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

Filing 927

Administrative Motion to File Under Seal Samsung's Motion to Exclude Opinions of Certain of Apple's Experts filed by Samsung Electronics America, Inc.(a New York corporation), Samsung Electronics Co. Ltd., Samsung Telecommunications America, LLC(a Delaware limited liability company). (Attachments: #1 Samsung's Motion to Exclude Opinions of Certain of Apple's Experts, #2 Declaration Declaration of Joby Martin In Support of Samsung's Motion to Exclude Opinions of Certain of Apple's Experts, #3 Exhibit 1, #4 Exhibit 2, #5 Exhibit 3, #6 Exhibit 4, #7 Exhibit 5, #8 Exhibit 6, #9 Exhibit 7, #10 Exhibit 8, #11 Exhibit 9, #12 Exhibit 10, #13 Exhibit 11, #14 Exhibit 12, #15 Exhibit 13, #16 Exhibit 14, #17 Exhibit 15, #18 Exhibit 16, #19 Exhibit 17, #20 Exhibit 18, #21 Exhibit 19, #22 Exhibit 20, #23 Exhibit 21, #24 Exhibit 22, #25 Exhibit 23, #26 Exhibit 24, #27 Exhibit 25, #28 Exhibit 26, #29 Exhibit 27, #30 Exhibit 28, #31 Exhibit 29, #32 Exhibit 30, #33 Exhibit 31, #34 Exhibit 32, #35 Exhibit 33, #36 Exhibit 34, #37 Proposed Order Granting Samsung's Administrative Motion to File Documents Under Seal)(Maroulis, Victoria) (Filed on 5/17/2012)

EXHIBIT 32

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

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APPLE INC., a California corporation,

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Plaintiff,

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vs.
SAMSUNG ELECTRONICS CO., LTD., a
Korean business entity, SAMSUNG
ELECTRONICS AMERICA, INC., a New
York corporation, and SAMSUNG
TELECOMMUNICATIONS AMERICA,
LLC, a Delaware limited liability company,
Defendants.

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SAMSUNG ELECTRONICS CO., LTD., a
Korean business entity, SAMSUNG
ELECTRONICS AMERICA, INC., a New
York corporation, and SAMSUNG
TELECOMMUNICATIONS AMERICA,
LLC, a Delaware limited liability company,

Civil Action No. 11-CV-01846-LHK

Counterclaim-Plaintiffs,
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v.
APPLE INC., a California corporation,
Counterclaim-Defendant.

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Expert Report of Richard L. Donaldson, Esq.
March 22, 2012

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CONTAINS APPLE AND SAMSUNG ATTORNEYS’ EYES ONLY INFORMATION

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EXPERT REPORT OF RICHARD L. DONALDSON
CASE NO. 11-CV-01846 (LHK)

CONTAINS APPLE AND SAMSUNG ATTORNEYS’ EYES ONLY INFORMATION

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royalty—whether settled on by the parties during arms-length negotiations or determined by a

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court—will make it whole in the event of infringement and that it would be a breach the FRAND

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commitment to seek an injunction against a standard implementer. During my career at TI, I

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encountered no licensing negotiation counterparty that held a contrary view.

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G.

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Intel’s Sales of Chipsets to Apple Are Authorized Under Samsung’s
Declared Essential Patents

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104.

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For purposes of this analysis, I have assumed the following facts, which were

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provided to me by Apple:

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Corporation.

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Intel Mobile Communications GmbH (“IMC”) is a wholly owned subsidiary of Intel

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Intel Americas Inc. (“Intel Americas”) is a wholly owned subsidiary of Intel Corporation.

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- 34 EXPERT REPORT OF RICHARD L. DONALDSON
CASE NO. 11-CV-01846 (LHK)

CONTAINS APPLE AND SAMSUNG ATTORNEYS’ EYES ONLY INFORMATION

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105.

Based on my experience in drafting and negotiating patent license agreements,

including in the telecommunications industry,

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It is quite common in

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the telecommunications industry for chipset suppliers to sell their components through

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subsidiaries;
In addition, in my experience, any patent licensing professional would have expected

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106.

Similarly, agreements authorizing the sale of chipsets or other components are

extremely common in the telecommunications and computing

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Moreover, a supplier of downstream products such as a mobile phone handset or

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tablet computer would not expect to pay royalties for a component that it understood to be

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licensed

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principles of patent exhaustion.

due to well-understood

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107.
Many large

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companies have distribution chains that involve using subsidiaries to sell their products. For

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example, a company may have subsidiaries operating in many different countries under the

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- 35 EXPERT REPORT OF RICHARD L. DONALDSON
CASE NO. 11-CV-01846 (LHK)

CONTAINS APPLE AND SAMSUNG ATTORNEYS’ EYES ONLY INFORMATION

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control of the main company. If the licensee wants to avoid limiting its options for distributing

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products it is authorized to sell, it may seek a license that permits it to sell the licensed products

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through whatever channel it wishes. In my experience, the purpose of explicitly authorizing

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“indirect” sales is to permit sales where title changes hands more than once before reaching the

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ultimate customer, such as sales through wholly-owned sales or distribution subsidiaries.

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108.

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- 36 EXPERT REPORT OF RICHARD L. DONALDSON
CASE NO. 11-CV-01846 (LHK)

CONTAINS APPLE AND SAMSUNG ATTORNEYS’ EYES ONLY INFORMATION

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111.

In my experience, licensing negotiators are well aware of the doctrine of patent

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exhaustion and consider its effects when negotiating licenses.
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Provisions under which a licensor authorizes a supplier of components to sell to
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downstream product suppliers and thereby exhaust the licensor’s patent rights are extremely
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common in the telecommunications and computing industries. Indeed component suppliers
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typically insist on such provisions so that they can sell components to downstream customers and
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assure those customers that they need not obtain their own license from the patent-holder that has
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licensed the component supplier.
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V.

Trial Exhibits

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112.

If called as a witness at trial, I may rely on visual aids and demonstrative exhibits

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that demonstrate the bases of my opinions. Examples of these visual aids and demonstrative
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exhibits may include, for example, interrogatory responses, deposition testimony and deposition
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exhibits, as well as charts, or diagrams.
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113.

Other than as referred to in this report, I have not yet prepared any exhibits for use

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at trial as a summary or support for the opinions expressed in this report, but I expect to do so in
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accordance with the Court’s scheduling orders.
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- 37 EXPERT REPORT OF RICHARD L. DONALDSON
CASE NO. 11-CV-01846 (LHK)