motion for permission to present evidence that apple practices patent claims

8/12/2019 Motion for Permission to Present Evidence That Apple Practices Patent Claims

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APPLE I NC .S MOTION FOR EVIDENCE THAT APPLE PRACTICES ITS PATENTS A ND CURATIVE I NSTRUCTIONSCase No. 12-cv-00630-LHK

JOSH A. KREVITT (CA SBN 208552) [email protected]. MARK LYON (CA SBN 162061)[email protected], DUNN & CRUTCHER LLP1881 Page Mill RoadPalo Alto, CA 94304-1211Telephone: (650) 849-5300Facsimile: (650) 849-5333

HAROLD J. McELHINNY (CA SBN 66781)[email protected] P. BENNETT (CA SBN 65179)

[email protected] W. LONDEN (CA SBN 85776)

[email protected] KREVANS (CA SBN 116421)[email protected] N. BORENSTEIN (CA SBN 133797)

[email protected] J. OLSON (CA SBN 175815)[email protected] & FOERSTER LLP425 Market StreetSan Francisco, California 94105-2482Telephone: (415) 268-7000Facsimile: (415) 268-7522

Attorneys for Plaintiff andCounterclaim-Defendant APPLE INC.

WILLIAM F. [email protected] CUTLER PICKERINGHALE AND DORR LLP60 State StreetBoston, MA 02109Telephone: (617) 526-6000Facsimile: (617) 526-5000

MARK D. SELWYN (SBN 244180)[email protected] CUTLER PICKERINGHALE AND DORR LLP950 Page Mill RoadPalo Alto, California 94304Telephone: (650) 858-6000Facsimile: (650) 858-6100

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

APPLE INC., a California corporation ,

Plaintiff,

v.

SAMSUNG ELECTRONICS CO., LTD., aKorean corporation; SAMSUNGELECTRONICS AMERICA, INC., a NewYork corporation; and SAMSUNGTELECOMMUNICATIONS AMERICA,LLC, a Delaware limited liability company,

Defendants.

Case No. 12-cv-00630-LHK

APPLE INC.S MOTION FORPERMISSION TO PRESENTEVIDENCE THAT APPLEPRACTICES THE 414, 172, AND959 PATENTS AND CURATIVEINSTRUCTIONS

Case5:12-cv-00630-LHK Document1567 Filed04/03/14 Page1 of 11


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APPLE I NC .S MOTION FOR EVIDENCE THAT APPLE PRACTICES ITS PATENTS A ND CURATIVE I NSTRUCTIONSCase No. 12-cv-00630-LHK 1

NOTICE OF MOTION

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that Plaintiff Apple Inc. (Apple) shall and hereby does move

the Court, pursuant to Civil Local Rule 7, for permission to present testimony and evidence

demonstrating that Apple practices the asserted patents and curative instructions on the grounds

that Defendants Samsung Electronics Co., Ltd.; Samsung Electronics America, Inc.; and

Samsung Telecommunications America, LLC (collectively, Samsung) made prejudicial and

false statements during opening statements that have unfairly prejudiced Apple.

This motion is based on this notice of motion and supporting memorandum, the

supporting Declaration of Erik J. Olson, and such other written or oral argument as may be

presented at or before the time this motion is taken under submission by the Court.

RELIEF REQUESTED

Apple seeks an Order permitting Apple to present testimony and evidence demonstrating

that Apple has practiced and continues to practice the 414, 172, and 959 patents in order to

correct the false impressions created by Samsungs counsel. Apple also requests that the Court

recognize Apples continuing objection to any further misleading or false statements by

Samsung. And Apple asks the Court to issue curative instructions, both now and with the final jury instructions, to curtail the harm and prejudice caused by Samsungs improper statements to

the jury.

Dated: April 3, 2014 /s/ Harold J. McElhinny Harold J. McElhinny



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MEMORANDUM

I. INTRODUCTION

During opening statements, Samsungs counsel repeatedly made irrelevant, misleading,

and even untrue statements that have undoubtedly caused the jury to form impressions that are

highly prejudicial to Apple. Over and over again, Samsungs counsel represented that Apple

has never practiced the 414, 172, and 959 patentseven though, as Samsung knows, Apple

has sold and continues to sell products that use each of Apples asserted patents. The Courts

order limiting Apples ability to contend that it practices the 414, 172, and 959 patents at trial

does not (and cannot) permit Samsung to affirmatively present false factual statements to the

jury; but now that Samsung has done precisely that, Apple should be permitted to respond with

testimony and evidence demonstrating that Apple practices those patents. Samsungs counsel

also improperly suggested to the jury that it should consider the fact that Apple may seek

permanent injunctive reliefwhich is irrelevant to the issues that the jury is being asked to

decide and extremely prejudicial to Apple. And finally, Samsungs counsel misrepresented the

Federal Circuits preliminary injunction decision in a way that, again, is highly prejudicial to

Apple.

Samsungs repetition of these misleading and untruthful statements has unfairly prejudiced Apple at the outset of the trial. As set forth below, Apple requests that the Court:

(1) permit Apple to present testimony and evidence demonstrating that Apple has practiced and

continues to practice the 414, 172, and 959 patents in order to correct the false impressions

created by Samsungs counsel; (2) recognize Apples continuing objection to any further

misleading or false statements by Samsung; and (3) issue curative instructions, both now and

again with the final jury instructions, to curtail the harm and prejudice caused by Samsungs

improper statements to the jury.

II. ARGUMENT

A. Samsungs False Statements Regarding Whether Apple Practices The 414,172, And 959 Patents Are Highly Prejudicial To Apple And RequireCurative Action.

Apple has sold and continues to sell products that include embodiments of all five



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patents that Apple is asserting at trial. In connection with the case narrowing proceedings in

this case, however, the Court has ordered that Apple may not tell the jury that it practices the

414, 172, and 959 patents. More specifically, in granting Samsungs Motion in Limine #2,

the Court ordered that:

Apple may present the invention story of [the 414, 172, and 959] patents, but may not contend that it practices the patents. Applemay not rebut any Samsung contention that Apple productsconstitute an acceptable non-infringing alternative to the 414, 172,or 959 Patents by contending that Apple practices an unasserted orasserted claim of the 414, 172, or 959 Patents.

(Dkt. 1398 at 3 (emphasis added).) Following that order, the parties filed a joint submission on

jury instructions, which proposed an instruction that [i]n this case, Apple does not contend

that it practices the 414, 172, and 959 patents. (Dkt. 1418 at 1 (emphasis added).) The

Courts final preliminary jury instructions accordingly stated that [i]n this case, Apple does not

contend that it practices the 414, 172, or 959 patents. (Dkt. 1542 at 22 (emphasis added).)

Although Apple has sold in the past and continues to sell products that practice the 414,

172, and 959 patents, 1 Apple has complied with the Courts order by not telling the jury

during opening statements that it practices those patents. Apple expected that Samsung would

also comply with the Courts order during trial and would state, at most, that Apple does notcontend that it practices the 414, 172, and 959 patents or that the jury would see no evidence

that Apple practices those patents.

Samsung, however, has flouted the Courts ruling by making false statements to the jury

regarding whether Apple has ever practiced the asserted patents. During opening statements,

Samsungs counsel told the jury that:

Apple admits, the judge has instructed you , Im sure it went past you because it was so quick, the preliminary instructions and Mr. McElhinnyacknowledged 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 .Apple doesnt consider it valuable enough to even use.

1 See Olson Decl., Ex. 2, Cockburn Expert Report 470-473 (172 patent); Olson Decl.,Ex. 3, Snoeren Expert Report 360-367, 525-528 (959 and 414 patents).



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(Olson Decl., Ex. 1, 4/1/14 Trial Tr. 353:6-12 (emphases added).) In particular,

Samsungs counsel said to the jury that the judge has instructed and Apple admits

that Apple has never practiced three of the five asserted claimseven though the Court

gave no such instruction and Apple made no such admission.

To make matters worse, Samsungs counsel repeatedly told the jury that Apple

affirmatively does not practice the 414, 172, and 959 patents and has never used

those patents in Apples own products:

The way you know that Apple thinks thats a nuisance, because in theiPhone, they dont use that [172] patent, never have. Have never used it.The iPhone does it differently . ( Id. at 386:17-19 (emphasis added).)

So in other words, the survey participants are told, you either use Apples

[414] patent which, again, this is another one, Apple doesnt use this, its not in any iPhone, never has been . ( Id. at 391:3-5 (emphasis added).)

But, again, this search capability that, you know, they claim to have a[959] patent on, its not something that they have ever used. Its never

been done on the iPhone. ( Id. at 401:22-24.)

iPhone doesnt even use four out of these five features. ( Id. at 357:18(emphasis added).)

Even though most of these patent claims are not valuable enough for Appleto use itself, it claims that Android uses them and that this causes customersto buy Samsung phones. And if Samsung didnt have these features, theydsell more Apple phones even though a customer looking for four of five of

these features couldnt find them in an Apple phone, they dont use them .( Id. at 359:6-12 (emphasis added).)

So what are the damages that Apple seeks for use of its own particular formof word correction, which it doesnt even use ? ( Id. at 386:25-387:2.)

Apple itself doesnt even use four of the five. They agree as to three. Wehave to prove to you the fourth, the slide to unlock. You cant get those

features by buying an Apple product. Theyre not in a product. They dont use them. ( Id. at 413:22-414:1.)

Samsungs statements to the jury go far beyond what the Court ordered and the parties

stipulated tonamely, that Apple would not contend that it practices the 414, 172, and 959

patents. Even worse, the repeated statements made by Samsungs counsel during opening

statements are demonstrably false because many of Apples past and current products do, in

fact, practice Apples patents. Apple did not, could not, and would not have stipulated that it

does not practice the 414, 172, and 959 patents because such a stipulation would have been



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untrue. See Darwish v. Tempglass Grp. , Inc., 26 F. Appx 477, 480 (6th Cir. 2002) ([P]arties

[cannot] stipulate to patently untrue facts. (second alternation in original; quoting FDIC v. St.

Paul Fire & Marine Ins. Co. , 942 F.2d 1032, 1038 n.3 (6th Cir. 1991))). Indeed, the Court

would have had an obligation to reject such a false proposed jury instruction. See Dillon, Read

& Co. v. United States , 875 F.2d 293, 300 (Fed. Cir. 1989) (a trial court has a duty to reject

stipulations which are demonstrably false).

In just the first day of trial, Samsung has deliberately used the Courts order limiting the

scope of what Apple may contend at trial to create the knowingly false impression that Apple

does not practiceand has never practicedthe 414, 172, and 959 patents. That false

impression, which Samsungs counsel repeated over and over again, has unfairly prejudiced

Apple. Accordingly, Apple seeks the following relief to reduce the harm caused by Samsungs

repeated prejudicial statements.

1. Apple should be permitted to present testimony and evidencedemonstrating that it practices and has previously practiced the 414,172, and 959 patents.

Apple should be permitted to present evidence that it does, in fact, practice the 414,

172, and 959 patents in order to rebut the false impression created by Samsungs repeated

statements to the jury. Although the Court previously excluded such evidence, under thecurative admissibility rule, previously excluded evidence may be permitted when the opposing

party has opened the door by introducing evidence on the same issue or when it is needed to

rebut a false impression that may have resulted from the opposing partys evidence.

Henderson v. George Wash. Univ. , 449 F.3d 127, 140-141 (D.C. Cir. 2006) (finding abuse of

discretion where the trial court did not permit the introduction of previously excluded evidence

when the opposing party opportunistically used [the prior exclusion] ruling not only to shield

themselves from potentially damaging evidence, but also to use it as a sword to slice through

the foundation of much of appellants case); see also United States v. Sine , 493 F.3d 1021,

1037 (9th Cir. 2007) ([T]he opening the door principle allows parties to introduce evidence

on the same issue to rebut any false impression that might have resulted from the earlier

admission.); United States v. Rosa , 11 F.3d 315, 335 (2d Cir. 1993) (otherwise inadmissible



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evidence can be admitted when it is needed to rebut a false impression that may have resulted

from the opposing partys evidence). Apple accordingly requests that the Court permit Apple

to introduce testimony and evidence demonstrating that Apple currently practicesand has in

the past practicedthe 414, 172, and 959 patents. 2

2. Apple requests a continuing objection to any false or misleadingstatements regarding Apples practice of the 414, 172, and 959patents.

Apple also requests a continuing objection to any misleading statements regarding

Apples practice of the 414, 172, and 959 patents. For the reasons discussed above, Apple

objects to any argument, testimony, or evidence from Samsung suggesting that Apple does not

actually practiceor has never practicedthe 414, 172, and 959 patents. Apple asks the

Court to recognize a continuing objection from Apple to any such argument, testimony, or

evidence presented by Samsung for the remainder of the trial.

3. Apple requests a curative instruction.

Finally, the Court should issue a curative instruction to the juryboth now and with the

final jury instructions. Samsungs repeated statements suggesting that Apple does not practice

the 414, 172, and 959 patents have no doubt already caused the jury to form the false

impression that Apple does not practice and has never practiced its own patents. To minimizethe unfair prejudice to Apple caused by Samsungs misleading statements, Apple requests that

the Court provide the jury with the following curative instruction:

Whether a party practices its own patents is not relevant to theissues of infringement and validity that you will be asked to decidein this case. I have previously instructed you that Apple does notcontend that it practices the 414, 172, or 959 patents, and thatSamsung does not contend that it practices the 449 patent. To theextent Samsung has suggested that Apple does not in fact practicethe 414, 172, and 959 patents, those statements are not true.They are stricken from the record and you should disregard them.

2 Samsung apparently agrees that the parties should be permitted to present evidence torebut the other partys arguments that its products do not practice the asserted patents. In theJoint Amended Pretrial Statement, Samsung identified the following issue: Whether Appleshould be allowed to argue that Samsungs products do not practice the 449 patent and, if so,whether Samsung should be allowed to present argument and evidence its products do practicethe patent. (Dkt. 1455-1 at 12.)



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B. Samsungs Reference To The Possibility Of A Permanent Injunction WasExtremely Prejudicial To Apple And Warrants A Curative Instruction.

There is no legitimate reason for Samsung to discuss the possibility of permanent

injunctive relief during this trial on liability and damages. Nevertheless, Samsungs counsel

made the following remark to the jury during opening statements:

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 its there, andthey want to take that big number not only to the bank, not only tothe bank, but to get an order saying that none of these phones can

be sold in the United States anymore .

(Olson Decl., Ex. 1, 4/1/14 Trial Tr. 358:19-24 (emphasis added).)

The Supreme Court has recognized the well-established principle that a jury is to base its

verdict on the evidence before it, without regard to the possible consequences of the verdict.

Shannon v. United States , 512 U.S. 573, 576 (1994); see also id. at 579 (Information regarding

the consequences of a verdict is therefore irrelevant to the jurys task.). That rule is a reflection

of the basic division of labor in our legal system between judge and jury. Id. Equitable

remedieslike injunctive reliefare the exclusive province of the court and should not influence

the jurys decision on the merits of the case.

Consistent with the Supreme Courts guidance, district courtsincluding in several patentcaseshave repeatedly precluded the parties from mentioning to the jury the possibility of post-

trial permanent injunctive relief. See, e.g. , Broadcom Corp. v. Emulex Corp. , No. 09-1058, Dkt.

770 at 2 (C.D. Cal. Aug. 10, 2011) (excluding any reference to the jury about the possibility of

permanent injunctive relief in a patent case); Ciena Corp. v. Corvis Corp. , 352 F. Supp. 2d 526,

529 (D. Del. 2005) (patent defendant precluded from refer[ring] to the injunctive remedy in the

presence of the jury); Computer Assoc. Intl, Inc. v. American Fundware, Inc. , 831 F. Supp.

1516, 1530 (D. Colo. 1993) (granting motion in limine to exclude reference to claim for

injunctive relief in the jurys presence because [the Court] will determine, if necessary, whether

to enjoin AFWs distribution of PC-Fund or Fundware based on the jurys conclusions); United

States Football League v. National Football League , No. 84-7484, 1986 WL 7012, at *2-3

(S.D.N.Y. June 17, 1986) (barring defendants from referring to the possibility of injunctive relief



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in front of the jury, since such references would needlessly confuse the issues and unfairly

prejudice plaintiffs).

Samsungs reference in its opening statement to the fact that Apple may seek an order

enjoining Samsungs sale of infringing products is contrary to those well-established principles.

Permanent injunctive relief is an equitable remedy for the Courtand the Court aloneto decide

following the jurys verdict. Samsung is asking the jurors to decide this case based on the

consequences of their verdict, not the facts or the law. Samsungs statement risks that the jury

will think that Apple is not entitled to damages or, even worse, that it should find no liability to

avoid the possibility of an injunction. It is an improper invitation to jury nullification.

Apple asks the Court to preclude Samsung from making any further statements regarding

the possibility of injunctive relief for the remainder of the trial. Moreover, in an effort to

counteract the prejudicial harm that has already occurred, Apple requests that the Court provide

the jury with the following curative instruction both now and with the final jury instructions:

Both Apple and Samsung have requested a permanent injunction barring sales of products found to infringe the others patents.Should you find that either party infringes the others patents, it isfor the Court, and not you, to decide whether to enter an injunctionthat bars sales of those infringing products in the United States. Aninjunction does not automatically follow a finding of patentinfringement. In fact, the Court previously denied Apples requestfor a permanent injunction in a prior case after a jury found thatSamsung infringed six Apple patents and awarded damages. Yourdecision in this case, and any damages that you award, should nottake into account whether the Court might enter an injunction that

bars sales of any infringing product.

C. Samsungs Reference To The Federal Circuits Preliminary InjunctionDecision Was Highly Prejudicial To Apple And Warrants A CurativeInstruction.

During opening statements, Samsungs counsel mischaracterized the Federal Circuits

preliminary injunction decision in this case in a way that is highly prejudicial to Apple. In

particular, Samsungs counsel stated:

What happened is they sued on a different search patent.They sued on the 604 patent, not this one, and they went to courtand they got an injunction against our doing this type of search.We didnt think it was right. We didnt agree, but we complied.And so we it wasnt hard to do. I mean, we turned that off.



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We appealed it, and the court of appeals reversed and saidwe were right, Apple was wrong, were entitled to do it , and thendropped that patent.

(Olson Decl., Ex. 1, 4/1/14 Trial Tr. 402:7-15 (emphasis added).)

To begin with, Samsungs statement regarding the Federal Circuits preliminary

injunction decision is incorrect. In that decision, the court addressed the issues of irreparable

harm and claim construction with respect to the 604 patent and held that Apple did not satisfy the

burden necessary for a preliminary injunction. Apple Inc. v. Samsung Elecs. Co. , 695 F.3d 1370

(Fed. Cir. 2012). Contrary to Samsungs assertion, the Federal Circuit did not hold that Samsung

was entitled to use Apples universal search feature. 3

Samsungs statement regarding the preliminary injunction decision is also highly

prejudicial to Apple. It unfairly suggests to the jury that an appeals court sided with Samsung and

against Apple on an issue that is relevant in the current trial, when in fact the Federal Circuits

decision has no relevance to the issues that are before the jury. Samsungs statement also

improperly suggests that the appeals court somehow ruled that Samsung is entitled to use Apples

patented universal search feature claimed in the 959 patent , even though the 959 patent was not

at issue in the appeal.To minimize the prejudice caused by Samsungs improper statement regarding the Federal

Circuits preliminary injunction ruling, Apple requests that the Court issue the following curative

instruction both now and with the final jury instructions:

Any prior rulings by the court of appeals are not relevant to theissues that you are being asked to decide in this case. To the extentSamsung has suggested that the court of appeals ruled that Samsungis entitled to use Apples patented universal search feature, thosestatements are not true. They are stricken from the record and youshould disregard them. The court of appeals has not considered orruled on whether Samsung infringes the 959 patent. That issue isfor you to decide.

3 Samsungs statement that [t]hey sued on the 604 patent, not this one is also false.The original complaint filed on February 8, 2012 asserted infringement of both the 604 patentand the 959 patent. (Dkt. 1.) That false statement prejudicially suggests that the 959 patent wasadded to the lawsuit as an afterthought by Apple only after the finding on the 604 patent. That issimply not the case.



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III. CONCLUSION

Samsungs repetition of false and prejudicial statements to the jury during opening

statements has unfairly prejudiced Apple at the outset of trial. Apple respectfully requests that

the Court: (1) permit Apple to present testimony and evidence demonstrating that Apple has

practiced and continues to practice the 414, 172, and 959 patents in order to correct the false

impressions created by Samsungs counsel; (2) recognize Apples continuing objection to any

further misleading or false statements by Samsung; and (3) issue curative instructions, both now

and again with the final jury instructions, to minimize the harm and prejudice caused by

Samsungs improper statements to the jury.

Dated: April 3, 2014 MORRISON & FOERSTER LLP

By: /s/ Harold J. McElhinnyHarold J. McElhinny

Attorneys for PlaintiffAPPLE INC.



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Declaration of Erik J. OlsonCase No. 12-cv-00630-LHK (PSG)

JOSH A. KREVITT (CA SBN 208552) [email protected]. MARK LYON (CA SBN 162061)[email protected], DUNN & CRUTCHER LLP1881 Page Mill Road

Palo Alto, California 94304-1211Telephone: (650) 849-5300Facsimile: (650) 849-5333

HAROLD J. McELHINNY (CA SBN 66781)[email protected] P. BENNETT (CA SBN 65179)

[email protected] W. LONDEN (CA SBN 85776)

[email protected] KREVANS (CA SBN 116421)[email protected] N. BORENSTEIN (CA SBN 133797)[email protected] J. OLSON (CA SBN 175815)[email protected] & Foerster LLP425 Market StreetSan Francisco, California 94105-2482Telephone: (415) 268-7000Facsimile: (415) 268-7522

WILLIAM F. LEE ( pro hac vice )[email protected] CUTLER PICKERING

HALE AND DORR LLP60 State StreetBoston, Massachusetts 02109

Telephone: (617) 526-6000Facsimile: (617) 526-5000

MARK D. SELWYN (CA SBN 244180)[email protected] CUTLER PICKERING

HALE AND DORR LLP950 Page Mill RoadPalo Alto, California 94304Telephone: (650) 858-6000Facsimile: (650) 858-6100

Attorneys for Plaintiff and Counterclaim-Defendant Apple Inc.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIASAN JOSE DIVISION

APPLE INC., a California corporation,

Plaintiff,

vs.

SAMSUNG ELECTRONICS CO., LTD., aKorean business entity; SAMSUNG

ELECTRONICS AMERICA, INC., a NewYork corporation; SAMSUNGTELECOMMUNICATIONS AMERICA,LLC, a Delaware limited liability company,

Defendants.

Case No. 12-cv-00630-LHK

DECLARATION OF ERIK J. OLSON INSUPPORT OF APPLE INC.S MOTIONFOR PERMISSION TO PRESENTEVIDENCE THAT APPLE PRACTICESTHE 414, 172, AND 959 PATENTS ANDCURATIVE INSTRUCTIONS

Case5:12-cv-00630-LHK Document1567-1 Filed04/03/14 Page1 of 3


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Declaration of Erik J. Olson1 Case No. 12-cv-00630-LHK (PSG)

I, Erik J. Olson, hereby declare as follows:

1. I am a partner with the law firm of Morrison & Foerster LLP, counsel for Apple

Inc. (Apple). I am licensed to practice law in the State of California. I have personal

knowledge of the matters stated herein and understand them to be true. I submit this declarationin support of Apple Inc.s Motion for Permission to Present Evidence that Apple Practices the

414, 172, and 959 Patents and Curative Instructions.

2. Attached as Exhibit 1 hereto is a true and correct copy of excerpts of the April 1,

2014 trial transcript in the above-captioned matter.

3. Attached as Exhibit 2 hereto is a true and correct copy of excerpts of the August

12, 2013 Expert Report of Professor Andrew Cockburn in the above-captioned matter.

4. Attached as Exhibit 3 hereto is a true and correct copy of excerpts of the August

12, 2013 Expert Report of Dr. Alex C. Snoeren Concerning U.S. Patent Nos. 6,847,959 and

7,761,414 in the above-captioned matter.

I declare under penalty of perjury that the foregoing is true and correct to the best of my

knowledge. Executed this 3rd day of April, 2014, in San Jose, California.

Dated: April 3, 2014 s/ Erik J. Olson Erik J. Olson



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Declaration of Erik J. Olson2 Case No. 12-cv-00630-LHK (PSG)

ATTESTATION OF E-FILED SIGNATURE

I, Harold J. McElhinny, am the ECF User whose ID and password are being used to file

this Declaration. In compliance with Civil L.R. 5-1(i)(3), I hereby attest that Erik J. Olson has

concurred in this filing.

Dated: April 3, 2014 s/ Harold J. McElhinny Harold J. McElhinny



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UNI TED STATES COURT REPORTERS

268

UNI TED STATES DI STRI CT COURT

NORTHERN DI STRI CT OF CALI FORNI A

SAN J OSE DI VI SI ON

APPLE I NC. , A CALI FORNI ACORPORATI ON,

PLAI NTI FF,

VS.

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

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

DEFENDANTS.

)))))))))

))))))))

C- 12- 00630 LHK

SAN J OSE, CALI FORNI A

APRI L 1, 2014

VOLUME 2

PAGES 268- 497

TRANSCRI PT OF PROCEEDI NGSBEFORE THE HONORABLE LUCY H. KOH

UNI TED STATES DI STRI CT J UDGE

APPEARANCES ON NEXT PAGE

OFFI CI AL COURT REPORTERS: LEE- ANNE SHORTRI DGE, CSR, CRRCERTI FI CATE NUMBER 9595I RENE RODRI GUEZ, CSR, CRRCERTI FI CATE NUMBER 8074

PROCEEDI NGS RECORDED BY MECHANI CAL STENOGRAPHY TRANSCRI PT PRODUCED WI TH COMPUTER



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DEFENDANTS' OPENI NG STATEMENT


351

FI REHOSE.

BUT I F WE DO OUR J OB, WE WI LL MAKE THAT TECHNOLOGY AND

THAT EVI DENCE UNDERSTANDABLE TO YOU.

I F WE DO OUR J OB, YOU WI LL KNOWWHO THE TRUE I NVENTORS AND

I NNOVATORS ARE.

I F WE DO OUR J OB, YOU WI LL KNOWWHO THE COPI ER I S.

I F WE DO OUR J OB, YOU WI LL KNOWWHO THE I NFRI NGER I S.

AND, LADI ES AND GENTLEMEN, I F WE DO OUR J OB AND WE FOCUS

YOU ON THE RI SK THAT APPLE TOOK TO REVOLUTI ONI ZE THE WORLD, WE

WI LL BRI NG YOU THE EVI DENCE TO DETERMI NE WHAT PATENTS ANDI NNOVATI ON ARE REALLY WORTH.

THANK YOU.

THE COURT: OKAY. TI ME I S NOW11: 46. WE' LL STOP AT

NOON. OKAY? THANK YOU.

MR. QUI NN: OKAY. OPENI NG.

THE COURT: 11: 47. GO AHEAD, PLEASE.

MR. QUI NN: THANK YOU, YOUR HONOR.

(MR. QUINN GAVE HIS OPENING STATEMENT ON BEHALF OF

DEFENDANTS.)

MR. QUI NN: GOOD MORNI NG, FOLKS. I T' S STI LL MORNI NG.

WOW. I CAN WONDER WHY SOME OF YOU MI GHT BE LOOKI NG A

LI TTLE SI DEWAYS AT ME RI GHT NOWAFTER HEARI NG THAT PRESENTATI ON

OF APPLE' S CASE FROM TWO VERY SKI LLED LAWYERS.

BUT DURI NG J URY SELECTI ON, YOU PROMI SED US THAT YOU' D KEEP

AN OPEN MI ND UNTI L YOU HEARD ALL THE EVI DENCE, AND I ' M SURE



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352

THAT YOU APPRECI ATE THAT YOU' VE ONLY HEARD A SMALL PART OF THE

STORY AT THI S POI NT.

SO I ' D LI KE TO TALK TO YOU ABOUT SOME I MPORTANT FACTS THAT

NEI THER MR. MCELHI NNY NOR MR. LEE SPOKE ABOUT I N THEI R

STATEMENTS TO YOU.

BEFORE I SI T DOWN, I ' M GOI NG TO PROVE TO YOU, DURI NG THE

COURSE OF THI S TRI AL, WE WI LL PROVE TO YOU THAT, YES, APPLE I S

A GREAT COMPANY, BUT THEY DON' T OWN EVERYTHI NG. THEY DON' T OWN

THE ONLY WAY TO SEARCH ON PHONES. THEY DON' T OWN THE ONLY WAY

TO SYNC. THEY DON' T OWN THE ONLY WAY TO HAVE AN UNLOCK SCREENON A PHONE.

WE WI LL PROVE TO YOU THAT THEY VASTLY OVERSTATED THE

SCOPES OF THOSE PATENT CLAI MS AND THAT THEY' RE COUNTI NG ON YOU

TO BE CONFUSED AND NOT UNDERSTAND THAT, YES, I NDEED, THESE ARE

VERY, VERY NARROWSOFTWARE CLAI MS THAT COVER ONE ABI LI TY, ONE

WAY TO DO SOMETHI NG THAT A LOT OF DI FFERENT COMPANI ES DO

DI FFERENT WAYS.

AND WE WI LL PROVE TO YOU - - RI GHT NOWI ' M J UST GOI NG TO BE

BLUNT RI GHT NOW. THEI R REQUEST, THEY FI NALLY SAI D THE WORD,

THEY FI NALLY - - I WAS WAI TI NG. I WAS WONDERI NG WHETHER THEY

WOULD SAY I T TO YOU, THE "B" WORD, BI LLI ONS.

AND THEY PUT THAT NUMBER OUT THERE TO PUT I T I N YOUR HEADS

SO THAT THAT' S THE DAMAGES HORI ZON THAT YOU' RE THI NKI NG OF.

FOLKS, I ' LL PROVE TO YOU I N MY OPENI NG STATEMENT THAT THAT

I S A GROSS, GROSS EXAGGERATI ON AND AN I NSULT TO YOUR



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353

I NTELLI GENCE.

AS APPLE TOLD YOU, THE I PHONE WAS I NNOVATI VE BACK I N 2007.

I T WAS THE I NVENTI ON OF THE YEAR ALL THOSE YEARS AGO BACK I N

2007.

BUT THI S CASE I S REALLY NOT ABOUT THAT I PHONE OR ANY

I PHONES THAT COME AFTER I T. APPLE ADMI TS, THE J UDGE HAS

I NSTRUCTED YOU, I ' M SURE I T WENT PAST YOU BECAUSE I T WAS SO

QUI CK, THE PRELI MI NARY I NSTRUCTI ONS AND MR. MCELHI NNY

ACKNOWLEDGED I T, APPLE ADMI TS THAT THREE OF THE FI VE PATENT

CLAI MS THAT I T I S SUI NG ON WERE NOT I N THAT I PHONE AND HAVENEVER BEEN I N ANY I PHONE SI NCE. APPLE DOESN' T CONSI DER I T

VALUABLE ENOUGH TO EVEN USE.

THERE' S A FOURTH ONE, SLI DE TO UNLOCK THAT I N THEI R LATEST

PRODUCTS OPERATI NG SYSTEM, I OS 7, THEY' VE ABANDONED ALSO.

WE' LL PROVE THAT TO YOU AS WELL.

THI S CASE REALLY I S NOT - - ALSO I T' S NOT ABOUT SAMSUNG

COPYI NG APPLE.

THE FEATURES THAT APPLE ACCUSES I N THI S CASE ARE ALL

SOFTWARE FEATURES, SOFTWARE THAT RUNS ON THE SMARTPHONES AND

TABLETS OF MANY, MANY COMPANI ES I N THE WORLD.

APPLE AGREES, APPLE AGREES THAT THAT SOFTWARE AND THOSE

FEATURES WERE PUT ON THAT SOFTWARE - - OR THOSE FEATURES WERE

PUT I N THAT SOFTWARE THAT' S USED BY MANY DI FFERENT COMPANI ES BY

ENGI NEERS, SOFTWARE ENGI NEERS AT ANOTHER COMPANY, NOT BY

SAMSUNG. AND I ' M NOT POI NTI NG THE FI NGER AS THEY' VE SAI D.



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354

WE' LL PROVE TO YOU THAT, I N FACT, THE ENGI NEERS AT THAT

OTHER COMPANY DI D I NDEPENDENTLY DEVELOP THOSE SOFTWARE

FEATURES, AND THEY DI D NOT COPY APPLE.

LET ME SHOWYOU WHAT I MEAN. THI S I S ONE OF THE PHONES

THAT' S ACCUSED I N THI S CASE. I T' S A SAMSUNG PHONE. I T' S

CALLED THE SAMSUNG GALAXY NEXUS. YOU CAN SEE THAT I T' S J OI NT

EXHI BI T 29K FOR THE RECORD. THI S CAME OUT I N DECEMBER 2011, A

LI TTLE BI T MORE THAN TWO YEARS AGO.

SAMSUNG ENGI NEERED ALL THE HARDWARE ON THI S PHONE, EVERY

BI T OF I T, AND I T OFFERS, THI S PHONE OFFERS CONSUMER,SMARTPHONE USERS, MANY THI NGS THAT THE I PHONE DOESN' T J UST I N

TERMS NOWOF THE HARDWARE.

I T HAS A - - YOU CAN' T SEE I T VERY WELL, BUT I T HAS KI ND OF

A CURVED SHAPE TO I T. I T FI TS VERY WELL I N THE HAND.

I T HAS A 4. 65 I NCH SCREEN, WHI CH I S LARGE - - A THI RD

LARGER THAN, YOU KNOW, THE SAMSUNG - - THE I PHONE SCREEN WAS AT

THE TI ME THI S CAME OUT. I T' S LARGER THAN ANY SCREEN ON ANY

I PHONE TO THI S DAY.

I T HAS A REALLY, A HI GH DEFI NI TI ON, VERY, VERY CLEAR

SCREEN, A SUPER AMOLED SCREEN WHI CH I S CLEAR. YOU CAN SEE

THI NGS BETTER I N BRI GHT LI GHT.

I T' S GOT A BATTERY I N I T THAT' S SWAPPABLE. YOU CAN BUY AN

EXTRA BATTERY AND SWAP I T OUT WHENEVER YOU WANT. YOU DON' T

HAVE TO TAKE YOUR PHONE BACK TO THE STORE TO REPLACE THE

BATTERY.



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355

I T HAS SOMETHI NG CALLED NEAR FI ELD COMMUNI CATI ONS, REALLY

COOL. WI TH A COMPATI BLE PHONE, YOU CAN CLI CK THEM TOGETHER AND

TRANSFER FI LES, I NFORMATI ON, DATA, PHOTO FI LES.

I T USES THE VERY HI GH SPEED FOR 4G LTE NETWORK, WHI CH

WASN' T I NTRODUCED ON THE I PHONE UNTI L MUCH TI ME LATER. THI S

CAME OUT WI TH A FASTER NETWORK SPEED.

THE TRUTH OF THE MATTER I S, PEOPLE AT SAMSUNG ARE VERY

PROUD OF THE HARDWARE THAT THEY DEVELOPED. THEY BUI LT THE BEST

SMARTPHONES AND HARDWARE I N THE WORLD.

AND TECHNOLOGY REVI EWERS NOTI CED WHAT SAMSUNG HAS ACHI EVEDWI TH I TS PHONES.

HERE' S ONE UP HERE FROM "LAPTOP MAGAZI NE. " YOU CAN SEE

WHAT I T SAYS. THE BEST HD SCREEN ON THE MARKET.

"WI RED MAGAZI NE, " THE BEST ANDROI D PHONE TO DATE. THE

TRUEST REPRESENTATI ON OF ANDROI D.

YOU' RE GOI NG TO LEARN I N THI S CASE THAT WHAT - - WHY DO

PEOPLE BUY PHONES? THEY WANT YOU TO BELI EVE WHAT THEY ARE

TRYI NG TO SELL YOU I N THI S CASE I S THAT PEOPLE BUY PHONES

BECAUSE OF FI VE, YES, SMALL SOFTWARE FEATURES, PARTI CULAR WAYS

OF ACCOMPLI SHI NG THI NGS LI KE SYNCI NG AND SEARCHI NG.

THAT' S WHAT THEY WANT YOU TO BELI EVE.

AND THAT BECAUSE OF THOSE FI VE SOFTWARE FEATURES, PEOPLE

BOUGHT A LOT MORE SAMSUNG PHONES, AND I NSTEAD, I F SAMSUNG

DI DN' T HAVE THEM, PEOPLE WOULD HAVE BOUGHT A LOT MORE I PHONES.

BUT YOU' LL LEARN THAT I T I S THESE FEATURES THAT I SHOWED



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356

YOU ON THI S PHONE, HARDWARE FEATURES, AND OTHERS LI KE I T THAT

CAUSED CONSUMERS TO BUY THI S PRODUCT, THI NGS LI KE A HI GH

QUALI TY SCREEN, A HI GH QUALI TY CAMERA, CONNECTI VI TY, BATTERY

LI FE, WEI GHT, SHAPE, THI NGS LI KE THAT.

THESE ARE THE REASONS, NOT THESE PARTI CULAR VARI ANTS I N

BACKGROUND OF SOFTWARE FEATURES THAT YOU CAN' T EVEN SEE, THE

THI NGS THAT THEY ARE SUI NG SAMSUNG OVER.

NOW, ALL OF THI S HARDWARE I N THE NEXUS WAS CREATED BY

SAMSUNG. EVERY BI T OF I T.

AND THEY' RE SUI NG OVER THI S.I T DOES NOT ACCUSE - - APPLE DOES NOT ACCUSE ANY OF THAT

HARDWARE OF I NFRI NGI NG ANY OF I TS RI GHTS, AND MR. MCELHI NNY

SHOWED YOU A SCREEN OF A NUMBER OF SAMSUNG PRODUCTS. NONE OF

THOSE ARE ACCUSED. NONE OF THAT HARDWARE. NONE OF THE SHAPES

THAT YOU SEE THERE. NONE OF THOSE ARE ACCUSED I N THI S CASE OF

I NFRI NGI NG ANY OF THE RI GHTS.

YOU MI GHT BE SURPRI SED TO LEARN ONE UNDI SPUTED FACT. NOT

A SI NGLE SOFTWARE FEATURE I N THI S NEXUS PHONE, WHI CH I ' M

HOLDI NG I N MY HAND, WAS CONCEI VED BY SAMSUNG, WAS DEVELOPED BY

SAMSUNG, OR WAS CODED BY SAMSUNG. NOT ONE OF THE ACCUSED

FEATURES ON THI S PHONE WHI CH BRI NGS US ALL HERE TODAY WAS

DESI GNED, MUCH LESS COPI ED, BY ANYONE AT SAMSUNG.

THE ACCUSED FEATURES ON THI S PHONE WERE DEVELOPED

I NDEPENDENTLY BY SOME OF THE MOST SOPHI STI CATED AND CREATI VE

MI NDS I N THE SMARTPHONE I NDUSTRY, THE SOFTWARE ENGI NEERS AT



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357

GOOGLE UP THE ROAD I N MOUNTAI N VI EW, WHO CREATED THE ANDROI D

OPERATI NG SYSTEM USED BY ALL SMARTPHONE ENGI NEERS, MEMBERS OF

THE J URY, EXCEPT FOR APPLE, USED BY ALL HARDWARE COMPANI ES, ALL

HANDSET MANUFACTURERS, EXCEPT FOR APPLE. I N THE WAY THAT MOST

P. C. MAKERS USE THE MI CROSOFT WI NDOWS OPERATI NG SYSTEM, ALMOST

ALL, EVERYBODY BUT APPLE, I N THE SMARTPHONE I NDUSTRY USES

ANDROI D SOFTWARE, NOT J UST SAMSUNG.

AND I N THI S TRI AL, YOU WI LL HEAR FROM THOSE GOOGLE

ENGI NEERS. AND MR. MCELHI NNY SAI D WE' RE GOI NG TO POI NT THE

FI NGER AT GOOGLE. WE' RE NOT GOI NG TO POI NT THE FI NGER ATGOOGLE. GOOGLE DI DN' T COPY. THOSE GOOGLE ENGI NEERS, WHO YOU

WI LL HEAR FROM I N THI S TRI AL, WI LL EXPLAI N TO YOU HOWTHEY

I NDEPENDENTLY DEVELOPED THI S SOFTWARE WI THOUT COPYI NG.

THI S CASE I S REALLY NOT ABOUT THESE FI VE MI NOR SOFTWARE

FEATURES AND PATENT CLAI MS THAT APPLE I S ASSERTI NG. I T' S NOT

ABOUT THEM CAUSI NG PEOPLE NOT TO BUY I PHONES AND I NSTEAD TO BUY

SAMSUNG PHONES.

I PHONE DOESN' T EVEN USE FOUR OUT OF THESE FI VE FEATURES.

SMARTPHONES I NVOLVE HUNDREDS OF DI FFERENT FEATURES, SOME

OF THEM BI G, SOME OF THEM SMALL.

YOUR COMMON SENSE - - AND SEVERAL EXPERTS WHO WI LL COME I N

AND TESTI FY AND WI LL TELL YOU THAT CONSUMERS DON' T CHOOSE ONE

PHONE OVER ANOTHER BECAUSE OF THE PARTI CULAR WAY WORD

CORRECTI ON SUGGESTI ONS ARE PRESENTED ON THE SCREEN, WHI CH I S

WHAT THEI R PATENT COVERS. THERE' S A LOT OF DI FFERENT WAYS TO



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358

DO THAT.

THEY DON' T BUY A PHONE BECAUSE OF THE PARTI CULAR WAY THAT

THE SOFTWARE SYNCS I N BACKGROUND. THERE' S MORE THAN ONE WAY TO

DO THAT.

OR THE PARTI CULAR DESI GN OF THE UNLOCK SCREEN. THAT' S NOT

WHY CONSUMERS BUY PRODUCTS.

APPLE' S CLAI MS ARE ALL THAT NARROW. APPLE DOES THI S, TOO,

FOLKS. WE' LL SHOWYOU, WE WI LL SHOWYOU APPLE' S REAL WORLD

RESEARCH THAT THEY DO. THEY KNOWWHY PEOPLE BUY PHONES. THEY

GO OUT AND THEY DO RESEARCH. THEY SURVEY THEM. AND THEI R OWNREAL WORLD RESEARCH THAT THEY DO FOR BUSI NESS EVERY SI NGLE, YOU

KNOW, EVERY DAY, OR HOWEVER OFTEN THEY DO I T, NOT FOR COURT

CASES, NOT FOR HI RED EXPERTS, NOT FOR LAWYERS, BUT WHAT THEY DO

I N THEI R BUSI NESS SHOWS THAT PEOPLE DON' T BUY - - THEY DON' T

EVEN ASK SMARTPHONE PURCHASERS, I PHONE PURCHASERS, DI D YOU BUY

I T FOR THI S FEATURE OR DI D YOU BUY I T FOR THAT FEATURE? THEY

KNOWTHEY DON' T. THEY KNOWTHAT' S NOT WHAT MATTERS, AND WE' LL

SHOWTHAT TO YOU FROM APPLE' S OWN SURVEYS.

YET APPLE I S HERE LI TERALLY SEEKI NG BI LLI ONS OF DOLLARS

FOR PARTI CULAR SOFTWARE CONFI GURATI ONS THAT ARE UNDER THE HOOD

I N THE PHONE THAT MOST CONSUMERS ARE NOT EVEN AWARE THAT I T' S

THERE, AND THEY WANT TO TAKE THAT BI G NUMBER NOT ONLY TO THE

BANK, NOT ONLY TO THE BANK, BUT TO GET AN ORDER SAYI NG THAT

NONE OF THESE PHONES CAN BE SOLD I N THE UNI TED STATES ANYMORE.

I T' S AN ATTACK ON ANDROI D. I T' S AN ATTACK, I T' S AN ATTACK - -



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359

MR. MCELHI NNY: OBJ ECTI ON, YOUR HONOR. THI S I S

ARGUMENT.

THE COURT: OVERRULED. OVERRULED.

MR. QUI NN: I T' S THE TRUTH. I T' S AN ATTACK AN

ANDROI D, AND THAT' S WHAT THI S CASE I S.

EVEN THOUGH MOST OF THESE PATENT CLAI MS ARE NOT VALUABLE

ENOUGH FOR APPLE TO USE I TSELF, I T CLAI MS THAT ANDROI D USES

THEM AND THAT THI S CAUSES CUSTOMERS TO BUY SAMSUNG PHONES. AND

I F SAMSUNG DI DN' T HAVE THESE FEATURES, THEY' D SELL MORE APPLE

PHONES EVEN THOUGH A CUSTOMER LOOKI NG FOR FOUR OF FI VE OF THESEFEATURES COULDN' T FI ND THEM I N AN APPLE PHONE, THEY DON' T USE

THEM.

AS TO THREE OF THEM, THAT' S UNDI SPUTED.

SLI DE TO UNLOCK, WE' LL PROVE THAT TO YOU.

THE ONLY WAY THAT APPLE CAN MAKE THI S CLAI M FOR BI LLI ONS

OF DOLLARS I S - - WHI CH CONFLI CTS WI TH ALL THE REAL WORLD

EVI DENCE YOU' RE GOI NG TO SEE - - I S TO COME UP WI TH A STUDY

WHI CH THEY DI D SPECI ALLY FOR YOU BY THE MAN WHOSE NAME WAS

I NTRODUCED TO YOU, DR. J OHN HAUSER. AND I ' M GOI NG TO SPEND

SOME TI ME TALKI NG WI TH YOU THI S AFTERNOON ABOUT DR. HAUSER AND

THE SURVEY, AND I WI LL SHOWYOU THAT STUDY.

WHAT THI S CASE I S REALLY ABOUT I S APPLE TRYI NG TO LI MI T

CONSUMER CHOI CE AND TO GAI N AN UNFAI R ADVANTAGE OVER I TS ONE

MAJ OR COMPETI TOR, GOOGLE' S ANDROI D, A COMPETI TOR THAT HAS

PASSED APPLE I N SOME RESPECTS.



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360

DON' T GET ME WRONG, APPLE I S AN AMAZI NGLY I NNOVATI VE

COMPANY.

BUT I N SOME RESPECTS YOU' LL SEE GOOGLE' S ANDROI D HAS

PASSED APPLE.

AND I N THI S CASE, APPLE HAS SUED - - THI S I S WHAT' S GOI NG

ON HERE - - THE BI GGEST USER OF GOOGLE' S ANDROI D SOFTWARE AND

THE MOST SUCCESSFUL MANUFACTURER OF ANDROI D PHONES, SAMSUNG, TO

TRY TO PREVENT I T FROM SELLI NG PHONES WI TH THAT LEADI NG ANDROI D

SOFTWARE AND TO GET THE PROFI TS THAT SAMSUNG HAS EARNED SELLI NG

ANDROI D PHONES.I T I S TRYI NG TO GAI N FROM YOU I N THI S COURTROOM WHAT I T

HAS LOST I N THE MARKETPLACE.

YOUR HONOR, WOULD THI S BE A GOOD PLACE TO BREAK?

THE COURT: I T' S 12: 01. LET' S GO AHEAD AND BREAK FOR

LUNCH. WE' LL SEE EVERYONE BACK AT 1: 00 O' CLOCK.

PLEASE DON' T RESEARCH OR DI SCUSS THE CASE.

THANK YOU FOR YOUR PATI ENCE AND YOUR SERVI CE.

( J URY OUT AT 12: 02 P. M. )

THE COURT: THE J URORS 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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361

AFTERNOON SESSION

( J URY OUT AT 12: 59 P. M. )

THE COURT: WELCOME. TAKE A SEAT, PLEASE. I

UNDERSTAND THERE' S A SEALI NG I SSUE. I S THAT RI GHT? I S THERE

AN I SSUE?

MR. MCELHI NNY: THERE I S, YOUR HONOR.

THE COURT: OH, OKAY.

MR. SELWYN: GOOD AFTERNOON, YOUR HONOR. WI TH THE

FI RST WI TNESS THI S AFTERNOON - -

THE COURT: YES.MR. SELWYN: - - MR. SCHI LLER, SAMSUNG, WE UNDERSTAND,

EXPECTS TO USE CERTAI N CONFI DENTI AL BUSI NESS I NFORMATI ON OF

APPLE THAT DI SCUSSES FUTURE BUSI NESS STRATEGY, CAPACI TY

I NFORMATI ON, FI NANCI AL I NFORMATI ON.

OUR SUGGESTI ON TO SAMSUNG WAS THAT WE HANDLE THOSE

DOCUMENTS MUCH THE WAY WE' VE HANDLED SOURCE CODE I N THE PAST,

WHI CH I S SHOWI T TO THE J URY AND COUNSEL, NOT PUT I T UP ON THE

SCREEN, AND HAVE COUNSEL REFER TO LI NES OF THE DOCUMENT RATHER

THAN READI NG ALOUD THE DOCUMENTS TO THE PUBLI C.

THAT WOULD BE ACCEPTABLE TO APPLE, THAT' S WHAT WE' VE DONE

I N THE PAST, AND THEN APPLE WOULD MOVE TO SEAL THE DOCUMENT.

WE UNDERSTAND THAT THERE ARE PORTI ONS OF CERTAI N DOCUMENTS

THAT SAMSUNG WOULD LI KE TO READ ALOUD THAT RELATE TO

CONFI DENTI AL BUSI NESS I NFORMATI ON OF APPLE' S CONCERNI NG FUTURE

STRATEGY.



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362

I F SAMSUNG I NTENDS TO DO THAT, THAT' S AN I SSUE FOR US.

THESE ARE DOCUMENTS THAT SAMSUNG HAS NEVER SEEN BEFORE.

SAMSUNG I S NOT ENTI TLED TO SEE, VERY SENSI TI VE I NFORMATI ON

ABOUT APPLE' S ROADMAP AND FUTURE PRODUCT STRATEGY.

THE COURT: ALL RI GHT. SO YOUR REQUEST I S THAT WE,

WHAT, SEAL THE COURTROOM? I WOULD LI KE TO USE THE PROCEDURE

WE' VE USED I N THE PAST AND I DON' T SEE WHY A PARTI CULAR PI ECE

OF I NFORMATI ON HAS GOT TO BE STATED OUT LOUD. I DON' T WANT TO

MOVE ALL THESE PEOPLE OUT TO THE HALLWAY.

MR. SELWYN: THAT I S OUR STRONG PREFERENCE AS WELL, TO DO I T AS WE' VE DONE I N THE PAST, REFERRI NG THE WI TNESS TO

PARTI CULAR PORTI ONS OF THE DOCUMENT, ASKI NG THE QUESTI ONS ABOUT

THOSE PORTI ONS, BUT NOT READI NG I T ALOUD AND NOT PUTTI NG I T UP

ON THE SCREEN.

MR. PRI CE: THE REASON, YOUR HONOR, THE REASON THEY

WANT TO DO THAT I S SO THAT WE CAN' T DO AN EFFECTI VE

CROSS- EXAMI NATI ON.

THESE DOCUMENTS DON' T HAVE ANYTHI NG TO DO - -

THE COURT: J UST LET ME SEE THE DOCUMENTS.

MR. PRI CE: SURE.

THE COURT: PLEASE.

MR. PRI CE: I ' LL GI VE YOU AN EXAMPLE. I ' LL SHOWTO

YOU EXHI BI T 411. I T' S AN EXAMPLE. THEY' RE NOT GOI NG TO SAY OR

SHOWANY OF THE NUMBERS I N THE DOCUMENT.

MR. SELWYN: YOUR HONOR, 411 I S AN I PHONE REVI EWFROM



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363

THE SPRI NG OF LAST YEAR. I F YOU LOOK AT, BEGI NNI NG AT PAGES

' 678 AND - 9, THERE' S DI SCUSSI ON ABOUT CARRI ER SUBSI DI ES,

SPECI FI C CARRI ER SUBSI DI ES.

WE GET I NTO FROM 13, 14, AND THEN MOST OF THE REMAI NDER OF

THE DOCUMENT, 21, 22, 18 AND 19, 26 THROUGH 32, 36 THROUGH 39

AS FI NANCI AL FORECASTS, DI SCUSSI ONS ABOUT SELLI NG - -

THE COURT: OKAY. I ' M SORRY TO I NTERRUPT YOU. I

HAVE A J URY WAI TI NG.

SO J UST GI VE ME THE PAGE NUMBERS THAT ARE I N DI SPUTE, AND

I ' M GOI NG TO GI VE YOU A RULI NG, NOT RI GHT NOW, AND WE' RE GOI NG TO GO AHEAD WI TH THI S OPENI NG STATEMENT.

OKAY. SO WHAT ARE THE NUMBERS I N DI SPUTE? I ' LL TAKE A

LOOK, AND I ' LL LET YOU KNOWWHAT MY RULI NG I S BEFORE

MR. SCHI LLER TESTI FI ES.

MR. SELWYN: THANK YOU.

THE COURT: WHAT ARE THE PAGE NUMBERS THAT ARE I N

DI SPUTE?

MR. PRI CE: I CAN MAKE I T EASI ER BY TELLI NG YOU THE

PAGES I WOULD USE.

THE COURT: OKAY.

MR. PRI CE: I T' S I N A DOCUMENT LI KE THI S, THE VERY

SAME I NFORMATI ON.

THE COURT: NO, NO. I WANT TO SEE THE DOCUMENT YOU

WANT TO USE. I WANT TO SEE THE PAGES THAT ARE I N DI SPUTE. I

DON' T WANT I T' S LI KE THI S KI ND OF REPRESENTATI ON.



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MR. PRI CE: 413, 413 THEN, YOUR HONOR.

THE COURT: 413. YOU MEAN DX 413?

MR. PRI CE: YES, YOUR HONOR, DX 413.

THE COURT: AND ANY PARTI CULAR PAGES, OR THE WHOLE

THI NG.

MR. PRI CE: YES. I N PARTI CULAR, YOUR HONOR, PAGE 8.

THE COURT: OKAY. ALL RI GHT. WHAT ELSE?

MR. PRI CE: PAGE 14.

THE COURT: ALL RI GHT. PAGE 8, I ' M NOT GOI NG TO

ALLOWYOU TO DO THI S OPEN. THESE ARE PROJ ECTI ONS FOR FUTURE.MR. PRI CE: NO. THESE ARE CURRENT, YOUR HONOR.

THE COURT: WHEN I S YOUR FI SCAL YEAR? WHEN DOES

APPLE' S FI SCAL YEAR BEGI N AND END?

MR. SELWYN: OCTOBER I S THE END OF THE FI SCAL YEAR.

THE COURT: SO I T RUNS FROM NOVEMBER TO OCTOBER?

MR. SELWYN: CORRECT.

THE COURT: SO ARE YOU I N FI SCAL YEAR 2014 OR 2013?

OR WHAT' S YOUR CURRENT FI SCAL YEAR RI GHT NOW?

MR. SELWYN: 2014.

THE COURT: OKAY. SO YOU WANT PAGE 8. WHAT ELSE?

MR. PRI CE: PAGE 14.

THE COURT: OKAY.

MR. PRI CE: AND PAGE 46.

THE COURT: OKAY. I S THAT I T? I S THERE ANY OTHER

DI SPUTE?



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365

MR. PRI CE: ONE MOMENT, YOUR HONOR.

MR. SELWYN: YOUR HONOR, THE PARTI ES J UST - - WE MET

AND CONFERRED FOR A LENGTHY AMOUNT OF TI ME ABOUT AN ENTI RELY

DI FFERENT DOCUMENT, WHI CH I S THE ONE THAT WE HAD BEEN TOLD THAT

THEY WERE GOI NG TO USE.

SO THESE THREE PAGES ARE NEWTO US AND HAVEN' T BEEN

DI SCUSSED SPECI FI CALLY BEFORE.

MR. PRI CE: THEY' RE I N THE OTHER DOCUMENT AS WELL.

THE COURT: OKAY. WHAT HAPPENED? I RULED ON THE

OBJ ECTI ONS THAT YOU ALL FI LED YESTERDAY DURI NG LUNCH AND LASTNI GHT. SO WHY AM I GETTI NG HI T WI TH THI S WHEN I HAVE A J URY

WAI TI NG FOR AN OPENI NG STATEMENT?

DI D YOU CHANGE YOUR MI ND - -

MR. PRI CE: NO.

THE COURT: - - AS TO WHAT EXHI BI T YOU WANTED TO USE?

MR. PRI CE: OH, NO, YOUR HONOR. THESE WERE

DI SCUSSED.

MR. SELWYN: YOUR HONOR, WE' VE BEEN DI SCUSSI NG THI S

FOR THREE DAYS AND TRYI NG TO GET SPECI FI CI TY ABOUT WHAT WI LL BE

OFFERED.

THI S I S THE FI RST TI ME WE' VE HEARD ABOUT THESE THREE PAGES

I N PARTI CULAR, AND WE' VE BEEN ASKI NG TO UNDERSTAND WHAT PAGES

WOULD BE USED.

WE WERE DI SCUSSI NG BEFORE EXHI BI T 411. WE MAY BE ABLE TO

RESOLVE THESE THREE PARTI CULAR PAGES. THI S I S THE FI RST TI ME



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366

WE' RE HEARI NG ABOUT THESE.

THE COURT: ALL RI GHT. WELL, WE' RE GOI NG FORWARD

WI TH AN OPENI NG STATEMENT. I ' M NOT HAVI NG THI S J URY WAI T ANY

LONGER.

SO WHY DON' T YOU MEET AND CONFER, AND LET ME KNOWI F YOU

STI LL HAVE A PROBLEM. OTHERWI SE I ' LL GI VE YOU MY RULI NG ON

THESE THREE DOCUMENTS. OKAY.

MR. SELWYN: THANK YOU.

THE COURT: BUT I ' M GOI NG TO KEEP THI S BI NDER.

MR. PRI CE: THANK YOU, YOUR HONOR. THE COURT: AND I N THE FUTURE, I WANT YOUR SEALI NG

OBJ ECTI ONS I N THE OBJ ECTI ONS THAT YOU' RE FI LI NG, OKAY?

SO WHEN YOU I DENTI FY AN EXHI BI T THAT YOU I NTEND TO USE,

YOU NEED TO I DENTI FY THE PAGE NUMBERS, OKAY?

MR. PRI CE: I HEAR YOU, YOUR HONOR.

THE COURT: ALL RI GHT. THANK YOU.

( J URY I N AT 1: 06 P. M. )

THE COURT: ALL RI GHT. WELCOME BACK. PLEASE TAKE A

SEAT.

MR. QUI NN, I F YOU WOULD PLEASE CONTI NUE.


THE COURT: THE TI ME I S NOW1: 07. GO AHEAD, PLEASE.


BEFORE LUNCH I SHOWED YOU THI S NEXUS PHONE, WHI CH I S ONE

OF THE ACCUSED PHONES HERE. AS I TOLD YOU, ALL THE HARDWARE I N



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367

HERE I S MADE BY SAMSUNG. NONE OF THE SOFTWARE. I T' S PURE

ANDROI D.

THERE ARE SOME PHONES, SOME SAMSUNG PHONES WHERE THE

ANDROI D SOFTWARE I S SLI GHTLY MODI FI ED BY SAMSUNG WHEN WE GET I T

AND PUT I T I N THE PHONE.

BUT J UST SO YOU KNOW, APPLE' S POSI TI ON I S THAT THOSE

MODI FI CATI ONS DON' T MAKE ANY DI FFERENCE, THAT THE MONEY I S OWED

ANYWAY.

SO THI S I S REALLY ABOUT APPLE VERSUS GOOGLE' S ANDROI D, AND

I WANT TO TALK TO YOU A LI TTLE BI T ABOUT THAT COMPETI TI ON. ANDI ' M GOI NG TO - - AND WHAT THE EVI DENCE I S GOI NG TO SHOWABOUT

THAT COMPETI TI ON AND ABOUT WHAT APPLE HAS CALLED I N I TS OWN

I NTERNAL E- MAI LS THE I NNOVATOR' S DI LEMMA.

NOW, THE I NNOVATOR' S DI LEMMA I S ACTUALLY A PRETTY WELL

UNDERSTOOD CONCEPT I N ACADEMI C RESEARCH AND TECHNOLOGY. THE

I NNOVATOR' S DI LEMMA OCCURS WHEN, AND THESE ARE APPLE' S WORDS,

THEY' RE STEVE J OBS' WORDS, WHEN A MARKET LEADER HANGS ON TO AN

OLD PARADI GM FOR TOO LONG. AND WHEN THAT HAPPENS, WHEN A

MARKET LEADER HANGS ON TO AN OLD PARADI GM FOR TOO LONG, I T

BECOMES VULNERABLE TO I NNOVATI ON BY OTHERS.

APPLE WAS AN I NNOVATOR, BUT I N 2011, THERE WAS ANOTHER

COMPANY THAT GOT I NTO THE SMARTPHONE WORLD, WHI CH WAS ALSO VERY

I NNOVATI VE, AND THAT' S GOOGLE.

WE ALL KNOWGOOGLE. I DON' T NEED TO SPEND MUCH TI ME

I NTRODUCI NG GOOGLE TO YOU. I T STARTED AS A SEARCH COMPANY



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368

HERE, TWO GUYS, STANFORD UNI VERSI TY, I N A GARAGE. I THI NK MANY

OF YOU KNOWTHE STORY.

I T STARTED OUT DOI NG SEARCH, BUT NOWSO MANY DI FFERENT

APPLI CATI ONS, HUNDREDS OF PEOPLE USE I T EVERY DAY, MAPS, GPS,

YOUTUBE, GOOGLE DOC, GOOGLE VOI CE, GOOGLE NEWS. LOTS OF

DI FFERENT THI NGS WHI CH PEOPLE FI ND VERY, VERY USEFUL I N THEI R

EVERY DAY LI VES.

THEY HAVE THE FI NEST SOFTWARE ENGI NEERS I N THE WORLD. I T

SEEMS ON LI NE THEY CAN DO J UST ABOUT ANYTHI NG. THEY DON' T NEED

TO COPY PEOPLE. THEY DON' T NEED TO COPY APPLE.LET ME TELL YOU ABOUT THE ANDROI D STORY AND HOWTHE

DEVELOPMENT OF THE ANDROI D OPERATI NG SYSTEM HAPPENED AT GOOGLE.

BACK I N 2005, TWO YEARS BEFORE THE I PHONE CAME OUT, EI GHT

PEOPLE WHO HAD EXPERI ENCE DEVELOPI NG SMARTPHONES GOT TOGETHER,

THEY J OI NED GOOGLE, AND SET OUT TO SOLVE A PROBLEM I N THE PHONE

I NDUSTRY.

THE PROBLEM WAS THAT HI STORI CALLY THE PHONE I NDUSTRY HAD

BEEN VERY CLOSED. CARRI ERS BASI CALLY TOLD HANDSET

MANUFACTURERS WHAT PHONES HAD TO DO, WHAT THEY HAD TO LOOK

LI KE.

AND ALL THE DI FFERENT HANDSET MANUFACTURERS, THE PHONE

MAKERS WERE MAKI NG THEI R OWN HARDWARE AND TRYI NG TO MAKE THEI R

OWN SOFTWARE AT THE SAME TI ME, AND I T TURNS OUT THAT THE

HANDSET MANUFACTURERS WEREN' T THE BEST I N THE WORLD AT MAKI NG

CUTTI NG EDGE SOFTWARE.



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369

AND BY THE TI ME THEI R SOFTWARE GOT TO MARKET, OFTEN THEY

WERE BEHI ND.

SO THESE EI GHT PEOPLE WHO J OI NED GOOGLE HAD THE I DEA THAT

WHAT THE I NDUSTRY REALLY NEEDED WAS A SHARED, OPEN PLATFORM

THAT EVERYONE COULD USE AND CUSTOMI ZE AND USE TO I NNOVATE AND

I MPROVE.

AND THEY THOUGHT I T WOULD BE BEST I F THI S SOFTWARE, THI S

PLATFORM, WAS NOT CONTROLLED BY J UST ONE COMPANY. I NSTEAD,

THEY WANTED TO GI VE MANUFACTURERS, PHONE MANUFACTURERS,

APPLI CATI ON DEVELOPERS, CARRI ERS A PLATFORM WHI CH THEY COULDALL USE, ADJ UST, I NNOVATE WI TH, ADAPT TO THEI R OWN USES, DEEPLY

BRAND I T, AND TO GI VE THEM THE FREEDOM TO DO WI TH THI S COMMON

PLATFORM WHAT THEY WANTED TO DO, OR WHAT THEY COULD DO.

THE I DEA WAS TO CREATE THI S OPEN SOURCE PLATFORM, ANDROI D,

AND GI VE I T AWAY.

THEY SPENT THREE YEARS BUI LDI NG I T AT GOOGLE AND GAVE I T

AWAY. ANYBODY CAN DOWNLOAD I T I F YOU GO TO SOURCE. ANDROI D. COM,

AND PEOPLE I N THE I NDUSTRY CAN DOWNLOAD THI S OPEN SOURCE

PLATFORM.

FROM ABOUT 2005 TO 2008, THI S GROUP WORKED TOGETHER

BUI LDI NG ANDROI D, WORKI NG LI KE KI ND OF A STARTUP I NSI DE A MUCH

BI GGER COMPANY. THEY CONTACTED MANUFACTURERS, THEY CONTACTED

CARRI ERS TO SEE I F THEY WOULD BE I NTERESTED I N THI S OPEN SOURCE

PLATFORM, AND I T TURNED OUT THEY WERE.

AND SI NCE THEN, YOU KNOW, I T CAME TO MARKET. I T' S BEEN



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370

EXTREMELY SUCCESSFUL.

I N ADDI TI ON TO BEI NG ON HUNDREDS OF MI LLI ONS OF PHONES AND

TABLETS, ANDROI D I S NOWI N THE DASHBOARD OF SOME CARS. I T' S - -

YOU KNOW, THE AMAZON KI NDLE RUNS ON ANDROI D. EVEN GOOGLE

DOESN' T KNOWALL THE DEVI CES I N THE WORLD THAT RUN ON ANDROI D.

I T' S BEEN A HUGE SUCCESS.

AND THAT SUCCESS I S A TESTAMENT TO THE HARD WORK AND THE

I NGENUI TY OF THE ENGI NEERS AT GOOGLE AND THE ANDROI D

MANUFACTURERS. I T I S CLEAR THAT GOOGLE' S VI SI ON WAS RI GHT.

I NNOVATI ON HAPPENS WHEN EVERYONE I S ABLE TO CONTRI BUTE THEI ROWN I DEAS.

AND GOOGLE I S A HI GHLY I NNOVATI VE COMPANY. THEY' RE

PERFECTLY CAPABLE OF DEVELOPI NG THEI R OWN SEARCH FEATURE ON A

PHONE WI THOUT COPYI NG APPLE.

BUT THE END OF 2010, THE TOP OF GOOGLE' S MANAGEMENT,

STEVE J OBS HI MSELF, RECOGNI ZED THAT APPLE I TSELF FACED THE

I NNOVATOR' S DI LEMMA AND THAT GOOGLE I NNOVATI ON WAS DI SRUPTI NG

THE SMARTPHONE I NDUSTRY THAT APPLE HAD DOMI NATED SI NCE 2007.

I N RESPONSE TO THI S, STEVE J OBS DECLARED, I N 2011, THAT

APPLE WOULD START A HOLY WAR, A HOLY WAR ON GOOGLE.

APPLE KNEWTHAT GOOGLE WAS FURTHER ALONG I N SOME I MPORTANT

TECHNOLOGY SO - -

MR. MCELHI NNY: EXCUSE ME, YOUR HONOR. AGAI N, I HAVE

TO OBJ ECT. THERE' S MOTI ONS I N LI MI NE ON THI S.

THE COURT: THERE WAS A MOTI ON I N LI MI NE THAT THAT



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371

WOULD NOT BE PERMI TTED, SO THAT' S STRI CKEN.

MR. QUI NN: THAT WAS - -

THE COURT: GO AHEAD, PLEASE.

MR. QUI NN: THAT' S NOT MY UNDERSTANDI NG, YOUR HONOR.

THE OBJ ECTI ONS TO THI S WERE OVERRULED. THI S DOCUMENT. I T' S

EXHI BI T, DEFENSE EXHI BI T 489.

THE COURT: GO AHEAD, PLEASE, WI TH THE REST OF YOUR

OPENI NG.

MR. QUI NN: SO MR. J OBS DRAFTED THI S AGENDA I N

OCTOBER 2010 FOR APPLE' S ANNUAL RETREAT OF THE TOP 100EXECUTI VES AT APPLE WHERE THEY GET TOGETHER AND THEY TALK

AMONGST THEMSELVES ABOUT WHAT I S MOST I MPORTANT TO THE COMPANY.

WE HAVE STEVE J OBS' S AGENDA. THERE' S NOTHI NG MORE

AUTHORI TATI VE ABOUT WHAT MATTERS TO APPLE.

HERE I S THAT AGENDA. I T' S I N DEFENSE EXHI BI T 489, AND YOU

CAN SEE UP AT THE TOP HERE - - I DON' T KNOWI F WE CAN ENLARGE

THI S. STEVE J OBS, OCTOBER 2010, I T' S HI S CUT FOR THE AGENDA.

AND THEN I F WE GO FORWARD, GO DOWN BELOW, WHAT DOES HE

WRI TE? "2011 HOLY WAR WI TH GOOGLE. "

BELOWTHAT. "APPLE I S I N DANGER OF HANGI NG ON TO THE OLD

PARADI GM TOO LONG ( I NNOVATOR' S DI LEMMA) GOOGLE AND MI CROSOFT

ARE FURTHER ALONG ON THE TECHNOLOGY.

"TI E ALL OUR PRODUCTS TOGETHER SO WE CAN FURTHER LOCK

CUSTOMERS I NTO OUR ECOSYSTEM. "

AND THEN I F WE CAN GO FORWARD, COMPARI SONS WI TH GOOGLE,



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372

SAMSUNG.

FORWARD. CATCH UP TO ANDROI D WHERE WE ARE BEHI ND,

NOTI FI CATI ONS, TETHERI NG, SPEECH.

AND THEN NEXT, "STRATEGY: CATCH UP TO GOOGLE CLOUD

SERVI CES. ANDROI D DEEPLY I NTEGRATES GOOGLE CLOUD SERVI CES.

WAY AHEAD OF APPLE I N CLOUD SERVI CES FOR CONTACTS, CALENDARS,

AND MAI L. "

DON' T HAVE TI ME TO GO THROUGH THE COMPLETE DOCUMENT NOW,

BUT THI S WI LL COME I NTO EVI DENCE. YOU WI LL HAVE THI S DOCUMENT.

A HOLY WAR ON ANDROI D. THAT WAS APPLE' S STRATEGY.FROM APPLE' S POI NT OF VI EW, GOOGLE' S ANDROI D WAS TOO

SUCCESSFUL. PEOPLE WERE BUYI NG TOO MANY ANDROI D PHONES.

GOOGLE HAD ALWAYS BEEN A CLOUD COMPANY, AND I TS CLOUD

TECHNOLOGY, WHI CH AMONG OTHER THI NGS, ENABLED PEOPLE TO

WI RELESSLY SYNC, SYNC THEI R CALENDARS, CONTACTS, AND MAI L AND

SAVE THEI R FI LES ON A CLOUD SERVER WAS FAR AHEAD OF APPLE' S AND

APPLE' S MI SSI ON FOR 2011 WAS TO CATCH UP AND GET AHEAD OF

GOOGLE AND ANDROI D, AND THI S LAWSUI T I S PART OF THAT STRATEGY.

SAMSUNG - - LET ME TURN NOWTO TALK ABOUT SAMSUNG.

SAMSUNG, AS MR. MCELHI NNY SAYS, HE' S RI GHT, HE' S BEEN A

MOBI LE PHONE I NDUSTRY LEADER SI NCE THE EARLY 1990S, LONG BEFORE

APPLE LAUNCHED THE I PHONE J UST SEVEN YEARS AGO. THERE HAVE

BEEN MANY FI RSTS THAT SAMSUNG HAS CONTRI BUTED TO THE CELL PHONE

WORLD.

I F WE COULD LOOK AT SLI DE 14.



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373

YOU CAN SEE SOME OF THEM UP THERE. FI RST 3G PHONES, FI RST

3G WI NDOWS SMARTPHONE, FI RST CAMERA PHONE, MORE 4G LTE PRODUCTS

I N THE YEAR BEFORE APPLE DI D, RECOGNI TI ON SOFTWARE, HI GH DEF

DI SPLAYS.

SAMSUNG HAS CONTI NUED THAT I NNOVATI ON TO THI S DAY, OFFERED

LARGER SCREENS, PHONES THAT WORK WI TH STYLUSES, AND PHONES THAT

CAN TRANSFER PHOTOS, VI DEOS AND OTHER DOCUMENTS J UST BY

CLI CKI NG THE PHONES TOGETHER.

THE PATENT OFFI CE HAS RECOGNI ZED SAMSUNG' S HARD WORK, AND

I FI ND I T VERY I RONI C THAT APPLE' S COUNSEL WOULD SAY THATSAMSUNG DOESN' T CARE ABOUT PATENTS.

LAST YEAR THE UNI TED STATES PATENT AND TRADEMARK OFFI CE

AWARDED SAMSUNG THE SECOND HI GHEST NUMBER OF PATENTS I N THE

WORLD OF ANY COMPANY I N THE WORLD. NUMBER 1 WAS I BM. SAMSUNG

CARES ABOUT PATENTS.

LET ME SHOWYOU ANOTHER PHONE, ANOTHER EXAMPLE OF ONE OF

SAMSUNG' S MOST I NNOVATI VE PHONES. I T' S ANOTHER PHONE THAT

APPLE I S SUI NG OVER HERE.

THI S I S THE GALAXY NOTE I I . THI S PHONE HAS - - I T WAS

RELEASED I N OCTOBER 2012. I T' S ONE OF THE PHONES THAT APPLE

SAYS WE WOULDN' T HAVE SOLD SO MANY OF THEM I F WE DI DN' T HAVE

THESE PARTI CULAR VERSI ONS OF THESE SOFTWARE FEATURES.

THI S PHONE HAS J UST A TON OF UNI QUE FEATURES. SOME OF

THEM UP ON THE SCREEN THERE, THE MULTI WI NDOWBROWSI NG, THE

VERY HI GH SPEED PROCESSOR, TWO GI GABYTES OF MEMORY.



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374

MANY THI NGS ON THI S PHONE THAT YOU CAN' T GET ON THE

I PHONE. SOME PEOPLE WANT THESE FEATURES. I T' S NOT THESE KI NDS

OF SMALL FEATURES THAT APPLE I S SUI NG OVER THAT CAUSED THESE

PEOPLE TO BUY THE PHONES.

SAMSUNG AND APPLE' S HARDWARE WENT I N VERY DI FFERENT

DI RECTI ONS I N 2013. YOU CAN SEE A BI G DI FFERENCE I N THEI R

PRODUCTS UP THERE ON THE SCREENS, SOME COMPARI SONS OF SOME OF

THE MORE RECENT PRODUCTS.

WE WI LL PROVE TO YOU I N THI S CASE THAT I T' S THESE

FEATURES, THE KI ND OF FEATURES I ' M SHOWI NG YOU ON THE NEXUS, ON THE GALAXY NOTE, THI NGS LI KE LARGE SCREENS, REPLACEABLE

BATTERI ES, VERY HI GH QUALI TY CAMERA AND SPEED, USE OF STYLUSES,

THEY ARE THE KI NDS OF THI NGS THAT DI STI NGUI SH SAMSUNG PRODUCTS

AND CAUSE PEOPLE TO BUY THOSE PHONES.

THAT' S THE REASON WHY SAMSUNG I S THE LEADI NG MANUFACTURER

OF ANDROI D POWERED PHONES. I T' S WHAT SETS SAMSUNG APART FROM

ALL THE OTHER PHONES THAT USE THI S SAME OPEN SOURCE ANDROI D

PLATFORM.

ANOTHER I MPORTANT REASON THAT SAMSUNG SELLS PHONES I S I T' S

BEEN ABLE TO DO SOME VERY SUCCESSFUL ADVERTI SI NG AND

DEVELOPMENT OF I TS BRAND.

I N 2011 SAMSUNG HI RED A NEWU. S. MARKETI NG CHI EF, A MAN BY

THE NAME OF TODD PENDLETON. AND THEY HI RED HI M FROM NI KE. AND

HE APPROACHED ADVERTI SI NG FOR SAMSUNG I N KI ND OF A VERY

DI FFERENT WAY. HE STARTED LOOKI NG AT SOCI AL MEDI A, TWI TTER,



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375

FACEBOOK, WEBSI TES, AND TRACKI NG WHAT PEOPLE WERE SAYI NG ABOUT

SAMSUNG' S PHONES.

AND THEN HE USED WHAT HE LEARNED FROM SOCI AL MEDI A TO

CREATE ADS, AND THEY SOUNDED REAL TO PEOPLE BECAUSE THEY' RE NOT

ADS THAT WERE WRI TTEN BY AD EXECUTI VES, BUT ADS, THI NGS THAT

PEOPLE WERE, REAL PEOPLE WERE SAYI NG ABOUT THEMSELVES AND ABOUT

REAL PHONES.

AND AROUND THE TI ME THAT SAMSUNG WAS DOI NG THAT AND

CHANGI NG I TS SHI FT AND I TS APPROACH TO ADVERTI SI NG, THERE WAS

AN ARTI CLE THAT CAME OUT I N THE "WALL STREET J OURNAL, "OCTOBER 5, 2011, ABOUT THE LAUNCH OF THE I PHONE 4S.

AND BASI CALLY THE GI ST OF THE ARTI CLE WAS THAT THE I PHONE

4S WAS A REALLY GOOD PHONE, BUT I T WAS MORE, AS THE ARTI CLE

SAI D, MORE FI ZZLE THAN POP.

AND I N THE MI DDLE OF THI S ARTI CLE WAS A BOX, AND THE BOX

COMPARED THE I PHONE 4S, APPLE' S NEW PHONE, WI TH THE SAMSUNG

GALAXY S I I . AND I N THI S BOX, I N THE "WALL STREET J OURNAL, "

THE TWO OF THEM WERE COMPARED FEATURE BY FEATURE.

AND FROM THAT COMPARI SON, THE UPSHOT WAS PRETTY CLEAR THAT

ALTHOUGH THE I PHONE 4S WAS A VERY FI NE PHONE, THE SAMSUNG PHONE

WAS ACTUALLY BETTER.

AND TODD PENDLETON, THE NEWHEAD OF MARKETI NG FOR SAMSUNG,

SEI ZED ON THI S TO START A NEWADVERTI SI NG CAMPAI GN, THE NEXT

BI G THI NG I S ALREADY HERE.

AND THI S ADVERTI SI NG CAMPAI GN USED THE VOI CE OF THE



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376

CONSUMER, PRESENTED I N KI ND OF AN AMUSI NG WAY, AND THI S THEME

OF THE NEXT BI G THI NG I S ALREADY HERE TO CREATE A DI STI NCTI VE

BRAND PERSONALI TY FOR SAMSUNG, AND I T CAUGHT ON, AND I T WAS

POWERFUL. AND THAT' S ANOTHER REASON SAMSUNG HAS BEEN VERY

SUCCESSFUL I N SELLI NG PHONES.

AND SAMSUNG' S BRAND BECAME AS STRONG AS APPLE' S. HERE' S

AN I NTERNAL DOCUMENT FROM APPLE SHOWI NG SOME RESEARCH RESULTS.

YOU CAN SEE THI S I S AN APPLE DOCUMENT - - AS MR. MCELHI NNY SAI D,

WE EXCHANGED DOCUMENTS I N DI SCOVERY - - AND THI S I S WHAT

APPLE - - I T SAYS "SAMSUNG' S BRAND I MPRESSI ON I S J UST AS STRONGAS APPLE' S I N THE U. S. , " AND HERE YOU SEE APPLE HERE AND

SAMSUNG HERE.

SO THI S NEW, EDGY MARKETI NG STRATEGY WAS CLEARLY PAYI NG

OFF AND, FRANKLY, I T DROVE APPLE CRAZY.

WE WI LL SHOWYOU I NTERNAL APPLE DOCUMENTS, DOCUMENTS THAT

HAVEN' T BEEN MADE PUBLI C BEFORE, DOCUMENTS THAT YOU WI LL BE THE

FI RST TO SEE THAT SHOWHOWAPPLE WAS REALLY CONCERNED ABOUT THE

COMPETI TI ON I T WAS GETTI NG FROM ANDROI D AND I N PARTI CULAR FROM

SAMSUNG.

THE "WALL STREET J OURNAL" PUBLI SHED AN ARTI CLE, THE TI TLE

OF WHI CH WAS "HAS APPLE LOST I TS COOL TO SAMSUNG?"

AND APPLE' S HEAD OF WORLDWI DE MARKETI NG, PHI L SCHI LLER,

WHO APPLE SAYS WI LL BE THE FI RST WI TNESS WHO WI LL TESTI FY TO,

FORWARDED THI S TO HI S ADVERTI SI NG AGENCY SAYI NG "WE HAVE A LOT

OF WORK TO DO TO TURN THI S AROUND. "



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377

MR. SCHI LLER BECAME MAYBE OBSESSED I S THE RI GHT WORD WI TH

SAMSUNG' S CAMPAI GN THAT PORTRAYED SAMSUNG AS THE YOUNGER,

HI PPER CHOI CE, AND HE WAS FRUSTRATED THAT APPLE SEEMED

UNWI LLI NG TO RESPOND.

APPLE HAS HAD ONE ADVERTI SI NG COMPANY THAT THEY' VE USED

EXCLUSI VELY FOR YEARS. THAT ADVERTI SI NG COMPANY HAS ONLY ONE

CLI ENT. I T' S APPLE. THEY MEET EVERY SI NGLE WEEK. THAT

MR. SCHI LLER WROTE AN E- MAI L TO TI M COOK SAYI NG I THI NK WE' VE

GOT TO START LOOKI NG FOR ANOTHER ADVERTI SI NG AGENCY. WE' RE

J UST NOT GETTI NG WHAT WE NEED.I T BECAME A SUBJ ECT OF DI SCUSSI ON AT THE BOARD OF DI RECTOR

AT APPLE, WHAT ARE YOU GOI NG TO DO ABOUT THI S BRANDI NG PROBLEM?

SO THEY I NTRODUCED THEI R FI RST BRAND CAMPAI GN SI NCE 1997,

I T WAS A BRAND CAMPAI GN. THE TI TLE WAS SOMETHI NG LI KE DESI GNED

I N CALI FORNI A. THE FI RST TI ME APPLE HAD DONE A BRAND CAMPAI GN

SI NCE 1997 WHEN I T WAS ON THE VERGE OF BANKRUPTCY.

WHY ALL THI S? WHY WAS - - WHAT WAS THE SOURCE OF APPLE' S

CONCERN? CLEARLY SAMSUNG WAS OFFERI NG CONSUMERS A CHOI CE, A

MORE - - A YOUNGER, MORE PLAYFUL TAKE ON SMARTPHONES AND

CONSUMERS WERE LI STENI NG.

NOW, I WANT TO TALK TO YOU ABOUT THE I NFRI NGEMENT AND

I SSUES - - I NFRI NGEMENT I SSUES AND VALI DI TY I SSUES RELATED TO

EACH OF THE APPLE PATENTS I N THI S CASE.

BUT BEFORE I DO THAT, I WANT TO DI SCUSS THE DAMAGES, WHI CH

I ' VE TOLD YOU, FRANKLY, ARE ABSURD, MULTI BI LLI ON NUMBER OF



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DAMAGES THAT THEY' RE SEEKI NG I N THI S CASE.

I WANT TO TALK ABOUT DAMAGES FI RST BECAUSE I THI NK WHEN

YOU UNDERSTAND WHAT APPLE I S SEEKI NG AND HOWTHEY WENT ABOUT

I T, I T' LL SHED SOME LI GHT ON THE CREDI BI LI TY OF APPLE' S WHOLE

CASE.

AS I ' VE TOLD YOU, THESE PATENTS ARE VERY NARROWSOFTWARE

PATENTS THAT COVER - - THAT COVER ONE WAY TO HAVE A FEATURE THAT

CAN BE DONE MORE THAN ONE WAY, FEATURES - - THAT I S TO SAY, WHAT

A DEVI CE CAN DO, SEARCH, SYNC I N BACKGROUND, THE OTHER THI NGS.

I T' S NOT THE SAME THI NG AS A PATENTED CLAI M. A CLAI M MAYBE ONE WAY TO ACCOMPLI SH THAT FEATURE.

AND MANY COMPANI ES, SAMSUNG, GOOGLE, OTHER COMPANI ES HAVE

DI FFERENT WAYS OF ACCOMPLI SHI NG THE SAME THI NG.

WE WI LL SHOWYOU THAT APPLE HAS T

motion for permission to present evidence that apple practices patent claims

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