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

Filing 2130

Declaration Reply Declaration Of John R. Hauser In Support Of Apples Motion For A Permanent Injunction filed byApple Inc.. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G)(Jacobs, Michael) (Filed on 11/9/2012)

Exhibit C

Highly Confidential - Attorneys' Eyes Only

Page 1
1

UNITED STATES DISTRICT COURT
STATE OF CALIFORNIA SAN JOSE DIVISION
- - -

2
3

4

APPLE INC., A CALIFORNIA
CORPORATION,
Plaintiff,

5

vs.

NO. 11-CV-01846-LHK

6

7

8

9

10
11

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.

12
13
14

15

16

VIDEOTAPED DEPOSITION OF YORAM (JERRY) WIND
HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
Philadelphia, Pennsylvania
Wednesday, November 7, 2012

17
18
19
20
21
22
23
24
25

Reported by:
Maureen Broderick, RPR
JOB NO. 55261
TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 11
1

consumers buy the Samsung phones because of

10:08

2

these features.

10:08

3

BY MR. KUWAYTI:

4

Q

10:08

And I'm trying to get a little bit more

10:08

5

specific to understand what you mean by "drive

10:08

6

consumer demand" and how you understood your

10:08

7

assignment.

10:08

8
9

Were you trying to determine whether

10:08

these features were the sole reason that consumers

10:08

10

bought this product or a substantial reason, or

10:08

11

something else?

10:08

12

MR.

13

THE WITNESS:

RAMOS:

Object to the form.
I didn't look at it as

10:08
10:08

14

either sole or substantial.

15

what extent his study design allows one to

10:08

16

conclude what is the relative importance of

10:08

17

these features in determining consumers'

10:08

18

purchase decisions.

10:08

19

It is basically to

BY MR. KUWAYTI:

20

Q

10:08

10:08

So when you say "relative importance,"

10:08

21

determine whether the extent to which they're a

10:08

22

factor in the decision to purchase the product at

10:08

23

all?

10:08

24
25

A

This, you know, is -- assuming that the

relative importance is zero, then they're not a

TSG Reporting - Worldwide

877-702-9580

10:09
10:09

Highly Confidential - Attorneys' Eyes Only

Page 12
1

factor.

2

at this in terms of -- typically in marketing you

10:09

3

look in terms of what is the relative importance of

10:09

4

different features, benefits in determining consumer

10:09

5

buying decisions.

10:09

6

Q

But we're not looking at 01.

Okay.

We're looking

So if there are some consumers who

10:09

10:09

7

are buying the product, a product because of the

10:09

8

features, are those features driving demand?

10:09

9

A

Well, for these respondents, for these

10:09

10

consumers, it will be one of the factors that

10:09

11

determines their purchase.

10:09

12

how important is it?

13
14
15

The question then is,

10:09
(Reporter clarification.)

BY MR. KUWAYTI:
Q

10:09
10:09

So as you understood the term "driving

10:09

16

demand," which you've used in your report in

10:10

17

paragraph 1, describing your assignment, if you

10:10

18

concluded that there were some consumers who were

10:10

19

buying smartphones or tablets because of these

10:10

20

features that Dr. Hauser tested, then that would

10:10

21

mean that those features were driving consumer

10:10

22

demand to some extent?

10:10

23

A

You cannot look at it without looking at

24

the relative importance.

25

as I mentioned before.

It's not an absolutely 01,
Everything in term of

TSG Reporting - Worldwide

877-702-9580

10:10
10:10
10:10

Highly Confidential - Attorneys' Eyes Only

Page 13
1

consumer behavior is relative.

2

decisions based on a single factor in most cases.

10:10

3

And it's a combination of factors, features,

10:10

4

benefits, experiences, that lead to consumer buying

10:10

5

decision.

10:10

6

Q

Consumers don't make

So let's probe that a little bit.

You say

10:10

10:10

7

consumers don't make decisions based on a single

10:10

8

factor in most cases.

10:10

9

in your decades of work in the marketing field?

Has that been your experience

10:11

10

A

Yes.

10:11

11

Q

And how many factors do consumers

10:11

12
13

typically look at when they're buying a product?
A

It varies all over, depending on the

10:11
10:11

14

product, depending on the situation, depending on

10:11

15

the consumers.

10:11

16

Q

You know, you cannot generalize.

Have you ever encountered a situation

10:11

17

where consumers are buying a product because of just

10:11

18

one reason?

10:11

19

A

10:11

I'm sure there are some consumers in some

20

context that may buy because of a single factor,

10:11

21

especially if the factor is something like a brand

10:11

22

as opposed to a feature.

But I have a hard time

10:11

23

kind of recalling any study that would show that

10:11

24

there are consumers who buy a product or service

10:11

25

because of one product feature.

10:11

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 14
1

Q

2

experience?

10:11

3

A

Correct.

10:11

4

Q

So if there are some consumers for whom

10:11

So that would be very unusual in your

10:11

5

these features were a contributing factor in their

10:12

6

decision to purchase the product, is that -- under

10:12

7

your understanding, would that be driving consumer

10:12

8

demand?

10:12

9

A

Yes, it will qualify as contributing.

The

10:12

10

question then is, how important is it in term of

10:12

11

their decision?

10:12

12

Q

Okay.

10:12

13

A

And, again, I mentioned a number of times

10:12

14

it's not a 01, basically it's a relative

10:12

15

contribution.

10:12

16

you know, how important is it relative to other

10:12

17

factors?

10:12

18

Q

And the question is then empirically,

And how important does it have to be to be

10:12

19

driving consumer demand, in your understanding of

10:12

20

that term?

10:12

A

10:12

21

It has to be a significant enough factor.

22

It will, you know, kind of with the presence of this

10:12

23

factor, a consumer -- this will tilt consumer

10:12

24

preference, and they will buy this specific product

10:12

25

compared to another one that does not have this

10:13

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 19
1

this product versus other products they're

10:18

2

considering.

10:18

Q

10:18

3

So I just want to make sure that we're a

4

hundred percent clear, because to me the two things

10:18

5

that you said there are different.

10:18

6

First, you said that a significant

10:18

7

number of consumers would consider these features to

10:18

8

be significant in their purchase of the product.

10:18

9

And then you went on to say that without these

10:18

features, they will not buy the product.

10:18

10
11

So is that what you were looking to

10:18

12

determine, whether if these features were absent,

10:18

13

consumers would not buy the product?

10:19

14

definition of "consumer demand"?

15

MR.

16

THE WITNESS:

RAMOS:

Is that your

10:19

Object to the form.
Well, that's one operational

10:19
10:19

17

definition of what I meant by "significant."

10:19

18

So then we look at this as two separate things.

10:19

19

When I said "significant contribution," my

10:19

20

next sentence was explaining what "significant

10:19

21

contribution" means:

10:19

22

features, people will not buy; with these

10:19

23

features, people will buy them.

10:19

24
25

that without these

And then you can also obviously try to

10:19

look in term of the question of, you know, kind

10:19

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 20
1

of, how much more would they be willing to pay

10:19

2

for a product with these features versus a

10:19

3

product without these features?

10:19

4

So these are all ways of measuring

10:19

5

operationally the question of or the statement

10:19

6

that I made concerning significant

10:19

7

contribution.

10:19

8
9

BY MR. KUWAYTI:
Q

10:19

How does the, how does measuring the

10:19

10

willingness to pay for a product with these features

10:19

11

relate to your question of determining whether it is

10:20

12

a feature that makes a significant contribution to

10:20

13

the purchaser's decision to purchase?

10:20

14

A

Well, if the people would be willing to

10:20

15

pay more for a product with the feature and actually

10:20

16

buy a product at a higher price, then obviously it

10:20

17

is indicated that this feature is important for them

10:20

18

and, therefore, it affects their willingness to buy

10:20

19

the product.

10:20

Q

10:20

20

To put it into a concrete term in terms

21

of -- let's say I'm buying a BMW and there are three

10:20

22

things about that BMW that really appeal to me above

10:20

23

everything else.

10:20

24

that I think it's the best-looking car out there on

10:20

25

the market.

10:21

One is the brand.

One is the fact

And the other is that I think

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 21
1

technically it's a terrific car.

2

leading to my decision to buy the product.

3

And all three are

But, you know, I probably would

10:21
10:21
10:21

4

still -- I would still buy that product if

10:21

5

technically it wasn't quite as good because I think

10:21

6

it looks great and it's a BMW.

10:21

7

that scenario that the fact that the product is

10:21

8

technically good is something that is driving my

10:21

9

demand for the car?

10:21

10

A

Would you say in

Well, again, @consumer evaluation are

10:21

11

never done in abstract of other brands and other

10:21

12

options in the marketplace.

So the question is with

10:21

13

respect to the brand name, how do they value it, the

10:21

14

BMW versus Porsche, Mercedes and others; how they

10:21

15

evaluate the design, the look of the BMW versus

10:22

16

others; and how do they value the technical features

10:22

17

of the BMW versus other cars.

10:22

18

evaluation.

19

It's a relative

10:22
And then if you're giving me --

10:22

20

basically in your scenario it sounded like there are

10:22

21

two BMW cars:

10:22

22

superior technology; second option seems to be same

10:22

23

brand, same look, but not as good a technology as

10:22

24

the first one; and then the consumer in the real

10:22

25

world will make a choice, then, between these and

10:22

One which is a brand look and

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 25
1

and toward experience and away from features.

2

10:26

Features are actually, in increasing

10:26

3

number of studies, are becoming less and less

10:26

4

critical factors in consumer purchases behavior.

10:26

5

And whether you look at a combination of features,

10:26

6

services, benefits, solution, the experience, look

10:26

7

at the totality of this, consumer buying decision is

10:26

8

a combination of a number of these and rarely, if

10:27

9

ever, a factor of one factor, let alone one feature.

10:27

10

Q

So if the test for driving consumer demand

10:27

11

were whether this one factor was the sole item

10:27

12

leading you to the -- leading a consumer to purchase

10:27

13

a product, that test would almost never be met?

10:27

14

MR.

15

THE WITNESS:

RAMOS:

Object to the form.

10:27

I don't think I ever said

10:27

16

that the requirement needs to be a sole

10:27

17

determinant.

10:27

18

BY MR. KUWAYTI:

10:27

19

Q

Right.

10:27

20

A

I think from the beginning I emphasized

10:27

21

we're talking about relative importance.

22

question then is, is the relative importance strong

10:27

23

enough, significant enough to tilt the decision?

10:27

24

when you're confronted with your two BMWs, the one

10:27

25

great brand, great look, superior technology, and

10:27

TSG Reporting - Worldwide

877-702-9580

And the

10:27

So

Highly Confidential - Attorneys' Eyes Only

Page 26
1

the second which is the same brand, the same look,

10:27

2

but somewhat less kind of sophisticated or less good

10:27

3

technology, you know, kind of -- does the difference

10:28

4

in technology between the two change your decision?

10:28

5

And you'll decide, no; now that the level of the

10:28

6

technology is below, it's not good enough and I will

10:28

7

now look at other options in the marketplace.

10:28

8
9

Q

Right.

And I think, I think I understand

what you're saying.

But if the test for whether

10:28
10:28

10

something were driving consumer demand is whether

10:28

11

that was the sole determinant of the reason to

10:28

12

purchase the product, that test could almost never

10:28

13

be met in your experience?

10:28

14

MR.

15

THE WITNESS:

RAMOS:

Object to the form.

10:28

I would find it kind of

10:28

16

strange to find a factor that is a sole

10:28

17

determinant.

10:28

18

mentioned before of a brand name, that a brand

10:28

19

name represents a totality of images,

10:28

20

associations, perceptions of a consumer of the

10:29

21

brand; and a consumer may decide, you know, BMW

10:29

22

is such a terrific brand; I will just go ahead

10:29

23

and buy a BMW kind of basically because, in

10:29

24

their mind, if you probe further, the BMW is a

10:29

25

very rich set of association with them.

10:29

Perhaps with the exception I

TSG Reporting - Worldwide

877-702-9580

So if

Highly Confidential - Attorneys' Eyes Only

Page 27
1

you probe further for the association, you'll

10:29

2

find out; and one of them may be technology.

10:29

3
4
5

BY MR. KUWAYTI:
Q

Okay.

10:29
Did you try to do your own conjoint

analysis in this case?

10:29
10:29

6

A

No.

10:29

7

Q

Did anybody on your team try to do an

10:29

8

analysis or a conjoint analysis?

10:29

9

A

Not that I know.

10:29

10

Q

Are you aware of anybody on your team or

10:29

11

not on your team that tried to replicate all or any

10:29

12

part of Dr. Hauser's survey with survey respondents?

10:29

13

A

Not that I know.

10:29

14

Q

Did you consider doing another survey

10:29

15

to -- let me step back.

16

10:29

You point out in your report that, in

10:30

17

your opinion, there are a number of design flaws

10:30

18

with Dr. Hauser's survey.

Did you consider doing

10:30

19

another survey in revising some of those flaws to

10:30

20

see what would happen?

10:30

21

A

No.

We didn't have time.

This was very,

22

you know, time-compressed.

23

could have designed a survey in this time period.

24

Q

25

And there was no way I

to do that?

About how much time would have been needed

10:30
10:30
10:30
10:30
10:30

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 28
1

A

You need, you need time to kind of design

10:30

2

a survey carefully and monitor it with the field and

10:30

3

analyze the results.

10:30

4

probably a meaningful conjoint analysis study will

10:30

5

be about six to eight weeks.

10:30

6

and this assumes that I had the time, and I did not

10:30

7

have the time to devote to this.

10:30

8
9

Q

Okay.

The fastest you can do

And the question is --

So if you didn't have anything else

10:31

on your plate, sounds like you could have done it.

10:31

10

It would have been tight, but you could have done

10:31

11

it?

10:31

12
13
14
15
16

MR.

RAMOS:

Object to the form.

BY MR. KUWAYTI:
Q

10:31

In the time since you were approached by

Samsung.
A

10:31

10:31
10:31

Yeah.

I was not asked to do the design,

10:31

17

nor did I propose it because I basically had many

10:31

18

other commitment and could not have done it.

10:31

19

Do you know if Dr. Sukumar tried to do his

10:31

20

own conjoint survey testing these patented features,

10:31

21

the ones that were tested in Dr. Hauser's?

10:31

22
23
24
25

Q

A

I heard his name, but I have no idea what

he did.
Q

10:31
10:31

Are you aware of any consideration that

was given by Samsung to replicating Dr. Hauser's

TSG Reporting - Worldwide

877-702-9580

10:31
10:32

Highly Confidential - Attorneys' Eyes Only

Page 29
1

survey and modifying it to correct any of the flaws?

2
3

A

No, I have not heard of anything like

this.

10:32
10:32
10:32

4

Q

In Paragraph 9 of your report --

10:32

5

A

Yes.

10:32

6

Q

-- you describe your experience with

10:32

7

conjoint analysis.

10:32

8

A

Correct.

10:32

9

Q

A number of the articles that you or

10:32

10

studies that you reference here are 35 years old or

10:32

11

older than that.

10:32

12

A

Are they still relevant today?

Well, if you go back to the original book

10:32

13

that Paul Green, Dr. Rao and I wrote, there's the

10:32

14

first book on conjoint analysis, it studies a lot of

10:32

15

the principles that still kind of hold.

And a lot

10:32

16

of the studies that were used, like if you look at

10:33

17

the Courtyard by Marriott, the design had been

10:33

18

replicated by Courtyard by Marriott a number of

10:33

19

times over the years following this.

10:33

20

is still applicable.

21

And the design

10:33

So the idea of some of the approaches

10:33

22

we used in like hybrid conjoint analysis and others

10:33

23

are still very relevant and are still being used

10:33

24

today.

10:33

25

Q

Are there any of the articles that you

TSG Reporting - Worldwide

877-702-9580

10:33

Highly Confidential - Attorneys' Eyes Only

Page 54
1
2

number will be five, five different measures.
Q

Now, in any of the real-life studies that

11:11
11:11

3

you've done with conjoint analysis, did the people

11:11

4

taking the survey use actual dollars as part of the

11:11

5

survey?

11:11

6

A

I don't recall actual dollars, but the way

11:11

7

that the majority of my studies are designed, it's

11:11

8

typically focused on indicating the likelihood of

11:11

9

buying a product or service or whatever we're

11:11

10

looking at as opposed to just selecting kind of

11:12

11

basically a choice-base conjoint.

11:12

12

So we're looking at the likelihood of

11:12

13

buying.

And we are setting the, the setting in term

11:12

14

of the framing of the questions in a way that try to

11:12

15

make it as realistic as possible within the, kind of

11:12

16

the budget constraint of the individuals involved.

11:12

17

But these are hypothetical transactions

11:12

18

that the consumer is making; they're not actually

11:12

19

paying with actual dollars for the choices, right?

11:12

20
21
22

Q

A
correct.
Q

Correct.

In most of these cases, that's

11:12

But you're working --

11:12

In fact, in every case that you've been

11:12

23

involved in, it's been a hypothetical transaction.

11:12

24

You've never done a conjoint survey involving actual

11:12

25

dollars where consumers had to spend from money that

11:12

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 55
1
2

they had in making these choices, right?
A

I'm trying to kind of recall the different

11:12
11:13

3

studies we've done over the years.

4

would agree that the vast majority of the studies

11:13

5

are not asking for real dollars.

11:13

6

Q

I definitely

You can't remember even one that you've

11:13

11:13

7

ever done -- out of all the conjoint analyses that

11:13

8

you've done, you can't remember even one, sitting

11:13

9

here today, where the consumers used actual dollars?

11:13

10

A

Actually I can remember one.

11:13

11

Q

One.

11:13

12

In how many years you've been doing

this, 35, 40?

11:13

13

A

Since 1970.

11:13

14

Q

So in over 40 years of doing these

11:13

15

studies, there's one that you can remember where

11:13

16

consumers used actual dollars; otherwise, it was

11:13

17

hypothetical transactions?

11:13

18

A

Well, the way we addressed the realism is

11:13

19

through the framing of the question, not by giving

11:13

20

them real dollars.

11:13

21

Q

And my question, Dr. Wind, is in over 40

11:13

22

years of doing these conjoint analyses, you can only

11:14

23

remember one that you've done where consumers used

11:14

24

actual dollars?

11:14

25

A

But actual dollar is not the only way to

TSG Reporting - Worldwide

877-702-9580

11:14

Highly Confidential - Attorneys' Eyes Only

Page 56
1

assure the reality and the realism of the task as

11:14

2

opposed to play money.

11:14

3

Q

Great.

So you don't need to use actual

11:14

4

dollars in a conjoint survey to ensure the reality

11:14

5

and accuracy of the task and results, right?

11:14

6
7
8
9

A

Correct.

I did not say that you have to

use real dollars.
Q

11:14
11:14

And, in fact, you're not alone in this.

11:14

It's not as though you're the only person out there

11:14

10

who is not using actual dollars.

11:14

11

extremely rare for anybody to use actual dollars in

11:14

12

a conjoint analysis, right?

11:14

In fact, it's

13

A

Correct.

11:14

14

Q

And despite that, conjoint analyses are

11:14

15

used, as you said, all the time and are a fixture in

11:14

16

the commercial world and real-life decisions are

11:14

17

based on them?

11:14

18

A

Because the real dollar is not the measure

11:14

19

of the realism.

20

market reality and allow consumers to make

11:15

21

meaningful decisions depends on the framing of the

11:15

22

question and the context you're providing them.

11:15

23

Q

Right.

The measure of does it represent

And the fact that real dollars are

11:14

11:15

24

not used is not something that impacts the accuracy

11:15

25

or reliability of the study?

11:15

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 57
1

A

Correct.

Real dollars is not the factor.

11:15

2

The real factor is the realism of the framing of the

11:15

3

questions.

11:15

4
5

MR. KUWAYTI:
hour.

We've been going about an

Do you want to take a break?

6

THE WITNESS:

7

VIDEO OPERATOR:

Real quick.

11:15
11:15
11:15

This ends Videocassette

11:15

8

Tape No. 1 of the November 7, 2012 videotaped

11:15

9

deposition of Dr. Jerry Wind.

11:15

10

We're off the video record at 11:16 a.m.

11:15

11

(Brief recess.)

11:15

12

VIDEO OPERATOR:

This begins Videocassette

11:29

13

No. 2 of the November 7, 2012 videotaped

11:29

14

deposition of Dr. Jerry Wind.

11:29

15

We return to the video record at

11:29

16

11:29 a.m.

11:29

17

BY MR. KUWAYTI:

11:59

18
19

Q

If you turn to paragraph 12 of your expert

report in this case, Dr. Wind.

11:29
11:29

20

A

(Witness complies.)

11:29

21

Q

It is entitled Materials Reviewed and

11:29

22

Research Team.

11:29

23

A

Yes.

11:29

24

Q

And it describes, it says that in

11:29

25

appendix B to your report you list materials that

TSG Reporting - Worldwide

877-702-9580

11:30

Highly Confidential - Attorneys' Eyes Only

Page 58
1

were reviewed and/or relied upon.

2

is, are those materials that you reviewed personally

11:30

3

or does it include materials that you reviewed and

11:30

4

that your team may have reviewed that you didn't

11:30

5

see?

11:30

6
7

A

And my question

Let me look at appendix B, and I'll let

you know in a minute.

11:30

11:30
11:30

8

Q

Sure.

11:30

9

A

I think I've looked at all of these items

11:30

10

listed on appendix B.

11:30

11

Q

You looked at them personally?

11:30

12

A

Yes.

11:30

13

Q

So let's turn to appendix B.

11:30

14

A

(Witness complies.)

11:31

15

Q

And it lists, there's a category of legal

11:31

16

documents that you reviewed.

17

the declarations that were submitted with Samsung's

11:31

18

opposition to this motion for a permanent

11:31

19

injunction.

11:31

20

Dr. Van Dam, the declaration of Dr. Gray.

And it lists some of

Do you see that?

The declaration of

11:31

11:31

21

A

Right.

11:31

22

Q

And you reviewed those, right?

11:31

23

A

Briefly skimmed them.

11:31

24

Q

There's also a declaration from a

11:31

25

Dr. Erdem, E-R-D-E-M.

Did you review her

TSG Reporting - Worldwide

877-702-9580

11:31

Highly Confidential - Attorneys' Eyes Only

Page 75
1

of the factors but not for the other that created

11:53

2

the bias that I'm reporting on.

11:53

3
4

Q

And in those animations -- you viewed the

animations, right?

11:53
11:53

5

A

Yes, I did.

11:53

6

Q

And in the animation relating to the '163

11:53

7

patent, the non-infringing alternative that

11:53

8

Dr. Hauser presented was, in fact, exactly the

11:53

9

non-infringing alternative that you describe in your

11:53

report, wasn't it?

11:53

10
11

A

And the '163 is -- I must tell you, I

11:53

12

think I found it very confusing the way the

11:53

13

animation was.

11:53

14

study, which I actually do not mention specifically

11:53

15

in the report, is that there was basically no way

11:53

16

that Dr. Hauser can actually tell if the consumer

11:54

17

really understood the stimuli that they were

11:54

18

presented with.

11:54

19

beginning, but he really does not -- could have done

11:54

20

very easily, to ask each respondent to test to what

11:54

21

extent they really understood the context of this.

11:54

22

And I still viewed this animation a

11:54

And one of the big problems with the

He relied on a pretest in the

23

few times to try to figure out what '163 patent is.

11:54

24

Very confusing where presenting it.

11:54

25

Q

And part of the purpose of the pretest is

TSG Reporting - Worldwide

877-702-9580

11:54

Highly Confidential - Attorneys' Eyes Only

Page 76
1

to make sure that respondents were understanding the

11:54

2

survey, right?

11:54

3

A

Yes.

But pretest is no replacement to --

11:54

4

in a correct survey to include another question.

5

could be done very, very simply to ask the

11:54

6

respondent for their understanding of the features.

11:54

7

An open-ended question could have easily been

11:54

8

inserted once the people saw this stimuli to say,

11:54

9

you know, What is your understanding of the specific

11:54

10

features we just discussed?

11:55

11

line.

14

Or something along this

This was not done.

12
13

It

11:55

And we have no idea to what extent
the consumers really understood what they saw there.
Q

11:54

And let me go back to my question, which

11:55
11:55
11:55

15

is the non-infringing alternative that Dr. Hauser

11:55

16

presented in those video animations for the '163

11:55

17

patent is, in fact, exactly what you describe in

11:55

18

your report as the Samsung design-around, the user

11:55

19

double-taps, zooms back out; and if they want to

11:55

20

recenter, they double-tap on that part of the screen

11:55

21

at that point?

11:55

22

A

For '163, if consumer understood it, yes.

11:55

23

Q

Okay.

11:55

And then for blue glow, for the

24

rubber-banding patent, do you recall the

11:55

25

non-infringing alternative that Dr. Hauser presented

11:55

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 77
1

in the video the animations?

11:55

2

A

3

thing.

4

which is totally different implication than coming

11:56

5

with an elegant, little, blue glow in the corner

11:56

6

when you touch it as opposed to this warning sign of

11:56

7

red all over, red frame.

11:56

8

fair representation of the infringing alternative.

9

Q

Yeah.

He presented totally different

He presented red, complete border of red

So I don't think this is a

So Dr. Hauser presented a non-infringing

11:55
11:56

11:56
11:56

10

alternative that had a glow of light around the

11:56

11

entire screen when you get to an edge, and Samsung's

11:56

12

non-infringing alternative is to have a glow of

11:56

13

light just around one side of the screen, right?

11:56

14

MR.

15

THE WITNESS:

RAMOS:

Object to form.

11:56

Yes, but with one kind of --

11:56

16

you omitted one very important factor, that the

11:56

17

Samsung is light blue and the Dr. Hauser kind

11:56

18

of presentation of this is strong-red glow

11:56

19

around the entire frame, which sends a totally

11:56

20

different signal and is not an appropriate kind

11:56

21

of replacement for the Samsung approach.

11:56

22
23
24
25

BY MR. KUWAYTI:
Q

And why is it a totally different signal,

in your opinion?
A

11:57
11:57

It's a different stimulus.

TSG Reporting - Worldwide

When you look

877-702-9580

11:57

Highly Confidential - Attorneys' Eyes Only

Page 78
1

at the light-blue glow that you get when you get to

11:57

2

the end, compare it to this red frame, it's a

11:57

3

totally different stimulus.

11:57

4

consumers would react to the blue glow.

5

Q

And we don't know how

So your position is that Dr. Hauser needed

11:57
11:57

6

to present exactly the Samsung design-around to do

11:57

7

this test?

11:57

8
9

MR.

RAMOS:

Object to form.

BY MR. KUWAYTI:

10

Q

11:57
11:59

To value, to determine how people value

11:57

11

the '163, you have to present precisely the same

11:57

12

design-around that Samsung chose to implement?

11:57

13

A

Well, he should have done a few things.

11:57

14

He should have, number one, tried to represent

11:57

15

accurately in the videos the alternative that

11:57

16

Samsung used and make sure that consumers understand

11:58

17

them.

11:58

18

Two, and most importantly, in the

11:58

19

stimuli, the screens, the 16 screens that each

11:58

20

respondent saw, it would have been very important to

11:58

21

include, not kind of to cross over basically to say

11:58

22

or no feature, but rather to present the

11:58

23

alternative.

11:58

24
25

So I think the problem is much more
serious with respect to the 16 screens that

TSG Reporting - Worldwide

877-702-9580

11:58
11:58

Highly Confidential - Attorneys' Eyes Only

Page 79
1

consumers saw and not just the correction of the

11:58

2

videos that people saw once at the beginning.

11:58

3

don't know what they understood it to mean.

4

Q

We

Do you know how they would access the

11:58
11:58

5

videos from that screen of 16 if they wished to see

11:58

6

them again?

11:58

7

A

11:58

8
9

They could have clicked, but we have no

idea if they did actually watch it or not.
Q

Right.

11:58

So they -- if they were confused,

11:58

10

so the alternative was presented to them, explained

11:58

11

to them at the beginning, and then they were the 16

11:58

12

in the screen, and if they were confused or couldn't

11:59

13

remember what that alternative was, they could click

11:59

14

on the link and be shown the video again, right?

11:59

15

That's your understanding?

11:59

16

MR.

17

THE WITNESS:

RAMOS:

Object to form.
That's my understanding.

11:59
11:59

18

But basically this assumes that respondents and

11:59

19

Internet panel will take the time to do it.

11:59

20

And it also assumes that this will have more of

11:59

21

an impact on them than what they're seeing in

11:59

22

front of them, which is the stimulus, and the

11:59

23

stimulus screens that basically presented

11:59

24

clearly that the alternative is not having

11:59

25

these features at all.

11:59

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 80
1
2

BY MR. KUWAYTI:
Q

11:59

Do you know, Dr. Wind, whether at the time

11:59

3

Dr. Hauser constructed his survey these

11:59

4

design-arounds were in the marketplace?

11:59

5
6
7

A

I don't know.

I don't know the exact time

when they were lunched.
Q

12:00
12:00

So your report actually does not make

12:00

8

mention of the fact that Dr. Hauser presented these

12:00

9

non-infringing alternatives in the video animations,

12:00

does it?

12:00

10
11

A

Correct.

Might have been oversight.

I

12:00

12

focused primarily on what I considered to be the

12:00

13

most important factors, which are the screens, the

12:00

14

16 stimuli screens.

12:00

15

Q

You didn't explain that to the Court,

12:00

16

that, in fact, when you say he didn't -- you say

12:00

17

here his non-infringing alternatives were to remove

12:00

18

the features from the device; you did not in your

12:00

19

report explain to the Court that, in fact,

12:00

20

non-infringing alternatives were presented for each

12:01

21

of the three patents in detail in video animations

12:01

22

to the respondents of this survey, right?

12:01

23
24
25

MR.

RAMOS:

Object to the form.

BY MR. KUWAYTI:
Q

12:01
11:00

Yes or no?

TSG Reporting - Worldwide

12:01

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 81
1

A

Correct.

I did not.

I did not mention

12:01

2

it.

3

understanding here and my view is that the two

12:01

4

problems that were mentioned before, that the

12:01

5

animation, we don't know how clear it was to the

12:01

6

respondent and, two, that the critical 16 screens

12:01

7

did not include any reference to alternative

12:01

8

designs.

12:01

It can easily be corrected.

9
10

But, again, my

(Reporter clarification.)
BY MR. KUWAYTI:

11

Q

12:01

12:01

Yeah.

12:01
And that's a different problem than

12:01

12

you what describe in your report because here we're

12:01

13

quibbling about whether Dr. Hauser needed to not

12:01

14

just show consumers a detailed animation at the

12:01

15

beginning and when he presented the 16 alternatives,

12:01

16

give them a link if they were confused and wanted to

12:01

17

go back.

12:02

18

that biased the survey, and not whether he just

12:02

19

failed to present non-infringing alternatives at

12:02

20

all.

12:02

That's what we're arguing about, whether

21

MR.

22

THE WITNESS:

23
24
25

RAMOS:

Object to form.
I lost you.

I thought that

he did fail --

12:02
12:02

BY MR. KUWAYTI:
Q

12:02

12:02

Let's strike the question.

TSG Reporting - Worldwide

877-702-9580

12:02

Highly Confidential - Attorneys' Eyes Only

Page 82
1

A

-- that he did fail to mention the

12:02

2

alternative design in the 16 screens.

3

16 screens do not mention, when people are looking

12:02

4

at it -- and if you think about this in term of a

12:02

5

typical respondent to an Internet patent all trying

12:02

6

to work as fast as they can to finish this, they're

12:02

7

focusing on the screens.

12:02

8

did not mention the alternatives.

9

referring to.

The

12:02

And the screens basically
That's what I was

If it's unclear, I'd be glad to

12:02
12:02

10

modify it to include this comment on the animation.

12:02

11

BY MR. KUWAYTI:

12:02

12

And this could have been tested, right?

12:02

13

Dr. Hauser presented his results in March of this

12:02

14

year in his report, right?

12:02

15
16
17

Q

A

I did not see his report in March.

I saw

it much later.
Q

Right.

12:02
12:02

But Dr. Sukumar was Samsung's

12:03

18

expert at trial and critiqued Dr. Hauser's survey,

12:03

19

correct?

12:03

20

A

That's my understanding.

12:03

21

Q

And Samsung has had the report since March

12:03

22

of 2012, correct?

12:03

23

A

That's my understanding.

12:03

24

Q

And one way to determine, rather than sit

12:03

25

here and have you speculate as to whether people

TSG Reporting - Worldwide

877-702-9580

12:03

Highly Confidential - Attorneys' Eyes Only

Page 87
1

studies.

2

Professor Hauser study to the extent that he

12:07

3

would allow us to assess the statement we read

12:07

4

at the beginning, the objective of the study.

12:07

5
6

I was asked primarily to evaluate

So realistically I could not have done it.
BY MR. KUWAYTI:

12:07

12:07
12:07

7

Q

You could not have done it?

12:08

8

A

I didn't have the time.

I didn't have the

12:08

time, nor was I kind of asked to try to do any other

12:08

studies in this area.

12:08

9
10
11
12

Q

You didn't have the time because you were

busy doing other things?

12:08
12:08

13

A

Correct.

12:08

14

Q

But in the two months you had, that's more

12:08

15

than enough time to have done such a test?

16

A

Assuming that you kind of draw everything

12:08
12:08

17

out of my life, yeah.

18

responsibilities at the university, and I could not

12:08

19

have devoted the time to do it.

12:08

20

Q

I've major other

Since you've referenced it, why don't we

12:08

12:08

21

turn to the section of your report beginning with

12:08

22

paragraph 46 where you describe these inconsistent

12:08

23

results or nonsensical predictions, as you describe

12:08

24

them.

12:08

25

Now, in paragraphs -- in this section

TSG Reporting - Worldwide

877-702-9580

12:09

Highly Confidential - Attorneys' Eyes Only

Page 88
1

of your report, B1 and 2, what you are describing

12:09

2

here are predictions that you performed using the

12:09

3

results, right?

12:09

4

A

I'm not sure of the use of the word

12:09

5

"predictions."

6

Hauser's approach with respect to the other

12:09

7

scenarios and show basically the results we get are

12:09

8

basically counterintuitive, counter common sense,

12:09

9

nonsensical, whatever term you want to use.

12:09

10

Q

I replicated basically Professor

So when I use the word "predictions," I'm

12:09

12:09

11

actually using your word, sir.

12

paragraph 46 at the very beginning, In order to

12:09

13

further evaluate the reliability and validity of

12:09

14

Professor Hauser's WTP price premium estimates, I

12:09

15

employed the RFC simulation technique underlying

12:10

16

those estimates to evaluate predictions, not

12:10

17

reported by Professor Hauser in his report.

12:10

You say in

12:09

18

A

You're correct.

12:10

19

Q

And then again when you describe Exhibit 9

12:10

20

to your report, you say Exhibit 9 shows specific

12:10

21

predictions of the RFC simulation, right?

12:10

22

A

You're correct.

12:10

23

Q

Okay.

12:10

So you're reporting predictions

24

that you think are nonsensical, not actual results

12:10

25

of the survey, not actual responses from the people

12:10

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 89
1
2

who took the survey?
A

Correct.

12:10
That's what I meant by saying we

12:10

3

replicated his approach.

And if you look at the

12:10

4

actual exhibits, we kind of basically replicated

12:10

5

what he has done, but with respect to these new

12:10

6

scenarios.

12:10

Q

12:10

7

So when you say at page 25 that 32 percent

8

of survey respondents would prefer to pay $199

12:10

9

rather than $99 for the benchmark smart phone -- do

12:11

you see that?

12:11

10
11

A

Yes.

12:11

12

Q

-- you're not saying that 32 percent of

12:11

13

people who took the survey actually preferred to pay

12:11

14

$199 rather than $99 for the benchmark smartphone,

12:11

15

you're saying that you predict, based on the

12:11

16

results, that that would happen?

12:11

17

And the

12:11

18

inference -- to go back to our previous discussion,

12:11

19

and the reason -- one of the reasons you can get it

12:11

20

is, my inference is basically the consumers, when

12:11

21

they were confronted with the actual task of

12:11

22

choosing one of the product on each one of the

12:11

23

screens, that they were inconsistent in their

12:11

24

judgment when they chose the 16 choices they made.

12:11

25

A

Q

Correct.

Using his methodology.

I'm going to ask you, if you can, to try

TSG Reporting - Worldwide

877-702-9580

12:11

Highly Confidential - Attorneys' Eyes Only

Page 90
1

to limit your responses to my question.

2

your responses are quite long, and I understand you

12:11

3

have a view that you want to get out, which is

12:12

4

expressed in the report.

12:12

5

If you could try to focus on the question, I would

12:12

6

appreciate it.

12:12

Some of

But we have limited time.

12:11

7

So when you say similarly in the

12:12

8

second bullet, 43 percent of survey respondents

12:12

9

would prefer to pay $99 rather than $0 for the

12:12

10

benchmark smartphone, you're not saying that

12:12

11

actually happened, that 43 percent of people who

12:12

12

took the survey actually made that choice; you're

12:12

13

saying you predict that that's what would happen?

12:12

14
15
16
17

A

Correct.

Based on Dr. Hauser's

12:12

methodology.

12:12

Q

12:12

And that's the same for all of these

bullets on paragraph 25, right?

12:12

18

A

Correct.

12:12

19

Q

And it's the same for the -- when you say

12:12

20

that you have qualitatively similar predictions

12:12

21

associated with Professor Hauser's tablet analysis,

12:12

22

those are also predictions, not actual results?

12:12

23

A

Correct.

12:12

24

Q

And it's the same in section 2 of your

12:12

25

report; you say you employed the RFC simulation to

TSG Reporting - Worldwide

877-702-9580

12:12

Highly Confidential - Attorneys' Eyes Only

Page 91
1

generate predictions involving pairs of smartphones

12:12

2

where one is clearly superior to another.

12:13

3

section as well, you're not reporting actual

12:13

4

results; you're reporting predictions that you made,

12:13

5

right?

12:13

6

A

Correct; using Dr. Hauser's methodology.

12:13

7

Q

And if we turn back to paragraph 15 of

12:13

In that

8

your report and we look at the bullet, first bullet

12:13

9

at the bottom of the page, you say, As many as

12:13

10

43 percent of survey respondents chose to purchase

12:13

11

smartphones or tablets that were priced higher than

12:13

12

an identical lower-priced device.

12:13

13

Do you see that?

12:13

14

A

Yes, I see.

12:13

15

Q

In fact, that's not an accurate way to say

12:13

16

that, right?

What you're really saying is that you

12:13

17

predict that 43 percent of survey respondents would

12:13

18

choose to purchase?

12:13

19

That's, that's what we actually

12:13

20

state explicitly in the paragraphs that I mentioned

12:13

21

there:

But you're correct;

12:14

22

that should have been more careful in the wording of

12:14

23

this bullet point.

12:14

24
25

A

Q

Correct.

See paragraph 46 to 47.

Right.

If you could go back today, you

would change that, right?

TSG Reporting - Worldwide

12:14
12:14

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 92
1

A

Correct.

12:14

2

Q

Same thing with the next bullet on

12:14

3

paragraph 9 when you say, As many as 35 percent of

12:14

4

respondents preferred, clearly in theory, yet

12:14

5

identically-priced devices, that also isn't really

12:14

6

phrased accurately; you should have said your

12:14

7

prediction is that as many as 35 percent would

12:14

8

prefer?

12:14

9

MR.

10

RAMOS:

THE WITNESS:

Object to form.
Correct.

12:14

The same applies

12:14

Basically, the statement in

12:14

11

to all of these.

12

the paragraphs that explain it, the detailed

12:14

13

paragraphs, 48 to 51, for example, with respect

12:14

14

to bullet point 2 is correct.

And here I

12:14

15

probably should have been more careful in

12:14

16

stating it and stated that a prediction based

12:14

17

on Professor Hauser's methodology yield the

12:14

18

following.

12:14

19

BY MR. KUWAYTI:

11:59

20

Q

Okay.

So here's an important question for

21

you:

22

results, you and your team, correct?

You spend a lot of time with Dr. Hauser's

12:14
12:15
12:15

23

A

Yes.

12:15

24

Q

Did you find that any of the predictions

12:15

25

that you're setting out in sections 1 and 2 of your

TSG Reporting - Worldwide

877-702-9580

12:15

Highly Confidential - Attorneys' Eyes Only

Page 93
1

report, did you find that any of those things

12:15

2

actually happened with the thousands of responses

12:15

3

that you had from these surveys?

12:15

4
5
6
7

MR.

RAMOS:

Object to form.

BY MR. KUWAYTI:
Q

12:15
12:15

Did you find people actually making these

choices?

12:15
12:15

8

MR.

9

THE WITNESS:

RAMOS:

Object to form.
Let me try to understand the

12:15
12:15

10

question.

11

look at the actual unconstrained respondent

12:15

12

judgments to the 16 stimuli.

12:15

13

matrix of the -- 400-some respondents by the 16

12:15

14

kind of stimuli, basically the 16 screens; see

12:15

15

their actual choices; identify profiles which

12:16

16

are consistent with these predictions; and see

12:16

17

to what extent consumer actually in the raw

12:16

18

data chose it?

12:16

19
20

So the question is, then, to try to

So you have a

Is this your question?

BY MR. KUWAYTI:
Q

11:59

You're making my question a lot more

21

complicated than it has to be.

22

second.

Let's back up a

12:16
12:16
12:16

23

A

Okay.

24

Q

Okay.

25

12:15

12:16
You were given the task of

critiquing Dr. Hauser's report, correct?

TSG Reporting - Worldwide

877-702-9580

12:16
12:16

Highly Confidential - Attorneys' Eyes Only

Page 94
1

A

No.

2

Q

And so the first thing that you did was,

I was given the task to evaluate it.

12:16
12:16

3

when you looked at these results before making these

12:16

4

predictions, the first thing you did was you looked

12:16

5

at these results and you looked at, did people

12:16

6

actually make irrational choices, right?

12:16

7

responded to the survey, did any of those people

12:16

8

actually make the wrong choice where they chose a

12:16

9

clearly inferior phone and chose to pay more money

12:16

for it?

12:16

10
11

When they

Did you look at that?

12

A

12:16

We did not look at that -- I thought

12:16

13

that's exactly what I was driving in my previous

12:17

14

answer.

12:17

15

that to look at the actual data for each one of the

12:17

16

respondents, identify -- go back to the actual

12:17

17

stimuli that's presented for each respondent.

18

basically you have for each respondent the 16

12:17

19

screens and in each one of the 16 screens the full

12:17

20

profile of the four products that were presented;

12:17

21

look for specific profiles that match the items that

12:17

22

we identify here as inconsistent and see to what

12:17

23

extent the specific combination existed in the raw

12:17

24

data.

12:17

25

To look at the actual results, it means

So

I have not done this.
What we have done is we primarily

TSG Reporting - Worldwide

877-702-9580

12:17

12:17

Highly Confidential - Attorneys' Eyes Only

Page 95
1

looked at the -- we used the same methodology that

12:17

2

Dr. Hauser used and used this, using exactly the

12:17

3

same approach he did, to try to say what will happen

12:17

4

in other situations.

12:18

5

we report in this series of exhibits.

6

Q

And that's the prediction that

12:18

So you predict that, on page 25,

12:18

7

32 percent of survey respondents would prefer to pay

12:18

8

a hundred --

12:18

9

A

I'm sorry.

10

Q

Page 25, first bullet.

12:18

11

A

Yes.

12:18

12

Q

You predict that 32 percent of survey

12:18

Where are you?

12:18

13

respondents would prefer to pay $199 rather than $99

12:18

14

for the benchmark smartphone, and you're not aware

12:18

15

of a single instance where anybody taking the survey

12:18

16

actually did that?

12:18

17

A

Well, the whole beauty of conjoint

12:18

18

analysis is that you can evaluate combinations

12:18

19

beyond the combinations given to the respondent.

12:18

20
21

Q

Okay.

I understand that you did that.

You went beyond that and you made predictions.

12:18
12:18

22

My question is, you're not aware of

12:18

23

any instance where even one person made the choice

12:18

24

that you're predicting would occur in actual fact?

12:18

25

A

I cannot answer it in terms of we were or

TSG Reporting - Worldwide

877-702-9580

12:19

Highly Confidential - Attorneys' Eyes Only

Page 96
1

not.

2

of them.

3

We didn't do the analysis.

Q

There may be a lot

12:19

We did not do this analysis.

12:19

You cannot report, you cannot sit here

12:19

4

today and report to the Court that there is even one

12:19

5

person who made that kind of irrational choice in

12:19

6

actual fact?

12:19

7

A

But you're missing the point.

12:19

8

Q

Sorry, sir.

12:19

9

Answer yes or no, and then

you can give an explanation.

That's -- that's

12:19

10

right.

11

A

Can you repeat the question, please.

12:19

12

Q

Yes.

12:19

12:19

You cannot sit here today and report

13

to the Court that there's even one person who made

12:19

14

that kind of irrational choice that you're

12:19

15

predicting in your report, in actual fact?

12:19

16

A

Nor can I report to the Court the opposite

12:19

I don't know.

12:19

17

of this.

18

analysis.

19

basically that using the methodology that Dr. Hauser

12:19

20

used, if you apply exactly the same methodology to

12:19

21

other combinations, other profiles, you're getting

12:19

22

nonsensical results.

12:20

23

We have not done this

All I can report to the Court is

And the beauty of conjoint analysis

12:19

12:20

24

is that it allows you to deal with any combinations

12:20

25

of the factors and levels presented and not limit

12:20

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 97
1

them only to the few items in the stimuli.

2

But what you're asking for, we can go

12:20
12:20

3

back and look at the actual individual-level

12:20

4

respondent and see if there were among the random

12:20

5

profiles that Dr. Hauser created, where there were

12:20

6

these type of profiles, and then I'll be able to

12:20

7

report if any or what is the number of respondent

12:20

8

that actually did make these irrational or kind of

12:20

9

basically nonsensical choices in their stimuli.

12:20

10

But this has to be done before he

11

adjusts this to the constraint.

12

at the unconstrained responses.

So we have to look

12:20
12:20
12:20

13

Q

Right.

14

A

Yes, but we didn't do it.

12:20

15

Q

You could have done it; didn't do it?

12:20

16

A

Because I didn't find the necessary -- it

12:20

And you had those?

12:20

17

necessary to do it, given the nature of conjoint

12:20

18

analysis.

12:20

19

analysis, the beauty of this is that ability to

12:21

20

evaluate all possible combinations of factors

12:21

21

involving all the factors and levels without going

12:21

22

back only to the items which are in the stimulus,

12:21

23

say.

12:21

24
25

I think that given the nature of conjoint

But what you're asking for can easily be done.
Q

Now, to make the predictions that you did

make, you had to make certain assumptions, right?

TSG Reporting - Worldwide

877-702-9580

12:21
12:21

Highly Confidential - Attorneys' Eyes Only

Page 101
1

somewhere that he also did a First Choice analysis.

2
3

Q

So you said you replicated exactly the

methodology that Dr. Hauser used?

12:25
12:25
12:25

4

A

Right.

12:25

5

Q

And Dr. Hauser used both Randomized First

12:25

6

Choice and First Choice simulations to test his

12:25

7

model, right?

12:25

8
9

A

No.

The report that he did, the results

12:25

he reports are based on the Randomized First Choice.

12:25

10

There is a footnote that he said that he also did a

12:26

11

First Choice, and he found no difference between the

12:26

12

two.

12:26

13

relying on are the numbers of the Randomized First

12:26

14

Choice and not the First Choice.

12:26

15
16

But the report itself and the numbers he's

Q

The report describes in the footnote that

he also did the first choice.

12:26
12:26

17

A

That's what I just said.

12:26

18

Q

Yes.

12:26

And did you do a First Choice

19

analysis since you were trying to do -- as you have

12:26

20

said many times in your responses, you were trying

12:26

21

to do exactly the methodology that Dr. Hauser used.

12:26

22

Did you also do a First Choice analysis as he did to

12:26

23

see what the difference would be?

12:26

24
25

A

No.

I basically did only the Randomized

First Choice because that's the one he relies on

TSG Reporting - Worldwide

877-702-9580

12:26
12:26

Highly Confidential - Attorneys' Eyes Only

Page 102
1
2

mostly in his report.
So would it surprise you, Dr. Wind, to

12:26

3

find out that if you do your predictions and you

12:26

4

don't use a Randomized First Choice simulation where

12:26

5

you add this random error term, if you just use a

12:26

6

First Choice analysis and stick with the first

12:26

7

choices that people actually made in response to the

12:27

8

survey, that all of these nonsensical results

12:27

9

disappear?

12:27

10
11
12

Q

12:26

A

Would that surprise you?
It would surprise me, but I have no idea

because I have not done it.
Q

12:27
12:27

If that's actually the case, does that

12:27

13

suggest that maybe there's some problem with the RFC

12:27

14

simulation that you did?

12:27

15

A

If there's a problem with the RFC

12:27

16

simulation I did, then there should be a problem

12:27

17

with Dr. Hauser RFC simulation as well.

12:27

18

Q

How hard would it be for you to do, to run

12:27

19

the software to do the First Choice simulation as

12:27

20

Dr. Hauser did?

12:27

21

A

It's doable.

12:27

22

Q

I mean, how long does that take?

12:27

23

A

Not that long.

12:27

24

Q

In a day?

25

A

I don't know.

It can be done.

12:27
We have to look at the

TSG Reporting - Worldwide

877-702-9580

12:27

Highly Confidential - Attorneys' Eyes Only

Page 103
1

setting of the data.

2

done it.

3

Q

It can be done.

I have not

12:27
12:27

You have not done it.

Is one reason why

12:27

4

you didn't do it, Dr. Wind, because you believe that

12:27

5

if you used the Randomized First Choice method, you

12:27

6

were more likely to get this kind of nonsensical

12:28

7

result?

12:28

8
9

A

No.

I had absolutely zero prediction when

I did this analysis.

The idea was basically just to

12:28
12:28

10

see what we get.

I was very surprised with the

12:28

11

results we got.

I did not expect to get so many

12:28

12

nonsensical responses.

13

Q

12:28

Now, in paragraph 52 of your report, you

12:28

14

also talk about the fact that, in your estimation,

12:28

15

the estimates of Professor Hauser of the WTP price

12:28

16

premium associated with the touchscreen features

12:28

17

examined exceed the $152 average smartphone price

12:28

18

paid by survey respondents.

12:28

19

Do you see that?

12:28

20

A

Yes.

12:28

21

Q

Now, let's just be clear how you get to

12:28

22

that result.

23

you're including the three patents that were at

12:28

24

issue in this lawsuit, the features associated with

12:28

25

them, which are rubber band and tap to recenter and

12:29

You're including -- in paragraph 52,

TSG Reporting - Worldwide

877-702-9580

12:28

Highly Confidential - Attorneys' Eyes Only

Page 116
1

willingness to pay relates directly to demand on the

12:56

2

demand curve, right?

12:56

3

MR.

4

THE WITNESS:

RAMOS:

Object to the form.

12:56

Most of the economic

12:56

5

literature I'm familiar with talks about price,

12:56

6

not necessarily willingness to pay.

12:56

7

BY MR. KUWAYTI:

8
9
10

Q

12:56

Well, do you have any doubt that I could

12:56

pull out a half dozen economic textbooks that define

12:56

the demand curve in terms of willingness to pay?

12:56

11

A

No.

And I have no doubt that I can find

12:56

12

half a dozen references in economic literature that

12:56

13

use other measures for price.

So it's one way of

12:56

14

measuring it.

It's not the only way of measuring

12:56

15

it.

12:56

16

If you go purely to the economic, the

12:56

17

economic literature, then typically the focus is on

12:56

18

price versus quantity.

12:56

19

Q

And willingness to pay is one commonly

12:56

20

used definition in economic literature, one commonly

12:56

21

used method in economic literature for measuring

12:56

22

demand?

12:56

23

A

It's one of the measures used.

24

know how common.

25

read all the current economic literature.

I don't

And I don't, you know, kind of

TSG Reporting - Worldwide

877-702-9580

So it is

12:56
12:56
12:56

Highly Confidential - Attorneys' Eyes Only

Page 117
1

used.

12:56

2

The critical question is, what is the

12:57

3

conceptual and the operational definitions of this

12:57

4

term?

12:57

5

Q

It is an accepted definition -- in

12:57

6

economic literature, one of the accepted definitions

12:57

7

for demand is based on willingness to pay, correct?

12:57

8
9

A

Yes.

But the question here -- all it

does, it presents you a concept.

The question, to

12:57
12:57

10

be meaningful, has to go to the next level, two

12:57

11

levels, and ask, one, how is it defined

12:57

12

conceptually?

12:57

13

it defined operationally?

14
15
16
17
18

And, two, and most critically, how is

12:57

Without these two, this is almost a
meaningless-type question.
Q

12:57

How you calculate the willingness to pay,

how you measure it?
A

12:57

12:57
12:57

Well, I think it's quite clear that we're

12:57

19

talking about what is the concept that you have over

12:57

20

willingness to pay and then what is the methodology

12:57

21

that you use to try to measure it.

12:57

22
23

Q

If you look at page 40, page 40 of your

report --

12:58
12:58

24

A

Yes.

12:58

25

Q

-- you have a section of your report that

12:58

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 118
1

I'm going to ask you about that deals with what you

12:58

2

consider to be various design flaws in the scenario,

12:58

3

in Dr. Hauser's surveys.

And those are a subset of

12:58

4

this table, selective use of multi-media animations

12:58

5

in feature descriptions, lack of non-infringing

12:58

6

alternatives in survey design, respondents not

12:58

7

provided with a no-choice option, results are linked

12:58

8

to hypothetical spending scenarios, and survey

12:59

9

excludes several features critical to consumer

12:59

purchase decision.

12:59

10
11

Those are the design flaws that you

12:59

12

pointed to in your opinion in Dr. Hauser's study,

12:59

13

right?

12:59

14

A

Correct.

12:59

15

Q

Now, in the case -- we've already talked

12:59

16

about a couple of these.

17

effect column that you have here.

18

have in the bottom, the last one, survey excludes

12:59

19

several features critical to consumer purchase

12:59

20

decision.

12:59

21

WTP upwards?

12:59

22

A

Correct.

12:59

23

Q

And that's the best you were able to

12:59

But I want to go to the
For example, you

As the effect there, you say, May bias

12:59
12:59

24

conclude on your review of Dr. Hauser's report and

12:59

25

the work that you did is that it may bias the WTP

12:59

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 129
1

willingness to pay, but he's basically trying to

01:12

2

estimate and conclude concerning the impact of these

01:12

3

four -- three features on the demand for the

01:12

4

product.

01:12

5

Willingness to pay is only an

01:12

6

intermediary measure.

7

think critical, the absolutely fatal flow that you

01:12

8

cannot conclude is if you try to estimate anything

01:12

9

as to the impact the features will have on consumer

01:13

10

demand, and you cannot do it without having

01:13

11

alternative brands in the context.

01:13

12
13

Q

It's not as critical.

I

One of your other criticisms is that

Dr. Hauser didn't include a no-choice option --

01:12

01:13
01:13

14

A

Correct.

01:13

15

Q

-- measuring willingness to pay in doing

01:13

16

his survey.

17

01:13
And you've done conjoint analyses

01:13

18

where you didn't include a no-choice option,

01:13

19

correct?

01:13

20

A

If I do not include an explicit no choice

01:13

21

in my studies, I always use as a dependent variable

01:13

22

the likelihood to buy that includes zero, which

01:13

23

would -- basically is I'm not likely to buy it at

01:13

24

all, is the same as no choice, all the way to a

01:13

25

hundred.

01:13

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 130
1

So to rely -- the use of a likelihood

01:13

2

of buying, and especially in the context of a kind

01:13

3

of hybrid design, in a sense, assures that there is

01:14

4

always a no-choice-type option.

01:14

5

Q

Now, Dr. Wind, you know that in the

01:14

6

literature there are many articles that debate

01:14

7

whether including an outside option can bias --

01:14

8

including the outside option can actually bias the

01:14

9

survey and distort the results in some

01:14

circumstances, right?

01:14

10
11

A

I think there is mixed messages, if you

01:14

12

want to, in the literature.

13

that I think exists in this area is the Arzel [ph]

01:14

14

study that I'm referring to that clearly shows that

01:14

15

not including kind of a no option, none of these is

01:14

16

an option, does affect the price elasticity, which

01:14

17

is the most critical kind of input to our discussion

01:14

18

here, because it directly compares what happened to

01:14

19

the price elasticity with and without this option.

01:15

20

Q

The strongest study

But, as you said, there are mixed messages

21

in the literature.

22

disagree with that.

23

A

There are many articles that

01:14

01:15
01:15
01:15

I'm not sure many, but there are articles

01:15

24

that disagree with this in evaluating this area and

01:15

25

Paul Green, Abba Krieger and I have over the years

01:15

TSG Reporting - Worldwide

877-702-9580

Highly Confidential - Attorneys' Eyes Only

Page 131
1

have done a number of studies that addresses this

01:15

2

issue as part of other kind of methodological

01:15

3

studies.

01:15

4

trying to draw any conclusions concerning consumers

01:15

5

likely to buy a product in term of impact their

01:15

6

market share, which we typically look at, you have

01:15

7

to include this option.

01:15

8
9

Q

And the general conclusion is, if you're

Now, Dr. Sukumar did not include an

outside option in his survey that he did?

01:15
01:15

10

A

I don't know.

11

Q

I'm asking you to assume that he didn't.

01:15

12

A

Okay.

01:15

13

Q

We know, let's say for Dr. Sukumar's

01:15

I do not recall his study.

01:15

14

survey, he only included the Samsung-patented

01:15

15

features.

He had no distraction features at all.

01:16

16

It was using -- it was hypothetical transactions.

01:16

17

It wasn't using actual dollars, and there were no

01:16

18

outside options.

01:16

19

combined.

20

So now you have these three things

01:16
Now, knowing those three things

01:16

21

combined, do you think that Dr. Sukumar's study

01:16

22

cannot be relied upon to determine a willingness to

01:16

23

pay for the patented features in the smartphone and

01:16

24

tablet?

Just knowing those three things, is that

01:16

25

enough to say -- for you to say that study is not

01:16

TSG Reporting - Worldwide

877-702-9580