John Quinn Makes Closing Arguments For Samsung in Apple v Samsung Trial
This is a trial report of John Quinn’s closing arguments from my typed notes of the trial. It is not a transcript. In many places I have paraphrased what was said. And there may be errors. I’ve put this out in the thought that it could be helpful in the time period before an official transcript is made public.
Closing Arguments of John Quinn
I am relying on you . This is painfully quick my apology. I will be talking about Apple damages claim. We don’t think we owe nickle. Address damages in this case revealing for the light it sheds and credibility. 3 buckets Diminished – lost profits, off market profits, and reasonable royalty – I will discuss in order.
Diminished demand lost profit
These are the theory that if we didn’t have five features we would sell fewer phones and Apple captures 40 percent of those. Ladies and gentleman – Hauser. Don’t rely on just to say shows demand the only quantitative – Vellturo diminished demand (based on?) Hauser. He also bases willingness pay and buy and reasonable royalty on Hauser – but if Vellturo doesn’t have Hauser he has no basis to compute damages.
Begin with him. We don’ hate Hauser. His survey was useless for purpose he offered. It has flaws. Here are a few. He presents patent alternative measure. Overstates breadth of patent and understates the alternative. Came from lawyers [presumably the defined breadth of the patent and the defined narrowness of the alternative]. Auto word correction – only way – you second area you know that’s not true – the Dart phone – June 15 well before patent that was automatic word correction never [discussed? – disclosed?].
Apple’s response? A document from some unnamed person that it was somewhat jarring . Not suitable dated ?? April 2012. Two months before SIII – the all time best seller we launched – auto correct on 3 million phones with that keyboard without any complaints. It was non-infringing a few months later. This was this survey – is just an effort to mislead. You saw [survey participants?] told. Don’t have feature – you have to wait. If you don’t have this you will wait long and ?short?. You know Apple does no own everything – all claim 3 components not all . This is not description world don’t do what we do – don’t even say.
Survey design worthless – conjoint surveys have their uses – compare cup-holders or small features with a conjoint but you can’ t ask about cup-holders- ?automobiles? or what shifts in market share. Dr. Hauser like cup-holder, glove box, air-conditioning knobs – tell me 2-door, 4-door, color – and I’ll tell you the car you will buy. You can’t do that. For complex products you have to have major features May have gone a [over? by? past?] a lot of us. Hauser actually agrees. Agrees estimating yes- battery, 4G (probably screen [size?, quality?]).
He educated people instead of saying why you buy a phone. Did you know you had it. Do you know phone has ?toop? 2 heuristic? Educate them – this creates demand artifacts. Artificially inflates value . And how does he know. It has no integrity – reliability. Hauser said he did – by simply asking them if they understood. He didn’t you ask them what you understand – he answered no I am a socratic teacher. Does this make any sense to you folks? We are asking you to use common sense. Reibstein used an exact pre-test he found overwhelming confusion. Slide 51 25 26 quick 22 26 18 26 auto-correct. Universal search – to sync have to hookup use usb. Don’t have analyzer have to write down memorize.
Don’t take Reibstein’s word for it. See 454a – there you will have transcripts of all interviews. Do they have foggiest – ?interview?? Favorite is 54 – how presented – empty box. This was completely contrived. A sham survey. He may have an MIT PhD – but he did it for money – presented a sham. That is the way it is folks. 55 look at phone ?? 102 word correction for phone which they don’t even use remember price asked is absurd.
Hauser used argument only 4 dollars a month when the phone itself is at most 6 dollars a month – this has absolutely no credibility. Uncontradicted testimony 16 percent higher price same features. Terrible 56 predicting happen real market place – running Sawtooth software – that the Note 2 outsells SIII in the real world SIII outsold. Apple relied on – central to its damages case. They say Hauser didn’t have you’d have 25 -40 percent decrease. Survey is worthless. Vellturo – what does he do with Hauser percentage? – Takes it looks at sales number units decrease number and applies market share lost profits based on Hauser. Folks in the real world if features drive 25-50 percent why don’t they show up in the real world?
You saw produce both companies whey why – up on chart you’ve seen buyer survey these things never showed features . Apple’s claimed factors just aren’t factors at all. Slide 63 this is another reason diminished demand makes no for lost profits under law you must but for infringement Apple would have made sales. That’s what the law requires but for Chevalier – showed absolutely no correlation profitability of phones to the technology. Most profitable phones were the least infringing.
If you think about it for a moment. The idea nonsensical. Imagine customer goes in 3 component back ground sync and I want analyzer server search heuristic more important than big screen and battery life – Erdem said only techno geek would go in that way. Let’s get real nobody bought even slide to unlock – nobody ever bought . Samsung would be circle ripple best selling GSIII you have to have our form otherwise more probably could not identify single customer complaint for Samsung of being more prone to unlock. Idea that a hypothetical techno geek – Samsung I am going to ?seith? makes no sense. Why? Because Apple does not have them either. You take away we don’t have them either. Time opening the analyzer server they put on no evidence we practice the analyzer server – you know if they had proof we practice they would have put it in. If you look a lot ??? ?? def exhibit 345 you decide yourself if Apple still practicing slide to unlock no ?? no lost profits no ??
Second bucket – off the Market
Theory here how long Samsung design around we have to design around have to take off market their theory we are off market during time sell a lot more phones. That’s the off market theory. Vellturo lacks this present credibility issue because Vellturo gave only one off the market time period . He’s a financial expert how does he get off being tech Smartphone expert – it’s not in scope – he came in said give you 4 not 1 not 2 not 3 [damages numbers, presumably]. And this is slide 6. He did report before different mix. – he had done both 4 month and 1 month acknowledged had done one but did not know how but he did not. Consistent Apple’s going for grand slam home run. Only on long run – translates to a lot more money.
As Chevalier tested difference between one and four months – hundreds of millions dollars. On cross examination he told slide he said had not done 1 month but it would be very small number. Confronted with 17.5 million dollar number he said – I don’t know can’t do math here – I know small number. He wasn’t telling the truth . He’s done calculations 15 times. He wasn’t coming to present 17.5 million to show one month off be. We know that for 2 patents uncontradicted – Chevalier.
He did not want to be asked about one month. And we would not need 4 months. One of the most important – Samsung could do 1 month – slide 10 testimony Greenburg circle unlock already have swapped out. Slide 11 Kim ripple took 280 hours. How long – month. Word suggestion – already had Dart released with Galaxy SIII – originally release ?? 2011. In the can – no challenge – swap. 4 months to do that give me a break. Slide 14 analyzer server links to structure – Hackburn only have to change one thing – every limitation patent change in menu could have been done in a day So what is Apple’s fallback position? You might have been able to but carriers are bureaucratic.
That makes no sense. You’ve seen carriers frustrated with Apple subsidies – why would they be an obstacle to our implementing changes? You heard testimony we can get carriers in a matter of days. Don’t have time to talk about capacity issue – marketing capacity. Sexton 16-17 consistently [said?] capacity limited. The idea in 1 month 4 month crank out millions…
Third Bucket Reasonable Royalty
Hypothetical negotiation – Vellturo’s Edgeworth box – Hauser far apart not going – impasse far apart – what would have happened? – Total capitulation by Samsung – OK we will pay your number we’ll pay to one ask. One thing you know they are not going to cave and capitulate. Apple’s answer – Samsung would do it they would just raise prices.
If any company raise price any company would do it they would not wait – this is fantasy. Remember – Vellturo reasonable royalty- she [I’m guessing Chevalier] went through one at a time. Remember both sides have used. She went through benchmarks – the analytical approach correlation of profitability with patents – looking at OS updates – what Apple tells the Federal government what they are worth – positions in other cases – looking at product reviews – real world price of apps – Georgia Pacific factors – upward ?comp? policies. Adjust upward 35 cents a phone. What’s significant? She gave the real world. Apple did not. She looked at over 200 licenses.
They didn’t use any real world data – it was all Hauser. If you look at slide 21 confidential you can look at. Assuming reasonable royalty this is numbers by patent and by phone she gives gross number at bottom . Where was Dr. Vellturo when he was here? He disappeared for few days he brought back he was here for response. He could have gotten up . He didn’t take stand. About to get the hook.
Jump forward – 2 billion dollars – the power suggestion. How big is [?a building I think] 2,000 is high. How big do you really see – 1,500 feet don’t give the initial 2,000 – they say 200-300 feet – the power of suggestion that’s why they put out. They will be dancing in the streets of Cupertino if you award 100 million. Don’t compromise. Vellturo I confronted – what are they – the numbers would have been adjusted – that is an invitation to go out of your oaths. Unsupported big number get dividing by half or 100. Must make decision – don’t be influenced not to credit adjust.
Not entitled to any credence conclude by saying case really about competition – competition about Apple only competitor Android for those people believe Apple great American company – admire past what Apple needs to answer innovators dilemma not here in courtroom come out with more great product – watch, large phone or set-top box. That what Apple should get back to doing. They want monopoly [against?] Google android – cripple most successful user. This is a long shot in it’s in backyard. They certainly won’t take on a local company in Mountain View – they don’t fall – we are counting on you for fairness and common sense. Many Samsung employees here – they believe Samsung can get justice in Apple’s backyard based on evidence – you have the tools and the power to see justice is done.
Judge Koh indicated it was 2:05. It was agreed that Lee’s 29 minute testimony would wait until after a ten minute break.
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