Apple Inc. v. Samsung Electronics Co. Ltd. et al

Filing 1018

Declaration of Janusz A. Ordover, Ph.D. in Support of #997 Administrative Motion to File Under Seal Document Under Seal Re Apples Opposition To Samsungs Motion For Summary Judgment, #1004 Administrative Motion to File Under Seal Documents Under Seal Re Apples Opposition To Samsungs Motion For Summary Judgment filed byApple Inc.(a California corporation). (Attachments: #1 Exhibit A, #2 Exhibit B)(Related document(s) #997 , #1004 ) (Selwyn, Mark) (Filed on 6/1/2012)

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HAROLD J. MCELHINNY (CA SBN 66781)
[e-mail]
MICHAEL A. JACOBS (CA SBN 111664)
[e-mail]
RICHARD S.J. HUNG (CA SBN 197425)
[e-mail]
MORRISON & FOERSTER LLP
425 Market Street
San Francisco, California 94105-2482
Telephone: [phone]
Facsimile: [phone]

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WILLIAM F. LEE (pro hac vice)
[e-mail]
WILMER CUTLER PICKERING
HALE AND DORR LLP
60 State Street
Boston, Massachusetts 02109
Telephone: [phone]
Facsimile: [phone]
MARK D. SELWYN (SBN 244180)
[e-mail]
WILMER CUTLER PICKERING
HALE AND DORR LLP
950 Page Mill Road
Palo Alto, California 94304
Telephone: [phone]
Facsimile: [phone]
Attorneys for Plaintiff and
Counterclaim-Defendant Apple Inc.

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
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APPLE INC., a California corporation,

Case No.

11-cv-01846-LHK (PSG)

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Plaintiff,
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v.
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SAMSUNG ELECTRONICS CO., LTD., A
Korean business entity; SAMSUNG
ELECTRONICS AMERICA, INC., a New York
corporation; SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC, a
Delaware limited liability company.,

DECLARATION OF JANUSZ A.
ORDOVER, PH.D., IN SUPPORT OF
APPLE’S OPPOSITION TO
SAMSUNG’S MOTION FOR
SUMMARY JUDGMENT

Defendants.

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SUBMITTED UNDER SEAL

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ORDOVER DECL. ISO APPLE’S OPPOSITION TO SAMSUNG’S MOTION FOR SUMMARY JUDGMENT
CASE NO. 11-CV-01846-LHK (PSG)

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I, Janusz A. Ordover, declare and state as follows:
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I am Professor of Economics and former Director of the Masters in Economics

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Program at New York University, where I have taught since 1973. I am also a Special Consultant

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to Compass Lexecon, an economic consulting firm that is a wholly owned subsidiary of FTI

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Consulting, Inc.. I have been retained by counsel for Apple Inc. (“Apple”) in the above-captioned

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case against Samsung Electronics Co. Ltd., Samsung Electronics America, Inc., and Samsung

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Telecommunications America, LLC (collectively, “Samsung”) as an expert witness to analyze,

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from an economic perspective, Samsung’s alleged conduct with respect to certain standards-

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essential patents (“SEPs”) it claims to hold and the effect of that conduct on competition in the

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relevant technology markets and on Apple. I am providing this declaration in that capacity and in

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support of Apple’s Opposition to Samsung’s Motion for Summary Judgment. The matters stated

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herein are of my own personal knowledge or are my professional opinions. If called as a witness,

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I could and would testify competently as to them.

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2.

I provided an expert report in this action, dated March 22, 2012 (“Report”). A true

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and correct copy of the Report is attached hereto as Exhibit A. The Report accurately states the

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materials I reviewed, opinions that I formed, and the bases for those opinions. Excerpts of the

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transcript of my deposition in this case are attached hereto as Exhibit B.

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3.

My areas of specialization as an economist include industrial organization,

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antitrust, and regulation economics. My qualifications as an expert in these areas are detailed in

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the Report at paragraphs 1-2 and in my curriculum vitae attached as Exhibit 1 to the Report.

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4.

As discussed throughout my Report and summarized in paragraph 24, it is my

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opinion, inter alia, that Samsung’s conduct, specifically its failure timely to disclose its

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intellectual property rights (“IPR”), its failure to offer licenses to its declared SEPs on FRAND

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terms, and its efforts to obtain injunctive relief against Apple’s sale of mobile devices without

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offering Apple a FRAND license to its declared SEPs harmed competition in the technology

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markets in which Samsung’s declared SEPs competed. See Exhibit A ¶¶ 156-158 (“Samsung

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foreclosed its technological competitors and stymied the development of alternative solutions

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that…could have been available on FRAND terms.”); Exhibit B 271:18-25 (“To the extent that
ORDOVER DECL. ISO APPLE’S OPPOSITION TO SAMSUNG’S MOTION FOR SUMMARY JUDGMENT
CASE NO. 11-CV-01846-LHK (PSG)

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[Samsung misrepresented its willingness to offer FRAND licenses, and] that conduct caused

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ETSI working groups to standardize on Samsung technologies as opposed to on some other

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alternative technologies, that would, in my view, constitute harm in the upstream technology

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market.”).

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It is also my opinion that Samsung’s conduct has harmed Apply by imposing on it

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the cost and expense of defending against infringement claims, which defense would not have

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been required had Samsung not breached its obligations under the ETSI IPR Policy. See Exhibit

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A ¶ 161 (“Apple has spent millions of dollars in legal and expert fees defending Samsung’s

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claims of patent infringement for the seven declared SEPs, a defense that would not have been

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necessary but for Samsung’s non-FRAND conduct.”). When asked at my deposition if “Apple

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has sustained antitrust injury,” I testified, “It certainly sustained certain harm due to the need[] to

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defend itself across a broad range of jurisdictions… So that’s a harm to Apple.” Exhibit B

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251:19-252:2.

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6.

Finally, it is my opinion that downstream consumers of handsets and tablet

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computers will be harmed—in the form of increased product prices and decreased innovation—if

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Samsung succeeds in obtaining non-FRAND royalties from and injunctive relief against Apple or

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other manufacturers. See Exhibit 1 ¶¶ 159-169 (“Excessive royalties relative to the FRAND

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benchmark … would generally lead to higher end-user prices and less choice, to the detriment of

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consumers.”). I also testified at my deposition that if Samsung’s anticompetitive acts succeed in

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the upstream markets, there would be harm to downstream markets as well. Exhibit B 249:21-25.

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I declare under penalty of perjury that the foregoing is true and correct. Executed on
May 30, 2012.

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Janusz A. Ordover

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ORDOVER DECL. ISO APPLE’S OPPOSITION TO SAMSUNG’S MOTION FOR SUMMARY JUDGMENT
CASE NO. 11-CV-01846-LHK (PSG)

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ATTESTATION OF E-FILED SIGNATURE
I, Mark D. Selwyn, am the ECF User whose ID and password are being used to file this
Declaration. In compliance with General Order 45, X.B., I hereby attest that Janusz A. Ordover
has concurred in this filing
/s/ Mark. D. Selwyn
Mark D. Selwyn

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ORDOVER DECL. ISO APPLE’S OPPOSITION TO SAMSUNG’S MOTION FOR SUMMARY JUDGMENT
CASE NO. 11-CV-01846-LHK (PSG)

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