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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HAROLD J. MCELHINNY (CA SBN 66781)
[e-mail]
MICHAEL A. JACOBS (CA SBN 111664)
[e-mail]
RACHEL KREVANS (CA SBN 116421)
[e-mail]
JENNIFER LEE TAYLOR (CA SBN 161368)
[e-mail]
ALISON M. TUCHER (CA SBN 171363)
[e-mail]
RICHARD S.J. HUNG (CA SBN 197425)
[e-mail]
JASON R. BARTLETT (CA SBN 214530)
[e-mail]
MORRISON & FOERSTER LLP
425 Market Street
San Francisco, California 94105-2482
Telephone: [phone]
Facsimile: [phone]

WILLIAM F. LEE
[e-mail]
WILMER CUTLER PICKERING
HALE AND DORR LLP
60 State Street
Boston, MA 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]

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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,
Plaintiff,

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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.

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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

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I, Gregory Joswiak, hereby declare as follows:

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I am a Vice President in Apple’s Product Marketing department. I submit this

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declaration in support of Apple’s motions regarding sealing, filed contemporaneously herewith. I

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have personal knowledge of the matters set forth below. If called as a witness I could and would

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competently testify as follows.

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2.

I understand Apple seeks to seal sensitive categories of market strategy and

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financial information: (a) portions of recent market research reports; and (b) highly sensitive and

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non-public financial and manufacturing information (cost data, product line details, detailed

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product-level and model-level profit margins, and capacity data). If disclosed to the public, these

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categories of information would expose Apple to serious competitive harm. Such information

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would also be highly likely to impact Apple’s share price and, in turn, its shareholders.

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3.

Among the documents the parties have selected as potential exhibits in this action

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are the quarterly iPhone buyers surveys that Apple conducts. The surveys reveal, country-

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by-country, what is driving our customers to buy our products versus other products such as the

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Android products that Samsung sells. No competitor has access to our customer base to conduct

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such in-depth analysis. Getting access to this analysis would be of enormous benefit to our

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competitors. Today, a competitor who is trying to take away Apple market share can only

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speculate how Apple’s customers weigh the relative value of, for instance, FaceTime video

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calling, battery life, or Siri voice capability. They have to guess as to what demographics – age,

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gender, occupation – are most satisfied with Apple’s products. Certainly, they do not know how

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the preferences of customers in, for example, Japan differ from those in Australia, Korea, France

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or the United States. Perhaps most importantly, they are unable to observe trends over time. All

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of that information is set out in exacting detail in the proposed exhibits. No other entity could

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replicate this research because no other entity has access to the customer base that Apple has.

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4.

Just as important as the survey data itself are the conclusions Apple has drawn

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from the data. Knowing about Apple’s customer base preferences is extremely useful to a

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competitor, but knowing about what Apple thinks about its customer base preferences is even

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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

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infer what product features our competitors are likely to offer next, when, and in what markets.

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Our probability of success in predicting our competitors’ next move next would improve

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dramatically. Having that level of insight and confidence in our competitors’ next moves would

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allow us to target our efforts to prepare products and marketing counterstrategies in the short

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term, and target our long-term product plans to stay far ahead of the competition. Given

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unfettered access to Apple’s recent internal market research, I have no doubt that Apple’s

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competitors would use it as described above, resulting in serious competitive harm to Apple.

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5.

Because of the extreme sensitivity of this product research information,

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distribution is very tightly controlled within Apple. In fact, no internally conducted surveys of

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Apple customers are allowed to circulate outside a small, select group of Apple executives. No

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iPhone-related surveys are allowed to be distributed to anyone outside this group without my

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personal express permission, which I regularly refuse. When I do approve further distribution, it

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is almost always on a survey question-by-survey question basis, and even then distribution is

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limited to individuals who have a demonstrated need to know.

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6.

Also included among the documents that Apple seeks to seal are documents

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revealing Apple’s cost, product line details, detailed product-level and model-level profit

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margins, and production capacity. Disclosure of this data would severely harm Apple. Part of

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my responsibilities as Vice President in the Product Marketing department of Apple are to help

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make competitive decisions about what products to offer, with what features, when, and at what

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price points. When we make those decisions, two of the critical components of our decision

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making process are (1) what our customers value, and (2) what are our competitors are offering or

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are likely to be offering in the future. Apple (like other companies) makes an extensive effort and

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invests heavily in getting the best possible information about those factors.

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7.

If I and others in my department had access to my competitors’ precise cost and

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profit data, that would give us a significant competitive advantage. We would know exactly what

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price points to aim for in what markets. It would reveal our competitors’ weaknesses because we

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would know what products have thin or negative profit margins. We could then target those

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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

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additional competitive pressure. It would also reveal the soft spots in the market where our

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competitors are commanding unusually high profit margins. We could target those markets for

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competition too. If competitors gain access to similar information regarding Apple’s cost and

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profit structure, I am confident they will use the information to gain unfair advantage over Apple

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in the marketplace.

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8.

As discussed above, I have reviewed certain Apple documents that the Parties have

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selected as exhibits for this case. I note that they contain detailed cost and profit information,

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units and revenues broken down by market, model, and submodel. This information is extremely

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sensitive. For example, only Apple knows how many 16 GB iPhone 4S devices Apple sold last

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quarter in the United States as compared to 64 GB iPhone 4S devices or 8 GB iPhone 3GS

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devices, and what Apple’s profit margins on each of those products was. Such information is

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contained, for example, in DX 756. If the information contained in the documents I reviewed

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were distributed, however, competitors would know that and would be able to target their product

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offerings at Apple’s most successful and profitable products. It is a treasure trove of competitive

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intelligence.

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9.

Exhibit DX 776 is an example of a recent survey of iPhone buyers which contains

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highly sensitive intelligence on Apple customers and customer preferences worldwide, as

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discussed above. Exhibits DX 777-780 are examples of documents contain highly sensitive

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financial data. For the reasons detailed above, disclosure of these documents would irreparably

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harm Apple’s business.

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I declare under penalty of perjury that the foregoing is true and correct. Executed this
27th day of July, 2012 at Cupertino, California.

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/s/ Gregory Joswiak
Gregory Joswiak

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DECLARATION OF GREGORY JOSWIAK
CASE NO. 11-CV-01846-LHK
sf-3175959

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ATTESTATION OF E-FILED SIGNATURE
I, Michael A. Jacobs, am the ECF User whose ID and password are being used to file this

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Declaration. In compliance with General Order 45, X.B., I hereby attest that Greg Joswiak has

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concurred in this filing.

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Dated: July 27, 2012

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/s/ Michael A. Jacobs
Michael A. Jacobs

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DECLARATION OF GREGORY JOSWIAK
CASE NO. 11-CV-01846-LHK
sf-3175959

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