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

Filing 615

Declaration of Erik J. Olson in Support of Apple's Motion to Compel Production of Documents and Things filed byApple Inc.. (Jacobs, Michael) (Filed on 1/11/2012)

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1 2 3 4 5 6 7 8 9 HAROLD J. MCELHINNY (CA SBN 66781) MICHAEL A. JACOBS (CA SBN 111664) JENNIFER LEE TAYLOR (CA SBN 161368) ALISON M. TUCHER (CA SBN 171363) RICHARD S.J. HUNG (CA SBN 197425) JASON R. BARTLETT (CA SBN 214530) MORRISON & FOERSTER LLP 425 Market Street San Francisco, California 94105-2482 Telephone: (415) 268-7000 Facsimile: (415) 268-7522 WILLIAM F. LEE WILMER CUTLER PICKERING HALE AND DORR LLP 60 State Street Boston, MA 02109 Telephone: (617) 526-6000 Facsimile: (617) 526-5000 MARK D. SELWYN (SBN 244180) WILMER CUTLER PICKERING HALE AND DORR LLP 950 Page Mill Road Palo Alto, California 94304 Telephone: (650) 858-6000 Facsimile: (650) 858-6100 10 11 Attorneys for Plaintiff and Counterclaim-Defendant APPLE INC. 12 13 14 UNITED STATES DISTRICT COURT 15 NORTHERN DISTRICT OF CALIFORNIA 16 SAN JOSE DIVISION 17 APPLE INC., 18 19 20 21 22 Case No. Plaintiff, v. 11-cv-01846-LHK (PSG) DECLARATION OF ERIK J. OLSON IN SUPPORT OF MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND THINGS 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., 23 Defendants. 24 25 26 27 28 OLSON DECLARATION ISO APPLE’S MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND THINGS 11-CV-01846-LHK (PSG) sf-3091572 1 I, Erik J. Olson, declare as follows: 2 1. I am a partner at Morrison & Foerster LLP representing Apple in this matter. I 3 have appeared in this action. I have personal knowledge of the facts set forth below, except 4 where I indicate that I am relying on the work of others whom I supervise. If called upon, I 5 would and could competently testify thereto. 6 2. I have been personally involved in Apple’s work to evaluate money damages and 7 other relief in connection with its claims against Samsung. I have substantial prior legal and 8 litigation experience in this area. 9 3. In connection with my work in this case, I have reviewed a substantial number of 10 the documents that Samsung has produced that contain information on various financial metrics, 11 such as sales, cost of goods sold, gross margin, expenses of various types, and operating profit. 12 In addition, I have supervised other lawyers who have reviewed additional documents produced 13 by Samsung. Collectively, these lawyers and I have made a good faith effort to look at the 14 documents relating to this subject matter that Samsung has produced. 15 4. Based on the documents, it appears that Samsung uses an electronic database, as 16 its “system of record” to keep track of accounting and financial data. Such systems store data and 17 can routinely be used to prepare financial statements or financial reports through an electronic 18 interface. Such reports can be prepared either based on a standardized template or prepared based 19 on ad hoc criteria selected by a user. Such systems reduce the need to “print” certain financial 20 data as a hard copy. Nonetheless, they are designed to provide consistent, and often immediate, 21 access to updated reports for members of a company’s finance and management team. 22 5. Samsung’s production includes various, ad hoc documents that contain partial 23 information from Samsung’s financial system, presentations that include financial data from this 24 and other sources, and material that does not appear to tie to Samsung’s accounting database. 25 The reports that Samsung has produced are piecemeal and incomplete. For example, they contain 26 information that reflects only: (a) one or more carriers or vendors to whom Samsung sells phones; 27 (b) one or more accused products; (c) one division of Samsung; (d) some but not all expenses 28 (such as reports reflecting only standard costs or only advertising costs but not other costs of good 1 OLSON DECLARATION ISO APPLE’S MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND THINGS 11-CV-01846-LHK (PSG) sf-3091572 1 sold or other expenses); and (e) limited, often non-standard periods of time (e.g. May to August 2 2009). Alternatively, the documents produced are forecasts and not actual reports for periods 3 prior to their production. The documents are occasionally inconsistent and no single type of 4 report exists in sufficient numbers to cover the relevant period during which infringement has 5 occurred based on Apple’s allegations. 6 6. As a result, the documents produced to date are not sufficient to obtain any rational 7 or consistent picture of Samsung’s sales or profitability due to its infringement. To do so, it is 8 important to have figures reflecting sales, costs, expenses, and various measures of profitability, 9 and it is important to have data that is comprehensive and consistent across time periods and is 10 11 drawn from Samsung’s system of record. 7. Samsung also improperly seeks to limit its production solely to information that 12 Samsung has specifically tied to an individual accused product. While that information must be 13 produced, the vast majority of line items included in Samsung’s income statement are not tracked 14 on an individual product basis. To understand how such expenses should (or should not) be 15 allocated to calculate Samsung’s profits requires a production of Samsung’s financial data on a 16 broader basis. 17 8. Samsung’s production is also lacking the worldwide data needed by Apple. If 18 Samsung already allocated each relevant U.S. expense or deduction to a specific smartphone, 19 worldwide data would be unnecessary. Samsung does not. Thus, experts will need to evaluate 20 how any unallocated expenses should be treated. To do so, Apple’s financial expert will need 21 broader consolidated data on all of Samsung’s sales and expenses in the United States and 22 worldwide. Moreover, the broader data is needed to untangle the highly complex financial 23 structure created by transfer pricing, internal reallocations and other intercompany transfers that 24 artificially increase or diminish the revenues and profits of individual subsidiaries. 25 9. Obtaining consistent and comprehensive data from which to evaluate Samsung’s 26 profitability is one of the goals of Apple’s motion to compel. Despite specific requests, Samsung 27 has not provided this information to date. 28 OLSON DECLARATION ISO APPLE’S MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND THINGS 11-CV-01846-LHK (PSG) sf-3091572 2 1 10. I have also been involved in the collection of information from Apple on financial 2 subjects. Apple has already produced documents taken from its system of record that reflect its 3 sales and various GAAP measures of profitability for accused products during standardized 4 periods, such as Apple’s fiscal year 5 6 7 8 I declare under penalty of perjury that the foregoing is true and correct. Executed this 11th day of January, 2012 at San Francisco, California. /s/ Erik J. Olson Erik J. Olson 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 OLSON DECLARATION ISO APPLE’S MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND THINGS 11-CV-01846-LHK (PSG) sf-3091572 3 1 2 ATTESTATION OF E-FILED SIGNATURE I, Michael A. Jacobs, am the ECF User whose ID and password are being used to file this 3 Declaration. In compliance with General Order 45, X.B., I hereby attest that Erik J. Olson has 4 concurred in this filing. 5 Dated: January 11, 2012 /s/ Michael A. Jacobs Michael A. Jacobs 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 OLSON DECLARATION ISO APPLE’S MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND THINGS 11-CV-01846-LHK (PSG) sf-3091572 4

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