Apple Inc. v. Samsung Electronics Co. Ltd. et al
Filing
2129
Declaration Reply Declaration Of Marylee Robinson In Support Of Apples Motions For A Permanent Injunction, For Damages Enhancement, For Supplemental Damages And For Prejudgment Interest; And Judgment As A Matter Of Law (Renewed), New Trial, And Amended Judgment [FRCP 50, 59] filed byApple Inc.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 3, # 3 Exhibit 4)(Jacobs, Michael) (Filed on 11/9/2012)
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HAROLD J. MCELHINNY (CA SBN 66781)
hmcelhinny@mofo.com
MICHAEL A. JACOBS (CA SBN 111664)
mjacobs@mofo.com
RACHEL KREVANS (CA SBN 116421)
rkrevans@mofo.com
JENNIFER LEE TAYLOR (CA SBN 161368)
jtaylor@mofo.com
MORRISON & FOERSTER LLP
425 Market Street
San Francisco, California 94105-2482
Telephone: (415) 268-7000
Facsimile: (415) 268-7522
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Attorneys for Plaintiff and
Counterclaim-Defendant APPLE INC.
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WILLIAM F. LEE
william.lee@wilmerhale.com
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)
mark.selwyn@wilmerhale.com
WILMER CUTLER PICKERING
HALE AND DORR LLP
950 Page Mill Road
Palo Alto, California 94304
Telephone: (650) 858-6000
Facsimile: (650) 858-6100
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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,
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Plaintiff,
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.
Case No. 11-cv-01846-LHK (PSG)
REPLY DECLARATION OF
MARYLEE ROBINSON IN
SUPPORT OF APPLE’S MOTIONS
FOR A PERMANENT
INJUNCTION, FOR DAMAGES
ENHANCEMENT, FOR
SUPPLEMENTAL DAMAGES AND
FOR PREJUDGMENT INTEREST;
AND JUDGMENT AS A MATTER
OF LAW (RENEWED), NEW
TRIAL, AND AMENDED
JUDGMENT [FRCP 50, 59]
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REPLY ROBINSON DECL. ISO APPLE’S MOT. FOR PERMANENT INJUNCTION, DAMAGES
ENHANCEMENT, SUPPLEMENTAL DAMAGES, AND PREJUDGMENT INTEREST; AND JUDGMENT
AS A MATTER OF LAW (RENEWED), NEW TRIAL, AND AMENDED JUDGMENT [FRCP 50, 59]
CASE NO. 11-CV-01846-LHK (PSG)
sf-3213371
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I, Marylee Robinson, hereby declare as follows:
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I.
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BACKGROUND
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I am a Director with Invotex Group, located at 1637 Thames Street, Baltimore,
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Maryland 21231. I previously submitted a declaration in support of Apple’s Motion for Judgment
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as a Matter of Law (Renewed), New Trial, and Amended Judgment, and Apple’s Motion for a
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Permanent Injunction and for Damages Enhancements.
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support of those same motions.
I submit this declaration in further
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II.
SUPPLEMENTAL DAMAGES CALCULATIONS
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In Samsung’s opposition to Apple’s request for supplemental damages, Samsung
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argues that Apple’s $50.40 per-sale damages rate based on the jury’s total damages award
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“awards Apple supplemental damages based on amounts the jury never awarded as to any of [the]
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eight products” that remained on sale after June 30, 2012. (Dkt. No. 2053 at 26:22-23.) “For
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instance,” Samsung explains, “Apple’s average includes $143,539,179 the jury awarded on the
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Fascinate (Dkt. 1931), but the Fascinate is not one of the products for which Apple seeks
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supplemental damages.” (Id. at 26:23-25.)
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3.
As discussed in my prior declaration, I calculated supplemental damages based on
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the jury’s verdict as a whole. This approach was more conservative than calculating a per-unit
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rate based only on the eight specific products. As illustrated in Exhibit 1 attached hereto, if
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Apple had calculated supplemental damages using only the eight specific products, as opposed to
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the entire jury award, the resulting per-unit damages figure would have been $50.85, instead of
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$50.40, resulting in an additional $1.07 million in supplemental damages.
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4.
I used all the sales data available at the time of my declaration to prepare the
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projections of future sales of infringing products. As discussed at paragraphs 7 to 12 of my
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declaration, this calculation was intended to serve as an estimate for all infringing products and
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not just the eight products that I used for purposes of the projection.
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REPLY ROBINSON DECL. ISO APPLE’S MOT. FOR PERMANENT INJUNCTION, DAMAGES
ENHANCEMENT, SUPPLEMENTAL DAMAGES, AND PREJUDGMENT INTEREST; AND JUDGMENT
AS A MATTER OF LAW (RENEWED), NEW TRIAL, AND AMENDED JUDGMENT [FRCP 50, 59]
CASE NO. 11-CV-01846-LHK (PSG)
sf-3213371
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5.
Samsung has provided a declaration from Mr. Kerstetter which only includes
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figures on unit sales for the eight products used in the projections, as well as a subsequently
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produced single page with figures for the Galaxy Tab 7.0. I understand that Apple asked for the
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underlying documents created in the ordinary course to verify these figures, as well as all
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infringing and diluting devices, but Samsung has refused to provide them. Discovery in this case
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demonstrates that this information is easily available to Samsung and could be produced. The
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failure to do so is a significant concern given the substantial difficulties that Invotex had in
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getting accurate financial data from Samsung during discovery in this case. It is a further concern
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because I was able to verify that products were being sold by carriers in September in a manner
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that is not consistent with Mr. Kerstetter’s statement. 1 Finally, Samsung’s prior data reflects a
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pattern in which, for some products, sales end for a period and then resume later. 2 Without the
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ability to verify using information prepared in the ordinary course of Samsung’s business, I
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continue to believe that my prior projections are sensible projections of Samsung’s sales of
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infringing products.
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As an alternative, I have updated my projections and calculations using the figures
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provided by Mr. Kerstetter and Samsung. With this information included, my calculation of
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supplemental damages through December 31, 2012 is $101,167,892 (see Exhibit 2).
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resulting daily figure would be $399,196 (see Exhibit 2.3). My calculation of prejudgment
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interest on the supplemental damages would be $770,339 (see Exhibit 3). Further, the alternative
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daily interest accumulated on Apple’s supplemental and verdict damages would be $106,872 (see
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Exhibit 4).
The
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For example, Mr. Kerstetter states that there were zero unit sales in September 2012 of the Galaxy S 4G, but I
was able to verify that carriers were offering the Galaxy S 4G for sale in September 2012. See paragraph 8,
footnote 3, of my September 21 declaration, and Exhibit 12 thereto. (See Dkt. No. 1982-71 ¶ 8 & n.3; Dkt. No.
1982-83.)
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For example, as reflected in Exhibit 2.1 to my September 21 declaration, the Continuum experienced a stop in
sales in February 2011, a restart in sales in March 2011, another stop in sales in October through November
2011, and another restart in sales in December 2011. Likewise, the Indulge experienced a stop in sales in April
through June 2011 and a restart in sales in July 2011. (Dkt. No. 1982-73 at 4.)
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REPLY ROBINSON DECL. ISO APPLE’S MOT. FOR PERMANENT INJUNCTION, DAMAGES
ENHANCEMENT, SUPPLEMENTAL DAMAGES, AND PREJUDGMENT INTEREST; AND JUDGMENT
AS A MATTER OF LAW (RENEWED), NEW TRIAL, AND AMENDED JUDGMENT [FRCP 50, 59]
CASE NO. 11-CV-01846-LHK (PSG)
sf-3213371
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III.
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ENHANCEMENT DAMAGES
A.
Model Reflecting the Benefit of Samsung’s Increase in Market Share from the
Products that Violated Apple’s Trade Dress
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Samsung argues that the model described in Paragraphs 25-30 and Exhibits 7-8 of
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my September 21, 2012 declaration overstates the harm that Samsung’s sale of the trade-dress
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diluting products has caused to Apple. I disagree with those arguments. My calculations include
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a number of conservative assumptions that tend to understate Apple’s harm.
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Most significant among those is the 50% reduction in Apple’s share of available
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units that I used to be conservative and to account for other factors that may affect the rate at
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which Apple would have acquired sales. This adjustment, which was not used in any prior model,
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is sufficient to account for differences in carrier preferences, operating system preferences, price
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or other market considerations as calculated in Mr. Musika’s previously disclosed model of
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Apple’s lost profits used at trial. In the absence of this 50% adjustment, the model suggests that
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Apple would have lost more than $1.4 billion in lost profits.
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Another conservative assumption is the use of unadjusted market share for Apple
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in the calculation. This understates the number of units captured by Apple as compared to a
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traditional Mor-Flo analysis and correspondingly reduces the lost profits calculated in the model.
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On average, using a traditional Mor-Flo analysis would have increased Apple’s market share
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from 30% to 37% from Q3-2010 to Q2-2012.
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Samsung claims that the model failed to account for Apple’s capacity. That is
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incorrect. Before submitting my original declaration, I checked my final unit sales figures against
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the capacity calculations prepared by Mr. Musika and used at trial, which showed more than
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sufficient inventory and manufacturing capacity to account for the unit sales included in the
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model.
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Samsung claims the model does not account for non-infringing and non-diluting
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units of Samsung’s smartphones. That is incorrect. First, the revenue and lost profits calculations
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reflected in Exhibits 7 and 8 of my September 21 declaration do not include any unit sales other
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than infringing or diluting units. Second, by using the percent reduction described in paragraph
REPLY ROBINSON DECL. ISO APPLE’S MOT. FOR PERMANENT INJUNCTION, DAMAGES
ENHANCEMENT, SUPPLEMENTAL DAMAGES, AND PREJUDGMENT INTEREST; AND JUDGMENT
AS A MATTER OF LAW (RENEWED), NEW TRIAL, AND AMENDED JUDGMENT [FRCP 50, 59]
CASE NO. 11-CV-01846-LHK (PSG)
sf-3213371
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27 of my September 21 declaration, which was applied only to infringing and diluting units, I
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effectively assumed that Samsung would retain all of its sales of non-infringing and non-diluting
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smartphones.
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smartphones would contribute substantially to increases in Samsung’s market share after 2010.
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Thus, the model assumes that Samsung’s non-infringing and non-diluting
Samsung claims that I failed to account for the impact of hypothetical changes to
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products to design-around Apple’s patents as considered by Mr. Musika. The model differs from
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Mr. Musika’s analysis for two reasons. First, the model I presented seeks to account for what
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Samsung did do beginning in 2010 and through 2012, and it is my understanding that, with very
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limited exceptions involving two of the utility patents, Samsung did not implement alternative
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designs or features that sought to avoid Apple’s intellectual property. Second, the model attempts
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to account for the “head start” or benefit that Samsung obtained by substantially increasing its
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market share following introduction of the products that violated the trade dress, design patents
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and utility patents. The introduction of a hypothetical design-around after the diluting and
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infringing phones were in the marketplace would not impact those downstream benefits and thus
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would not reduce the harm suffered by Apple.
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13.
Samsung claims that the model captures sales for which Apple has already been
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awarded lost profits as a part of the $1,049,343,540 jury award. I disagree. First, it is not
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possible to know with certainty how many units sold by Samsung the jury included in an Apple’s
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lost profits calculation. Moreover, if Samsung is correct in its hypothesis that the jury awarded
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$91 million in lost profits, that award would correspond to less than 300,000 lost unit sales. My
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model predicts Apple would have lost over $700 million in lost profits corresponding to over 2
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million unit sales attributable to Samsung’s dilution, while I understand Apple is only seeking
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$400 million in enhancement damages under the Lanham Act. The model reflects an analysis of
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incremental gains to Samsung and incremental harm to Apple from gains in Samsung’s market
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share beyond the original 5% that existed in the second quarter of 2010.
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In light of the multiple conservative adjustments included in the model, the relative
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rate at which Apple captures sales not made by Samsung in this model is very similar to Mr.
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Musika’s prior analysis. Apple captures approximately 12% in Mr. Musika’s analysis as reflected
REPLY ROBINSON DECL. ISO APPLE’S MOT. FOR PERMANENT INJUNCTION, DAMAGES
ENHANCEMENT, SUPPLEMENTAL DAMAGES, AND PREJUDGMENT INTEREST; AND JUDGMENT
AS A MATTER OF LAW (RENEWED), NEW TRIAL, AND AMENDED JUDGMENT [FRCP 50, 59]
CASE NO. 11-CV-01846-LHK (PSG)
sf-3213371
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on page 40 of his March 22 expert report, and approximately 10% in the model included with my
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September 21 declaration. The methods differ but the results are complementary and consistent.
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After reviewing the criticisms stated by Samsung, I continue to conclude that the
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model reflected in my prior declaration provides an appropriate analysis of the benefit that
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Samsung received and the harm Apple experienced based on the “head-start” Samsung received
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by substantially increasing its market share by selling products that violated the Lanham Act, as
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found by the jury. Market share increases have substantial positive effects on the sales of follow
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on products by the same company and a corresponding negative effect on other competitors. That
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was certainly the case in the present circumstances as reflected in the model. The jury’s verdict
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does not compensate Apple for this harm.
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I declare under penalty of perjury that the foregoing is true and correct and that this
Declaration was executed this 9th day of November 2012, at Baltimore, Maryland.
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_________________________________
MARYLEE P. ROBINSON
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REPLY ROBINSON DECL. ISO APPLE’S MOT. FOR PERMANENT INJUNCTION, DAMAGES
ENHANCEMENT, SUPPLEMENTAL DAMAGES, AND PREJUDGMENT INTEREST; AND JUDGMENT
AS A MATTER OF LAW (RENEWED), NEW TRIAL, AND AMENDED JUDGMENT [FRCP 50, 59]
CASE NO. 11-CV-01846-LHK (PSG)
sf-3213371
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