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

Filing 1416

Declaration of Gregory Joswiak in Support of 1414 JOINT MOTION , 1408 Corrected Renewed Administrative Motion to File Under Seal filed by Apple Inc.. (Related document(s) 1414 , 1408 ) (Jacobs, Michael) (Filed on 7/27/2012) Modified text on 7/30/2012 (dhm, COURT STAFF).

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1 2 3 4 5 6 7 8 9 10 HAROLD J. MCELHINNY (CA SBN 66781) MICHAEL A. JACOBS (CA SBN 111664) RACHEL KREVANS (CA SBN 116421) JENNIFER LEE TAYLOR (CA SBN 161368) ALISON M. TUCHER (CA SBN 171363) RICHARD S.J. HUNG (CA SBN 197425) JASON R. BARTLETT (CA SBN 214530) MORRISON & FOERSTER LLP 425 Market Street San Francisco, California 94105-2482 Telephone: (415) 268-7000 Facsimile: (415) 268-7522 WILLIAM F. LEE WILMER CUTLER PICKERING HALE AND DORR LLP 60 State Street Boston, MA 02109 Telephone: (617) 526-6000 Facsimile: (617) 526-5000 MARK D. SELWYN (SBN 244180) WILMER CUTLER PICKERING HALE AND DORR LLP 950 Page Mill Road Palo Alto, California 94304 Telephone: (650) 858-6000 Facsimile: (650) 858-6100 11 12 13 Attorneys for Plaintiff and Counterclaim-Defendant APPLE INC. 14 UNITED STATES DISTRICT COURT 15 NORTHERN DISTRICT OF CALIFORNIA 16 SAN JOSE DIVISION 17 18 APPLE INC., a California corporation, Plaintiff, 19 20 21 22 23 24 v. SAMSUNG ELECTRONICS CO., LTD., a Korean corporation; SAMSUNG ELECTRONICS AMERICA, INC., a New York corporation; and SAMSUNG TELECOMMUNICATIONS AMERICA, LLC, a Delaware limited liability company, Defendants. 25 26 27 28 DECLARATION OF GREGORY JOSWIAK CASE NO. 11-CV-01846-LHK sf-3175959 Case No. 11-cv-01846-LHK DECLARATION OF GREGORY JOSWIAK IN SUPPORT OF APPLE MOTIONS TO SEAL 1 I, Gregory Joswiak, hereby declare as follows: 2 1. I am a Vice President in Apple’s Product Marketing department. I submit this 3 declaration in support of Apple’s motions regarding sealing, filed contemporaneously herewith. I 4 have personal knowledge of the matters set forth below. If called as a witness I could and would 5 competently testify as follows. 6 2. I understand Apple seeks to seal sensitive categories of market strategy and 7 financial information: (a) portions of recent market research reports; and (b) highly sensitive and 8 non-public financial and manufacturing information (cost data, product line details, detailed 9 product-level and model-level profit margins, and capacity data). If disclosed to the public, these 10 categories of information would expose Apple to serious competitive harm. Such information 11 would also be highly likely to impact Apple’s share price and, in turn, its shareholders. 12 3. Among the documents the parties have selected as potential exhibits in this action 13 are the quarterly iPhone buyers surveys that Apple conducts. The surveys reveal, country- 14 by-country, what is driving our customers to buy our products versus other products such as the 15 Android products that Samsung sells. No competitor has access to our customer base to conduct 16 such in-depth analysis. Getting access to this analysis would be of enormous benefit to our 17 competitors. Today, a competitor who is trying to take away Apple market share can only 18 speculate how Apple’s customers weigh the relative value of, for instance, FaceTime video 19 calling, battery life, or Siri voice capability. They have to guess as to what demographics – age, 20 gender, occupation – are most satisfied with Apple’s products. Certainly, they do not know how 21 the preferences of customers in, for example, Japan differ from those in Australia, Korea, France 22 or the United States. Perhaps most importantly, they are unable to observe trends over time. All 23 of that information is set out in exacting detail in the proposed exhibits. No other entity could 24 replicate this research because no other entity has access to the customer base that Apple has. 25 4. Just as important as the survey data itself are the conclusions Apple has drawn 26 from the data. Knowing about Apple’s customer base preferences is extremely useful to a 27 competitor, but knowing about what Apple thinks about its customer base preferences is even 28 more valuable. If Apple had access to this kind of in-depth analysis of our competitors, we could DECLARATION OF GREGORY JOSWIAK CASE NO. 11-CV-01846-LHK sf-3175959 1 1 infer what product features our competitors are likely to offer next, when, and in what markets. 2 Our probability of success in predicting our competitors’ next move next would improve 3 dramatically. Having that level of insight and confidence in our competitors’ next moves would 4 allow us to target our efforts to prepare products and marketing counterstrategies in the short 5 term, and target our long-term product plans to stay far ahead of the competition. Given 6 unfettered access to Apple’s recent internal market research, I have no doubt that Apple’s 7 competitors would use it as described above, resulting in serious competitive harm to Apple. 8 5. Because of the extreme sensitivity of this product research information, 9 distribution is very tightly controlled within Apple. In fact, no internally conducted surveys of 10 Apple customers are allowed to circulate outside a small, select group of Apple executives. No 11 iPhone-related surveys are allowed to be distributed to anyone outside this group without my 12 personal express permission, which I regularly refuse. When I do approve further distribution, it 13 is almost always on a survey question-by-survey question basis, and even then distribution is 14 limited to individuals who have a demonstrated need to know. 15 6. Also included among the documents that Apple seeks to seal are documents 16 revealing Apple’s cost, product line details, detailed product-level and model-level profit 17 margins, and production capacity. Disclosure of this data would severely harm Apple. Part of 18 my responsibilities as Vice President in the Product Marketing department of Apple are to help 19 make competitive decisions about what products to offer, with what features, when, and at what 20 price points. When we make those decisions, two of the critical components of our decision 21 making process are (1) what our customers value, and (2) what are our competitors are offering or 22 are likely to be offering in the future. Apple (like other companies) makes an extensive effort and 23 invests heavily in getting the best possible information about those factors. 24 7. If I and others in my department had access to my competitors’ precise cost and 25 profit data, that would give us a significant competitive advantage. We would know exactly what 26 price points to aim for in what markets. It would reveal our competitors’ weaknesses because we 27 would know what products have thin or negative profit margins. We could then target those 28 markets for competition on feature sets knowing that our competitors are unable to withstand DECLARATION OF GREGORY JOSWIAK CASE NO. 11-CV-01846-LHK sf-3175959 2 1 additional competitive pressure. It would also reveal the soft spots in the market where our 2 competitors are commanding unusually high profit margins. We could target those markets for 3 competition too. If competitors gain access to similar information regarding Apple’s cost and 4 profit structure, I am confident they will use the information to gain unfair advantage over Apple 5 in the marketplace. 6 8. As discussed above, I have reviewed certain Apple documents that the Parties have 7 selected as exhibits for this case. I note that they contain detailed cost and profit information, 8 units and revenues broken down by market, model, and submodel. This information is extremely 9 sensitive. For example, only Apple knows how many 16 GB iPhone 4S devices Apple sold last 10 quarter in the United States as compared to 64 GB iPhone 4S devices or 8 GB iPhone 3GS 11 devices, and what Apple’s profit margins on each of those products was. Such information is 12 contained, for example, in DX 756. If the information contained in the documents I reviewed 13 were distributed, however, competitors would know that and would be able to target their product 14 offerings at Apple’s most successful and profitable products. It is a treasure trove of competitive 15 intelligence. 16 9. Exhibit DX 776 is an example of a recent survey of iPhone buyers which contains 17 highly sensitive intelligence on Apple customers and customer preferences worldwide, as 18 discussed above. Exhibits DX 777-780 are examples of documents contain highly sensitive 19 financial data. For the reasons detailed above, disclosure of these documents would irreparably 20 harm Apple’s business. 21 22 I declare under penalty of perjury that the foregoing is true and correct. Executed this 27th day of July, 2012 at Cupertino, California. 23 /s/ Gregory Joswiak Gregory Joswiak 24 25 26 27 28 DECLARATION OF GREGORY JOSWIAK CASE NO. 11-CV-01846-LHK sf-3175959 3 1 2 ATTESTATION OF E-FILED SIGNATURE I, Michael A. Jacobs, am the ECF User whose ID and password are being used to file this 3 Declaration. In compliance with General Order 45, X.B., I hereby attest that Greg Joswiak has 4 concurred in this filing. 5 Dated: July 27, 2012 6 /s/ Michael A. Jacobs Michael A. Jacobs 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF GREGORY JOSWIAK CASE NO. 11-CV-01846-LHK sf-3175959 4

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