Apple v Samsung Trial – Opening Statement of John Quinn for Samsung – April 1, 2014

I attended much of the trial on Tuesday April 1. I missed Apple’s opening statement. And when I arrived, Samsung’s opening statement had begun. Samsung’s attorney, John Quinn, was beginning to question the testimony of Apple’s expert witness Dr. Hauser. This is not a”transcript” – what I have done is attempt to paraphrase what was said based on my rough short-hand notes. 

Update April 5: Full Transcript Available

Apple has made a filing in which a complete transcript is provided and is now publicly available. So my notes which follow are less useful.

Apple Expert Dr. Hauser Challenged 

I arrived a little later. When I got there, Mr. Quinn began by attacking the expert testimony of Dr. Hauser. In particular, Mr. Quinn stressed that Dr. Hauser gave a disclaimer, stating that he had not reviewed or interpreted the claims terms themselves. Mr. Quinn criticized, saying those terms were provided to Dr. Hauser by Apple’s attorneys.

Apple Expert Dr. Vellturo Challenged

Samsung next attacked Dr. Vellturo’s testimony, pointing out that Dr. Vellturo is not on the faculty of any University, and that Dr. Vellturo testifies for a living. Samsung mentioned that Dr. Vellturo claimed that he could not remember how many times he had been hired by Apple. Mr. Quinn indicated Dr. Vellturo may have testified for Apple 10-12 times. And he criticized Dr. Vellturo for claiming that the sync patent is worth 792 million dollars in damages, and mentioned that that damages figure is based on bad descriptions.

Samsung Expert Dr. Reibstein

Samsung then mentioned that witness Dr. Reibstein is an expert on conjoint surveys, and that Dr. Reibstein believes conjoint surveys are inappropriate for complex multi-featured products. Mr. Quinn indicated that Dr. Reibstein questions whether those surveyed in relation to such complex products actually understand what they are being told – and that Dr. Reibstein conducted his own study to investigate that.

Samsung indicated that Dr. Rebstein recruited other people and showed them the same video and descriptions as were contained in Apple’s conjoint study. And that Dr. Rebstein then had those new people take a test, asking if they understood. The people in the study are said to have indicated that they did understand, but that when this was actually tested, Dr. Rebstein showed that they in fact did not understand. Samsung argued that as a result there is a real question as to whether the people in Apple’s conjoint study actually understood the terms they were being asked about when they were surveyed.

Mr. Quinn showed an internal Apple survey which only found 16% of consumers purchase iPhones for a specific feature, referencing slide number 50. On slide 51 he showed a drill down on the feature people were most interested in. Mr. Quinn indicated that the most cited features were things like phone weight, display size, phone thickness and battery life. Mr. Quinn argued that Apple in fact knows that those are really the things that are important to consumers.

As an example, Mr. Quinn cited the 2012 problem with Apple Maps. He claimed that while the PR fallout from the failure of the maps was terrible, forcing Apple’s CEO to apologize, the iPhone 5 was still Apple’s highest selling iPhone. Mr Quinn went on to argue that an iPhone completely lacking a map would also sell.

Claims all Five Patents Invalid

Samsung’s attorney argued that Apple’s  infringement claims are based on five patents that are invalid and should not have been issued. I was able to record Samsung’s objections to four of five of those patents which follow next.

‘414 Background Synchronization Patent 

I believe Samsung indicated that the ‘414 patent requires 3 separate synchronization (computers?). Mr. Quinn indicated that a Dr (Chase?), Samsung’s expert, as well as an expert from Google, would or did testify that Android does synchronization differently. Also, Mr. Quinn indicated it had been done before via Windows Mobile. Mr. Quinn indicated that Gary Hall from Windows either did or would testify that the synchronization was a design pillar at Windows previously. Mr Quinn indicated that the patent office did not have this information before it when it issued the patent.

Mr. Quinn argued that background synchronization was being done (I believe by Google) before the synchronization patent had been issued. Samsung’s attorney went on to argue that, I believe, as a cloud company Google was way ahead in syncing. He referenced some sort of Steve Jobs statement where Steve Jobs is said to have indicated that Apple needed to play catch-up on synchronization. Mr. Quinn noted that you could not sync wirelessly via the first iPhone. Rather users had to plug in their device in order to do so.

647 Analyzer Server Patent

Analyzer server patent 647 – highlisth tap. Samsung’s attorney then argued that Apple’s ‘647 Analyzer Server Patent does not cover every way to click and call. This is the patent where phone numbers are highlighted in text and then you can click them to make phone calls. Mr. Quinn indicated that this feature had been available in the marketplace before the patent and that Apple did not invent it. He also indicated that Google designed one method that runs in the background differently.

Mr. Quinn said that he would not get into details, but that the jurors remember when they see what Google / Android does, they’ll see there is no Analyzer Server being used. Samsung’s attorney went on to argue that Apple would try to argue that a software library is really an analyzer server, but that that is not the case. Finally Mr. Quinn argued that Xerox Park had the same thing in 1991. So the patent should not have been issued. 

‘721 slide to unlock patent

Mr. Quinn indicated that they will show that there are lots of different types of unlocking. He showed the example of a colored puzzle piece that you insert into an empty puzzle piece space to unlock. He argued that you don’t have to slide it on track to unlock. It only unlocks if you put the piece in.

Samsung’s attorney went on to argue that Samsung tried to distinguish itself in this. Mr. Quinn also pointed to the Galaxy II Rebel – where you put your finger on it and it creates a wave of water that you can move across the screen. He indicated there is no use of slide to lock there. Mr. Quinn mentioned that this is the best selling GS3 phone and it does not use slide to unlock.

Mr. Quinn then went on to argue that Apple itself has moved away from slide-to-unlock. For example, on phones now you go from anywhere on the left to anywhere on the right, giving much more freedom. He mentioned that Apple still includes the words “slide to unlock” on the phone, but that the way you unlock the phone has changed. He then asked if this is really something worth millions of dollars. Whether this is why someone buys the phone. And that this would be one of the jury’s decisions.

‘959 Universal Search

Mr. Quinn indicated that this patent involves a very specific way to combine overall search results from different sources including the Internet. (My language is imprecise here and what he said is probably very important – he mentioned combining overall search results and he mentioned the Internet – this is as best as I am able to reconstruct it).

Samsung’s attorney went on to argue that it is fair to say that Google understands search, and they don’t need to go to Apple for help on how to do it. He mentioned that Google had been doing search since 1997. On a desktop since 2004. I believe Mr. Quinn mentioned that the challenged functions were added to the Android/Samsung phones in 2009 – but that Samsung never used the patented functionality and neither has the iPhone.

Mr. Quinn went on to address something that may have been said in Apple’s opening argument. Samsung’s lawyer stated that Apple said that Samsung was sued and removed the feature. Mr. Quinn said he wanted to correct the record on this. That they were sued on a different search patent – the ‘604, previously. That they lost at the district court level and disagreed but complied and removed the functionality. Mr. Quinn went on to state that the issue was appealed and that Samsung won that appeal. And then they put the feature back in. He argued they didn’t put it back in because it was vitally important. Just one of many features.

Samsung indicated the feature sometimes even causes problems. He went into details about “heuristic.” And he claimed that Google thinks what Samsung is doing is not a heuristic at all. Mr. Quinn went on to indicate that there is prior art and then mentioned something called, I believe, WAIS. He then mentioned Dr. Mark Bernard, and that the patent office did not know about this when it issued the patent.

Damages Calculations and Experts

Apple’s Damage Theories and Calculations

Mr. Quinn then went into damages theories and calculations, criticizing Apple. He mentioned that there were lost profits, unreasonable royalties and other tings. He mentioned that Apple argued that Samsung owed 508 million dollars because Samsung would have to take 4 months to develop non-infringing alternatives on 3 of these features, and that as a result Apple would sell a lot more phones during that time period.

Mr. Quinn criticized that, stating that Samsung has, and Apple does not dispute, a non-infringing alternative lock screen function – the water on the page that was mentioned before. And he said that it would take at most four days to implement an alternative to the alleged infringement of the Analyzer Server Patent.

Mr. Quinn indicated Apple’s argued reasonable royalty rate per phone was $40.10. He indicated that Samsung’s expert, Dr. Chevalier indicated that if all five patents were infringed, it would be worth 35 cents per phone together. Mr. Quinn mentioned Dr. Chevalier’s credentials, including being a professor at Yale and publishing in various academic journals such as the American Economic Review, the Journal of Political Economy and the Journal of International Economics.

He stated that Dr. Chevalier looked at what Apple told the Government – which is different than what it is claiming now. And at Apple’s prior representations about what its software is worth in courts. And at what people are actually willing to pay. 

Mr. Quinn mentioned that the most popular application, Swiftfeet – that people only pay 24 cents for that application. He concluded that Samsung does not think they infringe the five patents. And that furthermore, that they think four out of the five patents are invalid. And that, even if it turns out that those patents are found to be valid and that they are infringing, the proper damages calculation is $39.4 million.

Samsung’s Damage Theories and Calculations

Mr. Quinn went on to go through the patents and requested damages that Samsung is asserting against Apple. It was clear that he was trying to paint a contrast between a reasonable Samsung and an unreasonable Apple.

First, Mr. Quinn noted that Samsung does not normally sue for patent infringement. He discussed how, prior to the “war,” companies would do corss-licensing deals. That it used to be acceptable to co-exist. But he said after Apple sued them they thought it was appropriate to assert their patents against Apple.

He went on to discuss how you can have engineers go to the same school, and then some go to work for Google, and some go to work for Apple. And that in that situation you may end up with a situation where, with both sets of engineers attempting to make easy to use, effective and fast devices, some similar solutions may be developed. That that sometimes happens.

Mr. Quinn claimed that when that happens, “it’s not a holy war.” That law provides a remedy and it is a payment. That it is not about punishing a wrongdoer. He then argued that Apple was attempting to do something else by seeking massive damages for small features that have no impact on sales.

Mr. Quinn noted that Apple was not challenging the validity of the Samsung patents. And then went on to talk about the two specific patents that Samsung was asserting against Apple. 

‘239 Samsung Video Transmission

He explained this patent is for compressing video in real time to transmit quickly without interruption. Mr. Quinn indicated that Dr. Shoenfield of the University of Chicago shows that Apple in fact infringes the patent. He mentioned that there were two key terms – a computer and a camera I bleive. He mentioned both terms are satisfied. He alleged that FaceTime infringes and that Apple infringes heavily. I believe he indicated that when an Apple device transmits videos or images via email and messaging on the iPhone there is infringement of this patent. Compresses video in real time to tramit quickly without interruption.

Anticipating a criticism from Apple, or perhaps addressing something said in Apple’s oral arguments, he did acknowledge that Samsung bought the patent in question. He quickly talked about the original inventor, who I believe he said was from Oklahoma where there are tornadoes. And that the development was spurred, I believe he at least implied, to allow storm trackers to post their videos of tornadoes from relatively remote locations effectively.

He also indicated that the fact that a patent is purchased is not a defense for an alleged infringer. He mentioned that Apple purchases patents, and that this is absolutely irrelevant.

He also conceded that the patent has expired. But he indicated Apple is only seeking damages for up until the point in time when it expired.

449 Samsung Image Classification Patent

He indicated, I believe, that this was originally a Hitachi patent. He mentioned that a revolutionary Hitachi patent allowed for the production of many photos that were disorganized – so much so that you could not keep track of them. Hitachi then invented this to solve the problem of locating photos. He put a comparison of the patent onscreen with the relevant display from an iPhone. The phone showed on screen was either an iPhone 5 or a 6, I could not quite tell which.

Mr. Quinn indicated an expert from MIT will show how the patent is infringed.

Contrasting Samsung Requested Damages to Apple Requested Damages

Samsung then indicated that there requested damages were reasonable. Samsung stressed that these two patents were very important, unlike the Apple patents. Especially the video patent (239) but also the 449 patent. He indicated Samsung was only requesting 6.78 million in damages for the ‘239 patent and 158,400 for the ‘449 patent.

Mr. Quinn indicated that just because they were asking for these relatively small amounts does not mean Samsung does not respect the patent system. And he ridiculed the notion that if you don’t ask for billions you are not taking the patent system seriously.

Mr. Quinn indicated he they would show that the surveys showing billions in damages are wrong. He mentioned that Samsung uses real world market prices – for example the 99 cent price for the Facetime App as a benchmark for the ‘239 and ‘449 features.

Mr. Quinn mentioned that Apple says 6.78 million is far too much – even assuming infringement. But that at the same time, for much more minor features, Apple is seeking billions in damages. Mr. Quinn stated that the types of features are not worth hundreds of millions of dollars.

He said that Apple is arguing that they would have sold more phones. Mr. Quinn then pointed out that Apple does not even use 4 of the 5 asserted patents, so how can that be? You can’t even buy those patented features in an Apple product.

Mr. Quinn stated told the jurors that Apple wants them to believe 2 billion worht even though Apple doesn’t even include them in its products. And he said a very good explanation of the fact that the patents are not used much is that the patents are worth very little. He argued that Apple patents claim ordinary ways of doing ordinary things.

Mr. Quinn went on to note that the whole purpose of the suit is to get at Google. Doing this by singling out the single most successful manufacturer of Android phones and tablets. He went on to state that just having the Android platform is not a guarantee of success. That Samsung’s unique success is not in things that are the same but in things that are uniquely Samsung, in particular, Samsung’s hardware. And that it was due to hard work from Samsung.

Conclusion

Mr. Quinn wrapped up by saying customers bought Samsung for the stylus, the big scree, the amolyd dsiplay and the high quality camera. He indicated those were the things you can only get on a Samsung phone. He stated they didn’t buy Samsung phones for the features alleged to infringe Apple’s patents.

With this Mr. Quinn wrapped up and the first witness was called.
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