PERMIT YOU TO COMPRESS AND STORE HUNDREDS OF

PHOTOGRAPHS AND VIDEOS.

IN EARLIER CAMERAS, YOU COULD ONLY STORE LIKE TEN PICTURES

AND YOU COULDN'T STORE ANY VIDEOS AT ALL.

USED CUTTING EDGE TECHNOLOGY TO PERMIT YOU TO STORE SO MANY ON

THE CAMERA THAT YOU COULDN'T KEEP TRACK OR FIND OUT WHERE THEY

WERE.

THIS HITACHI CAMERA

SO THIS IS KIND OF A NIFTY, IF YOU WANT, EASY TO USE

FEATURE THAT HITACHI INVENTED.

BUILDING FOLDERS RIGHT INTO THE CAMERA TO MAKE IT EASIER TO

MANAGE AND TO LOCATE THE PHOTOS AND THE VIDEOS.

IT SOLVED THE PROBLEM BY

YOU'LL SEE THAT ON THE LEFT-HAND SIDE HERE, YOU'LL SEE ONE

OF THOSE FIGURES FROM THE PATENT.

ALBUMS HERE.

THE PATENT IS THAT YOU ACTUALLY NUMBER, YOU CAN NUMBER THE

ACTUAL NUMBER OF PHOTOGRAPHS THAT ARE THERE.

24
25

YOU'LL SEE THERE'S A LIST OF

IT'S KIND OF AN ENGINEER'S DRAWING, AND PART OF

AND THEN ON THE RIGHT-HAND SIDE, YOU'LL SEE THE ALBUMS,
YOU KNOW, SAME FUNCTIONALITY ON THE IPHONE.

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AND DR. KEN PARULSKI, WHO HAS AN ADVANCED DEGREE FROM

M.I.T., WIDELY RECOGNIZED PIONEER IN DIGITAL PHOTOGRAPHY, WILL

COME HERE AND WALK YOU THROUGH THESE CLAIMS AND SHOW YOU HOW

APPLE INFRINGES THIS PATENT.

SO BECAUSE THESE TWO PATENTS ARE INFRINGED, SAMSUNG IS

ENTITLED TO DAMAGES, AND THOSE DAMAGES, AGAIN, TAKE THE FORM OF

A REASONABLE ROYALTY.

UNLIKE THE MINOR SOFTWARE PATENTS APPLE HAS SUED ON, THE

VIDEO PATENT, THE '239 PATENT INCLUDES VERY IMPORTANT FEATURES

THAT RELATE TO THE TRANSMISSION OF VIDEO WHICH APPLE HAS VERY

HEAVILY PROMOTED, FACETIME OVER CELLULAR.

ALSO E-MAIL, TRANSMISSION OVER E-MAIL, THROUGH TEXT.

THIS IS SOMETHING THAT'S BEEN VERY -- THAT IS, IN FACT,

SOMETHING VERY IMPORTANT.

AND YOU LOOK AT THOSE -- I SHOWED YOU THE IPHONE CONSUMER

SURVEY, WHAT FEATURES PEOPLE FOCUS ON.

IT.

RISE TO THE LEVEL OF SOMETHING PEOPLE TAKE NOTE OF.

IT'S SOMETHING THAT IS ADVERTISED,

FACETIME WAS ONE OF THEM.

I DON'T KNOW IF YOU SAW

THAT'S ONE THAT ACTUALLY DOES

THE OTHER, THE VIDEO ALBUMS PATENT, IT'S A MORE -- YOU

KNOW, IT'S A USEFUL BUT MORE LIMITED FEATURE, BUT IT'S

VALUABLE.

AND WE HAVE DR. KEARL, JAMES KEARL, WHO'S A TRAINED

ECONOMIST AT M.I.T., WHO DETERMINED THAT APPLE WOULD HAVE PAID

$6.9 MILLION FOR A LICENSE IN A NEGOTIATION.

AND, YOU KNOW, IT'S -- I FOUND MR. LEE'S ARGUMENT

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SURPRISING, THE FACT THAT, YOU KNOW, WE'RE SUING AND ONLY

ASKING FOR $158,000, OR WE'RE ONLY ASKING FOR $6.78 MILLION

SOMEHOW MEANS THAT WE DON'T RESPECT PATENTS OR THAT WE DON'T

CARE ABOUT PATENTS, THAT THE SUGGESTION SEEMED TO BE THAT IF

YOU AREN'T ASKING FOR BILLIONS, YOU'RE NOT TAKING PATENTS

SERIOUSLY.

YOU WILL SEE -- THE EVIDENCE IN THIS CASE WILL SHOW YOU

THAT THEIR BILLION DOLLAR NUMBERS ARE COMPLETELY UNSUPPORTED.

THEY ALL TIE BACK TO THAT UNRELIABLE HAUSER SURVEY, AND THEY'RE

PUTTING THOSE NUMBERS OUT THERE JUST TO TRY TO GET THEM IN YOUR

HEAD.

12
13

AND WE WILL SHOW YOU HOW PROPERLY TO CALCULATE A ROYALTY
ON THESE, YOU KNOW, ON THESE PATENTS WHICH APPLE HAS INFRINGED.

DR. KEARL CALCULATED THESE DAMAGES.

125.

ACTUAL DATA THAT HE COULD RELY ON.

IF WE LOOK AT SLIDE

HE STARTED WITH SOME REAL WORLD DATA, AND HE HAD SOME

THERE WAS A TIME WHEN FACETIME WAS FIRST INTRODUCED WHERE

APPLE ACTUALLY SOLD THAT AS AN APP ON THE MAC, AND IT WAS A

HUGE SUCCESS .

PEOPLE BOUGHT IT.

IT COST 99 CENTS.

SO THERE'S A POINT, YOU KNOW, A REAL WORLD DATA POINT THAT

DR. KEARL COULD WORK WITH, WHAT WOULD PEOPLE PAY FOR THIS?

WHAT IS IT WORTH?

AND YOU'LL SEE, HE WILL EXPLAIN TO YOU HOW HE THEN DID

MARKET STUDIES COMPARING THAT TO OTHER FEATURES, OVER TEXTING,

OVER E-MAIL IN THE VIDEO ALBUMS PATENT AND CAME UP WITH THE

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NUMBERS WHICH I SHOWED YOU.
NOW, HERE'S THE IRONY:

ALTHOUGH THE 6.78 MILLION THAT

SAMSUNG IS ASKING FOR FOR THESE TWO PATENTS IS A FRACTION OF

WHAT APPLE IS ASKING FOR ON ITS PATENTS, APPLE SAYS THAT 6.78

MILLION IS FAR TOO MUCH.

APPLE IS SAYING THAT.

IT'S TELLING YOU THAT EVEN

ASSUMING, EVEN ASSUMING IT INFRINGES THE '239 PATENT BY USING

FACETIME, A FEATURE THAT APPLE VERY HEAVILY PROMOTED AS A

MARQUEE FEATURE, IT SHOULD PAY LESS THAN 6.78 MILLION.

10
11
12

AT THE SAME TIME, FOR MUCH MORE MINOR FEATURES, THEY'RE
SEEKING BILLIONS.

IT'S THAT SIMPLE.

ONE THING THEY'RE CORRECT ON.

THESE TYPES OF FEATURES

AREN'T WORTH HUNDREDS OF MILLIONS OF DOLLARS.

A SIGNIFICANT DIFFERENCE IN SALES.

VALUE.

MILLION.

THEY DON'T MAKE

THEY HAVE VERY LIMITED

IN THIS CASE, DR. KEARL DETERMINED THAT THAT WAS $6.78

SO JUST TO WRAP UP, YOU'VE HEARD APPLE'S LAWYERS SAY THAT

SAMSUNG IS TAKING SALES AWAY FROM APPLE BECAUSE IT HAS THESE

FEATURES THAT CUSTOMERS WANT AND THAT IF SAMSUNG DIDN'T HAVE

THESE FEATURES, SAMSUNG WOULD SELL FEWER PHONES AND APPLE WOULD

SELL MORE.

APPLE ITSELF DOESN'T EVEN USE FOUR OF THE FIVE.

AGREE AS TO THREE.

SLIDE TO UNLOCK.

THEY

WE HAVE TO PROVE TO YOU THE FOURTH, THE

YOU CAN'T GET THOSE FEATURES BY BUYING AN APPLE PRODUCT.

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THEY'RE NOT IN A PRODUCT.

THEY DON'T USE THEM.

APPLE WANTS YOU TO BELIEVE THAT THESE CLAIMS ARE WORTH

OVER $2 BILLION EVEN THOUGH THEY ARE NOT VALUABLE ENOUGH FOR

APPLE TO USE.

A VERY MUCH MORE COMMON SENSE EXPLANATION AS TO WHY A

PATENT CLAIM IS NOT ADVERTISED OR LICENSED OR USED IS NOT

BECAUSE IT'S WORTH VERY MUCH, BUT BECAUSE IT'S WORTH VERY

LITTLE.

THE CLAIMS, THESE APPLE PATENT CLAIMS ARE ORDINARY WAYS TO

DO ORDINARY THINGS THAT HAVE BEEN, CAN BE, AND ARE BEING DONE

DIFFERENTLY.

ANDROID IS IPHONE'S MAIN COMPETITOR, AND GOOGLE IS AN

APPLE OBSESSION.

ANDROID, AND THAT IS THE PURPOSE OF THIS LAWSUIT.

APPLE'S WHOLE FOCUS IS TO BEAT GOOGLE'S

APPLE HERE IS SINGLING OUT, SINGLING OUT, FROM ALL OF THE

ANDROID POWERED HANDSET MANUFACTURERS, IT'S SINGLING OUT THE

MOST SUCCESSFUL MANUFACTURER'S PRODUCTS THAT RUN ON ANDROID,

SAMSUNG, AND TRYING TO CAPTURE THE PROFITS IT MADE FROM SELLING

ANDROID CELL PHONES AND TABLETS.

HOW DO YOU KNOW THIS IS TRUE, THIS GALAXY NEXUS PHONE

WHICH THEY'RE SUING OVER AND THEY ACCUSE?

HARDWARE.

SOFTWARE IS PURE ANDROID.

24
25

NOTHING IN THE

THEY DON'T ACCUSE ANYTHING IN THE HARDWARE.

THE

APPLE IS TARGETING NEXUS'S PURE SAMSUNGLESS SOFTWARE.
THAT'S WHAT THIS LAWSUIT IS ABOUT.

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JUST HAVING ANDROID DID NOT GUARANTEE SAMSUNG'S SUCCESS.

THERE ARE MANY DIFFERENT MANUFACTURERS THAT MAKE ANDROID

PRODUCTS.

NOT IN THE THINGS THAT WERE THE SAME, BUT THE THINGS THAT WERE

DIFFERENT, LIKE THE INNOVATION, QUALITY, SELECTION, BUSINESS

STRATEGY, OFFERING A LARGE VARIETY OF DIFFERENT PHONES AT MANY

DIFFERENT PRICE POINTS, THE PROMOTION, THE DEVELOPMENT, THE

BRAND, ALL OF THE RESULTS OF THE HARD WORK FROM THE PEOPLE AT

SAMSUNG.

10
11
12
13

SAMSUNG'S UNIQUE SUCCESS IN THE ANDROID WORLD WAS

LOTS OF PEOPLE, LOTS OF COMPANIES USE ANDROID, BUT NONE OF
THEM ARE SELLING NEARLY AS MANY PHONES AS SAMSUNG.
SAMSUNG'S SUCCEEDS WHERE OTHERS HAVEN'T BECAUSE OF
SAMSUNG'S HARDWARE.

IT IS THE SAMSUNG DIFFERENCE -- IT'S THE SAMSUNG

DIFFERENCE MAKING CONTRIBUTIONS THAT SELL PHONES AND MAKE IT

FAR AND AWAY THE MOST SUCCESSFUL ANDROID -- THE MOST SUCCESSFUL

MANUFACTURER IN THE ANDROID WORLD.

APPLE DOES NOT ACCUSE THOSE DIFFERENT MAKING HARDWARE

FEATURES OF INFRINGEMENT.

ON THESE PHONES, PHONES WHICH PEOPLE BOUGHT BECAUSE THEY CARE

ABOUT BIG SCREENS, STYLUSES, SUPER HD, AMOLED SCREENS, HIGH

QUALITY CAMERAS, AND THE OTHER THINGS THAT YOU COULD ONLY GET

ON THAT SAMSUNG PHONE.

BE LEFT WHERE THEY SPENT IT.

APPLE IS NOT ENTITLED TO THE PROFIT

THE MONEY THAT CONSUMERS SPENT SHOULD

THANK YOU VERY MUCH.

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THE COURT:

THE TIME IS NOW 2:21.

LET'S TAKE A 15 MINUTE BREAK AND WHEN WE COME BACK, APPLE
WILL CALL ITS FIRST WITNESS.
ALL RIGHT.

THANK YOU.

PLEASE DON'T RESEARCH OR DISCUSS

THE CASE.
(JURY OUT AT 2:21 P.M.)

7
8

OKAY.

THE COURT:

OKAY.

THE RECORD SHOULD REFLECT THE

JURORS HAVE LEFT THE COURTROOM.

MR. SELWYN, HAVE YOU HAD A CHANCE TO -- PLEASE TAKE A

SEAT -- HAVE YOU HAD A CHANCE TO TAKE A LOOK AT THOSE THREE

PAGES?

12
13

MR. SELWYN:

WE HAVE.

WE HAVE NO OBJECTION TO THOSE

THREE PAGES OF EXHIBIT 14 BEING DISPLAYED PUBLICLY.

THE COURT:

OKAY.

MR. SELWYN:

AND THAT'S DX 413.

DX 413.

WE UNDERSTAND THAT THOSE ARE

THE ONLY THREE PAGES FROM THAT DOCUMENT OR LIKE DOCUMENT THAT

THEY INTEND TO USE.

THE COURT:

OKAY.

SO THERE'S NO OBJECTION ANYMORE.

ALL RIGHT.

I'M GOING TO RETURN THIS TO YOU.

(RECESS FROM 2:22 P.M. UNTIL 2:37 P.M.)

(JURY IN AT 2:37 P.M.)

THANK YOU.

THE COURT:

OKAY.

THANK YOU.

EVERYONE PLEASE TAKE YOUR SEATS.

WELCOME BACK.

PLEASE TAKE A SEAT.

YOU HAVE JUST RECEIVED A PHOTO OF THE FIRST WITNESS.

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WILL GET A PHOTO FOR EVERY WITNESS, AND THERE IS A TAB IN YOUR

JURY BINDER THAT SAYS WITNESS PHOTOS.

INCLUDE THEM.

THAT'S WHERE YOU CAN

YOU'RE FREE TO TAKE NOTES.

THIS IS JUST TO HELP YOU REMEMBER DURING YOUR

DELIBERATIONS, WHICH IS BE A NUMBER OF WEEKS FROM NOW, IT JUST

ENABLES YOU TO PUT A NAME WITH A FACE AND PERHAPS YOUR NOTES,

OR AT LEAST YOUR MEMORIES OF WHAT THAT PERSON SAID.

ALL RIGHT.

9
10

PLEASE CALL YOUR FIRST WITNESS.

MR. MCELHINNY:

YOUR HONOR, MR. PHILIP SCHILLER.

(PLAINTIFF'S WITNESS, PHILIP WILLIAM SCHILLER, SWORN.)

THE WITNESS:

THE CLERK:

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15

APPLE CALLS AS ITS FIRST WITNESS,

I DO.

WOULD YOU HAVE A SEAT, PLEASE.

AND PULL THE MICROPHONE TOWARDS YOU AND STATE YOUR NAME,
PLEASE, AND SPELL IT.

THE WITNESS:

W-I-L-L-I-A-M, S-C-H-I-L-L-E-R.

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THE COURT:

ALL RIGHT.

P-H-I-L-I-P,

THE TIME IS NOW 2:38.

AHEAD, PLEASE.

DIRECT EXAMINATION

BY MR. MCELHINNY:

AWKWARD.

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25

PHILIP WILLIAM SCHILLER.

MAKE SURE YOU'RE COMFORTABLE.

I DON'T WANT TO HAVE YOU

READY?
A.

YES.

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LET'S DO IT AGAIN.

PLEASE INTRODUCE YOURSELF TO THE JURY,

MR. SCHILLER.

MY NAME IS PHILIP SCHILLER.

BY WHOM ARE YOU EMPLOYED, SIR?

APPLE.

YOU'RE GOING TO HAVE TO GET THAT MICROPHONE UP THERE.

APPLE.

THERE YOU GO.

POSITION WITH APPLE?

WHAT IS YOUR POSITION, YOUR CURRENT

SENIOR VICE-PRESIDENT OF WORLDWIDE MARKETING.

AND JUST AT A HIGH LEVEL, WHAT ARE YOUR RESPONSIBILITIES?

I'M RESPONSIBLE FOR ALL THE MARKETING ORGANIZATIONS AT

APPLE.

TEAM, SIR?

YES.

AND ARE YOU A MEMBER OF APPLE'S EXECUTIVE TEAM?

I AM.

AND WHAT IS THE EXECUTIVE TEAM AT APPLE?

THE EXECUTIVE TEAM IS MADE UP OF NINE OF US THAT RUN --

THAT ARE RESPONSIBLE FOR ALL OF THE FUNCTIONS AT APPLE, AND

COLLECTIVELY WE MANAGE APPLE.

HOW LONG HAVE YOU PERSONALLY WORKED AT APPLE, SIR?

SOMETHING OVER 23 YEARS.

AS OF TODAY TO WHOM DO YOU REPORT AT APPLE?

DOES APPLE HAVE SOMETHING WHICH IT CALLS THE EXECUTIVE

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THE CEO, TIM COOK.

LET'S GO BACK.

VIEW OF WHAT YOUR JOB RESPONSIBILITIES ARE?

FUNCTIONS.

MARKETING, BUSINESS MARKETING, EDUCATION MARKETING, OR

DEVELOPER PROGRAMS, CUSTOMER RESEARCH, PRODUCT FINANCE.

8
9

YES.

CAN YOU GIVE US A LITTLE BIT MORE DETAILED

I'M RESPONSIBLE, AGAIN, FOR ALL THE MARKETING
SO THAT'S PRODUCT MARKETING, INTERNATIONAL

I THINK THOSE ARE THE MAJORITY OF THE ORGANIZATIONS.
Q.

AND AS PART -- IS MARKETING THE SAME AS OR DIFFERENT THAN

PUBLIC RELATIONS?

THE WORLD THEY CONSIDER IT ONE OF THE MANY PARTS OF MARKETING

AT APPLE.

OF MARKETING.

IS MARKETING THE SAME AS OR DIFFERENT THAN SALES.

VERY DIFFERENT FROM SALES.

CAN YOU THEN EXPLAIN THE RELATIONSHIP BETWEEN THOSE THREE

FOR US?

PRESS ON ALL OF THE THINGS THAT THEY HAVE QUESTIONS ABOUT, THE

STORIES THEY'RE WRITING, AND HOW INTERFACE, AND HAVE

RELATIONSHIPS WITH MEMBERS OF THE PRESS.

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25

IT'S -- AT APPLE IT'S DIFFERENT.

I THINK IN GENERAL IN

WE SEPARATE THE PUBLIC RELATIONS TEAM FROM THE REST

AND IS MARKET -- THESE ARE THE LESS ONES I HAD TO LEARN.

LET'S SEE.

PUBLIC RELATIONS IS A TEAM THAT WORKS WITH THE

AND MARKETING COVERS, AT APPLE, A HUGE VARIETY OF THESE
MARKETING DISCIPLINES, LIKE WORKING ON A PRODUCT AND ALL OF THE

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FEATURES THAT CUSTOMERS MIGHT WANT, AND WORKING ON THE WEBSITE.

APPLE.COM IS PART OF MY MARKETING COMMUNICATIONS TEAM OR

WORKING TO LAUNCH A PRODUCT AROUND THE WORLD.

THINGS IN THE MARKETING DOMAIN.

THOSE ARE ALL

AND THEN SALES IS RESPONSIBLE FOR THE CHANNELS THAT OUR

PRODUCT IS OFFERED THROUGH AND SALES TO BOTH END USERS, AS WELL

AS ITS OTHER PARTNERS WHO THEN SELL OUR PRODUCT.

8
9
10

PERSONALLY, I LIKE TO THINK OF SALES AS VERY SHORT-TERM
FOCUS, WHAT DO I HAVE TO DO TO GET A PRODUCT FROM HERE TO THERE
AND HELP SOMEBODY BUY IT RIGHT NOW?

WHERE MARKETING WE TRY TO HAVE A LONGER HORIZON LINE TO

LOOK FURTHER OUT AT WHAT PEOPLE THINK, WHAT TRENDS ARE

HAPPENING, WHAT WE MIGHT DO TO IMPROVE OUR PRODUCTS AND SO ON.

SO IT'S A LONGER VIEWPOINT.

PRODUCTS?

YES, WE DO.

AND DO YOU HAVE A FANCY NAME FOR THAT PROCESS?

YES.

DOES MARKETING PLAY A ROLE IN THAT PROCESS?

WE DO.

CROSS-FUNCTIONAL ORGANIZATION MADE UP OF PEOPLE FROM ALL THE

TEAMS, MARKETING, HARDWARE ENGINEERS, SOFTWARE ENGINEERS,

FINANCE, OPERATIONS, SUPPORT.

DOES APPLE HAVE A PROCESS BY WHICH IT DEVELOPS NEW

IT'S CALLED THE APPLE NEW PRODUCT PROCESS.

THE APPLE NEW PRODUCT PROCESS, OR ANPP, IS A

AND COLLECTIVELY THIS CROSS-FUNCTIONAL TEAM WORKS ON

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WHATEVER PRODUCT THEY'RE WORKING ON.

THIS PROCESS.

AND EVERY PRODUCT FOLLOWS

SO THAT'S THE APPLE NEW PRODUCT PROCESS.

PRODUCT PROCESS AT APPLE?

REPRESENT THE CUSTOMER, THAT WE'RE ON THAT TEAM TO UNDERSTAND

WHAT CUSTOMERS WANT AND NEED AND OFTEN IN WORKING ON THE

PRODUCT YOU'LL HAVE MANY CHOICES TO MAKE BETWEEN DIFFERENT

AND WHAT IS THE ROLE OF MARKETING AS SUCH IN THE NEW

I THINK THE SIMPLEST WAY TO LOOK AT OUR ROLE IS TO

TECHNOLOGIES, DIFFERENT THINGS YOU WANT TO DO WITH THE PRODUCT.

AND THE MARKETING TEAM CAN ADD A LOT OF INSIGHT AND

DIRECTION BASED ON OUR KNOWLEDGE OF WHAT CUSTOMERS, IF THEY

WERE SITTING IN THE ROOM, THEY MIGHT WANT US TO CHOOSE FOR

THEM.

SIR, I'D LIKE TO TALK TO YOU ABOUT THE IPHONE.
HOW DID APPLE COME TO DEVELOP THE IPHONE?

HAPPENING IN PARALLEL THAT ALL CAME TOGETHER TO MAKE THE IPHONE

COME TO BE.

WELL, A NUMBER OF YEARS AGO A BUNCH OF THINGS WERE

ONE OF THE THINGS IS WE HAD GREAT SUCCESS WITH THE IPOD.

IT WAS REALLY OUR FIRST BIG SUCCESS AFTER OUR COMPUTER, AFTER

THE MAC, WE DID IPOD.

AND THIS GREAT LITTLE MUSIC PLAYER MEANT A LOT TO US, AND

WE WONDERED WHAT COULD COME LATER ON AFTER IPOD?

DEVICE MIGHT YOU HAVE THAT COULD HOLD YOUR MUSIC AND YOUR

UNITED STATES COURT REPORTERS

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PHOTOS AND VIDEOS AND MEDIA TYPES YOU CARE ABOUT THAT YOU CARRY

WITH YOU.

3
4
5
6
7

AND OUR VISION WAS PERHAPS SOME DAY IT WOULD BE THE PHONE,
THAT COULD BECOME A DEVICE.
SO WE WANTED TO TRY TO INVENT THAT FEATURE RATHER THAN LET
IT HAPPEN TO US.
SECONDLY, THERE WAS SOME OTHER TECHNOLOGY AND THINGS WE

WERE WORKING ON, WE WERE ALREADY WORKING ON WHAT WOULD

EVENTUALLY BECOME THE IPAD, AND WE WERE WORKING ON THAT AND WE

HAD COME UP WITH TECHNOLOGY FOR MULTITOUCH USER INTERFACES, FOR

USING YOUR HANDS ON THE SCREEN TO MANIPULATE OBJECTS.

AND WE REALIZED THAT THAT COULD BE A PRETTY BIG

BREAKTHROUGH FOR A PHONE, AND WE COULD TAKE THAT TECHNOLOGY AND

INSTEAD USE IT FIRST TO MAKE A PHONE.

AND I THINK THE THIRD THING THAT WAS HAPPENING AROUND THAT

TIME WAS BECAUSE IPOD WAS A SUCCESS, WE WERE ALWAYS WONDERING

WHAT ELSE COULD COME DOWN THE ROAD THAT WOULD CHANGE A WHOLE

INDUSTRY LIKE THE IPOD DID?

WITH THE IPOD, WHAT CHANGED WAS WE MOVED FROM MECHANICAL

DEVICES, DVD PLAYERS, CD PLAYERS, INTO DEVICES THAT WERE

CONTROLLED BY SOFTWARE.

UNDERGO THAT KIND OF TRANSFORMATION WHERE APPLE COULD BE A

LEADER AND MAKING THAT HAPPEN?

PHONE, SOME DAY A PHONE, LIKE THE IPOD, COULD BE DRIVEN MOSTLY

BY SOFTWARE, NOT JUST BY BUTTONS AND SWITCHES, AND THAT WAS OUR

AND WE ALWAYS THOUGHT WHAT ELSE COULD

AND WE REALIZED THAT COULD BE A

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VIEW OF HERE'S OUR OPPORTUNITY TO CHANGE THIS INDUSTRY AND

CHANGE APPLE.

HOW LONG WAS THE DEVELOPMENT PROCESS FOR THE IPHONE?

WELL, THERE'S NEVER ONE SIMPLE MOMENT IN TIME WHEN IT

STARTS.

TIMES.

A NUMBER OF THINGS ARE ALL BEGINNING AT DIFFERENT

BUT ROUGHLY, YOU KNOW, TWO AND A HALF YEARS OR SO, EARLY

IN 2004 TO 2005 TIMEFRAME PEOPLE WERE BEGINNING TO WORK ON IT.

AND WHEN WAS THE IPHONE EVENTUALLY ANNOUNCED?

IN JANUARY OF 2007.

AND WAS THE DEVELOPMENT CONTINUOUS FROM THE TIME FROM 2004

TO 2007?

MORE AND MORE PEOPLE WERE ADDED TO THE PROJECT OVER TIME.

YES.

IT -- IT BEGAN AND AS IT PICKED UP STEAM AND GREW,

BUT IT WAS BEING DEVELOPED THAT ENTIRE TIME.

APPROXIMATELY HOW MANY PEOPLE AT APPLE WERE INVOLVED IN

THE IPHONE PROJECT?

SMALL TEAM THAT GREW QUICKLY TO HUNDREDS OF PEOPLE, AND REALLY

IN THE END, IT BECAME THE WHOLE COMPANY.

PRODUCT AND INVOLVES PRETTY MUCH EVERY ORGANIZATION AT APPLE.

WAS THIS PROJECT CONFIDENTIAL AT APPLE?

VERY MUCH.

AND WHAT WERE SOME OF THE OBJECTIVE EVIDENCE THAT IT WAS

CONFIDENTIAL?

WELL, IT CHANGES OVER TIME.

AT THE BEGINNING IT WAS A

IT WAS OUR NUMBER ONE

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WE KNEW THIS WAS SO BIG AND IMPORTANT TO APPLE THAT EXTRA STEPS

WERE TAKEN TO KEEP IT SECRET.

WELL, WE TRY TO KEEP ALL OF OUR PROJECTS CONFIDENTIAL, BUT

NOT ONLY DID WE LIMIT THE NUMBER OF PEOPLE WHO WOULD KNOW

WHAT WAS GOING ON, BUT THOSE PEOPLE NEEDED TO ACTUALLY SIGN A

SPECIAL NONDISCLOSURE AGREEMENT SPECIFICALLY FOR THIS PROJECT

TO SAY THIS IS EXTRA SECRET AND NEEDED, NEEDED THAT

DOCUMENTATION.

AND YOU WEREN'T ALLOWED TO TALK TO OTHER PEOPLE WHO AREN'T

ALREADY APPROVED ON THE LIST OF PEOPLE WORKING ON IPHONE IN THE

BEGINNING.

AND PEOPLE WHO WORKED ON IT HAD SPECIAL MEETINGS IN

SPECIAL LOCATIONS AND EXTRA SECURE ROOMS AND SO ON.

MANY ELEMENTS OF IT THAT WERE SECRET.

THERE WERE

DEVELOPMENT PROJECT FOR THE IPHONE?

YES.

DID APPLE CONSIDER THAT A, A RISKY INVESTMENT AT THE TIME?

INCREDIBLY RISKY.

COMPANY."

SAW AS RISKY?

HUGE RISK THIS WAS FOR APPLE.

WERE YOU PERSONALLY INVOLVED IN THE DECISION TO START THE

WE HAD A TERM WE CALLED "YOU BET YOUR

AND WHAT WAS IT ABOUT THAT PARTICULAR INVESTMENT THAT YOU

THERE ARE A NUMBER OF WAYS THAT WE THOUGHT ABOUT WHAT A

FIRST, APPLE HAD REALLY ONLY HAD TWO PRODUCTS AT THE TIME,

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THE MAC AND THE IPOD.

AND TO TAKE ON A WHOLE NEW PROJECT OF THIS NATURE IS, IS

RARE FOR APPLE.

PRODUCT AND HAVE ALL OF OUR BEST PEOPLE WORK ON SOMETHING.

WE DON'T WANT TO DILUTE OURSELVES ACROSS TOO MANY THINGS.

WE LIKE TO THROW OURSELVES FULLY INTO A
SO

THIS WAS AN AREA WE WERE GETTING INTO WITH NO PAST

EXPERIENCE.

HAVING NOT MADE A PHONE, WE DIDN'T KNOW ABOUT

RADIOS AND ANTENNAS AND ALL THE THINGS THAT GO INTO MAKING A

PHONE.

AND WE DIDN'T WANT TO HURT OUR REPUTATION AS A COMPANY

THAT WAS GROWING AGAIN, STARTING TO BECOME SUCCESSFUL AGAIN,

AND TURNING OURSELVES AROUND AND RISK ALL THAT TO DO SOMETHING

WE'VE NEVER DONE BEFORE.

WERE YOU PERSONALLY INVOLVED IN THE IPHONE DEVELOPMENT

PROJECT?

YES.

WHAT ROLE DID YOU PLAY?

BOTH AS A MEMBER OF THE EXECUTIVE TEAM WHERE WE ALL TALKED

ABOUT IT AND WERE INVOLVED IN IT, AND ALSO AS THE HEAD OF THE

PRODUCT MARKETING TEAM, MY TEAM WAS RESPONSIBLE FOR WORKING ON

ALL THE PRODUCTS, WORKING DIRECTLY HAND IN HAND WITH THE

ENGINEERS ON THE CHOICES AND DECISIONS ON WHAT WE'RE GOING TO

DO AND WHAT WE'RE GOING TO MAKE.

WHEN WAS THE IPHONE FIRST PUBLICLY ANNOUNCED?

WE ANNOUNCED IT IN JANUARY AT MACWORLD 2007.

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AND WHERE WAS THAT?

IN SAN FRANCISCO.

WERE YOU PERSONALLY INVOLVED IN PLANNING THAT

ANNOUNCEMENT?

YES, I WAS.

DID YOU PERSONALLY PARTICIPATE IN THE ANNOUNCEMENT ITSELF?

OH, YEAH, IN MANY WAYS.

8
9

I, AND MY TEAM, WERE RESPONSIBLE FOR WORKING ON THE WHOLE
PRESENTATION, THE KEYNOTE, THE DEMOS.

10
11

AND THEN ALSO I TOOK -- HAD A PERSONAL ROLE IN THE DEMO OF
THE VERY FIRST PHONE CALL ON THE IPHONE.

THINK -- FRANKLY, UNFORTUNATELY YOU WERE ON THE CUTTING ROOM

FLOOR.

ANNOUNCEMENT?

OUR JURY HAS ONLY SEEN PART OF THE VIDEO, AND I DON'T

SO CAN YOU TELL US ABOUT WHAT YOUR ROLE WAS AT THE

IT WAS MY FAVORITE PART.
SO WHEN WE WERE PRESENTING THE IPHONE, ONE OF THE THINGS

WE WANTED TO SHOW PEOPLE WAS THAT IT WAS A BREAKTHROUGH

TELEPHONE AND THE EXPERIENCE OF MAKING A CALL ON IT WAS

SOMETHING REALLY GREAT AND FUN.

SO MR. JOBS WAS DOING THE KEYNOTE AND HE FIRST MADE A

PHONE CALL TO SIR JONATHAN IVES, THE HEAD OF OUR DESIGN TEAM,

WHO WAS IN THE AUDIENCE, AND STEVE SHOWED HOW TO MAKE A PHONE

CALL, AND WHILE HE WAS ON THAT CALL TO JONATHAN, I MADE A CALL

TO STEVE ALSO FROM THE AUDIENCE.

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SO YOU SAW A SECOND CALL COME IN, AND THEN STEVE WAS ABLE

TO SHOW HOW YOU SWITCH BETWEEN TWO CALLS TO JOIN THEM TOGETHER

AND MERGE THEM TOGETHER IN ONE CONFERENCE CALL.

ALL DONE WITH A WHOLE NEW EXPERIENCE.

I'M VERY PROUD OF, PART OF THE VERY FIRST PHONE CALL MADE ON

THE IPHONE PUBLICLY.

AND THIS WAS

SO I GOT TO BE SOMETHING

WAS THERE AN OVERALL THEME OF THIS KEYNOTE ANNOUNCEMENT?

YES.

EVERYONE WE'RE GOING TO MAKE HISTORY TODAY.

FIRST, THE KEYNOTE WAS KICKED OFF WITH STEVE TELLING
WE ALL KNEW WHAT A

BIG MOMENT THIS WAS.

AND HE STARTED TO TALK ABOUT IPHONE, FIRST TALKING ABOUT

WE'RE GOING TO INTRODUCE THREE NEW PRODUCTS TODAY RATHER THAN

JUST ONE, AND THOSE THREE PRODUCTS WERE A REVOLUTIONARY NEW

PHONE, AN INTERNET COMMUNICATION DEVICE, AND THE BEST IPOD WE

EVER MADE, THOSE THREE THINGS.

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AND, OF COURSE, THOSE THREE THINGS WERE ULTIMATELY REALLY
ONE THING THAT DID ALL OF THAT.

CAN YOU DESCRIBE WHAT THE ATMOSPHERE WAS AT THIS

ANNOUNCEMENT?

THE ENERGY AND FEELING IN THE ROOM.

WAS THERE A VIDEO THAT WAS MADE OF THE ANNOUNCEMENT?

YES.

SIR, YOU HAVE A WHITE BINDER IN FRONT OF YOU THAT CONTAINS

EXHIBITS.

I THINK THE WORD I ALWAYS THINK OF IS ELECTRIC.

WOULD YOU OPEN IT UP, PLEASE, TO EXHIBIT,

UNITED STATES COURT REPORTERS

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PLAINTIFF'S EXHIBIT 118.

OKAY.

CAN YOU TELL ME WHAT THAT IS, PLEASE?

THIS IS A DVD WITH A VIDEO FROM THAT ANNOUNCEMENT.

5
6

MR. MCELHINNY:

YOUR HONOR, I MOVE THE ADMISSION OF

PLAINTIFF'S EXHIBIT 118.

MR. PRICE:

NO FURTHER OBJECTION.

THE COURT:

ALL RIGHT.

IT'S ADMITTED.

(PLAINTIFF'S EXHIBIT 118 WAS ADMITTED IN EVIDENCE.)

THE COURT:

GO AHEAD, PLEASE.

BY MR. MCELHINNY:

THE PRESS ATTEND?

ATTEND THE ANNOUNCEMENT?

AND THE REACTION WAS ENORMOUS.

CAN IMAGINE IN PRESS AND ONLINE.

POSITIVE?

THAT THIS WAS ONE OF THE MOST AMAZING BREAKTHROUGHS EVER, AND

THERE WERE FEELINGS FROM SOME WHO THOUGHT IT WAS THE BIGGEST

MISTAKE AND WE WERE GOING TO FALL FLAT ON OUR FACE.

FAILURE OF THE IPHONE?

SIR, WAS THERE A PUBLIC REACTION TO THE ANNOUNCEMENT?

DID

I SHOULD ASK THAT QUESTION, DID THE PRESS

OH, YES, THERE WERE MANY PRESS IN ATTENDANCE AT THE EVENT,
IT WAS COVERED BY EVERYONE I

WAS THE INITIAL REACTION TO THE ANNOUNCEMENT, WAS IT ALL

OH, NOT AT ALL.

IT WAS VERY MIXED.

THERE WERE FEELINGS

CAN YOU GIVE US SOME EXAMPLES OF PEOPLE WHO PREDICTED

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MR. BOTTOMER, THEN CEO OF MICROSOFT SAID SOME PRETTY MEAN

THINGS ABOUT HOW WE WERE GOING TO FAIL WITH IT.

NOT SURPRISINGLY MOST OF OUR COMPETITORS DID,

WE HEARD COMMENTS FROM NOKIA, FROM A SMARTPHONE MAKER AT

THE TIME, PALM, SAID THAT WE CAN'T JUST COME UP AND MAKE A

PHONE THE VERY FIRST TIME OUT AND SO ON.

7
8
9

THERE WERE NO END TO THE LIST OF PEOPLE WHO SAID THIS
WOULD FAIL.
Q.

WOULD YOU LOOK IN YOUR BINDER, PLEASE, TO PLAINTIFF'S

EXHIBIT 135A.

OKAY.

CAN YOU TELL ME WHAT THAT IS, PLEASE?

THIS IS AN ARTICLE FROM THE "NEW YORK TIMES" DATED

JANUARY 11TH, 2007.

AND IS THIS PUBLIC REACTION TO THE ANNOUNCEMENT ITSELF?

YES.

WRITTEN BY MR. DAVID POGUE, AND IT DESCRIBES HIS THOUGHTS OF

THAT.

20
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THIS IS A NEWS STORY ABOUT THE LAUNCH AT THAT TIME

JUST A MINUTE.
YOUR HONOR, I MOVE THE ADMISSION OF PLAINTIFF'S EXHIBIT

135A.
MR. PRICE:

NO FURTHER OBJECTION, AND WE REQUEST A

LIMITING INSTRUCTION AS TO THIS NOT BEING ENTERED FOR THE TRUTH

OF THE MATTER.

THE COURT:

THIS IS NOT ADMITTED FOR THE TRUTH OF THE

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MATTER, BUT IT IS ADMITTED.

(PLAINTIFF'S EXHIBIT 135A WAS ADMITTED IN EVIDENCE.)

THE COURT:

GO AHEAD, PLEASE.

MR. MCELHINNY:

THANK YOU.

SIR, WE'VE PUT ON THE -- WE'VE PUT THE ARTICLE ON THE

SCREEN AND WE'VE ALSO PUT ON A DEMONSTRATIVE.

DEMONSTRATIVE -- WE DON'T HAVE THE TIME TO READ ALL OF THESE

ARTICLES.

DEMONSTRATIVE TO EXPLAIN SOME OF THE SALIENT POINTS, OR THE

THE JURY WILL HAVE THEM.

SALIENT POINT.

12
13

CAN YOU USE THIS

YES I CAN.
AS YOU SEE, IT'S FROM THE "NEW YORK TIMES," THE TITLE OF

THE ARTICLE WAS "APPLE WAVES ITS WAND AT THE PHONE."

YOU SEE A PICTURE OF THE IPHONE BEING HELD IN A HAND, AND

ONE OF THE QUOTES FROM THE ARTICLE IS "THIS MACHINE IS SO

PACKED WITH POSSIBILITIES THAT THE CELL PHONE MAY ACTUALLY BE

THE LEAST INTERESTING PART."

SIR, DID THE PRESS COVERAGE CONTINUE AFTER THE FIRST WEEK

FOLLOWING MACWORLD ANNOUNCEMENT?

YES, IT DID.

SO THE PHONE WAS ANNOUNCED IN JANUARY.

RELEASED FOR SALE?

THAT SUMMER, IN JUNE OF 2007.

WHAT ACCOUNTED FOR THE SIX MONTHS IN BETWEEN?

WELL, THAT'S, FIRST, THE AMOUNT OF TIME IT TOOK US TO

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COMPLETE THE PRODUCT AND START TO BUILD THEM AND GET THEM READY

FOR SALE.

JANUARY ANNOUNCEMENT AND THE JUNE RELEASE TO PROMOTE THE

IPHONE?

YES, WE DID.

AND WHAT DID YOU DO, SIR?

WELL, FIRST, IN THE BEGINNING WE DID NOTHING FOR MANY

WEEKS.

DID APPLE DO ANYTHING IN THAT SIX MONTHS BETWEEN THE

WE ACTUALLY HAD A STRATEGY OF GOING SILENT.

AND THIS WAS BECAUSE THE PRESS COVERAGE WAS SO ENORMOUS

AND SO POSITIVE ABOUT THE EXCITEMENT AROUND THE PRODUCT THAT WE

THOUGHT TO JUST LET THAT GO OUT THERE.

ADD TO THE EXCITEMENT.

THERE WAS NOT A LOT TO

AND THEN TO PREPARE CUSTOMERS FOR THE ARRIVAL OF IPHONE

FOR SALE AS WE GOT CLOSER TO JUNE, WE DID END UP WITH SOME TV

ADVERTISEMENTS.

FIRST WE DID A TEASER AD AS WE CALL IT ON THE

ACADEMY AWARDS.

IT WAS JUST CALLED HELLO, AND IT SHOWED PEOPLE

ANSWERING THE PHONE.

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20

AND THEN AS WE GOT CLOSER TO THE LAUNCH OF THE IPHONE, WE
STARTED TO CREATE ACTUAL TV ADS ABOUT THE IPHONE.

SIR, WOULD YOU LOOK IN YOUR BINDER, PLEASE, AT PLAINTIFF'S

EXHIBIT 180.

YES.

WHAT IS THAT, SIR?

THIS IS A DVD ABOUT THE FIRST ADS WE CREATED TO LAUNCH THE

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IPHONE.

MR. MCELHINNY:

MR. PRICE:

THE COURT:

ALL RIGHT.

IT'S ADMITTED AND IT IS --

(PLAINTIFF'S EXHIBIT 180 WAS ADMITTED IN EVIDENCE.)

AND AGAIN,

YOU ARE NOT TO CONSIDER IT FOR ITS TRUTH.

NO FURTHER OBJECTIONS.

LIMITING PURPOSE.

5
6

YOUR HONOR, I MOVE PDX 180, PLEASE.

THE COURT:

GO AHEAD, PLEASE.

BY MR. MCELHINNY:
Q.

MR. SCHILLER, I'D LIKE TO SHOW IT FOR THIS AD, PLEASE.
(A VIDEOTAPE WAS PLAYED IN OPEN COURT OFF THE RECORD.)

MR. MCELHINNY:

NOW CAN WE SEE THEM TOGETHER?

(LAUGHTER.)

(A VIDEOTAPE WAS PLAYED IN OPEN COURT OFF THE RECORD.)

BY MR. MCELHINNY:

SIR, THAT WAS THE FIRST AD THAT YOU DID; IS THAT CORRECT?

YES.

DO YOU RECALL WHAT THE TITLE OF THAT AD WAS?

HOW TO.

STARTED WITH THE SLIDE TO UNLOCK FEATURE?

ABSOLUTELY.

WAS THAT INTENTIONAL?

YES, IT WAS.

CAN YOU EXPLAIN THE LOGIC BEHIND THAT CHOICE, PLEASE?

WAS THERE ANY SIGNIFICANCE TO THE FACT THAT IT

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ACTUALLY USE AN IPHONE FOR THEMSELVES, AND SO THEY'VE NEVER

USED AT THIS POINT IN TIME A DEVICE ANYTHING LIKE IT.

WHEN THIS AD RAN, PEOPLE HADN'T HAD THE OPPORTUNITY YET TO

THE CHALLENGE IS HOW DO YOU SHOW PEOPLE, IN A SIMPLE,

30-SECOND AD, SOMETHING THAT GIVES THEM A FEEL FOR WHAT IT'S

LIKE TO USE THIS NEW GENERATION OF APPLE'S SMARTPHONE.

AND WE STARTED THE AD WITH SOMETHING YOU'RE GOING TO BE

DOING EVERY DAY, MANY, MANY TIMES A DAY, WHICH IS TO UNLOCK THE

SCREEN, AND TO DO THAT, YOU USE A SIMPLE GESTURE, SLIDE TO

UNLOCK.

AND THAT ONE GESTURE, HAVING SEEN THAT ONE THING FIRST,

YOU GET AN INSTANT IDEA OF HOW MULTITOUCH WORKS SO THAT YOU'RE

DOING A GESTURE ON THE SCREEN, AND IT DOES SOMETHING SIMPLE AND

USEFUL TO YOU, AND THAT IT'S EASY TO USE.

MANUAL TO FIGURE IT OUT.

YOU DON'T NEED A

AND THAT ONE STARTING POINT WAS A GREAT BEGINNING TO YOUR

UNDERSTANDING OF WHAT AN IPHONE IS AND WHAT THIS KIND OF DEVICE

CAN DO.

HAD YOU IDENTIFIED UNIQUE RISKS IN TRYING TO BRING A

MULTITOUCH PRODUCT TO MARKET IN 2007?

OH, YES, WE DID.

AND WHAT WERE THE RISKS THAT WERE SPECIFIC TO THAT KIND OF

A PRODUCT?

EITHER HAD A NUMERIC KEY PAD, FEATURES PHONES WOULD HAVE A TEN

WELL, UNTIL THE IPHONE, THE MAJORITY OF PHONES OUT THERE

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DIGIT KEYPAD, OR HAD A PHYSICAL KEYBOARD ON IT FOR NOT ONLY

DIALLING, BUT TYPING ON IT AS WELL, AND PEOPLE WERE VERY

FAMILIAR WITH THAT AND COMFORTABLE WITH THAT.

THE IDEA THAT YOU WOULD NOW GO TO A FULL GLASS SCREEN THAT

YOU WOULD TOUCH WITH YOUR FINGERS AND CONTROL TO TYPE AND MAKE

GESTURES WAS, WAS PRETTY UNUSUAL AND RISKY AND MANY PEOPLE

CALLED THAT OUT AS PERHAPS THE GREATEST RISK TO IPHONE IS HOW

YOU WOULD HAVE AN EASY TO USE, POWERFUL EXPERIENCE ON THIS

MULTITOUCH DISPLAY.

WOULD YOU AGREE WITH ME ABOUT THAT?

YES.

AND HOW DID YOU OVERCOME THESE RISKS AND CHALLENGES?

IS IT ABOUT THAT, THE PRODUCT, THAT YOU THINK NOW IN RETROSPECT

MADE IT SUCCESSFUL?

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25

OBVIOUSLY IN RETROSPECT THE PRODUCT HAS BEEN SUCCESSFUL.

WHAT

WELL, A LOT WENT INTO MAKING IT SUCCESSFUL.
MR. PRICE:

OBJECTION.

CALLS FOR IMPROPER OPINION

TESTIMONY.
THE COURT:

OVERRULED.

GO AHEAD, PLEASE.
THE WITNESS:

YOU MAY ANSWER.
A LOT OF THINGS WENT INTO MAKING THE

IPHONE SUCCESSFUL.
TO ME, I THINK IT'S THIS INCREDIBLE, BEAUTIFUL DESIGN.
PEOPLE LOVED HOW IT LOOKS.
THAT IT DOES THINGS THAT YOU'VE NEVER BEEN ABLE TO DO

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BEFORE AT THE TIME WITH PHONES, ALL THIS INTERNET CAPABILITIES

AND ITS IPOD USEFULNESS.

BUT MOST OF ALL, THAT THIS PIECE OF GLASS THAT COMES ALIVE

WITH SOFTWARE IS, IS EASY TO USE, IS FUN TO USE, AND DOES ALL

THESE NEW ACTIONS FOR YOU WITHOUT HAVING TO BE TRAINED OR

TAUGHT.

7
8

IT'S INTUITIVE AND EASY TO USE AND POWERFUL AND FUN.

AND MAKING THAT WHOLE EXPERIENCE, IT JUST ADDS UP TO AN
EXPERIENCE THAT'S UNIQUE AND USEFUL TO PEOPLE.

ULTIMATELY, I THINK THAT DROVE ITS SUCCESS.

BY MR. MCELHINNY:

WENT ON SALE?

BIG DAY.

CHOSE TO GO TO CHICAGO.

MICHIGAN AVENUE, AND I WENT THERE AND BROUGHT MY SON WITH ME

BECAUSE I KNEW IT WOULD BE A BIG DAY FOR BOTH OF US, AND WE

WERE THERE TO BE PART OF THE EXCITEMENT OF THE FIRST SALES OF

IPHONE.

EACH OF THE MAJOR SALES LOCATIONS?

ENERGY, THE NEWNESS OF A DEVICE LIKE IPHONE COMING INTO THE

MARKET WAS GOING TO BE FELT AROUND THE COUNTRY, AND WE WANTED

TO BE EVERYWHERE WE COULD AND SEE AND FEEL THAT AS WELL.

WHERE WERE YOU PERSONALLY ON THE DAY THAT THE IPHONE FIRST

WHEN IT FIRST WENT ON SALE, I AND MY TEAM KNEW IT WAS A
SO WE FANNED TO DIFFERENT SELLING LOCATIONS, AND I
WE HAVE AN APPLE RETAIL STORE ON

AND WHY DID YOU HAVE SOMEBODY FROM THE ORGANIZATION GO TO

BECAUSE FOR US THIS WAS A HISTORIC DAY.

UNITED STATES COURT REPORTERS

THE CROWDS, THE

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AFTER THE IPHONE WAS RELEASED, DID YOU SEE ANY REVIEWS OF

PEOPLE WHO HAD ACTUALLY -- BY REPORTERS OR PROFESSIONALS WHO

HAD ACTUALLY USED THE PHONE AND WERE REVIEWING IT?

YES.

IF YOU OPEN YOUR BINDER, PLEASE, TO EXHIBIT PDX 144A AS IN

ALBERT.

OKAY.

CAN YOU TELL US WHAT THAT IS, PLEASE?

THIS IS A SUMMARY OF SOME OF THE NEWS COVERAGE ABOUT

IPHONE.

MANY PAGES IS IT?

IT IS SIX PAGES LONG.

AND DOES IT HAVE EXCERPTS OF VARIOUS ARTICLES?

RIGHT?

AND BE MORE SPECIFIC.

WHAT DO YOU MEAN BY A SUMMARY?

HOW

IS THAT

IT DOES.

MR. MCELHINNY:

MR. PRICE:

YOUR HONOR, WE MOVE PDX 144A.

NO FURTHER OBJECTION, AGAIN, WITH A

FURTHER LIMITING INSTRUCTION THAT IT'S NOT TO BE USED FOR THE

TRUTH OF WHAT'S SAID.

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THE COURT:

THIS IS ADMITTED, BUT IT'S NOT TO BE

CONSIDERED FOR THE TRUTH OF WHAT IS SAID.

(PLAINTIFF'S EXHIBIT 144A WAS ADMITTED IN EVIDENCE.)

BY MR. MCELHINNY:

JUST SO THE JURY WILL RECOGNIZE IT, CAN WE DO WHAT WE'VE

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DONE, PUT THE FIRST PAGE UP.

CAN YOU JUST EXPLAIN TO US WHAT THIS SUMMARY IS.

YES.

YOU CAN SEE LISTED ON, FOR EXAMPLE, THE FIRST PAGE

FOUR DIFFERENT EXAMPLES OF SEPARATE NEWS COVERAGE, EACH ONE

ABOUT THE IPHONE.

CHRONICLE, ANOTHER FROM THE "NEW YORK TIMES," ANOTHER FROM

"U.S.A. TODAY," AND A FOURTH ONE FROM THE "NEW YORK TIMES"

AGAIN ON THIS ONE PAGE.

THERE'S ONE FROM THE SAN FRANCISCO

CAN YOU LOOK IN YOUR BINDER, PLEASE, AND SEE PLAINTIFF'S

EXHIBIT 113A?

YES.

CAN YOU TELL ME WHAT 113A IS, PLEASE.

THIS IS A REVIEW OF THE IPHONE THAT APPEARED IN THE

"WALL STREET JOURNAL" DATED JUNE 27TH, 2007.

15
16
17

MR. MCELHINNY:

YOUR HONOR, I MOVE THE ADMISSION OF

113A.
MR. PRICE:

AND, AGAIN, NO FURTHER OBJECTIONS, YOUR

HONOR, AND WITH A LIMITING INSTRUCTION NOT TO BE CONSIDERED FOR

THE TRUTH.

20
21

THE COURT:

OKAY.

IT'S NOT TO BE CONSIDERED FOR THE

TRUTH OF WHAT IS STATED.

BUT IT'S ADMITTED.

(PLAINTIFF'S EXHIBIT 113A WAS ADMITTED IN EVIDENCE.)

THE COURT:

GO AHEAD, PLEASE.

MR. MCELHINNY:

THANK YOU.

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GOING TO SHOW YOU A DEMONSTRATIVE, PDX 2, WHICH WE'VE CREATED.

CAN YOU USE THE DEMONSTRATIVE, PLEASE, AND USE IT TO GIVE US

THE SALIENT POINTS THE ARTICLE.

MR. SCHILLER, I'M SHOWING YOU FIRST 113A AND THEN I'M

FIRST, WHO IS WALTER MOSSBERG.

THIS ARTICLE WAS WRITTEN BY WALTER MOSSBERG AND KATHERINE

BOEHRET.

REVIEWER IN THE "WALL STREET JOURNAL" AND IS ONE OF THE BEST

KNOWN TECHNOLOGY COLUMNISTS IN OUR COUNTRY.

AND MR. MOSSBERG HAS BEEN A LONG-TIME PRODUCT

ARTICLE FOR THE JURY, PLEASE.

IPHONE."

CAN YOU USE THE DEMONSTRATIVE, PLEASE, TO ILLUMINATE THE

YES.

THE TITLE OF THE ARTICLE IS "TESTING OUT THE

YOU SEE AN IMAGE THERE OF FIVE IPHONES SHOWING DIFFERENT

USES ON THE SCREEN.

RIGHT THAT APPEARED IN THE ARTICLE THAT SHOWED THE IPHONE

AGAINST AND COMPARED TO COMMON COMPETITIVE PRODUCTS AT THE

TIME.

DEMONSTRATIVE.

YOU ALSO SEE A TABLE HERE ON THE BOTTOM

AND THERE ARE TWO QUOTES CALLED OUT IN THIS

THE FIRST IS "THE IPHONE IS, ON BALANCE, A BEAUTIFUL AND

BREAKTHROUGH HANDHELD COMPUTER.

A NEW BAR FOR THE SMARTPHONE INDUSTRY."

23
24
25

ITS SOFTWARE, ESPECIALLY, SETS

AND THE SECOND QUOTE IS "THE IPHONE IS A WHOLE NEW
EXPERIENCE AND A PLEASURE TO USE."
Q.

SIR, IF YOU LOOK AT THE FOUR PHONES, DO YOU SEE THAT'S THE

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SAMSUNG BLACKJACK?

YES, I DO.

IS THAT WHAT THE BLACKJACK LOOKED LIKE IN 2007?

YES, IT DID.

THANK YOU.

IN YOUR BINDER, CAN YOU TELL US WHAT THAT IS?

"NEW YORK TIMES," ALSO DATED JUNE 27TH, 2007.

THIS IS ANOTHER PRODUCT REVIEW, THIS ONE FROM THE

MR. MCELHINNY:

10
11

SIR, IF YOU WOULD PLEASE TURN TO EXHIBIT 127A

MR. PRICE:

YOUR HONOR, I MOVE 127A.

AGAIN, NO FURTHER OBJECTIONS AND NOT TO

BE OFFERED FOR THE TRUTH OF THE MATTERS ASSERTED.

THE COURT:

ALL RIGHT.

IT IS ADMITTED, AND IT'S NOT

TO BE CONSIDERED FOR THE TRUTH OF THE MATTER STATED IN THE

ARTICLE.

(PLAINTIFF'S EXHIBIT 127A WAS ADMITTED IN EVIDENCE.)

THE COURT:

GO AHEAD, PLEASE.

BY MR. MCELHINNY:

GOING TO PUT ON DEMONSTRATIVE PDX 3, AND CAN YOU USE THIS TO

SUMMARIZE THE ARTICLE FOR?

ITS HYPE," WRITTEN BY DAVID POGUE, JUNE 27TH, 2007.

SIR, WE'VE PUT THE ARTICLE ON THE BOARD, BUT NOW WE'RE

YES.

THIS ARTICLE WAS TITLED "THE IPHONE MATCHES MOST OF

TWO OF THE QUOTES IN THE ARTICLE ARE "UNLESS YOU'VE BEEN

IN A SENSORY-DEPRIVATION TANK FOR SIX MONTHS, YOU KNOW WHAT THE

IPHONE IS:

A TINY, GORGEOUS HAND-HELD COMPUTER WHOSE SCREEN IS

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A SLAB OF TOUCH-SENSITIVE GLASS.

"AND THE BIGGER ACHIEVEMENT IS THE SOFTWARE.

BEAUTIFUL, MENU-FREE, AND DEAD SIMPLE TO OPERATE."

PX 133.

APPEARED IN 2007.

SIR, WOULD YOU PLEASE LOOK IN YOUR BINDER AT EXHIBIT
CAN YOU TELL US WHAT THAT EXHIBIT IS, PLEASE.

YES.

THIS IS A SPECIAL ARTICLE IN "TIME MAGAZINE" THAT

MR. MCELHINNY:

MR. PRICE:

YOUR HONOR, I MOVE EXHIBIT PX 133.

NO FURTHER OBJECTIONS AND NOT FOR THE

TRUTH OF THE MATTER ASSERTED.

THE COURT:

IT'S FAST,

ALL RIGHT.

IT IS ADMITTED AND NOT TO BE

CONSIDERED FOR THE TRUTH OF WHAT'S STATED IN THE ARTICLE.

(PLAINTIFF'S EXHIBIT 133 WAS ADMITTED IN EVIDENCE.)

THE COURT:

GO AHEAD, PLEASE.

BY MR. MCELHINNY:

USE THAT TO HELP US UNDERSTAND SO WE'VE GOT A SUMMARY OF WHAT

WAS IN THE ARTICLE.

ABOUT THE BEST INVENTIONS OF 2007, AND IN THIS STORY, THEY

AWARDED IPHONE THE INVENTION OF THE YEAR FOR 2007.

SIR, LET ME PUT A DEMONSTRATIVES UP, PDX 4, AND CAN YOU

YES.

THIS STORY IN "TIME MAGAZINE" WAS AN ANNUAL STORY

AND AS YOU SEE IN THE DEMONSTRATIVE THERE IS -- THE COVER

OF "TIME MAGAZINE," THIS IS PRETTY AMAZING THAT IN NOVEMBER OF

2007, THEY PLACED IPHONE ON THE COVER.

PRODUCTS ON THE COVER OF "TIME MAGAZINE."

YOU DON'T USUALLY SEE

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THEY ALSO HAD FUN WITH THE ICONS ON THE HOME SCREEN ON THE

ARTICLE AND SPELLED OUT THE TITLE OF THE ARTICLE, "BEST

INVENTIONS OF 2007."

4
5

AND THERE ARE THREE QUOTES HERE DIRECTLY FROM THAT
ARTICLE.

THE FIRST IS "TOUCHY FEELY."

THE SECOND, "APPLE'S ENGINEERS USED A TOUCHSCREEN INNOVATE

PAST THE GRAPHICAL USER INTERFACE (WHICH APPLE HELPED PIONEER

WITH THE MACINTOSH IN THE 1980S) TO CREATE A WHOLE NEW KIND OF

INTERFACE."

AND "THIS IS, AS ENGINEERS SAY, NONTRIVIAL."

SIR, WOULD YOU LOOK PLEASE AT PX 134?

YES.

WHAT IS EXHIBIT 134?

IT IS A STORY FROM THE TECHNOLOGY SECTION OF THE

"NEW YORK TIMES" THAT APPEARED IN NOVEMBER OF 2011.

DID YOU SAY 2011?

YES.

OKAY.

19
20
21
22
23
24
25

YOUR HONOR, I MOVE PX 134.
MR. PRICE:

NO FURTHER OBJECTIONS AND AGAIN NOT FOR

THE TRUTH OF THE MATTER ASSERTED.
THE COURT:

ALL RIGHT.

IT'S ADMITTED AND IT'S NOT TO

BE CONSIDERED FOR THE TRUTH OF WHAT'S STATED.
(PLAINTIFF'S EXHIBIT 134 WAS ADMITTED IN EVIDENCE.)
BY MR. MCELHINNY:

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DEMONSTRATIVES, PDX 5.

HELP SUMMARIZE THE ARTICLE FOR US, PLEASE.

SPECIAL.

INNOVATIONS" AND THE U.S. PATENT AND TRADEMARK OFFICE CREATED

AN EXHIBIT ABOUT STEVE JOBS'S PATENTS AND INVENTIONS, AND IN

DOING THAT, THEY SET UP DISPLAYS WITH, WITH PATENTS ON THEM,

ABOUT A DOZEN ON EACH ONE, AND THEY DESIGNED THEM TO LOOK JUST

10
11

SIR, HERE'S THE ARTICLE, 134, AND WE'VE GOT A

YES.

AND CAN YOU USE THE DEMONSTRATIVES TO

THIS IS AN ARTICLE THAT, FOR ME, IS SOMETHING PRETTY
IT WAS TITLED "PATENT OFFICE HIGHLIGHTS JOBS'S

LIKE THE PHONE.
SO YOU'D WALK INTO THIS EXHIBIT, YOU'D SEE AN IMAGE OF

STEVE AND YOU'D SEE MANY, MANY, MANY OF HIS PATENTS ALL THERE,

AND THAT'S WHAT THAT PHOTO REPRESENTS.

AND TWO OF THE PARAGRAPHS FROM THAT ARTICLE READ "THE

UNITED STATES PATENT AND TRADEMARK OFFICE IN ALEXANDRIA,

VIRGINIA RECENTLY UNVEILED AN EXHIBIT OF 30 GIANT IPHONE-LIKE

MODELS HONORING THE INVENTIONS OF THE LATE STEVE JOBS.

ALTOGETHER ABOUT 300 PATENTS ARE AN DISPLAY, GIVING EXHIBIT

ATTENDEES A VISUAL TOUR THROUGH APPLE'S HISTORY OF DESIGN AND

INNOVATION.

"PATENTS ON TECHNOLOGICAL DEVICES DO NOT ALWAYS RESULT IN

REAL PRODUCTS THAT HIT THE CONSUMER MARKET, BUT THEY DOCUMENT

AN INVENTOR'S RESEARCH AND METHODOLOGY IN DIFFERENT AREAS OF

DESIGN AND ENGINEERS.

COME TOGETHER TO FORM ONE REAL PRODUCT, LIKE THE IPAD."

OFTEN, MULTIPLE PATENTED TECHNOLOGIES

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SIR, WHAT'S THE SIGNIFICANCE OF THIS SECOND QUOTE?

WELL, THE SECOND QUOTE TALKS ABOUT --

MR. PRICE:

YOUR HONOR, I'M GOING TO OBJECT TO LACK

OF FOUNDATION, SPECULATION.

ARTICLE SAYS.

THE COURT:

MR. MCELHINNY:

IT'S INTERPRETING WHAT THIS

LAY A FOUNDATION IF HE KNOWS.
I'LL REPHRASE IT.

SIR, IN YOUR VIEW, BASED ON YOUR EXPERIENCE AT APPLE AND

YOUR KNOWLEDGE OF THE PROCESS, DO YOU FIND SIGNIFICANCE IN THAT

SECOND QUOTE?

YES, I DO.

WHAT IS THE SIGNIFICANCE THAT YOU FIND, SIR?

13
14
15

MR. PRICE:

THE SIGNIFICANCE OF THAT QUOTE.
THE COURT:

OVERRULED.

GO AHEAD.

I'LL OBJECT TO RELEVANCE WITH HIS VIEW OF

ALL RIGHT.

YOU MAY ANSWER.

THE WITNESS:

AS WE WORK ON PRODUCTS AT APPLE AND THE

DEVELOPMENT PROCESSES, AS WE DISCUSSED EARLIER, IT TAKES YEARS,

IT INVOLVES MANY HUNDREDS OF ENGINEERS AND PEOPLE WORKING

TOGETHER, AND THESE INVENTIONS, MANY OF THEM ARE PATENTED AND

THEY APPEAR IN THE PRODUCT, THROUGHOUT TIME, AT DIFFERENT

TIMES, SOMETIMES RIGHT AWAY, SOMETIMES NOT UNTIL MUCH LATER .

THEY'RE ALL PART OF A PROCESS THAT OCCURS.

AND SOMETIMES ALL THOSE PATENTS, A LOT OF PATENTS ALL COME

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TOGETHER TO MAKE ONE PRODUCT AS THIS SAYS.

2
3

THAT'S NOT ALWAYS THE CASE.

IT VARIES AND EACH CASE IS

UNIQUE.

BY MR. MCELHINNY:

HAVE GIVEN US AN EXAMPLE, BUT IS IT A LINEAR PROCESS, ONCE YOU

START ON A PRODUCT, YOU WORK ON IT TO THE END AND THEN YOU WORK

ON A NEW PRODUCT FROM THE BEGINNING TO THE END?

LIKE THAT?

YOU MENTIONED THE APPLE NEW PRODUCT PROCESS, AND YOU MAY

MILESTONES IN THEM THAT ARE LAID OUT.

NO.

IS IT IN ORDER

THERE IS A PROCESS WE FOLLOW THAT HAS VERY RIGID

BUT THE DEVELOPMENT WORK HAPPENS THROUGHOUT.

TIME THINGS

ARE INVENTED EARLY IN THE PROCESS, SOMETIMES LATER IN THE

PROCESS.

PARALLEL TOGETHER AT DIFFERENT STAGES OF THE DEVELOPMENT.

16
17

THERE ARE MULTIPLE PROGRAMS AT ANPP GOING ON IN

SO IT IS A FORMAL PROCESS WITH MANY ELEMENTS HAPPENING IN
PARALLEL.

DID THE IPHONE DEVELOPMENT PROCESS RESULT IN INVENTIONS

THAT WEREN'T IMMEDIATELY INCORPORATED INTO THE IPHONE?

YES, OF COURSE.

AND FROM APPLE'S PERSPECTIVE, ARE THOSE INVENTIONS STILL

VALUABLE TO APPLE?

INVENTING NEW VERSIONS OF THE IPHONE, NEW VERSIONS OF OUR

OPERATING SYSTEM.

EXTREMELY.

WE'RE STILL IN A MARKET HERE WHERE WE'RE

IT'S STILL GROWING AND THERE'S SO MUCH MORE

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TO DO TO HELP CUSTOMERS AND CREATE NEW VALUE IN OUR BUSINESS.

IT'S LONG FROM OVER.

SIR, LET'S MOVE TO A SLIGHTLY DIFFERENT SUBJECT.
WHAT WERE THE SALES FIGURES LIKE FOR THE ORIGINAL IPHONE?

THEY WERE REALLY GREAT.

HAVE YOU PREPARED A SUMMARY FOR THIS JURY WHICH SHOWS

THOSE SALES NUMBERS?

YES.

MR. MCELHINNY:

YOUR HONOR --

OR WOULD YOU OPEN YOUR BINDER, PLEASE, TO PX 143.

OKAY.

WHAT IS PX 143?

THIS IS A CHART THAT WE PREPARED OF CUMULATIVE UNIT SALES

OF THE IPHONE AND IPAD.

MR. MCELHINNY:

YOUR HONOR, I MOVE PLAINTIFF'S

EXHIBIT 143.

MR. PRICE:

NO FURTHER OBJECTION.

THE COURT:

IT'S ADMITTED.

(PLAINTIFF'S EXHIBIT 143 WAS ADMITTED IN EVIDENCE.)

THE COURT:

GO AHEAD, PLEASE.

MR. MCELHINNY:

THERE.

SALES FOR THE IPHONES?

ALL RIGHT.

WE'LL PUT IT ON THE BOARD

SO CAN YOU -- WHERE DO WE FIND THERE AT LEAST THE INITIAL

SO THIS IS A CHART OF CUMULATIVE SALES, SO SALES AS

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THEY'RE GROWING OVER TIME.

UNITS, AND TIME IS ALONG THE BOTTOM SCALE, FROM 2007 AT THE

BEGINNING OF THE IPHONE UNTIL LATE 2013.

4
5

THE VERTICAL SCALE IS MILLIONS OF

AND THE BLUE LINE REPRESENTS THE CUMULATIVE SALES OF
IPHONE WITH EACH QUARTERLY TOTAL OF SALES.

AND CAN YOU SUMMARIZE FOR US WHAT THE ORIGINAL, THE SALES

OF THE ORIGINAL IPHONE WERE?

QUARTER, WE SOLD THE IPHONE, WE STARTED QUITE MODESTLY WITH

YES.

AS YOU CAN SEE IN THE BEGINNING, THE VERY FIRST

300,000 UNITS, A GREAT LAUNCH FOR US, BUT WE HAD NO IDEA WHERE

IT WAS ALL GROWING.

OVER A MILLION AND THEN OVER 5 MILLION AT THE START OF 2008,

OVER 10 MILLION AT THE START OF 2009, AND ON AND ON.

THE COURT:

AND YOU CAN SEE IT GREW VERY QUICKLY TO

CAN I ASK YOU ONE QUESTION.

WHEN YOU

KEEP SAYING "NO FURTHER OBJECTION," THERE WAS NO OBJECTION

FILED TO SOME OF THESE.

KNOW?

WHAT ARE YOU PRESERVING, JUST SO I

MR. PRICE:

THE MOTIONS IN LIMINE OBJECTIONS, YOUR

THE COURT:

OKAY.

MR. PRICE:

PARDON ME?

THE COURT:

THEY WERE NOT TO EVERY SINGLE EXHIBIT,

HONOR.

20
21

24
25

THEY WERE NOT TO EVERY SINGLE

EXHIBIT.

BUT LET'S TALK ABOUT THIS LATER.
MR. PRICE:

SURE.

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THE COURT:

ALL RIGHT.

MR. MCELHINNY:

GO AHEAD, PLEASE.

THANK YOU.

DOES THIS CHART ALSO SHOW THE SALES OF SUBSEQUENT MODELS

OF THE IPHONE AFTER THE ORIGINAL IPHONE?

YEAR'S SALES HAVE ACCELERATED AND GROWN THROUGHOUT THIS TIME.

2013?

IT DOES.

WITH EACH YEAR, THERE WERE NEW MODELS AND EACH

AND CAN YOU TELL US WHAT THE TOTAL WAS THROUGH THE END OF

YES.

YOU CAN SEE AT THE TOP RIGHT CORNER ON THAT, AT THE

VERY HIGHEST POINT OF THAT BLUE LINE, IT'S JUST SHY OF 170

MILLION UNITS.

YOU OBSERVE CHANGES IN THE PHONE MARKETPLACE AS A RESULT OF THE

INTRODUCTION OF THE IPHONE?

YES.

AND CAN YOU DESCRIBE THOSE CHANGES FOR US?

FROM YOUR POSITION AS THE HEAD OF MARKETING AT APPLE, DID

MR. PRICE:

OBJECTION.

THE COURT:

OVERRULED.

19
20

VAGUE, AMBIGUOUS.

GO AHEAD, PLEASE.
THE WITNESS:

WHAT WE HOPED FOR, WHAT WE EXPECTED TO

HAVE HAPPEN DID, IN FACT, OCCUR, WHICH WAS THAT BEFORE THE

IPHONE, THE MAJORITY OF PHONES THAT EVERYBODY HAD THAT WE ALL

USED WERE WHAT WE CALLED FEATURE PHONES.

24
25

THEY'RE SIMPLER DEVICES THAT HAD A SCREEN WHERE YOU COULD
MAKE YOUR CALLS AND KEEP YOUR CONTACTS ON THEM.

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KEYPAD FOR DIALLING ON IT.

AND THEN AFTER THE IPHONE, THERE WAS A DRAMATIC CHANGE IN

THE MARKETPLACE AND PHONES NOW COULD BECOME SMARTER AND BE

DRIVEN BY POWERFUL SOFTWARE THAT LETS YOU DO THINGS ON THE

INTERNET AND ACCESS ALL YOUR MEDIA AND ALL THESE THINGS THAT WE

DREAMT THE IPHONE COULD DO, IT REALLY DID CHANGE THE WORLD OF

PHONES.

SIR, HAS IT BEEN APPLE'S EXPERIENCE THAT WHEN A CUSTOMER

BUYS AN APPLE PRODUCT, THEY TEND TO BUY ADDITIONAL APPLE

PRODUCTS?

OR SERVICES?

YES, IT IS.

AND CAN YOU DESCRIBE THAT FOR US?

WELL, OFTEN WHEN A CUSTOMER PURCHASES A PRODUCT OF OURS,

AN IPHONE, AN IPAD OR ANOTHER DEVICE, THAT IF THEY HAVE A GREAT

EXPERIENCE WITH IT AND THEY REALLY LOVE IT, THEY'LL TEND TO BUY

OTHER THINGS WITH IT, THE ECOSYSTEM, ACCESSORIES AND OTHER

PRODUCTS THAT THEY MIGHT WANT TO USE WITH IT.

AND IF THEY CONTINUE TO HAVE A GREAT EXPERIENCE WITH IT,

THEY'RE LIKELY TO BUY MORE PRODUCTS FROM US DOWN THE ROAD, NOT

ONLY A SMARTPHONE, BUT MAYBE A COMPUTER.

FROM US.

THEY MIGHT BUY A MAC

WE ALSO OBSERVED A NETWORK EFFECT OF CUSTOMERS WHO BUY OUR

PRODUCTS.

IF THEY'VE HAD A GREAT TIME WITH IT, THEY'LL TELL

FAMILY AND FRIENDS AND THEY MAY START TO BUY IPHONES AND MACS

AND OTHER PRODUCTS.

OR IN THE WORK PLACE, IF THEY FIND I CAN

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USE THIS IPHONE AT WORK AND GET MY E-MAIL, OTHER PEOPLE MAY

LEARN THAT AND THEY ALL START TO HAVE THEM AS WELL.

3
4
5

SO THERE'S A LOT OF ECOSYSTEM EFFECTS ONCE SOMEONE STARTS
TO BUY AND USE OUR PRODUCT IF THEY LOVE THEM.
Q.

6
7

SIR, I WANT TO TURN BRIEFLY TO THE IPAD.
CAN YOU TELL US -- AGAIN, I REALLY DO WANT TO DO THIS

BRIEFLY -- WHAT WAS THE GENESIS OF THE IPAD PRODUCT?

IN THE BEGINNING OF WORKING ON THE IPAD, WE WERE TRYING TO

INVENT A MORE AFFORDABLE COMPUTER.

OUR MOST POPULAR MACS WERE

NOTEBOOKS AND NOTEBOOK PRICING WAS GOING DOWN AND WE THOUGHT

EVENTUALLY NOTEBOOK PRICES WERE GOING TO DROP WELL BELOW $500.

BUT COMPETITORS WERE MAKING SOME REALLY CHEAP PRODUCTS

THAT WE WOULD NEVER BE PROUD TO MAKE.

WASN'T THERE.

HOW COULD WE MAKE A FUTURE MOBILE COMPUTER THAT HAD FEWER

MOVING PARTS, KEYBOARDS, THAT WOULD ALLOW US TO MAKE A NOTEBOOK

REPLACEMENT THAT WAS EVEN MORE AFFORDABLE.

THE QUALITY REALLY

SO WE CHALLENGED OUR TEAM TO HELP US FIGURE OUT

AND WE STARTED WORKING ON THAT AND WE HAD PROBABLY ONE OF

THE MOST IMPORTANT THINGS TO SOLVE WOULD BE TO GET RID OF THE

PHYSICAL KEYBOARD AND USE THE SCREEN TO TYPE DIRECTLY ON -- TO

GET RID OF THE MOUSE OR TRACK PAD AND USE THE SCREEN TO

MANIPULATE OBJECTS ON.

23
24
25

AND THAT'S WHAT LED US TO WORK ON MULTITOUCH TECHNOLOGY
THAT EVENTUALLY GAVE RISE TO BOTH THE IPAD AND IPHONE.
Q.

WHEN WAS THE IPAD ANNOUNCED?

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IN JANUARY OF 2010.

SO THAT'S THREE YEARS AFTER THE IPHONE; CORRECT?

YES, IT IS.

WHEN WAS THE IPAD RELEASED?

IN APRIL OF 2010.

WHAT WAS, GENERALLY, THE RECEPTION FOR THE IPAD?

THERE WAS TREMENDOUS EXCITEMENT AND INCREDIBLE MEDIA

COVERAGE AROUND THE IPAD.

WAS THE IPAD INVESTMENT PROJECT CONSIDERED A GAMBLE AT

APPLE?

BECAUSE WE WERE ADDING NOW A FOURTH PRODUCT IN OUR BUSINESS,

MAC, IPOD, IPHONE, AND NOW IPAD, WE DIDN'T WANT TO DILUTE OUR

RESOURCES TOO MUCH BY TAKING ON YET ANOTHER THING.

WOULD RISK OTHER WORK.

YES.

IT WAS ALSO A "YOU BET YOUR COMPANY" PRODUCT, FIRST

SO THAT

AND UP UNTIL THAT POINT IN TIME, BEFORE IPAD, OTHER

COMPANIES HAD TRIED TABLET LIKE COMPUTERS AND NONE HAD DONE

WELL.

SO HERE WE ARE DOING BETTER WITH -- THE IPOD WAS DOING

REALLY WELL, AND NOW THE IPHONE IS DOING REALLY WELL, AND WE'RE

ABOUT TO TAKE ON SOMETHING RISKY THAT OTHERS HAD TRIED AND

FAILED AT AND WE RISKED THE REPUTATION OF APPLE IF WE WERE TO

FAIL AT THAT.

HOW WERE THE SALES OF THE IPAD PRODUCT?

OH, THE EARLY SALES OF THE IPOD WERE EVEN STRONGER THAN

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IPHONE.

IT WAS GREAT.

ABOUT THE SALES OF THE IPAD?

BOTTOM OF THE CHART, AND THAT TRACKS THE CUMULATIVE SALES OF

THE IPAD HERE IN THE U.S. FROM THE BEGINNING IN 2010 UP UNTIL

2013.

INVENTIONS IT MADE LEADING UP TO AND DURING THE DEVELOPMENT OF

LET'S GO BACK TO EXHIBIT 143.

WHAT DOES THIS TELL US

WELL, YOU CAN SEE ON THE SAME CHART THE ORANGE LINE ON THE

MR. SCHILLER, DID APPLE SEEK PATENT PROTECTION FOR THE

THE IPHONE AND THE IPAD?

YES.

WHY?

WELL, THERE ARE MANY REASONS TO WANT, TO GET PATENTS ON

OUR INVENTIONS.

FIRST, WE HAVE A LOT OF REALLY BRIGHT ENGINEERS WHO PUT IN

LONG HOURS AND PUT A LOT OF THEMSELVES PERSONALLY INTO CREATING

THESE THINGS, THESE IDEAS THEY DREAM UP AND THE INVENTIONS THAT

THEY COME UP WITH.

AND THOSE ARE THINGS THAT ARE CREATED FOR APPLE.

PRODUCT COMPANY, A TECHNOLOGY PRODUCT COMPANY.

PRODUCTS THAT ARE HOPEFULLY UNIQUE AND SPECIAL.

TRY TO DO.

WE'RE A

WE MAKE
THAT'S WHAT WE

AND THOSE INVENTIONS, IF THEY'RE UNIQUE AND SPECIAL, WE

WANT TO USE THEM IN OUR PRODUCTS FOR OURSELVES, TO

DIFFERENTIATE OURSELVES FROM THE REST OF THE MARKET.

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AND PATENTS HOPEFULLY HELP TO PROTECT US SO THAT WE CAN DO
THAT AND HAVE OUR UNIQUE ADVANTAGES.

THEY ALSO HELP IDENTIFY THOSE THINGS THAT WE'VE CREATED IN

OUR PRODUCTS THAT ARE UNIQUE TO APPLE THAT PEOPLE WILL

RECOGNIZE AND SEE AS APPLE INVENTING THEM, BEING THE CREATIVE

INVENTOR COMPANY WE LIKE TO BE SEEN AS.

I THINK IT'S REALLY IMPORTANT TO THE VERY DNA OF APPLE

THAT WE'RE AN INNOVATOR WHO CREATES UNIQUE DIFFERENTIATIONS IN

OUR PRODUCTS THAT CUSTOMERS VALUE.

YOUR EXPERIENCE AT APPLE, WHAT ARE YOUR VIEWS ABOUT SOME OF THE

REASONS WHY THE IPHONE HAS BEEN SO SUCCESSFUL.

13
14

SIR, BASED ON YOUR JOB RESPONSIBILITIES, WHAT YOU DO AND

MR. PRICE:

OBJECTION, YOUR HONOR.

CALLS FOR EXPERT

TESTIMONY.

THE COURT:

OVERRULED.

GO AHEAD, PLEASE.

THE WITNESS:

IN MY JOB WORKING ON THE IPHONE, HAVING

A UNIQUE PRODUCT THAT SOLVES PROBLEMS FOR CUSTOMERS IN SPECIAL

WAYS AND MAKES THEM EASY AND FUN AND POWERFUL TO USE IS THE

VERY ESSENCE OF WHAT MAKES IT GREAT AND WHAT MAKES IT

SUCCESSFUL.

BY MR. MCELHINNY:

AND WHAT ARE THE REASONS FOR THE SUCCESS OF THE IPAD, SIR?

IN THE SAME WAY.

PRODUCT BEFORE IT IN ITS CATEGORY, HAS SUCCEEDED BECAUSE IT'S

WE'VE CREATED A PRODUCT THAT, UNLIKE ANY

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BEAUTIFUL AND IT DOES THINGS YOU NEED IT TO DO AND IT DOES IT

IN FUN, INTUITIVE, EASY-TO-USE WAYS, AND THAT'S SO MUCH ABOUT

THE SOFTWARE AND ULTIMATELY THE ENTIRE USER EXPERIENCE WE

CREATED.

SIR, WOULD YOU OPEN YOUR BINDER, PLEASE, TO EXHIBIT 122A.

OKAY.

WHAT IS EXHIBIT 122A?

THIS IS A, A SUMMARY OF A QUESTION WE'VE ASKED CUSTOMERS

IN OUR MARKET RESEARCH SURVEYS, IN THIS CASE IPHONE BUYERS,

ABOUT THEIR EXPERIENCE WITH AN IPHONE.

AT BOTH PAGES 1 AND 2?

QUARTER OF FISCAL 2012.

MR. MCELHINNY:

MR. PRICE:

17
18

AND WHAT TIME PERIOD DO THOSE SURVEYS COVER, SIR, LOOKING

FROM THE FIRST QUARTER OF FISCAL 2011 UP UNTIL THE FOURTH

YOUR HONOR, I MOVE EXHIBIT 122A.

YOUR HONOR, I OBJECT AS BEING

INAPPROPRIATE SUMMARIES.
SPECIFICALLY, AND I THINK WE HAVE AN AGREEMENT ON THIS, I

BELIEVE THERE WAS AN AGREEMENT NOT TO EVEN ATTEMPT TO ADMIT

PAGE 3.

21
22
23
24
25

THE COURT:

I'M SORRY.

I COULDN'T HEAR THE LAST

THING YOU SAID.
MR. PRICE:

I BELIEVE THERE WAS AN AGREEMENT NOT TO

ADMIT PAGE 3.
(DISCUSSION OFF THE RECORD BETWEEN COUNSEL.)

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MR. PRICE:

HOLD ON ONE SECOND, YOUR HONOR.

LET ME

LOOK AT THE NEW EXHIBIT.

(DISCUSSION OFF THE RECORD BETWEEN COUNSEL.)

MR. PRICE:

YOUR HONOR, I NOW HAVE A CORRECT COPY.

THE ONLY OBJECTION IS THAT IT'S AN INAPPROPRIATE SUMMARY.

NOT -- IT'S NOT A COMPLICATED DOCUMENT OR VOLUMINOUS DOCUMENTS.

7
8

THE COURT:
OBJECTION?

ALL RIGHT.

IT'S

SO YOU'RE MAKING A 1006

THAT'S OVERRULED.

GO AHEAD, PLEASE.

BY MR. MCELHINNY:

CAN WE PUT THIS UP ON THE SCREEN, PLEASE, FIRST PAGE.
MR. SCHILLER, WHAT IS AN IPHONE BUYER SURVEY?

MY MARKET RESEARCH TEAM --

LET ME STOP YOU RIGHT THERE.

TEAM?

LOOK BOTH AT PRIMARY RESEARCH, QUESTIONS WE CAN ASK OF

CUSTOMERS AND PULL TOGETHER RESULTS, AS WELL AS SECONDARY

RESEARCH, THAT'S RESEARCH THAT OTHER PEOPLE DO THAT WE CAN

PURCHASE AND LOOK AT AND SEE WHAT THEY'VE LEARNED OR FOUND OUT.

WHAT IS A MARKET RESEARCH

IT'S A SMALL GROUP OF PEOPLE WHO WORK FOR ME WHO HELP US

AND MY TEAM IS RESPONSIBLE FOR THOSE TWO THINGS.

ALL RIGHT.

I APOLOGIZE FOR INTERRUPTING YOU.

BACK TO

WHAT IS AN IPHONE BUYER SURVEY?

QUESTIONS OF RECENT IPHONE BUYERS TO FIND OUT SOME OF THE

SO THIS IS A SURVEY THAT WE RUN EACH QUARTER THAT ASKS

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THINGS THEY THINK ABOUT IPHONE.

SURVEYS?

MY TEAM DOES.

AND ARE THE SURVEYS THEMSELVES THAT ARE -- THAT THIS

DOCUMENT SUMMARIZES, ARE THEY CONSIDERED CONFIDENTIAL DOCUMENTS

AT APPLE?

YES, THEY ARE.

AND WHY IS THAT?

BECAUSE ANY COMPANY, AND THIS IS CERTAINLY TRUE IN OUR

CASE, HAS A UNIQUE ABILITY TO SPEAK TO YOUR OWN CUSTOMER.

COMPETITORS DON'T KNOW OUR CUSTOMERS WELL, BUT WE HAVE AN

ABILITY TO SPEAK TO THEM AND ASK THEM QUESTIONS AND THEN GATHER

THIS DATA AND GAIN INSIGHTS AS TO WHAT THEY MAY THINK, AND WE

CONSIDER THAT CONFIDENTIAL.

SUMMARY, ON PAGE 1 OF THE SUMMARY THAT WE'VE GOT HERE?

ACROSS MANY SURVEYS OVER PERIODS OF TIME WE LISTED.

20
21

AND WHO DETERMINES WHAT QUESTIONS GET ASKED ON THESE

OUR

SIR, CAN YOU EXPLAIN TO US WHAT WE'RE SEEING ON THIS

YES.

THIS IS A SUMMARY OF ONE QUESTION THAT WAS ASKED

THE SIMPLE QUESTION WAS HOW IMPORTANT WAS EASE OF USE TO
YOUR DECISION TO PURCHASE YOUR IPHONE?

AND THESE ARE THE RESPONSES TO THAT QUESTION, AND

SPECIFICALLY THE WAY WE LOOK AT THE RESPONSE IS CUSTOMERS ARE

ASKED TO RANK THEIR BELIEF ON WHETHER THIS WAS IMPORTANT TO

EASE OF USE ON A SCALE OF 1 TO 5.

THE TOP TWO THINGS ARE

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WHETHER IT WAS SOMEWHAT IMPORTANT OR VERY IMPORTANT.

AND IN MARKETING WHAT WE DO IS WE COMBINE THOSE TWO TOP

SCORES TO CREATE ONE TOTAL SCORE, AND THAT'S A MEASURE OF HOW

IMPORTANT IT IS THAT YOU COMPARE AMONGST DIFFERENT QUESTIONS

AND DIFFERENT SURVEYS.

SIR, WHY DO YOU USE THE PHRASE "EASE OF USE" IN YOUR

SURVEYS?

APPLE HAS DONE FOR CUSTOMERS OF OUR PRODUCTS OVER THE YEARS.

I THINK EASE OF USE IS ONE OF THE MOST IMPORTANT THINGS

IT'S ONE OF THE MOST IMPORTANT THINGS WE TRY TO DELIVER IN OUR

PRODUCTS, AND I THINK IT'S SOMETHING APPLE IS KNOWN FOR.

IT'S INCREDIBLY IMPORTANT.

THAT MAKES THE SMARTPHONE EASY TO USE, WHY YOU GET THESE KINDS

OF CUSTOMER RANKINGS?

USE.

IT'S AN ACCUMULATION OF ALL THE THINGS THAT MAKE UP YOUR

EXPERIENCE WITH THAT PRODUCT.

THOSE THINGS ARE SOFTWARE, ALL THE GREAT SOFTWARE FEATURES THAT

MAKE IT SO YOU UNDERSTAND HOW YOU CAN GET WHAT YOU WANT DONE

AND YOU ENJOY DOING THAT.

EXPERIENCE OF EASE OF USE.

PREPARED, CAN YOU EXPLAIN TO US WHAT WE'RE SEEING THERE,

AND WHAT IS IT, BASED ON YOUR UNDERSTANDING OF WHAT IT IS

WELL, THERE ISN'T ONE SPECIFIC FEATURE THAT SAYS EASE OF
THIS ISN'T A SWITCH ON THE SCREEN THAT SAYS EASY OR HARD.

AND THE PREDOMINANT RANGE OF

I THINK THAT ADDS UP TO YOUR

IF YOU WOULD LOOK AT PAGE 2 OF THE SUMMARY THAT YOU

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PLEASE.

EASE OF USE WHERE WE HAD SUCH A HIGH RESPONSE RATE OVER TIME

AND INSTEAD LOOKS AT IT BY INDIVIDUAL IPHONE MODEL.

ALL THAT TIME, YOU KNOW, WHAT DO CUSTOMERS THINK ABOUT EASE OF

USE FROM IPHONE 4, IPHONE 4S, IPHONE 5 TO SEE IF THERE'S ANY

DIFFERENT BY PRODUCT.

8
9

SO THIS LOOKS AT THAT SAME DATA OF ASKING CUSTOMERS ABOUT

SO ACROSS

AND WHAT IT SHOWS IS THERE REALLY ISN'T ANY DIFFERENCE BY
PRODUCT.

SO OVER TIME, OVER DIFFERENT PRODUCTS, THEY CONSISTENTLY

TELL US THAT WELL OVER 90 PERCENT ON AVERAGE THINK EASE OF USE

IS EXTREMELY IMPORTANT TO THEIR PURCHASE CHOICE OF AN IPHONE.

SIR, IN YOUR BINDER, WOULD YOU PLEASE TURN TO EXHIBIT 123.

OKAY.

AND CAN YOU TELL ME WHAT THAT DOCUMENT IS?

SO THIS IS A SURVEY THAT WAS DONE OF SMARTPHONE BUYERS

FROM DIFFERENT VENDORS THAT ALSO WAS ASKING THE QUESTION OF

EASE OF USE.

19
20

MR. MCELHINNY:

SHOULD SOMEBODY OFFER THE JUROR SOME WATER, PLEASE.

JUROR:

THE COURT:

JUROR:

THE COURT:

YOUR HONOR, MAY I OFFER THE JUROR, OR

THAT WOULD BE GOOD.
OH, YES.

I'M SORRY.
THAT WOULD BE GOOD.

GOING TO TAKE A BREAK AT 3:30.

IT'S 3:29.

YOU KNOW, WE WERE
IF YOU WOULD LIKE

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TO TAKE ONE NOW, WE CAN DO THAT.

JUROR:

THE COURT:

THAT WOULD BE GREAT.
OKAY.

AND YOU MAY STEP DOWN.

(JURY OUT AT 3:29 P.M.)

9
10

LET'S TAKE A 15 MINUTE

BREAK.

IT'S 3:29.

THE COURT:

OKAY.

THE RECORD SHOULD REFLECT THE

JURORS HAVE LEFT THE COURTROOM.
PLEASE TAKE A SEAT.
I'M LOOKING AT THE MOTIONS IN LIMINE THAT SAMSUNG FILED.

I DON'T SEE ANY THAT WOULD ADDRESS CUMULATIVE UNIT SALES OF

IPHONE AND IPAD.

WHAT IT IS THAT YOU'RE PRESERVING SINCE THERE WAS NO INDIVIDUAL

OBJECTIONS FILED TO THIS PX 143, THE OBJECTIONS WERE TO 122,

179, AND 211.

16
17

SO I JUST WANT TO HAVE AN UNDERSTANDING OF

SO WHAT IS IT EXACTLY THAT'S BEING PRESERVED HERE, JUST SO
I UNDERSTAND?

MR. PRICE:

YOUR HONOR, I'VE BEEN TOLD YOU'RE RIGHT,

WE DID NOT MAKE MOTIONS IN LIMINE ON THOSE, THOSE SPECIFIC

EXHIBITS.

THE COURT:

OKAY.

MR. PRICE:

SO MY ONLY OBJECTION WAS TO 1006, WHICH

THE COURT:

WHICH WAS NOT TO THIS ONE.

23
24
25

YOU -WERE YOU

MAKING -- I DIDN'T HEAR YOU MAKING A 1006 OBJECTION TO THIS

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ONE.

YOU SAID YOU WERE PRESERVING YOUR MOTION IN LIMINE

OBJECTION, WHICH THERE IS NONE.

3
4

MR. PRICE:

AND I'VE BEEN TOLD THAT, AS IS USUALLY

THE CASE, YOU'RE RIGHT.

5
6

SO --

THE COURT:
PRESERVING.

I JUST WANT TO UNDERSTAND WHAT YOU'RE

I KNOW EVERYONE WANTS TO MAKE A GOOD RECORD.

MR. PRICE:

I KNOW THE MAIN THING --

THE COURT:

AND I ALSO WANT TO MAKE A GOOD RECORD,

TOO.

SO IF YOU'RE MAKING AN OBJECTION, I WANT TO KNOW WHAT IT

IS SO THAT I CAN MAKE AN APPROPRIATE RULING.

ASKING.

12
13
14
15
16

MR. PRICE:

THAT'S WHY I'M

I UNDERSTAND WHY YOU'RE ASKING.

WE'VE

MADE A LOT OF OBJECTIONS ABOUT NEWSPAPER ARTICLES, ET CETERA.
THE COURT:

SURE, I TOTALLY UNDERSTAND.

THAT WAS

MOTION IN LIMINE NUMBER -(PAUSE IN PROCEEDINGS.)

THE CLERK:

THERE'S A REQUEST FOR SOME LOZENGES.

THE COURT:

OH, OKAY.

19
20

(LAUGHTER.)
MS. KREVANS:

MR. MCELHINNY:

24
25

OH, LET SAMSUNG

INSPECT THOSE.

I HAVE SOME.

THEY'RE MINE, YOUR HONOR.
WOULD YOU PLEASE TELL THE JURY THAT

SAMSUNG DIDN'T WANT THEM TO HAVE THESE.
THE COURT:

AND WE CAN GET SOME MORE.

AND I'M GOING

TO BRING UP THE EMERGENCY AND AIRBORNE AND EVERYTHING ELSE.

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CANNOT -OKAY.

I UNDERSTAND.

ALL RIGHT.

SO FOR 143, I'M

UNDERSTANDING THERE WAS NOT A 1006 OBJECTION.

WOULD OVERRULE IT BECAUSE OTHERWISE TRYING TO INTRODUCE SINGLE

SALES NUMBERS FOR EVERY QUARTER FOR A PERIOD OF SEVEN YEARS I

THINK WOULD -- IT WOULD BE HELPFUL TO A JURY TO HAVE A

CUMULATIVE PRESENTATION, A SUMMARY PRESENTATION OF THAT TYPE OF

CUMULATIVE AND LENGTHY EVIDENCE.

9
10

BUT I UNDERSTAND THERE'S NO MOTION IN LIMINE OBJECTION AS
TO 143.

MR. PRICE:

YOU'RE CORRECT.

THE COURT:

GOT IT.

MR. MCELHINNY:

THE COURT:

MR. MCELHINNY:

THE COURT:

22
23
24
25

LET'S

WHAT TIME DO YOU WANT US BACK, YOUR

TEN MINUTES.
TEN MINUTES.

YEAH.

THANK YOU.

(RECESS FROM 3:33 P.M. UNTIL 3:43 P.M.)

20
21

THANK YOU.

HONOR?

ALL RIGHT.

TAKE OUR BREAK.

14
15

IF THERE WAS, I

THE COURT:

ALL RIGHT.

LET'S PLEASE BRING IN OUR

JURY.
(JURY IN AT 3:44 P.M.)
THE COURT:

ALL RIGHT.

WELCOME BACK.

DO WE HAVE EIGHT?
THE CLERK:

WE ARE --

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THE COURT:
PERSON.

I JUST DIDN'T SEE THE EIGHTH

THAT'S WHY.

(LAUGHTER.)

4
5

OKAY.

THE COURT:

ALL RIGHT.

AND WOULD EVERYONE PLEASE

TAKE A SEAT.

TIME IS NOW 3:44.

GO AHEAD, PLEASE.

BY MR. MCELHINNY:

PLAINTIFF'S EXHIBIT 123.

MR. SCHILLER, WOULD YOU LOOK, PLEASE, IN YOUR BINDER AT

YES.

WHAT IS EXHIBIT 123, SIR?

THIS IS A SUMMARY OF A SMARTPHONE MARKET BUYER STUDY.

FOR WHAT TIME PERIOD DOES IT COVER?

FROM THE FOURTH QUARTER OF FISCAL 2011 UNTIL THE FOURTH

QUARTER OF FISCAL 2012.

MR. MCELHINNY:

YOUR HONOR, I MOVE THE SUMMARY,

PX 123.

MR. PRICE:

NO OBJECTION.

THE COURT:

ALL RIGHT.

IT'S ADMITTED.

(PLAINTIFF'S EXHIBIT 123 WAS ADMITTED IN EVIDENCE.)

THE COURT:

BY MR. MCELHINNY:

IN THE SUMMARY?

GO AHEAD, PLEASE.

MR. SCHILLER, CAN YOU TELL US WHAT WE'RE LOOKING AT HERE

YES.

THIS IS ALSO A QUESTION THAT WAS ASKED OF CUSTOMERS

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OF BOTH IPHONES, AS WELL AS ANDROID PHONES, HOW IMPORTANT OR

UNIMPORTANT WAS EASE OF USE TO THEIR DECISION TO PURCHASE A

PHONE?

AND YOU CAN SEE IN BLUE COLOR THERE ARE THE BARS FOR THE

IPHONE OR IOS USERS, AND IN GREEN, THE ANDROID PHONE USERS AND

WHAT THEY FELT ABOUT THE IMPORTANCE OF EASE OF USE.

AND, AGAIN, SO WE'RE CLEAR, WHAT'S THE DIFFERENCE BETWEEN

THE SURVEYS THAT WENT INTO THIS SUMMARY AND THE SURVEYS OF THE

PRIOR SUMMARY THAT YOU WERE TALKING ABOUT?

OWN CUSTOMERS.

WELL, THE PRIOR SUMMARY, WE HAD ACCESS TO SURVEYING OUR

WHEN IT COMES TO A SURVEY WHERE YOU'RE SURVEYING CUSTOMERS

OF OTHER PRODUCTS, YOU HAVE TO TURN TO OTHER MEANS THAT ARE

USEFUL, BUT NOT QUITE AS GOOD YOUR OWN.

IN THIS CASE YOU WORK WITH AN OUTSIDE COMPANY THAT HAD

ACCESS TO THE INTERNET COMMUNITY, PEOPLE THAT THEY OFTEN ASK

QUESTIONS OF.

18
19

SO IT'S AN INTERESTING RESULT.

IT'S GOOD, BUT NOT AS

GOOD.

LET'S LOOK AT PAGE 2 OF THIS SURVEY, AND WHAT DOES THIS

TELL US, OF THE SUMMARIES OF THE SURVEYS.

US?

BUYERS WERE TO PURCHASE AN IPHONE IN THE FUTURE TO FOLLOW ON

THEIR PURCHASE WITH ANOTHER IPHONE.

WHAT DOES THIS TELL

SO THIS PAGE IS ABOUT THE QUESTION ABOUT HOW LIKELY THESE

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AND, AGAIN, IT'S A TOP TWO BOX METRIC USE.

SO PEOPLE WHO

SELECTED EITHER SOMEWHAT LIKELY OR VERY LIKELY AS THEIR

RESPONSE TOTALLED UP, AND AS YOU SEE, THAT IS A VERY, VERY

STRONG RESPONSE TO GET WELL OVER 90 PERCENT OF CUSTOMERS ON

AVERAGE TO SAY THAT THEY'RE LIKELY TO PURCHASE AN IPHONE AGAIN.

WOULD YOU SHOW US PAGE 3 OF THE SUMMARY, PLEASE.
AND WHAT DOES THIS TELL US?

THIS IS A QUESTION THAT WAS ASKED OF THE PEOPLE IN THE

SURVEY ABOUT WHETHER THEY ARE -- THIS DEVICE THEY CURRENTLY OWN

IS THEIR FIRST SMARTPHONE WHETHER THEY'RE A FIRST-TIME

SMARTPHONE BUYER, AND AS YOU SEE ACROSS THE BARS, THE NUMBER

WAS VERY HIGH FOR FIRST-TIME BUYERS, ANYWHERE FROM JUST UNDER

50 PERCENT TO AS HIGH AS 60 PERCENT OF PEOPLE WHO HAD BOUGHT A

SMARTPHONE DURING THE TIME OF THE SURVEY WHO HAD NEVER HAD ONE

BEFORE.

IS THE TIME PERIOD THAT THE SURVEY IS SHOWING US THIS HIGH

FIRST-TIME BUYERS PHENOMENA?

2011 AND GO INTO THE FOURTH QUARTER OF FISCAL 2012.

WHAT IS THE FOURTH QUARTER OF APPLE'S FISCAL 2012?

THAT IS THE JULY/AUGUST/SEPTEMBER QUARTER IS HOW WE COUNT

FISCAL QUARTERS.

IN WHAT CALENDAR YEAR WOULD THAT BE?

THAT WOULD BE 2012.

AND, AGAIN, I THINK THE YEARS MAY BE IMPORTANT HERE.

WHAT

THIS SURVEY PERIOD STARTED AT FOURTH QUARTER OF FISCAL

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AS THE HEAD OF MARKETING?

WHAT WE'VE BEEN SAYING FROM DAY ONE WHEN WE STARTED WORK ON THE

IPHONE IS THAT ONE DAY WE BELIEVE MOST EVERYONE WOULD HAVE A

SMARTPHONE, AND WHERE WE ARE THROUGHOUT THIS PERIOD OF TIME IS

STILL IN A TIME WHERE MANY, MANY PEOPLE DON'T HAVE A

SMARTPHONE.

LIKELY TO HAVE A FEATURE PHONE, PREVIOUS GENERATION OLDER

THANK YOU.

WHAT IS THE SIGNIFICANCE OF THIS NUMBER TO YOU

OH, IT'S INCREDIBLY IMPORTANT.

IT SHOWS, FIRST OF ALL,

THEY MAY NOT HAVE A CELL PHONE AT ALL OR THEY'RE

TECHNOLOGY, AND ARE NOW GETTING A SMARTPHONE.

AND AT LEAST DURING THE PERIOD OF ALL OF THIS RESEARCH YOU

SEE THAT STILL A VERY LARGE NUMBER OF PEOPLE ARE GETTING THEIR

FIRST PHONE, AND THAT FIRST PHONE, AS WE TALKED ABOUT EARLIER,

IS THE PHONE PURCHASE THAT WILL THEN HELP YOU DECIDE WHAT

FOLLOW-ON PRODUCTS YOU MIGHT GET.

YOU'RE MORE LIKELY TO STAY WITH IT FOR A LOT LONGER.

IF YOU LIKE THAT PRODUCT,

SIR, HAS APPLE MADE EFFORTS TO PROMOTE ITS PRODUCTS?

YES, IT HAS.

AND WHAT KIND OF THINGS DO YOU DO TO PROMOTE YOUR

PRODUCTS?

LARGE KEYNOTES AND EVENTS.

PRODUCTS; WE DO ADVERTISING; WE DO OUTDOOR MARKETING; WE SET UP

DISPLAYS IN OUR RETAIL STORE AND WE TRAIN PEOPLE.

WELL, IN MARKETING WE HAVE MANY ACTIVITIES.

WE PUT ON

WE DO PRESS REVIEWS OF OUR

MANY, MANY THINGS.

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IS ADVERTISING IMPORTANT TO WHAT YOU DO?

IT IS.

SIR, IS IT, IN YOUR OPINION, IS IT ADVERTISING THAT DRIVES

THE SALES OF THE APPLE PRODUCTS?

NOT AT ALL.

HELP ME WITH THAT.

ADVERTISING AND IT'S IMPORTANT, WHY DO YOU SAY IT DOESN'T DRIVE

THE SALES OF YOUR PRODUCTS?

IT'S ONE OF THE MARKETING FUNCTIONS THAT I RUN.

IF YOU SPEND AS MUCH TIME AS YOU DO ON

IN MY BELIEF IS THAT APPLE -- THE THING THAT'S MOST

IMPORTANT TO THE MARKETING IS NOT THE MARKETING.

PRODUCT.

IT'S THE

AT THE END OF THE DAY, YOU CAN HAVE A HORRIBLE PRODUCT AND

A GREAT AD.

SO GOOD.

IT MIGHT NOT SELL WELL BECAUSE THE PRODUCT'S NOT

OR YOU COULD HAVE A GREAT PRODUCT AND A HORRIBLE AD AND

THE PRODUCT STILL MIGHT DO WELL BECAUSE IT'S A GREAT PRODUCT.

SO ADVERTISING IS A TOOL THAT'S USEFUL IN MARKETING, BUT

THE CORRELATION BETWEEN THE AD AND A SALE I'VE NEVER FOUND AT

APPLE TO BE VERY STRONG.

IS THE VIEW THAT YOU'VE JUST EXPRESSED REFLECTED IN THE

WAY THAT APPLE DOES ITS ADVERTISING?

I BELIEVE SO.

AND HOW IS THAT?

WELL, WE'VE HAD A STRATEGY FOR QUITE A WHILE IN OUR

MARKETING THAT WE CALL "THE PRODUCT AS HERO."

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EXPLAIN THAT FOR US, PLEASE.

IT'S A SIMPLE THOUGHT, BUT A -- IT HAS A HUGE IMPACT

ACROSS OUR MARKETING, THAT IF THE MOST IMPORTANT THING TO THE

CUSTOMER WANTING TO PURCHASE A PRODUCT IS THE PRODUCT ITSELF,

THEN THE MARKETING SHOULD DO A GOOD JOB OF FOCUSSING FIRST AND

FOREMOST ON THE PRODUCT.

IT'S WHAT YOU SEE IN THE AD.

IT'S WHAT YOU SEE ON THE

BILLBOARD.

THE PRODUCT IS THE MOST IMPORTANT THING, YOU FOCUS MOST ON THAT

PRODUCT.

12
13

IT'S WHAT YOU SEE WHEN YOU WALK INTO THE STORE.

I WANT TO SWITCH SUBJECTS AGAIN.
IS SAMSUNG ONE OF APPLE'S COMPETITORS IN THE SMARTPHONE

MARKET?

YES.

LET ME SHOW YOU PDX 7, SIR, WHICH IS A LIST OF ACCUSED

PRODUCTS IN THIS CASE.

17
18

DURING THE TIME THEY WERE ON THE MARKETPLACE, DID THOSE
PRODUCTS COMPETE WITH APPLE'S SMARTPHONES AND TABLETS?

YES, THEY DID.

SIR, DID APPLE OFFER ITS PRODUCTS TO ONLY CERTAIN SEGMENTS

OF THE SMARTPHONE AND TABLET MARKET?

SEGMENTATION.

QUESTION BETTER.

NOT AT ALL.

IN THE WORLD OF MARKETING, THAT'S CALLED

CAN I INTERRUPT YOU?

TELL US -- I SHOULD HAVE ASKED THE

TELL US, PLEASE, WHAT SEGMENTATION IS IN THE

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WORLD OF MARKETING?

OF THE POPULATION, SOME PEOPLE CONSIDER SEGMENTS BY

DEMOGRAPHICS, LIKE AGE GROUP OR INCOME.

IT'S A SIMPLE THOUGHT, THAT THERE ARE DIFFERENT SEGMENTS

OTHER PEOPLE LOOK AT SEGMENTATION BY WHAT KIND OF JOB YOU

MAY HAVE, WHETHER YOU'RE IN EDUCATION OR BUSINESS AND THE KIND

OF BUSINESS.

8
9

AT APPLE, THAT'S NEVER BEEN THE WAY WE WORK ON OUR
PRODUCTS.

THAT'S NEVER BEEN THE WAY WE MARKET OUR PRODUCTS.

WE HAVE A VERY SIMPLE PRINCIPLE.

PRODUCTS FOR EVERYONE.

THINGS REALLY SIMPLE.

13
14

WE TRY TO MAKE OUR

IF YOU DO THAT, IT ACTUALLY KEEPS

THE IPHONE, WHO DO WE MARKET AND DESIGN THE IPHONE FOR,
FOR EVERYONE.

WE DESIGN THE IPAD FOR EVERYONE.

SOMETHING, AND I'M NOT SURE WE ALL WOULD HAVE UNDERSTOOD WHAT

IT WAS.

SAMSUNG'S COUNSEL, IN HIS OPENING ARGUMENT, REFERRED TO

HE MENTIONED SOMETHING ABOUT CARRIER SUBSIDIES.

YES.

CAN YOU TELL US WHAT CARRIER SUBSIDIES ARE AS THEY AFFECT

PRICING IN THE CELL PHONE MARKET?

PURCHASE A PHONE, IT ALMOST ALWAYS COMES WITH A CONTRACT TIME

LENGTH.

WHEN MANY CUSTOMERS HERE IN THE UNITED STATES GO TO

YOU CAN PURCHASE A PHONE, AND THEY MAY HAVE A TWO-YEAR

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CONTRACT WITH THAT.

THAT CARRIER FOR THAT PERIOD OF TIME.

AND THAT MEANS YOU'RE GOING TO STAY WITH

AND IN EXCHANGE FOR THAT, WHAT THE CARRIER GIVES YOU IS A

LOWER PRICE ON THE PHONE, AND THAT LOWERING OF THE PRICE,

THAT'S WHAT'S CALLED A SUBSIDY.

AND WHAT IS, TODAY, THE LOWEST PRICE AT WHICH AN IPHONE IS

AVAILABLE TO A CONSUMER WHO WANTS TO GET ONE?

FOR FREE.

HOW CAN THAT BE?

AGAIN, WHAT HAPPENS IS THAT OUR IPHONES ARE OFFERED BY

CARRIERS IN THE UNITED STATES, YOU KNOW, CARRIERS LIKE AT&T AND

VERIZON AND SPRINT, AND THEY OFFER THEM AND IF YOU PURCHASE IT

WITH A CONTRACT TO STAY WITH THAT CARRIER, THAT THERE ARE

MODELS OF IPHONE THAT WILL START FOR ZERO DOLLARS DOWN.

JUST GET THE IPHONE.

RETAIL CHANNELS?

YES, WE DO.

AND CAN YOU GIVE US SOME EXAMPLES OF WHERE YOU COMPETE

HEAD-TO-HEAD WITH SAMSUNG?

CHANNELS.

OTHERS, OR IN LARGE RESELLERS, LIKE BEST BUY WOULD BE AN

EXAMPLE OF THOSE AND THROUGH ONLINE CHANNELS AND ON AND ON.

YOU

DO APPLE AND SAMSUNG COMPETE HEAD-TO-HEAD IN PARTICULAR

WE BOTH OFFER PRODUCTS FOR SALE IN A WIDE VARIETY OF
FOR EXAMPLE, CARRIER STORES, AGAIN, LIKE AT&T AND

SIR, CAN YOU TELL ME WHAT YOUR PERSONAL REACTION WAS WHEN

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SAMSUNG'S GALAXY PHONES FIRST CAME ON TO THE MARKETPLACE?

2
3

MR. PRICE:

MR. MCELHINNY:

IT'S

THIS IS FOUNDATIONAL TO THE EFFECTS

OF COMPETITION, YOUR HONOR.

THE COURT:

OVERRULED.

GO AHEAD, PLEASE.

8
9

I'M GOING TO OBJECT.

NOT RELEVANT WITH RESPECT TO THESE PATENTS IN THIS CASE.

4
5

OBJECTION.

THE WITNESS:

I DO REMEMBER WHEN I FIRST SAW A

SAMSUNG GALAXY PHONE BEING LAUNCHED.

I READ ABOUT IT IN AN

ONLINE NEWS STORY AND THE FIRST REACTION WAS SHOCK THAT IT

APPEARED THAT THEY, THAT SAMSUNG, WAS GOING TO BE DOING A LOT

OF COPYING OF OUR PRODUCT.

TO COPY THE IPHONE.

BY MR. MCELHINNY:

IN MARKETING?

18
19
20
21

IT LOOKED SO MUCH LIKE AN ATTEMPT

SIR, DOES COPYING, AS SUCH, CAUSE APPLE PRODUCTS PROBLEMS

IT CAUSES A LOT OF PROBLEMS, MUCH.
MR. PRICE:

I OBJECT UNLESS IT'S COMING TO DAMAGES,

INFLUENCE FROM THESE PATENTS, CLAIMS IN THIS CASE.
MR. MCELHINNY:

THE DAMAGE CAUSED BY COPYING IS

GENERIC, YOUR HONOR.

THE COURT:

OVERRULED.

THE WITNESS:

GO AHEAD.

YOU MAY ANSWER.

WELL, WE SPOKE EARLIER ABOUT HOW IN OUR

MARKETING IT'S DOMINATED BY THE PRODUCT AS THE HERO.

TRYING TO SHOWCASE WHAT OUR PRODUCT IS, WHAT IT DOES, WHY IT'S

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SO SPECIAL, WHY IT'S INNOVATIVE.

AND WHEN SOMEONE ELSE COPIES THINGS ABOUT THAT PRODUCT,

INNOVATIONS WE'VE CREATED, IT DIMINISHES THE VALUE THAT WE'RE

BRINGING TO CUSTOMERS.

CAPABILITIES THAT WERE UNIQUE TO US.

AS EASY TO MARKET.

IT, FIRST OF ALL, TAKES AWAY
SO THAT UNIQUENESS ISN'T

SECONDLY, IT CONFUSES CUSTOMERS ABOUT THE SOURCE OF THOSE

THINGS, WHETHER APPLE IS BEING INNOVATOR AND DOING THESE THINGS

OR WHETHER SAMSUNG OR SOMEONE ELSE IS INNOVATING, AND THAT

CONFUSES CUSTOMERS AND TO THE EXTENT THAT THIS HAPPENS A LOT

AND IT'S HAPPENING ON A VERY LARGE SCALE, MORE AND MORE IT

DIMINISHES WHETHER PEOPLE EVEN SEE APPLE AS THE INNOVATOR WE

ARE IN THE THINGS WE'RE CREATING.

AND AS THE MARKETER WHO HAS TO HELP CUSTOMERS UNDERSTAND

THE INNOVATIONS AND THE EASE OF USE AND THE GREAT EXPERIENCE OF

THE PHONE THAT WE CREATE, IT GETS HARDER AND MORE CHALLENGING

IF OTHERS ARE COPYING THOSE THINGS AND YOU CAN'T STAND ON THEM

AS YOUR OWN INNOVATIONS.

SIR, ARE YOU GENERALLY FAMILIAR WITH THE FIVE PATENTS THAT

ARE BEING SPECIFICALLY ASSERTED IN THIS CASE?

GENERALLY I AM, YES.

JUST SO WE UNDERSTAND, AT WHAT LEVEL DO YOU UNDERSTAND

THEM?

I KNOW THAT THERE ARE FIVE.

I KNOW ROUGHLY WHAT THEY ARE

AND CERTAINLY I'M AWARE OF THEM.

AND NOT TO PROGRAMMING LEVEL

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DETAIL, I'M NOT A PROGRAMMER, BUT I DO KNOW ABOUT THEM.

GENERALLY FAMILIAR WITH APPLE'S WILLINGNESS TO LICENSE ITS

INTELLECTUAL PROPERTY TO OTHER COMPANIES?

THAT ONE.

YES.

OKAY.

TO AUGUST 2011.

I WILL TRY.

CAN YOU HELP ME OUT?

GETTING THERE, ARE SOME GUIDEPOSTS OF EVENTS THAT HAPPENED AT

APPLE DURING THAT PERIOD THAT YOU WOULD BE FAMILIAR WITH?

THINK ABOUT WAS WHAT WE WERE WORKING ON AND DOING.

SUMMER WE HAD INTRODUCED, NOT YET SHIPPED, THE LATEST VERSION

OF OUR OPERATING SYSTEM, IOS 5 AT THAT TIME, SOFTWARE THAT

WOULD RUN ON IPHONES AND IPADS.

OKAY.

ARE YOU, AS A MEMBER OF THE EXECUTIVE TEAM, ARE YOU

JUST A YES OR NO TO

I WOULD LIKE YOU TO TAKE YOURSELF BACK, IF YOU CAN,
CAN YOU DO THAT FOR ME?

SO THAT WE UNDERSTAND HOW YOU'RE

WELL, AS I THINK OF THE SUMMER OF 2011, THE FIRST THING I
SO IN THAT

SO WE HAD LAUNCHED IOS 5 AND HAD A NUMBER OF NEW

CAPABILITIES.

WE INTRODUCED ICLOUD WITH THAT, ONE OF OUR

INTERNET SERVICES BUILT INTO THE OPERATING SYSTEM.

WE INTRODUCED IMESSAGE, COMMUNICATIONS IN IOS, AND

WIRELESS SYNCING WAS ONE OF THE BIG FEATURES THAT WAS PART OF

THAT.

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25

WE WERE ALSO AT THAT TIME WORKING ON THE NEXT IPHONE THAT
WOULD COME OUT JUST SHORTLY AFTER, IN SEPTEMBER.

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DEEPLY INVOLVED IN THAT, AND THAT WOULD BE THE IPHONE 4S,

WHICH, AMONG OTHER CAPABILITIES, BROUGHT TO MARKET SIRI AS PART

OF THAT, THAT'S OUR INTELLIGENT DIGITAL ASSISTANT.

AND CERTAINLY I THINK WHAT'S RELEVANT TO THIS DISCUSSION,

WE WERE CLEARLY IN AN EXTREMELY COMPETITIVE ENVIRONMENT WITH

SAMSUNG AT THE TIME AND THERE WAS A LOT GOING ON RELATIVE TO

THAT.

ACTUALLY, THAT'S WHAT I NOW WANT YOU TO FOCUS ON.
CAN YOU DESCRIBE FOR US IN SOME DETAIL WHAT APPLE'S

COMPETITIVE VIEW OF SAMSUNG WAS IN AND AROUND AUGUST OF 2011?

THE SHOCK OF SEEING SAMSUNG START TO COPY SOME OF OUR PRODUCTS

AND WAS WELL AWARE THAT THEY HAD A STRATEGY TO COME AFTER

APPLE, BOTH NOT ONLY IN PRODUCTS, BUT IN THEIR MARKETING.

WELL, AS I HAD STATED EARLIER, I ALREADY HAD EXPERIENCED

AND IT'S CERTAINLY NOT A COMPANY THAT I WOULD SAY WE HAD,

AT LEAST I WAS AWARE OF A FRIENDLY RELATIONSHIP WITH, THIS

COMPANY THAT WAS COMING AFTER YOUR PRODUCTS AND YOUR CUSTOMERS

AND STATED SO MUCH AS THAT.

19
20

IT WASN'T A GOOD RELATIONSHIP, AND WE SAW IT GROWING AS A
VERY COMPETITIVE ENVIRONMENT BETWEEN THE TWO COMPANIES.

PATENTS AT ISSUE IN THIS CASE IN AUGUST OF 2011, WOULD THOSE

FACTORS HAVE PLAYED A ROLE IN APPLE'S DECISION MAKING?

HAD THERE BEEN DISCUSSIONS ABOUT LICENSING THE FIVE

I -MR. PRICE:

YOUR HONOR, I'M GOING TO OBJECT.

UNITED STATES COURT REPORTERS

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FOUNDATION.

UNDISCLOSED.

THIS IS EXPERT TESTIMONY, AND IT'S BEEN

MR. MCELHINNY:

THIS WAS WHAT WAS GOING ON IN APPLE'S

EXECUTIVES HEADS, YOUR HONOR.

MR. PRICE:

ON A HYPOTHETICAL?

THE COURT:

I'LL ALLOW ONE LIMITED QUESTION AND THEN

YOU NEED TO MOVE ON.

MR. MCELHINNY:

9
10

GOT IT?
(RECORD READ.)

THE WITNESS:

YES, THEY WOULD, VERY MUCH SO.

BY MR. MCELHINNY:

APPLE IN THE MARKETPLACE?

I BELIEVE SO.

AND IN WHAT WAYS?

SIR, HAS SAMSUNG'S INFRINGEMENT OF APPLE'S PATENTS HARMED

MR. PRICE:

OBJECTION, YOUR HONOR.

CALLS FOR EXPERT

OPINION, UNDISCLOSED.

20
21

I WILL, YOUR HONOR.

CAN I ASK YOU TO REPEAT THE QUESTION, PLEASE, SO THAT I'VE

THEY HAD A MARKETING.

MR. MCELHINNY:
FACT OF INJURY.

THIS IS BASIC PERCIPIENT WITNESS TESTIMONY.

THE COURT:

THIS IS THE NATURE -- THIS IS THE

OVERRULED.

GO AHEAD, PLEASE.

BY MR. MCELHINNY:

LET ME ASK YOU THE QUESTION AGAIN.

HAS SAMSUNG'S

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INFRINGEMENT HARMED APPLE IN THE MARKETPLACE?

YES, I BELIEVE SO.

MR. PRICE:

YOUR HONOR, I'M GOING TO ALSO OBJECT IT

ASSUMES FACTS NOT IN EVIDENCE AT THIS POINT.

TESTIMONY COMPARING THESE PATENTS TO WHAT'S IN THESE PRODUCTS

EXCEPT FOR YOUR ONE RULING.

THE COURT:

8
9

THERE'S BEEN NO

OVERRULED.

GO AHEAD, PLEASE.
BY MR. MCELHINNY:

DO YOU HAVE THE QUESTION IN MIND?

YES.

OKAY.

THIS TIME.

MARKETPLACE.

INNOVATIONS THAT WE'VE CREATED AND APPLE'S ROLE AS THE

INNOVATOR.

COULD YOU ANSWER IT?

I THINK YOU CAN ANSWER IT

GO AHEAD.

I BELIEVE IT HAS CAUSED DAMAGE FOR APPLE IN THE
IT HAS CAUSED PEOPLE TO QUESTION SOME OF THE

I THINK IT HAS CONFUSED PEOPLE AS TO WHICH PRODUCTS ARE,

ARE CREATING THIS EXPERIENCE AS THE MOST EASY TO USE AND WILL

BEST SERVE CUSTOMER'S NEEDS, AND I THINK THAT CHALLENGE IS MADE

HARDER BY THE COPYING AND THAT HURTS APPLE IN THOSE EFFORTS.

TODAY THAT APPLE WAS OPPOSED TO FAIR COMPETITION IN THE

MARKETPLACE.

THERE WAS A SUGGESTION IN ONE OF THE OPENING ARGUMENTS

IS THAT TRUE?

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NOT AT ALL.

WHAT IS APPLE'S VIEW ABOUT FAIR COMPETITION IN THE

MARKETPLACE?

MAKE BETTER PRODUCTS.

COMPANIES COMPETING WITH EACH OTHER TO MAKE BETTER PRODUCTS AND

OFFER, OFFER THINGS TO THEM.

8
9
10

WELL, COMPETITION IS GREAT.

COMPETITION PUSHES US ALL TO

IT HELPS THE CUSTOMER.

THEY BENEFIT BY

BUT THE WAY IN WHICH THAT COMPETITION HAPPENS MATTERS.
COMPANIES NEED TO CREATE NEW PRODUCTS, THINK OF NEW IDEAS,
SOLVE PROBLEMS IN NEW WAYS.

THAT IS HOW THE CUSTOMER BENEFITS.

AND THAT'S HOW WE ALL COMPETE WITH EACH OTHER.

I THINK

COMPETITION IS A GREAT THING WHEN DONE WELL AND DONE TO THE

BENEFIT OF THE CUSTOMER.

MR. MCELHINNY:

THE COURT:

ALL RIGHT.

MR. PRICE:

MAY WE HAVE A MINUTE TO SET UP?

THE COURT:

SURE, I'LL GIVE YOU TIME TO SET UP.

I HAVE NOTHING FURTHER, YOUR HONOR.

(PAUSE IN PROCEEDINGS.)

MR. PRICE:

YOUR HONOR?

THE COURT:

ALL RIGHT.

THE TIME IS NOW 4:03.

4:04.

ARE YOU READY.

TIME IS NOW

GO AHEAD, PLEASE.
MR. PRICE:

THANK YOU, YOUR HONOR.
CROSS-EXAMINATION

BY MR. PRICE:

MR. SCHILLER, WE WERE JUST TALKING ABOUT COMPETITION, AND

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I BELIEVE THAT IT HAS BEEN YOUR TESTIMONY THAT WHEN YOU WERE AT

APPLE AND APPLE CAME OUT IN 2007 WITH THAT IPHONE, YOU EXPECTED

THAT IN THE FUTURE, THERE WOULD BE OTHER SMARTPHONE COMPANIES.

CORRECT?

YES.

AND IT WAS YOUR OBSERVATION THAT, YOU KNOW, THAT COMPANIES

TENDED TO FOLLOW TRENDS WITHIN THE SMARTPHONE INDUSTRY.

HAD OBSERVED THAT?

I'M NOT SURE WHAT YOU MEAN BY "TRENDS."

LIKE FOR A WHILE THERE WERE THESE FLIP PHONES, YOU KNOW.

THERE WERE, YEAR TO YEAR, THINGS IN THE MARKET THAT, THAT

MANUFACTURERS OFFERED THAT MIGHT BE SIMILAR.

14
15

YOU

YES, THAT DID HAPPEN WITH THE FLIP PHONES.
I'M NOT SURE ABOUT THE QUESTION WITH SMARTPHONES WHAT YOU

MEAN.

WELL, YOU CERTAINLY EXPECTED COMPETITION IN THE SMARTPHONE

MARKET; CORRECT?

YES.

AND YOU KNEW THAT OTHER COMPANIES WERE ALLOWED TO COMPETE

WITH APPLE IN THE SMARTPHONE MARKET AS LONG AS THOSE COMPANIES

DIDN'T DO THINGS THAT APPLE ITSELF HAD THE SOLE RIGHT TO DO;

CORRECT?

PEOPLE HAVE, COMPANIES HAVE THE RIGHTS TO DO AND NOT DO.

PREFER NOT TO RESPOND AS A LAWYER.

I'M NOT SURE IF YOU'RE ASKING A LEGAL QUESTION ABOUT WHAT

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I JUST KNOW GENERALLY AS A MARKETER WHAT, WHAT IS GOOD
COMPETITION AND -- BUT I SHOULDN'T SPEAK ON A LEGAL BASIS.

THINK YOUR ATTORNEY ASKED YOU SOME QUESTIONS ABOUT WHETHER YOU

WERE FAMILIAR WITH THE PATENTS IN THIS CASE.

WELL, I DON'T WANT YOU TO SPEAK ON A LEGAL BASIS, BUT I

DO YOU RECALL THAT?

YES, AND I AM GENERALLY FAMILIAR WITH THE FIVE PATENTS.

AND WHAT PATENTS DO IS THEY GIVE A COMPANY THE SOLE RIGHT

TO DO A PARTICULAR THING; CORRECT?

I BELIEVE SO.

AND SO TO FIND OUT WHETHER OR NOT SOMEONE IS DOING

SOMETHING YOU HAVE THE SOLE RIGHT TO DO, YOU REALLY HAVE TO

LOOK AT THE LANGUAGE OF THE PARTICULAR PATENT CLAIM; CORRECT?

CLAIMS IN A PATENT.

BETTER ANSWERED BY A LAWYER IF WE'RE GOING TO GET INTO WHAT

CLAIMS MEAN.

THAT YOU'RE NOT REALLY IN A POSITION TO SAY, YOU KNOW, WHETHER

OR NOT SAMSUNG CAN USE A PARTICULAR METHOD, FOR EXAMPLE, FOR

WORD SUGGESTION OR A PARTICULAR METHOD FOR SLIDE TO UNLOCK

BECAUSE YOU'RE NOT A LAWYER AND HAVEN'T REALLY COME TO TERMS

WITH THOSE CLAIMS IN THAT DETAIL; CORRECT?

IMPLEMENTATION OF A PATENT IS LEGAL OR NOT.

I -- AGAIN, I'M NOT AN EXPERT ON THE DIFFERENCE BETWEEN

OKAY.

I THINK THAT'S A LEVEL OF DETAIL THAT'S

WELL, SO I GUESS WHAT YOU'RE TELLING ME IS THAT, IS

YES, I'M NOT A LAWYER AND I SHOULDN'T SAY WHETHER SPECIFIC

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TO SAY.

THAT PHONE IN 2007, WHICH WE HEARD ALL THE APPLAUSE FOR ON THE

VIDEO EARLIER, THAT APPLE MADE AN EASY TO USE SMARTPHONE;

CORRECT?

YES, WE SURE DID.

AND YOU UNDERSTAND THAT OTHER COMPANIES WERE ALLOWED TO

COMPETE WITH APPLE TO MAKE SMARTPHONES THAT WERE EASY TO USE AS

LONG AS -- AS LONG AS THEY WEREN'T USING APPLE'S PATENTED WAY

AND SO YOU MENTIONED, FOR EXAMPLE, THAT APPLE CAME OUT --

OF DOING IT; THAT IS, USING WAYS THAT ONLY APPLE HAD THE RIGHT

TO DO; CORRECT?

I BELIEVE SO.

OKAY.

ME STEP BACK AGAIN.

15
16

AND SO IF YOU'RE LOOKING AT WHETHER OR NOT -- LET

SO IT WASN'T YOUR VIEW THAT, THAT, FOR EXAMPLE, ANDROID,
WHICH YOU UNDERSTAND WAS CREATED BY GOOGLE; CORRECT?

YES.

SO IT WASN'T YOUR UNDERSTANDING THAT GOOGLE, IN CREATING

AN ANDROID OPERATING SYSTEM, HAD TO COME UP WITH SOMETHING HARD

TO USE.

21
22

MR. MCELHINNY:

BEYOND THE SCOPE, YOUR HONOR.

DIDN'T MENTION THE WORD "GOOGLE" ONCE IN MY EXAMINATION.

MR. PRICE:

HE SAID --

THE COURT:

OVERRULED.

GO AHEAD.

YOU MAY ANSWER.

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THE WITNESS:

I'M SORRY.

COULD I HAVE THE QUESTION

AGAIN.

MR. PRICE:

SURE.

LET ME JUST CHECK SOMETHING.

DIDN'T YOU TALK ABOUT EASE

OF USE FOR ANDROID.

ANDROID?

IN THE CHART, YES.

AND YOU LOOKED AT SURVEYS CONCERNING THE USE OF USE FOR

ANDROID; RIGHT?

DIDN'T YOU COMMENT ABOUT EASE OF USE FOR

YES.

AND YOUR UNDERSTANDING IS THAT ANDROID IS CREATED BY

GOOGLE; CORRECT?

YES.

SO I JUST WANT TO MAKE SURE, IT'S NOT YOUR TESTIMONY THAT

JUST BECAUSE APPLE CAME OUT WITH THIS REMARKABLE PHONE IN 2007,

THAT GOOGLE, IN COMPETING, HAD TO COME OUT WITH SOMETHING HARD

TO USE.

NO.

I MEAN, GOOGLE WAS ALLOWED TO DEVELOP SOFTWARE THAT WAS

EASY TO USE SO LONG AS IT DID NOT VIOLATE APPLE'S RIGHTS;

CORRECT?

MR. MCELHINNY:

OBJECTION.

GOOGLE IS NOT A PLAYER IN THIS CASE.

THE QUESTION HAS BEEN ABOUT SAMSUNG.

THE COURT:

RELEVANCE, YOUR HONOR.
THEY'RE NOT A DEFENDANT.

OVERRULED.

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GO AHEAD, PLEASE.

THE WITNESS:

I'M SORRY.

COULD I HAVE THE QUESTION

AGAIN, PLEASE.

BY MR. PRICE:

TO USE THAT COMPETED WITH APPLE SO LONG AS IT DIDN'T DO IT IN A

WAY THAT VIOLATED APPLE'S RIGHTS; CORRECT?

I BELIEVE SO.

OKAY.

SURE.

GOOGLE COULD DEVELOP ANDROID SOFTWARE THAT WAS EASY

SO LET'S GO BACK THEN TO, TO, IF I CAN, TO THAT

2007 TIMEFRAME WHEN WE WERE LOOKING -- WE SAW ALL THOSE REVIEWS

OF THE IPHONE -- THAT FIRST IPHONE.

AND THERE WAS A LOT OF DEMAND FOR THAT IPHONE; CORRECT?

YES, THERE WAS.

OKAY.

ACCUSED -- THAT ARE BEING ASSERTED IN THIS CASE, THE PATENT

CLAIMS, AT LEAST FOUR OF FIVE OF THEM HAD NOTHING TO DO WITH

THE DEMAND FOR THAT FIRST IPHONE; CORRECT?

NOW, WE KNOW, HOWEVER, THAT THE PATENTS THAT ARE

MR. MCELHINNY:

EXCUSE ME, YOUR HONOR.

MAY WE

APPROACH?

THERE IS A LIMITATION ON WHAT WE'RE ALLOWED TO

ASSERT IN THIS CASE, BUT THE WITNESS HAS TO ANSWER QUESTIONS

HONESTLY IF THEY'RE ASKED IN THAT FORM.

THE COURT:

MR. MCELHINNY:

(PAUSE IN PROCEEDINGS.)

THE COURT:

GIVE ME ONE MINUTE, PLEASE.
THANK YOU, YOUR HONOR.

YOU MAY ANSWER.

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BY MR. QUINN:

DO YOU REMEMBER THE QUESTION?

YES.

PART OF WHAT CREATED DEMAND IN THE BEGINNING.

YOU ASKED ABOUT WHETHER PATENTS IN THE IPHONE WERE A
IS THAT CORRECT?

NO, THAT'S NOT MY QUESTION.
MY QUESTION WAS THAT THE PATENT CLAIMS THAT YOU ARE

ASSERTING, THAT APPLE IS ASSERTING IN THIS CASE, THAT THOSE

CLAIMS HAD NOTHING TO DO WITH THE DEMAND FOR THAT IPHONE IN

2007 BECAUSE THAT IPHONE DID NOT PRACTICE FOUR OF THOSE FIVE

CLAIMS?

CLAIMS ON THE PATENTS THAT YOU'RE DISCUSSING HERE THAT ARE

ASSERTED.

14
15

SO IF YOU WANT TO TALK MORE BROADLY ABOUT THE PATENTS,
WHICH I'M NOT SUGGESTING, THAT'S THE AREA I KNOW.

16
17

I'M -- I'M FAMILIAR WITH THE PATENTS, NOT THE INDIVIDUAL

INDIVIDUAL ASSERTIONS OF CLAIMS I THINK IS FOR OTHERS TO
SPEAK TO.

OKAY.

SO WHAT YOU'RE TELLING US IS THAT YOU PERSONALLY

AREN'T FAMILIAR WITH THE ACTUAL PATENT CLAIMS THAT APPLE IS

ASSERTING IN THIS CASE THAT SAMSUNG HAS INFRINGED IN ITS

PHONES?

EXPERTISE, NO.

OF -- I'M GOING TO TRY TO GET THE WORDS -- YOU WERE TALKING

IS THAT WHAT YOU'RE SAYING?

THE ASSERTION OF THE PATENT CLAIMS ARE NOT MY AREA OF

AND SO WHEN YOU WERE SAYING, TALKING ABOUT THE EFFECT

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ABOUT THE EFFECT OF COPYING OF THE IPHONE -- DO YOU RECALL THAT

IN THE LAST PART OF YOUR TESTIMONY?

YES.

OKAY.

WEREN'T TALKING ABOUT THE EFFECT OF ANYONE USING THE PARTICULAR

CLAIMS THAT ARE ASSERTED IN THIS CASE BECAUSE YOU DON'T EVEN

KNOW WHAT THOSE CLAIMS ARE?

WHICH INCLUDE MANY THINGS, AND NOT ABOUT ANY SPECIFIC CLAIM

CORRECT?

SO WHEN YOU WERE TALKING ABOUT THAT EFFECT, YOU

I WAS TALKING ABOUT THE TOTALITY OF ALL OF THE COPYING,

ASSERTION.

DECIDE IS ABOUT A SPECIFIC NUMBER OF PRODUCTS AND SPECIFIC -- I

THINK FIVE SPECIFIC CLAIMS?

YES.

OKAY.

THERE WAS ALL THIS EXCITEMENT ABOUT.

AND YOU UNDERSTAND THAT THIS CASE THAT THE JURY IS TO

DO YOU UNDERSTAND THAT MUCH?

AND SO LET'S TALK ABOUT THAT 2007 IPHONE WHICH

NOW, IT -- I GUESS IT DOESN'T HAVE A -- IT DOESN'T HAVE A

FORWARD FACING CAMERA SO YOU COULDN'T DO A SELFIE LIKE

ELLEN DEGENERES DID IN THE OSCARS; RIGHT?

I'M SORRY.

WOULD ELLEN DEGENERES USE -- AGAIN, I WASN'T

INVOLVED IN THAT, SO I'M NOT SURE WHAT EXACTLY SHE USED.

MAYBE YOU CAN TELL ME.

YOU DIDN'T WATCH THE OSCARS?

NO, I DIDN'T.

AH.

I WAS TRAVELLING THAT NIGHT UNFORTUNATELY.

WELL, IN ANY EVENT, THAT FIRST IPHONE THAT WE WERE

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TALKING ABOUT CAME OUT IN 2007.

TIME; CORRECT?

NO.

AND THERE WAS NO VIDEO; CORRECT?

WELL, IT PLAYED VIDEOS, YES.

COULD IT TAKE VIDEOS?

IT DID NOT HAVE A VIDEO CAMERA, NO.

I APOLOGIZE FOR BEING A LITTLE BIT UNCLEAR THERE.

THERE WAS NO APP STORE AT THAT

THE APP STORE CAME A YEAR LATER.

IT DIDN'T HAVE 3G; CORRECT?

WAS USED.

AND THAT'S -- IS THAT SLOWER THAN 3G GENERALLY?

DEPENDS.

HAVE TO BE AT THE TIME.

AGREE?

I THINK SO, THANKS.

SO IF WE LOOK AT THAT PRODUCT -- I WANT TO LOOK, IF WE

COULD, AT A SERIES OF PRODUCTS.

IN FRONT OF YOU -- NOT THE GREEN ONE.

DEPOSITION TESTIMONY.

CORRECT.

IT WAS AT&T EDGE NETWORKING WAS THE NETWORK THAT

IT'S VERY COMPLICATED.

IT CAN BE.

IT DOESN'T

SO STILL PRETTY REMARKABLE PRODUCT, ELECTRIFYING?

YES.

I WANT TO LOOK AT THE BINDER
THE GREEN ONE IS YOUR

I WANT TO LOOK AT THE OTHER ONE, AND TOWARD THE END THERE

ARE SOME DEMONSTRATIVES, COLORED PICTURES OF PHONES.

2312.

YOU

AND MAYBE YOU CAN TELL ME -- HAVE YOU FOUND IT?

UNITED STATES COURT REPORTERS

IT'S SDX

I'VE GOT

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IT UP HERE ON THE SCREEN.

NO.

THEY KEEP GOING RIGHT AFTER THAT.

I DON'T HAVE ANOTHER TAB AFTER THAT.

THEY'RE ALL BEHIND THAT TAB.

THERE IS NO TAB 2312.

I MEAN THERE ARE THREE PAGES AFTER THAT.

I'VE GOT 2310.

THEY DON'T --

AND IF IT'S EASIER, I THINK IT MIGHT BE ON YOUR MONITOR.

I SEE THIS, YES.

AND THIS IS A DEMONSTRATIVE SO I JUST WANT TO GO THROUGH.

SO IN JUNE 2007 WHEN YOU CAME OUT WITH THE ORIGINAL

IPHONE, ISN'T IT TRUE THAT THAT IPHONE DID NOT USE THE WORD

RECOMMENDATION METHODOLOGY THAT'S SET FORTH IN APPLE'S PATENT

172, CLAIM 18, THAT APPLE IS SUING ON TODAY?

15
16

MR. MCELHINNY:
SCOPE.

LACKS FOUNDATION.

IT'S BEYOND THE

IT'S ASKED AND ANSWERED.
THE COURT:

THAT'S SUSTAINED.

BY MR. PRICE:

WHETHER OR NOT THAT FIRST IPHONE PRACTICED THE APPLE PATENT

'172, CLAIM 18 THAT'S BEING FILED IN THIS CASE?

WELL, LET ME ASK YOU IF YOU KNOW, OKAY?

DO YOU KNOW

MR. MCELHINNY:

MR. PRICE:

I ASKED HIM IF HE KNOWS.

THE COURT:

IT HAS BEEN ASKED AND ANSWERED, BUT I'LL

SAME OBJECTION, YOUR HONOR.

ALLOW HIM TO GO AHEAD.

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THE WITNESS:

NO, I'M NOT AN EXPERT ON THE

PROGRAMMING OF THE INDIVIDUAL CLAIMS AND THE ASSERTIONS.

WOULDN'T KNOW.

BY MR. PRICE:

WENT THROUGH EVERY ONE OF THESE APPLE PHONES FROM THE ORIGINAL

IPHONE UP TO THE 5, IF I WENT THROUGH THOSE AND ASKED YOU

WHETHER OR NOT ANY OF THOSE PHONES PRACTICED ANY OF THE

SPECIFIC CLAIMS IN THIS CASE, WOULD YOU KNOW THE ANSWER TO

OKAY.

SO I'M GOING TO TRY TO SHORTEN THIS THEN.

SO I

SO IF I

THAT?

THE PATENTS.

THIS WONDERFUL, INNOVATIVE DEVICE, THE INVENTION OF THE YEAR,

YOU KNOW, YOU CAN'T TELL US WHETHER OR NOT THOSE REVIEWERS

ACTUALLY OBSERVED, YOU KNOW, OR SAW, YOU KNOW, ANY

IMPLEMENTATION OF THE SPECIFIC PATENT CLAIMS THAT ARE ASSERTED

IN THIS CASE?

NO.

I'M NOT THE ONE TO ASK ABOUT ASSERTED CLAIMS WITHIN

OKAY.

THAT'S NOT MY AREA OF EXPERTISE.

SO IN ALL THOSE REVIEWS THAT THE JURY SAW ABOUT

MR. MCELHINNY:

THE COURT:

MR. MCELHINNY:

22
23
24
25

CLAIMS.

OBJECTION, YOUR HONOR.

I DIDN'T HEAR THE OBJECTION.

WHAT IS IT?

WE'RE STILL TALKING ABOUT SPECIFIC

HE'S SAID NOW 18 TIMES.
THE COURT:

GO AHEAD.

ALL RIGHT.

OVERRULED.

YOU MAY ANSWER.

THE WITNESS:

I CAN'T SAY EITHER WAY.

UNITED STATES COURT REPORTERS

THEY MAY HAVE.

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THEY MAY NOT HAVE SINCE I DON'T HAVE DEEP KNOWLEDGE OF ASSERTED

CLAIMS.

BY MR. PRICE:

ASK YOU THIS:

YOU'RE SO PROUD OF THAT APPLE HAS, IF YOU TOOK AWAY A SPECIFIC

EASE OF USE FEATURE, WOULD THAT AFFECT, DO YOU BELIEVE, THE

SALES OF AN APPLE IPHONE?

NOW, YOU HAD TALKED A LITTLE BIT ABOUT -- LET ME
WITH RESPECT TO THE TYPES OF FEATURES THAT

HYPOTHETICALLY, YES.

I THINK EASE OF USE IS IMPORTANT AND

WE HAVE A LOT OF THINGS THAT ADD UP TO EASE OF USE.

11
12

OKAY.

BUT DEPENDING ON WHAT THEY ARE AND WHAT THE USER'S
EXPERIENCE IS, IT COULD IMPACT SALES.

LET ME STEP BACK A BIT FURTHER FROM THAT.

15
16

WELL, I'M ASKING YOU, DO YOU GENERALLY THINK -- IN FACT,

WITH RESPECT TO EASE OF USE, YOU HAVE ASKED YOUR CUSTOMERS
TO CHECK WHETHER OR NOT EASE OF USE IS IMPORTANT; CORRECT?

YES, WE ASKED QUESTIONS ABOUT THAT.

AND IN THOSE SURVEYS, YOU DON'T DEFINE EASE OF USE ANY

FURTHER THAN EASE OF USE; CORRECT?

CORRECT.

AND YOU -- IN YOUR SURVEYS, DO YOU ASK CUSTOMERS TO

COMPARE WHETHER ONE WAY OF DOING, SAY, A WORD RECOMMENDATION AS

YOU'RE TYPING IS EASIER TO USE THAN ANOTHER WAY OF DOING A WORD

CORRECTION?

NO, I DON'T RECALL ASKING THAT QUESTION EVER.

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OKAY.

HOW ABOUT SYNCING?

WE'VE HEARD THAT WORD SYNCING

USED BEFORE, AND I THINK YOU SAID ACTUALLY THAT IT WAS IN 2011

WHEN -- AUGUST OF 2011 THAT APPLE WAS FIRST COMING OUT WITH

INTRODUCING WIRELESS SYNCING THROUGH THE CLOUD.

SLIDE 2312 -- AND SO SOMEWHERE AROUND BETWEEN THE 4 AND 4S THAT

APPLE, FOR THE FIRST TIME, CAME OUT WITH THIS WIRELESS SYNCING?

NOT THROUGH THE CLOUD, BUT WIRELESS SYNCING, YES, IN IOS

OKAY.

CABLE, AND NOW YOU COULD DO IT WIRELESSLY.

YES.

SO IF WE CAN -- KEN, IF WE CAN PUT THAT BACK UP,

WE HAD WIRED SYNCING BEFORE YOU COULD DO OVER A

AND IT'S NOT LIMITED BY MODEL.

YOU COULD DO THAT -- YOU

COULD OPERATE THE OPERATING SYSTEM ON SOME PREVIOUS DEVICES AND

DO THAT AS WELL.

YOU COULD DOWNLOAD THAT SOFTWARE?

YES.

OKAY.

COMMENT IN OPENING THAT BEFORE APPLE, YOU HAD TO PLUG IN

DEVICES IN ORDER TO SYNC YOUR DEVICES.

AND SO, FOR EXAMPLE, I MEAN, THERE HAD BEEN A

THAT'S NOT TRUE, IS IT?

I'M SORRY.

WAS REFERRING TO.

ELSE SAID OUT OF CONTEXT.

SOME KIND OF A RESPONSIBILITY TO KNOW WHAT WAS IN THE MARKET.

OKAY.

I DON'T KNOW WHAT THAT COMMENT IS AND WHAT IT
I WOULDN'T WANT TO RESPOND TO WHAT SOMEONE

WELL, AS SOMEONE WHO'S HEAD OF MARKETING, YOU HAD

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IT DEPENDS ON THE SITUATION AND WHAT WE'RE TALKING ABOUT.

I'M SORRY.

THAT'S A VERY BROAD STATEMENT.

YOU HAD THE -- YOU WANTED TO KNOW WHAT YOUR

COMPETITORS WERE DOING, PEOPLE LIKE GOOGLE OR MOTOROLA OR HTC?

SOMETIMES YES, SOMETIMES NO.

OKAY.

WANT TO GET IT RIGHT HERE.

DIDN'T ONE OF YOUR COMPETITORS ALREADY HAVE WIRELESS SYNCING?

I DON'T KNOW.

ONE WAY OR THE OTHER?

I DON'T KNOW EITHER WAY.

OKAY.

DOES BACKGROUND SYNCING?

NO, I'M NOT FAMILIAR WITH THAT.

DO YOU KNOW WHAT BACKGROUND SYNCING IS?

I CAN MAKE A GUESS TO THE TERMINOLOGY.

SPECIFICS OF WHAT THE IMPLEMENTATION IS.

MAKING UP A GUESS IF YOU ASKED ME TO RESPOND TO THAT.

I DON'T WANT YOU TO GUESS.

OKAY.

NOW, WHEN YOU USED THE PHRASE "EASE OF USE" IN YOUR

SURVEYS, I THINK YOU TESTIFIED THAT THAT, THAT TERM REFERS TO

HUNDREDS OF FEATURES.

YES, IT DOES.

AND THAT YOU'VE SAID THAT YOU PERSONALLY COULDN'T RANK

OKAY.

AND SO I'M JUST ASKING YOU, AUGUST -- I'M SORRY.
SO AUGUST 2011, PRIOR TO THEN,

IN ANY EVENT, DO YOU KNOW HOW THE ANDROID SYSTEM

I DON'T KNOW THE

I WOULD BE JUST

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THOSE HUNDREDS OF FEATURES AS TO EASE OF USE?

NO, I DON'T BELIEVE I COULD.

AND CERTAINLY AS OF JULY 2013, YOU WEREN'T AWARE OF

ANYBODY AT APPLE WHO HAD DONE ANY KIND OF RANKING AS TO THESE

HUNDREDS OF FEATURES OF EASE OF USE?

I'M NOT AWARE THAT WE DID THAT, NO.

AND I ASKED YOU WHETHER OR NOT, IF YOU TAKE OUT -- IF YOU

TOOK OUT ONE OF THOSE HUNDREDS OF FEATURES OF EASE OF USE,

WHETHER IT WOULD AFFECT APPLE'S SALES.

I BELIEVE YOU SAID THAT IT VERY WELL COULD.

HYPOTHETICALLY ABOUT VAGUE TOPICS.

OR NOT THAT WOULD ACTUALLY AFFECT SALES; CORRECT?

SO MAYBE YOU CAN HELP ME BE MORE SPECIFIC.

18
19
20

IT'S POSSIBLE.

I DON'T KNOW.

WE'RE SPEAKING VERY

WELL, YOU'D WANT TO ACTUALLY LOOK INTO THAT TO SEE WHETHER

AGAIN, I DON'T KNOW WHAT WE'RE TALKING ABOUT REALLY HERE,

OKAY.

I'LL TRY TO BE SPECIFIC.

EASE OF USE, HUNDREDS OF FEATURES.

IF YOU TAKE OUT ONE,

COULD YOU ASSUME THAT THAT'S GOING TO IMPACT APPLE'S SALES?
A.

IT'S POSSIBLE.

I'LL GIVE YOU A SIMPLE FOR INSTANCE.

IF I TOOK OUT THE EASE WITH WHICH YOU CAN SIMPLY MAKE A

PHONE CALL WITH A PHONE, YOU MIGHT NOT WANT TO BUY THAT PHONE

BECAUSE IT'S REALLY HARD TO DO THE ONE THING YOU REALLY NEED TO

DO ALL THE TIME.

SO IT DEPENDS.

WE WOULD HAVE TO TALK ABOUT THE SPECIFIC

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SITUATION.

DETERMINE WHETHER OR NOT, IF YOU HAVE ONE FEATURE VERSUS

ANOTHER, WHETHER IT'S GOING TO IMPACT SALES.

AT THE SPECIFIC FEATURE AND ITS IMPACT ON CONSUMERS; CORRECT?

TRYING TO HELP YOU ANSWER YOUR QUESTION, AND IT'S NOT SOMETHING

I'VE HAD TO LOOK AT AND HAD TO STUDY.

9
10

OKAY.

SO YOU CAN'T USE BROAD CATEGORIES OF EASE OF USE TO

AGAIN, I DON'T NEED TO.

YOU NEED TO LOOK

I DO MY JOB IN MARKETING.

I'M

EASE OF USE IS INCREDIBLY IMPORTANT, ONE OF THE MOST
IMPORTANT THINGS IN OUR PRODUCT.

BUT I'VE NEVER HAD TO PICK IT APART MYSELF IN MARKETING

AND SEGREGATE OUT DIFFERENT FEATURES AND RANK NUMBER VALUE

THEM.

ABOUT.

SO IT'S NOT SOMETHING I NORMALLY HAVE TO DO AND I THINK

THAT -- I MEAN YOU AND YOUR MARKETING TEAM -- AS TO WHAT HELPS

DRIVE SALES, OKAY --

SURE.

-- OF APPLE PRODUCTS.

20
21

OKAY.

SO LET ME ASK YOU THEN WHAT YOU HAVE LOOKED AT

AND I THINK YOU WOULD PROBABLY AGREE WITH ME THAT YOU
BELIEVE THAT THE APPLE IPHONES ARE THE EASIEST TO USE?

I BELIEVE SO.

AND -- BUT YOU'VE -- IN LOOKING AT ONE OF THE SURVEYS IN

YOUR DIRECT EXAMINATION WHICH CONCERNED THE USE OR THE FACT

THAT THERE WERE NEW CONSUMERS BEING BROUGHT INTO THE MARKET.

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DO YOU REMEMBER THAT?

YES.

AND LET ME SEE IF I CAN CALL YOUR ATTENTION TO THAT.

WAS, I THINK, EXHIBIT 123-3.

5
6

IF WE CAN PUT THAT UP?

THAT WAS A PX 123-3.

THAT

THAT'S A

PLAINTIFF'S EXHIBIT.

HERE WE GO.

THIS IS THE ONE YOU WERE TALKING ABOUT IN THE

PERCENTAGE OF FIRST-TIME SMARTPHONE BUYERS AND HOW IT HAD GROWN

UP THROUGH FISCAL YEAR, AND WE WERE TALKING ABOUT THESE

NUMBERS, 60 PERCENT, 47 PERCENT, ET CETERA; CORRECT?

YES.

AND OBVIOUSLY -- AND I GUESS YOU WERE SAYING THAT A LOT OF

PEOPLE BEFORE, YOU KNOW, THIS TIMEFRAME, WERE USING PHONES THAT

WEREN'T SMARTPHONES.

CORRECT.

IS THERE A TERM IN THE INDUSTRY FOR THOSE SORTS OF PHONES?

YES.

AND YOU'VE GOT SOME EXPERTISE, YOU BELIEVE YOU HAVE A

SIGNIFICANT AMOUNT OF EXPERTISE, AT LEAST YOU BELIEVE, IN DOING

SURVEYS; CORRECT?

YES.

YOU'VE DONE THEM MOST OF YOUR LIFE?

CERTAINLY SINCE COLLEGE, YES.

OKAY.

A VERY LONG TIME AGO.

WE CALL THEM FEATURE PHONES.

WHICH IS -- WELL, WHICH HAS BEEN MOST OF YOUR LIFE?

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(LAUGHTER.)

BY MR. PRICE:

SURVEY?

YEAH.

AND THERE'S A GOOD WAY AND A BAD WAY TO DO A

YOU AGREE WITH THAT?

ACTUALLY, BAD QUESTION.

THERE ARE GOOD AND BETTER WAYS TO DO SURVEYS; CORRECT?

OFTEN THAT'S TRUE.

AND WHAT YOU FOUND IS THAT YOU LIKE ASKING QUESTIONS OF

PEOPLE ABOUT WHAT DO YOU THINK, KIND OF OPEN-ENDED QUESTIONS,

AND THEN TRY TO LEARN FROM THEM?

I'M SORRY.

I THINK THAT'S TAKEN OUT OF CONTEXT.

I THINK YOU CAN ASK PEOPLE WHAT THEY THINK.

I DON'T LIKE

OPEN-ENDED QUESTIONS AS MUCH IN TERMS OF -- I MEAN, YOU CAN ASK

THEM.

15
16

IT'S NOT GOOD OR BAD.
BUT I THINK YOU GET A MORE DEFINITIVE, CLEAR RESULT IF

THERE'S A SPECIFIC LIST OF THINGS TO PICK FROM.

I THINK WHEN YOU MADE THAT STATEMENT, I BELIEVE I WAS MORE

REFERRING TO IT'S BETTER TO ASK PEOPLE, IN MY SURVEYS FOR

MARKETING, ABOUT THINGS THEY HAVE A KNOWLEDGE OF, LIKE WHAT

THEY THINK OF THEIR PHONE, VERSUS THINGS THAT THEY DON'T HAVE

KNOWLEDGE OF.

22
23
24
25

BUT THAT'S IN MY MARKETING SURVEYS.
Q.

SO LET ME FOLLOW UP THEN.
IN YOUR SURVEYS, YOU PREFER TO ASK PEOPLE THINGS WHAT THEY

HAVE A KNOWLEDGE OF RATHER THAN GIVING THEM KNOWLEDGE AND THEN

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ASKING THEM ABOUT IT?

ON THE WORK I DO, YES.

I'M SORRY.

YES.

AND, IN FACT, YOU SAID THAT, THAT YOU -- YOU DON'T TRY TO

CREATE A SURVEY WHERE YOU ACTUALLY HAVE TO PUT SOMETHING IN

THEIR HEAD TO THEN GET IT OUT?

DONE.

I COULDN'T HEAR YOU.

FOR THE WORK I DO, YES.

I THINK THAT'S MORE DIFFICULT.

IT CAN BE DONE.

IT IS

BUT I THINK IT'S A MORE DIFFICULT METHODOLOGY.

INSTEAD OF ASKING SOMETHING THEY'RE ALREADY KNOWLEDGEABLE

ABOUT, YOU HAVE TO TELL THEM ABOUT SOMETHING, YOU FIND THAT

THAT DATA, IN YOUR EXPERIENCE, IS LESS RELIABLE.

IT DEPENDS ON THE QUESTION.

WELL, WHEN YOU SAY, QUOTE, "HERE'S SOMETHING YOU DIDN'T

KNOW, LET ME TELL IT TO YOU, AND NOW YOU TELL ME BACK WHAT YOU

THINK, WELL, THAT'S GETTING LESS RELIABLE DATA"?

18
19
20

AND YOU SAID THAT IF YOU USE THAT METHODOLOGY WHERE,

IT CAN BE.

YOU AGREE WITH THAT; CORRECT?
A.

I THINK GENERALLY IT IS BUT NOT ALWAYS.
A SIMPLE EXAMPLE, IF I ASKED YOU, WOULD YOU BE UPSET

TOMORROW IF THE SUN NEVER CAME UP AGAIN?

PRETTY EASY ONE.

VERY UPSET, AND I THINK THAT WOULD BE A VERY RELIABLE ANSWER.

I MIGHT ASK SOMETHING MORE DIFFICULT FOR YOU TO IMAGINE

I THINK THAT'S A

I THINK WE WOULD ALL SAY, YES, WE WOULD BE

AND THAT MIGHT NOT BE RIGHT.

I THINK IT DEPENDS.

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AND YOU'RE TALKING ABOUT YOUR EXPERIENCE DOING SURVEYS,

MOST OF THAT IS WITH SMARTPHONES?

NO.

PRODUCT?

NO.

WHAT'S IT WITH?

QUITE A LOT.

EARLY '80S.

I'VE PLAYED WITH A NUMBER OF THINGS.

I'VE DONE IT IN MEDICAL RESEARCH, OTHER PRODUCTS,

YOU DIDN'T KNOW, LET ME TELL IT TO YOU, AND NOW YOU TELL ME

BACK WHAT YOU THINK, THAT'S GETTING LESS RELIABLE DATA THAN

ASKING THEM ABOUT WHAT THEY ALREADY KNOW ABOUT," DO YOU AGREE

WITH THAT?

I THINK THAT'S TRUE IN MANY SITUATIONS.

OKAY.

AS I SAID, I'VE BEEN DOING THIS SINCE THE

SO ACROSS THE BOARD, WHEN YOU SAY "HERE'S SOMETHING

AND IF WE CAN PUT BACK UP THAT DOCUMENT, 133.

OH, NO.

THE COURT:

TIME IS 4:31.

IS THIS A QUICK QUESTION?

MR. PRICE:

YEAH, IF I CAN ASK THAT QUICK QUESTION

ABOUT THE SURVEY THEN.

YEARS, FISCAL YEARS TWO, THREE, FOUR HERE -- I'M SORRY.

FISCAL YEAR '11, '12, '13, FISCAL YEAR, FOURTH QUARTER.

24
25

AND WHAT YOU'RE SAYING THE TREND IS SHOWING US IN THE

DO YOU SEE THOSE?
A.

YES.

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ABOUT THE SMARTPHONES THAN PEOPLE WHO ALREADY OWN SMARTPHONES

THAT ARE COMING INTO THE MARKET; CORRECT?

SMARTPHONE.

FOR A SHORT PERIOD OF TIME IS LESS KNOWLEDGEABLE THAN SOMEONE

WHO'S OWNED IT FOR ONE OR TWO YEARS, I WOULDN'T SAY THAT THAT'S

WHAT THIS DATA SAYS.

9
10

YOU'RE GETTING A LOT OF PEOPLE WHO MAY HAVE LESS KNOWLEDGE

NO, I WOULDN'T SAY THAT.

THESE ARE PEOPLE WHO NOW OWN A

AND TO SUGGEST THAT SOMEONE WHO OWNS A SMARTPHONE

THERE'S NO QUESTION HERE ABOUT THEIR KNOWLEDGE.
Q.

AND I APOLOGIZE ABOUT --

THE COURT:

IT IS 4:32.

MR. PRICE:

I'LL CLARIFY TOMORROW.

THE COURT:

IT'S TIME TO GO.

ACTUALLY, WE'RE NOT

GOING TO BE IN SESSION TOMORROW OR THURSDAY, BUT WE'LL RESUME

ON FRIDAY MORNING AT 9:00 A.M. WITH MR. PRICE'S CROSS OF

MR. SCHILLER.

17
18
19

YOU'RE EXCUSED NOW.
CASE.

AND, MR. DUNHAM, LOTS OF VITAMIN C AND REST.

JUROR:

THE COURT:

22
23
24
25

PLEASE DO NOT RESEARCH OR DISCUSS THE

FRIDAY MORNING.

I'LL BE FINE.
OKAY.

THANK YOU.

WE'LL SEE YOU ALL ON

THANK YOU FOR YOUR PATIENCE AND YOUR SERVICE.

IF YOU WOULD PLEASE LEAVE YOUR JURY BINDERS IN THE JURY
DELIBERATION ROOM.

THANK YOU.

(JURY OUT AT 4:32 P.M.)

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2
3
4
5

THE COURT:

YOU MAY STEP DOWN.

THE RECORD SHOULD REFLECT THE JURORS HAVE LEFT THE
COURTROOM.
ARE THERE ANY ISSUES OR SHOULD WE GO AHEAD AND ADJOURN
OURSELVES FOR THE DAY?

MS. MAROULIS:

THE COURT:

MR. MCELHINNY:

THE COURT:

NONE FOR SAMSUNG, YOUR HONOR.

ALL RIGHT.

NO?

ANYTHING FOR APPLE?

NOTHING FOR APPLE, YOUR HONOR.
ALL RIGHT.

THANK YOU.

WE'LL SEE

YOU ON FRIDAY MORNING THEN AT 9:00 O'CLOCK.

(PAUSE IN PROCEEDINGS.)

MR. MCELHINNY:

EXCUSE ME, YOUR HONOR.

OUR NEXT

WITNESS IN ORDER IS HERE AND I JUST WANT TO LET HIM SIT IN THE

WITNESS CHAIR AND GET A FEEL FOR IT.

SECOND.

THE COURT:

IT'LL ONLY TAKE ONE

I NEED TO NOTIFY SAMSUNG -- EXCUSE ME.

THERE'S BEEN A REQUEST TO HAVE THE NEXT WITNESS SIT IN THE

CHAIR SO HE CAN KNOW WHAT IT FEELS LIKE.

OBJECTION?

MR. QUINN:

MR. MCELHINNY:

THE COURT:

MR. MCELHINNY:

24
25

IS THERE ANY

NO.
THANK YOU.

IS HE HERE?
HE IS HERE.

WE'LL GO AHEAD, YOUR

HONOR.
THE COURT:

ALL RIGHT.

I'M GOING TO STAY TO

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CHAPERONE.

MR. MCELHINNY:

(PAUSE IN PROCEEDINGS.)

MR. MCELHINNY:

THE COURT:

MR. MCELHINNY:

OWN SET OF BINDERS.

OKAY.
YOU'LL HAVE WATER, YOU'LL HAVE YOUR

BE CAREFUL, DON'T ROLL OFF.

(DISCUSSION OFF THE RECORD.)

THE WITNESS:

THE COURT:

YOUR HONOR, THIS IS MR. CHRISTIE.

HE'LL BE OUR NEXT WITNESS.

ALL RIGHT.

THANK YOU VERY MUCH.

I APPRECIATE IT.

OKAY.

(THE EVENING RECESS WAS TAKEN AT 4:35 P.M.)

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UNITED STATES COURT REPORTERS

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CERTIFICATE OF REPORTERS

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WE, THE UNDERSIGNED OFFICIAL COURT REPORTERS OF THE

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF

CALIFORNIA, 280 SOUTH FIRST STREET, SAN JOSE, CALIFORNIA, DO

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HEREBY CERTIFY:
THAT THE FOREGOING TRANSCRIPT, CERTIFICATE INCLUSIVE, IS

A CORRECT TRANSCRIPT FROM THE RECORD OF PROCEEDINGS IN THE

ABOVE-ENTITLED MATTER.

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______________________________
IRENE RODRIGUEZ, CSR, CRR
CERTIFICATE NUMBER 8076

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_______________________________
LEE-ANNE SHORTRIDGE, CSR, CRR
CERTIFICATE NUMBER 9595

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DATED:

APRIL 1, 2014

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UNITED STATES COURT REPORTERS

Case 3:10-cv-03561-WHA Document 1340-3 Filed 10/15/15 Page 1 of 7

EXHIBIT 2

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EXHIBIT 3

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

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APPLE INC., A CALIFORNIA
CORPORATION,

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C-12-00630 LHK
SAN JOSE, CALIFORNIA
APRIL 22, 2014
VOLUME 11
PAGES 2620-2873

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TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE LUCY H. KOH
UNITED STATES DISTRICT JUDGE

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APPEARANCES ON NEXT PAGE

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OFFICIAL COURT REPORTERS:

LEE-ANNE SHORTRIDGE, CSR, CRR
CERTIFICATE NUMBER 9595

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PROCEEDINGS RECORDED BY MECHANICAL STENOGRAPHY
TRANSCRIPT PRODUCED WITH COMPUTER

UNITED STATES COURT REPORTERS

.5A8(-$%!6D!##)&#!312
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A P P E A R A N C E S:

FOR PLAINTIFF
APPLE:

4
5

MORRISON & FOERSTER
BY: HAROLD J. MCELHINNY
RACHEL KREVANS
425 MARKET STREET
SAN FRANCISCO, CALIFORNIA

94105

6
7

WILMER, CUTLER, PICKERING,
HALE AND DORR
BY: WILLIAM F. LEE
60 STATE STREET
BOSTON, MASSACHUSETTS 02109

8
9
10

BY: MARK D. SELWYN
950 PAGE MILL ROAD
PALO ALTO, CALIFORNIA

94304

12
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QUINN, EMANUEL, URQUHART & SULLIVAN
BY: JOHN B. QUINN
WILLIAM PRICE
865 S. FIGUEROA STREET, FLOOR 10
LOS ANGELES, CALIFORNIA 90017

BY:

17
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FOR SAMSUNG:

VICTORIA F. MAROULIS
KEVIN B. JOHNSON
555 TWIN DOLPHIN DRIVE
SUITE 560
REDWOOD SHORES, CALIFORNIA

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UNITED STATES COURT REPORTERS

94065

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INDEX OF WITNESSES

DEFENDANTS'

KENNETH PARULSKI
DIRECT EXAM BY MR. JOHNSON (RES.)
CROSS-EXAM BY MR. LEE

P. 2624
P. 2627

SANJAY RAO
DIRECT EXAM BY MR. CEDERBERG
CROSS-EXAM BY MR. LEE

P. 2645
P. 2553

JAMES KEARL
DIRECT EXAM BY MR. CEDERBERG
CROSS-EXAM BY MR. LEE
REDIRECT EXAM BY MR. CEDERBERG

P. 2656
P. 2669
P. 2677

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PLAINTIFFS'

TIM MILLET
DIRECT EXAM BY MS. TALLON
CROSS-EXAM BY MR. JOHNSON

P. 2687
P. 2701

ROBERTO GARCIA
DIRECT EXAM BY MR. SELWYN

P. 2703

TRACEY MAZUR
BY DECLARATION

P. 2716

JAMES STORER
DIRECT EXAM BY MR. SELWYN
CROSS-EXAM BY MR. JOHNSON

P. 2718
P. 2779

JAMES MACCOUN
BY VIDEOTAPED DEPOSITION

P. 2785

TODD MOWRY
FURTHER DIRECT EXAM BY MS. KREVANS

P. 2787

MARK ALEXANDER SNOEREN
FURTHER DIRECT EXAM BY MS. KREVANS
FURTHER CROSS-EXAM BY MR. PAK

P. 2812
P. 2850

ANDREW COCKBURN
FURTHER REDIRECT EXAM BY MR. MCELHINNY

P. 2859

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THE PARTIES HAVE AGREED, WE UNDERSTAND THAT YOUR HONOR HAS

AN INSTRUCTION, AND THIS COVERS THE SAME MATERIAL AND WE'RE

AGREED THAT YOU -- THAT THE INSTRUCTION MAY BE APPROPRIATE EVEN

BEFORE THE INTERROGATORY.

THE COURT:

MR. MCELHINNY:

THE COURT:

AT THIS TIME?
YES, YOUR HONOR.

OKAY.

EVIDENCE THAT A PARTY IS

INDEMNIFIED IS NOT ADMISSIBLE TO PROVE THAT THE PARTY IS

LIABLE, BUT IS ADMISSIBLE FOR ANOTHER PURPOSE, SUCH AS PROVING

A WITNESS'S BIAS.

OKAY.

GO AHEAD, PLEASE.

TIME IS 1:58.

MR. MCELHINNY:

AT THIS POINT, I'M GOING TO READ

SAMSUNG'S SWORN ANSWER TO APPLE'S INTERROGATORY -- APPLE'S

INTERROGATORY, THIRD SET OF INTERROGATORIES, ANSWER NUMBER 32.

THE DATE OF THIS ANSWER WAS SEPTEMBER 24, 2012.

QUESTION:

"TO THE EXTENT SAMSUNG CLAIMS TO BE INDEMNIFIED

OR OTHERWISE COMPENSATED IN CONNECTION WITH THIS LAWSUIT BY ANY

THIRD PARTY, IDENTIFY THAT THIRD PARTY, STATE THE FULL BASIS

FOR THE ALLEGED INDEMNIFICATION, AND DESCRIBE THE SCOPE OF THE

ALLEGED INDEMNIFICATION."

AFTER AN OBJECTION, THE ANSWER IS:

"SUBJECT TO AND

WITHOUT WAIVING THE FOREGOING GENERAL AND SPECIFIC OBJECTIONS,

SAMSUNG RESPONDS AS FOLLOWS:

INDEMNIFICATION FROM ANY THIRD PARTY."

SAMSUNG IS NOT CURRENTLY SEEKING

UNITED STATES COURT REPORTERS

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AGAIN, DATED SEPTEMBER 24TH, 2012.

THE COURT:

MR. MCELHINNY:

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AT THIS POINT, YOUR HONOR, WE WOULD

LIKE TO PLAY THE DEPOSITION CLIP OF A MR. JAMES MACCOUN.
MR. MACCOUN, AT THE TIME OF HIS DEPOSITION, WAS A PATENT
COUNSEL AT GOOGLE.
(THE VIDEOTAPED DEPOSITION OF JAMES MACCOUN WAS PLAYED IN
OPEN COURT OFF THE RECORD.)

9
10

ALL RIGHT.

MR. MCELHINNY:

AT THIS POINT, YOUR HONOR, I WOULD

LIKE TO LODGE PLAINTIFF'S EXHIBIT 3010 AS A DEPOSITION CLIP.

THE COURT:

MR. MCELHINNY:

ALL RIGHT.

THAT'S LODGED.

AND I WOULD LIKE TO MOVE THE

ADMISSION OF PX 227, PX 228, AND PX 229, ALL OF WHICH ARE

SEALED EITHER IN THEIR ENTIRETY OR IN PART AT SAMSUNG'S

REQUEST.

MS. MAROULIS:

THE COURT:

18
19

NO FURTHER OBJECTION, YOUR HONOR.

OKAY.

(PLAINTIFF'S EXHIBITS 227, 228, AND 229 WERE ADMITTED IN
EVIDENCE.)

THE COURT:

MR. MCELHINNY:

THE COURT:

THOSE WILL BE ADMITTED.

AND I'LL CLARIFY THE SEALING LATER.
THANK YOU, YOUR HONOR.

ALL RIGHT.

THE TIME IS 2:16.

DO YOU NEED A MINUTE TO GET YOUR NEXT WITNESS READY?

MS. KREVANS:

THE COURT:

WE DO, YOUR HONOR.

OKAY.

ACTUALLY, IT'S 2:16.

UNITED STATES COURT REPORTERS

PERHAPS WE

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EXHIBIT 4

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

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APPLE INC., A CALIFORNIA
CORPORATION,

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C-12-00630 LHK
SAN JOSE, CALIFORNIA
APRIL 29, 2014
VOLUME 14
PAGES 3194-3369

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TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE LUCY H. KOH
UNITED STATES DISTRICT JUDGE

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APPEARANCES ON NEXT PAGE

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OFFICIAL COURT REPORTERS:

LEE-ANNE SHORTRIDGE, CSR, CRR
CERTIFICATE NUMBER 9595
IRENE RODRIGUEZ, CSR, CRR
CERTIFICATE NUMBER 8074

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25

PROCEEDINGS RECORDED BY MECHANICAL STENOGRAPHY
TRANSCRIPT PRODUCED WITH COMPUTER

UNITED STATES COURT REPORTERS

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

FOR PLAINTIFF
APPLE:

4
5

MORRISON & FOERSTER
BY: HAROLD J. MCELHINNY
RACHEL KREVANS
425 MARKET STREET
SAN FRANCISCO, CALIFORNIA

94105

6
7

WILMER, CUTLER, PICKERING,
HALE AND DORR
BY: WILLIAM F. LEE
60 STATE STREET
BOSTON, MASSACHUSETTS 02109

8
9
10

BY: MARK D. SELWYN
950 PAGE MILL ROAD
PALO ALTO, CALIFORNIA

94304

12
13

QUINN, EMANUEL, URQUHART & SULLIVAN
BY: JOHN B. QUINN
WILLIAM PRICE
865 S. FIGUEROA STREET, FLOOR 10
LOS ANGELES, CALIFORNIA 90017

BY:

17
18

FOR SAMSUNG:

VICTORIA F. MAROULIS
KEVIN B . JOHNSON
555 TWIN DOLPHIN DRIVE
SUITE 560
REDWOOD SHORES, CALIFORNIA

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UNITED STATES COURT REPORTERS

94065

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INDEX OF PROCEEDINGS

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CLOSING ARGUMENT BY MR. MCELHINNY

P. 3198

CLOSING ARGUMENT BY MR. PRICE

P. 3255

CLOSING ARGUMENT BY MR. NELSON

P. 3273

CLOSING ARGUMENT BY MR. JOHNSON

P. 3313

CLOSING ARGUMENT BY MR. QUINN

P. 3322

REBUTTAL CLOSING ARGUMENT BY MR. LEE

P. 3344

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SAN JOSE, CALIFORNIA

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APRIL 29, 2014
P R O C E E D I N G S

(JURY OUT AT 9:08 A.M.)

THE COURT:

MR. MCELHINNY:

MR. PRICE:

GOOD MORNING, YOUR HONOR.

GOOD MORNING.

(JURY IN AT 9:08 A.M.)

8
9

GOOD MORNING AND WELCOME.

THE COURT:

GOOD MORNING, WELCOME.

PLEASE TAKE A

SEAT.
YOU HAVE NOW HEARD ALL THE EVIDENCE AND YESTERDAY YOU

HEARD THE LAW.

COUNSEL.

EVIDENCE AND ARGUE TO YOU WHAT HE OR SHE BELIEVES THAT EVIDENCE

HAS SHOWN.

IT'S NOW TIME TO HEAR THE CLOSING ARGUMENTS OF

EACH COUNSEL WILL HAVE AN OPPORTUNITY TO REVIEW THE

I AGAIN REMIND YOU THAT WHAT THE ATTORNEYS SAY DURING

THEIR ARGUMENTS IS NOT EVIDENCE.

EVIDENCE OR THE LAW, YOU ARE TO RELY ON YOUR OWN RECOLLECTION

OF THE EVIDENCE AND ON THE JURY INSTRUCTIONS THAT I HAVE

PROVIDED TO YOU.

IF ANY ATTORNEY MISSTATES THE

THE SEQUENCE OF THE CLOSING ARGUMENTS WILL BE AS FOLLOWS:

APPLE WILL GIVE THE FIRST CLOSING ARGUMENT ON ITS AFFIRMATIVE

CASE AGAINST SAMSUNG; SAMSUNG WILL THEN GIVE ITS CLOSING

ARGUMENT ON ITS DEFENSIVE CASE AGAINST APPLE'S AFFIRMATIVE

CASE, AS WELL AS ON SAMSUNG'S AFFIRMATIVE CASE AGAINST APPLE;

APPLE WILL THEN GIVE A CLOSING ARGUMENT ON ITS DEFENSIVE CASE

UNITED STATES COURT REPORTERS

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CLOSING
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AGAINST SAMSUNG'S AFFIRMATIVE CASE.

SO UPON THE CONCLUSION OF THESE ARGUMENTS, YOU WILL BEGIN

DELIBERATIONS IN THE JURY ROOM.

NOT TO DISCUSS THE CASE UNTIL ALL EIGHT JURORS ARE PRESENT IN

THE JURY ROOM.

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PLEASE REMEMBER THAT YOU ARE

SO WITH THAT, I'M GOING TO INVITE APPLE'S COUNSEL TO COME
UP.
TIME IS NOW 9:10.

GO AHEAD, PLEASE.

MR. MCELHINNY:

THANK YOU.

MAY IT PLEASE THE COURT.

(MR. MCELHINNY GAVE HIS CLOSING ARGUMENT ON BEHALF OF THE
PLAINTIFF.)
MR. MCELHINNY:

LADIES AND GENTLEMEN OF THE JURY,

GOOD MORNING.

JURORS:

GOOD MORNING.

MR. MCELHINNY:

LET'S REMEMBER HOW WE GOT HERE.

JANUARY OF 2007, APPLE INTRODUCED THE IPHONE, A MULTITOUCH,

TOUCHSCREEN DEVICE THAT COMBINED A MUSIC PLAYER AND AN INTERNET

BROWSER AND A TELEPHONE.

THAT PRODUCT, AND THE NEW FEATURES THAT MADE IT

ACCESSIBLE, FUN, AND EASY TO USE, WERE REVOLUTIONARY.

I'M GOING TO TAKE A MINUTE HERE AND EXPLAIN A LITTLE BIT

ABOUT THE PROCESS.

AND THE LAWYERS HAVE BROUGHT YOU PAGES AND THEY PUT SLIDES ON

THE SCREEN.

UP UNTIL NOW, YOU'VE SAT THERE PATIENTLY

THAT WONDERFUL WORLD IS GOING TO CHANGE THIS AFTERNOON AND

UNITED STATES COURT REPORTERS

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YOU'RE GOING TO GET LOCKED IN THIS LITTLE ROOM AND THEY'RE

GOING TO BRING IN ALL OF THESE TRAYS OF EXHIBITS AND THEY'RE IN

WHITE BINDERS.

THEM, BUT THE PAGES AREN'T MARKED, THEY'RE NOT HIGHLIGHTED.

YOU'RE GOING TO HAVE TO FIND THOSE EXHIBITS YOURSELF.

AND THE EXHIBITS ALL HAVE EXHIBIT NUMBERS ON

SO WHAT I'M GOING TO DO -- MANY OF THE SLIDES THAT YOU'VE

SEEN ARE NOT GOING TO BE IN EVIDENCE, SO YOU WON'T FIND THOSE.

YOU WILL JUST FIND THE EXHIBITS.

SO WHAT I'M GOING TO DO AS I WALK THROUGH THIS THIS

MORNING IS I'M GOING TO CALL OUT EXHIBIT NUMBERS, AND IF THAT'S

HELPFUL TO YOU, YOU CAN TAKE THOSE EXHIBIT NUMBERS DOWN AND

YOU'LL BE ABLE TO FIND -- IF YOU'RE INTERESTED IN THESE

DOCUMENTS, YOU'LL BE ABLE TO FIND THAT DOCUMENT WHEN YOU LOOK

IN THE BINDERS LATER THIS AFTERNOON.

THIS DOCUMENT IS EXHIBIT 145.

WE CALL IT THE GRAVITY TANK

DOCUMENT.

REMEMBER, BY SAMSUNG'S CONSULTANTS ANALYZING THE EFFECT OF THE

IPHONE, AND THEY CALLED IT REVOLUTIONARY.

THIS WAS A DOCUMENT THAT WAS PREPARED, YOU'LL

THE IPHONE LITERALLY CREATED A NEW SMARTPHONE MARKET.

TOOK THE WORLD BY STORM.

SUCCESSFUL PRODUCTS EVER IN THE FIELD OF ELECTRONICS, AND IT

WAS THE MOST SUCCESSFUL UNTIL THE INTRODUCTION OF THE IPAD

THREE YEARS LATER IN 2010, AN ENTIRELY NEW AND REVOLUTIONARY

PRODUCT.

APPLE CREATED ONE OF THE MOST

THESE PRODUCTS WERE CREATED BY TRUE GENIUSES, LIKE

UNITED STATES COURT REPORTERS

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STEVE JOBS, AND LIKE THE APPLE INVENTORS WHO CAME HERE TO

TESTIFY BEFORE YOU.

SEEMS SO LONG AGO -- LIKE GREG CHRISTIE WHO CAME HERE AND

TESTIFIED ON BEHALF OF THE IPHONE, ORIGINAL IPHONE TEAM.

PEOPLE, IF YOU CAN REMEMBER BACK NOW -- IT

TIM MILLET, THOMAS DENIAU WHO CAME FROM PARIS WITH HIS

FRENCH ACCENT, AND ROBERTO GARCIA.

PEOPLE WHO, THROUGH GENIUS AND HARD WORK, HAVE MADE REAL

CONTRIBUTIONS TO THE WAY PEOPLE COMMUNICATE WITH EACH OTHER AND

SHARE INFORMATION.

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THEY WERE, AND ARE, REAL

THEY CAME HERE TO THIS COURTROOM.

THEY FACED

CROSS-EXAMINATION AND THEY TESTIFIED BEFORE YOU.
AND AS YOU ALSO KNOW, THEIR INVENTIONS ARE PROTECTED BY

PATENTS THAT WERE ISSUED BY THE U.S. PATENT AND TRADEMARK

OFFICE.

WE SAW THAT MR. JOBS EXPRESSLY WARNED WOULD-BE COMPETITORS

THAT APPLE WAS SEEKING PATENT PROTECTION FOR ITS INVENTIONS, TO

PUT THOSE COMPETITORS ON NOTICE THAT THEY COULD NOT SIMPLY COPY

APPLE'S NOVEL FEATURES AND DESIGNS.

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THAT PART IS HISTORY.

IT IS UNCONTROVERTED.

OF IT HAS BEEN CHALLENGED IN THIS TRIAL.
WE ARE HERE BECAUSE OF A SERIES OF DECISIONS BY SAMSUNG

ELECTRONICS.

HAVE A TOUCHSCREEN SMARTPHONE.

24
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NOT A WORD

WE KNOW THAT IN JUNE 2007, SAMSUNG DID NOT EVEN
IT WASN'T EVEN WORKING ON THAT.

INSTEAD, IT SPECIALIZED IN LESS COMPLICATED FEATURE
PHONES.

UNITED STATES COURT REPORTERS

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WE ALSO KNOW THAT AT THAT TIME SAMSUNG WAS NOT

PARTICULARLY SUCCESSFUL.

OF THE PHONES IN THE UNITED STATES MARKETPLACE.

LEADER, AND IT WAS NOT MAKING PROGRESS.

IT WAS ONLY SELLING ABOUT 5 PERCENT

AND THEN WE SHOWED YOU EXHIBIT 149.

IT WAS NOT A

WE KNOW THAT SAMSUNG

BROUGHT ALL OF ITS EXECUTIVES TOGETHER FOR A CRITICAL MEETING

IN FEBRUARY 2010 WHEN ITS TOP EXECUTIVE MADE CLEAR THAT SAMSUNG

WAS SUFFERING WHAT THEY CALLED A CRISIS OF DESIGN AND THAT ITS

MOST SOPHISTICATED CUSTOMERS, THE AMERICAN PHONE COMPANIES,

WERE TELLING SAMSUNG THAT THE ONLY WAY FORWARD FOR IT WAS TO,

QUOTE -- THIS IS THEIR WORDS -- TO "MAKE SOMETHING LIKE THE

IPHONE."

AND WE KNOW THAT THIS WAS FOLLOWED BY MONTH AFTER MONTH OF

FRENZIED ACTIVITY AT SAMSUNG WHEN SAMSUNG DESIGNERS CHANGED

PHONE AFTER PHONE THAT WAS UNDER DEVELOPMENT TO COPY FEATURE

AFTER FEATURE AFTER FEATURE FROM THE IPHONE, AND THAT SAMSUNG

BEGAN TO SELL THESE INFRINGING PRODUCTS IN THE UNITED STATES.

WE KNOW THAT THAT LED TO A SECOND CRISIS, AND IN

AUGUST 2010, THERE WAS A MEETING BETWEEN SAMSUNG AND APPLE AND

AT THAT TIME, AS YOU HEARD, APPLE WAS ACTUALLY SAMSUNG'S

LARGEST COMPETITOR -- CUSTOMER BECAUSE SAMSUNG -- APPLE BOUGHT

ITS COMPONENTS, ITS PARTS FROM SAMSUNG.

AND THEY HAD THIS MEETING, AND AT THE MEETING, APPLE

ACCUSED SAMSUNG OF COPYING AND ACCUSED SAMSUNG OF INFRINGING

APPLE PATENTS AND DID EVERYTHING IT COULD DO TO CONVINCE

UNITED STATES COURT REPORTERS

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CLOSING
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SAMSUNG TO COMPETE FAIRLY INSTEAD OF UNFAIRLY.
BUT WE KNOW THAT SAMSUNG REJECTED THAT REQUEST AND

CONTINUED TO RELEASE VERSION AFTER VERSION OF INFRINGING PHONES

AND TABLETS, INCLUDING THE MORE THAN 37 MILLION DEVICES THAT

ARE AT ISSUE IN THIS CASE.

AND UNLIKE IN FAIRY TALES, WE KNOW THAT SAMSUNG'S ILLEGAL

STRATEGY HAS BEEN WILDLY SUCCESSFUL.

DRIVEN EVERY OTHER COMPETITOR, INCLUDING ALMOST EVERY OTHER

ANDROID COMPETITOR, ALMOST ENTIRELY OUT OF THE MARKET.

YOU HEARD THAT THEY HAVE

THE ONLY PRODUCTS THAT ARE SELLING TODAY ARE APPLE

PRODUCTS AND SAMSUNG PRODUCTS THAT INFRINGE APPLE PATENTS.

IS LITERALLY A TWO HORSE RACE.

AND, FINALLY, WE KNOW THAT SAMSUNG'S STRATEGY HAS UNFAIRLY

INJURED APPLE, THE COMPANY AND THE EMPLOYEES WHO WERE THE

SOURCE OF ALL THIS CREATIVITY.

THAT IS HOW WE CAME TO THIS PLACE.

AND SO NOW IT IS TIME FOR YOU, A JURY CHOSEN BY LOT TO

REPRESENT THIS COMMUNITY, TO DO JUSTICE, TO ASSEMBLE THE FACTS,

TO APPLY THE LAW TO THOSE FACTS, AND TO AWARD WHATEVER DAMAGES

THAT YOU FIND ARE APPROPRIATE.

THAT'S WHY WE'RE HERE.

FOUR SHORT WEEKS AGO I STOOD BEFORE YOU AND I TOLD YOU TWO

THINGS THAT I WOULD LIKE TO REPEAT THIS MORNING.

YOU THAT THERE WERE PROBLEMS WITH LAWSUITS.

IT'S NOT EASY TO

BE A JUROR IN A CASE AS COMPLICATED AS THIS.

THE TESTIMONY

COMES IN ONE WITNESS AT A TIME, YOU SEE ONLY BITS AND PIECES OF

UNITED STATES COURT REPORTERS

FIRST, I TOLD

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DOCUMENTS ON THE SCREEN, AND YOU DON'T EVEN FIND OUT THE LEGAL

PRINCIPLES UNTIL THE LAST DAY OF THE TRIAL.

AND WE GREATLY APPRECIATE YOUR WILLINGNESS TO UNDERTAKE THAT

TASK.

IT IS DIFFICULT

I ALSO TOLD YOU THAT ON THE APPLE SIDE, WE FELT IT WAS OUR

JOB TO DO WHAT WE COULD DO TO HELP YOU WITH YOUR JOB.

OUR JOB TO PRESENT THE EVIDENCE IN A CLEAR AND HELPFUL WAY, AND

IT IS BILL LEE'S AND MY JOB THIS MORNING TO TRY TO BRING THAT

EVIDENCE TOGETHER IN A WAY THAT WE HOPE WILL BE USEFUL TO YOU

10
11

IT WAS

WHEN YOU BEGIN YOUR DELIBERATIONS.
TO DO THAT, I'M GOING TO USE THE VERDICT FORM AND THE

INSTRUCTIONS THAT JUDGE KOH READ TO YOU YESTERDAY.

THE VERDICT

FORM CONTAINS ALL THE QUESTIONS YOU WILL BE ASKED TO ANSWER.

THE JURY INSTRUCTIONS TELL YOU HOW TO GO ABOUT ANSWERING THOSE

QUESTIONS.

CRITICALLY, THE INSTRUCTIONS HELP YOU DECIDE WHICH OF THE

EVIDENCE YOU HAVE SEEN IS RELEVANT TO THE QUESTIONS YOU HAVE TO

DECIDE AND WHICH OF THE EVIDENCE YOU HAVE SEEN HAS BEEN AN

ATTEMPT TO CONFUSE, TO MAKE YOUR JOB MORE DIFFICULT AND YOUR

ANSWERS LESS ACCURATE.

THE FIRST THING I WANT TO MAKE CLEAR IS WHO THE PARTIES

ARE TO THIS CASE.

FIRST PART OF THE CASE.

WE BROUGHT IN FRONT OF YOU, AND IT OWNS THOSE FIVE PATENTS.

OBVIOUSLY APPLE IS THE PLAINTIFF IN THE
APPLE INVENTED THE FIVE PATENTS THAT

THE FIRST DEFENDANT IN OUR CASE IS SAMSUNG ELECTRONICS

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CORPORATION, OR SEC.

SUWON, SOUTH KOREA.

ELECTRONICS AMERICA AND SAMSUNG TELECOMMUNICATIONS AMERICA.

4
5
6

AND AS YOU HEARD, SEC IS LOCATED IN
SEC OWNS THE OTHER TWO DEFENDANTS, SAMSUNG

SEC MANUFACTURES PHONES AND TABLETS AND SELLS THEM
DIRECTLY TO ITS SUBSIDIARIES IN THE UNITED STATES.
SEC DECIDES WHAT SOFTWARE IS GOING TO BE INSTALLED IN THE

PHONES IT SELLS IN THE UNITED STATES.

USE THE ANDROID OPERATING SYSTEM.

THE SUBSIDIARIES SELL THE ACCUSED PRODUCTS IN THE

10
11

IT WAS SEC THAT CHOSE TO

SEC SETS THE PRICES AT WHICH

UNITED STATES.
AND AS YOU MAY REMEMBER WHEN JUSTIN DENISON TESTIFIED, HE

TESTIFIED THAT ALL OF THE EMPLOYEES OF ALL THE SAMSUNG

COMPANIES SEE THEMSELVES AS PART OF SEC.

SOMEWHAT STRANGELY, NO EXECUTIVE FROM SEC TESTIFIED AT

THIS TRIAL.

SEC MADE, TO TELL YOU WHY THOSE DECISIONS WERE MADE, OR TO

DEFEND THEMSELVES IN ANY WAY AGAINST THE SERIOUS ACCUSATIONS

THAT YOU HAVE BEFORE YOU.

COME HERE AND FACE CROSS-EXAMINATION.

NO ONE CAME TO EXPLAIN TO YOU THE DECISIONS THAT

NONE OF THEM WERE BRAVE ENOUGH TO

SAMSUNG ELECTRONICS OF AMERICA, WHO WE CALL SEA, IS A U.S.

CORPORATION HEADQUARTERED IN NEW JERSEY.

SEA SELLS THE TABLETS

ACCUSED IN THIS CASE DIRECTLY TO CARRIERS, STORES, AND

CONSUMERS IN THE UNITED STATES.

NO SEA EMPLOYEE TESTIFIED AT THIS TRIAL.

FINALLY, SAMSUNG TELECOMMUNICATIONS OF AMERICA, STA, SELLS

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SAMSUNG SMARTPHONES TO CARRIERS, STORES, AND CONSUMERS IN THE

UNITED STATES.

STA IS HEADQUARTERED IN TEXAS.

WITH THE EXCEPTION OF ONE DESIGNER, EVERY SAMSUNG WITNESS

IN THIS CASE, MR. SOHN, THE FORMER CEO, MR. PENDLETON,

MR. DENISON, MR. SHEPPARD, AND MR. DICARLO WORKS OR WORKED FOR

STA DURING THE RELEVANT TIME PERIODS, AND ALL OF THESE GUYS

WERE MARKETING PEOPLE.

PERSON WHO COULD TALK ABOUT HOW THE INFRINGING PHONES CAME TO

BE.

10
11
12
13
14
15
16
17

NOT ONE SOFTWARE ENGINEER.

NOW I WANT TO TALK ABOUT THE PATENTS.

NOT ONE

FOR EACH OF THE

FIVE PATENTS IN THIS CASE, YOU WILL BE ASKED THREE QUESTIONS.
THE FIRST QUESTION IS, DID ANY OF THE THREE SAMSUNG
COMPANIES INFRINGE THE PATENT?
THE SECOND QUESTION IS, IF THERE WAS INFRINGEMENT, WAS
THAT INFRINGEMENT WILLFUL?
AND, THIRD, DID SAMSUNG PROVE, BY CLEAR AND CONVINCING
EVIDENCE, THAT THE PATENT IS INVALID?

IF YOU FIND THAT THE PATENT WAS INFRINGED, YOU WILL BE

ASKED -- THAT A VALID PATENT WAS INFRINGED, YOU WILL THEN BE

ASKED TO AWARD DAMAGES, BUT I'M GOING TO DEAL WITH DAMAGES

SEPARATELY.

22
23
24
25

LET'S START WITH THE '721 PATENT.

WE ARE ASSERTING, AS

YOU RECALL, CLAIM 8 OF THAT PATENT.
YOU WILL REMEMBER THAT PROFESSOR COCKBURN CAREFULLY WALKED
US THROUGH THE ELEMENTS OF CLAIM 8 AND TESTIFIED THAT SIX

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SAMSUNG PHONES, WHICH HE DIVIDED INTO FOUR FAMILIES, INFRINGED

THE '721 PATENT.

YOU CAN SEE THE FOUR FAMILIES ON THIS SLIDE.

LET'S BE CLEAR.

5
6

YOU HEARD NO DEFENSE FROM SAMSUNG TO FIVE

OF THESE SIX PHONES.
SAMSUNG'S EXPERT ON THE SLIDE TO UNLOCK WAS

PROFESSOR GREENBERG AND HE ONLY DEFENDED ONE PHONE, THE GALAXY

NEXUS.

9
10

FOR THE OTHER FIVE, HE PRESENTED NO DEFENSE.
I WANT TO POINT OUT ONE THING VERY SPECIFICALLY.

FOUR

WEEKS AGO IN HIS OPENING, SAMSUNG'S COUNSEL TOLD YOU THAT

SAMSUNG'S PUZZLE PIECE DESIGN, WHICH YOU SEE HERE ON THE

STRATOSPHERE PHONE, DID NOT INFRINGE.

VIDEO CLIP.

HE EVEN SHOWED YOU A

BUT NO SAMSUNG WITNESS BACKED THAT UP.

PROFESSOR GREENBERG DID NOT DEFEND THE PUZZLE PIECE.

COULDN'T, BECAUSE THE CLAIM LANGUAGE OF THE '721 PATENT READS

ON IT DIRECTLY.

THERE IS NOTHING IN THE CLAIM LANGUAGE ABOUT MOVING ALONG

A TRACK.

IMAGE.

THE PATENT CLAIMS REQUIRE CONTACT WITH AN UNLOCK

LET'S GO BACK AND LOOK AT THE PHONE.

THE PUZZLE PIECE IS

THE UNLOCK IMAGE.

THE CLAIMS REQUIRE CONTINUOUSLY MOVING THAT

UNLOCK IMAGE AND UNLOCKING THE DEVICE WHEN THE UNLOCK IMAGE IS

MOVED TO A PREDEFINED UNLOCK REGION.

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THE PREDEFINED REGION IS OBVIOUSLY THE MISSING PIECE OF
THE PUZZLE.
AND THE CLAIMS REQUIRE VISUAL CUES TO INDICATE THE

DIRECTION OF MOVEMENT OF THE UNLOCK IMAGE REQUIRED TO UNLOCK

THE DEVICE.

THE PUZZLE PIECE DOES ALL OF THAT.

SO YOU MAY ASK YOURSELF, WHY WOULD SAMSUNG'S LAWYER MAKE

AN ARGUMENT TO YOU THAT HE KNEW, THAT HE KNOWS THAT SAMSUNG HAD

NO EVIDENCE TO SUPPORT?

10
11

WAS HE TRYING TO HELP YOU TO GET TO A

CORRECT DECISION?
PROFESSOR GREENBERG DID DEFEND ONE PHONE, THE GALAXY

NEXUS.

UNLOCK IMAGE, THE GRAPHICS CHANGE.

HE SAID IT DIDN'T INFRINGE BECAUSE WHEN YOU TOUCH THE

BUT AS PROFESSOR COCKBURN EXPLAINED, THE PATENT CLAIM

LANGUAGE IS NOT LIMITED TO ANY PARTICULAR GRAPHIC DEPICTION.

HE SHOWED YOU THE SPECIFICATION WHICH EXPRESSLY ANTICIPATES

THAT ANIMATED GRAPHICS MIGHT BE USED.

18
19

SO REALLY, SAMSUNG HAS NO DEFENSE TO INFRINGEMENT ON ANY
OF THE SIX ACCUSED PHONES.

LET ME HELP YOU WITH SOMETHING ELSE.

HAVE A TON OF PHONES WITH YOU IN THE JURY ROOM.

TOLD YOU CAN'T PLAY GAMES WITH THEM, BUT YOU'RE GOING TO HAVE

THE PHONES IN THERE.

24
25

YOU ARE GOING TO

EACH ONE WILL HAVE AN EXHIBIT NUMBER ON IT.

YOU'VE BEEN

IF YOU WANT

TO FIND THE PHONE THAT DEMONSTRATES THE INFRINGING ACTIVITY FOR

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ANY OF A PARTICULAR -- FOR A PARTICULAR PATENT, YOU CAN FIND

THE RIGHT EXHIBIT NUMBER BY LOOKING AT THE CORRECT COLUMN IN

THE VERDICT FORM.

EXAMPLE, THE ADMIRE, YOU'LL SEE THE EXHIBIT NUMBER JX 28B, SO

IF YOU WANT TO TEST THE ADMIRE FOR THIS PATENT, YOU CAN LOOK AT

THAT EXHIBIT.

SO AFTER THE PHONES THAT ARE ACCUSED, FOR

TWO THINGS TO REMEMBER:

NOT ALL OF YOUR EXHIBITS INFRINGE

EVERY PATENT, SO YOU HAVE TO BE SURE THAT YOU HAVE THE RIGHT

EXAMPLE FOR THE PARTICULAR PATENT THAT YOU ARE LOOKING AT.

SECOND, PLEASE REMEMBER THE JUDGE'S INSTRUCTION NOT TO

ACCEPT SOFTWARE UPDATES SO THAT THE EXHIBITS WILL CONTINUE TO

BE ACCURATE.

13
14
15
16
17

THE QUESTION THEN IS, WHICH OF THE SAMSUNG COMPANIES IS
GUILTY FOR INFRINGING THIS PATENT?
AS YOU WILL SEE FROM THE INSTRUCTIONS, THERE ARE THREE
SEPARATE WAYS A COMPANY CAN COMMIT PATENT INFRINGEMENT.
THE FIRST IS CALLED DIRECT INFRINGEMENT AND IT IS DEFINED

IN YOUR INSTRUCTION NUMBER 24.

THE ACCUSED DEVICE IN THE UNITED STATES, THAT'S PATENT

INFRINGEMENT.

21
22
23

WHOEVER MAKES, USES, OR SELLS

INSTRUCTION NUMBER 25 PRESENTS GUIDELINES FOR DETERMINING
WHEN SALES OCCURRED IN THE UNITED STATES.
APPLYING THESE INSTRUCTIONS, WE BELIEVE THAT SEC IS LIABLE

FOR DIRECT INFRINGEMENT OF THE '721 PATENT BECAUSE IT SELLS ALL

OF THE ACCUSED PHONES TO STA AND SHIPS THEM TO STA IN THE

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UNITED STATES FOR RESALE TO CUSTOMERS.
WE BELIEVE THAT STA IS LIABLE FOR DIRECT INFRINGEMENT
BECAUSE IT SELLS THE ACCUSED SMARTPHONES IN THE UNITED STATES.

WE BELIEVE THAT WHEN YOU ADDRESS QUESTION NUMBER 4 IN THE

VERDICT FORM, YOU SHOULD FIND INFRINGEMENT BY BOTH SEC AND STA.

LET ME STOP HERE TO POINT OUT THAT DESPITE ALL THE TIMES

THAT SAMSUNG MENTIONED IT, YOU WILL NOT FIND A SINGLE QUESTION

ABOUT GOOGLE IN YOUR VERDICT FORM OR IN YOUR JURY INSTRUCTIONS.

GOOGLE IS NOT A DEFENDANT IN THIS CASE.

IF YOU FIND DIRECT INFRINGEMENT BY STA, YOU WILL BE ASKED

IN THE VERDICT FORM WHETHER OR NOT SEC -- THIS IS A LEGAL

TERM -- INDUCED THAT INFRINGEMENT.

WAY OF COMMITTING PATENT INFRINGEMENT.

14
15
16
17
18

INDUCEMENT IS A SEPARATE

INSTRUCTION 28 SETS OUT THREE ELEMENTS OF INDUCING
INFRINGEMENT.
FIRST, SEC MUST HAVE INTENTIONALLY TAKEN ACTION THAT
ACTUALLY INDUCED DIRECT INFRINGEMENT.
THIS IS WHY WE BROUGHT YOU THE EVIDENCE THAT SEC MAKES ALL

THE DEVICES.

THE AMERICAN SUBSIDIARIES REPORT BACK THEIR SALES AND

STRATEGIES TO HEADQUARTERS, AS YOU SAW ON THE EXHIBITS.

IT DESIGNS THE PHONES, IT SETS THE PRICES, AND

SECOND, SEC MUST HAVE BEEN AWARE OF THE ASSERTED PATENTS.

THIS IS WHY WE READ YOU UNDISPUTED FACT NUMBER 13 IN WHICH SEC

ADMITS THAT IT HAS KNOWN OF THESE PATENTS SINCE AT LEAST THE

LAWSUIT WAS FILED.

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AND, THIRD, SEC MUST HAVE KNOWN THAT THE ACTS IT WAS

CAUSING WOULD INFRINGE.

THE INSTRUCTION GOES ON TO SAY THAT

THIS KNOWLEDGE ELEMENT CAN BE SATISFIED BY WHAT THE LAW CALLS

WILLFUL BLINDNESS.

HERE WE ASK YOU TO REMEMBER THE SAMSUNG DOCUMENTS SHOWING

THAT SAMSUNG'S ADOPTION OF THE SLIDE TO UNLOCK WAS INTENTIONAL,

THAT WE ASKED THEM TO STOP THE INFRINGEMENT, THAT THEY SHOWED

UP HERE IN COURT WITH LITERALLY NO DEFENSE, AND THAT DESPITE

OUR EFFORTS, SAMSUNG CONTINUED TO SELL INFRINGING PHONES.

SAMSUNG CLEARLY KNEW THAT IT WAS CAUSING INFRINGEMENT.

WE ASK THAT AFTER YOU CONSIDER ALL THIS EVIDENCE, YOU FIND

THAT SEC INDUCED ITS SUBSIDIARY, STA, TO COMMIT INFRINGEMENT OF

THE '721 PATENT AND THAT YOU ANSWER YES TO QUESTION 5 ON YOUR

VERDICT FORM.

FINALLY, YOU WILL GET ASKED WHETHER OR NOT SEC COMMITTED

WHAT THE LAW CALLS CONTRIBUTORY INFRINGEMENT.

WAY IN WHICH A PARTY CAN INFRINGE.

CONTRIBUTORY INFRINGEMENT IS DEFINED IN INSTRUCTION

NUMBER 29 OF THE JURY INSTRUCTIONS.

ELEMENTS.

THIS IS A THIRD

AGAIN, IT HAS THREE

ONE, THAT SEC SUPPLIED AN IMPORTANT COMPONENT OF THE

INFRINGING PART OF THE PRODUCT.

THAT MADE ALL OF THE KEY DECISIONS ABOUT WHAT SOFTWARE WAS

PLACED ON THE INFRINGING PHONES.

HERE YOU KNOW THAT IT WAS SEC

TWO, THAT THE COMPONENT IS NOT A COMMON COMPONENT SUITABLE

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FOR NON-INFRINGING USE.

SPECIFICALLY DESIGNED FOR PHONES.

OBVIOUSLY ALL THIS SOFTWARE IS
IT HAS NO OTHER USE.

AND, THREE, THAT SAMSUNG SUPPLIED THE COMPONENT WITH

KNOWLEDGE OF THE PATENT AND KNOWLEDGE THAT THE COMPONENT WAS

ESPECIALLY MADE OR ADAPTED FOR USE IN AN INFRINGING MANNER.

THIS IS SIMILAR TO WHAT WE LOOKED AT BEFORE.

GIVEN

SAMSUNG'S ADMITTED KNOWLEDGE OF THE PATENT AND INTENTIONAL

COPYING OF THE PATENTED FEATURES, IT CLEARLY KNEW THAT ITS

SOFTWARE WAS DESIGNED TO INFRINGE.

10
11

AFTER YOU CONSIDER THESE FACTORS, WE ASK THAT YOU ANSWER
YES TO QUESTION NUMBER 6 ON THE VERDICT FORM.

AFTER YOU ANSWER THE INFRINGEMENT QUESTIONS, YOU WILL BE

ASKED WHETHER OR NOT SAMSUNG PROVED THAT THE '721 PATENT WAS

INVALID.

NUMBER 31, WHICH DESCRIBES THE BURDEN OF PROOF, AND INSTRUCTION

NUMBER 34, WHICH DESCRIBES THE TEST FOR OBVIOUSNESS.

THE INSTRUCTIONS YOU WILL NEED ARE INSTRUCTION

INSTRUCTION 31, SAMSUNG -- TELLS US THAT SAMSUNG HAS TO

PROVE INVALIDITY BY WHAT THE LAW CALLS CLEAR AND CONVINCING

EVIDENCE, WHICH IS A HIGHER THAN NORMAL STANDARD IN A CIVIL

CASE.

THE KEY QUESTION FOR OBVIOUSNESS IN INSTRUCTION 34 IS

WHETHER OR NOT THE INVENTION WOULD HAVE BEEN OBVIOUS TO A

PERSON OF ORDINARY SKILL IN THE FIELD AT THE TIME OF THE

INVENTION.

BUT THE INSTRUCTION SETS OUT SEVERAL IMPORTANT RULES.

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FIRST, YOU ARE REQUIRED TO CONSIDER WHAT WAS THE CONTENT
OF THE PRIOR ART?

WHAT WAS KNOWN BEFORE THE INVENTION?

SECOND, YOU ARE SUPPOSED TO CONSIDER WHAT THE LAW CALLS

ADDITIONAL FACTORS THAT MAY BE RELEVANT TO OBVIOUSNESS.

THINK OF THESE AS REALITY TESTS TO SEE HOW THE WORLD ACTUALLY

REACTED TO THE INVENTION AT THE TIME.

BUT MOST IMPORTANT, YOU CANNOT PROVE THAT SOMETHING IS

OBVIOUS JUST BY GOING AND FINDING BITS AND PIECES IN THE PRIOR

ART AND TRYING TO PUT THEM TOGETHER.

AS JUDGE KOH HAS TOLD YOU, YOU CANNOT USE HINDSIGHT.

IN OTHER WORDS, YOU CAN'T DO EXACTLY WHAT SAMSUNG HAS DONE

HERE.

FIND THE VARIOUS ELEMENTS IN THE PRIOR ART.

YOU CANNOT USE THE PATENT ITSELF AS A ROADMAP TO TRY TO

YOU KNOW FROM YOUR OWN EXPERIENCE THAT MANY TIMES WHEN YOU

POINT OUT SOMETHING NEW TO SOMEONE, YOU SAY, "LOOK AT THIS,

THIS IS A NEW IDEA," THE PERSON WILL GO, "OH, YEAH.

THAT'S OBVIOUS."

BUT WHERE WERE THEY BEFORE YOU POINTED IT OUT TO THEM?

IT'S ONCE YOU SEE THE IDEA THAT, ALL OF A SUDDEN, IN

RETROSPECT, USING HINDSIGHT, IT APPEARS OBVIOUS.

21
22
23

WELL,

WHERE WAS SAMSUNG BEFORE IT SAW THE IPHONE?
ANSWER TO THAT QUESTION.

YOU KNOW THE

THEY DIDN'T EVEN HAVE A SMARTPHONE.

PROFESSOR GREENBERG TESTIFIED THAT THE '721 PATENT WOULD

HAVE BEEN OBVIOUS IN LIGHT OF A PHONE MANUAL FOR A EUROPEAN

PHONE CALLED THE NEONODE AND AN ARTICLE BY A PERSON NAMED

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PLAISANT.

AS YOU SAW, THERE WERE HUGE PROBLEMS WITH THIS POSITION.

BOTH OF THESE REFERENCES THAT HE WAS TALKING ABOUT WERE

ACTUALLY BEFORE THE PTO EXAMINERS WHO ISSUED THE PATENT, AND

YOU CAN SEE THAT ON THE FACE OF THE PATENT WHERE THEY ARE

LISTED.

LET ME PAUSE HERE FOR A MOMENT.

YOU'RE GOING TO SEE,

THROUGHOUT ALL OF THESE PATENTS, THAT THE EXAMINERS WHO LOOKED

AT THEM WERE EXTREMELY THOROUGH.

THE PROSECUTION HISTORY,

WHICH IS IN EVIDENCE, IS HUNDREDS OF PAGES LONG.

FOR ONE OF OUR PATENTS.

CITED.

THAT'S JX 8

MANY PATENTS AND PUBLICATIONS ARE

EVEN IN A COUPLE OF CASES WHERE SAMSUNG HAS FOUND SOME

REFERENCE THAT MAY NOT HAVE BEEN CITED, NO SAMSUNG EXPERT HAS

EVER TESTIFIED TO YOU UNDER OATH THAT THIS NEW REFERENCE WAS

MORE RELEVANT THAN THE ART THAT THE EXAMINER ACTUALLY LOOKED

AT.

THAT'S AN IMPORTANT THING, BECAUSE IF THE EXAMINER HAS

LOOKED AT MORE RELEVANT ART, OTHER ART IS NOT IMPORTANT

ANYMORE.

FILLED IN HERE.

IMPORTANT AND THE EXAMINER NEVER SAW ANYTHING LIKE IT.

IT'S AN IMPORTANT GAP IN THE EVIDENCE THAT WAS NOT
NO ONE HAS EVER SAID THESE NEW THINGS ARE SO

SPECIFICALLY WITH RESPECT TO NEONODE AND PLAISANT,

PROFESSOR COCKBURN POINTED OUT THAT NEONODE HAS NO VISUAL CUES

AND NO CONTINUOUS MOVEMENT.

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THESE X'S ON THE SCREEN SHOW THAT ELEMENTS ARE MISSING.

HE POINTED OUT THAT NOT ONLY DID PLAISANT NOT FILL OUT THE

GAPS, PLAISANT ACTUALLY TAUGHT AWAY FROM USING A SLIDE IMAGE.

YOU MAY REMEMBER, HE PUT THE ARTICLE UP AND IT SAID THAT PEOPLE

WHO LOOKED AT THIS HAD MORE PROBLEMS WITH SLIDERS.

HARDER TO IMPLEMENT.

7
8
9
10
11
12
13

THEY WERE

IT WAS NOT AS GOOD.

THERE WAS NO CLEAR AND CONVINCING EVIDENCE THE '721 PATENT
IS INVALID.
SO THEN WE MOVE TO THE ADDITIONAL FACTORS TO BE CONSIDERED
UNDER INSTRUCTION -- UNDER THE INSTRUCTION.
PROFESSOR GREENBERG SAID THAT NO FACTOR, NONE OF THESE,
WEIGHED IN FAVOR OF VALIDITY.
BUT HE SIMPLY IGNORED THE EVIDENCE OF PUBLIC ACCLAIM.

IGNORED THE APPLE AD THAT WE SHOWED YOU THAT ACTUALLY FEATURED

THE SLIDE TO UNLOCK FEATURE.

16
17

HE IGNORED DOCUMENT AFTER DOCUMENT SHOWING THAT SAMSUNG
INTENTIONALLY COPIED THIS FEATURE FROM THE IPHONE.

PLAINTIFF'S EXHIBIT 121, WHICH IS THE VICTORY PHONE,

PLAINTIFF'S EXHIBIT 120, WHICH IS THE BEHOLD PHONE, PLAINTIFF'S

EXHIBIT 219, WHICH WAS THE KEPLER PHONE, AND PLAINTIFF'S

EXHIBIT 157, WHICH WAS THE AMETHYST PHONE, DR. GREENBERG DIDN'T

MENTION THEM.

EVERY ONE OF THOSE SAMSUNG INTERNAL DOCUMENTS COPIES SLIDE

TO UNLOCK FROM THE IPHONE.

NOT ONE OF THEM SUGGESTS THAT THE

IDEA WAS OBVIOUS OR THAT SAMSUNG HAD IT FIRST, THAT IT'S IN THE

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GOOGLE SOFTWARE.

NONE OF THE THINGS YOU HAVE HEARD FROM

SAMSUNG IN THIS TRIAL ARE SUPPORTED BY A SINGLE PAGE OF

SAMSUNG'S OWN INTERNAL DOCUMENTS.

A VERSION OF THE STORY THAT NEVER, EVER HAPPENED.

THEY ARE TRYING TO SELL YOU

LET'S TALK ABOUT THAT FOR A MINUTE.

THIS IS A TRIAL.

I MEAN, OBVIOUSLY THE PARTIES DISAGREE.

IT'S NOT UNUSUAL FOR PARTIES TO SEE THE WORLD DIFFERENTLY AND

YOU HAVE TO DECIDE WHERE THE TRUTH IS.

BUT IN THAT REGARD, WE HAVE TRIED TO PROVE EVERY IMPORTANT

FACT FROM SAMSUNG'S OWN DOCUMENTS.

CREATED BEFORE THIS LAWSUIT EXISTED.

AT SAMSUNG WERE ACTUALLY THINKING AT THE TIME.

THOUGHT THOSE DOCUMENTS WOULD SEE THE LIGHT OF DAY.

THOSE DOCUMENTS WERE
THEY SHOW WHAT THE PEOPLE
THEY NEVER

ON THE OTHER HAND, EVERY POINT SAMSUNG HAS TRIED TO MAKE

IN THIS TRIAL IS CONTRADICTED BY ITS OWN DOCUMENTS.

WITNESSES SAY A; THEIR OWN DOCUMENTS SAY B.

IN CASE AFTER CASE.

THEIR

YOU HAVE SEEN THAT

BUT SOMEHOW THAT DOESN'T SEEM TO EMBARRASS THEM.

SO BACK TO THE FACTORS THAT ARE RELEVANT TO OBVIOUSNESS.

ANOTHER FACTOR IS PRAISE FROM OTHERS IN THE FIELD.

YOU MAY REMEMBER, IT'S BEEN A WHILE NOW, BUT WHEN WE SAW WHAT

SAMSUNG'S EUROPEAN DESIGNERS ACTUALLY SAID -- THIS IS SAMSUNG'S

DESIGNERS -- WHEN THEY SAW THE SLIDE TO UNLOCK, WHICH IS

EXHIBIT 119, THEY DIDN'T SAY IT WAS OBVIOUS.

A "CREATIVE WAY TO SOLVE USER INTERFACE COMPLEXITY."

UNITED STATES COURT REPORTERS

AND

THEY SAID IT WAS

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IF YOU WEIGH THESE FACTORS, YOU WILL FIND THAT THEY

SUPPORT THE CONCLUSION THAT SLIDE TO UNLOCK WAS AN IMPORTANT

AND NOVEL INVENTION.

IF YOU AGREE, YOU WILL ANSWER QUESTION 8 IN THE VERDICT

FORM NO, SAMSUNG HAS NOT PROVEN THAT THIS CLAIM IS INVALID.

THAT WILL BRING YOU TO THE QUESTION OF WHETHER OR NOT

7
8
9

SAMSUNG'S INFRINGEMENT WAS WILLFUL.
INSTRUCTION NUMBER 30 WILL TELL YOU THAT THE TEST FOR
WILLFULNESS IS ONE OF RECKLESS DISREGARD, WHICH MEANS THAT

SAMSUNG ACTUALLY KNEW OR IT WAS SO OBVIOUS THAT IT SHOULD HAVE

KNOWN THAT ITS ACTIONS CONSTITUTED INFRINGEMENT OF A VALID AND

ENFORCEABLE PATENT.

HERE AGAIN, COPYING PLAYS A BIG PART AND YOU CAN FIND

WILLFULNESS IF YOU FIND THAT SAMSUNG COPIED OUR PATENTED

FEATURES.

I'M NOT GOING TO GO BACK THROUGH THE DOCUMENTS, BUT THINK

ABOUT THE BIG PICTURE FOR A MOMENT.

PATENTS, IT KNEW IT WAS FACING ITS OWN CRISIS OF DESIGN, AND IT

INTENTIONALLY COPIED THE IPHONE.

SAMSUNG KNEW ABOUT THE

WHEN IT GOT HERE TO TRIAL, IT PRESENTED NO INFRINGEMENT

DEFENSE FOR FIVE OF THE PRODUCTS THAT WERE ACCUSED, AND AN

INVALIDITY DEFENSE THAT HAD ALREADY BEEN REJECTED BY THE PTO.

THE FACT THAT IT ACTED WILLFULLY IS BEYOND DISPUTE.

IF YOU AGREE, YOU SHOULD ANSWER YES TO QUESTION NUMBER 7

ON THE VERDICT FORM FOR BOTH SEC AND STA, AND THAT WILL BE IT

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FOR THE '721 PATENT.
THE NEXT PATENT, THE '172 AUTOMATIC WORD CORRECTION PATENT

WILL BE A LOT QUICKER BECAUSE YOU DON'T GET ASKED ANY QUESTIONS

ABOUT INFRINGEMENT.

JUDGE KOH HAS ALREADY FOUND INFRINGEMENT

AS A MATTER OF LAW.

SEVEN SAMSUNG PHONES INFRINGE THE '172

PATENT.

AT PAGE 7.

8
9

YOU WILL FIND THEM LISTED IN PLAINTIFF'S EXHIBIT 222A

HERE'S AN AD FOR EXHIBIT 222A.
THIS CASE.

THERE'S A LOT OF DATA IN

THERE'S A LOT OF DAMAGES NUMBERS.

THERE'S A LOT OF

LISTS OF PHONES.

THAT WE THINK YOU WILL NEED, AND I'LL MENTION IT SEVERAL TIMES

TODAY, IN THIS ONE EXHIBIT, 222A, AND THAT'S WHERE YOU WILL

FIND ALL OF THE NUMBERS AND THE LISTS OF ACCUSED DEVICES AND

EVERYTHING IN ONE PLACE IF THAT'S HELPFUL TO YOU.

15
16
17

WE HAVE LISTED ALL OF OUR -- ALL THE DATA

I'M GOING TO BE SHOWING YOU SOME SLIDES, YOU WON'T HAVE
THE SLIDES, BUT YOU WILL HAVE THIS EXHIBIT 222A.
SO FOR THIS PATENT, WE CAN MOVE DIRECTLY TO VALIDITY.

THIS TIME IT WAS PROFESSOR WIGDOR WHO TESTIFIED THAT, IN HIS

VIEW, THE PTO WAS WRONG.

INVENTION WAS INVALID DUE TO A COMBINATION OF THE ROBINSON AND

XRGOMICS PATENTS.

PROFESSOR WIGDOR ARGUED THAT THE '172

BUT AS IT TURNED OUT, THE PTO HAD ALL THE FIGURES -- HE

DIDN'T MENTION THIS ON DIRECT, BUT ON CROSS-EXAMINATION, HE

ADMITTED THAT THE PTO HAD ALL THE FIGURES FROM THE ROBINSON

PATENT BEFORE IT IN ANOTHER PATENT TO AN INVENTOR CALLED LONGE.

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PROFESSOR COCKBURN POINTED OUT THAT BECAUSE ROBINSON DID

NOT SHOW THE CURRENT CHARACTER STRING IN THE TEXT BOX, IT WAS

MISSING MANY OF THE ELEMENTS IN CLAIM 18 OF THE '172 PATENT.

AND THE GAPS COULD NOT BE FILLED BY XRGOMICS BECAUSE

XRGOMICS WASN'T EVEN A SPELLING CORRECTION PATENT.

PATENT FOR WORD EXTENSION.

7
8
9

IT WAS A

IT DOES NO CORRECTION.

ABSOLUTELY NO REASON WHY PERSONS OF ORDINARY SKILL WOULD
TRY TO COMBINE THOSE TWO PATENTS.
PROFESSOR WIGDOR ALSO COMPLETELY IGNORED THE ADDITIONAL

FACTORS THAT ARE RELEVANT TO OBVIOUSNESS.

THAT SAMSUNG HAD SOLD OVER 7.5 MILLION INFRINGING PHONES AS

EVIDENCE OF COMMERCIAL SUCCESS.

HE IGNORED THE FACT

AND HE IGNORED THE INTERNAL SAMSUNG DOCUMENTS, SUCH AS

PLAINTIFF'S EXHIBIT 168, WHERE T-MOBILE REPORTED THAT THE

ALTERNATIVE THAT SAMSUNG WAS USING ON ITS DART PHONE HAD BEEN

TOO JARRING.

17
18
19

NOWHERE DID ANYONE EVER SUGGEST THAT THE APPLE PATENT AND
THE APPLE PATENTED FEATURE WAS OBVIOUS.
SO WHEN YOU GET TO QUESTION 8 ON THE VERDICT FORM, WE ASK

YOU TO CONCLUDE THAT THE PTO GOT IT RIGHT AND ANSWER NO AS TO

WHETHER SAMSUNG HAS PROVEN INVALIDITY OF THE '172 PATENT.

FINALLY, ON WILLFULNESS, WE KNOW, ONCE AGAIN, THAT SAMSUNG

CONTINUED TO USE THE FEATURE EVEN AFTER IT WAS AWARE OF THE

PATENT AND EVEN THOUGH IT HAD NO INFRINGEMENT DEFENSE.

THE CLASSIC DEFINITION OF WILLFULNESS.

THAT IS

SO YOU SHOULD ANSWER

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QUESTION NUMBER 7 YES.
THE THIRD PATENT IS APPLE'S '647 PATENT, WHICH YOU HEARD
REFERRED TO AS QUICK LINKS OR ALSO DATA DETECTORS.
APPLE IS ASSERTING CLAIM 9 AGAINST NINE ACCUSED SAMSUNG

PHONES.

THEM IN EXHIBIT 222A AT PAGE 7.

AGAIN, YOU CAN SEE THEM HERE, BUT YOU WILL ALSO FIND

WE CALLED DR. TODD MOWRY TO TESTIFY CONCERNING THIS

PATENT.

PHONE AND HE WALKED YOU THROUGH EACH OF THE CLAIM LIMITATIONS

10
11
12
13

DR. MOWRY LOOKED AT THE SOFTWARE CODE IN EVERY ACCUSED

AGAINST REPRESENTATIVE SAMSUNG PHONES.
DR. MOWRY CAREFULLY TOOK YOU THROUGH THE SAMSUNG SOFTWARE
THAT CARRIES OUT EACH OF THE CLAIMED FUNCTIONS.
SAMSUNG CALLED DR. JEFFAY AND DR. JEFFAY CONCEDED THAT THE

PHONES THAT DR. MOWRY LOOKED AT WERE REPRESENTATIVE OF THE

ACCUSED PHONES, AND THAT MOST OF THE CLAIM ELEMENTS ARE PRESENT

IN THE ACCUSED PHONES.

DR. JEFFAY, AS YOU'LL REMEMBER BECAUSE WE HEARD IT AGAIN

YESTERDAY, ARGUED THAT THERE WAS NO INFRINGEMENT BECAUSE IN HIS

OPINION, AN ANALYZER SERVER, AS THE TERM IS USED IN THE CLAIM,

COULD NOT BE PROGRAMMED AS A SHARED LIBRARY.

21
22
23
24
25

BASICALLY DR. JEFFAY SAYS A SHARED -- A SERVER AND A
LIBRARY ARE DIFFERENT.
WE BROUGHT DR. MOWRY BACK IN REBUTTAL TO SHOW YOU THAT
THAT WAS WRONG.
WE SHOWED YOU THE TESTIMONY OF THE INVENTOR, DR. BONHURA.

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WE SHOWED YOU THIS TESTIMONY.

BUT WE ALSO SHOWED YOU A 1996 APPLE -- 1996 APPLE INTERNAL

E-MAIL, WHICH IS DEFENDANT'S EXHIBIT DX 334, SHOWING THAT THE

APPLE INVENTORS HAD ACTUALLY BEEN CONSIDERING IMPLEMENTING THE

ANALYZER SERVER AS A SHARED LIBRARY, EXACTLY THE SAME

IMPLEMENTATION THAT SAMSUNG ENDED UP USING YEARS LATER IN ITS

INFRINGING PHONES.

8
9
10

AND THIS IS THE CRITICAL POINT:

THERE WAS MORE THAN ONE

WAY THAT A SOFTWARE DESIGNER COULD IMPLEMENT AN ANALYZER
SERVER, MORE THAN ONE WAY TO DESIGN THE SOFTWARE.

APPLE CONSIDERED A SHARED LIBRARY.

YOU CAN SEE THAT HERE.

SAMSUNG USES A SHARED LIBRARY.

THEY BOTH IMPLEMENT ANALYZER SERVERS.

BUT HERE YOU'LL SEE THAT APPLE'S INTERNAL DOCUMENTS ARE

COMPLETELY CONSISTENT WITH THE POSITION THAT WE'RE TAKING IN

THIS CASE.

YESTERDAY YOU'LL RECALL WE HAD TO COME BACK BECAUSE THE

JUDGE GAVE US ADDITIONAL DETAIL ABOUT THIS PATENT, TWO NEW

INSTRUCTIONS, AND SO THE EXPERTS CAME BACK TO TESTIFY ABOUT

THAT.

AND DR. JEFFAY CAME BACK AND HE CAME BACK TO RAISE TWO NEW

ISSUES.

SEPARATE FROM THE CLIENT APPLICATIONS, WHICH IS REQUIRED, A

SERVER ROUTINE SEPARATE FROM A CLIENT.

FIRST, HE CLAIMED THAT THE SHARED LIBRARY WAS NOT

FRANKLY, THAT ARGUMENT IS A SHELL GAME.

UNITED STATES COURT REPORTERS

EVERYONE AGREES

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THAT THIS CODE THAT WE'RE TALKING ABOUT IS CALLED A SHARED

LIBRARY.

APPLICATION.

USE IT.

THAT'S WHY IT'S CALLED THAT.

IT ISN'T PART OF ONE

IT'S SHARED BY EVERY APPLICATION THAT NEEDS TO

AND AS DR. JEFFAY WAS FORCED TO CONCEDE ON

CROSS-EXAMINATION, THE SAME LIBRARY IS USED BY THE BROWSER

APPLICATION.

IS USED BY OTHER APPLICATIONS.

9
10

IT IS ALSO USED BY THE MESSAGING APPLICATION.

IT IS NOT PART OF ANY ONE APPLICATION OR PART OF ANY ONE
CLIENT.

IT IS SEPARATE AND AVAILABLE TO ALL OF THEM.

AS DR. MOWRY EXPLAINED WHEN HE ACTUALLY SHOWED YOU THE

CODE, IT IS STANDALONE CODE THAT SITS IN A SEPARATE PLACE IN

MEMORY.

DR. JEFFAY KEPT SAYING, WELL, IT CAN'T RUN BY ITSELF.

BUT, FIRST, YOU'RE NOT GOING TO FIND "RUN BY ITSELF" ANY

PLACE IN THIS CLAIM INSTRUCTION.

HERE.

BUT SECOND, AS DR. MOWRY SAID, ALL SOFTWARE PROGRAMS WORK

TOGETHER.

PROGRAMS DON'T RUN BY THEMSELVES.

THAT'S NOT PART OF THE ISSUE

EVERYTHING WORKS WITH AN OPERATING SYSTEM.

THESE

THAT'S NOT THE TEST.

THE TEST IS WHETHER OR NOT THIS CODE IS SEPARATE FROM THE

APPLICATION, AND BECAUSE IT IS A LIBRARY, A SHARED LIBRARY, IT

IS SEPARATE.

24
25

IT IS USED BY ALL.

IT IS PART OF NONE.

SECOND, ON LINKING ACTIONS TO THE DETECTED STRUCTURES,
ALTHOUGH DR. JEFFAY ADMITTED THAT THE CODE IN THE PHONES

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CREATES THE REQUIRED SPECIFIED CONNECTION TO THE START

ACTIVITY, COMPUTER SUBROUTINE UNDER THE COURT'S LINKING ACTIONS

CONSTRUCTION, HE SAID THAT IT DIDN'T MEET THE CLAIM BECAUSE

START ACTIVITY DOESN'T DO ALL OF THE STEPS THAT ARE REQUIRED TO

MAKE A PHONE CALL OR SEND AN E-MAIL, WHATEVER ACTION THE USER

SELECTED.

BUT, AGAIN, LOOK AT THE CONSTRUCTION THAT THE COURT GAVE

YOU YESTERDAY FOR LINKING ACTIONS.

LINKED COMPUTER SUBROUTINE DO EVERY STEP, JUST THAT IT PERFORM

10
11

IT DOESN'T REQUIRE THAT THE

A SEQUENCE OF OPERATIONS ON THE DETECTED STRUCTURE.
AND DR. -- PROFESSOR MOWRY WALKED YOU THROUGH THE CODE AND

SHOWED YOU THAT THE SHARED LIBRARY CODE PERFORMED THE

OPERATIONS FOR BOTH THE BROWSER AND THE MESSENGER APPLICATIONS.

WHEN YOU GET TO QUESTION 1, WHICH COVERS DIRECT

INFRINGEMENT OF THE '647 PATENT, WE ASK YOU TO SAY YES AS TO

BOTH SEA AND STA AND TO FIND SEA LIABLE FOR INDUCED AND

CONTRIBUTORY INFRINGEMENT FOR THE REASONS THAT WE HAVE

DISCUSSED.

AS TO VALIDITY ON THIS PATENT, WE HAD ANOTHER ONE OF THOSE

WEIRD MOMENTS.

IN THE OPENING, IF YOU TOOK NOTES, YOU'LL

REMEMBER THAT SAMSUNG'S LAWYER SAID THAT A PRODUCT -- HE TALKED

ABOUT THIS PRODUCT AT GREAT LENGTH -- CALLED EMBEDDED BUTTONS

AND HE TALKED ABOUT HOW EMBEDDED BUTTONS HAD BEEN INVENTED AT

XEROX PARK AND HE PROMISED YOU THAT THEY WOULD SHOW YOU THAT

EMBEDDED BUTTONS INVALIDATED THE '647 PATENT.

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BUT ONCE AGAIN, THERE TURNED OUT TO BE NO EVIDENCE TO

SUPPORT WHAT HE TOLD YOU.

BUTTONS, BUT HE DID NOT RELY ON IT TO ARGUE INVALIDITY.

YESTERDAY HE DIDN'T EVEN MENTION IT AT ALL WHEN HE WENT BACK TO

THE ISSUE OF VALIDITY.

6
7
8
9
10

DR. JEFFAY MENTIONED EMBEDDED

INSTEAD, DR. JEFFAY RELIES ON A DIALLING SYSTEM CALLED
SIDEKICK, AND YOU WILL REMEMBER THAT.
BUT THERE WAS NO EVIDENCE AT ALL TO SUPPORT THE ARGUMENT
THAT SAMSUNG'S LAWYER TOLD YOU THAT THEY WERE GOING TO MAKE.
SO LET'S TALK ABOUT SIDEKICK.

AS YOU HAVE SEEN, SIDEKICK

WAS A VERY PRIMITIVE DIALING SYSTEM.

STRUCTURE, A SIMPLE PHONE NUMBER FORMAT, AND IT DID NOT OFFER A

MENU OF OPTIONS ONCE IT IDENTIFIED THAT STRUCTURE.

THOSE ARE THE VERY THINGS THAT MADE THE '647 INVENTION SO

HELPFUL.

MENU OF OPTIONS.

17
18
19

IT DETECTED ONLY A SINGLE

IT IDENTIFIED MULTIPLE STRUCTURES AND IT PROVIDED A

SIDEKICK DOES NOT PRACTICE THE INVENTION AND IT CANNOT
PROVE THAT THIS PATENT IS INVALID.
YESTERDAY DR. JEFFAY WAS FORCED TO ADMIT THAT SIDEKICK --

THE FIRST TIME HE WAS HERE, DR. JEFFAY ADMITTED THAT SIDEKICK

DIDN'T HAVE THE POP-UP MENU, IT DIDN'T PROVIDE THE, THE

OPTIONS.

YESTERDAY HE WAS ALSO REQUIRED TO ADMIT THAT IT DIDN'T

HAVE THE LINKING ACTION THAT WAS REQUIRED BY THE COURT'S

ADDITIONAL CONSTRUCTION.

YOU'D HAVE TO PUT ANOTHER X ON THIS

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SLIDE FOR THE LINKING ACTION.

WHAT YOU HAVE HERE IS AN EXPERT TELLING YOU SIMPLY THAT

ALMOST ALL OF THE CLAIM REQUIREMENTS WOULD HAVE BEEN OBVIOUS,

EVEN THOUGH THERE IS NO EVIDENCE THAT ANYONE EVER CREATED THIS

INVENTION, THAT ANYONE EVER FILLED IN THE GAPS, THAT ANYONE

EVER CREATED WHAT IT WAS THAT MAKES THIS INVENTION VALUABLE.

7
8
9

HE SIMPLY WAVED HIS HANDS OVER IT AND HE SAID THIS WOULD
HAVE BEEN OBVIOUS.
THAT CANNOT BE CLEAR AND CONVINCING EVIDENCE.

HOW CAN IT

BE OBVIOUS IF THE THOUSANDS OF PEOPLE WORKING IN THIS FIELD

NEVER THOUGHT OF IT UNTIL THE APPLE INVENTORS DID IT?

AND IN THIS CASE, THE ADDITIONAL FACTORS RELEVANT TO

OBVIOUSNESS ARE AGAIN HELPFUL.

INTENTIONALLY COPIED THIS FEATURE, WITH THE USEFUL POP-UP MENU,

DIRECTLY FROM THE IPHONE -- THAT'S IN PLAINTIFF'S EXHIBIT

146 -- AND THEY COPIED IT IN 2010.

17
18
19
20
21

YOU SAW THAT SAMSUNG

WHY DO YOU HAVE TO COPY IT IN 2010 IF THE IDEA WAS OBVIOUS
ALL THOSE YEARS FROM THE SIDEKICK?
SO IN QUESTION NUMBER 8, WHEN YOU ARE ASKED IF SAMSUNG
PROVED THE PATENT INVALID, YOU SHOULD ANSWER NO.
ON THE ISSUE OF WILLFULNESS, WE KNOW THAT THE '647 PATENT

IS ONE OF THE PATENTS THAT WAS EXPRESSLY LISTED WHEN APPLE MET

WITH SAMSUNG IN AUGUST 2010 AND ASKED THEM TO STOP COPYING.

24
25

BUT WE KNOW THAT INSTEAD OF STOPPING, SAMSUNG SIMPLY -- WE
SAW THIS -- CUT AND PASTE THE APPLE INVENTOR'S ORIGINAL PAPER

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INTO ITS 2011/2012 USER EXPERIENCE PLANNING DOCUMENT.

ARE EXHIBITS 106 AND 107.

THESE

AND, FINALLY, WE KNOW THAT FROM THE TESTIMONY, AFTER APPLE

FILED THIS SUIT, GOOGLE CHANGED ITS OWN ANDROID CODE TO

ELIMINATE THE POP-UP MENU.

BUT WHEN THAT HAPPENED, SAMSUNG STOPPED USING THE GOOGLE

CODE AND IT WROTE ITS OWN CODE SO THAT ITS PHONES WOULD

CONTINUE TO COPY THE APPLE PRODUCTS DOWN TO THE SMALLEST

DETAIL.

10
11
12
13
14

THAT IS WILLFUL INFRINGEMENT.

THE FOURTH PATENT IS THE '959 UNIVERSAL SEARCH PATENT.
APPLE IS ASSERTING CLAIM 25.
DR. SNOEREN SHOWED HOW EACH OF THE CLAIM ELEMENTS IS FOUND
ON THE ACCUSED SAMSUNG DEVICES.
AGAIN, SAMSUNG'S NON-INFRINGEMENT DEFENSE IS RELATIVELY

NARROW.

IT DOES NOT DENY THAT ITS PHONES SEARCH BOTH LOCALLY AND ON THE

INTERNET.

SAMSUNG DOES NOT DENY THAT IT HAS UNIVERSAL SEARCH.

INSTEAD, DR. RINARD RAISED A VERY TECHNICAL ARGUMENT TO

TRY TO DEFEAT INFRINGEMENT.

HEURISTIC ON THE SAMSUNG DEVICES DOES NOT SEARCH INFORMATION ON

THE INTERNET BECAUSE THERE IS ALSO A SEPARATE HEURISTIC ON

GOOGLE SERVERS THAT ALSO OPERATES ON GOOGLE INTERNET SEARCHES.

THAT WAS HIS ARGUMENT.

24
25

DR. RINARD ARGUED THAT THE GOOGLE

BUT AS DR. SNOEREN SHOWED YOU ON REBUTTAL, THAT'S NOT
REALLY A DEFENSE BECAUSE THE SAMSUNG PHONES LOCATE BOTH CURRENT

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AND HISTORICAL INTERNET RESULTS.

USER'S INTERNET HISTORY, AND THAT IS SEARCHED AS PART OF THE

UNIVERSAL SEARCH FEATURE.

THE PHONE ITSELF STORES THE

IRONICALLY, DR. SNOEREN WAS ABLE TO USE THIS DRAWING FROM

THE GOOGLE ENGINEER, BJORN BRINGERT, TO PROVE THIS POINT.

DRAWING SHOWS CLEARLY THAT THE PHONE ITSELF SEARCHES FOR

INFORMATION ON THE INTERNET.

8
9
10
11
12
13

BECAUSE THE SAMSUNG DEVICES ARE COVERED BY THE CLAIM
LANGUAGE, WE ASK THAT YOU ANSWER YES TO QUESTION NUMBER 2
CONCERNING THE '959 PATENT.
BUT THERE'S ONE ADDITIONAL POINT HERE.

UNDER THE '959

PATENT, THE ACCUSED DEVICES INCLUDE BOTH PHONES AND TABLETS.
SO IN THIS CASE, ALL THREE COMPANIES ARE DIRECT

INFRINGERS.

AND STA SELLS PHONES.

THE

SEC SELLS PHONES AND TABLETS; SEA SELLS TABLETS;

QUESTIONS 5 AND 6 ON THE VERDICT FORM ABOUT CONTRIBUTORY

INDUCEMENT CONTINUE TO BE THE SAME ANALYSIS BECAUSE IT IS SEC

THAT INDUCES BOTH SEA AND STA TO INFRINGE AND IT IS SEC THAT

CONTRIBUTES TO THEIR INFRINGEMENT.

WITH REGARD TO VALIDITY, SAMSUNG PRESENTED TWO ARGUMENTS.

THE FIRST WAS BASED ON THE SOFTWARE PROGRAM CALLED FREEWAIS SF.

THE SECOND WAS BASED ON A COMBINATION OF TWO PATENTS

23
24
25

CALLED SMITH AND SHOHAM.
LET ME DEAL WITH FREEWAIS SF FIRST.

I'M SURE THAT THIS

WAS PRETTY COMPLICATED WHEN THE EVIDENCE WAS GOING IN.

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IN ORDER TO UNDERSTAND WHAT SAMSUNG WAS TRYING TO DO, YOU

HAVE TO LOOK AT THE INSTRUCTIONS.

INSTRUCTION NUMBER 32, WHICH DEALS WITH ANTICIPATION, YOU ARE

SUPPOSED TO CONSIDER ONLY EVIDENCE THAT MEETS THE LEGAL

DEFINITION OF PRIOR ART.

AS YOU WILL SEE FROM

AND IN THIS CASE, IN ORDER TO BE PRIOR ART, THE ART HAD TO

BE PUBLICLY KNOWN OR PUBLICLY USED BY OTHERS IN THE

UNITED STATES BEFORE THE APPLE INVENTORS CONCEIVED OF THE

INVENTION.

SO THE '959 PATENT WAS FILED, YOU'LL SEE ON THE FACE, IN

JANUARY OF 2000.

IT HAD TO HAVE BEEN KNOWN OR USED IN THE U.S. AT LEAST BEFORE

2000.

SO IN ORDER FOR FREEWAIS SF TO BE PRIOR ART,

SAMSUNG -- ONE OF SAMSUNG'S PROBLEMS IS THAT THERE IS NO

EVIDENCE THAT ANYONE HAD EVER USED THE FREEWAIS SF PROGRAM TO

SEARCH LOCALLY AND ON THE INTERNET IN THE UNITED STATES BEFORE

THE YEAR 2000.

I USE THREE CARD MONTE, I USE THE SHELL GAME.

SAMSUNG PUT IN A BUNCH OF EVIDENCE ABOUT A U.S. COMPANY

CALLED WAIS, W-A-I-S, THEY EVEN BROUGHT A WITNESS TO TALK ABOUT

THE WAIS COMPANY, AND THE WAIS COMPANY, AN AMERICAN COMPANY,

MADE SOFTWARE.

THAT IS NOT THE SOFTWARE THAT DR. RINARD RELIED UPON.

AMERICAN WAIS SOFTWARE IS NOT PART OF THEIR INVALIDITY.

SIMPLY IN THIS CASE TO CONFUSE THIS ISSUE OF WHAT WAS IN

UNITED STATES COURT REPORTERS

THE

IT'S

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AMERICA AND WHAT WASN'T IN AMERICA.
THE SOFTWARE THEY'RE RELYING ON IS CALLED FREEWAIS SF, AND

AS YOU WILL RECALL, SAMSUNG BROUGHT THE SOURCE CODE OVER FOR

FREEWAIS SF OVER FROM GERMANY LAST YEAR AND PAID DR. RINARD TO

SET UP HIS OWN COMPUTER SYSTEM USING OUR PATENT AS A ROADMAP.

WHAT THEY WANTED TO ARGUE TO YOU WAS THAT YOU COULD ASSUME

THAT BECAUSE DR. RINARD WAS ABLE TO DO IT LAST YEAR, SOMEONE

ELSE MUST HAVE DONE THIS MORE THAN 15 YEARS AGO.

BUT THERE IS NO EVIDENCE THAT ANYONE HAD DONE IT BEFORE

DR. RINARD USED OUR PATENT AS A ROADMAP.

CLEAR AND CONVINCING EVIDENCE.

12
13
14

THERE'S CERTAINLY NOT

SO SAMSUNG HAS LOTS OF PROBLEMS HERE.

FIRST OF ALL, THE

PATENT CLAIMS A COMPUTER READABLE MEDIUM.
SOURCE CODE, WHICH THEY BROUGHT OVER FROM GERMANY -- THIS

IS WHY YOU HEARD THIS TESTIMONY -- SOURCE CODE IS NOT COMPUTER

READABLE.

CANNOT BE PRIOR ART TO THIS PATENT.

PEOPLE READ IT.

MACHINES DON'T.

SO SOURCE CODE

YOU MAY REMEMBER THAT DR. RINARD TESTIFIED THAT ONE OF THE

THINGS HE HAD TO DO, HE USED THE WORD "COMPILE," HE HAD TO

COMPILE THE SOURCE CODE HE GOT FROM GERMANY.

STEP THAT TURNS SOURCE CODE, WHICH PEOPLE CAN READ, INTO

COMPUTER -- INTO A COMPUTER READABLE MEDIUM.

COMPILING IS THE

SAMSUNG KNEW THIS WAS A PROBLEM, SO IT BROUGHT DR. RINARD

BACK, HE WAS THEIR LAST WITNESS BEFORE YESTERDAY, SO LAST

FRIDAY, THEY BROUGHT HIM BACK TO TRY A LITTLE BIT MORE OF THIS

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THREE CARD MONTE.

THIS TIME, DR. RINARD TESTIFIED THAT WHAT HE -- HE WASN'T

RELYING ON THE SOFTWARE, THE SOURCE CODE, HE WAS RELYING ON THE

DISK, BECAUSE THE DISK IS A COMPUTER READABLE MEDIUM, AND SO HE

SAID "NOW I'M RELYING ON THE DISK AND NOT THE SOURCE CODE."

BUT THAT PUTS SAMSUNG BACK WHERE IT STARTED, BECAUSE THE

DISK THAT'S IN EVIDENCE GOT HERE ONLY LAST YEAR FROM GERMANY.

IT WAS NOT IN THE UNITED STATES BEFORE THE YEAR 2000.

CANNOT BE PRIOR ART.

THE DISK

SO TO PUT IT SIMPLY, WE DON'T THINK YOU CAN FIND CLEAR AND

CONVINCING EVIDENCE THAT FREEWAIS SF, THE GERMAN PROGRAM, WAS

EVER USED IN THE UNITED STATES FOR AN INTERNET SEARCH BEFORE

JANUARY OF 2000.

BUT THEN SAMSUNG HAS AN EVEN BIGGER PROBLEM.

WHEN IT GOT

THE SOURCE CODE LAST YEAR, EVEN THOUGH IT WAS USING OUR PATENT

AS A ROADMAP, IT FOUND OUT THAT INSTALLING FREEWAIS SF ON A

SINGLE COMPUTER DOES NOT MEET CLAIM 25.

OF HEURISTICS, YOU'LL REMEMBER YOU NEED TWO, AND THERE IS NO

INTERNET SEARCH -- YOU NEED THREE.

20
21
22
23
24
25

THERE IS ONLY ONE SET

SO DR. RINARD HAD TO SET IT UP ON TWO SEPARATE COMPUTERS,
ONE TO SEARCH LOCALLY AND THE OTHER TO SEARCH THE INTERNET.
BUT THEN THE CODE HE POINTED TO ON THE INTERNET HEURISTIC
WAS ON THE WRONG PLACE.

IT'S ON THE SECOND COMPUTER.

SO AFTER ALL THAT WORK THAT HE DID, WHAT DR. RINARD ENDED
UP PROVING WAS EXACTLY HOW COOL APPLE'S INVENTION IS.

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PERMITS UNIVERSAL SEARCH, LOCAL AND INTERNET, USING THE SAME

DEVICE.

PATENT.

NO ONE HAD EVER DONE THAT BEFORE APPLE CREATED ITS

DR. RINARD ALSO MENTIONED THOSE OTHER TWO PATENTS, SMITH

AND SHOHAM.

TO MATCH THE CLAIMS OF THE APPLE PATENT TO THE TECHNOLOGY OF

THOSE TWO PATENTS.

8
9

HE LITERALLY JUST MENTIONED THEM.

HE NEVER TRIED

WITH RESPECT TO UNIVERSAL SEARCH, THE OTHER FACTORS ARE
ALSO SIGNIFICANT.

YOU HEARD ABOUT THIS IN THE TESTIMONY.

THIS

IS THE PATENT THAT SAMSUNG SAYS IT TEMPORARILY TOOK OUT OF ITS

PHONES BECAUSE OF THIS CASE.

12
13
14
15
16

BUT WHAT IT -- BUT WHICH IT RUSHED TO PUT BACK IN AT THE
FIRST POSSIBLE MOMENT BECAUSE ITS CUSTOMERS DEMANDED IT.
THIS IS SIGNIFICANT EVIDENCE OF PUBLIC ACCLAIM, AND ALSO
OF SAMSUNG'S WILLFUL INFRINGEMENT.
AT THE END OF THE DAY, THIS IS ANOTHER CASE WHERE THE

PATENT AND TRADEMARK OFFICE PERFORMED A THOROUGH EXAMINATION

AND CONCLUDED THAT THIS PATENT WAS VALID.

TOLD YOU THAT THE ART HE TESTIFIED ABOUT WAS MORE RELEVANT THAN

WHAT THE EXAMINER CONSIDERED.

AND CONVINCING EVIDENCE THAT WOULD JUSTIFY OVERTURNING THE PTO

DECISION.

ARE WE HAVING FUN?

(LAUGHTER.)

MR. MCELHINNY:

DR. RINARD NEVER

THERE IS NO COMPELLING OR CLEAR

FINALLY, THERE IS THE '414 -- I'M

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SORRY TO MARCH YOU THROUGH ALL THIS, BUT IT'S THE ONLY WAY I

CAN THINK OF TO ACTUALLY HELP YOU DO IT, SO THIS IS THE WAY

WE'VE GOT TO DO IT.

WHAT?

I DON'T WANT YOU TO BE IN THERE AND SAY,

SO HERE WE GO.

FINALLY, THERE'S THE '414 BACKGROUND SYNC PATENT.

WE HAVE

ACCUSED TEN SAMSUNG DEVICES.

ONCE AGAIN, DR. SNOEREN, USING SAMSUNG SOURCE CODE,

DEMONSTRATED THAT EVERY ELEMENT OF THE CLAIM IS FOUND IN EVERY

10
11

ACCUSED DEVICE.
SAMSUNG BROUGHT IN DR. CHASE TO RAISE A TECHNICAL DEFENSE.

YOU MAY REMEMBER THAT DR. CHASE TESTIFIED THAT EVEN THOUGH THE

SAMSUNG PHONES HAVE SIX SYNC ADAPTERS, IN HIS OPINION, FOUR OF

THOSE SIX SYNC ADAPTERS WERE NOT KEY -- THE CLAIM LANGUAGE IS

CONFIGURED TO SYNCHRONIZE BECAUSE THEY DID NOT CARRY OUT EVERY

STEP OF THE SYNCHRONIZATION THEMSELVES, BUT SIMPLY STARTED THE

PROCESS.

18
19
20

SAME ARGUMENT WE HEARD BEFORE.

IT DOESN'T DO THE WHOLE

THING, IT ONLY STARTS THE PROCESS, THEREFORE, IT DOESN'T COUNT.
ON REBUTTAL, DR. SNOEREN CAME BACK AND SHOWED YOU THE

SOURCE CODE WHERE THE SYNC ADAPTERS PERFORMED A ROUTINE WHICH

WAS CALLED ON PERFORM SYNC.

AND THEN HE SHOWED YOU TWO GOOGLE DOCUMENTS THAT PROVED

THAT IT IS DR. SNOEREN WHO WAS CORRECT ON THIS ISSUE.

SHOWED YOU PLAINTIFF'S EXHIBIT 172, WHICH SAYS THAT THE SYNC

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ADAPTER HANDLES ALL OF THE SYNC PROTOCOL LOGIC.
AND WE SHOWED YOU PLAINTIFF'S EXHIBIT 102 -- THE FIRST ONE

WAS 172, THIS ONE IS 102 -- AND THIS DOCUMENT DESCRIBES HOW THE

SYNC ADAPTER IS A FEATURE THAT PROVIDES THE NECESSARY THREAD.

BASED ON THIS EVIDENCE AND DR. SNOEREN'S TESTIMONY, WE BELIEVE

WE HAVE PROVEN INFRINGEMENT.

AGAIN, IN THIS CASE, BECAUSE THE ACCUSED DEVICES ARE BOTH

TABLETS AND PHONES, IT IS ALL THREE SAMSUNG ENTITIES THAT

INFRINGE.

TO TRY TO PROVE THAT THIS PATENT IS INVALID, SAMSUNG

PRESENTED TWO PIECES OF PRIOR ART.

CALLED WINDOWS MOBILE.

MOBILE DOESN'T HAVE THE SYNC COMPONENTS THAT ARE SPECIFIC TO

THREE DIFFERENT DATA CLASSES AND THAT CREATE THEIR OWN THREADS.

15
16
17
18
19

THE FIRST WAS A PROGRAM

BUT AS DR. SNOEREN EXPLAINED, WINDOWS

INSTEAD, E-MAIL, CALENDAR, AND CONTACTS WERE ALL SYNCED ON
THE SAME THREAD, SLOWING THINGS DOWN FOR THE USER.
WINDOWS MOBILE IS JUST ANOTHER EXAMPLE OF WHAT THE WORLD
WAS LIKE BEFORE THE '414 PATENT WAS INVENTED.
THE SECOND PIECE OF ART WAS A COMPUTER PROGRAM CALLED

EVOLUTION.

WORKED ON SOMETHING CALLED A SUMMARY TABLE.

THE DATABASE THAT WAS REQUIRED BY THE CLAIM.

23
24
25

BUT AS DR. SNOEREN EXPLAINED, FOR E-MAIL, EVOLUTION
IT DID NOT HAVE

SO, AGAIN, WE THINK THAT SAMSUNG HAS FAILED TO PROVE
INVALIDITY.
TO CONFIRM THAT, AGAIN, YOU LOOK AT THE OTHER FACTORS.

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AND THEN HERE I THOUGHT THE -- SAMSUNG PUT THIS EVIDENCE IN,

AND I WONDERED, WHY WERE THEY DOING IT?

IT'S SO CLEAR TO ME.

YOU MAY REMEMBER THAT SAMSUNG SHOWED YOU THIS SLIDE.

WAS SLIDE 83.

THE 2006 GOOGLE DOCUMENT THAT DESCRIBED BACKGROUND SYNC AS A

FEATURE, IN 2006, THAT GOOGLE HOPED TO HAVE IN THE SOFTWARE

THAT THEY WERE PLANNING TO WRITE.

8
9
10
11
12
13
14
15

IT WAS A SAMSUNG EXHIBIT 327.

THIS

IT SHOWED HERE

THIS IS EXACTLY WHAT YOUR JURY INSTRUCTIONS CALLED
LONG-FELT NEED.

GOOGLE WANTED THE FEATURE IN 2006, BUT THEY

DIDN'T KNOW HOW TO DO IT.
IN FACT, THE EVIDENCE IS THAT THEY WEREN'T ABLE TO GET IT
INTO THEIR OWN SOFTWARE UNTIL TWO YEARS LATER IN 2008.
HOW COULD IT TAKE THE PEOPLE AT GOOGLE TWO YEARS IF THE
INVENTION WAS OBVIOUS?
SAMSUNG'S INFRINGEMENT WAS WILLFUL BECAUSE IT HAD KNOWN OF

THE PATENT, BUT IT MADE NO EFFORT WHATSOEVER TO REMOVE THE

FEATURES FROM THE PHONES.

SO THAT CONCLUDES WHAT THE LAW REFERS TO AS THE LIABILITY

ISSUES.

THROUGH 8 IN THE VERDICT FORM.

OR NOT ANY OF THE SAMSUNG COMPANIES IS LIABLE FOR PATENT

INFRINGEMENT.

BY THIS TIME, YOU WILL HAVE FINISHED QUESTIONS 1
YOU WILL HAVE DECIDED WHETHER

AND IF YOU FIND ANY OF THEM LIABLE, IF YOU FIND THAT AN

APPLE PATENT IS VALID AND INFRINGED, YOU WILL MOVE ON TO THE

ISSUE OF DAMAGES.

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BUT BEFORE I GO THERE, I WANT TO MENTION TWO THINGS THAT

YOU WILL NOT FIND IN THE JURY INSTRUCTIONS.

THE INSTRUCTIONS BECAUSE THEY ARE SIMPLY EFFORTS TO MISDIRECT.

THEY ARE NOT IN

THE FIRST IS THE QUESTION OF WHETHER OR NOT APPLE USES ANY

OF THE PARTICULAR CLAIMS OF THE PATENT, OR THE PATENTS, IN ITS

PRODUCTS.

IT'S NOT RELEVANT TO INFRINGEMENT OR VALIDITY.

8
9

YOU WON'T FIND THAT ANYWHERE IN THE VERDICT FORM.

THE ISSUE IN THIS CASE IS SAMSUNG'S CONDUCT, AND IT IS
SAMSUNG THAT NEEDS TO CONVINCE YOU THAT THE INVENTIONS IT HAS

TAKEN, THE INVENTIONS IT HAS COPIED, THE INVENTIONS IT HAS PUT

IN TENS OF MILLIONS OF INFRINGING PRODUCTS, THE INVENTIONS IT

HAS REFUSED TO STOP USING, HAVE NO VALUE.

THE SECOND ISSUE IS THE GOOGLE ISSUE.

AGAIN, IN HIS

OPENING, LAWYER -- SAMSUNG'S LAWYER SAID THIS CASE WOULD BE

ABOUT APPLE -- REMEMBER, HE USED THE PHRASE, EVERYONE WENT,

(GASP) APPLE'S WAR ON GOOGLE.

BUT AS YOU HAVE NOW SEEN, THERE IS NO SUCH WAR ON APPLE'S

PART.

I BET A DOLLAR THAT YOU'LL SEE IT AGAIN THIS MORNING.

YOU SAW AN E-MAIL THAT USED THOSE WORDS, JUST A SNIPPET.

BUT THE EXHIBIT IS DX 489.

WHEN YOU LOOK AT THE EXHIBIT,

YOU WILL SEE THAT IT TALKS ABOUT A COMPETITIVE WAR, MAKING

BETTER PRODUCTS, MAKING THE RETAIL EXPERIENCE BETTER, GETTING

MORE SALES.

SO MUCH FOR THE CONCEPT OF A HOLY WAR.

BUT WHAT WE DO NOW KNOW IS THAT SAMSUNG AND GOOGLE HAVE

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WORKED OUT THEIR ISSUES CONCERNING PATENT INFRINGEMENT AMONGST

THEMSELVES.

GOOGLE.

BUT ONLY THOSE TWO.

SUGGESTED.

SAMSUNG'S LAWYERS ARE PAID BY BOTH SAMSUNG AND

GOOGLE IS HELPING TO DEFEND THE '959 AND '414 PATENTS,
NOT ALL FIVE AS SAMSUNG'S COUNSEL MAY HAVE

MR. PRICE:

I OBJECT.

THE COURT:

OVERRULED.

MR. MCELHINNY:

ON --

NOT BE AN ISSUE FOR YOU.

YOUR INSTRUCTIONS.

THAT'S IMPROPER ARGUMENT BASED

PLEASE SIT DOWN.

AT THE END OF THE DAY, GOOGLE SHOULD
YOU WILL NOT FIND IT ANY PLACE IN

SAMSUNG MAKES, USES, AND SELLS.

THERE WAS NO CLAIM THAT

GOOGLE INVENTED ANY OF THESE FEATURES BEFORE APPLE DID.

SAMSUNG EXPERT CAME IN HERE AND SAID "I'M RELYING ON GOOGLE'S

WORK AS PRIOR ART."

SO GOOGLE IS IRRELEVANT TO VALIDITY.

YOU SHOULD REACH YOUR JUDGMENT BASED ON THE EVIDENCE.

GOOGLE'S AND SAMSUNG'S SECRET INDEMNITY AGREEMENTS WILL TAKE

CARE OF THEMSELVES.

IF THIS GOOGLE ISSUE HAS ANY RELEVANCE AT ALL, IT IS

RELEVANT TO CREDIBILITY.

BEGINNING AND POINTED THE FINGER AT GOOGLE.

THAT GOOGLE IS HELPING TO PAY HIS FEES.

SAMSUNG'S LAWYER GOT UP AT THE
HE DIDN'T MENTION

WHEN SAMSUNG PRESENTED GOOGLE WITNESSES AS DISINTERESTED

THIRD PARTIES, THEY DID NOT MENTION THAT GOOGLE HAD AGREED IN A

CONTRACT TO HELP DEFEND THIS CASE.

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WE HAD TO BRING THAT AGREEMENT TO YOUR ATTENTION.

BUT THEN, AS YOU SAW, WHEN WE ASKED SAMSUNG, IN

SEPTEMBER 2012, IF THEY HAD SOUGHT INDEMNITY, THEY LIED TO US,

AND THEY LIED TO US UNDER OATH.

IF IT STRIKES YOU THAT PARTIES THAT LIE UNDER OATH CANNOT

BE TRUSTED, YOU WILL FIND THAT COMMON SENSE THOUGHT EXPRESSLY

SPELLED OUT FOR YOU IN JURY INSTRUCTION NUMBER 12.

8
9
10

SO NOW I'D LIKE TO TURN TO DAMAGES.

THIS IS THE HEART OF

THIS CASE.
MAKE NO MISTAKE ABOUT IT.

THERE ARE TWO WAYS THAT SAMSUNG

CAN WIN THIS CASE.

THAT THEY DO NOT INFRINGE OR IF YOU DECIDE THAT OUR PATENTS ARE

NOT VALID.

THAT CASE THEY DESERVE TO WIN.

OBVIOUSLY THEY WIN THE CASE IF YOU DECIDE

IF THAT'S WHAT YOU DECIDE, SAMSUNG WILL WIN, AND IN

BUT SAMSUNG WINS EVEN IF YOU DO FIND INFRINGEMENT IF YOU

AWARD DAMAGES AT A LEVEL THAT ENDS UP REWARDING SAMSUNG'S

BUSINESS STRATEGY.

IF SAMSUNG CAN COPY APPLE'S PRODUCTS, SELL INFRINGING

PRODUCTS, AND INCREASE ITS MARKET SHARE AND END UP PAYING ONLY

A SMALL FINE, ITS STRATEGY WILL HAVE BEEN SUCCESSFUL AND,

WHATEVER YOU INTENDED, SAMSUNG WILL END UP AS A BIG WINNER.

THIS IS EXACTLY SAMSUNG'S STRATEGY.

THAT IS WHY ITS

WITNESSES CALL SOFTWARE FEATURES TRIVIAL, EVEN THOUGH ITS

INTERNAL DOCUMENTS CALL THEM CRITICAL.

IT'S WHY SAMSUNG'S WITNESSES HAVE TESTIFIED THAT THE

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PATENTS ARE EASY TO DESIGN AROUND, EVEN THOUGH SAMSUNG'S

BEHAVIOR SHOWS THAT THEY RESISTED, AND IN MANY CASES, HAVE

REFUSED TO CHANGE TO SO-CALLED NON-INFRINGING ALTERNATIVES.

AND THAT IS WHY SAMSUNG'S POSITION IS THAT APPLE HAS LOST

NO LOST PROFITS AND THAT, IN A NEGOTIATION, APPLE WOULD LICENSE

ITS PATENTS FOR PENNIES ON THE DOLLAR.

7
8
9

EVERY ONE OF THOSE ARGUMENTS IS AN ARGUMENT AIMED AT
CONVINCING YOU TO LOWER THEIR DAMAGES.
SO LET'S SEE WHAT THE COURT'S INSTRUCTIONS SAY ABOUT

DAMAGES.

DAMAGES, I TOLD YOU THIS AT THE BEGINNING, LOST PROFITS AND A

REASONABLE ROYALTY.

YOU WILL FIND THAT THERE ARE TWO POSSIBLE MEASURES OF

AT A MINIMUM, IF YOU FIND INFRINGEMENT, WE ARE ENTITLED TO

A REASONABLE ROYALTY.

PROVED THEM.

WE RECOVER LOST PROFITS ONLY IF WE HAVE

SO LET'S LOOK FIRST AT LOST PROFITS.

THE TEST IS EASILY

STATED:

THERE WAS A REASONABLE PROBABILITY THAT APPLE WOULD HAVE MADE

MORE SALES IF THE INFRINGING PRODUCTS HAD NOT BEEN ON THE

MARKET.

APPLE IS ENTITLED TO LOST PROFITS IF WE PROVE THAT

LET ME STATE THAT AGAIN.

IF YOU FIND THAT ANY SAMSUNG

PHONE INFRINGES, YOU ASK, WHAT WOULD HAVE HAPPENED IN THE

MARKETPLACE IF SAMSUNG HAD TO TAKE THAT PHONE OFF THE

MARKETPLACE ENTIRELY SO THAT THE FEATURES COULD BE REDESIGNED?

IN THAT TIME THAT IT WAS OFF THE MARKET, WOULD APPLE HAVE MADE

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SOME OF THOSE SALES?
IN INSTRUCTION NUMBER 37, THE COURT WILL GIVE YOU FOUR
FACTORS THAT APPLE MUST PROVE.

FIRST, THAT THERE WAS DEMAND FOR THE PATENTED PRODUCT.

TWO, THAT THERE WERE NO ACCEPTABLE NON-INFRINGING

ALTERNATIVES AVAILABLE, OR EVEN IF THERE WERE, THE NUMBER OF

SALES THAT WOULD BE MADE DESPITE THE NON-INFRINGING

ALTERNATIVES.

9
10
11
12
13
14

THREE, THAT APPLE HAD THE CAPACITY TO MANUFACTURE AND
MARKET THE ADDITIONAL PHONES.
AND NOW YOU'RE SEEING WHY SOME OF THESE WITNESSES CAME TO
TESTIFY.
AND, FOUR, THE AMOUNT OF PROFIT THAT APPLE WOULD HAVE MADE
IN ITS LOST SALES.

LET'S LOOK AT THESE FACTORS A LITTLE MORE.

WAS THERE DEMAND IN THE MARKETPLACE?

WE KNOW THERE WAS.

WE KNOW THERE WAS DEMAND FOR THE APPLE PRODUCTS THAT PRACTICED

THE SLIDE TO UNLOCK AND DATA DETECTOR PATENTS BECAUSE YOU HAVE

SEEN THE SALES NUMBERS.

YOU ALSO SAW, I'M NOT GOING TO WASTE YOUR TIME WITH IT

RIGHT NOW, BUT THEY'RE IN EVIDENCE, THE DOZENS AND DOZENS OF

ARTICLES PRAISING APPLE'S PRODUCTS.

WE ALSO KNOW THAT THERE WAS DEMAND FOR THE SAMSUNG

PRODUCTS THAT INFRINGED THE PATENTS BECAUSE WE ALSO SAW THE

SAMSUNG SALES FIGURES AND HOW THEY SKYROCKETED WHEN SAMSUNG

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STARTED TO SELL PHONES THAT INCORPORATED APPLE'S INFRINGING --

APPLE'S PATENTED FEATURES.

FINALLY, WE SAW FROM SAMSUNG'S INTERNAL DOCUMENT, WHICH IS

EXHIBIT 156, THE AMERICAN PHONE MARKET WAS A TWO HORSE RACE.

IF A SALE DIDN'T GO TO SAMSUNG, IT WAS MOST LIKELY GOING TO GO

TO APPLE.

THERE WAS CLEARLY DEMAND FOR THE PRODUCTS.

THE SECOND FACTOR INVOLVES WHAT THE LAW CALLS ACCEPTABLE

NON-INFRINGING ALTERNATIVES.

WERE THERE OTHER WAYS TO

ACCOMPLISH THE SAME RESULTS THAT WOULD HAVE BEEN ACCEPTABLE TO

A CONSUMER, BUT THAT DID NOT INFRINGE APPLE'S PATENTS?

THE INSTRUCTION, NUMBER 37, SAYS WE CAN GET LOST PROFITS

EITHER IF WE PROVE THERE WERE NO ACCEPTABLE NON-INFRINGING

ALTERNATIVES, OR EVEN IF THERE WERE ALTERNATIVES AVAILABLE,

THEN WE COULD HAVE MADE ADDITIONAL SALES IN THE CASE.

DR. VELLTURO ADDRESSED BOTH SITUATIONS.

HE FOUND LOST

PROFITS WHERE THERE WERE NO NON-INFRINGING ALTERNATIVES

AVAILABLE.

PROFITS.

DURING THE TIME SAMSUNG WAS SEARCHING FOR A NON-INFRINGING

ALTERNATIVE THAT WAS ACCEPTABLE TO USERS AND CARRIERS.

THIS IS WHAT HE CALLED THE OFF THE MARKET LOST

THE PRODUCT ITSELF WOULD HAVE BEEN OFF THE MARKET

AND THEN DR. VELLTURO FOUND A SMALLER NUMBER OF LOST

PROFITS AFTER SOME HYPOTHETICAL REDESIGN PRODUCT CAME BACK ON

THE MARKET BECAUSE THE HYPOTHETICAL ALTERNATIVES WOULD NOT HAVE

BEEN EQUALLY ATTRACTIVE TO USERS AND CARRIERS.

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THE FIRST QUESTION IS, HOW LONG WOULD THE SAMSUNG PHONES
BE OFF THE MARKET WHILE THEY WERE BEING REDESIGNED?
WE ARE ONLY SEEKING OFF THE MARKET LOST PROFITS FOR THREE

PATENTS, THE '647, THE '721, AND THE '172 AND, BASED ON THE

TESTIMONY OF OUR EXPERT, DR. VELLTURO, ONLY FOR A FOUR MONTH

PERIOD.

7
8
9
10
11

WE THINK THAT'S PRETTY CONSERVATIVE.

FOR THE QUICK LINKS PATENT, WE KNOW THAT SAMSUNG HAS NEVER
BEEN ABLE TO DESIGN AROUND IT.

THEY STILL USE IT TO THIS DAY.

USING A HYPOTHETICAL FOUR MONTH PERIOD IS EXTREMELY
FAVORABLE TO THEM.
FOR THE SLIDE TO UNLOCK AND WORD CORRECTION PATENTS, BASED

ON DR. COCKBURN'S TESTIMONY, IT WOULD TAKE MONTHS TO DESIGN A

NEW INTERFACE, TO TEST IT, AND TO GET CARRIER APPROVAL.

SAMSUNG HAS TOLD YOU THAT IT WOULD ONLY TAKE TWO HOURS,

BUT THEY PRODUCED NO DOCUMENTS THAT SHOW THE NORMAL DESIGN --

HOW LONG THE NORMAL DESIGN PROCESS TAKES.

THERE REALLY IS NO EVIDENCE IN THE RECORD THAT SUPPORTS

ANY PERIOD SHORTER THAN FOUR MONTHS.

THE BEGINNING WOULDA, SHOULDA, COULDA.

20
21
22

IT'S ALL WHAT I CALLED AT

DURING THE OFF THE MARKET PERIOD, SAMSUNG SOLD MILLIONS OF
INFRINGING PHONES.
DR. VELLTURO CALCULATED THAT ONLY A FRACTION OF THOSE

SALES WOULD HAVE GONE TO APPLE IF THE SAMSUNG PHONES HAD BEEN

OFF THE MARKET -- I CAN'T SAY THE NUMBER OUT LOUD, BUT YOU CAN

SEE THE NUMBER OF UNITS ON THE SCREEN IN RED -- AND THAT APPLE

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LOST THOSE PROFITS.

THAT RESULTS IN OFF THE MARKET LOST

PROFITS OF ABOUT $507 MILLION.

THE SECOND ELEMENT OF THE NON-INFRINGING ALTERNATIVE

FACTOR IS WHETHER OR NOT CONSUMERS WOULD HAVE BEEN DISAPPOINTED

WITH THE HYPOTHETICAL NON-INFRINGING DESIGN THAT WOULD HAVE

REPLACED THE PATENTED FEATURES.

AGAIN, ALL THE EVIDENCE TELLS US THAT THEY WOULD BE.

FIRST, WE HAD THE REAL WORLD EVIDENCE.

WE KNOW THAT

EVENTUALLY SAMSUNG REMOVED THE SLIDE TO UNLOCK AND AUTO CORRECT

FEATURES, SO WE GAVE THEM FULL CREDIT FOR THAT AND WE ARE NOT

SEEKING DIMINISHED DEMAND LOST PROFITS FOR THOSE TWO PATENTS.

BUT FOR THE REMAINING THREE, WE KNOW THAT IN THE REAL

WORLD, SAMSUNG HAS NEVER BEEN ABLE TO DESIGN AROUND QUICK LINKS

OR BACKGROUND SYNC.

WORKED FOR THEM IN THE REAL WORLD.

THEY HAVE NEVER FOUND AN ALTERNATIVE THAT

AND WE KNOW THAT WITH UNIVERSAL SEARCH, WHEN THEY TOOK IT

OUT AS PART OF THIS CASE, THEY PUT IT BACK IN AT THEIR FIRST

OPPORTUNITY BECAUSE THEIR USERS DEMANDED IT.

SO IN THE REAL WORLD -- THE DAMAGES WORLD IS MUCH EASIER

FOR THEM BECAUSE IT TALKS ABOUT THIS HYPOTHETICAL WORLD.

IN THE REAL WORLD, THE WORLD IN WHICH SAMSUNG ACTUALLY MADE

DECISIONS THAT WE CAN SEE, SAMSUNG HAS NEVER FOUND A

SATISFACTORY ALTERNATIVE.

24
25

BUT

IT JUST KEEPS ON INFRINGING.

GIVING THEM CREDIT FOR SOME HYPOTHETICAL DESIGN AROUND
THAT NEVER HAPPENED IS EXTREMELY CONSERVATIVE.

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AND THEN WE CONFIRMED THAT CONSUMERS VALUE THESE FEATURES

OVER THE ALTERNATIVES BY CALLING ON PROFESSOR JOHN HAUSER TO DO

A CONJOINT SURVEY TO MEASURE EXACTLY HOW REAL CONSUMERS VALUE

THESE FEATURES.

ONE OF THIS COUNTRY'S ABSOLUTE EXPERTS IN THE FIELD, CONFIRMED

THAT REAL LIFE CONSUMERS FIND THESE FEATURES VALUABLE AND

PREFER THEM TO ALTERNATIVES THAT DO NOT INFRINGE.

AND THAT SURVEY, DESIGNED AND CARRIED OUT BY

USING THE SAME METHODS THAT HE HAS PERSONALLY USED DOZENS

OF TIMES AND THAT AMERICAN INDUSTRY HAS USED THOUSANDS OF TIMES

A YEAR FOR THE LAST FOUR DECADES, DR. HAUSER CONFIRMED WHAT IS

OBVIOUS, THAT THERE IS DEMAND FOR THE PATENTED FEATURES, THAT

CARRIERS AND CONSUMERS WANT THESE FEATURES IN THE PHONE, THAT

THEY HAVE AN IMPACT ON PURCHASING DECISIONS.

WHAT DID DR. HAUSER DO?

HE CONDUCTED A SMARTPHONE SURVEY

OF 507 PARTICIPANTS AND A TABLET SURVEY WITH 459 PARTICIPANTS.

EACH OF THESE PARTICIPANTS HAD A STRONG INCENTIVE TO

PARTICIPATE CONSCIENTIOUSLY IN THE SURVEY, BECAUSE YOU'LL

REMEMBER THEY GOT THIS POTENTIAL PRIZE SMARTPHONE OR TABLET

THAT INCLUDED THE FEATURES AND PRICE PREFERENCES THAT THEY HAD

INDICATED WITH THEIR SURVEY CHOICES.

THE SURVEY PARTICIPANTS WERE THEN WALKED THROUGH A SERIES

OF WRITTEN AND ANIMATED DESCRIPTIONS OF THE PATENTED FEATURES

AND ANOTHER 21 DISTRACTION FEATURES, WHICH DESCRIPTIONS THEY

COULD REPLAY AT ANY TIME IN THE SURVEY PROCESS, INCLUDING WHEN

THEY MADE THEIR SURVEY CHOICES.

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FROM THE 500 PARTICIPANTS IN THE SMARTPHONE SURVEY -- AND

LET'S BE CLEAR, THESE ARE THE PEOPLE WHO ACTUALLY DID THE

SURVEY, THEY'RE NOT THE PEOPLE IN DR. REIBSTEIN'S VIDEOS, THESE

ARE THE PEOPLE DR. HAUSER SURVEYED -- DR. HAUSER WAS ABLE TO

GATHER A RICH DATA SET REFLECTING OVER 16,000 CHOICES OR DATA

POINTS WHICH HE ANALYZED USING THE INDUSTRY GOLD STANDARD, THE

SAWTOOTH SOFTWARE, AND WHICH ESTABLISHED DEMAND FOR THE

PATENTED FEATURES IN THIS CASE.

9
10
11

DR. HAUSER VALIDATED THE RESULTS OF THIS ANALYSIS WITH
STANDARD TESTS THAT ESTABLISHED THEIR STATISTICAL RELIABILITY.
LET'S BE CLEAR.

SAMSUNG ABSOLUTELY HATES THE RESULTS OF

PROFESSOR HAUSER'S SURVEY BECAUSE IT SHOWS SO DRAMATICALLY THE

PATENTED FEATURES ARE VALUABLE.

14
15
16

THE SURVEY UNDERMINES EVERY ARGUMENT SAMSUNG NEEDS TO MAKE
IN THIS COURTROOM, SO SAMSUNG HAS DECLARED WAR ON IT.
EARLIER IN THIS CASE, AS YOU SAW, A SAMSUNG EXPERT NAMED

WAGNER TOLD THIS COURT THAT A CONJOINT SURVEY WAS EXACTLY THE

WAY TO MEASURE THE VALUE OF FEATURES AT ISSUE IN THIS CASE.

YOU DIDN'T SEE WAGNER IN THIS COURTROOM.

HE'S HISTORY.

AND YOU CERTAINLY NEVER SAW A SURVEY DONE BY SAMSUNG.

WHY WOULD THEY RUN A SURVEY?

THEY KNOW THAT THE FEATURES

ARE VALUABLE, AND THEY KNOW THAT ANY WELL DESIGNED SURVEY WOULD

SHOW THAT RESULT.

24
25

INSTEAD, YOU SAW A WHOLE FLOCK OF NEW EXPERTS TO NITPICK
HAUSER'S QUESTIONNAIRE, TO NITPICK THE DESIGN OF THE CHOICE

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SCREENS, AND TO OFFER THINGS LIKE EYE TRACKING TESTS AND

SENTENCE COUNTING TESTS WHICH THEY ADMITTED HAVE NEVER, EVER

PREVIOUSLY BEEN USED IN ANY SERIOUS DISCUSSION OF THE VALUE OF

PATENTS.

AND AS THEY ADMITTED, NOT ONE OF THESE PEOPLE HAS THE

EXPERTISE IN CONJOINT STUDIES TO MATCH DR. HAUSER.

THEY COULDN'T.

8
9
10
11
12
13

FRANKLY,

HE IS THE BEST.

AND HIS STUDY CONFIRMED WHAT SAMSUNG'S ACTIONS AND YOUR
COMMON SENSE TELL US IS TRUE.

THESE FEATURES HAVE VALUE.

THEY

HELP TO SELL PHONES.
IF THEY DIDN'T, SAMSUNG WOULD NEVER HAVE COPIED THEM AND
IT WOULD HAVE DROPPED THEM YEARS AGO.

BUT THAT NEVER HAPPENED.

THE SAMSUNG DECISION MAKERS, THE PEOPLE WHO DID NOT SHOW

UP HERE TO ANSWER OUR QUESTIONS, HAVE DECIDED THAT SAMSUNG

NEEDS THESE FEATURES TO CONTINUE TO BE SUCCESSFUL IN THE

MARKETPLACE.

COULD, AND THEIR ACTIONS CONFIRM PROFESSOR HAUSER'S RESULTS.

THAT IS THE REVEALED PREFERENCES THAT DR. VELLTURO TOLD US

ABOUT.

20
21
22

THEIR ACTIONS SPEAK LOUDER THAN ANY SURVEY EVER

SO FOR THE SECOND FACTOR, SAMSUNG PRODUCTS WOULD HAVE BEEN
OFF THE MARKET FOR AT LEAST FOUR MONTHS.
AND THEN IN THE HYPOTHETICAL WORLD WHERE THEY STOPPED

USING APPLE'S PATENTED FEATURES, THAT CHANGE WOULD HAVE

CONTINUED TO RESULT IN ADDITIONAL SALES OF APPLE PRODUCTS.

AND AS YOU SAW, DR. VELLTURO VALUED THOSE DIMINISHED

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DEMAND LOST PROFITS AT JUST UNDER $560 MILLION.

FORTUNATELY, THE NEXT TWO FACTORS ARE EASY.

APPLE'S VICE-PRESIDENT OF SUPPLY AND DEMAND MANAGEMENT,

TESTIFIED THAT APPLE HAD THE CAPACITY TO MAKE THE ADDITIONAL

PHONES AND TABLETS.

TESTIMONY.

7
8
9
10
11

RORY SEXTON,

NO SAMSUNG WITNESS DISPUTED THAT

AND SAMSUNG DID NOT DISPUTE THE PROFIT THAT APPLE MADE
FROM THE IPHONE SALES DURING THE DAMAGE PERIOD.
THE PROOF OF EACH OF THESE FOUR FACTORS IS STRONG AND IT
IS DOCUMENTED.
SAMSUNG, ON THE OTHER HAND, HAS STAKED OUT THE POSITION

THAT IT COULD SIMPLY HAVE DROPPED ALL THESE PATENTED FEATURES,

EVEN THOUGH IT NEVER HAS IN THE REAL WORLD, THAT IT COULD HAVE

REDESIGNED ITS PHONES IN LESS THAN A DAY, EVEN THOUGH IT NEVER

HAS IN THE REAL WORLD, AND THAT THE FEATURES MAKE NO DIFFERENCE

TO CONSUMERS.

IN MY OPENING.

WOULDA, SHOULDA, COULDA, EXACTLY AS I PREDICTED

AND EXACTLY AS I TOLD YOU SHE WOULD, SAMSUNG'S EXPERT TOLD

YOU THAT OUT OF THESE 37 MILLION INFRINGING SALES, APPLE DID

NOT LOSE ONE SALE.

NOT ONE.

ZERO.

IRONICALLY, AFTER ALL OF THIS DETAIL, YOU'LL FIND

INSTRUCTION NUMBER 39, WHICH IS ENTITLED MARKET SHARE.

INSTRUCTION SAYS SIMPLY THAT YOU CAN CHOOSE TO AWARD APPLE ITS

LOST PROFITS BY AWARDING IT ITS MARKET SHARE OF THE INFRINGING

DEVICES.

UNITED STATES COURT REPORTERS

THIS

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IN SOME WAYS, MARKET SHARE IS THE EASIEST BECAUSE IT TELLS

US EXACTLY WHAT HAPPENED IN THE REAL WORLD.

BRAND, IT ACCOUNTS FOR ADVERTISING, IT ACCOUNTS FOR SCREEN

SIZE, ALL OF THOSE FACTORS SAMSUNG WANTED TO TALK ABOUT.

5
6
7

IT ACCOUNTS FOR

AS YOU MAY RECALL, APPLE'S MARKET SHARE DURING THIS TIME
PERIOD WAS 40 PERCENT.
BUT YOU WILL RECALL THAT DR. VELLTURO HAS BEEN

CONSERVATIVE HERE AS WELL.

HE MADE A NUMBER OF DOWNWARD

ADJUSTMENTS BECAUSE OF CARRIERS WHO WERE CARRYING THE PHONES,

AND INSTEAD OF 40 PERCENT, APPLE IS SEEKING JUST UNDER 10

PERCENT OF SAMSUNG'S INFRINGING SALES.

EITHER WAY YOU MEASURE IT, APPLE'S LOST PROFITS DAMAGES

ARE JUST OVER $1 MILLION FOR 9.5 PERCENT OF SAMSUNG'S

INFRINGING SALES.

AGAIN, THIS SLIDE COMES DIRECTLY FROM EXHIBIT 222A.

THE SECOND TYPE OF DAMAGES IS WHAT THE LAW CALLS A

REASONABLE ROYALTY.

SALE FOR WHICH YOU AWARD US LOST PROFITS, AND DR. VELLTURO WAS

CAREFUL NOT TO DOUBLE COUNT.

OBVIOUSLY WE DO NOT GET A ROYALTY FOR ANY

BUT AS THE JUDGE HAS TOLD YOU IN INSTRUCTION NUMBER 40, A

REASONABLE ROYALTY PAYMENT IS THE MINIMUM AMOUNT OF DAMAGES

APPLE SHOULD BE AWARDED FOR EVERY ACT OF INFRINGEMENT.

IN INSTRUCTION NUMBER 41, JUDGE KOH LISTS 15 FACTORS THAT

YOU SHOULD CONSIDER IN DETERMINING A REASONABLE ROYALTY.

SUBMIT TO YOU THAT EVERY ONE OF THESE FACTORS ARGUES IN FAVOR

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OF A SUBSTANTIAL ROYALTY.

LET'S LOOK AT FACTOR 8, THE PROFITABILITY OF THE PRODUCT

MADE UNDER THE PATENTS, AND ITS COMMERCIAL SUCCESS AND CURRENT

POPULARITY.

THINK BACK TO THE CHARTS WE HAVE SHOWN YOU CONCERNING THE

COMMERCIAL SUCCESS OF THE IPHONE AND THEN THE SUCCESS OF THE

INFRINGING SAMSUNG PHONES.

HAS BEEN PHENOMENALLY SUCCESSFUL.

THE IPHONE WAS A REVOLUTION.

AND THE INFRINGING SAMSUNG PHONES HAVE DRIVEN VIRTUALLY

EVERY OTHER ANDROID PHONE MAKER OUT OF THE MARKETPLACE, MAKING

THE U.S. MARKET A TWO HORSE RACE.

IN SHORT, THE IPHONE WAS A REVOLUTIONARY PRODUCT IN A HOT

MARKETPLACE AND BOTH COMPANIES ARE MAKING MONEY.

INFRINGING PRODUCTS HAVE BEEN SO SUCCESSFUL THAT SAMSUNG HAS

BEEN ABLE TO SUBSTANTIALLY RAISE ITS PRICES.

MUCH, ON YOUR SCREEN, WHICH COMPARES SAMSUNG'S AVERAGE PRICE IN

2011 TO ITS AVERAGE PRICE IN 2012.

SUBSTANTIAL ROYALTY.

19
20

SAMSUNG'S

YOU CAN SEE HOW

FACTOR 8 CALLS FOR A

SO LET'S LOOK AT FACTOR 9, THE ADVANTAGE OF THE PATENTED
PROPERTY OVER THE OLDER DEVICES.

THIS IS, OF COURSE, ANOTHER PLACE WHERE SAMSUNG'S

DOCUMENTS AND ITS CONDUCT TELL A STORY THAT IS ENTIRELY

DIFFERENT THAN WHAT SAMSUNG HAS SAID IN THIS COURTROOM.

24
25

NOTHING SPEAKS MORE CLEARLY TO THIS FACTOR THAN THE CRISIS
OF DESIGN E-MAIL.

IN 2010, SAMSUNG WAS STUCK WITH OLD

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TECHNOLOGY.

IPHONE WAS THE DIFFERENCE BETWEEN HEAVEN AND EARTH.

THE DIFFERENCE BETWEEN THAT TECHNOLOGY AND THE

THE HIGHEST EXECUTIVES AT SAMSUNG HAVE SPELLED OUT FOR US

IN BLACK AND WHITE EXACTLY WHAT SAMSUNG WOULD HAVE BEEN

THINKING AT THE TIME OF THIS HYPOTHETICAL NEGOTIATION.

IN HIS OPENING, SAMSUNG'S LAWYER TOLD YOU THAT PEOPLE BUY

SAMSUNG PHONES FOR THEIR HARDWARE, NOT FOR THEIR SOFTWARE.

STOOD RIGHT HERE AND HE TOLD YOU THAT.

BUT THEN YOU SAW WHAT SAMSUNG SAID IN ITS INTERNAL

DOCUMENTS -- EXHIBIT 147 -- WHAT THE SAMSUNG DECISION MAKERS

WHO DIDN'T COME HERE TO TESTIFY UNDER OATH WERE ACTUALLY

THINKING, AND THE TRUTH IS ENTIRELY DIFFERENT.

SOFTWARE IS THE NEW VALUE DRIVER.

THEY SAID

EVEN MR. SOHN EVENTUALLY ADMITTED ON CROSS-EXAMINATION

THAT SOFTWARE VALUE HAS BECOME MORE IMPORTANT IN SMARTPHONES.

FINALLY, THE FIRST GOOGLE WITNESS, MR. LOCKHEIMER,

TESTIFIED THAT BACKGROUND SYNC WAS INCREDIBLY USEFUL, THAT WAS

HIS WORDS, INCREDIBLY USEFUL.

19
20

AFTER THAT TESTIMONY, SAMSUNG STOPPED ASKING THE GOOGLE
WITNESSES ABOUT THE VALUE OF SOFTWARE FEATURES.

FACTOR 9 ARGUES IN FAVOR OF A SUBSTANTIAL ROYALTY.

LET'S LOOK AT FACTOR 11, THE EXTENT TO WHICH THE INFRINGER

HAS MADE USE OF THE INVENTION AND ANY EVIDENCE PROBATIVE OF

THAT VALUE.

YOU KNOW THIS NUMBER NOW BY HEART.

OVER 37 MILLION

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INFRINGING SALES.

PEOPLE.

YOU COULD GIVE EVERY PERSON IN SAN JOSE 37 INFRINGING

PHONES.

THE SIZE OF THIS ILLEGAL ACTIVITY IS BEYOND

COMPREHENSION.

5
6

THE POPULATION OF SAN JOSE IS 1 MILLION

THE COURT:
10:30 NOW.

I'M SORRY TO INTERRUPT YOU, BUT IT'S

LET'S GO AHEAD AND TAKE OUR BREAK.

MR. MCELHINNY:

THE COURT:

9
10
11
12
13

THANK YOU, YOUR HONOR.

WE'LL TAKE A 15 MINUTE BREAK.

PLEASE DON'T RESEARCH OR DISCUSS THE CASE.
IN 15 MINUTES.
(JURY OUT AT 10:31 A.M.)
THE COURT:
COURTROOM.

OKAY.

THE JURORS HAVE LEFT THE

LET'S TAKE OUR BREAK NOW.

THANK YOU.

(RECESS FROM 10:31 A.M. UNTIL 10:45 A.M.)

(JURY IN AT 10:45 A.M.)

THE COURT:

WELCOME BACK.

THE TIME IS NOW 10:46.

GO AHEAD, PLEASE.

19
20
21
22
23

WE'LL SEE YOU

MR. MCELHINNY:

PLEASE TAKE A SEAT.

IT'S STILL ME, BUT I WON'T BE MUCH

LONGER, SO IF YOU CAN JUST HOLD ON.
WE WERE TALKING ABOUT FACTOR 11 ON THE LIST.

WE TALKED

ABOUT 37 MILLION, OVER 37 MILLION INFRINGING SALES.
AND SO THE QUESTION IS, IS THIS USE PROBATIVE OF VALUE?

HERE YOU CAN RELY ON YOUR COMMON SENSE FOR WHAT DR. VELLTURO

CALLED REVEALED PREFERENCES.

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SAMSUNG COPIED THE INVENTIONS BECAUSE IT THOUGHT THEY WERE

CRITICAL.

BEEN ABLE TO THINK OF ANY BETTER WAY, AND IT IS FIGHTING THIS

CASE BECAUSE IT KNOWS IT NEEDS THOSE FEATURES TO CONTINUE TO

SUCCEED IN THE MARKETPLACE.

IT CONTINUES TO USE THREE OF THEM BECAUSE IT HAS NOT

JUST LIKE YOUR PARENTS TOLD YOU WHEN YOU WERE CHILDREN,

WATCH WHAT THEY DO, NOT WHAT THEY SAY IN A COURTROOM WHEN THEY

ARE WORRIED ABOUT THE CONSEQUENCES.

9
10

MAYBE IT WAS MY PARENTS WHO SAID THAT, BUT THAT'S SLIGHTLY
DIFFERENT.

OKAY.

FACTOR 11 CALLS FOR A SUBSTANTIAL ROYALTY.

AND THEN WE CAN GO BACK TO FACTOR 5.

YOU WILL SEE WHY A

ROYALTY AGREED UPON IN AUGUST OF 2011 WOULD HAVE BEEN

SIGNIFICANT.

WHAT WAS THE COMMERCIAL RELATIONSHIP BETWEEN APPLE AND

SAMSUNG IN AUGUST OF 2011?

APPLE HAD ASKED SAMSUNG NOT TO COPY ITS PATENTS, AND THEN BY

AUGUST 2011, APPLE KNEW THAT SAMSUNG HAD SIMPLY BLOWN THAT

REQUEST OFF.

YOU KNOW THAT A YEAR PREVIOUSLY,

APPLE HAD SEEN THE NEW GALAXY PHONES AND IT KNEW THAT

SAMSUNG WAS RIPPING OFF KEY FEATURES.

SAMSUNG'S COPYING WAS HELPING SAMSUNG STEAL SALES FROM APPLE.

APPLE KNEW THAT

SO IN AUGUST OF 2011, IF SAMSUNG HAD ASKED TO LICENSE FIVE

KEY SOFTWARE FEATURES, WHAT WOULD APPLE HAVE SAID?

HAVE SAID WHAT SAMSUNG'S WITNESSES TOLD YOU, SURE, GO AHEAD,

UNITED STATES COURT REPORTERS

WOULD APPLE

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TAKE ALL FIVE FOR 1.75 A PHONE?
YOU KNOW THAT WOULD NOT HAVE HAPPENED.

YOU KNOW THAT

WOULD NOT HAVE HAPPENED.

REMEMBER THAT -- THE HIGHLIGHT FOR ME OF THE TRIAL,

REMEMBER WHEN MR. PENDLETON, THE ADVERTISING GUY FROM STA, WAS

SITTING UP THERE AND MR. LEE SURPRISED HIM BECAUSE HE'D BEEN

TALKING ABOUT S BEAM, THIS NEAR FIELD COMMUNICATION, AND

MR. LEE SAID TO HIM, WOULD SAMSUNG HAVE LICENSED S BEAM TO A

COMPETITOR FOR PENNIES ON THE DOLLAR?

MR. PENDLETON ALMOST FELL OUT OF HIS CHAIR.

HE ALMOST

SWALLOWED HIS TONGUE BECAUSE THE CONCEPT OF GIVING AWAY AN

IMPORTANT FEATURE WAS SO FAR FROM ANYTHING HE EVER WOULD HAVE

CONSIDERED IN THE REAL WORLD.

BY THE WAY, THAT SAME FEATURE WAS ONE THAT THE EYE

TRACKING EXPERT SAID HAD NO VALUE.

THE TESTIMONY OF THE SAMSUNG EXECUTIVE THAT YOU SAW.

COMPARE HER TESTIMONY TO

AUGUST 2011 WAS ALSO A CRITICAL POINT IN THE U.S. MARKET.

60 MILLION CONSUMERS WERE GOING TO BUY THEIR FIRST IPHONES

WITHIN THE NEXT 18 MONTHS.

YOU WHAT APPLE WOULD HAVE DONE.

AND, AGAIN, YOUR COMMON SENSE TELLS

TO BE HONEST, I DON'T UNDERSTAND SAMSUNG'S EVIDENCE ON

THIS POINT.

SAMSUNG TOLD YOU THAT APPLE HAD DECLARED WAR ON

GOOGLE.

FABULOUS ADVERTISING CAMPAIGN AND THAT APPLE WAS WORRIED THAT

NO ONE WANTED ITS PRODUCTS.

THEY TOLD YOU THAT APPLE WAS BEATEN DOWN BY SAMSUNG'S

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OBVIOUSLY NONE OF THAT IS TRUE.

BUT THINK FOR A MINUTE.

SUPPOSE IT WERE TRUE.

SUPPOSE

THAT THEY WERE RIGHT ABOUT THAT.

DEMAND IN AUGUST 2011 HIGHER OR LOWER?

DO YOU CHARGE LESS TO A

COMPETITOR THAT YOU ARE WORRIED ABOUT?

I DON'T THINK SO.

DON'T THINK YOU DO.

CHARGE THEM MORE.

8
9

WOULD THAT HAVE MADE APPLE'S

IF YOU ARE WORRIED ABOUT A COMPETITOR, YOU

THE SIMPLE TRUTH IS THAT WHEN YOU REACH THIS POINT IN THE
INSTRUCTIONS AND WHEN YOU CONSIDER THE FACTS THAT ARE SET OUT

IN YOUR INSTRUCTIONS AND ASK THE QUESTIONS THAT THE LAW ASKS

YOU TO -- TELLS YOU TO ASK, WHAT WOULD HAVE HAPPENED IN THIS

HYPOTHETICAL WORLD?

TAKEN?

ROYALTY IS ACCURATE, FAIR, AND BALANCED.

WHAT POSITION WOULD THE PARTIES HAVE

YOU WILL SEE THAT DR. VELLTURO'S OPINION ON REASONABLE

THE ROYALTIES HE SET FOR EACH PATENT ARE NOT HIGHER THAN

APPLE WOULD HAVE ASKED, AND SAMSUNG, FACING A CRISIS OF DESIGN,

WOULD HAVE PAID THEM TO BE ABLE TO STAY IN THIS MARKET.

AFTER CONSIDERING ALL 15 FACTORS, DR. VELLTURO CALCULATED

A ROYALTY RATE FOR EACH OF THE FIVE PATENTS TO BE APPLIED

SEPARATELY TO PHONES AND TABLETS.

RATES ON SLIDE 96, BUT YOU WILL HAVE THEM IN EVIDENCE AT MY

FAMOUS PX 222A, AND THEY'RE AT PAGE 37 OF THAT EXHIBIT.

YOU CAN SEE THOSE ROYALTY

SO HOW WILL YOU FILL OUT THE VERDICT FORM ON THIS ISSUE?

QUESTION 9 ASKS YOU FOR A TOTAL OF DAMAGES, COMBINED LOST

PROFITS AND REASONABLE ROYALTY.

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2
3

AND THEN QUESTION 10A ASKS YOU FOR A DETAILED BREAKDOWN BY
PHONE, BY PATENT, AND BY TIME PERIODS.
WE HAVE PROVIDED YOU WITH A CHART THAT SHOWS YOU WHAT THE

VERDICT FORM WOULD LOOK LIKE IF YOU ACCEPTED DR. VELLTURO'S

OPINION.

MEMORIZE IT, BUT YOU COULD ALSO FIND IT AT PAGE 13A OF

EXHIBIT 222A.

8
9

IT'S ON THE SCREEN HERE.

YOU HAVE FOUR SECONDS TO

FINALLY, YOU WILL BE ASKED QUESTION 10B, WHICH ASKS YOU TO
BREAK OUT DAMAGES FOR THREE ACCUSED PHONES FOR THREE PARTICULAR

TIME PERIODS.

HERE IS HERE ON SLIDE 97, BUT YOU WILL ALSO FIND IT AT 222A AT

PAGE 12.

DR. VELLTURO'S OPINION AS TO THE CORRECT ANSWER

WHEN YOU LOOK AT EXHIBIT 222A, AND IF YOU LOOK AT PAGES 19

AND 24, YOU WILL FIND THAT WE HAVE GIVEN YOU ALTERNATIVE CHARTS

WITH LOWER DAMAGES AMOUNTS THAT YOU CAN USE TO FILL OUT THIS

VERDICT FORM.

WE DIDN'T DO THAT BECAUSE WE THINK IT'S RIGHT, BUT THEY

ARE ALTERNATIVES THAT WILL BE HELPFUL TO YOU IF YOU REACH

CONCLUSIONS ABOUT LIABILITY OR DAMAGES THAT ARE NOT THE ONES

FOR WHICH I'VE BEEN ADVOCATING.

WE PROMISED YOU THAT WE WOULD GIVE YOU THE INFORMATION YOU

NEED TO MAKE YOUR DECISION IN A FORM THAT WOULD BE EASY FOR YOU

TO USE AND WE HAVE KEPT OUR WORD.

IN CLOSING, I WOULD LIKE TO SAY THIS:

BRINGING THIS

LAWSUIT WAS APPLE'S LAST CHOICE, ITS LAST OPTION.

UNITED STATES COURT REPORTERS

YOU KNOW

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THAT WE MET WITH SAMSUNG A YEAR BEFORE WE SUED AND TRIED TO

PERSUADE THEM TO COMPETE FAIRLY.

YOU KNOW, HOWEVER, FROM SAMSUNG'S INTERNAL DOCUMENTS THAT

SAMSUNG NEVER, EVER CONSIDERED THAT OPTION.

FOCUSSED ON THEIR OWN CRISIS OF DESIGN, AND THEIR REALIZATION

THAT THE ONLY WAY THEY COULD SUCCEED WAS, QUOTE, "TO MAKE

SOMETHING LIKE THE IPHONE."

8
9

THEY WERE TOO

SAMSUNG WAS COMMITTED TO TRYING TO GET AWAY WITH PATENT
INFRINGEMENT.

APPLE CANNOT SIMPLY WALK AWAY FROM ITS INVENTIONS.

CANNOT DO THAT TO THE PEOPLE THAT YOU SAW AND THE OTHER PEOPLE

LIKE THEM WHO WORKED SO HARD TO COME UP WITH SUCH FABULOUS

IDEAS.

14
15

APPLE

AND SO WE ARE HERE, 37 MILLION ACTS OF INFRINGEMENT LATER,
AND WE ARE COUNTING ON YOU FOR JUSTICE.

THE COURT:

OKAY.

MR. PRICE:

YOUR HONOR, MAY I JUST HAVE A SECOND TO

THE COURT:

OF COURSE.

TIME IS 10:54.

SET UP?

19
20

(PAUSE IN PROCEEDINGS.)

MR. QUINN:

YOUR HONOR, I'M READY.

THE COURT:

OKAY.

PLEASE.

///

TIME IS NOW 10:56.

UNITED STATES COURT REPORTERS

GO AHEAD,

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CLOSING
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2

(MR. PRICE GAVE HIS CLOSING ARGUMENT ON BEHALF OF
DEFENDANTS.)

MR. PRICE:

GOOD MORNING, LADIES AND GENTLEMEN OF THE

JURY.

WITNESSED IN A COURTROOM BEFORE, I THINK.

FROM FOUR LAWYERS IN CLOSING ARGUMENT, BECAUSE WE WANTED YOU TO

HEAR FROM THE LAWYERS WHO HAD PRESENTED WITNESSES ON RELEVANT

TOPICS.

IN.

YOU'RE GOING TO SEE SOMETHING THAT'S NEVER BEEN
YOU'RE GOING TO HEAR

THAT MIGHT HELP YOU REMEMBER THE TESTIMONY THAT CAME

PLUS NONE OF US IS AS DYNAMIC AS MR. MCELHINNY, SO WE

WANTED TO MAKE SURE YOU SAW A FEW DIFFERENT PERSONALITIES AT

THE SAME TIME.

13
14
15

I'M GOING TO TALK TO YOU ABOUT THE REAL WORLD EVIDENCE
ABOUT COPYING AND WHY SAMSUNG IS ABLE TO SELL ITS PHONES.
AND THEN YOU'RE GOING TO HEAR FROM MR. NELSON, WHO'S GOING

TO TALK TO YOU ABOUT SAMSUNG'S -- I MEAN APPLE'S PATENTS,

VALIDITY AND INFRINGEMENT.

18
19

YOU'RE GOING TO HEAR FROM MR. JOHNSON, WHO WILL TALK TO
YOU ABOUT SAMSUNG'S PATENTS.

AND THEN YOU'RE GOING TO HEAR FROM MR. QUINN, WHO'S GOING

TO TALK TO YOU ABOUT THE DAMAGES IN THIS CASE AND WHAT APPLE IS

ASKING FOR.

NOW, DURING THIS PRESENTATION, HIS PRESENTATION, I DON'T

KNOW HOW MANY TIMES MR. MCELHINNY SAID THAT BASICALLY SAMSUNG'S

SALES OF THESE ACCUSED PRODUCTS WERE CAUSED BECAUSE THEY HAD

UNITED STATES COURT REPORTERS

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TECHNOLOGY RELATING TO THESE FIVE, THE FIVE PATENTS.

AND THEY'RE ASKING FOR A BIG NUMBER HERE, AND THE REASON

THAT YOU HEARD THE WORD "COPY" SO MUCH, I'M GOING TO SUBMIT TO

YOU, IS BECAUSE THEY HAVE TO TRY TO GET YOU A LITTLE ANGRY TO

JUSTIFY THIS KIND OF NUMBER.

COPY.

STEAL.

I THINK IN THE OPENING MR. MCELHINNY SAID SOMETHING ABOUT

THE IPHONE BEING A HERO AND SAMSUNG TURNING TO THE DARK SIDE.

I DON'T KNOW IF YOU RECALL THAT.

WELL, FIRST LET ME ADDRESS COPYING, AND LET ME ADDRESS IT

VERY SQUARELY, AND I PUT THIS SLIDE UP HERE TO TALK ABOUT THESE

PARTICULAR PATENTS, AND IT'S TRUE THAT IF YOU DON'T PRACTICE A

PATENT, THAT DOESN'T MEAN THAT YOU CAN'T COLLECT DAMAGES FOR

IT.

PRACTICE AND SOMEONE ELSE IS.

15
16
17

YOU STILL GET DAMAGES IF YOU HAVE A PATENT THAT YOU DON'T

BUT YOU CAN'T COPY SOMETHING FROM THE IPHONE IF IT'S NOT
IN THE IPHONE.
AND THE UNDISPUTED EVIDENCE IS THAT APPLE, IN ITS IPHONE,

HAS NEVER PRACTICED THE '959, CLAIM 25 OF THE '959, WHICH IS

THE UNIVERSAL SEARCH; APPLE HAS NEVER PRACTICED, IN THE IPHONE,

CLAIM 20 OF PATENT '414, BACKGROUND SYNCHRONIZATION, IT DOESN'T

DO WHAT ITS PATENT SAYS; CLAIM 18 OF THE '172, THE WORD

SUGGESTION, APPLE HAS NEVER USED THAT CLAIM IN ITS IPHONE.

IT'S NOT PART OF THAT HEROIC IPHONE WHICH CAME OUT IN 2007.

24
25

SO SAMSUNG DIDN'T COPY IT.

GOOGLE DIDN'T COPY IT.

YOU

CAN'T COPY IT IF IT'S NOT THERE, IF APPLE DOESN'T PRACTICE IT.

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YOU'VE HEARD NO EVIDENCE IN THIS TRIAL AT ALL, BY THE WAY,

THAT PRACTICED -- THAT APPLE EVER PRACTICED CLAIM 9 OF THE '647

PATENT, WHICH IS THAT QUICK LINKS PATENT.

AND THE REASON, BY THE WAY, IS BECAUSE THESE PATENTS ARE

SPECIFIC WAYS, USING SPECIFIC ARCHITECTURES, TO ACCOMPLISH

SOMETHING.

WORD SUGGESTION.

THEY'RE NOT PATENTS COVERING UNIVERSAL SEARCH OR
THEY ARE PARTICULAR WAYS OF DOING IT.

SO YOU CAN'T COPY IF IT'S NOT IN THERE.

AND I THINK THE EVIDENCE SHOWS THAT, BY THE WAY THEY SLIDE

TO UNLOCK, APPLE'S PARTICULAR CLAIM ISN'T BEING PRACTICED BY

APPLE NOW WHEN THEY CHANGED IT IN IOS 7.

THE SECOND THING, OBVIOUSLY, IS THAT IN A DAMAGES CLAIM,

APPLE IS SAYING THAT, LOOK, SAMSUNG IS PRACTICING PARTICULAR

CLAIMS USING PARTICULAR ARCHITECTURE THAT'S CAUSING SALES, AND

IF IT COULDN'T DO THAT, IF IT WASN'T DOING THAT, THEN A LOT OF

PEOPLE WOULD COME TO APPLE, WHICH ALSO IS NOT PRACTICING THOSE

CLAIMS OF THOSE PATENTS.

AND THAT MAKES NO SENSE WHATSOEVER.

WHY WOULD YOU GO FROM

ONE PHONE THAT YOU BOUGHT TO ANOTHER WHICH LACKS THE SAME, YOU

KNOW, PRACTICE THAT THE PHONE YOU WERE WITH HAD?

MAKES NO SENSE.

IT SIMPLY

SO I WANTED TO TALK ABOUT THAT FIRST JUST TO SHOW WHY THIS

IS IMPORTANT, NOT BECAUSE YOU CAN'T COLLECT DAMAGES IF YOU HAVE

A PATENT THAT YOU'RE NOT PRACTICING.

COPY IT -- IF IT'S NOT IN YOUR PRODUCT, SOMEONE CAN'T COPY IT.

IT'S BECAUSE YOU CAN'T

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AND WHY WOULD SOMEONE COME TO YOUR PRODUCT IF YOU'RE NOT
PRACTICING THOSE SAME PATENTS?
SO LET ME GET A LITTLE BIT MORE DETAILED, THEN, INTO WHAT

WE SHOWED YOU.

CLAIMS THAT WERE IN THIS CASE WERE CREATED INDEPENDENTLY, NOT

COPIED, BY ANOTHER COMPANY WITH BRILLIANT ENGINEERS, GOOGLE,

RIGHT UP THE STREET.

8
9
10
11
12
13

THE TRUTH IS THAT THE PARTICULAR PATENTED

AND THE TRUTH IS THAT SAMSUNG SOLD MORE THAN ANY OTHER
ANDROID PHONE MAKER BECAUSE IT MADE THE BEST HARDWARE FOR THAT
ANDROID PLATFORM WHICH GOOGLE INDEPENDENTLY CREATED.
AND APPLE IS TRYING TO DISTRACT YOU FROM THAT BY SAYING
COPYING AND BY, BY INTENTIONALLY MISINTERPRETING THE DOCUMENTS.
AND LET ME START WITH THE CRISIS OF DESIGN, AND THAT'S

EXHIBIT 149.

THAT WAS IN FEBRUARY OF 2010.

IT WAS A

PRESENTATION GIVEN BY THE HEAD OF THE MOBILE DIVISION.

REALLY ASK YOU TO LOOK AT THAT.

IN SAMSUNG'S OWN WORDS, THEY WERE TO COPY THE IPHONE.

THAT'S NOT WHAT THAT SPEECH WAS ALL ABOUT.

YOU HEARD MR. MCELHINNY SAY,

WHEN YOU READ

ABOUT IT, YOU SEE THAT, YES, THEY ARE PRAISING THE IPHONE.

REALLY DID COME OUT AND SURPRISE THE INDUSTRY.

AND THEY ARE ALSO SAYING THE OMNIA, A SAMSUNG PHONE WHICH

USED THE MICROSOFT PLATFORM, THAT'S THE ONE MADE UP IN

WASHINGTON BY ANOTHER COMPANY, YOU KNOW, IT WASN'T VERY GOOD

COMPARED TO THE APPLE OPERATING PLATFORM.

THE DOCUMENT.

AND THAT'S PART OF

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BUT THE LANGUAGE ABOUT COPYING THE IPHONE, THAT'S WHAT
CARRIERS WERE SAYING.

AND IF WE CAN SHOW THAT, KEN?

AND WHAT WAS BEING SAID HERE IS THAT, YOU KNOW, SAMSUNG IN

THE PAST HAD ALWAYS LISTENED TO CARRIERS, THE KIND THAT SAYS

YES TO WHATEVER A CARRIER WANTS, THAT'S A SHORTCUT TO GOING OUT

OF BUSINESS.

8
9

AND YOU HEARD MR. SOHN COME HERE AND TELL YOU THAT, YOU
KNOW, BEFORE, BEFORE ACTUALLY THE IPHONE AND FOR A FEW YEARS

AFTERWARDS, THAT THE MANUFACTURERS LISTENED TO CARRIERS AS TO

WHAT TO DO AND WHAT PHONES TO MAKE INSTEAD OF GOING DIRECTLY TO

THE CONSUMER.

AND HE SAYS, "I HEAR THINGS LIKE LET'S MAKE SOMETHING LIKE

THE IPHONE," AND THAT'S COMING FROM THE CARRIERS.

NOWHERE IN

THAT DOCUMENT DOES HE SAY "LET'S COPY THE IPHONE."

AND THEY

DON'T COPY THE IPHONE.

WHAT HE'S SAYING IS THAT WE ARE BEHIND.

WE NEED TO FIND

AN OPERATING SYSTEM PLATFORM.

WILL SEE IN THAT TIMEFRAME THAT SHOW JUST THAT, AND THAT IS

EXHIBIT, FOR EXAMPLE, EXHIBIT 201.

THIS DURING THE TRIAL.

AND THERE ARE DOCUMENTS THAT YOU

MR. MCELHINNY SHOWED YOU

AND IF YOU GO TO PAGE -- KEN, PAGE 17 -- DO YOU REMEMBER,

THIS WAS IN 2009 AND IT'S AN INTERNAL SAMSUNG DOCUMENT, AND DO

YOU REMEMBER MR. MCELHINNY SAID THAT HARDWARE USED TO BE THE

PRIMARY BUYING FACTOR AND NOW IT'S SOFTWARE, AND YOU HEARD HIM

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SAY AGAIN IN CLOSING THAT SOFTWARE IS WHAT SELLS PHONES, NOT

HARDWARE.

WELL, THAT'S MISLEADING BECAUSE WHAT THIS IS TALKING

ABOUT, YOU SEE HARDWARE IS THE PRIMARY BUYING FACTOR.

YOU USED TO GO INTO A STORE AND YOU WOULD BUY A PHONE BECAUSE

IT WAS A FLIP PHONE OR IT WAS A CAMERA PHONE OR WHATEVER?

7
8

OKAY.

WELL, THOSE DAYS ARE OVER.

REMEMBER

PEOPLE BUY PHONES NOW

FOR CONTENT, FOR SERVICES.

AND WHAT MR. MCELHINNY DIDN'T SHOW YOU WAS THE SECOND PART

HERE.

APPLE USES APPLICATIONS, NOT HARDWARE, FOR SEGMENTATION.

AND THIS IS HARD TO SEE.

CUSTOMIZATION.

IT'S EXPERIENCE DRIVEN BY AFTERMARKET

AND IF YOU LOOK THROUGH THIS DOCUMENT -- AND I ASK YOU TO

LOOK ALSO AT PAGES 13 AND 81 -- SAMSUNG WAS IN A PLACE WHERE IT

HAD TO FIND AN OPERATING SYSTEM IT COULD USE THAT PEOPLE COULD

THEN DOWNLOAD THESE WONDERFUL APPLICATIONS THAT CONSUMERS NOW

WANTED FROM THIRD PARTIES, SO IT COULD DOWNLOAD MAPS OR NETFLIX

OR PLANTS VERSUS ZOMBIES OR CUT THE ROPE OR MARVEL COMICS.

THAT WAS AN IMPORTANT PART.

AND WHEN YOU SEE THESE DOCUMENTS THAT SAY SOFTWARE IS A

DRIVING FACTOR, READ THE DOCUMENT CAREFULLY, BECAUSE WHAT IT

SAYS IS THEY'RE TALKING ABOUT THE SOFTWARE THAT ALLOWS THE

CONSUMER EXPERIENCE OF GETTING THESE APPLICATIONS ON THE PHONE

SO THE CUSTOMER CAN CUSTOMIZE HIS OWN PHONE.

SAMSUNG RECOGNIZED THAT'S WHAT IT NEEDED BACK IN 2009, AND

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THE WAY IT RESOLVED THAT PROBLEM IS UNDISPUTED.

DOCUMENTS THEMSELVES.

PLATFORM AS, BY THE WAY, HAVE ALMOST EVERY OTHER MANUFACTURER.

I MEAN, THE ANDROID PLATFORM IS THE WORLD'S ALTERNATIVE TO

APPLE'S IOS.

IT'S IN THE

IT CHOSE TO GO WITH GOOGLE'S ANDROID

AND WE'VE BROUGHT IN HERE AND YOU HEARD MR. LOCKHEIMER

TESTIFY, HIROSHI LOCKHEIMER.

AND GOOGLE RECOGNIZED THIS NEED

WAY BACK IN 2006.

IN 2006, AND THAT IS THAT MANUFACTURERS WEREN'T CONCENTRATING

MR. LOCKHEIMER JOINED THEM IN 2006, GOOGLE

ON SOFTWARE AND THAT GOOGLE DECIDED TO BUILD A PLATFORM, WHICH

BECAME ANDROID, THAT WOULD BE FLEXIBLE AND OPEN SOURCED.

WOULD BE AN OPEN PLATFORM THAT WOULD GIVE YOU THE GUTS ON

OPERATING SYSTEM THAT ANY MANUFACTURER COULD USE AND THEN

APPLICATION DEVELOPERS, THE PEOPLE WHO WRITE ALL THOSE COOL

APPS, YOU KNOW, COULD MAKE FOR IT AND IT WOULD WORK WITH THAT

PLATFORM.

17
18
19
20

AND, OF COURSE, GOOGLE MAKES ITS OWN, YOU KNOW, ITS OWN
APPLICATIONS.
AND THEY BEGAN DOING THAT, AGAIN, BACK IN 2006.

THEY HAD

A VERSION 1 OUT IN 2008.

AND HERE'S THE KEY UNDISPUTED FACT IN THIS CASE:

EVERY PATENT WHICH APPLE CLAIMS IS INFRINGED IN THIS CASE IS

INFRINGED WITH THE BASIC GOOGLE ANDROID SOFTWARE BECAUSE THEY

INCLUDE -- THEY ACCUSE THE GALAXY NEXUS OF INFRINGING EVERY ONE

OF THEIR FIVE PATENTS, AND YOU HEARD MR. LOCKHEIMER TELL YOU

UNITED STATES COURT REPORTERS

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THAT THE SOURCE CODE, THE CODE FOR EVERY ONE OF THOSE FEATURES

WAS DEVELOPED BY ENGINEERS AT GOOGLE.

AND THIS IS NOT -- THIS IS DIFFERENT, KEN.

THIS IS NOT SAYING, POINTING A FINGER AT GOOGLE OR ANDROID

WHATSOEVER.

PARTICULAR METHODOLOGIES AND ARCHITECTURES THAT THEY CLAIM ARE

INFRINGED.

8
9
10

NO.

THIS IS SAYING THAT APPLE HAS FIVE PATENTS WITH

WE BROUGHT IN THE GOOGLE FOLKS, THE GOOGLE ENGINEERS

WHO INDEPENDENTLY DEVELOPED WHAT ANDROID DOES AND TOLD YOU IT
WAS DIFFERENT, DIFFERENT ARCHITECTURE, AND THAT'S SLIDE 20.

PUT THAT UP.

AND YOU'RE GOING TO HEAR MORE ABOUT THEM WHEN MR. NELSON

TALKS.

THEY INDEPENDENTLY DEVELOPED THESE FEATURES AND THAT THEY DON'T

INFRINGE.

WE'RE NOT POINTING THE FINGER AT GOOGLE.

WE'RE SAYING

WE BROUGHT YOU THE INVENTORS, SHALL WE SAY.

AND A QUICK DISTRACTION ON THE INVENTORS.

THE JUDGE

INSTRUCTED YOU AT THE TIME THE EVIDENCE CAME IN AS TO WHAT THAT

WAS RELEVANT TO -- THAT'S T-284, KEN -- AND THAT'S RELEVANT TO

POSSIBLE BIAS.

POTENTIAL BIAS, A FINANCIAL RESULT PUT IN THE CASE, OR THEY

COULD SOMEHOW LOSE MONEY, THAT'S SOMETHING YOU CAN CONSIDER IN

SEEING WHETHER THEY'RE TRUTHFUL.

IF A WITNESS TAKES THE STAND, IF THEY HAVE A

BUT WHEN THOSE WITNESSES TOOK THE STAND, APPLE KNEW ABOUT

THE ABILITY TO DO THAT.

APPLE KNEW -- THEY DIDN'T ASK THOSE

WITNESSES IF THEY KNEW, THEY DIDN'T ASK THE WITNESSES IF THEY

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WERE BIASED, AND YOU COULD SEE THAT THEY WEREN'T BIASED.
WHO IN THIS TRIAL HAS TRIED TO HIDE FROM YOU THE RELEVANCE

OF GOOGLE IN THIS CASE?

APPLE.

IT'S NOT -- IT'S NOT SAMSUNG.

IT'S

EVERY WITNESS WAS ASKED, GOOGLE IS NOT A PARTY TO THIS

CASE, YOU KNOW?

THIS CASE?

APPLE TO GIVE YOU THE IMPRESSION THAT GOOGLE WAS IRRELEVANT.

YOU UNDERSTAND THAT GOOGLE IS NOT A PARTY TO

EVERY ONE OF THOSE WITNESSES WAS ASKED THAT BY

GOOGLE IS CRITICAL ON THE QUESTION OF COPYING BECAUSE WE

DIDN'T COPY.

THE ENGINEERS WHO CAME UP WITH THESE FEATURES CAME IN HERE AND

TOLD YOU THEY DIDN'T COPY.

SAMSUNG DIDN'T COPY.

THEY WEREN'T TOLD TO COPY.

NOW, THERE'S ONE AREA, WHEN YOU USE THE GOOGLE OPERATING

SYSTEM, THERE ARE SOME DIFFERENCES YOU CAN MAKE, LITTLE CHANGES

YOU CAN MAKE TO IT SO THAT YOU CAN DIFFERENTIATE YOURSELF FROM

ANOTHER COMPANY, LIKE HTC OR MOTOROLA, AND ONE OF THOSE WAS THE

COVER, THE SLIDE TO UNLOCK.

YOU CAN CUSTOMIZE THAT.

NOW, APPLE ACCUSES GOOGLE'S WAY OF DOING THAT AS

INFRINGING.

CAME UP WITH THEY CLAIM INFRINGES.

THE BASIC ANDROID CODE WHICH GOOGLE INDEPENDENTLY

WELL, WE BROUGHT IN BEFORE YOU SAMSUNG'S SOFTWARE DESIGNER

ON, YOU KNOW, THE FACE OF THE PHONE, AND YOU HEARD FROM

YOUNGMI KIM, AND SHE TESTIFIED ABOUT WHETHER OR NOT SHE COPIED

APPLE'S SLIDE TO UNLOCK AND SHE SAID ABSOLUTELY NOT, AND SHE

POINTED OUT THAT THEY TRY TO DIFFERENTIATE THEIR PRODUCTS.

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AND WHEN YOU SAW HER TESTIFY, YOU COULD EVALUATE HER
DEMEANOR.
AND IF YOU LOOK AT HER WORK -- AGAIN, LOOK AT WHAT YOU DO,

NOT WHAT YOU SAY -- IF WE CAN PUT UP CHART 47 -- IF YOU LOOK AT

HER WORK -- BOY, THIS IS HARD TO SEE -- SHE CAME UP, FOR

EXAMPLE, WITH THE PUZZLE DESIGN BACK IN 2008/2009.

NOW, YOU'VE SEEN SOME DOCUMENTS THAT ARE FROM THE SOFTWARE

VERIFICATION GROUP WHICH COMPARE APPLE AND IPHONE ON MANY

LEVELS AND SOME TALK ABOUT ELEMENTS OF SLIDE TO UNLOCK.

AND WHAT SHE TOLD YOU WAS THESE ARE KIND OF LIKE BOOK

REPORTS THAT SHE LOOKS AT AND, FRANKLY, SHE PAYS NO ATTENTION

TO THEM.

BY THE RESULTS OF HER WORK.

14
15
16

AND THE WAY YOU KNOW SHE PAYS NO ATTENTION TO THEM IS
SHE DID NOT COPY THE IPHONE.

LOOK AT WHAT SHE CAME OUT WITH.

WELL, THERE WAS THE SLIDE

TO UNLOCK WHICH LOOKS ABSOLUTELY NOTHING LIKE THE IPHONE.
SHE CAME OUT WITH THE GALAXY S II.

THE GALAXY S II IS --

IN FACT, KEN, MAYBE WE CAN PUT UP SLIDE 44 BECAUSE I'M NOT

GOING TO HAVE TIME TO SHOW YOU THE PHONE ITSELF -- THAT'S ONE

OF THOSE WHERE THE WHOLE SCREEN SLIDES TO UNLOCK.

APPLE DOES NOT ACCUSE THAT OF INFRINGING.

ANOTHER DESIGN SHE CAME UP WITH WAS IN THE GALAXY NOTE

WHERE YOU SEE THIS CIRCLE HERE AND YOU MOVE YOUR FINGER OUTSIDE

THE CIRCLE AND IT UNLOCKS.

APPLE DOES NOT ACCUSE THAT OF INFRINGING.

SHE CAME UP WITH THE RIPPLE, THE GALAXY S III, WHERE YOU

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SLIDE -- YOU SWIPE TO UNLOCK.

INFRINGING.

APPLE DOES NOT ACCUSE THAT OF

IN FACT, THEIR EXPERT TOOK THE STAND -- IF WE CAN GO BACK

TO THAT CHART, 47, KEN -- LOOK, THESE ARE COMING OUT BEFORE

APPLE'S PATENT IS EVEN ISSUED.

AND MR. MCELHINNY CAME UP HERE AND TOLD YOU THAT SAMSUNG

COPIED, YOU KNOW, APPLE'S SLIDE TO UNLOCK PATENT.

MAKE SENSE.

AND THEIR OWN EXPERT, MR. COCKBURN, CAME UP HERE AND TOLD

YOU THERE IS NO EVIDENCE.

KEN, THE COCKBURN TESTIMONY.

12
13

IT DOESN'T

AND THIS IS, I BELIEVE, T-281, 2 --

YOU'RE NOT TALKING ABOUT ANYBODY COPYING THE PATENT;
CORRECT?

RIGHT.

THERE'S NO COPYING IN THIS CASE.

THERE WAS A DISCUSSION

AND COMPARISON OF THE PHONES.

INDEPENDENT GENIUSES AT GOOGLE, THE BASIC ANDROID.

THE CODE WAS CREATED BY THESE

YOU KNOW, ANY CHANGE THAT SAMSUNG MADE HAD THE EFFECT OF

NOT CHANGING THAT, NOT CHANGING THAT BASIC GOOGLE CODE.

THERE

IS NO COPYING.

YOU CAN GET ENRAGED AND THINK THAT THERE SHOULD BE, YOU KNOW,

BIG MONEY DAMAGES AWARDED.

BUT THEY HAVE TO MAKE YOU THINK THAT SO THAT

SO LET ME THEN GO INTO -- AND I ALMOST FORGOT ON THIS --

SO WE HAVE, YOU KNOW, GOOGLE, GOOGLE ENGINEERS DEVELOPING THIS

CODE.

YOU ARE ASKED, WHERE WERE YOU IN 2007, YOU KNOW, WHEN

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APPLE CAME OUT?

PRACTICING MOST OF THESE PATENTS, AT THIS POINT ALL OF THEM.

AND DIDN'T HAVE -- BY THE WAY, IT WASN'T

THE QUESTION WAS, WHERE WERE THEY, LIKE, IN 2010, 2011?

WE KNOW WHAT STEVE JOBS THOUGHT.

BEHIND ANDROID AT THAT TIME AND HE THOUGHT THAT THEY HAD TO

DECLARE A HOLY WAR ON ANDROID, AND THAT'S EXHIBIT 489, AND IF I

HAD A BUCK IN MY POCKET, I WOULD GIVE IT TO MR. MCELHINNY,

BECAUSE IT'S CRITICAL AS TO WHAT THIS CASE IS REALLY ABOUT.

9
10
11

STEVE JOBS THOUGHT THEY WERE

I MEAN, SAMSUNG, MOTOROLA, HTC AND OTHERS CHOSE ANDROID AS
A PLATFORM.
AND WE KNOW, IN OCTOBER 2010, STEVE JOBS RECOGNIZED WE

HAVE TO START A HOLY WAR ON GOOGLE.

THAT'S WHAT 2011 WAS GOING

TO BE ALL ABOUT.

EXECUTIVES GETTING TOGETHER AND MEETING WAS THIS HOLY WAR.

AND IF YOU LOOK THROUGH THIS DOCUMENT -- AND DO FLIP

IT WAS THE PRIMARY REASON FOR THESE

THROUGH IT -- EVERYONE WAS SUPPOSED TO TALK ABOUT GOOGLE AND

ANDROID AND IT WAS ALL ABOUT APPLE BEING IN DANGER OF HANGING

ON TO AN OLD PARADIGM TOO LONG, AN INNOVATOR'S DILEMMA.

GOOGLE AND MICROSOFT WERE FURTHER AHEAD IN TECHNOLOGY.

YOU GO THROUGH THIS, THEY'RE GOING TO SEE THAT GOOGLE WAS AHEAD

IN THE CLOUD, WHICH IS WHERE THE FUTURE WAS GOING, YOU KNOW,

WHERE YOU SYNC THROUGH THE CLOUD; THAT GOOGLE WAS AHEAD IN

CALENDAR.

AND IF YOU KIND OF FLIP THROUGH SOME OF THESE, YES,

SAMSUNG IS MENTIONED ALONG WITH GOOGLE, HTC, MOTOROLA, AND RIM.

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SAMSUNG IS JUST ONE OF THOSE MANUFACTURERS.

AT THIS TIME

SAMSUNG WAS NOT THE LEADING ANDROID MANUFACTURER.

THE FOCUS IS ON WE HAVE A HOLY WAR WITH GOOGLE.

AND THEY WERE GOING TO TARGET WHOEVER BECAME THE LARGEST

GOOGLE ANDROID SELLER, THE LARGEST COMPANY THAT SOLD THIS

INDEPENDENTLY DEVELOPED PLATFORM THAT YOU COULD THEN USE TO

DOWNLOAD YOUR APPLICATIONS AND WATCH TV AND DO ALL THAT FUN

STUFF.

SO HOW DID WE START, HOW DID SAMSUNG START INCREASING ITS

SALES?

PARTICULAR WAYS OF DOING SOMETHING THAT GOOGLE INDEPENDENTLY

DEVELOPED AND WAS DIFFERENT.

13
14
15

IT WASN'T BECAUSE IT COPIED.

IT WASN'T BECAUSE OF FIVE

THE WAY THEY DID IT WAS THEY HAD A PARADIGM SHIFT, AND YOU
HEARD FROM MR. SOHN, WHO CAME IN.
AND BY THE WAY, THERE'S CRITICISM THAT WE DIDN'T BRING IN

EXECUTIVES.

FEATURES, WHICH ARE THE GOOGLE ENGINEERS.

WE BROUGHT IN TO YOU THE INVENTORS OF THE ACCUSED

WE BROUGHT IN TO YOU, IN FOR YOU TO LOOK AT AND LISTEN TO

MS. YOUNGMI KIM, WHO WAS IN CHARGE OF THAT SLIDE TO UNLOCK.

AND WE BROUGHT TO YOU DALE SOHN, WHO WAS PRESIDENT OF

SAMSUNG AMERICA, AND AS YOU SAW ON THE OTHER SLIDES, WAS KEY

ADVISER, YOU KNOW, IN KOREA.

AND HE EXPLAINED TO YOU THAT THERE WAS A PARADIGM SHIFT

FROM WHAT WE REALIZED -- IF WE CAN PUT UP 156.21 -- WE REALIZED

THAT WE HAD TO BRAND SAMSUNG, WE HAD TO GET CONSUMERS TO KNOW

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WHO WE WERE AND TO GO INTO STORES TO ASK FOR THEM.
SAMSUNG WAS WELL KNOWN IN TV'S, YOU KNOW, BUT NOT IN
PHONES.
SO LET'S FOCUS ON BRANDING.

LET'S IMPROVE OUR RETAIL

PRESENCE.

LET'S BE FRIENDLY TO THE RETAILERS IN THIS REGARD.

OUR INVESTMENT STRATEGY IN MARKETING SO THAT WE'RE PROMOTING

OUR BRAND.

LET'S GO AND CREATE SPECIAL AREAS IN THE RETAILERS.
LET'S SHIFT

AND BY THE WAY, THAT DIDN'T INCREASE OUR ADVERTISING

DOLLARS.

YOU HEARD MR. PENDLETON, WHO'S HEAD OF MARKETING, SAY

IT JUST SWITCHED IT SO THAT SAMSUNG WAS CONTROLLING THE BRAND.

AND THEN LET'S MAKE SURE THAT OUR PRODUCTS ARE FLAWLESS.

AND MR. PENDLETON CAME UP HERE AND TOLD YOU WHAT THE FOCUS

WAS ON, HOW ARE WE SELLING THESE PHONES?

PLATFORM, A PLATFORM THAT'S USED BY THE REST OF THE WORLD

EXCEPT FOR IOS, SO HOW DO WE SELL SAMSUNG PHONES?

17
18
19

WE'RE USING A COMMON

BECAUSE AT THAT TIME, HTC WAS SELLING, WHAT, TWICE AS MUCH
AS WE WERE OF THE ANDROID PLATFORM.
AND HE EXPLAINED TO YOU THAT WE CREATED THESE ADS AND WE,

WE FOCUSSED ON OUR LEADERSHIP IN BIG SCREEN, 4G TECHNOLOGY.

LATER TALKED ABOUT, YOU KNOW, THE QUALITY OF THE SCREEN.

22
23
24
25

IT'S THE HARDWARE THAT DISTINGUISHED US FROM THE REST OF
THE WORLD THAT WAS USING THE BASIC GOOGLE ANDROID SOFTWARE.
AND IT WORKED.

AND THE WAY YOU KNOW IT WORKED IS THAT

APPLE LATER STARTED PANICKING.

THEY WERE -- FIRST, THE

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BRANDING WAS WORKING.

WAS ON THE STAND, WE SHOWED HIM AN E-MAIL WHICH HAD THE

"WALL STREET JOURNAL" ARTICLE THAT, THAT IS APPLE LOSING ITS

COOL TO SAMSUNG AND HE SAID WE'VE GOT TO DO SOMETHING ABOUT

THIS.

YOU REMEMBER THAT MR. SCHILLER, WHEN HE

AND THE RESPONSE FROM, FROM THE LEAD ADVERTISING AGENCY,

THE ONLY ADVERTISING AGENCY THAT THEY HAD USED FOR, WHAT, EVER,

A FELLOW NAMED JAMES VINCENT WAS, AND THIS IS 408A-3, WAS WE'VE

GOT TO DO SOMETHING HERE.

10
11

WHAT CAN WE DO?

HE'S TALKING ABOUT THINGS THAT APPLE CAN DO, BIGGER
SCREENS, THE APPLE BRAND IS SLIPPING.

AND THAT WAS EXACTLY WHAT MR. SOHN WAS TRYING TO DO,

CONCENTRATE ON THE HARDWARE AND ON THE BRAND, AND APPLE, AS A

RESULT OF THAT, WAS LOSING SALES TO SAMSUNG BECAUSE OF APPLE'S

HARDWARE, BECAUSE OF THAT.

AND BY THE WAY, JUST BECAUSE I DON'T HAVE TIME TO SHOW

THEM TO YOU, IF YOU LOOK AT EXHIBITS 409, 410, AND 498, THERE'S

THE STRING OF E-MAILS, YOU KNOW, BETWEEN MR. SCHILLER AND

OTHERS TALKING ABOUT WHAT ARE WE GOING TO DO?

SOMETHING FAST.

WE'VE GOT TO DO

WE HAVE TO MAKE DRASTIC CHANGES.

BY THE WAY, THEIR DRASTIC CHANGE WAS THAT, IN THAT SUMMER,

FOR THE FIRST TIME IN 14 YEARS, I BELIEVE, 15 YEARS, THEY

DECIDED TO DO A BRAND CAMPAIGN THEMSELVES, AND THEIR BRAND

CAMPAIGN IS PROBABLY ONE OF THE MOST SIMPLE YOU'VE EVER HEARD

OF.

IT WAS, DESIGNED BY APPLE IN CALIFORNIA, AS OPPOSED TO

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OURS.
SO APPLE, IN THE REAL WORLD, RECOGNIZED WHY SAMSUNG PHONES
WERE SELLING, NOT BECAUSE OF APPLE'S ACCUSED PATENTS.
ANOTHER WAY YOU KNOW THEY RECOGNIZED WHY WE WERE SELLING

IS THEY TOOK APART, THEY DIVISECTED -- THEY DISSECTED THE

SAMSUNG PHONES, AND IF YOU LOOK AT 489 AND JUST LOOK THROUGH

THAT, THAT'S A NUMBER OF DOCUMENTS THAT SHOWED HOW APPLE WOULD,

YOU KNOW, TAKE THINGS APART AND LOOK AT THE WIRES AND GUESS

WHERE THE WIRES CAME FROM.

EMPLOYEES WOULD GO OUT AND BUY

THESE PHONES SO THAT THEY COULD TAKE THEM APART, YOU KNOW, LIKE

A FROG.

AND THEIR CONCLUSIONS -- IF YOU GO TO PAGE 37 -- WAS --

THIS WAS APPLE'S MARKET RESEARCH.

SAMSUNG PHONES GOOD?

LIGHT, VERY FAST, GREAT CAMERA, ATTRACTIVE DESIGN, ENDLESS

FEATURES AND CUSTOMIZATION OPTIONS.

BEAUTIFUL SCREEN, INSANELY SLIM AND

BY THE WAY, THE BASIC OPERATING SOFTWARE, THEY DIDN'T

THINK SAMSUNG WAS VERY GOOD.

FRIENDLY AS HTC AND PHONE RIVALS.

THE GOOD, WHY ARE THESE

THEY SAID WE WEREN'T AS USER

SO LET'S TALK ABOUT, BEFORE WE COME TO COURT AND SEEK LOTS

OF MONEY FOR THINGS THAT APPLE ITSELF DOES NOT EVEN USE, YOU

KNOW, BEFORE WE COME TO COURT, WHAT'S APPLE SAID ITSELF AS TO

WHY SAMSUNG IS DOING WELL?

24
25

NOT BECAUSE OF THESE PARTICULAR WAYS OF DOING PARTICULAR
FEATURES, BUT BECAUSE OF WHAT MR. SOHN TOLD YOU, MR. PENDLETON,

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BECAUSE OF THE BRANDING, BECAUSE OF THE HARDWARE.
AND THE FINAL DOCUMENT I'M GOING TO TALK TO YOU ABOUT IS

THE OFF SITE THAT TOOK PLACE SHORTLY AFTER THESE E-MAILS OF

MR. SCHILLER IN THE SUMMER OF 2012.

THIS IS EXHIBIT 413.

AND BY THE WAY, THERE WAS A SUGGESTION THAT THIS EXHIBIT

WAS DONE BY SOME LONE MADMAN, I THINK MR. SCHILLER WAS

BASICALLY TRYING TO GET YOU TO THINK.

8
9

ACTUALLY, IF YOU LOOK AT EXHIBIT 411, YOU'LL SEE ANOTHER
DRAFT OF THIS, WHICH IS DISTRIBUTED WIDELY, AND IT'S CALLED THE

OPPENHEIMER IPHONE REVIEW.

APPLE.

MR. OPPENHEIMER WAS THEN THE CFO OF

AND IF WE LOOK AND SEE WHAT THEY RECOGNIZED WAS GOING ON,

FIRST THEY RECOGNIZE THAT THEIR IPHONE SALES WERE, THE GROWTH

WAS SLOWING.

I MEAN, THEY'RE STILL SELLING PHONES AND SELLING OUT EVERY

PHONE THEY COME OUT WITH.

LIKE APPLE LOVE APPLE.

KNOW THERE ARE A LOT OF YOU ON THE JURY WHO LOVE APPLE.

THEY'RE STILL SELLING MORE PHONES THAN ANYBODY.

PEOPLE LIKE APPLE, AND PEOPLE WHO

RAISE YOUR HAND IF YOU LOVE APPLE.

WHY WERE THEY SLOWING?

WELL, THEY VIEWED INTERNALLY WHY,

HERE'S THEIR INTERNAL VIEW AS TO WHY.

HERE WE GO, 814.

LET'S GO TO PAGE 814,

WHAT'S GOING ON?

IT'S BECAUSE THE STRONGEST DEMAND IS COMING FROM LESS

EXPENSIVE -- NOT APPLE -- AND LARGE SCREEN SMARTPHONES.

EXACTLY WHAT, EVEN BACK THEN IN THAT, QUOTE, "DESIGN OF CRISIS"

E-MAIL, EXACTLY WHAT SAMSUNG'S STRATEGY WAS.

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ADVANTAGE OF OUR ADVANTAGE IN THE HARDWARE.
AND THEN THE CARRIERS, THE PEOPLE WHO SELL THE PHONES,

WERE GETTING SICK OF APPLE.

PHONES COST APPLE -- I MEAN THE CARRIERS, LIKE, $700, $600.

WHEN YOU BUY THEM FOR CHEAPER, THE CARRIER IS PAYING A SUBSIDY.

IT'S LOSING MONEY.

7
8
9
10

DO YOU KNOW WHY?

BECAUSE THOSE

AND THE CARRIERS ARE CAPPING THE SALES BECAUSE OF SUBSIDY
PREMIUMS, UNFRIENDLY POLICIES.
APPLE IS THOUGHT OF AS BEING ARROGANT.
AND THEN WE LOOK AT THE LAST ONE.

THE COMPETITORS -- AND

BY THE WAY, YOU SEE THIS ISN'T SAMSUNG HERE, IT'S ANDROID,

BECAUSE THAT'S WHO THE HOLY WAR IS AGAINST BY THE WAY.

AND COMPETITORS HAVE DRASTICALLY IMPROVED THEIR HARDWARE

AND IN SOME CASES THEIR ECOSYSTEMS, WHICH IS, YOU KNOW, AGAIN,

THOSE GREAT APPLICATIONS YOU HAVE AND THE GOOGLE APPS AND LIKE

THE SAMSUNG HUB AND THINGS LIKE THAT, YOU KNOW?

17
18
19

IT SAYS SPENDING OBSCENE AMOUNTS, BUT ACTUALLY WE WERE
SPENDING THE SAME AMOUNT, JUST DOING IT BETTER.
AND SO THEIR FINAL CONCLUSION, APPLE'S INTERNAL VERDICT AS

TO WHY WE WERE SELLING PHONES, THEY COME IN HERE AND THEY SAY

THAT CONSUMERS WANTED SAMSUNG PHONES BECAUSE SAMSUNG COPIED

APPLE.

23
24
25

THAT WAS NOT THEIR INTERNAL VERDICT.

THEIR INTERNAL

VERDICT -- AND THIS IS PAGE -- BRING ME BACK -- 46?
MR. KOTARSKI:

46.

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MR. PRICE:

46, THEIR CONCLUSION, "CONSUMERS WANT

WHAT WE DON'T HAVE."
WHERE DID THE GROWTH COME FROM?

IT'S COMING FROM WHAT

APPLE DOES NOT HAVE, NOT FROM WHAT APPLE DOES HAVE AND SOMEONE

ELSE COPIED.

THAT'S THE REAL WORLD, NOT THE MADE-UP WORLD.

AND BY THE WAY, ANOTHER REAL WORLD, JUST ONE QUICK REAL

WORLD, THE GALAXY NOTE 2 AND GALAXY S III, APPLE ADMITS, YOU

KNOW, DIDN'T INFRINGE TWO OF THE PATENTS, THE KEYBOARD AND

SLIDE TO UNLOCK.

THOSE TWO PHONES -- AND KEN, CAN I HAVE SLIDE 21 -- THOSE

TWO PHONES SOLD MORE THAN ALL OTHER PHONES COMBINED THAT ARE

ACCUSED IN THIS CASE.

THEY CLAIM ARE INFRINGING, THE LARGER SAMSUNG'S SALES.

DOESN'T MAKE SENSE.

HARDWARE AND INNOVATION AND HARD WORK.

THE FEWER THE NUMBER OF PATENTS THAT
THAT

SAMSUNG'S SUCCESS IS BECAUSE OF ITS
THIS IS A MADE UP CASE.

AND NOW I'LL LET MR. NELSON TALK TO YOU ABOUT THAT.

(MR. NELSON GAVE HIS CLOSING ARGUMENT ON BEHALF OF THE

DEFENDANTS.)

MR. NELSON:

JURORS:

MR. NELSON:

GOOD MORNING, EVERYBODY.

GOOD MORNING.
SO YOU MIGHT HAVE GUESSED THAT I'D BE

TALKING TO YOU ABOUT THE PATENTS.

I'VE HAD THE OPPORTUNITY,

OVER THE LAST MONTH, TO TALK TO A LOT OF THE WITNESSES ABOUT

THE PATENTS, BUT I HAVEN'T HAD A CHANCE TO TALK TO YOU YET

ABOUT THE PATENTS AND THAT'S WHAT I'M GOING TO DO HERE.

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THESE FIVE PATENTS -- IF WE COULD PUT BACK UP SLIDE 18,
MR. KOTARSKI -- I WANT TO TALK ABOUT THESE PATENTS.
AND BEFORE I GET INTO THIS, I WANT TO CLEAR UP ONE THING

THAT APPLE COUNSEL SAID.

NUMBER OF INVENTORS ON THESE PATENTS TO TESTIFY.

THAT NUMBER IS ONE.

HE TOLD YOU THAT THEY BROUGHT IN A

THAT'S WHO CAME IN.

HE TOLD YOU THEY

BROUGHT IN MR. MILLET AND MR. DENIAU AND ONE OTHER GENTLEMAN,

MR. GARCIA.

NONE OF THOSE PEOPLE -- YOU'LL HAVE THE PATENTS

BACK THERE.

LOOK.

NONE OF THOSE PEOPLE ARE NAMED INVENTORS ON

THOSE PATENTS.

WITNESS, MR. CHRISTIE.

ON THE '721 PATENT.

THEY BROUGHT TO YOU ONE, THAT WAS THEIR SECOND
THAT WAS IT.

AND HE'S A NAMED INVENTOR

THAT'S ALL.

SO THE -- THAT MEANS THERE'S 14 -- THERE WERE 14 TOTAL.

THAT'S 13 APPLE PEOPLE THAT DIDN'T COME AND TESTIFY TO YOU.

OTHER THAN THE '721 PATENT, YOU HAVEN'T HEARD FROM ANY OF THEIR

FOLKS.

SO LET ME TELL YOU FIRST, BECAUSE YOU'VE HEARD A LOT ABOUT

WHAT APPLE DOESN'T WANT YOU TO DO, BUT LET ME TELL YOU WHAT YOU

ARE HERE TO DO.

AND IF WE COULD PUT UP JURY INSTRUCTION 18.

NOW, YOU'VE HEARD, AND WE'VE HEARD THROUGHOUT THIS CASE,

THAT THE COURT DETERMINED THAT ONE OF THE PATENTS, THE '172

PATENT, WITH CERTAIN MODELS WAS INFRINGED.

HASN'T BEEN A SECRET.

WE KNOW THAT.

THAT

APPLE HAS SAID THAT OVER AND OVER AGAIN.

BUT YOU KNOW WHAT THAT MEANS?

THE OTHER FOUR PATENTS, THE

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COURT DECIDED THAT'S UP TO YOU.

AND THAT'S RIGHT HERE IN THE INSTRUCTION.

THAT'S UP TO YOU TO DECIDE,

AND YOU KNOW WHAT ELSE THE COURT SAID IS ALL FIVE OF THE

PATENT CLAIMS ON THE VALIDITY, THAT'S UP FOR YOU -- UP TO YOU

TO DECIDE.

SO, LOOK, APPLE KEEPS TELLING YOU, THEY'VE DONE IT WITH A

NUMBER OF WITNESSES, THE PATENT OFFICE ALREADY LOOKED AT THESE

THINGS.

RIGHT?

YOU CAN'T SECOND GUESS THE PATENT EXAMINER.

BUT THAT'S JUST NOT THE WAY THE SYSTEM WORKS.

IN FACT,

YOU KNOW HOW OUR GOVERNMENT -- WE HAVE CHECKS AND BALANCES.

WHEN ONE BRANCH DOES SOMETHING, WE HAVE SOMEBODY ELSE THAT

CHECKS IT.

THAT'S EXACTLY WHAT THE JURY SYSTEM IS WITH RESPECT TO

PATENTS, RIGHT?

TO HELP OUT THE PATENT OFFICE.

THAT'S WHAT YOU'RE SUPPOSED TO DO.

YOU'VE GOT

THE PATENT OFFICE DOESN'T HAVE THE OPPORTUNITY TO HEAR

FROM US THE OTHER SIDE OF THE STORY.

THEY DON'T HAVE THE

OPPORTUNITY TO SEE ALL THE ART.

I'M GOING TO TALK TO YOU ABOUT THAT THE PATENT OFFICE NEVER SAW

ANY OF THESE THINGS.

THERE'S THREE OF THESE PATENTS

AND THEN THE OTHER TWO PATENTS WHERE COUNSEL KIND OF BEAT

ME UP WHERE COUNSEL SAID THE PATENT OFFICE SAW THIS, THEY NEVER

SAW THE COMBINATION THAT WE PRESENTED.

24
25

AND FURTHERMORE, THERE WAS NOBODY THERE TO PRESENT THE
OTHER SIDE OF THE STORY.

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SO YOU WON'T GET A JURY INSTRUCTION -- YOU CAN GO BACK AND

LOOK IN THERE.

OF THEM WILL SAY, OH, DEFER TO THE PATENT OFFICE.

SOMETHING THAT WAS IN FRONT OF THE PATENT OFFICE, DON'T GIVE IT

CONSIDERATION.

BECAUSE THAT'S NOT THE LAW.

GO LOOK THROUGH THOSE JURY INSTRUCTIONS.

DON'T LOOK AT IT.

NONE

IF THERE WAS

THERE'S NO SUCH INSTRUCTION

AND, IN FACT, IT'S NOT JUST HER HONOR THAT HAS SAID THAT.

WE SAW -- REMEMBER THIS PATENT VIDEO AT THE VERY BEGINNING OF

THE CASE WHERE THERE WAS, LIKE, AN INTRODUCTION INTO THE PATENT

SYSTEM?

THAT OF COURSE WE NEED THIS SYSTEM BECAUSE THE PATENT OFFICE

MAKES MISTAKE.

WELL, JUDGE FOGEL WAS THE GENTLEMAN THERE AND HE SAID

THINGS ARE OVERLOOKED.

SO IT'S VERY IMPORTANT, LADIES AND GENTLEMEN, THAT YOU

CONSIDER THE EVIDENCE THAT I'M GOING TO WALK THROUGH AND

PRESENT TO YOU, NOT SIMPLY LISTEN TO WHAT APPLE IS TELLING YOU

AND DON'T GIVE IT ANY CREDENCE.

DO.

THAT'S WHAT I'M ASKING YOU TO

THAT'S WHAT THIS CASE IS ABOUT.

WE'RE ENTITLED TO COME

HERE AND DEFEND OURSELVES WHEN WE'RE ACCUSED.

JUST SAY, WHATEVER YOU SAY, APPLE.

AND PRESENT OUR CASE, AND THAT'S EXACTLY WHAT WE'VE DONE, AND

WHEN YOU GO BACK INTO THAT ROOM WHEN I WALK YOU THROUGH THIS

EVIDENCE, THAT'S ALL I CAN ASK YOU TO DO IS CONSIDER WHAT I'VE

PRESENTED TO YOU.

WE DON'T HAVE TO

WE'RE ENTITLED TO COME IN

SO LET'S ALSO LOOK AT JURY INSTRUCTION NUMBER 24, AND THIS

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I WANT TO CLEAR UP A LITTLE BIT BECAUSE IT MIGHT BE A LITTLE

BIT CONFUSING.

3
4
5
6

YOU KNOW, YOU'VE HEARD A LOT OF TALK ABOUT THE IPHONE AND
PEOPLE LOOKING AT THE IPHONE.
NOW, MR. PRICE HAS ALREADY ADDRESSED THAT, THAT THESE
PATENTS AREN'T IN, I MEAN, THE IPHONE FOR THE MOST PART.

BUT -- OH, I HAVE A LASER POINTER NOW.

SO -- BUT THAT'S NOT INFRINGEMENT -- THAT'S NOT HOW YOU

9
10
11
12
13

DEAL WITH INFRINGEMENT AND INVALIDITY.
PRODUCT TO THE PRODUCT.

AND, IN FACT, WE KNOW WE COULDN'T BECAUSE THE IPHONE
DOESN'T PRACTICE MOST OF THESE PATENTS.
IT'S THE CLAIMS OF THE PATENTS THAT MATTER, AND IT'S EVERY

WORD HERE THAT MATTERS.

DON'T GET TO READ THINGS OUT.

KIND OF CLOSE.

YOU DON'T COMPARE THE

RIGHT?

WHEN WE'RE LOOKING AT INFRINGEMENT, WE
RIGHT?

WE DON'T SAY, AH, THAT'S

THAT'S NOT THE WAY IT WORKS.

AND THE OTHER THING THAT'S IMPORTANT IS WHEN WE TURN

AROUND AND WE LOOK AT THE PRIOR ART AND WE'RE COMPARING THE

PRIOR ART TO THE PATENT CLAIMS, WE DON'T PUT NEW WORDS IN.

RIGHT?

IMPORTANT.

THROUGH THIS EVIDENCE, BECAUSE I THINK APPLE IS TRYING TO PLAY

IT BOTH WAYS.

24
25

IT'S GOT TO BE THE SAME BOTH WAYS, AND THAT'S VERY
THAT'S A THEME THAT YOU'RE GOING TO SEE AS I WALK

SO LET ME FIRST TALK ABOUT THIS ANALYZER SERVER PATENT.
THAT'S THE '647 PATENT.

THAT'S WHERE WE LEFT OFF YESTERDAY, SO

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I FIGURED THAT WOULD BE FRESHEST IN EVERYBODY'S MIND AND LET'S

PICK UP THERE.

NOW, THERE ARE TWO INDEPENDENT REASONS THAT I'M GOING TO

GIVE YOU WHY THESE DEVICES DON'T INFRINGE, AND I'M GOING TO

WALK YOU THROUGH THAT EVIDENCE.

THINGS, BUT I WANT TO OUTLINE TWO FOR YOU HERE TODAY, AND I'M

GOING TO TALK ABOUT ONE PRIOR ART REFERENCE ABOUT WHY THAT'S

INVENTIVE.

WE PRESENTED ADDITIONAL

I WON'T WALK YOU THROUGH THE JURY VERDICT FORM.

MR. MCELHINNY ALREADY DID THAT.

APPARENT THAT WHERE HE SAYS TO SAY YES, I SAY NO.

WHERE HE SAYS NO, I SAY YES.

HE -- I MEAN, IT'S PROBABLY
RIGHT?

(LAUGHTER.)

MR. NELSON:

NOW, LET'S TALK ABOUT THIS ANALYZER

SERVER, OKAY?

REQUIRED, AN ANALYZER SERVER FOR DETECTING STRUCTURES IN THE

DATA.

THAT'S A LIMITATION OF THE CLAIM.

IT'S

NOW, YOU REMEMBER, THROUGH THIS CASE, IT REALLY SEEMED

LIKE APPLE WAS TRYING TO READ THAT LIMITATION OUT OF THE CLAIM.

THEY WERE TRYING TO GIVE IT NO MEANING, ANALYZER SERVER, IT'S

JUST A PIECE OF SOFTWARE.

BUT THE COURT GAVE US A CONSTRUCTION YESTERDAY MORNING

YOU'LL RECALL.

AND ANALYZER SERVER MEANS SOMETHING, AND IT

MEANS SOMETHING VERY IMPORTANT.

SEPARATE FROM THE CLIENT THAT RECEIVES DATA HAVING STRUCTURES

IT'S "A SERVER ROUTINE

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FROM THE CLIENT."
SO WE KNOW THAT TO HAVE AN ANALYZER SERVER, YOU'VE GOT TO

HAVE AT LEAST TWO THINGS.

SERVER, AND YOU'VE GOT TO HAVE A CLIENT, AND THE TWO OF THEM

HAVE TO BE SEPARATE.

WHAT SERVER MEANS, ANALYZER SERVER MEANS.

RIGHT?

BECAUSE YOU'VE GOT TO HAVE A

THAT'S WHAT THE COURT SAYS THAT'S

SO LET'S TALK ABOUT WHAT WE HEARD ABOUT THAT.

WE BROUGHT

IN THE FOLKS THAT ACTUALLY WROTE THAT CODE.

DISCUSSION ABOUT THE FRAMEWORK CODE AND THE SHARED LIBRARIES.

YOU RECALL SOME

MS. HACKBORN FROM GOOGLE, SHE CAME RELATIVELY EARLY ON OUR

SIDE OF THE CASE, SHE ACTUALLY WROTE THAT LINKIFY CODE, AND WE

ASKED HER, DID YOU IMPLEMENT IT AS A SERVER?

NO, I DIDN'T.

IT WASN'T IMPLEMENTED AS A SERVER, AND SHE TOLD YOU WHY

THAT WAS.

APPLICATIONS.

IT'S BECAUSE IT DIDN'T NEED TO SHARE DATA ACROSS

NOW, WHO ELSE DID WE HEAR FROM ABOUT THIS SHARED LIBRARY

ISSUE?

HIM INTO COURT TO TESTIFY.

RIGHT?

WELL, HERE IS ONE OF THE INVENTORS.

APPLE DIDN'T BRING

WE SHOWED YOU HIS DEPOSITION.

WE SHOWED YOU THAT DEPOSITION TESTIMONY.

AND COUNSEL REFERENCED THIS DX EXHIBIT 334.

THAT'S THAT

SERIES OF E-MAILS WE TALKED ABOUT A FEW TIMES.

I WANT YOU TO

GO BACK AND LOOK AT THAT AND I WANT YOU TO READ THAT VERY

CAREFULLY.

READ THAT DOCUMENT, WHICH IS WHY I PUT THAT DOCUMENT INTO

I'M NOT AFRAID OF THOSE DOCUMENTS, BECAUSE WHEN YOU

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EVIDENCE, YOU'LL SEE SOMETHING VERY, VERY IMPORTANT, WHICH IS

THAT AT THE TIME APPLE FILED THIS PATENT, OKAY -- THIS IS

FEBRUARY OF 1996 -- THE ONLY THING THAT THEY HAD EVER

COMPLIMENTED -- OR IMPLE -- CONTEMPLATED, THAT'S THE WORD I WAS

LOOKING FOR, IS IMPLEMENTING THIS AS A SERVER.

FIRST CLASS APPLICATION, AND THAT MEANS SOMETHING THAT CAN

STAND ALONE, RIGHT, BE BY ITSELF.

8
9
10
11

THEY CALL IT A

AND, SURE, LATER THERE WAS TALK, BECAUSE IF YOU LOOK
THROUGH THOSE E-MAILS, THERE WAS SOME TALK ABOUT SOME PROBLEMS
WITH PERFORMANCE BECAUSE OF OVERHEAD AND ISSUES LIKE THAT.
SO NOW THERE WAS, MUCH LATER, A DIFFERENT PROPOSAL THAT

WAS MADE, MAYBE WE SHOULD ELIMINATE AND WE SHOULD BUILD THAT

FUNCTIONALITY INTO THE APPLICATION ITSELF.

BE THE SHARED LIBRARY.

15
16
17

RIGHT?

THAT WOULD

BUT IF YOU LOOK AT WHEN THAT'S SUGGESTED, THAT IS EIGHT
MONTHS AFTER THE PATENT IS FILED.

RIGHT?

EIGHT MONTHS AFTER.

THIS PATENT CLAIMS AN ANALYZER SERVER.

IT DOESN'T TALK

ABOUT SHARED LIBRARIES.

FUNCTIONS THAT ARE REQUIRED HERE OF THE ANALYZER SERVER IN THE

APPLICATION ITSELF.

IT DOESN'T TALK ABOUT IMPLEMENTING THE

THE FACT THAT THE INVENTORS MAY LATER HAVE DECIDED, WELL,

THERE'S SOME PROBLEMS WITH THAT, SO MAYBE I'M GOING TO TRY TO

CHANGE IT, THAT'S VERY IMPORTANT BECAUSE THAT -- ONE, WE KNOW

IT CAN'T MAKE ITS WAY INTO THE PATENT BECAUSE THE PATENT WAS

FILED EIGHT MONTHS BEFORE.

RIGHT?

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THE SECOND THING WE KNOW IS IT ISN'T IN THE PATENT.

RIGHT?

AN ANALYZER SERVER.

THE APPLICATION ITSELF.

THIS IS WHERE THE WORDS BECOME VERY IMPORTANT.

IT SAYS

IT DOESN'T SAY PUT THAT FUNCTIONALITY IN
RIGHT?

IT'S VERY, VERY IMPORTANT, LADIES AND GENTLEMEN, SO GO

BACK AND LOOK AT THAT AND CONSIDER THAT TESTIMONY THAT WE

PRESENTED TO YOU FROM DR. BONHURA.

8
9

APPLE DIDN'T BRING TO YOU ONE SINGLE INVENTOR FOR THE '647
PATENT.

NOBODY CAME IN HERE AND SAT IN THAT STAND AND TOLD YOU

WHAT THIS INVENTION WAS ABOUT AND HOW THEY CAME UP WITH IT,

WHAT IT WASN'T AND WHAT IT WASN'T.

SO WHO ELSE DID WE HEAR FROM ABOUT THIS?

CERTAINLY WE

HEARD FROM SAMSUNG'S EXPERT, RIGHT, AND HE EXPLAINED EXACTLY

WHAT I JUST DESCRIBED TO YOU, THAT THIS LIBRARY CODE THAT

THEY'RE ACCUSING OF INFRINGEMENT, IT'S NOT JUST PART OF THE

APPLICATION.

IT IS THE APPLICATION.

WHO ELSE DID WE HEAR FROM?

RIGHT?

WE -- THIS IS YESTERDAY.

YOU'LL RECALL ME ASKING APPLE'S EXPERT ABOUT THIS LINKIFY,

THAT'S THE SHARED LIBRARY THAT THEY'RE ACCUSING IN THE

MESSENGER APPLICATION, AND HE ADMITS THAT IT CAN'T RUN AS A

STANDALONE APPLICATION, RIGHT?

22
23

IT CAN'T RUN BY ITSELF.

SO THERE'S NOTHING SEPARATE -- REMEMBER WHAT HE SAID?

AND

I ASKED HIM VERY -- WHAT IS THE CLIENT?

WELL, THAT'S THE MESSENGER APPLICATION.

WHAT IS THE -- THE MESSENGER APPLICATION WITH THE BROWSER,

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YOU KNOW, WE HAD THE BROWSER APPLICATION.

HE SAID.

APPLICATION.

4
5
6
7
8
9
10
11

RIGHT?

THAT'S WHAT

AND HE FREELY ADMITTED, THOSE ARE ONE SINGLE

SO WE KNOW FROM THE COURT'S CONSTRUCTION, WE NEED TWO
SEPARATE THINGS.

RIGHT?

WE HAVE ONE.

TWO SEPARATE THINGS.

THEIR EXPERT SAYS THERE'S JUST ONE THING,

THE ONE APPLICATION.
AND WHAT GOOGLE DID HERE, AND WHAT'S BEEN DONE WITH THESE,
IS TO PUT THE FUNCTIONALITY IN THE APPLICATION, ELIMINATE THE
OVERHEAD, DON'T USE AN ANALYZER SERVER.
SO -- AND THINK ABOUT IT, LADIES AND GENTLEMEN.

DOES IT

REALLY MAKE SENSE?

THE TRIAL, THEY'RE TRYING TO READ NO MEANING INTO THE ANALYZER

SERVER, BUT WE HAVE A CONSTRUCTION THAT SAYS WE NEED TWO

SEPARATE THINGS.

16
17
18
19

WE HAVE A CONSTRUCTION NOW -- THROUGHOUT

SO WHAT'S YOUR ANSWER TO THAT?

WELL, I POINTED TO THE ONE

THING, THE APPLICATION.
BUT REALLY, IF YOU LOOK IN THERE, I COULD KIND OF PULL IT
APART AND THAT WOULD BE TWO SEPARATE THINGS.

IT DOESN'T MAKE ANY SENSE.

NOW, THE OTHER REASON I WANT TO TALK TO YOU ABOUT -- THIS

IS TIED TO THE COURT'S CONSTRUCTION AS WELL -- THIS LINKING

ACTIONS TO DETECTED STRUCTURES, AND YOU HEARD, IN HIS FIRST

TIME AROUND FROM SAMSUNG'S EXPERT, ABOUT WHY THE ACTION

PROCESSOR LIMITATION WASN'T MET BECAUSE THERE WERE NO LINKED

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ACTIONS TO DETECTED STRUCTURES.

I MEAN, WE SEE HERE THE ACTION PROCESSOR FOR PERFORMING

THE SELECTED ACTION LINKED TO THE SELECTED STRUCTURE, MEANING

IT'S GOT TO BE WHAT THE ANALYZER SERVER LINKS TO THAT DETECTED

STRUCTURE.

RIGHT?

AND IN ANDROID -- REMEMBER, WE HEARD FROM MS. HACKBORN,

ONCE AGAIN, THAT ANDROID WAS DESIGNED VERY DIFFERENTLY, WITH

THIS INTENTS SYSTEM.

BEGINNING, AND THAT WAS TO MAKE IT FLEXIBLE, RIGHT, SO THAT YOU

THIS IS AN IDEA SHE HAD FROM THE

COULD BRING WHATEVER APPLICATION YOU WANTED.

THESE SPECIFIED CONNECTIONS MADE.

12
13
14

THAT WAS A DESIGN CHOICE.

YOU WOULDN'T HAVE

RIGHT?

IT WAS WHAT THEY WANTED.

BECAUSE, REMEMBER, IT'S AN OPEN PLATFORM.

RIGHT?

SO FOR THAT REASON -- AND DR. JEFFAY CAME IN AND EXPLAINED

TO YOU WHY THAT WAS DIFFERENT.

ACTION -- OR EXCUSE ME -- YOU PUT, SAY, AN E-MAIL IS A GOOD

EXAMPLE BECAUSE YOU MIGHT HAVE A CORPORATE E-MAIL AND YOU MIGHT

HAVE A PERSONAL E-MAIL, SO YOU TOUCH ON AN E-MAIL ADDRESS, AND

ONE OF THE THINGS YOU MIGHT WANT TO DO IS SEND.

YOU CAN SELECT, YOU KNOW, AN

WELL, YOU KNOW, YOU HAVE THOSE THINGS AND IT'S GOING TO

ASK YOU, WHICH ONE DO YOU WANT?

BECAUSE IT'S FLEXIBLE.

SO THERE IS NO SPECIFIED CONNECTION.

24
25

AND PART OF THAT REASON IS

YOU CAN RUN THE APPLICATIONS YOU WANT.

WHAT'S APPLE'S RESPONSE TO THAT?

I DON'T KNOW BECAUSE I

DIDN'T UNDERSTAND ANYTHING THAT THEIR EXPERT WAS SAYING

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YESTERDAY.

CODE AND SAID THIS DOES THIS AND THIS CALLS THIS.

EXPLAINED TO US IN ENGLISH WHY THAT WAS THE CASE, WHY IS THERE

A SPECIFIED CONNECTION.

5
6
7
8
9

I DIDN'T UNDERSTAND IT.

HE TALKED ABOUT A BUNCH OF

SO ONCE AGAIN, THIS IS APPLE'S BURDEN OF PROOF, LADIES AND
GENTLEMEN, AND THEY DIDN'T EXPLAIN IT TO YOU.
WE DID.

WE EXPLAINED TO YOU WHY IT'S NOT THERE.

IT'S NOT

THERE.
SO IF YOU FIND EITHER OF THOSE REASONS, THEN YOU FIND IN

OUR FAVOR.

OR THE OTHER, BECAUSE EVERYTHING MATTERS.

HE NEVER

RIGHT?

I DON'T HAVE TO PROVE BOTH.

IT'S JUST ONE

SO NOW I WANT TO TALK ABOUT THE PRIOR ART THAT WE BROUGHT

WITH RESPECT TO THIS PATENT, AND YOU'LL RECALL THAT WE BROUGHT

MR. LARS FRID-NIELSEN, THE GENTLEMAN FROM DENMARK WHO DESIGNED

THIS SYSTEM.

YEARS BEFORE THE PATENT CAME OUT.

AND THIS SYSTEM, REMEMBER, WAS 1985.

THAT'S 11

AND APPLE, YOU KNOW, THEY SAY, WELL, WAIT A MINUTE, THIS

DOESN'T DO A FEW THINGS, ONE OF THE THINGS BEING THE POP-UP

MENU WHICH I'LL ADDRESS IN A MOMENT.

20
21
22

ANOTHER THING IS, WELL, IT DOESN'T DETECT MULTIPLE
STRUCTURES.

REMEMBER THEY SAID THAT?

WELL, WE KNOW FROM THIS THAT WE'RE LOOKING AT HERE,

DX 332, THE -- THERE ARE DIFFERENT STRUCTURES HERE, DIFFERENT

TYPES OF PHONE NUMBERS BECAUSE ONE HAS A PARENTHESES AROUND IT

AND ANOTHER ONE JUST HAS THE DASHES.

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AND YOU'LL RECALL, WHEN YOU LOOKED AT THE CODE, HOW

APPLE'S EXPERT -- REMEMBER, THEY PUT THAT CODE UP FROM THE

SIDEKICK CODE AND IT HAD SET 1 AND ONE PATTERN AND IT HAD SET 2

IN ANOTHER PATTERN AND SET 3, AND HE SAID, OH, THOSE ARE ALL

ONE PATTERN.

WELL, THEY'RE NOT.

THEY'RE DIFFERENT PATTERNS.

RIGHT?

AND THAT'S THE POINT, BECAUSE AS THAT TESTIMONY THAT I

POINTED OUT TO YOU YESTERDAY FROM THEIR EXPERT, HE ACTUALLY

DEFINED, THE FIRST TIME HE CAME UP ON THE STAND, AND SAID EVERY

TIME WE HAVE A DIFFERENT PATTERN, YOU'VE GOT A DIFFERENT

STRUCTURE.

12
13
14

RIGHT?

SO THERE ARE MULTIPLE STRUCTURES.

WHAT'S THE OTHER THING THEY SAID?

WELL, THE OTHER THING

THEY SAID IS, WELL, IT DOESN'T DO MULTIPLE ACTIONS.
BUT WE KNOW FROM THE CONSTRUCTION THAT THE COURT GAVE US,

THAT'S NOT REQUIRED.

THAT CONSTRUCTION UP.

CONSTRUCTION.

IT'S AT LEAST ONE.

RIGHT?

AND I CAN PUT

THIS IS THE LINKING ACTIONS

WE'LL PUT THAT BACK ON THE SCREEN, PLEASE.

SEE, CREATING A SPECIFIED CONNECTION BETWEEN EACH DETECTED

STRUCTURE -- EXCUSE ME -- AND AT LEAST ONE COMPUTER SUBROUTINE.

RIGHT?

ACTIONS, YOU HAVE MULTIPLE STRUCTURES, YOU HAVE AN ACTION

LINKED TO ONE STRUCTURE, YOU HAVE AN ACTION LINKED TO ANOTHER

STRUCTURE, YOU HAVE ACTIONS.

ABOUT THEY HAVE TO BE DIFFERENT TYPES OF ACTIONS.

IT DOESN'T SAY MULTIPLE ONES BECAUSE YOU CAN HAVE

RIGHT?

THERE'S NOTHING IN HERE

UNITED STATES COURT REPORTERS

THERE'S NONE

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OF THAT.

NOW, THE LAST THING THAT APPLE TALKS ABOUT IS THIS POP-UP

MENU.

POP-UP MENU.

RIGHT?

AND THEY SAID, WELL, THERE'S NOTHING IN THE

BUT, REMEMBER, THIS WAS 1985.

RIGHT?

1985.

AND SIDEKICK

ITSELF, AS WE DEMONSTRATED TO YOU, HAD POP-UP MENU IN IT.

JUST DIDN'T USE IT FOR THIS DIALER FUNCTIONALITY.

8
9

SO THINK ABOUT THIS, LADIES AND GENTLEMEN:

APPLE'S

BASICALLY SAYING, WELL, SIDEKICK HAD ONE, RIGHT, STRUCTURED

ACTION.

PLACES, BUT IT DIDN'T DO THEM WITH RESPECT TO THE MENU THAT

SHOWS YOU THE ACTION.

IT DIDN'T HAVE TWO.

SIDEKICK DID POP-UP MENUS OTHER

THEY NEVER BROUGHT TO YOU AN INVENTOR TO SAY, HEY, WAIT A

MINUTE, THIS IS WHY IT WAS HARD TO DO TWO AND NOT ONE.

SOMEBODY ELSE ALREADY DID ONE.

DO TWO.

17
18
19

RIGHT?

THIS WAS WHY IT WAS HARDER TO

THEY DIDN'T BRING YOU SOMEBODY TO SAY, EUREKA, THAT'S WHAT
I WAS WORKING ON.
THEY DIDN'T BRING TO YOU SOMEBODY, ONE OF THE INVENTORS

THAT SAID, HEY, WAIT A MINUTE, THIS IS WHY IT WAS HARD TO

IMPLEMENT THIS AS A POP-UP MENU.

THEY NEVER DID THAT.

SO LADIES AND GENTLEMEN, THAT'S THE PATENT OFFICE.

NOW I WANT TO MOVE TO THE '959 PATENT, AND SOMEBODY IS

GOING TO -- THE CLAIMS ARE ALWAYS GOING TO BE UP HERE BECAUSE,

ONE, I WANT TO REFERENCE THEM AND, TWO, THEY'RE VERY IMPORTANT

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BECAUSE THAT'S WHAT WE'RE HERE FOR.

SO HERE, ON THE '959 PATENT, THIS IS THE HEURISTICS TO

LOCATE INFORMATION.

PATENT IS.

YOU'LL RECALL, RIGHT, THAT'S WHAT THIS

AND HERE'S WHAT I WANT TO FOCUS ON.

THERE'S TWO THINGS

THAT I'M GOING TO WALK THROUGH HERE TODAY AND GIVE YOU THE MAP.

I'M GOING TO WALK THROUGH WHY THERE'S NO INFRINGEMENT, BECAUSE

THERE IS NO HEURISTIC, THAT THERE'S NO HEURISTIC TO LOCATE

INFORMATION ON THE INTERNET.

AND I'M ALSO GOING TO WALK YOU THROUGH THE WAIS PRIOR ART,
THE FREEWAIS SF PRIOR ART.

13
14

OKAY?

AND SO FIRST, BEFORE I DO THAT, I SHOULD REMIND YOU,
SIDEKICK, PATENT OFFICE DIDN'T HAVE IT.

15
16

THAT'S NOT THERE IN THE

ACCUSED GOOGLE SEARCH APPLICATION.

11
12

RIGHT?

FREEWAIS PRIOR ART?

THE PATENT OFFICE DIDN'T HAVE IT.

DISPUTE ABOUT THAT.

NOW, LET'S GO TO THE NEXT SLIDE, MR. KOTARSKI.

NOW, HERE I JUST WANT TO REMIND YOU A LITTLE BIT, THIS WAS

TRUE WITH THE LAST PATENT I TALKED ABOUT, THE '647, AND IT'S

TRUE WITH THE '959 PATENT.

COUNSEL ABOUT THE IPHONE, 2007, THIS WAS WHERE EVERYTHING CAME

FROM.

23
24
25

YOU'VE HEARD A LOT FROM APPLE'S

WELL, WE'VE ALREADY SEEN THAT MOST OF THESE PATENTS AREN'T
USED IN THE IPHONE.
BUT WE ALSO KNOW THE '647, 1996, THERE'S NO IPHONE AROUND.

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THIS HAS NOTHING TO DO WITH THE IPHONE.

WE ALSO KNOW -- AS MR. PRICE SAID, YOU DIDN'T HEAR ONE

SHRED OF EXPERT TESTIMONY.

STRUCTURE OF THE CODE FROM THE '647.

DIDN'T HEAR ONE WORD FROM THEIR EXPERT ABOUT HOW APPLE DOES IT.

RIGHT?

CASE.

TELL US.

WE HEARD ALL ABOUT THE CODE AND THE
DO YOU RECALL THAT?

YOU

YOU DON'T HAVE ANY BASIS TO CONCLUDE THAT THAT'S THE
I'M NOT SURE WHY.

I DON'T KNOW WHY THEY DIDN'T WANT TO

NOW LET'S TALK ABOUT THIS '959 PATENT.

AGAIN, IF YOU LOOK

AT THAT PATENT, IT DOESN'T TALK ABOUT MOBILE PHONES, MOBILE

DEVICES.

WHAT THIS IS FOR.

IT TALKS ABOUT DESKTOP COMPUTERS.

RIGHT?

THAT'S

AND LET ME -- IF YOU GO TO THE NEXT SLIDE -- MAKE ONE

THING VERY CLEAR, BECAUSE THIS IS IMPORTANT BECAUSE I THINK

COUNSEL FOR APPLE REALLY CONFUSED THIS SEVERAL TIMES DURING HIS

CASE, PARTICULARLY DURING THE OPENING STATEMENT.

YOU'LL RECALL WHERE THEY SHOWED ONE OF THE PHONES AND

SAID, WAIT, SOMEBODY IS TYPING IN AND THERE'S INFORMATION

COMING FROM THE INTERNET AND LOCALLY, THE CONTACTS.

RECALL THAT VIDEO.

YOU'LL

WELL, IT'S VERY IMPORTANT WHAT THEY'RE NOT ACCUSING.

THIS

IS APPLE'S EXPERT, AND I ASKED HIM FLAT OUT, "YOU'RE NOT

ACCUSING THE FUNCTIONALITY OF THE GOOGLE SEARCH SERVER; RIGHT?

"I THINK THAT'S FAIR."

HE AGREES.

SO THE GOOGLE SEARCH SERVER, THAT'S NOT

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APPLE'S INFRINGEMENT CLAIM.

WITH IT.

THAT DOESN'T HAVE ANYTHING TO DO

THAT'S VERY IMPORTANT, BECAUSE WHAT IS IT THAT LOCATES THE

INFORMATION ON THE INTERNET?

IT'S THE GOOGLE SEARCH SERVER.

WHAT'S GOOGLE?

IT SHOULD COME AS NO SURPRISE.

WHAT HAS GOOGLE BEEN DOING FOR THE LAST --

SINCE 1997 WHEN THEY WERE FOUNDED?

BUT THAT'S NOT ACCUSED.

SO WHAT IS ACCUSED?

THAT'S WHAT GOOGLE DOES.

LET'S GO TO THE NEXT SLIDE.

MR. BRINGERT CAME, THIS IS THE GENTLEMAN FROM GOOGLE WHO

WROTE THIS GOOGLE SEARCH APPLICATION, OR HEADED THE TEAM TO

WRITE THIS GOOGLE SEARCH APPLICATION, AND HE EXPLAINED -- HE

DID THIS DRAWING.

WE'VE HIGHLIGHTED IT AS THIS YELLOW BOX.

SEARCH SERVER.

WHAT'S ACCUSED IS RIGHT HERE IN THE MIDDLE.

REMEMBER, NOT ACCUSED.

WHAT DOES THIS YELLOW BOX DO?

INFORMATION ON THE INTERNET.

GOOGLE SEARCH SERVER THAT DOES THAT.

RIGHT?

WELL, IT DOESN'T LOCATE

THAT'S FOR SURE.

MR. BRINGERT TOLD US WHAT IT DOES.
BLENDS RESULTS.

THAT'S THE

HE SAID THIS BLENDS

RESULTS.

SOME RESULTS, SOMEBODY FOUND SOMETHING, SOMEBODY LOCATED

SOMETHING FOR ME, AND THIS BLENDS RESULTS.

REMEMBER?

HERE IS THE GOOGLE

WELL, THAT'S NOT LOCATING.

IN OTHER WORDS, I HAVE

THAT'S NOT WHAT THE CLAIM

SAYS.

IT SAYS "HEURISTICS TO LOCATE INFORMATION IN A PLURALITY

OF LOCATIONS," ONE OF THEM BEING THE INTERNET.

UNITED STATES COURT REPORTERS

RIGHT?

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DOESN'T SAY, OH, TO BLEND INFORMATION TOGETHER THAT SOMEBODY

ELSE FOUND FOR ME.

LET HIM READ THAT LIMITATION OUT OF THE CLAIM.

4
5

THAT'S NOT WHAT THE CLAIM IS, AND YOU CAN'T

BUT HOW DOES APPLE'S EXPERT ACTUALLY DO THAT?
WAS INTERESTING.

WELL, THIS

THIS WAS SOME QUESTIONING FROM MR. PAK.

IF YOU GO BACK AND YOU'RE GOING TO LOOK -- AND I NEED TO

EXPLAIN A LITTLE BIT ABOUT THIS.

AT THE '959 PATENT, YOU'LL

SEE THERE'S SOMETHING DESCRIBED IN THAT '959 PATENT THAT'S

CALLED GLOBAL HEURISTICS, OKAY?

THAT'S SOMETHING DIFFERENT

THAN A PLURALITY OF HEURISTICS THAT'S IN THE CLAIM.

GLOBAL HEURISTICS, THEY DO SOME OTHER THINGS, BUT THAT'S NOT

PART OF THE CLAIM IN THE PATENT.

THESE

AND WE SEE HERE FROM APPLE'S EXPERT, HE SAYS EXACTLY THAT.

THE GLOBAL HEURISTICS, AS WE'VE DESCRIBED, DO A DIFFERENT THING

THAN THE PLURALITY OF HEURISTIC MODULES, RIGHT?

AND IF WE LOOK FURTHER HERE, WHAT DID HE SAY?

THAT GLOBAL

HEURISTICS MAY, AS WE DISCUSSED, FUSE, ORDER, THAT SORT OF

THING, THE RESULTS.

WELL, WHAT'S FUSE?

THAT'S BLEND, RIGHT?

SO HE SAID, APPLE'S EXPERT, HE SAID FLAT OUT IN HIS

DEPOSITION THAT THIS -- THAT BLENDING THAT THEY ACCUSED ISN'T

ONE OF THESE PLURALITY OF HEURISTICS IN THE CLAIM.

23
24
25

BUT HE CAME IN HERE TO COURT AND HE TOLD YOU SOMETHING
ELSE.

RIGHT?

HE TOLD YOU SOMETHING ELSE.

SO YOU'VE GOT TO CONSIDER THAT WHEN YOU GO BACK THERE.

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3

NOW, SO APPLE DOESN'T PRACTICE THIS CLAIM.

THE ACCUSED

ANDROID PHONES, SAMSUNG PHONES, DON'T PRACTICE THIS CLAIM.
BUT WE SHOWED YOU SOMETHING THAT DID, AND THAT'S THE WAIS

SYSTEM, SO LET ME JUST REMIND YOU A LITTLE BIT ABOUT THIS WAIS

SYSTEM.

THIS WAIS SYSTEM WAS THE UNIVERSAL SEARCH SYSTEM THAT WAS

DEVELOPED BY A COUPLE GENTLEMEN WHO WE BROUGHT IN TO TESTIFY --

I'LL TALK ABOUT THAT IN A MINUTE -- BUT YOU'LL SEE HERE THIS IS

THE UNIVERSAL SEARCH BOX.

CODE WAS.

IN GEORGE, AND WHAT CAME BACK FROM THE LOCAL MACHINE IS, YOU

KNOW, GEORGE ADAMS.

YOUR LOCAL MACHINE.

RIGHT?

THIS IS A DEMONSTRATION OF WHAT THIS

THIS IS THE UNIVERSAL SEARCH BOX.

YOU TYPE

HE MIGHT BE A CONTACT THAT YOU HAVE IN

AND HERE WHAT CAME BACK IS GEORGE WASHINGTON.

OKAY?

THOSE WERE PAPERS ABOUT GEORGE WASHINGTON THAT ARE OUT ON THE

INTERNET.

17
18
19

AND THEN THERE'S A RANKING THAT'S OVER THERE, THAT
HEURISTIC RANKING THAT WAS DESCRIBED FOR YOU.
SO WHAT DOES APPLE -- FIRST OF ALL, APPLE SAYS THAT WE'RE

PLANNING TO SHOW THAT BECAUSE WE BROUGHT TO YOU SOME GENTLEMEN

THAT ARE NOT FROM THE UNITED STATES.

WELL, BREWSTER KAHLE, RIGHT -- AND LET ME PUT UP SLIDE

22 -- HIS NAME IS RIGHT HERE ON THE CODE.

BROUGHT HIM FOR YOU.

RIGHT?

THAT'S WHY WE

REMEMBER, THIS WAS OPEN SOURCE CODE,

SO HE DEVELOPED THE FIRST VERSION AND HE DESCRIBED FOR

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YOU WHAT THAT IS.
NOW, OTHER PEOPLE BUILT ON THAT.

MR. PFEIFER IS THE ONE

WHO DID THE VERSION THAT WE TALKED ABOUT.

YES, THAT DOES SEARCH LOCALLY AND REMOTE AT THE SAME TIME.

5
6
7
8
9

WE TALKED -- GO FORWARD TO MR. KAHLE.

RIGHT?

AND HE SAID,

HE SAID IT USES

HEURISTICS, RIGHT, TO DO THAT.
SO THOSE GENTLEMEN CAME IN AND THEY TESTIFIED TO YOU ABOUT
WHAT THEIR PRODUCTS DID.
NOW, WHAT'S APPLE'S RESPONSE TO THAT?

WELL, APPLE SAYS A

FEW THINGS.

EVEN CONSIDER THIS AS PRIOR ART BECAUSE IT WASN'T IN THE

UNITED STATES.

THEIR FIRST RESPONSE IS, WAIT A MINUTE, YOU CAN'T

REMEMBER THAT?

WELL, THAT'S NOT RIGHT.

WE JUST HEARD THAT.
THAT'S NOT RIGHT AT ALL.

THEY

SAID THERE WAS NO EVIDENCE, THAT WE HAD NO EVIDENCE THAT IT WAS

INSTALLED HERE IN THE UNITED STATES.

IF YOU GO BACK AND YOU LOOK HERE -- THIS IS DX 313, THAT'S

AN EXHIBIT YOU HAVE -- THIS WAS AN E-MAIL THAT MR. PFEIFER

PRODUCED THAT SHOWS ALL THE INSTALLATIONS IN THE UNITED STATES.

I'VE HIGHLIGHTED THAT THERE.

AT THAT.

YOU GO AHEAD AND GO BACK AND LOOK

NOW, WHAT ELSE DID APPLE SAY?

WELL, THEIR SECOND THING IS

APPLE SAID, WAIT A MINUTE, SOURCE CODE, THAT'S NOT

INSTRUCTIONS.

24
25

SEE, THE CLAIM SAYS CONTAINING PROGRAM INSTRUCTIONS.
LET ME JUST EXPLAIN THIS TO YOU.

IT'S A COMPUTER READABLE

UNITED STATES COURT REPORTERS

AND

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MEDIUM, MEANING, YOU KNOW, SOMETHING THE COMPUTER CAN READ,

HARD DISK, WHATEVER, RIGHT, THAT CONTAINS THESE PROGRAM

INSTRUCTIONS.

SO THE PROGRAM INSTRUCTIONS ARE THE SOURCE CODE THAT

DR. RINARD TALKED TO YOU ABOUT AND SAID THIS IS THE 1996

VERSION, I DIDN'T CHANGE ONE LINE OF CODE.

THAT?

8
9
10
11
12

APPLE NEVER CHALLENGED THAT.

DO YOU REMEMBER

THEY NEVER SAID, WELL, WAIT

A MINUTE, HE CHANGED THIS CODE.
BUT APPLE NOW SAYS, THEIR EXPERT SAYS, WELL, WAIT A
MINUTE, SOURCE CODE CAN'T BE PROGRAM INSTRUCTIONS.
INTERESTING.

WHAT THEY'RE SAYING IS, WAIT A MINUTE, IF

IT'S INSTRUCTIONS THAT PEOPLE CAN ACTUALLY READ AND GET

SOMETHING FROM IT, IT'S NOT PRIOR ART.

15
16

BUT IF YOU ACTUALLY COMPILE IT, IT IS, EVEN THOUGH PEOPLE
CAN'T READ IT.

THAT DOESN'T MAKE ANY SENSE.

YOU KNOW WHAT ELSE DOESN'T MAKE ANY SENSE?

BEFORE THIS

CASE, APPLE AGREED -- YOU'RE GOING TO HAVE THIS IN YOUR

GLOSSARIES.

ABOUT SOME TERMS THAT MIGHT COME UP IN THE CASE AND WHAT THE

PARTIES AGREED TO.

23
24
25

YOU HAVE A LITTLE GLOSSARY IN YOUR JURY BINDERS

WELL, LOOK AT THIS ONE.
AGREED TO.

HERE'S A DEFINITION THAT APPLE

SOURCE CODE, WRITTEN INSTRUCTIONS FOR A COMPUTER.

SO I DON'T KNOW WHAT APPLE'S EXPERT IS TALKING ABOUT.

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RIGHT?

FOR A COMPUTER.

APPLE'S ALREADY AGREED THOSE ARE WRITTEN INSTRUCTIONS

WHAT'S THE THIRD THING THEY SAY?

WELL, THE THIRD THING

THEY SAY IS, WAIT A MINUTE, ALL OF THE THINGS THAT ARE IN HERE

HAVE TO BE LOCATED ON THE LOCAL DEVICE.

THAT?

REMEMBER THEY SAID

AND THEY SAID, WHAT YOU POINT TO, DR. RINARD, IS A

HEURISTIC FOR FINDING INFORMATION ON THE INTERNET THAT'S NOT ON

THE LOCAL MACHINE.

WELL, FIRST OF ALL, THIS IS JUST THE INSTRUCTIONS.

REMEMBER, THIS ISN'T A METHOD CLAIM.

TO DO ANYTHING.

DOING THAT.

YOU DON'T ACTUALLY HAVE

YOU JUST HAVE TO HAVE THE INSTRUCTIONS FOR

RIGHT?

THAT'S WHAT'S IMPORTANT.

THE SECOND THING IS THERE'S NOTHING IN THIS CLAIM -- THIS

IS ANOTHER SITUATION WHERE APPLE'S ADDING THINGS TO THE CLAIM.

THERE'S NOTHING IN HERE THAT SAYS, OH, WAIT A MINUTE, I NEED TO

HAVE ALL OF THAT INFORMATION ON ONE DEVICE AND, LOOK, ONE OF

THE THINGS IS THE INTERNET.

19
20
21

SO UNDER APPLE'S LOGIC, THE INTERNET HAS TO BE ON THE
LOCAL DEVICE.

IT DOESN'T MAKE ANY SENSE.

NOW, WHAT'S THE THIRD THING HE SAID?

WELL, THE THIRD

THING HE SAID IS SAMSUNG'S EXPERT, DR. RINARD ON THIS, DIDN'T

IDENTIFY A PLURALITY OF HEURISTICS.

LAWYER WORD THAT MEANS TWO OR MORE, RIGHT?

"PLURALITY" IS JUST A

SO -- BUT HE CAME BACK ON REBUTTAL AND HE POINTED OUT

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THAT, YES, ABSOLUTELY I DID.

HEURISTICS, THE HEURISTIC RELEVANCE RANKING, STEMMING, AND

SYNONYMS, HE POINTED THOSE OUT.

THE SOURCE CODE FOR THE THREE

RIGHT?

NOW, REMEMBER, THAT WAS TOWARDS THE END BEFORE WE HAD THE

OVERTIME, THE ADDITIONAL DAY OF TESTIMONY, AND APPLE'S COUNSEL

NEVER CHALLENGED THAT.

OUT OF, WE HAVE 15 MINUTES LEFT, YOUR HONOR, WE'RE JUST GOING

TO GIVE THEM TO THE COURT.

QUESTION.

10
11
12

THEY STILL HAD -- THEY MADE A BIG DEAL

THEY NEVER ASKED HIM A SINGLE

THEY NEVER CHALLENGED THIS.

THEY NEVER SAID, WELL,

WAIT A MINUTE, YOU'RE NOT RIGHT.
SO YOU'VE GOT TO THINK ABOUT THAT WHEN YOU'RE GOING BACK
THERE AND WEIGHING THE EVIDENCE.

NOW I WANT TO MOVE TO THE '414 PATENT.

THE '414 PATENT -- SOMEBODY IS GOING TO GET THE CLAIM AND

15
16
17
18

PUT IT UP HERE.
AGAIN, THE '414 PATENT, THAT'S WHAT APPLE KEEPS CALLING
THE BACKGROUND SYNC PATENT.
AND I'M GOING TO TALK ABOUT TWO THINGS, AND I'M GOING TO

TALK ABOUT THEM IN THE REVERSE ORDER HERE BECAUSE I DO THINK

IT'S IMPORTANT.

SO THIS WASN'T THE FIRST BACKGROUND SYNCING DEVICE.

SHOWED YOU THAT.

REMEMBER THAT, THAT MICROSOFT HAD DONE BEFORE.

24
25

WE SHOWED YOU THE WINDOWS MOBILE M.E.,

SO THIS ISN'T JUST ABOUT BACKGROUND SYNCING.

IT'S ABOUT A

VERY SPECIFIC ARCHITECTURE, AS YOU HEARD DURING THIS CASE, FOR

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BACKGROUND SYNCING, AND WHEN I WALK THROUGH WHAT APPLE SAYS TO

TRY TO GET AROUND THE PRIOR ART, YOU'RE GOING TO SEE HOW VERY

SPECIFIC IT IS, AND THAT SPECIFIC ARCHITECTURE IS SOMETHING

THAT SAMSUNG DOES NOT USE.

SO LET'S GO FIRST TO WHAT APPLE TOLD YOU IN OPENING

STATEMENT ABOUT WHAT THIS INVENTION IS.

THEY SAID, IT ALLOWS

THE PHONE TO DO IT AT THE SAME TIME, MEANING SYNCING, SO THAT

THE USER IS NEVER DISRUPTED AND NEVER UNDERSTANDS ACTUALLY THAT

THE SYNCING IS HAPPENING IN THE BACKGROUND.

WELL, WHAT WERE THEY IMPLYING TO YOU?

THEY WERE IMPLYING

TO YOU THAT WITHOUT THIS PATENT, THIS INVENTION, THIS IS

BACKGROUND SYNCING.

IT'S THE SAME THING WHEN THEY SHOWED YOU MR. LOCKHEIMER'S

TESTIMONY.

SAID IT WAS IMPORTANT.

YOU RECALL THAT TESTIMONY?

WELL, BACKGROUND SYNCING MAY BE.

THEY SAID, OH, LOOK, HE

BUT NOBODY EVER SAID,

AND APPLE DIDN'T TELL YOU, OURS IS A REALLY SPECIFIC WAY OF

DOING IT.

RIGHT?

MR. LOCKHEIMER TALKED -- WHEN HE WAS TALKING ABOUT THAT,

HE SAID, YEAH, THIS IS -- YOU KNOW, I WORKED AT THIS COMPANY,

GOOD, BACK IN THE 2000S AND IT WAS AN E-MAIL COMPANY AND THAT

WAS IMPORTANT TO US, THOSE KINDS OF THINGS.

23
24
25

SO DON'T BE DISTRACTED, LADIES AND GENTLEMEN.

THIS CLAIM

IS VERY SPECIFIC.
AND LET'S WALK THROUGH THAT.

SO WHAT DID APPLE'S EXPERT

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SAY WHEN I ASKED HIM THESE QUESTIONS?

DOING BACKGROUND SYNCING?

HE VERY QUICKLY SAID, NO, NO, NO,

THIS IS A PARTICULAR WAY.

RIGHT?

AND THEN SHORTLY THEREAFTER, HE TOLD US WHAT IT WAS.

YOU'VE GOT TO HAVE THREE.

A FEW TIMES.

DID IT COVER ALL WAYS OF

REMEMBER THAT?

WE TALKED ABOUT THAT

WITH CLAIM 25, THE WAY THIS IS, AND ALL THE PARTIES AGREE,

YOU'VE GOT -- ONE OF MY FINGERS HAS BEEN BROKEN A FEW TIMES,

WHEN I HOLD IT UP, IT DOESN'T WORK VERY WELL, SORRY -- I'LL USE

THIS HAND -- YOU HAVE GOT TO HAVE THREE OF THESE

SYNCHRONIZATION SOFTWARE COMPONENTS, RIGHT, NOT TWO.

OF THOSE THREE HAS TO BE FOR A DIFFERENT CLASS OF DATA.

EXAMPLES WE'VE BEEN USING WERE E-MAIL, CONTACTS, CALENDAR.

RIGHT?

TALKING ABOUT WHEN WE SAY A CLASS.

AND EACH
THE

IT'S JUST A DIFFERENT DATABASE IS WHAT WE'RE REALLY

SO WE KNOW THAT THAT'S VERY PARTICULAR.

WE DON'T DO IT.

BUT WINDOWS MOBILE M.E. DOES, AND LET ME SHOW YOU THAT

VIDEO THAT WE PLAYED JUST TO REMIND YOU OF WHAT'S GOING ON, AND

I'M GOING TO TALK ABOUT THIS, WHAT'S GOING ON.

21
22

(A VIDEOTAPE WAS PLAYED IN OPEN COURT OFF THE RECORD.)
MR. NELSON:

WE'VE GOT TWO DEVICES HERE THAT ARE

TALKING TO EACH OTHER, AND HERE SOMEBODY IS MAKING A CONTACT,

PUTTING IN -- AKIN ANDERSON I THINK IS WHAT IT'S GOING TO TURN

OUT TO BE.

YOU SEE HE'S WORKING ON THAT, TYPES IN A PHONE

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2
3
4

NUMBER, AND SAYS OKAY.
SO HE SENT THAT, RIGHT?

BASICALLY, YOU KNOW, OKAY, I WANT

TO SYNC.
AND NOW OVER HERE WHAT'S GOING ON ON THIS OTHER DEVICE,

HE'S GOING THROUGH THE INTERFACE, GOING THROUGH HIS CONTACTS

AND SAYING, WELL, YEAH, LOOK, I'M LOOKING AT THIS, I'M LOOKING

AT THAT.

8
9
10

AND WE SEE UP HERE THAT LITTLE TOWER STARTS BECOMING
ACTIVE, SO THAT MEANS IT'S SYNCING, AND THERE YOU GO,
AKIN ANDERSON.

SO THE WINDOWS M.E., WE KNOW IT CAN DO EXACTLY WHAT APPLE

SHOWED YOU WITH THE ACCUSED DEVICES IN THEIR OPENING STATEMENT.

SO THIS RIGHT HERE, AS WE WALKED THROUGH, IT HAS THE

ARCHITECTURE, THIS VERY SPECIFIC ARCHITECTURE OF CLAIM 20.

SO WHAT DOES APPLE SAY IN RESPONSE?

AND THIS IS

IMPORTANT.

IT'S DX 317 WHEN YOU GO BACK THERE -- THIS DESCRIBES THE

WINDOWS MOBILE M.E. ARCHITECTURE, AND YOU SEE THESE THREE BOXES

UP THERE, E-MAIL, CONTACTS, AND CALENDAR.

YOU RECALL HE CAME AND TESTIFIED.

THE PROVIDERS THAT CORRESPONDED TO THE THREE SYNCHRONIZATION

SOFTWARE COMPONENTS.

IN FACT, IN THIS DOCUMENT YOU WANT TO LOOK AT --

THAT WAS DR. CHASE,

THIS IS WHAT HE SAID WERE

WELL, WHAT DID APPLE'S EXPERT SAY?

HE ACTUALLY SAID IN

EACH ONE OF THOSE ARE, INDEED, THE SYNCHRONIZATION, SOFTWARE

SYNCHRONIZATION COMPONENTS AND THEY ARE, INDEED, CONFIGURED TO

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SYNCHRONIZE THOSE PARTICULAR DATA CLASSES.

2
3

SO HE AGREES, WINDOWS MOBILE M.E., IT HAS THAT SPECIFIC
ARCHITECTURE.

4
5
6
7
8
9
10

THERE'S NO DISPUTE THERE.

BUT WHAT DOES HE SAY?

WELL, I'VE LOOKED AT THE SOURCE

CODE.
AND, IN FACT, DR. CHASE EVEN TESTIFIED IN HIS TESTIMONY
THAT NONE OF THOSE PROVIDE A THREAD.
SO WE HEARD SOMETHING WE NEVER HEARD IN THE INFRINGEMENT
CASE, WELL, WAIT A MINUTE, THOSE DON'T PROVIDE A THREAD.
SO NOW THAT BECOMES THE ONLY DISTINCTION HE'S MAKING FOR

THIS PRIOR ART REFERENCE, IT DOESN'T PROVIDE A THREAD.

SAID, WELL, DR. CHASE AGREED.

13
14
15

AND HE

INTERESTING, BECAUSE I LISTENED TO DR. CHASE AND I DIDN'T
HEAR THAT.
SO WHAT DID DR. CHASE ACTUALLY SAY?

HE'S TALKING ABOUT

THESE PROVIDERS, THEY'RE ILLUSTRATED THERE, AND THESE

SYNCHRONIZATION SOFTWARE COMPONENTS, AND THEY PROVIDE THE

SYNCHRONIZATION SOFTWARE PROCESSING THREADS I SPOKE ABOUT.

I DON'T KNOW WHAT HE'S TALKING ABOUT.

WHAT IS APPLE'S

EXPERT TALKING ABOUT?

AGREED AND SAID, OH, THESE DON'T PROVIDE A THREAD.

22
23
24
25

HE TRIED TO TELL YOU THAT DR. CHASE

BUT YOU CAN SEE THE TESTIMONY RIGHT HERE.

HE EXPLICITLY

SAID THEY DO PROVIDE A THREAD.
NOW -THE COURT:

I'M SORRY TO INTERRUPT YOU, BUT IT'S

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12:02.

CAN WE GO AHEAD AND TAKE OUR LUNCH BREAK?

MR. NELSON:

THE COURT:

YES, YOUR HONOR.
OKAY.

THANK YOU.

WHY DON'T WE COME BACK

AT -- WE HAVE A LOT OF PEOPLE TODAY, SO IT MAY GET CONGESTED.

WHY DON'T WE COME BACK AT 1:10?

6
7
8
9
10
11
12
13
14
15
16
17

OKAY?

PLEASE DON'T RESEARCH OR DISCUSS THE CASE.
BACK AT 1:10.

WE'LL SEE YOU

THANK YOU.

(JURY OUT AT 12:03 P.M.)
THE COURT:
COURTROOM.

OKAY.

THE JURORS HAVE LEFT THE

WHY DON'T I JUST GIVE YOU YOUR TIME TOTALS?

APPLE AS USED 1 HOUR AND 31 MINUTES, SO YOU HAVE 29
MINUTES LEFT.
SAMSUNG HAS USED 1 HOUR AND 7 MINUTES, SO YOU HAVE 53
MINUTES LEFT.
ALL RIGHT.

THANK YOU.

MR. NELSON:

LET'S TAKE OUR LUNCH BREAK.

THANK YOU, YOUR HONOR.

(LUNCH RECESS WAS TAKEN FROM 12:03 P.M. TO 1:07 P.M.)

18
19
20
21
22
23
24
25

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2

AFTERNOON SESSION
(JURY OUT AT 1:09 P.M.)

3
4

THE COURT:

HAVE THE PARTIES STIPULATED TO THE

EXHIBITS?

MS. MAROULIS:

MS. KREVANS:

THE COURT:

THE COURT:
ALL RIGHT.

MR. NELSON:

THE COURT:

THANK YOU.

OKAY.

WELCOME BACK.

PLEASE TAKE A SEAT.

I AM, YOUR HONOR.
ALL RIGHT.

TIME IS 1:09.

PLEASE GO

AHEAD.

14
15

OKAY.

ARE YOU READY, MR. NELSON?

YES, YOUR HONOR.

(JURY IN AT 1:09 P.M.)

9
10

YES, YOUR HONOR.

MR. NELSON:
OKAY.

GREAT, THANK YOU.

SO LET'S PICK UP RIGHT WHERE WE LEFT OFF.

WE WERE

TALKING ABOUT THE ONLY DISTINCTION THAT APPLE RAISED WITH THE

WINDOWS M.E. PRIOR ART, AND THAT WAS THIS IDEA OF PROVIDING A

THREAD.

FIGURE OUT WHAT APPLE'S EXPERT WAS TALKING ABOUT.

WE LOOKED AT THE TESTIMONY, BUT LET'S SEE IF WE CAN

NOW, IF WE GO TO THE NEXT SLIDE, I THINK WE HAVE A LITTLE

BIT OF INSIGHT HERE.

WHAT APPLE'S EXPERT HAS DONE IS TO CHANGE

THE DEFINITION OF WHAT IT MEANS TO PROVIDE A THREAD, AND HE DID

IT IN A WAY THAT WAS INCONSISTENT WITH WHAT HE SAID AT HIS

DEPOSITION.

DISTINCTION.

THAT'S THE ONLY WAY THAT HE RAISES THIS

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MR. PAK ASKED HIM A QUESTION, "ARE YOU SAYING THAT

PROVIDING A THREAD IS THE SAME THING WAS CREATING A THREAD,

SIR?

YES OR NO?"

"YES, SIR, I'VE SAID THAT, AND I'LL SAY IT AGAIN."

BUT THEN WE SHOWED HIM HIS DEPOSITION TESTIMONY, AND YOU

SEE HERE -- I'LL PICK UP TOWARDS THE BOTTOM -- THAT "YOU SAY

THAT THE WORD 'PROVIDING' IN CLAIM 11 REQUIRES CREATING A

THREAD; IS THAT FAIR?

"ANSWER:

I SAY IT REQUIRES PROVIDING THE THREAD, WHICH IS

THE PLAIN LANGUAGE INTERPRETATION.

MEAN BY 'CREATE.'

I'M NOT QUITE SURE WHAT YOU

I MEAN, TECHNICALLY THERE IS NO CREATE."

SO WHEN WE GET TO TRIAL, THE ONLY DISTINCTION THAT HE

RAISES -- HE FIRST TELLS YOU THAT DR. CHASE DIDN'T SAY IT, AND

WE JUST SAW THAT HE DID, AND THE NEXT THING HE SAID IS HE

PROVIDES A DEFINITION OF WHAT IT MEANS TO PROVIDE A THREAD

THAT'S DIRECTLY CONTRADICTORY TO WHAT HE SAID AT HIS

DEPOSITION, AND THAT'S THE ONLY DISTINCTION THAT APPLE RAISED

AT THIS TRIAL WITH RESPECT TO THAT WINDOWS MOBILE M.E. PRIOR

ART.

SO LET ME TALK ABOUT WHY THIS PATENT IS NOT INFRINGED, BUT

I FIRST WANT TO ADDRESS SOMETHING THAT APPLE'S COUNSEL

ADDRESSED IN OPENING JUST TO CLEAR -- EXCUSE ME -- IN CLOSING,

WE'RE AT THE END NOW, BECAUSE HE LEFT SOMETHING OUT HERE.

24
25

YOU RECALL THAT HE SHOWED YOU THIS AND SAID, LOOK, IT TOOK
TWO YEARS FOR GOOGLE TO DEVELOP THIS BACKGROUND SYNCING.

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WELL, WHAT WAS GOING ON BETWEEN THIS -- REMEMBER, THIS,

YOU HEARD TESTIMONY ABOUT THIS, THIS 2008 ANDROID 1.0 RELEASE,

THAT'S A FULL RELEASE.

WORKING.

THAT WAS ON A PHONE, EVERYTHING

SO FROM 2006 TO 2008, THEY WEREN'T JUST WORKING ON

BACKGROUND SYNCING.

THE ENTIRE OPERATING SYSTEM, THE PLATFORM, THE FRAMEWORK, ALL

THE THINGS YOU HEARD ABOUT THAT ARE GOING ON IN THERE.

9
10
11

RIGHT?

THEY WERE WORKING ON DEVELOPING

THE OTHER THING THAT WAS LEFT OFF WAS HERE'S WHERE THE
'414 PATENT COMES IN, 2010.

SO THIS IS WAY AFTER THE FACT.

NOW, LET'S TALK ABOUT THIS NON-INFRINGEMENT.

SO YOU'LL

RECALL THAT -- IF WE GO TO THE NEXT SLIDE, MR. KOTARSKI --

YOU'LL RECALL THIS IS -- THESE ARE THE SYNC ADAPTERS THAT WE'RE

ACCUSED OF, AND WHAT'S GOING ON HERE IS THEY'RE TRYING TO DO A

LITTLE MISDIRECTION.

BECAUSE THEY'RE CALLED SYNC ADAPTERS, THEY SAY, OH, OKAY,

SYNC ADAPTERS, THEREFORE, THEY MUST DO THE SYNCHRONIZATION.

BECAUSE, REMEMBER, THAT'S WHAT THE CLAIM REQUIRES.

SYNCHRONIZATION SOFTWARE COMPONENT IS CONFIGURED TO SYNCHRONIZE

STRUCTURED DATA.

RIGHT?

WELL, AS WE SHOWED YOU FOR FOUR OF THESE, AND FOR ALL OF

THEM IN THE MAIL DATA CLASS, THERE ARE NO SUCH THINGS.

THAT'S NOT WHAT THEY DO.

24
25

AND WE BROUGHT YOU MR. WESTBROOK.

RIGHT?

HE'S THE GENTLEMAN THAT

HEADED UP THE GROUP THAT ACTUALLY DID THIS WORK.

UNITED STATES COURT REPORTERS

RIGHT?

AND

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HE MADE THIS DRAWING AND HE SHOWED YOU, AND IT'S THIS LITTLE

YELLOW BOX AGAIN THAT THEY'RE ACCUSING.

THAT'S THE SYNC ADAPTER.

WE HIGHLIGHTED IT.

BUT LOOK WHAT IT'S NOT CONNECTED TO.

IT'S NOT CONNECTED

TO THE DATABASE AND IT'S NOT CONNECTED TO THE GMAIL SERVER.

DOESN'T SYNCHRONIZE ANYTHING.

ACCESS TO THOSE THINGS.

IT CAN'T.

IT DOESN'T HAVE

AND MR. WESTBROOK EXPLAINED TO YOU WHY THAT WAS.

WE USED A DIFFERENT ARCHITECTURE BECAUSE WE WANTED TO DO IT

10
11
12
13

FASTER.

RIGHT?

WE WANTED THE APPLICATION TO BE FASTER.

SO IT WASN'T JUST THAT IT WASN'T THERE.

IT WAS THAT THERE

WAS A SPECIFIC TECHNICAL REASON FOR IT.
AND WITH RESPECT TO THOSE EXCHANGE SYNC ADAPTERS, HE SAID

THE SAME THING.

WE WANT TO BE FASTER.

NO, IT'S NOT THAT.

WE WANT TO PUSH E-MAIL.

WE USE THE EXCHANGE SERVICE.

WE DON'T USE THESE EXCHANGE SYNC ADAPTERS IN ORDER TO DO

THE SYNCHRONIZATION OF THE STRUCTURED DATA, WHICH IS WHAT THE

CLAIM REQUIRES.

SO WHAT DOES APPLE'S EXPERT SAY IN RESPONSE?

WELL, YOU'LL

RECALL THIS.

DISCUSSION ABOUT THAT.

THAT I'VE IDENTIFIED SYNCHRONIZATION COMPONENTS THAT CAUSE THE

SYNCHRONIZATION TO OCCUR, ABSOLUTELY."

24
25

WHAT HE SAYS IS, "WELL, I THINK THERE WAS SOME

REMEMBER THAT?

I WANT TO BE CLEAR, IT'S MY POSITION

HE SAID THAT CAUSE THE SYNCHRONIZATION TO

OCCUR.

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WELL, YOU'LL SEE BOTH PLACES, WHICH IS CONFIGURED TO

SYNCHRONIZE HERE IN CLAIM 11, WHEREIN THE SYNCHRONIZATION

SOFTWARE COMPONENT IS CONFIGURED TO SYNCHRONIZE, RIGHT, IS

CONFIGURED TO SYNCHRONIZE.

IT DOESN'T SAY "CAUSE."

IF MY SON CAME TO ME AND SAID, I SAID, SON, DID YOU DO

YOUR HOMEWORK, AND HE SAID, WELL, DAD, I CAUSED IT TO BE DONE,

THAT ANSWER WOULD SOUND STRANGE TO ME, AND IT SHOULD SOUND

STRANGE TO YOU HERE BECAUSE THAT'S NOT WHAT THIS CLAIM

REQUIRED.

SO HOW DO WE KNOW THAT'S NOT WHAT IT REQUIRED?

HAVE THIS.

FROM THE FILE WRAPPER AT PAGE 751.

THIS IS JX 8 THAT WE PUT INTO EVIDENCE.

AND YOU'LL
THIS IS

YOU'LL SEE THAT AT ONE TIME, APPLE DID HAVE A CLAIM THAT

SAID "CONFIGURED TO CAUSE RETRIEVAL AND STORAGE OF THE

STRUCTURED DATA," RETRIEVAL AND STORAGE, SYNCHRONIZING.

THAT'S WHAT YOU'RE DOING.

17
18
19
20
21

IT SAID THAT.

BUT THERE WAS PRIOR ART OUT THERE.

THEY COULDN'T HAVE

THAT CLAIM.
AND SO THEY TOOK IT OUT, AND NOW IT SAYS "CONFIGURED TO
SYNCHRONIZE."
SO IN ORDER TO TRY TO GET AROUND THE PRIOR ART IN THE

PATENT OFFICE, THEY TOLD THE PATENT OFFICE, NOT CAUSING.

RIGHT?

THE BARGAIN THEY STRUCK WITH THE PATENT OFFICE.

RIGHT?

THIS IS A DIRECT RELATIONSHIP.

TAKE IT OUT.

THAT'S

NOW THEY'RE COMING IN HERE AND THEY WANT TO SAY SAMSUNG'S

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2

PHONES, ANDROID CODE INFRINGES.
WHAT DO THEY DO?

RIGHT?

THEY WANT TO SAY THAT.

THEY TAKE IT -- THEY PUT IT BACK IN.

THEY CHANGED THE BARGAIN, RIGHT, BECAUSE THEY CAN'T GET

INFRINGEMENT WITHOUT REWRITING THE CLAIM.

BUT YOU CAN'T LET THEM DO IT.

YOU CAN'T LET THEM DO IT

BECAUSE THAT'S NOT WHAT THE PROCESS IS.

NOW THEY'VE GOT TO STICK WITH IT.

8
9
10
11

THEY STRUCK THIS DEAL.

SO NOW LET ME TURN TO THE '172 PATENT.

NOW, IN THE '172

PATENT, THIS IS THE ONE THAT THE COURT ALREADY FOUND INFRINGES.
YOU DON'T HAVE TO DEAL WITH THAT.
ONE THING THAT MIGHT NOT BE CLEAR FROM THIS WITH THE '172

PATENT IS FOR THE PHONES THAT ARE IN THIS CASE THAT HAVE BEEN

RELEASED SINCE SAMSUNG GOT NOTICE OF THAT PATENT -- THE NOTICE

WAS THE LAWSUIT, THAT'S FEBRUARY 8TH, 2012 -- THEY'RE NOT

ACCUSING THEM.

PHONES HAVE THE INFRINGING KEYBOARDS OR THE TABLET.

17
18
19
20
21

NOBODY SAYS -- APPLE DOESN'T SAY THAT THOSE

SO I JUST WANT TO MAKE THAT POINT CLEAR BECAUSE IT MAY NOT
HAVE BEEN CLEAR TO YOU WHEN WE WENT THROUGH THE CASE.
BUT LET ME TELL YOU WHY THAT CLAIM IS INVALID, AND LET ME
SHOW YOU HERE.

I WANT TO SHOW YOU THE ROBINSON PRIOR ART.

YOU'LL RECALL DR. WIGDOR, SAMSUNG'S EXPERT, CAME IN AND

WALKED THROUGH THIS ROBINSON REFERENCE AND TOOK YOU THROUGH

STEP BY STEP WITH RESPECT TO THE CLAIMS.

AND THE ONLY THING THAT WAS MISSING WAS THE IDEA, IF YOU

LOOK BEHIND FROM THIS FIGURE, WAS THAT WHEN YOU'RE TYPING, YOU

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PUT THE WORDS IN AT THE CURSOR.

TYPING IN AT THE CURSOR.

RIGHT?

YOU PUT WHAT YOU'RE

AND SO THAT WOULD BE THIS FIRST AREA, THE TOUCHSCREEN

DISPLAY THAT, THAT DISPLAYS A CURRENT CHARACTER STRING BEING

INPUT BY THE USER.

OKAY?

HE EXPLAINED THAT.

NOW -- BUT THAT WAS IT.

THAT WAS THE ONLY THING.

AND IF WE LOOK TO 96A, HE BROUGHT THE XRGOMICS PATENT UP,

RIGHT, AND SHOWED YOU, HERE'S A MOBILE DEVICE, HERE'S A MOBILE

DEVICE AND THIS IS ONE WHERE, AS IS COMMONLY KNOWN, YOU HAVE

THE CHARACTERS BEING INPUT.

SO WHAT'S APPLE'S RESPONSE TO THAT?

WELL, THE FIRST THING IS, WELL, THE PATENT OFFICE ALREADY

IT'S TWO-FOLD.

LOOKED AT THIS.

WELL, THEY DIDN'T LOOK AT THIS COMBINATION.

ALL THEY

TALKED ABOUT IS ROBINSON.

THERE'S NO EVIDENCE THAT THE PATENT

OFFICE LOOKED AT THIS COMBINATION OR THAT ANYBODY TOLD THEM,

HEY, YOU CAN COMBINE THESE THINGS TOGETHER.

WHAT'S THE OTHER THING THEY SAY?

WELL, WAIT A MINUTE,

NOBODY WOULD BECAUSE XRGOMICS IS A WORD SUGGESTION PATENT, NOT

A WORD CORRECTION PATENT.

THAT'S WHAT THEY SAID.

WHERE DOES IT SAY THAT?

IT DOESN'T SAY IT IN THE CLAIM.

THAT'S JUST SOMETHING THAT APPLE'S ADDED.

KNOW, WORD CORRECTION.

THAT.

WELL, THIS IS, YOU

THIS IS MISSPELLING.

IT DOESN'T SAY

AND YOU'LL SEE, IN THOSE JURY INSTRUCTIONS, COMBINING

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THINGS, IF THEY'RE IN THE SAME FIELD, RIGHT, IF THEY'RE

RELATED, THEN THOSE ARE KINDS OF THINGS THAT CAN BE COMBINED.

SO YOU'VE GOT TO CONSIDER THAT WHEN YOU GO BACK THERE.

AND THERE'S ANOTHER THING THAT'S IMPORTANT HERE.

APPLE

KEEPS SAYING DEFER TO THE PATENT OFFICE, DEFER TO THEM.

I'VE ALREADY TALKED ABOUT THAT.

AND

THAT'S NOT YOUR ROLE HERE.

BUT I'M GOING TO ILLUSTRATE HERE WHY IT'S REALLY

IMPORTANT, BECAUSE YOU'LL RECALL WHEN APPLE'S EXPERT WENT

THROUGH, RIGHT, HE UNDERLINED A WHOLE BUNCH OF THINGS.

TIME THE FIRST AREA WORD APPEARED, HE UNDERLINED IT.

DO YOU REMEMBER THAT?

EVERY

RIGHT?

BUT EACH TIME, I WAS VERY CAREFUL -- AND APPLE'S COUNSEL

ACTUALLY SAID THE SAME THING IN CLOSING -- THE REASON WHY HE

WAS UNDERLINING IT IS HE SAID, WELL, BECAUSE THE CHARACTERS

DON'T APPEAR IN THE FIRST AREA, THIS NEXT THING WON'T HAPPEN.

IT'S JUST CONFIRMING THAT THE ONLY THING MISSING IS THE

17
18

FACT THAT THE FIRST CHARACTERS.
SO APPLE -- THEY'RE LOOKING TO MAKE A LOT OF MONEY ON THIS

PATENT.

EVERYTHING ELSE, BUT WE DON'T PUT THE WORDS IN IT IN ROBINSON,

YOU KNOW, WHAT YOU'RE TYPING AT THE CURSOR, THAT SHOULD BE FOR

A PATENT.

IS THAT SO DIFFICULT?

24
25

THEY'RE SAYING BECAUSE, WAIT A MINUTE, ROBINSON HAS

THEY NEVER BROUGHT THE INVENTORS TO YOU AND SAID WHY
RIGHT?

AND IT IS PARTICULARLY IMPORTANT HERE BECAUSE REMEMBER AT
THE PATENT OFFICE, IT WAS JUST APPLE.

THEY COULD COME IN AND

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1

TELL THEM THE SAME THING, WELL, WAIT A MINUTE, THIS IS MISSING

AND THIS IS MISSING AND THIS IS MISSING, ALL BECAUSE THERE'S NO

CHARACTERS BEING TYPED AT THE FIRST AREA.

ANYBODY, LIKE US, TO RESPOND.

5
6
7
8

THERE WASN'T

RIGHT?

SO THAT'S VERY IMPORTANT THAT YOU CONSIDER THAT AND GO
BACK.
NOW I WANT TO MOVE TO THE LAST PATENT.

THIS IS THE '721

PATENT, SLIDE TO UNLOCK.

SO HERE -- FIRST I WANT TO SHOW YOU THE GALAXY NEXUS, AND

WE TALKED ABOUT THIS AND WHY THAT GALAXY NEXUS DOESN'T INFRINGE

THIS CLAIM.

THE WORDS OF THE CLAIM BECOME VERY IMPORTANT HERE.

SO YOU'LL SEE HERE THAT YOU HAVE TO MAKE CONTACT WITH AN

UNLOCK IMAGE, AND THEN YOU -- TO CONTINUOUSLY MOVE THE UNLOCK

IMAGE ON THE TOUCH SENSITIVE DISPLAY.

SAME WHEN YOU TOUCH, YOU MOVE IT.

16
17
18

BUT IF WE PLAY THE VIDEO OF THE GALAXY NEXUS, YOU'LL
RECALL THIS, THAT DOESN'T HAPPEN.

21
22
23

RIGHT?

(A VIDEOTAPE WAS PLAYED IN OPEN COURT OFF THE RECORD.)

19
20

IN OTHER WORDS, THAT

MR. NELSON:

YOU'LL SEE, THIS IS WHAT APPLE IS

CALLING THE UNLOCK IMAGE.
BUT WHEN THE GENTLEMAN TOUCHES IT, IT DISAPPEARS.

IT GOES

AWAY.
AND APPLE'S RESPONSE TO THAT IS, WELL, I HAVE SOMETHING IN

THE SPECIFICATION OF THE PATENT WHERE IT SAYS SOMETHING ON THE

UNLOCK IMAGE CAN APPEAR AND DISAPPEAR.

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WELL, TWO THINGS WITH THAT.

ONE, AS WE WENT THROUGH, IT

DOESN'T SAY THE UNLOCK IMAGE CAN DISAPPEAR IN THE

SPECIFICATION.

IT'S SOMETHING ON IT.

AND THE OTHER THING IS WHAT'S IMPORTANT IS THE CLAIM.

CLAIM DOESN'T -- YOU DON'T COMPARE IT TO THE SPECIFICATION.

YOU COMPARE IT TO THE CLAIM, AND THE CLAIM SAYS THAT YOU NEED

TO CONTINUOUSLY MOVE THAT UNLOCK IMAGE.

SO IT DOESN'T INFRINGE FOR THAT REASON.

NOW LET ME TALK ABOUT INVALIDITY WITH RESPECT TO THIS

PATENT.

11
12

THE

I'M GOING TO FINISH UP HERE.

SO HERE WAS THE ONLY INVENTOR THAT WAS BROUGHT TO YOU, THE
ONLY INVENTOR THAT APPLE HAD, AND THAT WAS MR. CHRISTIE.

WELL, HE GAVE SOME INTERESTING TESTIMONY HERE.

HE SAID

WHY IT WAS THAT THEY DEVELOPED THEIR UNLOCK SCREEN, "WE WANTED

IT TO BE SOMETHING THAT WOULD BE REALLY UNLIKELY TO HAPPEN

ACCIDENTALLY."

THAT'S WHAT HE SAID.

RIGHT?

OKAY.

WELL, WE SHOWED YOU THE NEONODE PRIOR ART, THIS IS THE

PHONE, AND IT IS -- THE REASON FOR THE UNLOCKING, IT SAYS RIGHT

THERE IN THE REFERENCE -- AND YOU'LL HAVE THIS DX 342 THAT YOU

CAN LOOK AT BACK IN THE JURY ROOM -- IT SAYS TO MAKE SURE NO

UNINTENTIONAL CALLS ARE MADE, IN OTHER WORDS, EXACTLY THE SAME

REASON.

AND FURTHER, WHAT DOES IT SAY IN HERE?

WHAT HAPPENS WITH

IT?

YOU PRESS THE POWER BUTTON, JUST LIKE YOU WOULD ON ANY OF

THESE PHONES IN ORDER TO GET THE SCREEN TO COME ON, AND THEN

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THE TEXT "RIGHT SWEEP TO UNLOCK" APPEARS ON THE SCREEN.

RIGHT.

3
4

SWEEP

THAT'S WHAT THEY SAY.

THAT'S WHAT THIS IS.

SO THE ONLY THING THAT WOULD BE

MISSING FROM THIS WOULD BE AN UNLOCK IMAGE.

THAT'S ALL.

WELL, WE SHOWED YOU PRIOR ART THAT HAS THAT UNLOCK IMAGE.

SPECIFICALLY, THE SLIDERS -- IF WE GO TO THE NEXT SLIDE -- THIS

IS FROM THE PLAISANT VIDEO THAT WE SHOWED YOU.

SLIDERS IN THE PRIOR ART.

RIGHT?

THERE'S

AND NOW LET'S GO TO THE THING THAT APPLE SHOWED YOU -- AND

THIS IS GOING TO ILLUSTRATE TO YOU WHY IT'S VERY IMPORTANT FOR

YOU TO BE A CHECK ON THIS AND NOT SIMPLY DEFER TO THE PATENT

OFFICE -- APPLE SHOWED YOU, DURING THEIR EXPERT'S TESTIMONY,

THIS FIRST PART FROM THE PLAISANT PAPER WHERE IT SAYS, OH, WE

WANT TOGGLES, THOSE ARE PREFERRED OVER SLIDES.

TEACHES AWAY FROM USING SLIDERS.

SO HE SAYS THAT

YOU'LL RECALL THAT TESTIMONY.

BUT RIGHT BELOW, WHAT THEY DIDN'T SHOW YOU, WHAT DOES IT

SAY?

USED THEM CORRECTLY IS ENCOURAGING SINCE MANY OTHER CONTROLS

CAN BE DESIGNED USING A SLIDING MOTION.

THE SLIDING MOTION IS THAT IT IS LESS LIKELY TO BE DONE

INADVERTENTLY."

"EVEN IF SLIDERS WERE NOT PREFERRED, THE FACT THAT USERS

ANOTHER ADVANTAGE OF

IN OTHER WORDS, EXACTLY THE SAME REASON FOR USING SLIDERS

THAT MR. CHRISTIE TESTIFIED TO OF WHY THEY CAME UP WITH THEIR

UNLOCK.

NOW, THE PATENT OFFICE DIDN'T, THEY DIDN'T -- NOBODY

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POINTED THIS OUT TO THEM.

WE KNOW WHAT APPLE POINTED OUT TO YOU WHEN THEY CAME.

TO THE EXTENT THAT THERE WAS A DISCUSSION WITH THE PATENT

OFFICE, WE CAN ONLY ASSUME THEY POINTED THEM TO THE SAME THING.

THAT'S VERY MISLEADING AND THAT'S WHY IT'S IMPORTANT FOR

YOU TO BE A CHECK, BECAUSE WE'RE HERE TO RESPOND.

TO BRING OUT THE INFORMATION ON THE OTHER SIDE OF THE STORY.

SO WITH THAT, I REALLY APPRECIATE YOUR ATTENTION.

WE'RE HERE

I KNOW

IT'S -- IT'S BEEN, YOU KNOW, A LONG, LONG CASE.

BUT THINK ABOUT IT WHEN YOU GO BACK IN THERE.

YOUR JOB IS

TO WEIGH THE EVIDENCE, RIGHT, TO WEIGH THE EVIDENCE YOU'VE

HEARD.

AND I'VE GIVEN YOU A ROADMAP FROM MY SIDE OF THE CASE.

AND THINK ABOUT WHO WE BROUGHT.

ACTUALLY WROTE THE SOFTWARE, THE GOOGLE ENGINEERS, MS. KIM.

THEY CAME IN.

17
18

WE SHOWED THAT.

WE BROUGHT IN THE PRIOR ARTISTS, TO THE EXTENT THAT WE
WERE RELYING ON PRIOR ART, WHO WROTE THAT SOFTWARE.

WHAT DID APPLE DO IN RESPONSE?

INVENTOR.

HERE.

WE BROUGHT THE PEOPLE THAT

APPLE BROUGHT IN ONE

THE OTHER 13, YOU DIDN'T HEAR THEM.

WHAT ELSE DID THEY DO?

THEY WEREN'T

THEY BROUGHT IN EXPERTS.

THAT'S

BASICALLY THEIR CASE.

YOU DON'T HEAR FROM THE PEOPLE WHO DO

IT, WHO DEVELOPED IT.

THEY BROUGHT IN EXPERTS, AND AS WE SAW

WALKING THROUGH HERE, THEY BROUGHT IN EXPERTS WHO CONTRADICTED

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THEMSELVES, AND THAT'S SOMETHING FOR YOU TO JUDGE WHEN YOU GO

BACK THERE IN THE JURY ROOM.

AND WITH THAT, I APPRECIATE YOUR ATTENTION AND I'M GOING

TO TURN IT OVER TO MY COLLEAGUE, MR. JOHNSON, WHO'S GOING TO

TALK TO YOU ABOUT THE SAMSUNG CASE, SAMSUNG PATENTS.

THANK YOU VERY MUCH.

(MR. JOHNSON GAVE HIS CLOSING ARGUMENT ON BEHALF OF THE

DEFENDANTS.)

9
10
11
12

MR. JOHNSON:

GOOD AFTERNOON, LADIES AND GENTLEMEN.

LET'S SWITCH GEARS.

I'M HERE TO TALK ABOUT THE TWO

SAMSUNG PATENTS, THE '239 PATENT AND THE '449 PATENT.
NOW, THE AFFIRMATIVE CASE, SAMSUNG'S AFFIRMATIVE CASE WENT

BY AND HAPPENED VERY QUICKLY.

WE DIDN'T HAVE MUCH TIME,

ESPECIALLY WHEN YOU'RE DEFENDING AGAINST APPLE'S GROSSLY

INFLATED DAMAGES CLAIM ON THE APPLE PATENTS.

BUT THE QUICK PACE OF THE AFFIRMATIVE CASE SHOULDN'T

DETRACT FROM THE IMPORTANCE OF SAMSUNG'S PATENTS, AND I'LL

ADDRESS THE EVIDENCE SHORTLY, BUT LET ME SLOW DOWN HERE BECAUSE

I WANT YOU TO REMEMBER THE CASE FOR WHAT APPLE DID NOT DO.

APPLE DID NOT CHALLENGE THE VALIDITY OF THE SAMSUNG

PATENTS.

THE APPLE SOURCE CODE THAT WE SHOWED YOU THAT SHOWS THAT APPLE

INFRINGES THESE TWO PATENTS.

24
25

APPLE DID NOT CHALLENGE THE MOUNTAIN OF EVIDENCE AND

AND APPLE DID NOT CHALLENGE THE DAMAGES CALCULATIONS ON
THE SAMSUNG PATENTS AT ALL.

THEY DID NOT CHALLENGE -- THEY

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DIDN'T BRING A SINGLE WITNESS OR HAVE ANY TESTIMONY TO

CHALLENGE THE TESTIMONY OF DR. KEARL AND DR. RAO ON DAMAGES.

3
4
5

NOW, DR. KEARL CALCULATED DAMAGES TO BE ABOUT $6 MILLION
ON THE '239 PATENT AND ABOUT $158,000 FOR THE '449 PATENT.
NOBODY CAME TO SAY THESE DAMAGES NUMBERS WERE WRONG, AND

NOBODY CAME TO SAY DR. RAO'S STRAIGHTFORWARD SURVEY WAS FLAWED.

APPLE NEVER CALLED DR. VELLTURO, THEIR EXPERT, AND NOBODY

8
9

ELSE CAME TO TESTIFY ON DAMAGES.
SO YOU WILL HEAR, LIKELY WHEN APPLE'S COUNSEL STANDS UP TO

DO HIS PART OF THE CLOSING, THAT THEY DON'T INFRINGE EITHER ONE

OF THESE PATENTS AND THAT THE TECHNOLOGY IS OLD AND NOT USED.

BUT EVEN AS THEIR EXPERT ADMITTED AND AS INSTRUCTION

NUMBER 18 SAYS IN THE JURY INSTRUCTIONS, YOU ARE TO COMPARE THE

ASSERTED CLAIMS TO THE ACCUSED PRODUCTS.

1993 FIRSTLOOK PRODUCT, THE OLD PRODUCT BROCHURES AND THE PRICE

QUOTATIONS TO THE ACCUSED PRODUCTS.

THE ACCUSED PRODUCTS.

YOU DON'T COMPARE THE

YOU COMPARE THE CLAIMS TO

AND IF WE LOOK AT THE '239 PATENT, CLAIM 15, THIS PATENT

WAS AHEAD OF ITS TIME.

STRAIGHTFORWARD.

VIDEO AND THEN TRANSMITTING THAT VIDEO OVER A CELLULAR NETWORK.

AND THE CLAIM IS SHORT AND

IT TALKS ABOUT CAPTURING AND COMPRESSING

WE BROUGHT YOU MICHAEL FREEMAN FROM TULSA, OKLAHOMA, WHO

WAS THE LEAD INVENTOR ON THE PATENT, AND HE CAME AND TOLD YOU

ABOUT THE VIDEO TRANSMISSION TECHNOLOGY THAT HE INVENTED WITH

HIS FAMILY, AND IT WAS VERY SUCCESSFUL AND IT WAS USED BY THE

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MILITARY, IT WAS USED BY TELEVISION STATIONS AROUND THE

COUNTRY, AND IT WAS USED IN THE OKLAHOMA CITY BOMBINGS TO

STREAM VIDEO TO RESCUERS.

SUCCESSFUL AND HOW IT WON TWO EMMY AWARDS.

HE TOLD YOU HOW THIS TECHNOLOGY WAS

AND THEN WE BROUGHT YOU DR. DAN SCHONFELD, A PROFESSOR

FROM THE UNIVERSITY OF ILLINOIS AT CHICAGO, A PROFESSOR OF

ELECTRICAL ENGINEERING AND COMPUTER ENGINEERING.

8
9

AND HE EXPLAINED HOW THE FACETIME OVER CELLULAR FEATURE
AND THE ABILITY TO TRANSMIT VIDEOS BY E-MAIL AND TEXT MESSAGES

ALL INFRINGE CLAIM 15, AND HE WALKED THROUGH A LOT OF DETAIL,

THROUGH DOCUMENTS THAT WERE CONFIDENTIAL APPLE DOCUMENTS,

CONFIDENTIAL APPLE SOURCE CODE, AND OTHER THIRD PARTY

DOCUMENTS.

14
15
16

NOW, THE CLAIMS REQUIRE -- CLAIM 15 REQUIRES A VIDEO
CAPTURE MODULE.
APPLE SAYS THEY DON'T CAPTURE VIDEO.

WELL, WE KNOW WHEN

YOU USE AN IPHONE, YOU CAN RECORD AND CAPTURE VIDEO AND IT

STORES IT.

DR. SCHONFELD SHOWED YOU -- AND THIS IS ONLY FOR THE JURY

AT THIS POINT -- HE SHOWED YOU THE APPLE SOURCE CODE THAT SAYS

APPLE CAPTURES VIDEO.

YOU'LL HAVE IN THE JURY ROOM, AND THESE ARE FUNCTIONS THAT ARE

APPLE'S FUNCTIONS THAT ALL DESCRIBE THE FACT THAT THE IPHONES

CAPTURE VIDEO.

THESE ARE SEGMENTS FROM JX 52A, WHICH

AND YOU'LL RECALL WHEN I CROSS-EXAMINED APPLE'S EXPERT ON

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THE STAND AND I ASKED HIM, DID YOU LOOK AT SOURCE CODE AND RELY

UPON IT AS PART OF YOUR DIRECT TESTIMONY, HE HAD TO ADMIT THAT

HE DID NOT.

TESTIMONY.

HE DID NOT RELY UPON SOURCE CODE IN HIS DIRECT

SO DR. SCHONFELD, SAMSUNG'S EXPERT, ALSO SHOWED YOU THE

SOURCE CODE FOR THE NEXT PART OF THE LIMITATION THAT TALKS

ABOUT MEANS FOR TRANSMISSION.

8
9
10
11

AND HE WALKED THROUGH HOW THE SOURCE CODE -- AND AGAIN
CONFIDENTIAL DOCUMENTS, PLAINTIFF'S EXHIBIT 255 -- ALSO
ESTABLISHED THAT THIS PART OF THE LIMITATION IS MET.
SO APPLE'S EXPERT WAS IN A BOX.

WHAT DID THEY DO?

APPLE'S EXPERT CAME AND TRIED TO ARGUE THAT APPLE DOESN'T

INITIALIZE A PORT AS PART OF THIS MEANS FOR TRANSMISSION.

WELL, YOU WILL HAVE DX 351 IN THE JURY ROOM, AND I

ENCOURAGE YOU TO LOOK AT PAGE 1818.

SEE APPLE REFERS TO THE FACT THAT IT HAS THREE PORTS.

17
18
19
20
21

AND ON THAT PAGE, YOU WILL

AND HE ALSO SHOWED YOU THE PARTS OF THE SOURCE CODE THAT
ALSO ESTABLISH IT HAS PORTS.
SO THEN APPLE'S EXPERT WENT SO FAR AS TO SAY, WELL,
FACETIME DOESN'T TRANSMIT VIDEO.
WELL, WE KNOW FROM COMMON SENSE THAT FACETIME, THE WHOLE

PURPOSE BEHIND FACETIME IS TO TRANSMIT VIDEO AND TO HAVE A

VIDEO CONVERSATION, AND THAT'S EXACTLY WHAT DR. SCHONFELD

EXPLAINED AS HE WALKED THROUGH THE VIDEO THAT SHOWED YOU HOW

FACETIME WORKS.

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AND, IN FACT, ULTIMATELY WHEN I CROSS-EXAMINED DR. STORER

AGAIN AND I POINTED OUT TO HIM THAT HE HAD PROVIDED A REPORT

EARLIER IN THE CASE AND THAT IN HIS REPORT, IT REFERRED TO THE

FACT THAT, QUOTE, "THE FACETIME APPLICATION PREPARES TO

TRANSMIT VIDEO," HE HAD NO CHOICE BUT TO AGREE WITH ME.

AND THAT STATEMENT THAT HE GAVE IN HIS EXPERT REPORT IN

THIS CASE DIRECTLY CONTRADICTS HIS TESTIMONY IN THIS COURT

WHERE HE SAID THAT FACETIME DOESN'T TRANSMIT VIDEO.

IT TRANSMITS VIDEO.

OF COURSE

SO APPLE TOLD YOU DURING THEIR OPENING STATEMENT THAT

SAMSUNG SELLS TO APPLE SOME COMPONENTS THAT IT NOW ACCUSES OF

INFRINGEMENT.

WELL, THIS IS MISLEADING AND WRONG.

FIRST, THE FACT THAT APPLE BUYS SOME COMPONENTS FROM

SAMSUNG IS NOT A DEFENSE TO INFRINGEMENT.

A DEFENSE.

APPLE KNOWS IT'S NOT

THEY DON'T ALLEGE IT'S A DEFENSE.

AND YOU WON'T FIND A JURY INSTRUCTION IN THE JURY

INSTRUCTIONS THAT SAYS IT'S A DEFENSE, BECAUSE IT ISN'T A

DEFENSE.

AS DR. SCHONFELD WENT ON AND EXPLAINED, APPLE ACTUALLY

DESIGNS AND IMPLEMENTS THE A6 PROCESSOR, WE SAW THAT PROCESSOR

THAT HAD THE APPLE LOGO ON IT, AND WE ALSO SAW -- IF WE PUT UP

DX 466, AND AGAIN YOU'LL HAVE THIS IN THE JURY ROOM -- APPLE

ITSELF REFERS TO THE FACT THAT IT DESIGNS ITS OWN A6 PROCESSOR

CHIP.

IN ADDITION, APPLE WRITES ITS SOURCE CODE, AND THE SOURCE

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CODE IS CONFIDENTIAL -- THEY WON'T LET US SHOW IT TO ANYBODY

ELSE EXCEPT YOU AND THE COURT AT THIS POINT -- AND THEY COMBINE

THE ACCUSED COMPONENTS AND THE SOURCE CODE IN AN INFRINGING

WAY, AND IT'S THIS COMBINATION OF COMPONENTS WITH THE SOURCE

CODE THAT INFRINGES THE CLAIMS.

6
7
8
9

LET'S TURN TO THE '449 PATENT, THE PHOTO AND VIDEO ALBUM
ORGANIZATION PATENT.
SO CLAIM 27 STARTS WITH A DIGITAL CAMERA.
YOU MR. PARULSKI TO TESTIFY.

HE WAS THE DIGITAL CAMERA EXPERT

THAT WORKED AT KODAK FOR 32 YEARS.

ARCHITECT.

CAMERA.

MORE THAN 60 DIGITAL CAMERA PUBLICATIONS.

SAMSUNG BROUGHT

HE WAS A DIGITAL CAMERA

HE DEVELOPED THE WORLD'S FIRST COLOR DIGITAL

HE HAS 200, MORE THAN 200 DIGITAL CAMERA PATENTS AND

APPLE BROUGHT YOU DR. STORER AGAIN, THE SAME EXPERT THAT

THEY USED ON THE VIDEO TRANSMISSION PATENT, DIFFERENT

TECHNOLOGY, AND DR. STORER ADMITTED ON CROSS-EXAMINATION THAT

HE DOESN'T HAVE EXPERIENCE DESIGNING DIGITAL CAMERAS.

18
19
20

THE ONLY REAL DIGITAL CAMERA EXPERT THAT YOU HEARD IN THIS
CASE WAS SAMSUNG'S MR. PARULSKI.
AND MR. PARULSKI WALKED THROUGH, AGAIN, THE EVIDENCE,

APPLE INTERNAL DOCUMENTS THAT CONFIRMED EACH PART OF THE CLAIM

IS IN THE ACCUSED PRODUCTS.

255 AND 351 TO LOOK AT IN THE JURY ROOM, AND HE WALKED THROUGH

EACH LIMITATION THAT WE SEE HERE, AND ALSO ON THE NEXT SLIDE,

PLEASE, KEN.

YOU'LL HAVE PLAINTIFF'S EXHIBIT

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AND HE SHOWED YOU THAT THIS PATENT IS ALL ABOUT SEARCHING

FOR PHOTOGRAPHS AND VIDEOS, AND HE SHOWED YOU THAT WHEN YOU

HAVE A PHONE, THE APPLE CAMERA ROLL, AND YOU LOOK AT THE CAMERA

ROLL, YOU CAN SEARCH THROUGH A LIST OF PHOTOGRAPHS TO FIND THE

PHOTO OR THE VIDEO THAT YOU'RE LOOKING FOR.

AND HE THEN EXPLAINED HOW THE SOURCE CODE IN THE APPLE

CONFIDENTIAL DOCUMENTS CONFIRM HIS UNDERSTANDING, AND HE WALKED

THROUGH A LOT OF LIMITATIONS AND FOUND THAT EACH OF THEM WERE

PRESENT IN THE IPHONE AND THE IPOD.

NOW, LET'S TALK A LITTLE BIT ABOUT DAMAGES.

AGAIN, IN THIS CASE WHERE THE PARTIES DISAGREED ON ALMOST

EVERYTHING, APPLE DIDN'T BRING A SINGLE WITNESS TO CHALLENGE

SAMSUNG'S DAMAGES CASE.

OF ECONOMICS WHO HAS WRITTEN BOOKS, TEXTBOOKS ON ECONOMICS,

HE'S CALCULATED PATENT DAMAGES IN A LOT OF CASES, AND HE EVEN

WAS RETAINED BY THE COURT TO SERVE AS A NEUTRAL EXPERT FOR THE

COURT IN ANOTHER CASE.

18
19
20

YOU HEARD FROM DR. KEARL, A PROFESSOR

AND YOU HEARD FROM DR. RAO, A SURVEY EXPERT WHO HAS
EXTENSIVE EXPERIENCE DESIGNING AND CONDUCTING SURVEYS.
NOW, DR. KEARL DID A SIMPLE, STRAIGHTFORWARD ANALYSIS, AND

HE USED THE STRAIGHTFORWARD SURVEY THAT DR. RAO HAD DONE TO

MEASURE THE RELATIVE VALUE OF THE PATENTED FEATURES IN THE '239

AND THE '449 PATENT, AND HE USED REAL WORLD EVIDENCE.

24
25

HE USED A REAL WORLD PRICE OF $.99 FOR FACETIME, WHICH IS
THE PRICE THAT APPLE USERS PAID TO DOWNLOAD THE FACETIME APP

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1
2

ONTO ITS DESKTOP.
AND THAT'S WHAT ECONOMISTS DO, THEY USE REAL WORLD

EVIDENCE AND REAL WORLD MARKET PRICES.

DR. KEARL DID HERE.

THAT'S EXACTLY WHAT

AND FOR THE '239 PATENT, HE CALCULATED THAT THE DAMAGES

ARE A LITTLE OVER 6 MILLION FOR ALL THREE OF THE IMPORTANT

FEATURES OF FACETIME, BEING ABLE TO SEND E-MAIL, AN E-MAIL WITH

A VIDEO OR BEING ABLE TO TEXT MESSAGE A VIDEO.

AND HIS DAMAGES CALCULATIONS ON BOTH PATENTS CAN BE FOUND

IN DEFENDANT'S EXHIBIT 391A, AND YOU'LL HAVE THAT IN THE JURY

ROOM ALSO TO REFER TO.

THAT EXHIBIT IS IN EVIDENCE.

NOW, AGAIN, YOU DIDN'T HEAR FROM DR. VELLTURO OR ANYBODY

ELSE THAT DR. KEARL'S NUMBERS WERE WRONG.

CHALLENGED HIS CALCULATIONS OR HIS METHODOLOGY, AND NOT A

SINGLE WITNESS CHALLENGED DR. RAO'S SURVEY, EITHER.

NOT A SINGLE WITNESS

NOW, FOR THE '449 PATENT, THE NUMBER IS CONSIDERABLY

LOWER.

IT'S $158,000, AND DR. KEARL TESTIFIED THAT'S BECAUSE

OF TWO REASONS.

VALUABLE AS THE FACETIME AND E-MAILING VIDEOS FEATURE THAT'S

COVERED BY THE '239.

THE FIRST IS THE VIDEO ALBUM PATENT IS NOT AS

AND SECOND, FOR THE '449 PATENT, THERE'S A NON-INFRINGING

ALTERNATIVE, A WAY TO DESIGN AROUND THE PATENT, AND IF A PATENT

IS EASY TO DESIGN AROUND, IT LOWERS THE VALUE OF THE PATENT.

THAT MAKES SENSE.

SO DR. KEARL USED REAL WORLD EVIDENCE, AND HE ALSO USED

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THE FACT THAT -- REMEMBER, THE INVENTOR CAME AND TESTIFIED THAT

HE HAD SEVERAL PATENT TECHNOLOGY COMPANIES THAT WERE INTERESTED

IN BUYING HIS VIDEO TRANSMISSION PATENT.

$2.3 MILLION FOR TWO PATENTS, AND HE USED THAT AS A CHECK, AS A

REALITY CHECK TO CHECK HIS NUMBER AND HIS METHODOLOGY.

SAMSUNG PAID

AND HE ALSO USED THE FACT THAT HITACHI AND SAMSUNG HAD

ENTERED INTO AN AGREEMENT WHERE SAMSUNG PURCHASED THE '449

PATENT AS PART OF A BUNDLE OF PATENT RIGHTS.

ABOUT 106 PATENTS AND PATENT APPLICATIONS FOR $35 MILLION, AND

10
11

THEY PURCHASED

HE USED THAT AS ANOTHER REALITY CHECK.
I'LL EXPECT THAT APPLE'S COUNSEL, IN CLOSING, WILL SAY --

TRY AND MAKE AN ISSUE OUT OF THE FACT THAT SAMSUNG PURCHASED

BOTH OF THESE PATENTS.

PATENTS.

15
16
17

THERE'S NOTHING WRONG WITH PURCHASING

COMPANIES BUY AND SELL PATENTS ALL THE TIME.

AND YOU WON'T HEAR APPLE SAY THAT PURCHASING A PATENT IS A
DEFENSE TO INFRINGEMENT.

IT ISN'T.

AND THE SAME IS TRUE WITH THE '239 PATENT BEING EXPIRED.

THE FACT THAT IT'S NOW EXPIRED DOESN'T RELIEVE APPLE OF THE

FACT THAT IT'S STILL LIABLE FOR INFRINGEMENT WHILE THAT PATENT

WAS ACTIVE.

SO WITH THAT, I GO BACK TO THE FACT THAT THE REAL WORLD

PURCHASE PRICES THAT DR. KEARL RELIES ON SERVE AS A REALITY

CHECK, AND THEY CONFIRM WHAT YOUR COMMON SENSE ALREADY TELLS

YOU, THE $6 MILLION NUMBER FOR THE '239 PATENT AND THE $158,000

NUMBER FOR THE '449 PATENT MAKES SENSE.

THEY'RE REAL WORLD

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1

NUMBERS THAT APPLE DOES NOT DISPUTE.

THANK YOU.

I'LL TURN IT OVER TO MR. QUINN.

4
5

MR. QUINN:

THANK YOU.

LADIES AND GENTLEMEN, I HAVE VERY LITTLE TIME TO TALK

ABOUT DAMAGES, SO I'M GOING TO HAVE TO RELY ON YOU FOLKS TO

REMEMBER A LOT OF THE DETAILS BECAUSE THIS IS GOING TO BE

PAINFULLY QUICK.

I APOLOGIZE FOR THAT.

BUT I WILL BE TALKING ABOUT APPLE'S DAMAGES CLAIM, AND NOT

BECAUSE -- JUST TO BE CLEAR, I THINK IT IS CLEAR, WE DON'T

THINK WE OWE APPLE A NICKEL.

THE ISSUES, INCLUDING DAMAGES, AND IN THIS CASE IN PARTICULAR,

I THINK IT'S KIND OF REVEALING TO LOOK AT APPLE'S DAMAGES CASE

FOR THE LIGHT IT SHEDS ON ALL OF ITS CASE AND THE CREDIBILITY

OF ITS CASE.

BUT WE'RE REQUIRED TO ADDRESS ALL

YOU'LL RECALL THERE ARE THREE BUCKETS OF DAMAGES THAT THEY

SEEK, THE DIMINISHED DEMAND LOST PROFITS, THE OFF THE MARKET

LOST PROFITS, AND THEN THE REASONABLE ROYALTY.

19
20
21

I'M GOING TO DISCUSS THOSE IN ORDER, AND I'M GOING TO
BEGIN WITH THE DIMINISHED DEMAND LOST PROFITS.
YOU'LL RECALL THESE ARE -- THE THEORY OF THIS IS THAT IF

WE DIDN'T HAVE THESE FIVE FEATURES IN OUR PHONES, WE WOULD SELL

FEWER PHONES AND APPLE WOULD CAPTURE A NUMBER OF THOSE PHONES

EQUAL TO ITS MARKET SHARE.

PERCENT.

THAT'S THE THEORY, ABOUT 40

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AND LADIES AND GENTLEMEN, THAT IS ALL HAUSER.

HAUSER.

RELY ON HIM JUST TO SAY, AS MR. MCELHINNY SUGGESTED, THAT THIS

SHOWS, THIS SURVEY SHOWS THERE IS DEMAND FOR THESE FEATURES.

5
6

THAT IS -- HE'S CENTRAL TO THAT THEORY.

THAT IS

THEY DON'T

THE ONLY QUANTITATIVE BASIS THAT DR. VELLTURO HAD FOR HIS
DIMINISHED DEMAND NUMBERS WAS HAUSER.

THAT'S ALL HE'S GOT.

HE'S ALSO THE BASIS FOR THE WILLINGNESS TO PAY AND THE,

YOU KNOW, WILLINGNESS TO BUY NUMBERS AND REASONABLE ROYALTY,

AND I'LL GET TO THAT, THAT'S ALSO BASED ON HAUSER.

BUT IF VELLTURO DOESN'T HAVE HAUSER, HE DOESN'T HAVE ANY

BASIS FOR THESE DIMINISHED DEMAND NUMBERS, SO IT'S IMPORTANT TO

BEGIN WITH HIM.

13
14

AND I JUST WANT TO SAY AT THE BEGINNING, WE DON'T HATE
PROFESSOR HAUSER.

WE DON'T HATE HIM.

HIS SURVEY, THOUGH, WAS USELESS TO ACCOMPLISH THE PURPOSE

THAT HE OFFERED IT FOR.

TIME TO DISCUSS A FEW.

IT HAS A NUMBER OF FLAWS.

I ONLY HAVE

IN THAT SURVEY, HE PRETENDS LIKE HE'S MEASURING THE

DIFFERENCE BETWEEN THE PATENT AND THE ALTERNATIVE, AND YOU SAW

THAT.

UNDERSTATES WHAT THE ALTERNATIVES ARE.

22
23
24
25

YOU SAW HOW HE OVERSTATES THE BREADTH OF THE PATENT AND

AND REMEMBER, THOSE DESCRIPTIONS IN THE SURVEY CAME FROM
THE LAWYERS.
IF WE CAN LOOK AT SLIDE 45, I SHOWED YOU THIS IN THE
OPENING STATEMENT.

AUTOMATIC WORD CORRECTION, THIS IS THE ONLY

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WAY YOU CAN GET AUTOMATIC WORD CORRECTION.

OUR FEATURE, YOU KNOW, YOU'VE GOT TO GO DOWN TO THE SECOND AREA

AND SELECT A DIFFERENT SPELLING OR A DIFFERENT WORD.

YOU KNOW THAT'S SIMPLY NOT TRUE.

SLIDE 47.

IF YOU DON'T HAVE

THE DART PHONE, WE'VE HAD IT SINCE JUNE 15TH,

2011.

FROM, YOU KNOW, WELL BEFORE THEIR PATENT ISSUED.

THAT.

THAT WAS AUTOMATIC WORD CORRECTION.

IN OPENING STATEMENT.

9
10

WE HAD

I SHOWED IT TO YOU

THAT WAS NEVER DISPUTED.
WHAT IS APPLE'S RESPONSE TO THAT?

SLIDE 48.

THEY SAY,

WELL, THEY FOUND THIS DOCUMENT WHERE SOME UNNAMED PERSON SAYS

SOMEONE ELSE SAID THE DART KEYBOARD WAS, QUOTE-UNQUOTE, A

SOMEWHAT JARRING EXPERIENCE, SO SOMEHOW THAT'S NOT A SUITABLE

ALTERNATIVE.

TAKE A LOOK AT THE DATE OF THAT DOCUMENT.

SLIDE 49.

THE S III PHONE LAUNCHES, OUR ALL TIME BEST SELLER.

THAT'S DATED APRIL 2012.

IT'S PX 168,

THAT IS TWO MONTHS BEFORE

NOTWITHSTANDING THAT DOCUMENT, WE LAUNCHED THAT PHONE WITH

THE DART KEYBOARD, AUTOMATIC WORD CORRECTION, AND WE SOLD

3 MILLION PHONES WITH THAT KEYBOARD WITH NO COMPLAINTS.

BROUGHT IN ANY EVIDENCE THAT THERE WERE ANY COMPLAINTS.

NOBODY

IT WAS REPLACED WITH ANOTHER NON-INFRINGING KEYBOARD A FEW

MONTHS LATER, BUT THE POINT IS THIS WAS A CONTRIVED -- THIS WAS

A -- THIS SURVEY IS JUST AN EFFORT TO MISLEAD YOU.

SYNCING, IF WE LOOK AT SLIDE 44, YOU SAW WHAT PEOPLE WERE

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TOLD.

HAVE TO WAIT.

IF YOU DON'T HAVE THIS FEATURE, YOU HAVE TO WAIT.

YOU

NO -- NO INFORMATION HERE ABOUT THIS IS THREE COMPONENT

BACKGROUND SYNCING, THIS IS OUR PARTICULAR PATENT.

JUST SAY, IF YOU DON'T HAVE THIS, YOU'RE GOING TO HAVE TO WAIT

AND THE WAIT MAY BE LONG OR SHORT.

YOU KNOW, APPLE DOESN'T OWN EVERYTHING.

ALL WAYS OF SYNCING IN BACKGROUND.

THREE COMPONENT SYNCING.

NO.

THEY

APPLE DOESN'T OWN

THEY'VE GOT THIS CLAIM FOR

THEY DON'T OWN ALL WAYS OF SYNCING.

THIS WAS NOT A DESCRIPTION OF THE WORLD AS IT REALLY IS TO

SAY, YOU KNOW, IF YOU DON'T DO WHAT WE DO, WHICH THEY DON'T

EVEN DESCRIBE, YOU KNOW, YOU'RE GOING TO HAVE TO WAIT.

13
14

WE SHOWED YOU OTHER, THE WINDOWS MOBILE, MR. NELSON SHOWED
YOU SLIDE 43, IT WAS ALREADY OUT THERE.

SO, YOU KNOW, THE DESCRIPTIONS WERE FLAWED.

SECOND, THE DESIGN OF THE SURVEY MADE IT ABSOLUTELY

WORTHLESS FOR WHAT APPLE TRIED TO DO.

YOU KNOW, YOU CAN'T --

CONJOINT SURVEYS HAVE THEIR USES.

WANTED TO COMPARE CUP HOLDERS AND SEE WHAT CUP HOLDERS PEOPLE

PREFER, OR SMALL FEATURES COMPARING THEM AGAINST EACH OTHER,

CONJOINT SURVEYS ARE FINE.

YOU HEARD THAT.

IF YOU

BUT YOU CAN'T ASK PEOPLE ABOUT CUP HOLDERS AND MAKE

CONCLUSIONS ABOUT WHAT AUTOMOBILES THEY WOULD BUY OR WHAT

SHIFTS IN MARKET SHARE WOULD BE.

DR. HAUSER'S SURVEY IS LIKE SAYING, TELL ME WHAT CUP

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HOLDER YOU LIKE, WHAT GLOVE BOX LATCH YOU PREFER, WHICH AIR

CONDITIONING KNOBS YOU PREFER, TELL ME WHETHER YOU WANT TWO

DOORS OR FOUR DOORS, AND TELL ME THE COLOR OF THE CAR YOU WANT

AND I WILL TELL YOU WHAT CAR YOU'LL BUY.

COMES DOWN TO.

6
7
8
9

YOU CAN'T DO THAT.

THAT'S REALLY WHAT IT

FOR COMPLEX PRODUCTS, YOU HAVE TO

INCLUDE THE MAJOR FEATURES.
AND THIS MAY HAVE GONE PAST A LOT OF US BECAUSE IT
HAPPENED SO FAST.

ON THE STAND, DR. HAUSER ACTUALLY AGREED

WITH THIS.

SLIDE 42.

HE WAS ASKED THE QUESTION, "YOU DO AGREE

THAT FOR THE PURPOSE OF ESTIMATING DEMAND FOR A PATENTED

FEATURE, MAJOR PRODUCT FEATURES MUST BE INCLUDED?

"ANSWER:

YES."

BUT THAT'S EXACTLY WHAT HE DIDN'T DO.

HE LEFT OUT THE

MAJOR FEATURES, THE TRUE DRIVERS, BRAND, BATTERY LIFE, LG --

YOU KNOW, 4G LTE.

IT'S NOT A PROPER USE OF A SURVEY.

INSTEAD -- AND THEN THE OTHER THING HE, YOU KNOW, HE

EDUCATED PEOPLE.

THESE SAMSUNG PHONE OWNERS, WHY DID YOU BUY YOUR PHONES AND

FINDING OUT WHAT THEY KNEW ABOUT THESE FEATURES, DO YOU KNOW

YOU'VE GOT THIS THREE COMPONENT BACKGROUND SYNC OR NOT, DO YOU

KNOW YOU HAVE THIS PHONETOP SEARCH WITH TWO HEURISTICS, INSTEAD

HE EDUCATED THEM, MADE THEM WATCH 18 VIDEOS BEFORE THEY TAKE

THE SURVEY.

INSTEAD OF FINDING OUT, YOU KNOW, ASKING

THAT CREATES WHAT DR. ERDEM SAYS ARE DEMAND ARTIFACTS.

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ARTIFICIALLY INFLATES THE VALUE OF THE FEATURES.

GOING TO GET ANY USEFUL INFORMATION THAT WAY.

AND HOW DOES HE KNOW?

IS IT HAS NO INTEGRITY.

UNDERSTAND IT.

6
7
8
9
10
11

YOU'RE NOT

YOU KNOW, THE WHOLE POINT OF THIS

IT HAS NO RELIABILITY IF PEOPLE DON'T

WELL, DR. HAUSER SAID, I CHECKED WHETHER THEY UNDERSTOOD
IT.

I ASKED THEM, DID YOU UNDERSTAND?

YES.

END OF IT.

HE WAS ASKED -- MR. PRICE ASKED HIM ON THE STAND, DIDN'T
YOU ASK THEM WHAT YOU UNDERSTOOD?

HE SAYS, DON'T YOU DO THAT

IN YOUR CLASSES AT SCHOOL?
HE SAID, NO, I'M A SOCRATIC TEACHER.

I DON'T GIVE TESTS

LIKE THAT TO ASK WHAT PEOPLE ACTUALLY LEARN.

DOES THIS MAKE ANY SENSE TO YOU FOLKS?

WE'RE RELYING ON

YOU TO COME TO THIS COURTROOM AS JURORS AND USE YOUR COMMON

SENSE, AND IT WAS CLEAR THAT THESE PEOPLE DID NOT UNDERSTAND

THESE QUESTIONS.

DR. REIBSTEIN, YOU'LL RECALL, DID AN EXACT PRE-TEST USING

THE EXACT SAME WORDS THAT DR. HAUSER USED.

SLIDE 50.

HE FOUND

OVERWHELMING CONFUSION, THE YESES UP THERE ARE, YEAH, IT TURNED

OUT PEOPLE WERE CONFUSED.

SLIDE 51, 25 OUT OF 26 DIDN'T UNDERSTAND QUICK LINKS.

22 OUT OF 26 DIDN'T UNDERSTAND BACKGROUND SYNCING.

18 OUT OF 26 WERE CONFUSED ABOUT AUTOMATIC WORD

24
25

CORRECTION.
REMEMBER THE VIDEOS.

UNIVERSAL SEARCH MEANT YOU COULD

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HAVE WI-FI WHEREVER YOU WERE.

YOU WOULD ALWAYS BE CONNECTED.

TO SYNC, YOU HAVE TO HOOK UP.

WHAT IT MEANT IS, YOU KNOW,

IF YOU DIDN'T HAVE THEIR BACKGROUND SYNCING, YOU WOULD HAVE TO

HOOK UP, USE A USB CABLE TO HOOK UP TO YOUR COMPUTER.

YOU KNOW, IF YOU DON'T HAVE THEIR ANALYZER SERVER, YOU

HAVE TO WRITE DOWN AND MEMORIZE PHONE NUMBERS AND ADDRESSES.

YOU DON'T HAVE TO TAKE DR. REIBSTEIN'S WORD FOR IT.

PLEASE LOOK AT DEFENSE EXHIBIT 454A.

TRANSCRIPTS OF ALL THOSE INTERVIEWS AND YOU CAN DECIDE FOR

YOURSELVES.

THEY WERE BEING ASKED?

THERE YOU'LL HAVE THE

DID THESE PEOPLE HAVE THE FOGGIEST IDEA OF WHAT

ONE OF MY FAVORITES, SLIDE 54, HOW WAS THE ALTERNATIVE?

YOU KNOW, IF YOU'RE NOT GOING TO USE THE CLAIMED PATENTED

FEATURE, HOW WAS THAT PRESENTED TO PEOPLE IN THESE SURVEYS?

EMPTY BOX.

16
17
18

AN EMPTY SQUARE.

HOW CAN YOU MINIMIZE IT MORE THAN BY JUST PUTTING UP AN
EMPTY BOX AND AN EMPTY SQUARE?
THIS WAS COMPLETELY CONTRIVED.

THIS WAS A SHAM SURVEY

DONE BY A MAN WHO MAY HAVE -- HE'S AT M.I.T., HAS A PH.D., HE

DID THIS FOR MONEY, APPLE PAID HIM, AND HE CAME IN AND

PRESENTED YOU WITH A SHAM.

FOLKS.

HOW DO WE KNOW THAT?

I'M JUST -- THAT'S THE WAY IT IS,

TAKE A LOOK AT THIS SLIDE 55.

LOOK

AT HIS CONCLUSIONS.

FOR A PHONE THAT COSTS $149, HE CONCLUDED

PEOPLE WOULD PAY, JUST FOR EXAMPLE, $102 MORE TO HAVE THEIR

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PARTICULAR VERSION OF AUTOMATIC WORD CORRECTION OR SUGGESTION

WHICH THEY DON'T EVEN USE.

OKAY?

IT'S ABSURD.

REMEMBER WHEN MR. PRICE ASKED HIM, YOU KNOW, ISN'T THIS

5
6

YOU KNOW THIS IS RIDICULOUS.

KIND OF ABSURD TO THINK THAT PEOPLE WOULD SPEND THAT MUCH MORE?
AND THEN DR. HAUSER WENT KIND OF THE USED CAR SALESMAN'S

TRICK, WELL, IT'S ONLY FOUR BUCKS MORE A MONTH.

ITSELF IS SIX BUCKS MORE A MONTH.

9
10
11

BUT THE PHONE

I MEAN, WHAT KIND OF CREDIBILITY -- THIS HAS ABSOLUTELY NO
CREDIBILITY.
OTHER IRRATIONAL RESULTS, YOU KNOW, UNCONTRADICTED

TESTIMONY, 68 PERCENT OF THE RESPONDENTS, IF YOU LOOK AT THE

DATA, ACTUALLY PREFERRED HIGHER PRICES FOR PHONES WITH THE SAME

FEATURES.

IT DID A TERRIBLE JOB -- SLIDE 56 -- IF YOU USED HIS DATA

OF ACTUALLY PREDICTING WHAT WOULD HAPPEN IN THE REAL

MARKETPLACE.

CHOICE SETS, RUNNING IT THROUGH THE SAWTOOTH SOFTWARE PROGRAM,

THAT THE NOTE 2 WOULD OUTSELL THE GS III.

GS III OUTSOLD THE NOTE 2 MANY, MANY TIMES MORE.

HE PREDICTS WITH HIS DATA, GOING THROUGH ALL THE

IN REAL LIFE, THE

APPLE WANTS YOU TO RELY ON THIS SURVEY.

IT IS CENTRAL

THAT THEIR DAMAGES CASE, BOTH REASONABLE ROYALTY AND DIMINISHED

DEMAND.

SAMSUNG DIDN'T HAVE -- HAUSER SHOWS THAT IF SAMSUNG DIDN'T HAVE

THESE THINGS, YOU'D HAVE 20 TO 45 PERCENT DECLINE IN SALES.

IT'S CENTRAL TO THEIR CASE.

THEY SAY, YOU KNOW,

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TRUST YOUR INSTINCTS.

TRUST YOUR COMMON SENSE.

THIS

SURVEY IS WORTHLESS.

NOW WE TURN TO DR. VELLTURO.

WHAT DOES HE DO?

HE TAKES

THOSE RESULTS -- HAUSER'S OUTPUT IS EXPRESSED AS A PERCENTAGE

DECLINE IN SALES.

SAMSUNG'S SALES NUMBERS, YOU KNOW, FIGURES OUT HOW MANY UNITS

THERE ARE, YOU KNOW, DECREASED NUMBER OF UNITS, APPLIES APPLE'S

MARKET SHARE AND CONVERTS THAT TO A LOST PROFITS NUMBER.

9
10

HAUSER TAKES THAT, LOOKS AT APPLE'S -- AT

IT'S ALL BASED ON HAUSER.

SLIDE 1.

DR. VELLTURO

ACKNOWLEDGED THAT.

FOLKS, IN THE REAL WORLD, IF THESE FEATURES DRIVE 20 TO 45

PERCENT OF THE SALES, WHICH IS WHAT HAUSER CONCLUDES, WHY DON'T

THEY SHOW UP ANYWHERE IN THE REAL WORLD?

EVIDENCE -- SLIDE 2 -- PRODUCED BY THESE COMPANIES, BOTH OF

THEM, BEFORE THERE EVER WAS A LAWSUIT, THEY LOOKED AT WHY DO

PEOPLE BUY PHONES?

THEM?

WHAT DO THEY RELY ON?

BUYER SURVEYS.

BACK AND LOOK AT THEM.

22
23

WHAT MATTERS TO

UP ON THE CHART WE'VE GOT SOME OF THOSE.

YOU SAW A LOT OF

YOU'VE SEEN THE

YOU CAN JOT DOWN THE NUMBERS IF YOU WANT TO GO

THESE THINGS NEVER SHOWED UP.

APPLE CLAIMED FEATURES JUST

AREN'T FACTORS AT ALL.
LET ME TURN TO HIS LOST PROFITS CALCULATION.

YOU GOT SOME

INSTRUCTION FROM THE COURT ON THIS -- THIS IS SLIDE 63 -- AND

THIS IS ANOTHER REASON THE DIMINISHED DEMAND THEORY MAKES NO

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SENSE AT ALL.
IT'S -- FOR LOST PROFITS, UNDER THE LAW, YOU MUST FIND

THAT BUT FOR, BUT FOR THE INFRINGEMENT, APPLE WOULD HAVE MADE

SALES THAT IT OTHERWISE DID NOT HAVE.

REQUIRES, BUT FOR ACTUAL CAUSATION.

THAT'S WHAT THE LAW

AS DR. CHEVALIER'S ANALYSIS SHOWED -- THIS IS SLIDE 4 --

THERE'S ABSOLUTELY NO CORRELATION BETWEEN SAMSUNG -- THE

PROFITABILITY OF SAMSUNG PHONES AND THE USE OF THEIR CLAIMED

TECHNOLOGY.

OUR MOST PROFITABLE PHONES ARE THE ONES THAT ARE

CHARGED AS BEING LEAST INFRINGING, THE NOTE 2 AND THE

GALAXY S III.

IF YOU THINK ABOUT IT FOR A MOMENT, THE IDEA THAT APPLE

LOST SALES BECAUSE SAMSUNG ALLEGEDLY HAD THESE FEATURES IS,

FRANKLY, NONSENSICAL.

INTO A STORE, GEE, WHAT DO I WANT TO BUY?

PHONE THAT HAS A, YOU KNOW, THREE COMPONENT BACKGROUND SYNCING,

I WANT TO MAKE SURE I'VE GOT THAT, AND I WANT AN ANALYZER

SERVER, I DON'T WANT SHARED LIBRARIES, I WANT TO MAKE SURE I

CAN SEARCH ON THE INTERNET AND ON THE PHONE, I WANT THE TWO

HEURISTICS.

BATTERY LIFE OR THE REST OF IT.

IMAGINE, FOR EXAMPLE, A CUSTOMER GOING
I WANT TO BUY A

THESE ARE MORE IMPORTANT TO ME THAN BIG SCREEN OR

AND BY THE WAY, I THINK DR. ERDEM IS RIGHT.

ONLY A TECHNO

GEEK WOULD BE GOING AND LOOKING FOR, YOU KNOW, THESE KINDS OF

DETAILED IMPLEMENTATIONS.

LET'S GET REAL.

NOBODY EVER BOUGHT A PHONE TO GET THESE

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THINGS.

EVER BOUGHT A PHONE BECAUSE THEY WANTED TO GET SLIDE TO UNLOCK.

EVEN, YOU KNOW, SLIDE TO UNLOCK.

I DARE SAY, NOBODY

SAMSUNG WOULDN'T BE LOSING SALES IF IT USED CIRCLE UNLOCK,

IF IT USED RIPPLE WHICH, YOU KNOW, ITS BEST SELLING GS III

PHONE USES.

AND BY THE WAY, THEY TRIED TO SUGGEST, WELL, YOU HAVE TO

HAVE OUR FORM OF SLIDE TO UNLOCK, IT'S BETTER THAN ALL THE

ALTERNATIVES BECAUSE OTHERWISE, YOU KNOW, ACCIDENTAL UNLOCKING

IS, YOU KNOW, IT'S, IT'S MORE PROBABLE THAT IT MIGHT HAPPEN.

THEY COULDN'T IDENTIFY A SINGLE, NOT ONE, IN THIS WHOLE

TRIAL, YOU WERE HERE FOUR WEEKS, CUSTOMER COMPLAINT ABOUT ANY

OF SAMSUNG'S OTHER FEATURES, WAYS OF UNLOCKING OF BEING MORE

PRONE TO UNLOCK.

THERE'S SIMPLY NO EVIDENCE OF THAT.

THE IDEA THAT SOME HYPOTHETICAL, YOU KNOW, TECHNO GEEK

WOULD BUY AN APPLE PHONE IF SAMSUNG DIDN'T HAVE THESE FEATURES,

NOW, I'M GOING TO SWITCH TO APPLE BECAUSE SAMSUNG NO LONGER HAS

THESE FEATURES, MAKES NO SENSE.

WHY?

KNOW THAT.

PROFITS BECAUSE SAMSUNG HAS THESE FEATURES, YOU TAKE AWAY THE

FEATURES FROM SAMSUNG, THEY'LL BUY OUR PHONES WHEN WE DON'T

HAVE THEM EITHER.

23
24
25

BECAUSE APPLE DOESN'T HAVE THEM EITHER.

YOU NOW

THAT'S THE THEORY THEY'RE TRYING TO SELL.

WE LOST

AT THE TIME OF OPENING STATEMENT, I SAID THREE OUT OF
FIVE.

THAT WAS AGREED.
THE ANALYZER SERVER, AS MR. NELSON SAID, THEY PUT ON NO

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EVIDENCE, NONE, THAT THEY PRACTICED THAT ANALYZER SERVER

PATENT.

3
4
5

YOU KNOW THIS WAS AN IMPORTANT ISSUE.

YOU KNOW IF THEY

PRACTICED IT, THEY WOULD HAVE PUT THAT EVIDENCE IN.
AND I'LL LEAVE IT TO YOU TO LOOK AT THE IOS 7, YOU KNOW,

THE NEW UNLOCK SCREEN WHICH, BY THE WAY, LOOKS A LOT LIKE THE

SAMSUNG GLASS UNLOCK, WHICH HAD COME OUT BEFORE.

TO YOU TO TAKE A LOOK AT THAT -- THAT'S DEFENSE EXHIBIT 345 --

AND YOU DECIDE FOR YOURSELF IF APPLE IS STILL PRACTICING SLIDE

10
11

I'LL LEAVE IT

TO UNLOCK.
NO LOST PROFITS, NO LOST SALES, NO EVIDENCE THAT ANYONE

EVER FAILED TO BUY AN IPHONE BECAUSE SAMSUNG HAD THESE

FEATURES.

SECOND BUCKET OF DAMAGES, OFF THE MARKET.

THE THEORY HERE IS, YOU KNOW, BASED ON HOW LONG SAMSUNG --

IF SAMSUNG HAD TO DO A DESIGN AROUND, IF WE ACTUALLY DID

INFRINGE, WE'RE USING THEIR TECHNOLOGY, WE INFRINGE, WE HAVE TO

DO A DESIGN AROUND, WE HAVE TO TAKE OUR PRODUCTS OFF THE MARKET

WHILE WE COME UP WITH AN ALTERNATIVE.

THEIR THEORY, THEIR THEORY IS, WHILE WE'RE OFF THE MARKET

FOR THAT TIME WHILE WE'RE COMING UP WITH AN ALTERNATIVE, APPLE

IS GOING TO SELL A LOT MORE PHONES.

LOST, YOU KNOW, LOST PROFITS THEORY.

24
25

THAT'S THE OFF THE MARKET

THIS AGAIN APPLIES ONLY TO THE THREE PATENTS.
DR. VELLTURO ACKNOWLEDGED THIS.

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NOW, THIS PRESENTS A REALLY IMPORTANT CREDIBILITY ISSUE

BECAUSE DR. VELLTURO CAME IN HERE AND HE CHOSE TO GIVE YOU

CALCULATIONS FOR ONLY ONE OFF THE MARKET PERIOD, FOUR MONTHS.

HE SAID IT'S GOING TO BE FOUR MONTHS.

BY THE WAY, HE'S A FINANCIAL GUY.

BEING A TECHNOLOGY GUY?

SAY IT WOULD TAKE FOUR MONTHS?

THE SCOPE OF HIS EXPERTISE.

HOW DOES HE GET OFF

YOU KNOW, A SMARTPHONE EXPERT WHO CAN
THAT WAS -- THAT'S NOT WITHIN

BUT HE CAME IN AND SAID, I'M GOING TO GIVE YOU THE NUMBERS

ABOUT WHAT OUR LOST PROFITS WOULD BE IF SAMSUNG WERE OFF THE

MARKET FOR FOUR MONTHS, NOT ONE MONTH, NOT TWO MONTHS, NOT

THREE MONTHS.

AND THIS IS SLIDE 6.

INTERESTINGLY, HE HAD DONE A REPORT BEFORE WHEN THERE WERE

A DIFFERENT MIX OF PRODUCTS AT ISSUE AND HE ACKNOWLEDGED IN HIS

REPORT BEFORE, HE HAD DONE CALCULATIONS BOTH AT FOUR MONTHS AND

AT ONE MONTH.

AND WHEN HE WAS ON THE STAND, HE ACKNOWLEDGED TO ME THAT

HE HAD DONE THE ONE MONTH CALCULATION BEFORE, HE KNEW HOW TO DO

IT, BUT HE DIDN'T COME HERE THIS TIME AND PRESENT YOU WITH THAT

NUMBER.

HE ONLY PRESENTED YOU WITH THE FOUR MONTH FIGURE.

THAT'S, YOU KNOW, CONSISTENT WITH APPLE'S APPROACH IN THIS

WHOLE CASE, LADIES AND GENTLEMEN, GOING FOR THE GRAND SLAM HOME

RUN.

ONLY TO PRESENT THE LONGER PERIOD WHICH TRANSLATES TO A LOT

MORE MONEY.

HE COULD DO THE ONE MONTH, HAD DONE IT BEFORE, BUT CHOSE

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AS DR. CHEVALIER TESTIFIED -- THIS IS SLIDE 7 -- IN HIS

FIRST SET OF CALCULATIONS, THE DIFFERENCE BETWEEN ONE MONTH OFF

THE MARKET AND FOUR MONTHS OFF THE MARKET WAS HUNDREDS OF

MILLIONS OF DOLLARS.

ON CROSS-EXAMINATION, HE TOLD US -- SLIDE 8 -- HE SAID HE

HAD NOT DONE THE ONE MONTH CALCULATION, BUT ACKNOWLEDGED THAT

IT WOULD BE A VERY SMALL NUMBER.

8
9

I CONFRONTED HIM WITH IT.

FOR ONLY ONE MONTH, IT'S ONLY $17.5 MILLION, ISN'T IT, SIR?"

10
11

I SAID, "IF YOU RAN THAT NUMBER

AND HE SAID, "I DON'T KNOW, I CAN'T DO THE MATH SITTING
HERE.

IT DOES BECOME QUITE SMALL.

"YOU HAVEN'T DONE THAT CALCULATION, SIR?

"NO.

HE WASN'T TELLING THE TRUTH.

15
16

I KNOW IT'S A SMALL NUMBER."
HE WASN'T TELLING THE TRUTH.

HE HAD DONE THAT CALCULATION.
REMEMBER, THIS IS A GUY THEY'VE HIRED 15 TIMES NOW.

THIS

CASE ALONE THEY PAID HIM $2.3 MILLION.

IN HERE AND PRESENT A $17.5 MILLION NUMBER.

DO THAT ARITHMETIC THAT HE HAD DONE BEFORE, COULD DO AGAIN TO

SHOW WHAT ONE MONTH OFF THE MARKET DAMAGES WOULD BE.

21
22
23

HE WASN'T GOING TO COME
HE WASN'T GOING TO

WE KNOW THAT FOR TWO OF THE PATENTS, THAT NUMBER IS ZERO.
THIS WAS UNCONTRADICTED TESTIMONY OF DR. CHEVALIER.
AND I THINK THIS IS PART OF THE REASON WHY DR. VELLTURO

DIDN'T COME BACK AND TAKE THE STAND.

HE WAS HERE.

I'LL TALK ABOUT IT MORE.

HE DIDN'T COME BACK AND EXPLAIN BECAUSE HE DIDN'T

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WANT TO BE ASKED THAT QUESTION, WHAT IS THE ONE MONTH?
AND WE WOULDN'T NEED FOUR MONTHS.

YOU KNOW, WE'RE TALKING

ABOUT SAMSUNG, ONE OF THE, YOU KNOW, GREATEST, LARGEST, MOST

IMPORTANT TECHNOLOGY COMPANIES IN THE WORLD.

THESE CHANGES, IF THEY HAD TO DO IT, IN ONE MONTH.

EVIDENCE ON THAT -- SLIDE 10 -- THE TESTIMONY OF DR. GREENBERG.

HE SAID THAT, YOU KNOW, THE CIRCLE UNLOCK, WE ALREADY HAD IT,

WE COULD SIMPLY SWAP THAT OUT.

THEY COULD DO
HERE'S THE

SLIDE 11, THE TESTIMONY OF YOUNGMI KIM, WE ASKED HER, HOW

LONG DID IT TAKE YOU TO COME UP WITH THE RIPPLE DESIGN?

SAID ABOUT 280 HOURS.

SLIDE 12, HOW ABOUT THE CIRCLE UNLOCK, HOW LONG DID IT

TAKE YOU TO COME UP WITH THAT?

MONTH TO DO THAT.

SHE SAID, WELL, IT TOOK ABOUT A

YOU KNOW, WORD SUGGESTION -- THIS IS PROFESSOR WIGDOR --

WE ALREADY HAD THE DART KEYBOARD.

THE GALAXY S III.

DART PHONE IN JUNE OF 2011.

19
20
21
22
23

SHE

IT WAS ALSO RELEASED WITH

WE HAD ORIGINALLY RELEASED IT ON -- WITH THE
HUGELY SUCCESSFUL.

WE HAD THOSE ALTERNATIVES.

THEY'RE IN THE CAN.

IT WOULD

HAVE BEEN NO CHALLENGE JUST TO SIMPLY SWAP THOSE OUT.
FOUR MONTHS TO DO THAT?

GIVE ME A BREAK.

NO EVIDENCE WAS

PRESENTED TO YOU.
SLIDE 14.

THE OTHER -- YOU KNOW, THE ANALYZER SERVER

PATENT, SOMETIMES CALLED LINKS TO STRUCTURES, YOU HEARD THE

TESTIMONY FROM DIANNE HACKBORN.

YOU KNOW, YOU ONLY HAVE TO

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CHANGE ONE THING AND YOU NO LONGER INFRINGE.

THAT.

PATENT.

4
5

YOU REMEMBER

IT HAS TO PRACTICE EVERY SINGLE LIMITATION OF THE

SHE SAID MAKING THE CHANGE, SHE'S TALKING ABOUT THE CHANGE
IN THE MENU, IT COULD HAVE BEEN DONE IN A DAY.

ONE MONTH WAS PLENTY OF TIME.

SO WHAT IT APPLE'S FALLBACK POSITION ON THIS?

APPLE'S

FALLBACK POSITION IS, WELL, YOU MIGHT HAVE BEEN ABLE TO DO IT,

BUT THE CARRIERS WOULD OBJECT TO IT, OR THEY WOULD PUT YOU

THROUGH A BUREAUCRATIC PROCESS.

THE CARRIER APPROVAL IN TIME.

THAT MAKE NO SENSE AT ALL.

YOU WOULDN'T BE ABLE TO GET

YOU'VE SEEN THE TESTIMONY

ABOUT HOW THE CARRIERS ARE FRUSTRATED WITH APPLE.

CAPPING THEM.

THEY HAVE THE SUBSIDIES THAT THEY HAVE TO PAY.

16
17

THEY'RE

THEY'RE MORE EXPENSIVE BECAUSE THEY -- YOU KNOW,

WHY ON EARTH WOULD THE CARRIERS GET IN THE WAY AND BE AN
OBSTACLE TO OUR, YOU KNOW, IMPLEMENTING THESE CHANGES?

YOU HEARD THE TESTIMONY FROM MR. DICARLO -- SLIDE 15 -- HE

SAID WE CAN GET APPROVAL FROM CARRIERS LIKE, IN A MATTER OF

DAYS.

I DON'T HAVE TIME TO TALK ABOUT THE CAPACITY ISSUE.

HAVE TO PROVE THAT THEY WOULD HAVE THE CAPACITY -- THIS IS

SLIDE 57 -- THAT THEY WOULD HAVE THE MARKETING AND

MANUFACTURING CAPACITY.

THEY

YOU HEARD THE TESTIMONY OF MR. SEXTON -- SLIDE 16 AND

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17 -- HOW APPLE WAS CONSISTENTLY CAPACITY LIMITED IN BEING ABLE

TO MAKE THE IPHONE.

THE IDEA THAT IN ONE MONTH, OR EVEN FOUR MONTHS, THEY

COULD HAVE CRANKED UP THE LINE AND BEEN ABLE TO MAKE MILLIONS

MORE PHONES MAKES NO SENSE AT ALL.

THIRD, THE REASONABLE ROYALTY, THIS IS THE HYPOTHETICAL

NEGOTIATION.

EDGE -- DR. VELLTURO'S SO-CALLED EDGEWORTH BOX.

YOU KNOW, THIS IS, YOU KNOW -- SLIDE 18 -- THE

AND I JUST LOVE THIS LITTLE STORY.

HE COMES -- BASED ON

HAUSER, HE COMES UP WITH THESE NUMBERS HERE AND HE SAYS THE

PARTIES ARE GOING TO BE FAR APART IN THIS NEGOTIATION.

NOT GOING TO BE A WAY -- YOU KNOW, THEY'RE GOING TO BE AT AN

IMPASSE.

THE NUMBERS ARE FAR APART.

SO WHAT WOULD HAPPEN?

WHAT WOULD HAPPEN DID HE SAY?

TOTAL CAPITULATION BY SAMSUNG.

WE'LL PAY YOUR NUMBER.

YOU ASKED.

THERE'S

SAMSUNG WOULD SAY, OKAY, APPLE,

YOU KNOW, FORGET IT.

WE'LL PAY WHAT

YOU KNOW, I THINK IF THERE'S ONE THING YOU KNOW ABOUT

SAMSUNG, IT'S THAT THEY'RE NOT JUST SIMPLY GOING TO CAVE AND

CAPITULATE.

BUT DR. VELLTURO HAS AN ANSWER TO THAT.

SAMSUNG WOULD DO IT.

PRICES AND IT WOULDN'T AFFECT THEIR SALES AT ALL.

24
25

WHY?

WELL, YOU KNOW,

BECAUSE THEY'D JUST RAISE THEIR

IF ANY COMPANY COULD SIMPLY RAISE ITS PRICES WITH NO
IMPACT ON ITS SALES, ANY COMPANY WOULD DO THAT AND THEY

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WOULDN'T WAIT UNTIL SOME HYPOTHETICAL NEGOTIATION.

IT TOMORROW.

THEY'D DO

I MEAN, THIS IS JUST A FANTASY.

REMEMBER HOW PROFESSOR CHEVALIER CAME UP WITH A REASONABLE

ROYALTY USING FIVE DIFFERENT METHODS?

WENT THROUGH THEM ONE AT A TIME.

THIS IS SLIDE 20.

SHE

REMEMBER, THIS IS AN EXPERT THAT BOTH SETS OF LAWYERS AT

DIFFERENT TIMES HAVE RETAINED.

CREDIBLE THAN SOMEBODY THAT BOTH SIDES HAVE USED.

YOU CAN'T GET ANYBODY MORE

SHE WENT THROUGH THE BENCHMARKS, REAL WORLD BENCHMARKS.

THE ANALYTICAL APPROACH, YOU KNOW, TRYING TO SEE IF THERE'S

SOME CORRELATION BETWEEN PROFITABILITY AND THE USE OF THE

PATENTS, LOOKING AT THEIR OPERATING SYSTEM UPDATES, WHAT THEY

FILE WITH THE SEC, WHAT APPLE TELLS THE FEDERAL GOVERNMENT.

14
15

ITS UPDATES INCLUDING THINGS LIKE TURN-BY-TURN NAVIGATION,
FACETIME, FIND MY IPHONE.

WHAT THEY'RE WORTH, POSITIONS THAT THEY HAVE TAKEN, YOU

KNOW, IN OTHER CASES, LOOKING AT PRODUCT REVIEWS, THE REAL

WORLD PRICES FOR APPS, LOOKING AT ALL THESE THINGS.

AND THEN SHE LOOKED AT THE GEORGIA-PACIFIC FACTORS AND

SAID THAT SHOULD BE AN UPWARD ADJUSTMENT BECAUSE THEY ARE

COMPETITORS AND APPLE HAS A CERTAIN POLICY WITH RESPECT TO IT,

SO SHE ADJUSTED IT UPWARDS TO $.35, A ROYALTY OF $.35 A PHONE.

WHAT'S SIGNIFICANT ABOUT THIS?

SHE GAVE YOU REAL WORLD

DATA.

LOOKED AT 200 DIFFERENT SMARTPHONE LICENSES FOR THE PURPOSE OF

APPLE DID NOT COME IN HERE -- AND SHE ALSO SAID SHE

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2
3
4

DETERMINING THAT A LUMP SUM ROYALTY WOULD BE APPROPRIATE.
THEY DIDN'T PRESENT YOU WITH ANY REAL WORLD DATA AT ALL.
IT WAS ALL HAUSER.
IF WE LOOK AT SLIDE 21 -- THIS IS CONFIDENTIAL -- YOU CAN

GO BACK AND LOOK AT THIS.

REASONABLE ROYALTY OF -- REMEMBER, WE'RE NOT SAYING ANYTHING IS

OWED TO THEM -- BUT ASSUMING A REASONABLE ROYALTY WAS OWED,

THIS IS THE NUMBERS.

PATENT, BY PHONE, AND SHE GIVES A GROSS NUMBER DOWN THERE ON

THE BOTTOM.

WHEW.

(LAUGHTER.)

MR. QUINN:

THIS IS HER BREAKDOWN ASSUMING A

YOU KNOW, YOU HAVE TO LOOK AT IT BY

WHERE IS DR. VELLTURO?

WHERE WAS

DR. VELLTURO?

KNOW, HE WAS HERE MOST OF THE TRIAL, DISAPPEARED FOR A FEW

DAYS.

THEY BROUGHT HIM BACK.

YOU KNOW, WHEN DR. CHEVALIER TESTIFIED -- YOU

LAST MONDAY, DID YOU SEE HIM HERE?

THEY COULD HAVE CALLED HIM.

HE WAS SITTING HERE.

HE WAS HERE TO LISTEN TO WHAT

SHE HAD TO SAY.

IT, HE COULD HAVE GOTTEN UP AND TAKEN THE STAND.

21
22
23
24
25

IF HE HAD ANYTHING TO SAY IN RESPONSE TO REBUT

HE DIDN'T TAKE THE STAND.

HE LEFT SO MANY QUESTIONS

UNANSWERED.
AND I'M ABOUT TO GET THE HOOK HERE, SO I'M JUST GOING TO
JUMP FORWARD.
THAT NUMBER, YOU KNOW, $2 BILLION, YOU KNOW, IT'S THE

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POWER OF SUGGESTION, YOU KNOW?

HOW BIG IS A REDWOOD TREE?

IF I TELL YOU A REDWOOD TREE

IS 2,000 FEET HIGH, YOU'D SAY, NO, NO, IT'S NOT 2,000 FEET

HIGH.

IF I ASK YOU, WELL, HOW BIG DO YOU REALLY THINK IT IS?

AND YOU SAY -- WELL, IT'LL INFLUENCE YOU.

1500 FEET.

8
9
10
11
12
13
14
15

YOU'LL SAY, WELL,

OTHER PEOPLE, YOU DON'T GIVE THEM THAT NUMBER, YOU SAY,
HOW BIG IS A REDWOOD TREE?

THEY'LL SAY, OH, MAYBE 200, 300

FEET.
IT'S THE POWER OF SUGGESTION.
NUMBER OUT THERE.

THAT'S WHY THEY PUT THAT

IT'S THE ONLY REASON.

THEY'LL BE DANCING IN THE STREETS OF CUPERTINO IF YOU GIVE
THEM $100 MILLION.

THEY DON'T EXPECT IT.

AN UNSUPPORTED NUMBER -- DON'T COMPROMISE FOLKS.

DR. VELLTURO, REMEMBER, WHEN HE WAS ON THE STAND, I SAID, HOW

IS THE JURY GOING TO COME UP WITH THIS?

ONE NUMBER.

HAUSER GAVE THEM ONLY

WHAT ARE THEY GOING TO DO, DO THEIR OWN SURVEY?

HE SAYS, WELL, THE NUMBERS WOULD HAVE BEEN TO BE ADJUSTED.

WELL, THAT'S AN INVITATION TO YOU TO VIOLATE YOUR OATH AS

JURORS AND GO OUTSIDE THE EVIDENCE, BECAUSE HE ONLY PRESENTED

THE ONE NUMBER FROM HAUSER ON THOSE TWO BASES.

UNSUPPORTED.

24
25

IT'S COMPLETELY

AN UNSUPPORTED BIG NUMBER DOESN'T GET SUPPORTED BY
DIVIDING IT IN HALF OR DIVIDING IT BY 100.

YOU STILL MUST MAKE

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YOUR DECISION BASED ON THE EVIDENCE.
DON'T BE INFLUENCED -- THE WAY TO DEAL WITH AN OVERSTATED

BIG NUMBER IS NOT TO CREDIT IT, NOT TO ADJUST IT, NOT TO GIVE

IT ANY CREDENCE AT ALL BECAUSE IT'S NOT ENTITLED TO ANY

CREDENCE.

AND I JUST WANT TO CONCLUDE BY SAYING WHAT THIS CASE IS

REALLY ABOUT.

COMPETITION WITH APPLE AND IT'S REALLY -- AND ITS ONLY

COMPETITOR, AND THAT'S ANDROID.

IT REALLY IS ABOUT COMPETITION.

IT'S ABOUT

FOR THOSE PEOPLE WHO BELIEVE THAT APPLE HAS BEEN A GREAT

AMERICAN COMPANY AND ADMIRE APPLE FOR THE WONDERFUL THINGS THAT

IT'S DONE IN THE PAST, I THINK WHAT APPLE NEEDS TO UNDERSTAND

IS THAT THE ANSWER TO THAT INNOVATOR'S DILEMMA THAT STEVE JOBS

TALKED ABOUT IS NOT HERE IN COURTROOMS SUING PEOPLE.

THE ANSWER IS TO GO BACK AND COME OUT WITH SOME MORE GREAT

PRODUCTS, LIKE THAT WATCH WE'VE BEEN HEARING ABOUT, OR THE

PHONES, YOU KNOW, THE LARGE SCREEN PHONES THAT WE'VE BEEN

HEARING ABOUT, OR THE SET TOP BOX, THOSE KINDS OF THINGS.

THAT'S WHAT APPLE SHOULD GET BACK TO DOING.

THEY'LL FIND THE SOLUTIONS TO INNOVATION DILEMMA.

THEY WANT TO MONOPOLIZE THIS MARKET.

THAT'S WHERE

THEY WANT TO ATTACK

GOOGLE AND ANDROID BY ATTACKING THE MOST SUCCESSFUL ANDROID

MAKER.

24
25

IF THEY CAN CRIPPLE THE MOST SUCCESSFUL ANDROID MAKER,
THEY'LL GO A LONG WAYS TOWARD ACCOMPLISHING THEIR GOAL.

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THIS SUIT WAS A LONG SHOT.

WORTH A CHANCE.

SAMSUNG.

4
5
6
7
8
9
10

THEY CYNICALLY THOUGHT IT WAS

IT'S IN OUR BACKYARD.

AFTER ALL, THEY'RE

THEY CERTAINLY WEREN'T GOING TO TAKE ON THE LOCAL COMPANY,
GOOGLE, IN MOUNTAIN VIEW, AND THEY DIDN'T.
THEY KNOW THEY'RE NOT ENTITLED TO A NICKEL.

DON'T FALL

FOR IT.
WE KNOW YOU WON'T FALL FOR IT.

WE'RE COUNTING ON YOU TO

USE YOUR SENSE OF FAIRNESS AND YOUR COMMON SENSE.
THE PEOPLE OF SAMSUNG, MANY OF WHOM ARE HERE AND MANY OF

WHOM ARE IN THE OVERFLOW COURTROOM NEARBY, BELIEVE THAT SAMSUNG

CAN GET JUSTICE, YES, THAT SAMSUNG CAN GET JUSTICE HERE IN

APPLE'S BACKGROUND.

14
15
16

BASED ON THE EVIDENCE PRODUCED IN THIS TRIAL, YOU HAVE THE
TOOLS AND THE POWER TO MAKE SURE THAT JUSTICE IS DONE.
THANK YOU FOR YOUR SERVICE.

THE COURT:

MR. LEE:

THE COURT:

MR. LEE:

THANK YOU FOR YOUR ATTENTION.

THE TIME IS 2:05.

YOUR HONOR, I THINK I HAVE 29 MINUTES.
YOU HAVE 29 MINUTES, THAT'S CORRECT.

AND DO YOU WANT TO TAKE A BREAK AT THE

NORMAL TIME OR SHOULD WE JUST GO STRAIGHT THROUGH?

YOU AND THE JURY.

THE COURT:

BATHROOM BREAK NOW?

MR. LEE:

IT'S UP TO

OH, WOULD YOU LIKE TO TAKE JUST A QUICK

AND THEN GO STRAIGHT THROUGH?

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THE COURT:

2
3

OKAY.

LET'S JUST TAKE A TEN MINUTE BREAK.

THANK

(JURY OUT AT 2:06 P.M.)

THE COURT:
COURTROOM.

ALL RIGHT.

THE JURORS HAVE LEFT THE

LET'S TAKE OUR TEN MINUTE BREAK.

(RECESS FROM 2:06 P.M. UNTIL 2:16 P.M.)

(JURY IN AT 2:16 P.M.)

THE COURT:

OKAY.

WELCOME BACK.

THANK YOU.

PLEASE TAKE A SEAT.

ARE YOU READY, MR. LEE?

MR. LEE:

THE COURT:

READY, YOUR HONOR.
ALL RIGHT.

2:17.

GO AHEAD, PLEASE.

(MR. LEE GAVE HIS REBUTTAL CLOSING ARGUMENT ON BEHALF OF

13
14

OKAY.

YOU.

I THINK SOMEONE HAS REQUESTED THAT.

THE PLAINTIFF.)
MR. LEE:

GOOD AFTERNOON, LADIES AND GENTLEMEN.

I'M

THE LAST PERSON THAT YOU HAVE TO LISTEN TO, THE LAST ARGUMENT

YOU'RE GOING TO HEAR, AND I'M GOING TO ASK YOU ONE THING AT THE

BEGINNING AND ONE THING AT THE END.

AND THE THING AT THE BEGINNING IS THIS:

YOU'VE HEARD FIVE

LAWYERS TALK TO YOU ABOUT SOME COMPLICATED MATERIAL, AND I HAVE

29 MINUTES, SO MY FIRST REQUEST IS, HANG IN THERE WITH ME.

I'LL GET IT DONE IN 29 MINUTES, OR LESS NOW.

WITH ME BECAUSE WE HAVE SOME IMPORTANT, IMPORTANT THINGS TO

SAY.

BUT HANG IN THERE

LADIES AND GENTLEMEN, THERE'S AN OLD SAYING AMONG TRIAL

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LAWYERS, AND IT GOES LIKE THIS:

FOCUS ON THE FACTS.

LAW.

ATTACK.

IF THE LAW IS GOOD FOR YOU, FOCUS ON THE

IF THE LAW AND THE FACTS ARE BAD FOR YOU, ATTACK.
ATTACK.

AND THAT HAS -- THAT IS WHAT SAMSUNG HAS DONE.

ATTACKED APPLE.

ATTACKED ITS EXECUTIVES.

HAS ATTACKED ITS LAWYERS.

9
10

IF THE FACTS ARE GOOD FOR YOU,

IT HAS ATTACKED ITS SCIENTISTS.

MR. PRICE:
SCOPE.

IT HAS

IT HAS ATTACKED ITS EXPERTS.

YOUR HONOR, I OBJECT.

AND IT

THIS IS BEYOND THE

THIS IS SUPPOSED TO BE REBUTTAL TO THE OFFENSIVE CASE.

THE COURT:

MR. LEE:

OVERRULED.

YOU'VE HEARD THE WORDS IN OPENING,

DISHONEST, MISLEADING.

MISLEADING.

DISHONEST.

YOU'VE HEARD THEM AGAIN TODAY.
SHAM.

WHY DOES SAMSUNG RESORT TO THOSE CHARACTERIZATIONS?

BECAUSE, AS MR. MCELHINNY SHOWED, AND I WILL SHOW YOU ON

17
18

SAMSUNG'S CLAIMS, THE FACTS AND THE LAW ARE WITH APPLE.
NOW, YOU'VE BEEN WITH MR. KREVANS, MR. MCELHINNY, OUR

COLLEAGUES AND ME FOR A MONTH NOW.

I'LL LET YOU JUDGE, I'LL

LET YOU JUDGE WHETHER THE ATTACKING WERE FAIR.

I INSTEAD WILL CONCENTRATE ON THE EVIDENCE AND THE LAW.

AND I'LL ADDRESS SAMSUNG'S CLAIMS, AND I'D LIKE YOU TO DO

ONE THING AS WE DO IT.

FOCUS ON WHAT SAMSUNG SAYS WHEN IT'S

THE DEFENDANT, AND COMPARE THAT TO WHAT SAMSUNG SAYS WHEN IT'S

THE PLAINTIFF.

BECAUSE, LADIES AND GENTLEMEN, YOU WILL FIND

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THAT THEIR POSITIONS ARE IRRECONCILABLY INCONSISTENT, EXCEPT

FOR ONE THING, AND I'LL SHOW YOU THAT THEY'RE INCONSISTENT

ACROSS THE BOARD.

4
5

THE ONE EXCEPTION IS THIS:

IT'S SAMSUNG'S CONSTANT EFFORT

TO CHEAPEN THE VALUE OF THE PATENTS.

MR. JOHNSON GOT UP TO START HIS CLOSING ON SAMSUNG'S

PATENTS AND HE STARTED, HE STARTED TALKING ABOUT APPLE'S DAMAGE

CLAIM.

WELL, LADIES AND GENTLEMEN, WE DO HAVE THAT CLAIM.

NOT SOMETHING WE'VE MADE UP AS MR. QUINN SUGGESTS.

IN IT.

WE THINK IT'S ACCURATE.

IT'S

WE BELIEVE

WE STAND BY IT.

NOW, I BEGAN MY OPENING ON SAMSUNG'S PATENTS IN 2010,

AUGUST 2010, AND I'M GOING TO TAKE YOU BACK THERE NOW BECAUSE

YOU'VE HEARD A LITTLE BIT MORE ABOUT THAT MEETING.

AS YOU'VE NOW HEARD DIRECTLY, DIRECTLY FROM SAMSUNG'S

DIRECTOR OF LICENSING, JON WON LEE, HERE IS WHAT HAPPENED AT

THAT MEETING.

PATENTS.

APPLE TOLD SAMSUNG THAT IT COPIED APPLE'S

APPLE TOLD SAMSUNG THAT IT HAD INFRINGED APPLE'S

MR. PRICE:

MR. LEE:

22
23

OBJECTION.

BEYOND THE SCOPE OF REBUTTAL.

IT IS NOT, YOUR HONOR.

THIS WAS THE

STARTING POINT FOR THE PURCHASE OF SAMSUNG'S PATENTS.
THE COURT:

OVERRULED.

GO AHEAD, PLEASE.

MR. LEE:

APPLE ASKED SAMSUNG TO STOP.

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AS I SAID TO YOU IN MY OPENING, THIS WAS A CRITICAL MOMENT

IN TIME.

SAMSUNG COULD HAVE STOPPED.

INVENTED, INNOVATED ON ITS OWN.

INFRINGING.

THEY COULD HAVE

THEY COULD HAVE STOPPED

OR IT COULD HAVE CHOSEN THE ALTERNATIVE.

AND THIS IS WHAT THE ALTERNATIVE WAS:

AFTER APPLE ASKED

THEM TO STOP COPYING, AFTER APPLE ASKED THEM TO STOP

INFRINGING, AFTER APPLE HAD SUED, SAMSUNG DECIDED TO PURCHASE

SOME PATENTS AND THEN SELECTED TWO OLD PATENTS TO SUE APPLE ON.

AND SAMSUNG CHOSE THOSE PATENTS, AND THEY CHOSE THOSE

PATENTS FOR A REASON, AND I THINK THE EVIDENCE WILL MAKE CLEAR

TO YOU JUST WHY.

NOW, MR. QUINN TOLD YOU IN HIS OPENING THAT SAMSUNG HAS

THE SECOND MOST PATENTS RECEIVED IN THE UNITED STATES FOR A

GIVEN YEAR.

AS WE TOLD YOU IN OUR OPENING, YOU WILL NOT SEE, AND YOU

HAVE NOT SEEN, ONE OF THOSE PATENTS.

SINGLE SAMSUNG PATENT THAT WAS INVENTED BY A SAMSUNG ENGINEER.

YOU HAVE NOT SEEN A SINGLE SAMSUNG PATENT THAT RESULTS FROM THE

WORK OF SAMSUNG.

YOU HAVE NOT SEEN A

AND AS I TOLD YOU, THERE IS A REASON FOR THAT.

AS WE SAID

IN OUR OPENING, THE REASON IS APPLE HAS BEEN THE INNOVATOR, AND

IN THIS FIELD, THE REASON YOU'RE NOT SEEING SAMSUNG PATENTS IS

SAMSUNG HAS BEEN THE FAST FOLLOWER.

YOU DON'T HAVE TO TAKE MY WORD FOR IT.

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PAGE 5.

FOLLOWER.

THIS IS WHAT SAMSUNG SAID ABOUT ITSELF, A FAST

AND THIS IS WHAT MR. PENDLETON SAID UNDER

CROSS-EXAMINATION, AND IT'S IMPORTANT BECAUSE IT EXPLAINS WHY

YOU SEE THE TWO PATENTS THAT I'M GOING TO TALK TO YOU ABOUT

THIS AFTERNOON.

MR. PENDLETON ADMITTED JUST THIS.

"QUESTION:

9
10

A FAST FOLLOWER IS SOMEONE WHO LETS SOMEONE

ELSE INTRODUCE THE INNOVATIVE PRODUCT AND THEN QUICKLY FOLLOWS
WITH THEIR OWN PRODUCT; CORRECT?

"THAT IS CORRECT.

"QUESTION:

CORRECT?

"ANSWER:

"QUESTION:

SAMSUNG HAS BEEN CALLED A FAST FOLLOWER;

YES.
IT HAS BEEN SPECIFICALLY CALLED A FAST

FOLLOWER IN THE SMARTPHONE WORLD; CORRECT?

"CORRECT."

NOW, THERE'S A SECOND REASON YOU HAVEN'T SEEN A SAMSUNG

PATENT ASSERTED AGAINST US, AND MR. PENDLETON GAVE YOU THAT

ANSWER AS WELL.

OF ITS PATENTS FOR PENNIES A UNIT.

HE TOLD YOU THAT SAMSUNG WOULD NOT LICENSE ONE

SAMSUNG WAS NOT GOING TO COME BEFORE YOU WITH A PATENT

THAT RESULTED FROM SAMSUNG WORK, LIKE NEAR FIELD COMMUNICATION,

AND TELL YOU THAT IT WAS INFRINGED, BUT THAT IT WOULD LICENSE

IT FOR $.35 A UNIT.

IT WASN'T GOING TO SAY THAT.

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SAY THAT.

MR. PENDLETON TOLD YOU THAT.

SO WHAT DID SAMSUNG DO?

SAMSUNG WENT OUT AND PURCHASED A

GROUP OF PATENTS AND IT SELECTED TWO OLDER PATENTS TO PUT

BEFORE YOU TO CLAIM THAT THE PATENTS WERE NOT WORTH MUCH.

NOW, THE EVIDENCE ESTABLISHES BOTH PATENTS, BOTH PATENTS

PURCHASED BY SAMSUNG AND PUT BEFORE YOU WERE OLD TECHNOLOGIES.

THE EVIDENCE ESTABLISHED, AND I'LL GO THROUGH IT IN A

LITTLE BIT MORE DETAIL, THAT THE IPHONE AND THE IPOD TOUCH USE

DIFFERENT TECHNOLOGIES.

MR. GARCIA AND MR. MILLET CAME AND APPEARED BEFORE YOU.

THEY DESCRIBED THE ENORMOUS INVESTMENT OF TIME AND EFFORT IN

DEVELOPING THESE NEW TECHNOLOGIES, THE TECHNOLOGIES THAT

SAMSUNG NOW SAYS INFRINGES.

THERE IS NOT A SHRED OF EVIDENCE THAT THE PATENTS WERE

COPIED, THAT THE TECHNOLOGY WAS COPIED, THAT THE PRODUCTS WERE

COPIED.

AND I SHOULD SAY PARENTHETICALLY, THERE'S BEEN SOME TALK

ABOUT COPYING A PATENT.

APPLICATION GETS FILED, BUT IT DOESN'T ISSUE FOR SEVERAL YEARS,

BUT IN THE MEANTIME, THERE'S A LOT OF --

21
22

MR. PRICE:

OBJECTION, YOUR HONOR.

THIS IS NOT

OFFENSIVE CASE.

THE COURT:

MR. LEE:

AS YOU KNOW FROM THE VIDEO, A PATENT

OVERRULED.

THE EVIDENCE HAS REVEALED TO YOU JUST WHY

SAMSUNG SELECTED THESE TWO OLD PATENTS.

SAMSUNG'S TOTAL

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DAMAGES, AS MR. JOHNSON TOLD YOU, FOR THESE TWO PATENTS IS JUST

OVER $6 MILLION.

6,158,000.

LET'S START WITH THE '449.

DO YOU REMEMBER MR. PARULSKI, WHO TESTIFIED AS SAMSUNG'S

EXPERT?

HE TOLD YOU THAT HE HAS BEEN PAID 250,000 ALONE.

DOES IT MAKE SENSE TO YOU THAT SOMEONE WOULD PAY $250,000

TO AN EXPERT, SETTING ASIDE WHAT THE LAWYERS ARE GETTING PAID,

TO PURSUE A $168,000 CLAIM?

IT MAKES SENSE ONLY IF YOU HAVE ONE PURPOSE, TO TRY TO

CONVINCE FOLKS, FOLKS LIKE YOU, THAT THE PATENTS AREN'T WORTH

MUCH.

YOU ALSO NOW KNOW THAT THEY HIRED FOUR EXPERTS,

DR. SCHONFELD, DR. RAO, MR. PARULSKI, AND DR. KEARL, WHO IN

TOTAL WERE PAID OVER $5 MILLION -- AGAIN, WITHOUT WHAT THE

LAWYERS HAVE BEEN PAID -- TO PURSUE A $6 MILLION CLAIM.

16
17
18

DOES THAT MAKE SENSE?

ONLY IN ONE CIRCUMSTANCE, IF YOU'RE

TRYING TO DEVALUE PATENTS, ALL PATENTS.
AND THIS WAS AN INTENTIONAL STRATEGY.

AS DR. KEARL

TESTIFIED DURING HIS QUICK TESTIMONY ON DAMAGES, HE USED A $.99

UPGRADE FOR FACETIME IN HIS ANALYSIS.

21
22
23

BUT ON CROSS-EXAMINATION, HE AGREED THAT THE ACTUAL VALUE
OF FACETIME WAS MANY, MANY TIMES HIGHER.
WHY WOULD YOU USE -- WHY WOULD YOU USE AN ARTIFICIALLY LOW

NUMBER?

ONLY ONE REASON.

THEY'RE THE PLAINTIFF.

REASON.

TO DEVALUE, TO CHEAPEN, TO CONVINCE YOU THAT THE

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PATENTS ARE NOT WORTH MUCH.
BUT THIS STRATEGY OF DEVALUING PATENTS WAS NOT IN

ISOLATION.

MR. PRICE TOLD YOU IN HIS OPENING TODAY THAT IT'S

IMPORTANT TO LOOK AT WHAT WAS GOING ON WHEN THESE EVENTS WERE

OCCURRING.

PATENTS WERE PURCHASED.

THIS IS 2011, JUNE TO SEPTEMBER, 2011, WHEN THESE

SO WHAT ELSE WAS SAMSUNG DOING?

YOU HAVE SEEN AND HAD IT DESCRIBED BY MR. SOHN IN PART,

AND ONE OF THE EXHIBITS THAT CAME IN FROM MR. SOHN IS PX 215,

AND THIS IS EXACTLY IN THIS PERIOD OF TIME WHEN THESE PATENTS

ARE BEING PURCHASED.

12
13

ON OCTOBER 4, 2001 -- I'M JUST GOING TO TELL YOU WHAT'S IN
THE E-MAIL.

14
15

LET ME SHOW YOU.

ON OCTOBER 4, 2001, MR. PENDLETON WRITES --

MR. PRICE:

YOUR HONOR, I OBJECT.

THIS IS WAY BEYOND

THE SCOPE OF REBUTTAL.

MR. LEE:

YOUR HONOR --

MR. PRICE:

AND WE KNOW WHAT ARGUMENT --

THE COURT:

OKAY.

EXCUSE ME.

MR. LEE IS COVERING

THE DEFENSIVE CASE TO SAMSUNG'S AFFIRMATIVE CASE.

THIS WAS AT

SAMSUNG'S REQUEST THAT WE ORDER THE CLOSINGS THIS WAY.

LIKE HIM TO CONTINUE.

I WOULD

THE OBJECTION'S OVERRULED.

2:27 IS THE TIME.

AND SAMSUNG'S CLOSING WAS FOUR MINUTES OVER, SO IF YOU'RE

GOING TO KEEP OBJECTING, I MAY GIVE THOSE FOUR MINUTES TO

APPLE.

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IT'S 2:27.

GO AHEAD, PLEASE.

MR. LEE:

ON OCTOBER 4, 2001, MR. PENDLETON WRITES,

"IT CONTINUES TO BE SAMSUNG'S POSITION TO AVOID ATTACKING APPLE

DUE TO THEIR STATUS AS A LARGE CUSTOMER."

2011, RIGHT IN THE MIDDLE OF THESE PURCHASE OF PATENTS.

6
7

THAT'S OCTOBER 4TH,

THREE DAYS LATER, THEY CHANGE THEIR MIND.

THREE DAYS

LATER, THEY SAY, "THIS IS OUR BEST OPPORTUNITY TO ATTACK."

"ATTACK" IS NOT MY WORD.

SO WHAT HAS CHANGED DURING THAT TIME?

YOU.

LAUNCHED.

IT'S THEIR WORD.
THE E-MAIL TELLS

FIRST IT TELLS YOU THAT ON OCTOBER 4TH, THE IPHONE 4S WAS
IT WAS ENORMOUSLY SUCCESSFUL.

SECOND, IT TELLS YOU EXPLICITLY THAT MR. JOBS DIED.

AND WHAT IS THE PLAN?

HERE IS WHAT THE E-MAIL SAYS, THREE

DAYS LATER, "WE'RE GOING TO ATTACK AS A VERY AGGRESSIVE

STRATEGY," AND THIS PURCHASE OF PATENTS, AND THE ASSERTION OF A

PATENT, SPENDING MILLIONS OF DOLLARS TO TRY TO CONVINCE YOU

THAT PATENTS DON'T HAVE MUCH VALUE ARE PART, PART OF THIS PLAN

TO ATTACK.

NOW, LET ME TURN QUICKLY TO THE PATENTS BECAUSE I THINK

WHEN YOU LOOK AT THE PATENTS, YOU'LL ACTUALLY BE ABLE TO SEE

THE INCONSISTENCY WITH THE POSITIONS.

IF YOU REMEMBER MR. PARULSKI AND MR. SCHONFELD, THEY

TESTIFIED THAT THESE TWO PATENTS ARE -- AND I HAVE IT ON THE

SCREEN NOW -- FUNDAMENTAL AND REVOLUTIONARY.

SAID.

THAT'S WHAT THEY

THESE PATENTS ARE FUNDAMENTAL AND REVOLUTIONARY.

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SAMSUNG CHARACTERIZED THESE PATENTS AS FUNDAMENTAL AND

REVOLUTIONARY TO YOU, EVEN THOUGH ITS OWN EXPERTS HAD NEVER

HEARD OF THE PATENTS BEFORE THE LAWYERS HANDED THEM TO THEM,

EVEN THOUGH ITS OWN LAWYER -- EVEN THOUGH ITS OWN EXPERTS HAD

NEVER HEARD OF THE INVENTORS BEFORE THE LAWYERS HANDED THE

PATENTS TO THEM.

SAMSUNG CHARACTERIZED THESE PATENTS AS FUNDAMENTAL AND

REVOLUTIONARY EVEN THOUGH IT COULD NOT SHOW YOU A SINGLE MODERN

DAY PRODUCT, NOT A SINGLE MODERN DAY PRODUCT THAT USED THESE

10
11

INVENTIONS.
AND THEY CHARACTERIZED THEM AS FUNDAMENTAL AND

REVOLUTIONARY EVEN THOUGH THERE WAS ABSOLUTELY NO EVIDENCE THAT

ANYBODY COPIED THE PATENTS, COPIED THE PRODUCTS THAT THEY

INTRODUCED EARLIER, OR COPIED THE TECHNOLOGY.

15
16
17
18

BUT THEN THEY SAY THAT APPLE'S PATENTS ARE TRIVIAL AND
NARROW.
I'LL ASK YOU THE SAME QUESTION THAT THEY HAVE ASKED YOU.
DOES THAT MAKE SENSE?

NOW, THE '239 PATENT IS THE FIRST OF THE TWO PATENTS.

IS, AS YOU NOW KNOW, ABOUT 20 YEARS OLD AND IT HAS EXPIRED.

I DON'T DISAGREE WITH MR. JOHNSON.

THAT DOESN'T MEAN THAT

THEY CAN'T GET DAMAGES DURING THE PERIOD THAT THE PATENT WAS IN

EFFECT.

24
25

BUT THIS IS WHERE WHAT MR. MCELHINNY SAID IS IMPORTANT.
IT IS SO IMPORTANT TO WATCH WHAT PEOPLE DID RATHER THAN WHAT

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THEY SAY TODAY THEY COULD HAVE DONE.
WHAT HAPPENED IN THE 15 YEARS BEFORE THIS PATENT WAS

ACQUIRED BY SAMSUNG?

PRODUCTS ACCUSED OF INFRINGING.

APPLE'S PRODUCTS WERE ON THE MARKET, THE

DID VOCI, WHO OWNED THE PATENT, EVER ONCE SUGGEST, EVEN

THOUGH IT HAD A PATENT BROKER UP THERE TRYING TO SELL THE

PATENT, DID THEY ONCE SUGGEST THAT APPLE WAS INFRINGING?

AND THERE'S A REASON.

AND THE REASON IS THAT THE PATENT COVERS A VERY SPECIFIC

IMPLEMENTATION OF AN OLDER TECHNOLOGY THAT YOU DON'T NEED

TODAY.

NO.

YOU MAY RECALL, WHEN I WAS CROSS-EXAMINING DR. SCHONFELD,

I TRIED TO GET HIM TO SAY YES OR NO, WHAT WAS IN THE PATENT,

AND WE HAD A LITTLE BIT OF TROUBLING GETTING THERE.

15
16
17

THERE'S A REASON HE DIDN'T WANT TO ACKNOWLEDGE WHAT WAS IN
THE PATENT, BECAUSE THE PATENT GIVES YOU THE ANSWER.
THE PATENT TALKS IN TERMS OF ANALOG VIDEO, LIKE OUR OLD

ANALOG PHONES, OUR OLD ANALOG TV'S.

CAMERAS AND VCR'S.

IT TALKS ABOUT VIDEO

IT HAS A FIGURE 1 IN THE PATENT WHICH TELLS YOU EVERYTHING

YOU NEED TO KNOW AS YOU TRY TO UNDERSTAND WHAT THE PATENT

CLAIMS.

THAT FIGURE 1 DESCRIBES A REMOTE UNIT.

THE REMOTE UNIT DOESN'T RECORD, THOUGH.

THE REMOTE UNIT

CAPTURES VIDEO THAT HAS BEEN RECORDED ELSEWHERE, THE VIDEO

CAMERA HERE, AND THEN, AND ONLY THEN, DOES IT DO SOMETHING WITH

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IT.

2
3

YOU SAW THE INVENTOR'S FIRSTLOOK PRODUCT FROM THE EARLY
1990S.

NOW, I'M NOT SUGGESTING THAT YOU SHOULD COMPARE THIS TO

APPLE'S IPHONE TO MAKE YOUR INFRINGEMENT DETERMINATION.

DON'T NEED TO.

BUT IT TELLS YOU A LOT ABOUT WHAT THE TERMS IN THE PATENT

MEAN.

POUNDS, AND IT WAS DESIGNED TO BE USED WITH ANALOG VIDEO

IT WAS DESIGNED IN THE EARLY 1990S, IT WAS WEIGHED 28

CAMERAS.

BETA, 8 MILLIMETER.

YOU

AND IT SAYS RIGHT IN THE BROCHURE, AT PX 251, VHS,

LADIES AND GENTLEMEN, THIS IS THE ONLY PRODUCT THAT YOU

HAVE SEEN THAT PRACTICES THIS INVENTION.

APPLE'S PRODUCTS, SAMSUNG HAS NOT IDENTIFIED FOR YOU A SINGLE

OTHER PRODUCT -- AND THIS HAS BEEN OFF THE MARKET FOR 15

YEARS -- THAT USES THIS INVENTION.

17
18
19

OTHER THAN ACCUSING

DID THEY SHOW YOU A SINGLE SAMSUNG PRODUCT THAT USES THIS
INVENTION?

THEY CALL THIS INVENTION FUNDAMENTAL.

BUT THEY DIDN'T TELL YOU THAT THERE'S EVEN A SAMSUNG

PRODUCT THAT USES IT.

FORWARD.

WHY?

BECAUSE TECHNOLOGY HAS MOVED

AND DR. STORER EXPLAINED JUST THAT TO YOU.

IF WE PUT ON THE SCREEN CLAIM 15, THIS IS WHAT MR. JOHNSON

PUT UP THERE, BUT HE NEVER USED THE WORDS IN HIS CLOSING "VIDEO

CAPTURE MODULE."

THAT'S A TERM IN THE PATENT, VIDEO CAPTURE

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MODULE.

2
3

AND AS HER HONOR HAS EXPLAINED TO YOU, YOU ARE TO USE THE
PLAIN AND ORDINARY MEANING OF THAT BACK IN 1994.

4
5

SO WHAT WAS THE PLAIN AND ORDINARY MEANING?

WHAT WAS A

VIDEO CAPTURE MODULE IN 1994?

THE PATENT AND THE EVIDENCE TELLS US.

IT WAS A COMPONENT

THAT YOU COULD GO OUT AND BUY, THAT YOU COULD SNAP ON A VIDEO

CARD AND INSTALL IN YOUR COMPUTER.

THE SCREEN NOW FROM PX 248.

USED IT.

IT LOOKS LIKE THE ONE ON

MR. FREEMAN USED IT.

DR. STORER

EVEN MR. GARCIA'S COLLEGE ROOMMATE USED IT.

REMEMBER, LADIES AND GENTLEMEN, THE WORDS IN THE

SPECIFICATION, THESE AREN'T RANDOM WORDS.

THAT THE INVENTORS PUT DOWN IN THEIR ORIGINAL APPLICATION.

THIS IS WHAT THEY WROTE IN 1994.

THESE ARE THE WORDS

AND THE PATENT DESCRIBES A VIDEO CAPTURE MODULE, JUST AS

DR. STORER DESCRIBED IT AND EXACTLY AS THE TYPE OF PRIOR ART

THAT COULD BE BOUGHT WITH A VIDEO CARD AND INSTALLED IN YOUR

COMPUTER.

THE PATENT TELLS YOU THAT.

DR. STORER TOLD YOU THAT AS WELL.

APPLE'S IPHONE PRODUCTS DON'T HAVE ONE.

ONE.

WE TAKE DIGITAL VIDEO.

VIDEO TO DIGITAL VIDEO.

NEED TO CAPTURE IT ANYWHERE ELSE.

THEY DON'T NEED

THE WORLD HAS MOVED FROM ANALOG

WE TAKE DIGITAL VIDEO AND THERE'S NO

THAT'S WHY, WHEN SAMSUNG CLOSED TODAY, THEY REFERRED YOU

TO PHRASES LIKE "CAPTURE VIDEO" DESCRIBING THE RECORDING OF IT

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AND THEY NEVER USED THE WORDS "VIDEO CAPTURE MODULE."

AND THERE'S A SIMPLE REASON.

WE DON'T HAVE THAT.

DR. SCHONFELD AND DR. STORER BOTH LOOKED AT THE BILL OF

MATERIALS.

THE ACCUSED PRODUCTS RIGHT DOWN TO THE LAST SCREW -- YOU WILL

HAVE THEM BEFORE YOU -- LITERALLY TO THE LAST SCREW.

NO -- THERE IS NO VIDEO CAPTURE MODULE.

8
9
10

WHY?

THE BILL OF MATERIALS HAS EVERY SINGLE COMPONENT OF

BECAUSE WE RECORD DIGITAL VIDEO.

WE DON'T NEED TO

CAPTURE IT FROM SOMEWHERE ELSE.
IN THE SAME WAY, THERE'S MEANS FOR TRANSMISSION, AND I'LL

JUST SAY THIS TO GUIDE YOU IN YOUR DELIBERATIONS.

THE SECOND PART HAS THAT MEANS OF TRANSMISSION.

THERE'S

CLAIM 15 IN

WHEN YOU LOOK AT HER HONOR'S FINAL INSTRUCTION NUMBER 27,

YOU WILL SEE SHE SAYS THIS TYPE OF CLAIM, AMONG ALL THE CLAIMS

YOU HAVE TO CONSIDER, HAS A SPECIAL MEANING, AND THAT SPECIAL

MEANING IS THEY HAVE TO SHOW THAT THE SPECIFIC STRUCTURE, THE

SPECIFIC STRUCTURE THEY DESCRIBED 20 YEARS AGO, IS IN OUR

PRODUCT.

AND THAT'S WHAT'S REQUIRED.

THAT'S WHAT HER HONOR'S CLAIM INTERPRETATION SAYS,

THEY CAN'T DO IT.

THEY CAN'T DO IT BECAUSE THERE ARE NO

PORTS TO PLUG CABLES IN BECAUSE WE DON'T NEED THEM.

NO MODEMS OUTSIDE OF THE TELEPHONE BECAUSE WE DON'T NEED THEM.

THE SPECIFIC THINGS THAT HER HONOR HAS IDENTIFIED SIMPLY

24
25

THERE ARE

AREN'T IN THE APPLE PHONE BECAUSE WE DON'T NEED THEM.
NOW LET'S LOOK AT THE '449 PATENT, AND LET ME ADDRESS ONE

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THING FIRST, WHICH IS THIS ATTACK ON DR. STORER'S

QUALIFICATIONS.

THIS PATENT IS ABOUT DATA COMPRESSION AND DATA

DECOMPRESSION.

YOU THAT.

MR. PARULSKI TOLD YOU THAT.

DR. STORER TOLD

AS BETWEEN THE TWO OF THEM, THE PERSON WHO HAS THE REAL

EXPERIENCE IN DATA COMPRESSION AND DECOMPRESSION IS ACTUALLY

DR. STORER.

BUT YOU DON'T HAVE TO TAKE MY WORD FOR IT.

WHEN NASA,

RIGHT, THE NATIONAL AERONAUTICS SPACE AGENCY, NEEDED SOMEONE TO

COME IN AND CONSULT ON DATA DECOMPRESSION AND DATA COMPRESSION,

WHO DID THEY GO TO?

THEY WENT TO DR. STORER.

NOW, WHAT DR. STORER TOLD YOU IS THERE ARE FIVE SEPARATE

REASONS, FIVE SEPARATE REASONS THAT THE MODERN DAY FACETIME IN

IPHONE DOESN'T USE THE CLAIMED INVENTION.

THROUGH ALL FIVE.

I'M NOT GOING TO GO

INSTEAD I'M GOING TO IDENTIFY TWO FOR YOU.

THE FIRST IS THIS.

THERE IS A REQUIREMENT OF A LIST IN A

SEARCH MODE.

ACKNOWLEDGED IS THIS:

POSSIBLE TO DISPLAY ALL THE PHOTOS IN THE CAMERA AND SIMPLY

SCROLL THROUGH THEM.

WHAT THE PATENT TELLS US AND WHAT MR. PARULSKI
THE INVENTION EXISTED BECAUSE IT WAS NOT

THE PATENT SAYS THAT.

BUT MR. PARULSKI SAID IT IN HIS TRIAL TESTIMONY

EXPLICITLY, AND IF I CAN PUT THAT ON THE SCREEN.

PURPOSE OF THIS WAS YOU CAN'T PUT ALL OF THE PICTURES UP AT

ONCE.

THE TECHNOLOGY WON'T ALLOW IT.

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SO WHAT ARE WE GOING TO DO?

WE'RE GOING TO HAVE A SEARCH MODE.

FIGURES 4 AND 7.

WE'RE GOING TO HAVE A LIST.
AND THAT'S WHAT'S SHOWN AT

DR. STORER ALSO EXPLAINED TO YOU THAT IN THE OLD

TECHNOLOGY, THERE WAS A REASON TO HAVE WHAT THE PATENT CLAIMS

AS A SINGLE COMPRESSOR BECAUSE THE COMPRESSION TECHNIQUES FOR

VIDEO AND STILL IMAGES OVERLAPPED AT THE TIME.

8
9

BUT TODAY, THEY'RE DIFFERENT, VERY DIFFERENT, AND
COMPLETELY DIFFERENT.

AND AS A CONSEQUENCE, IF YOU LOOK AT SDX 3729, WHICH I'M

GOING TO PUT ON JUST YOUR SCREENS RIGHT NOW, YOU WILL SEE THAT

THERE ARE TWO DIFFERENT COMPONENTS EMPLOYING TWO DIFFERENT

METHODOLOGIES MADE BY TWO DIFFERENT SUPPLIERS.

CLOSE TO SATISFYING THE LIMITATIONS.

AND THEY'RE DIFFERENT FOR A REASON.

TECHNOLOGY NEEDS TO BE DIFFERENT.

TECHNOLOGY.

THEY DON'T GET

THE MODERN DAY

THEY CAN'T BE 20 YEAR OLD

NOW, MR. JOHNSON MENTIONED, AND I AGREE WITH HIM, SOME OF

THE COMPONENTS THAT ARE ACCUSED OF INFRINGING CAME FROM

SAMSUNG.

THIS IS IMPORTANT FOR TWO REASONS.

HERE IS THE FIRST.

SAMSUNG BOUGHT THESE PATENTS IN 2011.

THEY DIDN'T SUE US UNTIL

APRIL OF 2012.

OF DOLLARS OF COMPONENTS, BILLIONS OF DOLLARS OF COMPONENTS,

AND THEN THEY SUED US AND THEY NOW CLAIM THAT WE'RE INFRINGING

FOR SEVEN MONTHS THEY WERE SELLING US BILLIONS

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THIS PATENT, THE PATENT THEY PURCHASED, BY USING THE COMPONENTS

THEY SOLD TO US.

THAT THEY SOLD TO US WHILE THEY HELD THE PATENTS AND WE BOUGHT

THEM.

THEY WANT $6 MILLION FOR USING COMPONENTS

NOW, IT'S IMPORTANT FOR A SECOND REASON, AND HERE'S WHAT

IT IS.

THAT WE BOUGHT THE COMPONENTS FROM SAMSUNG.

8
9
10

MR. JOHNSON SAID IT'S NO DEFENSE TO PATENT INFRINGEMENT

HE'S RIGHT.

I AGREE.

IT'S NOT A DEFENSE IF YOU'RE THE

MAKER OR USER OR SELLER OF A COMPONENT TO A CLAIM OF PATENT
INFRINGEMENT.

IT APPLIES TO OUR PURCHASE OF COMPONENTS FROM SAMSUNG.

IT APPLIES TO SAMSUNG'S USE OF GOOGLE SOFTWARE.

IT DOESN'T MATTER WHERE IT COMES FROM IF YOU'RE THE

14
15

PERSON, IF YOU ARE THE PERSON WHO USES IT.
NOW, DAMAGES QUICKLY, AND HERE IS THE MOST IMPORTANT THING

ABOUT THE DAMAGES CLAIM.

DR. HAUSER FOR THE LAST HALF HOUR OR SO, ATTACK HIS STUDY AS

DISHONEST AND A SHAM.

YOU'VE HEARD MR. QUINN ATTACK

WHAT DID SAMSUNG DO WHEN IT WAS ITS TURN TO PROVE DAMAGES?

REMEMBER, THE SHOE IS NOW ON THE OTHER FOOT.

WHAT DID THEY DO?

22
23
24
25

ASK YOURSELF,

DID THEY HAVE DR. ERDEM DO AN EYE TRACKING STUDY TO PROVE
THEIR DAMAGES?

NO.

DID THEY HAVE DR. CHEVALIER DO A LINE COUNTING STUDY TO
PROVE THEIR DAMAGES?

NO.

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DID THEY DO WHAT MR. WAGNER SAID, A CONJOINT STUDY?

NO.

INSTEAD, THEY BROUGHT DR. RAO IN, WHO TESTIFIED FOR EIGHT

MINUTES, AND HE PRESENTED YOU WITH A SURVEY, A MAX DIFF SURVEY

THAT, LIKE DR. ERDEM'S STUDY, LIKE DR. CHEVALIER'S STUDY, HAS

NEVER BEEN USED IN A COURT IN AMERICA TO DETERMINE DAMAGES.

HE SHOWED YOU HIS SURVEY SHEET, HE DESCRIBED THE DATA

POINTS, AND HE SAID THAT'S ENOUGH.

8
9

NOW, LADIES AND GENTLEMEN, WHEN YOU RETIRE TO THE JURY
ROOM AND YOU CONSIDER THE ATTACKS ON DR. HAUSER, ASK YOURSELF

THIS:

KNOW, THE AMOUNT DOESN'T MATTER, IT'S THE ANALYTICAL FRAMEWORK

YOU USE, IF WHAT DR. RAO DID IS ENOUGH, HOW CAN IT POSSIBLY BE

THAT WHAT DR. HAUSER DID NOT BE?

IF WHAT DR. RAO DID IS ENOUGH TO DETERMINE DAMAGES, YOU

AND YOU'LL REMEMBER MY LAST CROSS-EXAMINATION OF DR. RAO.

DID ANYBODY ASK YOU, DID ANYBODY ASK YOU TO PERFORM A MAX DIFF

SURVEY, A CONJOINT SURVEY, ANY OTHER SURVEY THAT WOULD HAVE

SHOWN YOU WHAT THE APPLE FEATURES WERE WORTH?

AND THE ANSWER WAS NO.

IT.

ANSWER.

HE DIDN'T DO IT.

AND THERE'S ONLY ONE REASON.

NO ONE ELSE DID

THEY DIDN'T WANT TO KNOW THE

NOW, LADIES AND GENTLEMEN, WE'RE AT THE END OF OUR

CLOSING, AND BEFORE I SIT DOWN, I'D LIKE TO THANK YOU ON BEHALF

OF ALL OF US FOR YOUR CAREFUL TIME AND ATTENTION.

BEEN A BURDEN, A BURDEN UPON YOU, A BURDEN UPON YOUR FAMILIES.

WE KNOW IT'S

ON BEHALF OF MR. MCELHINNY AND MS. KREVANS AND ALL OF OUR

UNITED STATES COURT REPORTERS

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COLLEAGUES, BUT MOSTLY ON BEHALF OF THE FOLKS AT APPLE, WE

THANK YOU.

NOW I'M GOING TO ASK YOU THAT LAST THING THAT I SAID I WAS

GOING TO ASK YOU TO DO, AND THAT'S THIS:

BEGIN YOUR DELIBERATIONS, PUT YOURSELF IN THE POSITION OF THE

APPLE ENGINEERS, SCIENTISTS, AND LEADERS.

POSITION OF SOME OF THE PEOPLE LIKE MR. CHRISTIE, MR. DENIAU,

MR. GARCIA, MR. MILLET, AND MR. SCHILLER.

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PUT YOURSELF IN THE

LADIES AND GENTLEMEN, THESE ARE THE PEOPLE WHO CAME TO
WORK BEFORE THE SUN CAME UP AND LEFT AFTER THE SUN WENT DOWN.

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BEFORE YOU RETIRE AND

MR. PRICE:

YOUR HONOR, I OBJECT.

THIS ISN'T

REBUTTAL TO THE OFFENSIVE CASE.

MR. LEE:

YOUR HONOR, THIS GOES DIRECTLY TO

CHALLENGING THEIR PATENTS.

THE COURT:

MR. LEE:

OVERRULED.

THESE ARE THE FOLKS WHO WORKED TIRELESSLY,

AS MR. GARCIA DESCRIBED TO YOU, TO INVENT FACETIME, AND AS

OTHER DESCRIBED TO YOU, TO INVENT THE IPHONE AND THE IPOD

TOUCH.

THESE ARE PEOPLE WHO INVENTED AND INNOVATED AND

FUNDAMENTALLY CHANGED, FUNDAMENTALLY CHANGED THE WAY WE

COMMUNICATE.

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AND FOR THESE FIVE PEOPLE, THEY CAME AND GOT ON THE STAND
AND UNDERWENT MUCH CROSS-EXAMINATION.
NOW, YOU'RE ONE OF THOSE PEOPLE, AND YOU'VE HEARD THAT THE

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SAMSUNG PATENTS ARE REVOLUTIONARY AND FUNDAMENTAL, PATENTS THAT

NO ONE HAS USED, THAT NO ONE HAD HEARD OF BEFORE THE LAWYER

GAVE IT TO THE EXPERT, AND THAT NO ONE HAS COPIED.

BUT YOUR WORK IS TRIVIAL AND UNIMPORTANT.

DOES THAT MAKE SENSE TO YOU?

AND YOU SAY TO YOURSELF, IF YOU'RE MR. GARCIA OR

MR. MILLET, HOW CAN THAT BE?

TRIVIAL AND UNIMPORTANT, BUT THESE PATENTS THAT NO ONE IS USING

ARE FUNDAMENTAL AND REVOLUTIONARY?

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HOW CAN IT BE THAT OUR WORK IS

YOUR COMMON SENSE WILL TELL YOU WHAT THE ANSWER TO THAT
IS.
WE ALL WOULD AGREE THAT THE WORLD AND THE GLOBAL ECONOMY

DEPENDS UPON INNOVATION AND INVENTION.

PATENTS ISSUED BY THE UNITED STATES PATENT OFFICE UNDER OUR

CONSTITUTION.

DEPEND ON OTHERS TO RESPECT PATENTS, AND AS MR. DENISON SAID,

WE DEPEND UPON PEOPLE NOT TO ENGAGE IN THE UNFAIR COMPETITION

OF PATENT INFRINGEMENT.

WE DEPEND ON PATENTS,

WE DEPEND UPON FAIR AND SQUARE COMPETITION.

AND MOST OF ALL, LADIES AND GENTLEMEN, WE DEPEND UPON

PEOPLE LIKE YOU WHO WILL RECOGNIZE THE DIFFERENCE BETWEEN FAIR

COMPETITION, FAIR AND SQUARE COMPETITION, AND UNFAIR

COMPETITION, THE UNFAIR COMPETITION OF PATENT INFRINGEMENT, AND

TO NOT ALLOW IT TO HAPPEN.

AND THAT'S WHAT WE ASK YOU TO DO NOW, HERE, TODAY.

THANK YOU.

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THE COURT:

THE TIME IS 2:46.

PLEASE COME FORWARD.

I'M GOING TO ASK MS. PARKER BROWN TO

SWEAR IN OUR BAILIFF, PLEASE.
(COURT SECURITY OFFICER SWORN.)

THE MARSHAL:

THE COURT:

I DO.

OKAY.

SO WHAT IS GOING TO HAPPEN IS THAT

YOU ARE GOING TO GET A COPY OF -- NO.

ACTUAL VERDICT FORM.

YOU'RE GOING TO GET THE

YOU'RE ALSO GOING TO RECEIVE 15 BLANK NOTES.

IF YOU

HAVE -- IF ANYONE ON THE JURY HAS ANY QUESTION, YOU CAN PLEASE

FILL OUT THE NOTE NUMBER, DATE, TIME, YOUR SIGNATURE.

AND WE WILL TRY TO RESPOND TO YOU AS QUICKLY AS WE CAN,

BUT PLEASE CONTINUE TO DELIBERATE.

ASSEMBLE EVERYONE AND JOINTLY AGREE UPON A RESPONSE TO YOU.

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IT MAY TAKE US SOME TIME TO

SO WHENEVER YOU HAVE A NOTE, IF YOU WOULD JUST KNOCK ON
THE DOOR, YOUR BAILIFF WILL BE OUTSIDE.
ALL COMMUNICATIONS SHOULD BE IN WRITING BECAUSE THE

PARTIES ARE ENTITLED TO KNOW WHAT INFORMATION YOU ARE GETTING

WHILE YOU'RE DELIBERATING.

IN ADDITION, YOU WILL HAVE THE JOINT EXHIBIT LIST.

IF YOU

WANT TO FIND ANY OF THE EXHIBITS THAT HAVE BEEN REFERENCED

THROUGHOUT THE TRIAL, YOU'LL HAVE THIS INFORMATION IN THIS RED

WELL WHICH WE ARE GOING TO GIVE TO YOU.

IN ADDITION, YOU'RE GOING TO HAVE ALL OF THESE CARTS THAT

HAVE ALL OF THE EXHIBITS THAT HAVE BEEN ADMITTED INTO EVIDENCE,

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SO YOU CAN LOOK AT ANYTHING IF YOU WISH.
SO TODAY WE'LL BE DELIBERATING UNTIL 4:30 AND YOU WILL
STAY IN THIS JURY ROOM.
BUT AS OF TOMORROW, I WOULD LIKE YOU TO DELIBERATE IN MY

JURY ROOM, WHICH IS ON THE FOURTH FLOOR.

ANYTHING IN OPEN COURT, WE'LL COME BACK TO THIS COURTROOM

BECAUSE I WILL HAVE OTHER CRIMINAL AND CIVIL CASES IN THE NEXT

TWO DAYS HAPPENING IN MY COURTROOM, BUT YOU'LL BE DELIBERATING

ON THE FOURTH FLOOR.

IF WE NEED TO DO

WHEN YOU GET OFF THE ELEVATORS AND GO BACK TO THE BACK

HALL, PLEASE TURN TO THE LEFT TO GO TO THE FIRST STREET SIDE OF

THE BUILDING INSTEAD OF GOING TO THE RIGHT TO THE SECOND STREET

SIDE OF THE BUILDING, WHICH IS WHERE WE ARE NOW.

SO YOU'LL BE DELIBERATING ON THE FOURTH FLOOR FOR THE REST

OF THE TIME, BUT THEN WE'LL ALWAYS COME UP HERE TO THIS

COURTROOM, SINCE THIS IS THE ONLY ONE LARGE ENOUGH, IF WE NEED

TO DO ANYTHING IN OPEN COURT.

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ALL RIGHT.

SO WITH THAT, YOU CAN PLEASE TAKE YOUR BINDERS

AND GO TO THE JURY ROOM UNTIL 4:30 TODAY.
THE CLERK:

I'M JUST GOING TO GO BACK AND REMIND THEM

THAT I NEED THEIR LUNCH ORDER.
THE COURT:

OH, THAT'S FINE.

ALL RIGHT.

(JURY OUT AT 2:49 P.M.)

OKAY?

THANK YOU FOR YOUR PATIENCE AND YOUR SERVICE.

THE COURT:

OKAY.

THE RECORD SHOULD REFLECT THAT THE

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JURORS HAVE LEFT THE COURTROOM.

PLEASE TAKE A SEAT.

I WOULD LIKE EACH -- COUNSEL FOR EACH SIDE TO REVIEW THE

MATERIALS THAT ARE ACTUALLY GOING BACK TO THE JURY ROOM.

WANT TO HAVE EVERYONE ON THE RECORD SAY THAT THEY ARE OKAY WITH

THESE PARTICULAR MATERIALS.

SO ONE IS THE JOINT EXHIBIT, JOINT LIST OF EXHIBITS

ADMITTED THROUGH APRIL 28TH, 2014.

1857, AND I WILL GIVE YOU AN OPPORTUNITY TO REVIEW THE ACTUAL

THE ECF DOCKET NUMBER IS

COPY.

ANOTHER ONE ARE THE BLANK JURY NOTES.

THE THIRD IS THE VERDICT FORM, WHICH IS ECF DOCKET NUMBER

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1836.
LET ME ASK MS. PARKER BROWN IF YOU CAN LET THEM SEE THOSE
MATERIALS.
AND WE DO HAVE AGREEMENT AS TO THE EXHIBITS, CORRECT?

CAN

YOU PLEASE IDENTIFY WHICH ARE THE CARTS THAT WILL BE GOING TO

THE JURY ROOM?

THE CLERK:

SO THEY'RE GOING TO INSPECT THIS?

THE COURT:

YES, IF YOU WOULD, PLEASE.

WHICH ONES ARE THE CARTS THAT ARE GOING TO THE JURY ROOM?

THE CLERK:

THESE TWO AND THE DEVICES, I BELIEVE.

MR. SABRI:

THAT'S RIGHT.

THE COURT:

ALL RIGHT.

SO LET'S JUST PUT ON THE

RECORD, I WANT SOMEONE TO IDENTIFY THEMSELVES FOR APPLE AS

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APPROVING THE TWO BEIGE CARTS FULL OF BINDERS AND THE TWO BLACK

CARTS FULL OF DEVICES THAT ARE IN RED WELLS.

SOMEONE --

CAN I HAVE

MR. SABRI:

NATHAN SABRI FOR APPLE, YOUR HONOR.

THE COURT:

AND YOU APPROVE OF THOSE FOUR CARTS?

MR. SABRI:

YES, YOUR HONOR.

THE COURT:

ALL RIGHT.

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MS. MAROULIS, DO YOU APPROVE

OF THOSE FOUR CARTS?
MS. MAROULIS:
THE COURT:

YES, YOUR HONOR.

OKAY.

THANK YOU.

THEN I'M GOING TO HAVE MS. PARKER BROWN -- MS. PALANJIAN,

MR. HUANG, MAYBE YOU CAN HELP -- WHEEL THOSE INTO THE JURY

ROOM, PLEASE.

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OKAY.

MR. SABRI, HAVE YOU REVIEWED THE VERDICT FORM, THE

EXHIBIT LIST, AND THE JURY NOTES?

MR. SABRI:

I HAVE, YOUR HONOR.

THE COURT:

OKAY.

MR. SABRI:

YES, YOUR HONOR.

THE COURT:

ALL RIGHT.

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ARE THOSE SATISFACTORILY TO APPLE?

MS. MAROULIS, HAVE YOU

REVIEWED THE VERDICT FORM, THE JURY NOTES, AND EXHIBIT LIST?
MS. MAROULIS:

YES, YOUR HONOR.

THEY'RE SATISFACTORY

FOR SAMSUNG.
THE COURT:

OKAY.

THANK YOU.

SO THOSE WILL GO BACK

TO THE JURY ROOM.
I DID JUST WANT TO PLACE ON THE RECORD AS WELL THAT THE

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FINAL JURY INSTRUCTIONS THAT WERE READ TO THE JURY YESTERDAY

WERE ECF DOCKET NUMBER 1847.

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HAVE YOU PROVIDED YOUR BEST MEANS OF CONTACT AND CONTACT
INFORMATION TO MS. PARKER BROWN?

MR. MCELHINNY:

MS. MAROULIS:

THE COURT:

WE HAVE, YOUR HONOR.
YES, YOUR HONOR.

OKAY, GREAT.

SO WE KNOW HOW TO CONTACT

YOU.

WE WILL DO IT, AS WE'VE DONE THE PREVIOUS TWO TRIALS, WHEN

THE JURORS LEAVE FOR THE END OF THE DAY, WE'LL JUST HAVE A

MESSAGE FILED ON ECF SAYING THE JURORS HAVE ADJOURNED FOR THE

DAY.

WE'LL ALSO DO, AS WE'VE DONE IN THE PREVIOUS TWO TRIALS,

WE WILL FILE THE JURY NOTES SO IF YOUR TEAMS ARE DISPARATE,

EVERYONE CAN GO ONLINE AND SEE WHAT THE QUESTION WE HAVE.

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WE HAVE MR. MINTZ HERE, HE'LL BE OUR LIAISON TREE FOR THE
MEDIA, AS IN THE PREVIOUS TWO TRIALS.
WHAT ELSE?
ORGANIZE?

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ANYTHING ELSE THAT WE NEED TO COORDINATE?

MR. MCELHINNY:

NOTHING FURTHER FOR APPLE, YOUR

HONOR.
THE COURT:

OKAY.

ANYTHING -- ANYTHING MORE THAT WE

SHOULD COORDINATE?

MS. MAROULIS:

THE COURT:

NOTHING FURTHER, YOUR HONOR.

OKAY.

THEN THANK YOU VERY MUCH.

UNITED STATES COURT REPORTERS

WE'LL

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GO AHEAD AND LET YOU KNOW WHEN THEY ADJOURN FOR TODAY AND IF WE

HAVE ANY NOTES.

(A RECESS WAS TAKEN PENDING THE JURY'S DELIBERATIONS.)

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CERTIFICATE OF REPORTER

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I, THE UNDERSIGNED OFFICIAL COURT REPORTER OF THE UNITED

STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA,

280 SOUTH FIRST STREET, SAN JOSE, CALIFORNIA, DO HEREBY

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CERTIFY:
THAT THE FOREGOING TRANSCRIPT, CERTIFICATE INCLUSIVE, IS

A CORRECT TRANSCRIPT FROM THE RECORD OF PROCEEDINGS IN THE

ABOVE-ENTITLED MATTER.

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_______________________________
LEE-ANNE SHORTRIDGE, CSR, CRR
CERTIFICATE NUMBER 9595

DATED:

APRIL 29, 2014

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UNITED STATES COURT REPORTERS

Case 3:10-cv-03561-WHA Document 1340-6 Filed 10/15/15 Page 1 of 1

EXHIBIT 5
TENTATIVELY FILED
UNDER SEAL

Case 3:10-cv-03561-WHA Document 1340-7 Filed 10/15/15 Page 1 of 2

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ORACLE AMERICA, INC.
Plaintiff,
v.
GOOGLE INC.
Defendant.

SAN FRANCISCO DIVISION
Case No. CV 10-03561 WHA
[PROPOSED] ORDER GRANTING
ORACLE’S MOTION TO DISQUALIFY
THE RULE 706 EXPERT
Dept.: Courtroom 8, 19th Floor
Judge: Honorable William H. Alsup

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[PROPOSED] ORDER
CV 10-03561 WHA

Case 3:10-cv-03561-WHA Document 1340-7 Filed 10/15/15 Page 2 of 2

Before the Court is Oracle America, Inc.’s Motion to Disqualify the Rule 706 Expert.

Having considered the Motion, and all matters presented to the Court in connection with the

Motion, the Court HEREBY ORDERS that the Motion is GRANTED.

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IT IS SO ORDERED.

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Dated:

,
Honorable William H. Alsup
United States District Court Judge

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-1-