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

Filing 1345

Unredacted Oppositions to Apple's Motions in Limine (Dkt. Nos. 1208, 1209) by Samsung Electronics America, Inc.(a New York corporation), Samsung Electronics Co. Ltd., Samsung Telecommunications America, LLC(a Delaware limited liability company) re 1256 Order on Administrative Motion to File Under Seal, (Attachments: # 1 Exhibit A to the D'Amato Declaration, # 2 Exhibit B to the D'Amato Declaration, # 3 Exhibit C to the D'Amato Declaration, # 4 Exhibit G to the D'Amato Declaration, # 5 Exhibit H to the D'Amato Declaration, # 6 Exhibit I to the D'Amato Declaration, # 7 Exhibit J to the D'Amato Declaration)(Maroulis, Victoria) (Filed on 7/25/2012) Modified text on 7/26/2012 (dhm, COURT STAFF).

D'AMATO DECLARATION
EXHIBIT H
FILED UNDER SEAL

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

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APPLE INC., a California
corporation,

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Plaintiff,
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vs.

CASE NO.

11-cv-01846-LHK

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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,
Defendants.
____________________________/

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H I G H L Y
C O N F I D E N T I A L
A T T O R N E Y S' E Y E S O N L Y

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VIDEOTAPED DEPOSITION OF MICHAEL J. WAGNER
VOLUME II
PALO ALTO, CALIFORNIA
SATURDAY, MAY 12, 2012

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BY:

ANDREA M. IGNACIO HOWARD, CSR, RPR, CCRR, CLR

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CSR LICENSE NO. 9830
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JOB NO. 49053
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entire market value rule.

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16:28

And that's what the law seems to say, and I

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just have to accept -- even though I don't agree with

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it, that's what the rule is.

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Because it's not the entire revenue rule.

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It's the entire market value rule, which to me is a

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measure of profits and value.

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apportionment, then I don't think it's the entire

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value.

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And yet if you do any

But that's clearly not what the case law says
and what judges say.
Q

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16:28

Well, you -- what is -- as you understand

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what cases say, as long as you do an apportionment of

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some type, you're meeting the rule?

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A

No.

You -- even though you've done some

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apportionment, that does not mean you're outside of

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the entire market value rule.

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total profits or sales of the product, you're until

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there.

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Q

If you started from the

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Your -- so your understanding as you're

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I see.

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applying it here for purposes of your criticisms of

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Mr. Musika is that the entire market value rule just

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prohibits starting with entire profitability at all?

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A

Correct.

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Q

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Let's -- let's turn, then, to the question of

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All right.

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how Mr. Musika calculates his income ranges for this

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reference point.

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Do you have a criticism of the methods he

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uses to -- other than whether it qualifies under the

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entire market value rule, whether it is appropriate --

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I'll stop there.

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I don't think his method is

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appropriate as based on what I've said in my report.

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That, again, if you use his approach and just change

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certain assumptions, and you do his approach and you

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separate out iPad from iPhone, it just doesn't work.

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I mean, he would show that Samsung has no value from

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using these patents.

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A

Q

Well, I -- yes.

And what is it that causes you to believe

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that you would change the -- what assumptions would

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need to change in order for it to have no value?

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Well, the only assumption I think you need to

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change, which is his decision or judgment to use only

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a 5 percent tax rate for Samsung, which makes no sense

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to me.

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Apple, the worldwide tax rate.

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He should be using, just like he does for

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And if you just make that one change, my
recollection is it's -- using his approach, Samsung is

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generating no value from these patents.
Q

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Do you -- have you actually identified

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through discussions with Samsung what tax rate they

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pay all in on the Accused Products?

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A

No.

I just know it's pursuant to a

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negotiation with the federal government as to

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arm's-length transfer pricing.

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Q

And do you have any reason to disagree with

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Mr. Sheppard's testimony that the amount of the profit

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or the amount of the tax -- excuse me -- that the --

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let me strike all that.

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Do you have any reason to disagree with

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Mr. Sheppard's testimony that the amount of the profit

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that is to be identified pursuant to the transfer

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price discussions with the IRS is 1 percent?

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I'd need more information to know; but no.

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He clearly has better information than I do.

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that's based on the historic financial results, it

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doesn't surprise me.

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no, it wouldn't surprise me that it's a 1 percent tax

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rate.

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But if

They haven't made any money.

But if they're making big profits, I don't

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think it would be 1 percent.

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U.S. government has done that.

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Q

I cannot believe the

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So

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Well, do you have -- certainly, you don't

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have any better information regarding Samsung's U.S.

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tax rate than Mr. Sheppard?

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That's true.

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Q

Why do you believe that the use of -- let me

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back up.

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You agree that the U.S. tax rate is a

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relevant question; correct?

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I believe it's relevant.

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Q

The -- so why can't you believe that the

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government would do that?
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Because I -- I would be furious at our

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government if they are letting some international

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corporation not pay taxes in the United States for

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their business they do in the United States.

I would

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believe that they have -- they pay the same tax rates

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as any corporation in the U.S.

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But if they're losing money, they're not

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going to pay taxes, just like a U.S. company who

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doesn't make money doesn't pay more than 1 percent

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taxes.

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Q

When you say the same as any U.S. company,

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you're talking about, like, a General Electric or

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other companies that operate in the U.S.?

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A

Well, that's a bad example because they are

international, and they have all the same issues that

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