Apple v Samsung Hearing on Post-Trial Motions Transcript January 30, 2014

I attended this hearing, which occurred on January 30. Rough notes follows. Although this is listed as a transcript it is notes that were jotted down and often involves quite a bit of paraphrasing. I am publishing it in the interim before somebody puts out an official transcript. In addition to adding links I will be providing a small amount of highlights and commentary in the next day or two.

Judge Koh

First then JMOL Motions Questions.

Samsung

Available non-infringing alternatives undermines irreparable harm but also undermines balance of harms because no infringing sales stopped.

Samsung

Key argument balance of harms. Not stopping the sale of infringing products. We have. We are not selling adjudicated product. All products would be new. None for over a year. No question not selling.

Injunction will create fear and uncertainty for carriers and retailers. (I believe referring to their brief) mentioned that during the time the injunction was in place for the Tab 101, Apple spread fear and doubt.

Balance of hardships tips in favor of Samsung. Apple is not harmed.  But Samsung will for be by fear. Partners might get cessation letters. All for contempt. This would be an end run around accusing new products in court and establishing causal nexus etc…

Balance further in favor in Samsung Before you found balance was neutral and were affirmed by Federal Circuit.

Your court should not be used for that. (Presumably talking about doing the end around).

Judge Koh

Replied discussing Kennedy’s e-Bay. In 1st order. If there are no longer infringing products how do I rely on that? I am just supposed to be speculating?…

Samsung?

That’s right your honor.

Judge Koh:

Isn’t that speculative.

Samsung

Carriers and retailers are not in a position to know. Evidence on Tab 10.1.  Apple misused that injunction. Federal Circuit affirmed your public interest part of e-Bay’s Kennedy decision.

Samung

If anything public interest stronger in only being used against new products. None are redesigned old. They are all new.

Samsung

Public Interest and Balance of Hardhips. Medtronic decision: Public has a legitimate interest in only doing scope of monopoly not more. Nothing would do that more if you enjoin more. You would be holding mini-trials. We think it would create legal issues.

Judge Koh

Circuit IBM Nokia ??? distinguish. Shouldn’t I follow circuit?

Samsung

Footnote 7 most important part of the Federal Circuit opinion. Full and total discretion on your part.

Samsung

Brings up discussion settlement talks.

Samsung

Overwhelming distinctions – there were no carve outs were all about monetizing. Only got one paragraph from Watrous .

Samsung

We believe you can’t rule against us without evidentiary hearing but could rule for us based on record you have.

Judge Koh

Let me ask a question. 9th Circuit Case Law sliding scale don’t necessrily have 4 if some more. (I’m not sure what is being discussed here. The four factors?) Cites Ginsburg concurrence. Donhere(not sure if this is a name or was supposed to be “done here”).

Samsung

No your honor e-Bay is clear you have to show all four factors. Any factor in our favor means we win.

Samsung

Balance (of hardships?) and public interest don’t even need consideration. Two more. Footnote 7 about license. Apple Samsung negotiations – Rule 408 doesn’t exclude them. Willingness to license is purpose. You have cart blanch to look at those. January and July 2013 all three utility patents were on the table. Last sentence(?). You don’t have to find irreparable or monetary. You have to decide

Judge Koh

Is there any number that is sufficient – if we get into billions..

Samsung

…?

Samsung

Apple has showed

October 2010. Apple Samsung confidential discussions – 2 sources willing to monetize – to Samsung. Mr. Lutton admission and powerpoint. Contradict what Mr. Textler(?) said. Documentary evidence.

Dont’ think I answered HTC-Nokia. Answer. We have shown ?metic? included all of the patents or 1 patent. We’ve shown thin detail were carve outs were not carve out. Can’t go into (probably due to information being sealed)

4 dinstinct

Pub Interest, Hardship, Licensing. One thing you can’t do is rule against Samsung on basis of licensing without evidentiary hearing.

You’ve heard you can’t ??? if license was in settlement. Mere fact does not show willingness. Everything but causal nexus.

Apple (Lee)

Answer two

Legal and

She called attention to footnote 7. Has nothing to do nothing HTC Nokia IBM

Did Federal Circuit

Footnote only 7 Apple and Samsung.. Key sentence.

That presentation does not mention patents by name. Mr. Lutton’s testimony. If you just read preceding paragraph. Very powerpoint doesn’t mention. Now were they talking broadly? Sure. Certain on and certain off (I’m guessing this is certain patents on certain patents off). Discussion was

HTC there were certain patents that were off limits.

Then your honor there was disagreement as to what happened. Those types of discussions are going on now?

These are just discussions. Your honor has stated in your own rulings the idea that you…

No plaintiff would ever engage in meaningful discussions.

This is all in context of…

Only issue licensing Federal Circuit is sufficient license? IBM Nokia HTC are not sufficiently comparable. One meeting and post-litigation.

Footnote 7: If you are going to rely on it, there is no ?? that you have to resolve.

Fed Circuit – a set of licenses not sufficient. + licenses in discussions

Judge Koh

Address other point on public interest. In a way shifted no longer on sale. What about point we are completely dealing with new products. No discovery on. Would it be worse now?

Unknown Apple or Samsung

You asked Federal Circuit answer page 6 of your original order citing ???? Page 1370 Federal Circuit – injunction we are seeking enjoins infringing activity. Jury ruled one time through utilizing injunction would enjoin that activity . Law for activities. Question new products are they colorably . If you look at 1730 Federal Circuit they specifically address.

To the extent colorably and infringing that is just consistent using minor tweaks

Judge Koh

So how would it work. Mini-trial. Claim construction?

Apple

Real world example: Broadcom Qualcom case. Jury verdict for Broadcom. There was injunction 2 ??

.. There were three contempt proceedings. Order required plaintiff to make a showing sufficient. If so then required to show cause. Two weeks of discovery. Should not be claim construction. Two weeks discovery.

Judge Koh

Can I jump ?irrp? causal nexus question?

Apple

Sure.

Judge Koh

Samsung contends Dr. Hauser did not take into account non-infringing will pay factors over-inflated bounce back no bounce back versus to ?? val … She says I don’t think he did.

Samsung

He did more. First working through survey group. Surveys interview identified a set or group of features or attributes. In using them he setup conjoint survey. Well recognized. Identified in first part the feature he could use for confounding. He designed 2nd part which is what your honor has seen. The diff perms and combs testing and using. Actually give 24,000 different combinations and that is what he tested

Very best proof this wi… that is measures market value. You may recall in 1st trial. Samsung called Sukamar to testify conjoint survey he had done. To identify Samsung … to demonstrate causal con?

393′ question sir what assignment did your reci – I was asked by counsel to usage study on three Samsung patents and also to understand willingness to pay or market value. He’s right. He’s right. He is saying same thing as Hauser said. What Samsung trying to do that there are three feature tested
more complicated than that.

Hauser

Testing in front right balance

Too many

Spiro Magistrate 929 … 1027 takes on precisely issue. No . Everybody still recognizes you can do discrete . 6-8 right way.

Sukumar test jury used no confuounding just the three

Key on Hauser asked by Federal Circuit.

Identify the market value of stt’s. Thats what Hauser did. 2 parts. 1 to identify features

Judge Koh

But how can you it be market value if it exceeds the price of device. 2 answers. What Hauser siad – these ?? willingness to pay. Do they redeem willingness to pay. Do they demonstrate in absolute number. He..
Federal Circuit – if you have demonstrated willingness to pay ????

Federal Circuit – look at full body evidence. Ease of use insufficient. ?? sufficent. We’ll send back to district court so you could consider all the evidence.

Judge Koh

So are we supposed to ignore that market value of small features set exceeds price of phone. How are we supposed to account for tother features of phone

Apple (Lee)

I don’t have precise page. Actual cost of phone 2 year plan. So phone price plus 2 years plan carrier.

Judge Koh

So there is nothing…

Apple (Lee)

The Federal Circuit is the right factor is willingness to pay and does Hauser show that?. If you consider 1367 1368 its about willingness to pay. Hauser said demonstrates(?) willing to pay. Don’t have to take my or Huaser Sukamar said same…

Every expert has performed conjoint analysis measuring willingness pay. None has ever used except one has used actual ?? dollars.

Hauser – said they have all done it

Samsung saying take survey 2 through juries. And to say not crediblle sufficent. Together with copying evidence together with surveyed if that’s not sufficient to make a connection even though in same they used exactly same survey.

I think headline survey you fund irreparable harm …… ecosystem etc… they acc ewe think correct. Is there a connection

???? ??? /?? And I think there are really two issues they identified that lead inexorably to perm injunction. 1) Hauser plus copying and survey evidence. 2) second monetary does not 3) When there has been jury verdict 23 products infringe 3 products. When there has been determine they are comparable(?). That there are downstream sales and ecosystem and they cannot be compensated money damages the natural. inexorable result. Federal Circuit.

Kennedy wasn’t saying anything different

Read Kennedy in light of previous concurrence Roberts.

Kennedy said yes, there is the deal with NPE’s and multiple features. And the collection
Showed demand for patented feature but not that demand. You have to look conjoint plus the other including copying.

Is that right.

Judge Koh

 

Apple (Lee)

Does the conjoint survey show feature drives demand – willingness to buy and mark value

Judge Koh

I am hearing no.

Don’t see driving demand.

Apple (Lee)

Consider their laptop battery . One example – there are batteries around come up with longer life. Can’t prove drive but will affect will to pay and interest in product and that is enough. that was example she gave to help.

It’s not ?????
****

Judge Koh

 

Judge Koh

If I rule on all these JMOL(?) driver. Doesn’t not have to be sole driver can be “a”. JMOL and final judgement.

Judge Koh

OK I’d like to go to lost profits and I have question for both sides

Samsung

Do I get to respond to Lee

Samsung

Does not show causal nexus. Shows driver consumer demand / Apple III corrected causal nexus. You got it right. Integral part irrparable harm. Causal nexus is prerequisite. Show patented is a Hauser does not show.

Apple (Lee)

Hauser says willingness to buy. No will to buy. Compared to what?

Ludicrous to say they would pay $100 for these three features.

They are cited in our opposition brief page five

Hauser is not using their numbers. They aren’t to what they would pay in market. Those numbers are demand slide. What they willing to pay not what
Lets focus on cup-holder favorite example

Federal Circuit paragraph right before. If willing to pay an extra 10 in 20,000 car does not drive demand. 10,000 maybe prob rel

Mr. Hauser does not use anything equivalent. Compared to what. It would be ludicrous what they would be rel to phone and he keeps denying that.

Hauser is not showing you what the Federal Circuit said is ONE DATA POINT.

Hauser not showing willingness to pay value in relation to other features. He’s selected features.. without including features consumers think important.

IN ??? vs Sony Spiro asked what features do you think important. Hauser admitted didn’t do that. He asked – what do you like. 100’s features came up.

Hauser incapable finding for degree you need to say driving demand.

Circuit gave you complete and total freedom. Did not application to you. They cleaned up their language. Clean up their language Samsung I and Samsung II. Made clear you need to find driver of consumer demand

No 1) does not show real price. 2) and it does not do relative. Old song compare to what ?.omer made up

Brand name, battery life, texting. He did not test them relatively(?) or comparatively.

The Circuit left it to you decide other methodological survey a very unhelpful survey. I’ ll just remind you ??? tested for some. He did not test against non-infringing ??? features from jury. He should have tested against the most relevant ones.

He created a selection bias. 6 out of 100’s of patents. Driving people to focus. Exacerbating

Google v Oracle forcing among leading to those products rather than open ended will lead to inflation price premium = made up numbers 3)

There ?wee? no boundaries or controls. Should Hauser should have done subsequent one after 1st juries verdict. Hauser could not predict future. He could have come up with non-infringing to test. Yes a subsequent survey would have been helpful not dispositive.

Mr Lee another incorrect. Samsung Sukomar. Refer you 2915-7 paragraph 4 we were not using conjoint to show demand. That is simply incorrect.

There may be a conjoint some day shows it. But this one isn’t it. It didn’t even ask if you were aware of these feature of if they matter to them.

Falls far short sufficient casual nexus. Test is not “some connection.”

As if significant increases price of product or desirability of product. Hauser shows neither. can show price and can how desirability because does not compare features ?)

Mr Lee incorrect. Licensing decided HTC Nokia – sent back to you decide entirely including the #7 license point

In every….

Apple Lee

If the court consider 1574 Hauser fed cir showing of some connection. That’s the standard. Point 2 Hauser at page 16 sp says he includes non-infringing alternatives. 23 by 6 with finding irreparable harm . Would be extraordinary if no injunction. If they are going to sell not colorably different they should be enjoined.
?Apple:888

Judge Koh?

Do you think ??? only applies to liability

Apple

Yes because of the cases in our brief. The long that the law tries to come back compromise verdict is when they do not… trade-off in jury room – if you go with us liability we’ll fix that damages.

Federal Circuit.

Judge Koh

But unanimous.

Apple

But they don’t start that way. Discussion. Most trials. Underlying implication in your question Our psotion is you can’t unpack this verdict. We don’t know how they got to that @
We don’t know if there was a compromise. Under the 9th Circuit opinions it is not appropriate to figure out how

Your honor did it last time first alliance inappropriate legal theory.

Judge Koh?

2nd Questions for Samsung******

Is there cases compromise verdict. Any case

Can we reverse engineer verdict. No exact case in this procedural posture. It not sip;y different rylaty. Exact midpoint.

Judge Koh

Isn’t there another way?

???

Davis never provided tool for expenses. Nothing in record. They chose midpoint You want rational considered by jury. Cannot have salmonic decision.

Judge Koh

lets say scenerio. No liability question . Damages 2 possible ways. 1) Davis – op expenses – permissible. or
Lost Profits***************

Judge Koh

questions for Samsung.

1st question. Samsung had also challenged lost profits after 2012 trial. I had denied Samsung JMOL. If I did not Misiak same new. Whay should I change.

Samsung Evidence.

1 important distinction. Apple failure non-infringing alternatives. Samsung Intercept and Galaxy Ace. Samsung showed other Nomuro – but look at actual evidence.

Pandit Factor all four in particular #2 – absence of alternatives.

Judge Koh

What if Jury found the intercept didn’t find phone sliding key board would be

Samsung

You look solely to the accused features. Admissions by Dr. Sing. The Intercet phone worked the same way. Even if there wre some… size of screen etc..

What ?? what are the patented features – Standard Havens, Presidio ??

Intercept and Galaxy Ace. Apple’s burden Samsung est.

Admission Dr. Singh. Commercially successful. Sales of over $270 million Intercept Wagner testimony
Ms Davis other one was available commercially successful phone.

Both of those phones on market
These four bars lost profits.

Not just any alternatives. When your own ends it. Slimford Calico brands and Fuji photo

Judge Koh

If it infringes other patents isn’t this issue. For example Galaxy Ace – other 2 patents. Sufficiently short even if one wee to consider apple’s patent – even if non-impediment. You could design around
Even if one takes account

Even under – you would still be able to design around

Judge Koh

what specific evidence that the non-infringing feature could easily to put into another product

Samsung

How long design around was question. Was Apple’s burden. Burden was on Apple

Judge Koh

that’s a different question.. What evidence non-infringing could have been incorporated into another product

Samsung

as long as demonstrate they demonstrate know-how. Davis …

Judge Koh

She didn’t testify.. she said you would have to … software. She did not testify to that fact.

Samsung

she did not but she said design-around July 2010 381 patent 1200 line 23 1201 line 7. 163′ feb 4 2011, pages 1201 line 1 line 17. Was apple’s burden to show alternatives Samsung didn’t even have burden but showed via … cross couple of people

Were in market. Even though disagree other patents in phones – even conceding they could have been design around by admission of apple’s own expert.

***

Judge Koh

-Let me ask what your ??
Intercept…

Apple – weeds. People don’t buy features they buy products. Iron Seeting = Tow bar. Even though the actual product on market or hypothetical product if there would have been acceptable. If you think about it most don’t even have feature. Even in this case they would have bought –

**********
**********
Non-infringing alternatives. Ruled against Samsung. Koh raised that expert said infringing but jury said now.

Judge Koh

raises against.

Apple seriously –

Samsung

100%

Market share alone can’t use substitute but-for???

***3:55pm (after break got in a little late)

…..Apple speaking…

Koh Don’t

Exhibit 26 – summary – ranges shefound summary

Judge Koh

Income approach how did she get to her … ?? number

Apple: She looked at the income not just Samsung also Apple money made per hone and then allocated considering features – other evidence about value of phones. Used prof judgement attributable to the particular patented features.
These survived Daubert challenge

What she didn’t do is take entire value of phone and apply reduced percentage

She disassembled base

Judge Koh

And how did she do that

Apple

By applying her expert opinion considering all this information

Koh

your saying she did allocation soley by features

Apple

I wouldn’t say profits. She came to value and income number by feature using evidence and expertise came up range

As Samsung or apple would have done had they had this hypothetical negotiation.

Judge Koh

Still not sure how she did that.

Apple

She took revenue. Balakrishnan says important did this ?and? this. Took Hauser survey not actual numbers – but using expert opinion about value app consumers apply to feature – and that gave her (tested etc

Judge Koh

But we already said we have no denominator

Apple

Testing process not using actual dollars but this other stuff – this test this way has been validated. Alsup skeptical – not Federal Circuit.

Judge Koh

It works patented feature but this is different. She said something different.

Apple

Ah ah – it doesn’t tell us just that there is ??? in the play in the number it says whether significant and ???? ???

In cross of Hauser price said your not telling us they buy because features. Hauser said yes I am outside these features they would not have bought they choose each one need price objected saying outside but Koh said OK because it was elicited

Samsung

Your honor may I address errors

Report not testimony. Her testimony was very brief.
Brief insufficient

Federal Circuit Whiteserv e v computer packages spec – cannot merely mention Georgia Pacific or test. Did not even take off factors.

Federal Circuit do not require use all GA Pac – if t…

….

Judge Koh

Musika walked through Georgia Pacific factors more than what Ms. Davis did. Reminded challenged inconsistent? – Davis was not sufficient under federal circuit white, laser dynamics. ?uniloc

Judge Koh

white a little diff 25%. In this case Ms. Davids? didn’t she also use income cost. She named but did not explain. Very short Same logic should apply here. You cannot say what an ??? ???? is you have to explain.

Judge Koh

what about her cost approach – cost design around. Why isn’t that a portion of the patented

Samsung

merely the cost of being off market some do use it. But that does not give

Judge Koh

….

Samsung

It is not …

One of the challenges in damage case. You don’t want …

Additionally don’t use cost use ? portion / income.

Judge Koh

Waiver argument question

This has to do with new trial national origins

Apple one question . Revenue waiver – other than objections you set forth are there any other objections made during the trial.

Closing – statement of fact based on stereotype. So we could see what apple was actually doing. Prior to the closing. The earlier statements – was setting up poser keg that they ignite.

Windsor was it reversed % of rev to % of prof. Ex 25 not Ex 26. Hypothetical. Royalty
*************

Television manufacturer
Case Management conference Feb 23 other case. Motion or do we need a hearing.

Lee

Don’t need it March 5 pre-trial makes

Samsung

They want hearing.

Judge Koh

February 20 on hold. Assume February 20. ??? won’t get close to time.. Plus you might settle.

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