Connie Guglielmo, Forbes Staff
I cover the people and technology driving Silicon Valley
Tech | 8/03/2012 @ 1:28PM |14,528 views
Judge Berates Samsung Over 'Excluded Evidence,' Calls For End To 'Theatrics' In Apple Patent Suit (Live Blog)
Phil Schiller, Apple’s head of worldwide marketing, says Samsung’s copycat designs have hurt iPhone and iPad sales, created confusion for consumers in the market, and co-opted the more than $1 billion Apple has spent to advertise its smartphone and tablet. An Apple email shows that executives at the company believe there is a market for a 7-inch tablet.
Phil Schiller, Apple's global chief of marketing, said that Samsung's devices have hurt iPhone and iPad sales.
The patent dispute between Apple and Samsung resumed today, with the judge presiding over the four-week trial berating Samsung for deliberately trying to taint the jury when it distributed exhibits to the media that it called “excluded evidence” but which the court had already deemed inadmissable at least six times.
There was “a real and possible danger” that Samsung and its attorney John Quinn made a decision to “taint the jury” and that Samsung had made a “willful and deliberate” attempt to get the exhibits before the jury, U.S. District Court Judge Lucy Koh said at the start of today’s session. “I will not let any theatrics or any sideshow distract from what we are here to do.”
While she denied Apple’s request that the court rule in its favor in the patent dispute, Judge Koh said that when the trial is over she will revisit Samsung’s behavior and decide what “other consequences” may be appropriate. Apple had asked for Samsung to be sanctioned as well.
Judge Koh questioned each of the jurors individually and asked if they had read anything about the trial, including news stories, since July 31.
Apple is suing Samsung for $2.5 billion, saying the Korean electronics manufacturer copied its designs for the iPhone and iPad. Samsung has countersued, saying Apple is infringing on its patents and is seeking a cut of the sales of each iPhone and iPad sold.
The trial started July 30 with jury selection, and was followed the next day by 90-minute opening statements by each company. Apple began calling its witnesses the following day.
Judge Koh also told the jury today that the number of objections and reconsiderations of prior motions has been “ridiculous.” Each company must now present their objections while the the jury is seated, with the time used to discuss them deducted from the 25 hours of trial time each side is allowed.
Scott Forstall, head of iOS software at Apple, takes the stand.
As of the start of today’s hearing, Apple has used up 67 minutes of its time, while Samsung has used 34 minutes. It’s Apple’s turn today to call witnesses and it’s going to start by continuing its examination of Phil Schiller, Apple’s SVP of global product marketing. The following is a play-by-play, noting California time. Refresh this page to see updates.
9:15: Phil Schiller returns to the stand. He is being questioned by Apple’s lawyer, Harold McElhinny.
He’s asked to describe how the iPhone came to market. “Apple had been known for years for being the creator of the Macintosh computer…Then we had a big hit with the iPod. This changed everyone’s view inside and outside the company. If you can do the iPod, what else can you do. Lots of crazy suggestions, he says, including cars. “So we were searching for what to do after the iPod.” Looked at cell phones. “We realized at the time cell phones weren’t any good as entertainment devices. So that was one of the things that led” us to think about mobile phones. Apple was working, at the same time, on a tablet. So the decision to make the iPhone and a multi-touch tablet came together at the same time.
What is multi-touch? “The ability to use on one surface more than one finger,” Schiller said. He said no one was really doing anything with multi-touch technology, which would allow for gestures.
Schiller says he was involved in the development of the iPhone and its introduction in January 2007. He’s being asked what is the tehem of the event. “the Iphone was a brand new concept — this new generation of smartphone.” The way Apple decided to explain its use was to talk about its use as mobile phone. The second was as a persona communication device — managing your email, surfing the Web. The third component was managing your entertainment, such as music. he said the energy was “amazing” after the iPhone was released. “We had a huge amount of press” after the announcement.
Where people expressing doubt of the success of the iPhone? “We had many press reports, from press, analysts and even competitors who said we were going to fail,” Schiller said, including Microsoft and Palm. He’s being asked why they thought Apple might fail. “Probably the biggest reason was that Apple had never had a phone before, that we were new into the business and that we would fall on our faces.”
After the launch of the iPhone, Apple deemed it could “go quiet” and let the press write about the device. Before the iPhone’s June 2007 release, Apple started a marketing campaign, including an ad during the Academy Awards announcing the iPhone’s availability in June. Marketing picked up in advance of its official release, “helping the whole world get ready” for the iPhone.
Schiller went to Chicago for the iPhone’s physical release to be part of the rollout scene there. He’s being asked if any of the press about the iPhone looked at the iPhone’s design. Schiller said many stories addressed its design. He’s being asked by reviews of the iPhone by the New York Times, Wall Street Journal and Time magazine.
Schiller is now commenting on how the U.S. Patent Office, after the death of former CEO Steve Jobs, set up an exhibit about Jobs’ innovations. And they used the iPhone to demonstrate
Schiller is now being asked about early iPhone sales. “The sales were extremely good and exceeded our expectations,” Schiller said. He is now showing a chart with cumulative iPhone and iPad sales to date.
How did subsequent models of the iPhone sell in comparison to the original? “Extremely well,” Schiller said. We used to “joke internally” that we could gauge sales and see that all subsequent generations sold as many as all the previous generations combined.
Did Apple follow trends in the smartphone market? What changes did you observe? “We considered the iPhone a new generation of iPhone. We looked at the market as becoming divided in two large category of customers. There were customers who had not yet bought into these new generations of smartphones — feature phones like flip phones, etc. And then customers who were buying the new generation. Schiller says the “iPhone created that new second category of smartphones.”
As more and more customers get the iPhone, you’re trying to sell to a new user or someone who has one and wants to upgrade. He says that customers who get an iPhone are more likely to stick to that product/ecosystem because they’re comfortable with it.
Schiller says that iPhone users tend to buy other iPhones. He calls it the halo effect — the idea of once you buy a product from a company, and you have a good experience, you’re more likely to buy another product from that company.
9:39: Now discussing the introduction and shipment of the iPad. Apple resumed its focus on the iPad after the iPhone launched. The iPad was announced in Jan. 2010 and shipped a few months later. Schiller says there was “huge coverage” of the iPad announcement. “It was a big gamble,” he says of the iPad. “People had tried to make tablet computers before and had failed miserably…So it was considered a dead category and not likely to succeed.” Apple had huge hits with the iPod and iPhone and so to take on a category that people thought would not succeed was a risk to the company, Schiller said.
Schiller is now discussing the criticism about the iPad. “There was great doubt as to whether it would be successful,” Schiller said, describing some of the negative comments about its size, limitations in creating content and the lack of a keyboard. He says that many in the industry doubted that a device that didn’t have a keyboard attached to it could be successful in meaningful numbers.
Schiller now says why the iPhone is success. “No. 1, people find the iPhone design beautiful. No. 2 it’s an incredibly easy to use devie with all of our software…And third because we do such a good job integrating hardware and software. And fourth, we’ve taken the entire experience — and taken responsibility to make all those things work well for the customer.”
On to the iPad, he repeats that its beautiful, easy to use, integrated hardware, software and services. “we’ve actually shown people the value this incredibly beautiful product can have in their lives.” something they had never had before. “That was one of the biggest challenges.
Schiller is now being asked to comment on the iPhone design. There’s a screen up in the courtroom with four geneartions of the iPhone. He says the design is consistent – rounded corners, rectangular, full glass face with a black screen and black area around the screen, colorful icons. You see the dock along the bottom, for which we’re known for.
He’s not asked about the iPad. Repeats that there’s consistency of the design and talks about the design elements used by Apple. “All together, it’s a simple beautiful look that has stayed consistent.” He says that the design has contributed to its success. “I believe that customers value beautiful products and that they can identify with the company that makes them.”
Schiller is now being asked about Apple customer surveys (iPone Buyer Survey) that was done in Q4 in fiscal 2010, the first quarter of fiscal 2011, second quarter of fiscal 2011 and third quarter of fiscal 2011.
What is an iPhone buyer survey? Schiller says that periodically his market research team will do surveys of customers who have bought our products and ask them questions that we’re curious about. It’s a small team that collects industry research and that does web and phone surveys and compiles them. Schiller says these are confidential documents. Why? “One of the tough things in our industry when researching products — you can research your own customers. It’s difficult to research a competitor’s customers. our data that we have gathered on our customers is difficult for others to gather and therefore it’s confidential.
9:56: Schiller is showing a summary of the surveys. The question is to rate the importance of the attractive appearance and design into their decision to purchase the iPhone. Apple was trying to understand from a customer’s perspective was what they felt about the appearance of a device and how important that design was in their buying decision. “This survey result across time and across many customers confirms for me that most customers believe that attractive design is important.”
Schiller says that in the “top two boxes” in compiling the surveys, it found that 85 percent of customers service said appearance and design is important to them.
Apple also asked customers about ease of use – both the physical design, is it easy to understand, but also the software – is it easy to use.
Schiller is now talking about the importance of marketing and advertising to customers. Says advertising is an important way to reach customers. Schiller says “we have a very distinctive and unique approach. WE call t his approach to marketing as “product as hero.” The most important thing we do at Apple is to crate a product, an amazing product, and we want to showcase those products as much as we can. Says that the product is the focal point of the advertising/marketing and you see it most predominantly.
Any special challenges to marketing the iPhone? Because the iPhone was such a new kind of device and people had no idea how it worked, the easiest way was to pick it up and use it. In TV advertising, how do you show that? Schiller says. So it was a challenge in marketing the iPhone. He’s now discussing a video that shows how to use the iPhone and it’s being shown to the jury and courtroom. It’s an early iPhone commercial with someone showing off the features – “This is how you turn it on. This is your music. This is your email. This is the Web. And this is a call on your iPhone.”
Schiller is asked to explain the logic in the 30-second commercial. “You saw that the product is the hero. You can see if very distinctly. You can see how it works” – by clicking and scrolling. He says the ad also shows the iPhone was a great phone, a personal communication device and a great iPod. All three were shown in the ad.
All the iPhone ads are now on a DVD that Apple is trying to move into evidence, including the ad just shown in court. The jury will have the DVD in the jury room. There’s also a chart showing all the ads that ran on TV.
Now on to any special challenges marketing the iPad. Schiller says, “Like the iPhone, the iPad is a device that is brand new. People had no experience with anything like the iPad.” Challenge was to show how this hero product works and what it could do for you. Now going to show a 30-second iPad commercial. “In that brief ad, we wanted you to see the beautiful design, how easy it is to use. That’s its meant for a wide range of users. And to give you a taste of the rich depth of software, to give you a reason “why you might want to have an iPad in your life.”
The court is now being told there is a DVD that has all the iPad commercials in evidence. It will also be available to jurors.
Samsung objects to the DVDs with the ads, though it has no problem with a list of ads being supplied in the form of a chart.
Schiller is talking about which publications it chooses for its ads. Nationwide media that fit into the audience it’s trying to reach. He is commenting on an exhibit that shows some of the print ads for the iPad.
Schiller is now being asked about ‘product placement.’ He says its common practice to get your product places on a TV show, movie and that his team works to get Apple products used by stars. Buzz marketing is a term for a grass-roots marketing effort designed to create excitement outside the normal kinds of advertising, and Schiller says they have a person at Apple who works on that as well.
There is a DVD with clips of TV shows in which Apple products have appeared, as well as a chart that lists all the clips. Samsung again objects to the DVD but not the chart.
A chart is now being discussed that shows Apple’s expenses for U.S. advertising of the iPhone and iPad. How much did Apple spend on iPhone advertising? In 2008, $97.5 million. In 2009, $149.6 million. In 2010, Apple spent $173.3 million. By June 2010, we would have spent three quarters of that — $120 or $130million on iPhone advertising.
As for iPad in 2010, Apple spent $149.5 million in advertising.
Schiller says that the iPad and iPhone are well-known, sought after – signs that the marketing and advertising has been successful.
10:15: Court is now taking a break.
10:36: Court resumes. Judge Koh says that Samsung’s objection to the DVDs being excluded is sustained.
Schiller retakes the stand and is asked if Samsung is a competitor to Apple? “They have many smartphones that compete with us. Schiller says perhaps the best known rival is Samsung’s Galaxy line. He’s asked if Apple and Samsung sell their products through the same channel.
Schiller asked if he keeps track of rival products. Does he recall how he felt when he saw Samsung’s Galaxy? “I was pretty shocked at that appearance of the Galaxy S phone and the extent that it appeared to copy Apple’s products and the problems it would cause for us.”
Why is copying in marketing a problem “When we create marketing, we talk about how we market our product as the hero, how distinct it is…how we’ve kept it consistent. When someone sees a copy – customers can get confused as to who’s product belongs to which company. So we went from having easy to market because it’s so distinct and unique to a challenge because someone has copied us.
Are you opposed to competition? Competition is great. Every day there are companies creating products to compete with us. They create their own unique products, their own unique designs…We let the customer decide who’s right, who has the better products. That’s fair competition.
Is copying fair? Schiller says not at all. Because when you copy or steal the idea of one company’s products, now you’re trading off all the investment, goodwill we’ve created. When you rip that off, you’re trying to take all that benefit on to yourself. You’re taking the hundreds of millions we’ve invested in the our products and all the value we’ve created.
Now Schiller asked about the iPad and what he thought about Samsung’s rival products. “Even more shocked. Well, they’ve done it again. They’re just going to copy our whole product line.”
I think having copycat products in the marketplace makes our job as marketers more difficult, it confuses the customers, diminishes the value that Apple has created and it “dilutes the way customers sees Apple.”
“I absolutely believe it has had an impact on our sales,” Schiller says. “Some customers are choosing to buy a Samsung product because it looks a lot like the iPhone or the iPad.” That also affects then the subsequent purchases because you’re buying into an ecosystem and what other products members of a family may buy “I think it has effects on initial sales as well as related sales.”
10:47: And that’s it for Apple lawyer. Samsung lawyer Bill Price will now question Schiller.
Schiller asked if other companies are allow to put a virtual, or soft, keyboard on a screen and it affects the size of a screen.
Price is saying that if you use a touchscreen, does it allow you to remove a physical keyboard? Schiller says yes.
Samsung is now pointing to LG phones with virtual keyboards and asking if Schiller has seen them.
Samsung points to an internal Apple email, written by a marketing exec named Steve Sinclair, who brings up a marketing challenge. Sinclair’s email says: “It’s tough to approach this with the criteria being ‘first.” I don’t now how many things we can come up with that you could claim we did first. Certainly, we have the first commercially successful versions of many features, but that’s different than launching something to market first. Can we nuance this so it isn’t about shipping a feature first?”
11:00: Schiller is being asked about how Apple designed the iPhone with a large touchscreen with a virtual keyboard and how Apple designed the touchscreen. Now talking about the placement of the speaker and camera on the iPhone and how the corner’s edges are rounded to make it easier for people to take the phones in and out of the pocket. Schiller says there are lots of design reasons for rounded corners, and one of them is certainly moving things in and out of your pocket.
Schiller agrees he was involved in the design of the iPhone and that he considers the phone’s initial design to be unique, beautiful. Schiller reiterates that it’s hard, in advertising, for consumers to tell the difference between phones when they’re seeing them quickly on a highway billboard or on TV.
Samsung is now talking about the price of the iPhone and how much time they spend picking out a smartphone. Schiller says prices is subjective and that some iPhones are free with a service contract.
Samsung asks Schiller if he knows of Samsung’s phones that are supposed to have copied from the iPhone as he makes a point about whether customers can tell the difference between Apple and Samsung products. Schiller says, “Yes, I believe there a number of phones that copied the iPhone…I believe customers can be confused….Again, I was talking specifically about the marketing”and all the confusion that can occur there.
Schiller is being shown a chart comparing an iPhone and a Samsung Continuum phone. Samsung is now talking about the buttons at the bottom of the screens and why Apple has only one button. ”We believe the easiest design for the iPhone is a single button on the home screen.” He says Apple didn’t choose to use four buttons, like the Samsung Android phones with four buttons, because that’s the way the iOS works, while Android uses 4 phone buttons.
Now Schiller is being asked about the design of the iPhone and where the logo is. It’s not on the front of the iPhone, but the logo is on the back. “It’s a small device and there’s already a large logo on the back.”
Schiller says to him, the front of the iPhone is the entire front face of the phone and that it’s one screen.
Samsung is asking Schiller if he thinks consumers can confuse the iPhone and the Continuum? Schiller says there is room for confusion as the Samsung phone more and more resembles the iPhone.
11:15: Now Schiller is being shown an iPhone 3Gs and the Samsung Droid Charge.
Samsung is asking how much Apple is asking for in damages. Schiller says he’s not aware of the financial details of the claims of each individual device. Samsung is also asking him if he’s seen all the Samsung phones in this case. Schiller says yes, and he says that he believes that some consumers may be confused about the devices because Samsung has incorporated iPhone design elements.
Now Samsung is asking about the iPhone Buyer Survey and if they would show why someone bought a Samsung phone Schiller says correct. He’s also asked if Apple would now the reason why someone picked a Samsung. ”You would have to ask them. I don’t do market research for Samsung.”
And the survey doesn’t say anything about Samsung customers and why they may/may have not bought a Samsung phone. Schiller agrees that’s not the purpose of the iPhone User Survey.
Samsung is looking at the iPhone User Survey and asking questions about “the importance of attractive appearance and design.” It says that wasn’t as important as some other features, like usability. Schiller says some features rated higher than appearance, some rated lower.
Now looking at a market research study that shows “reason for coice by OS ownership share in Q10.” This study shows brand model/design/color was a reason for buying a phone by just 1 percent of buyers. Schiller says that’s now how he looked at the survey.
Samsung is asking if iPhone buyers — 78 percent — also use a case or bumper for their iPhone. Schiller agrees. Those cases cover up the bezel, Samsung says. Schiller says it depends on the case. Do you agree that the home button is prominent, consistent and unmistakable and unique part of the Apple design? Schiller says yes.
Is there a single Samsung phone that has a single home button like Apple? Schiller says he’s not aware of any Samsung phone like that.
Samsung is now asking about the ‘channels of trade’ for Apple and Samsung — and it’s displaying a chart with retailers and carriers who carry both companies products. Schiller is being asked if, on a year-by-year basis, he could tell us who carried Apple’s products. He said he never tried to do it on a year-by-year basis but just to show which channels the iPhone is sold in.
Court is now watching a clip from the iPhone introduction in Jan. 2007 in San Francisco, where Jobs is doing a demo of the iPhone (sending a photo) to Schiller.
You believe that the iPhone customers have the experience of sending photos with email? Schiller says yes.
11:37: Schiller is being asked about an Apple internal document that is a teardown of a Samsung phone. Schiller says he has never seen the document before and so the judge says Samsung needs to ask someone else about them
Samsung is now asking that pages from some of Apple’s iPhone user survey be moved into evidence (it’s not going to be the whole document — Apple considers that the whole document a trade secret.)
Schiller is now being asked about the frequency of iPhone design changes. He says that Apple changes its design. Samsung has now asked if there will be design changes in the iPhone 5 (couple of objections on that one). Schiller says he prefers not to talk about confidential future products. Apple lawyer says the iPhone 5 is not a public product and that there has been no discussion/disclosure about future products.
11:45: Samsung has returned to an external survey that Apple bought. Schiller is explaining the terminology and methodology used in the survey. He says there is an overlap in the Apple brand and design and that people associate Apple with great design.
What was theme for the iPhone design? Schiller said, “We were trying to create a new breakthrough design for phone that was simple and beautiful and easy to use. We had a term in Apple called the “lust factor.” Is it so gorgeous that people had lusted after it?”
Now Samsung is asking about the four-button design on a Samsung phones. Schiller says he doesn’t think they’re as beautiful as the iPhone. “I think we have a lustful, gorgeous design in total.”
Schiller is finished and excused, but Apple reserves the right to call him for rebuttal.
11:52:Apple’s Scott Forstall, who runs iOS software, is now being called to the stand. He’s being questioned by Apple’s lawyers.
Forstall says he’s current SVP of iOS. What is iOS? “iOs is the operating system that runs all iPhones, iPad and iPod Touch.” In addition to software, his group also does user interface design for those products and the Macintosh. He says he reports to Apple CEO Tim Cook and is a member of the Executive Team (there are 10 people on the EC).
Forstall says he has about 1,000 people reporting directly to me, but in the matrix organization, there are 2,000 people who interact with him team.
Forstall says he went to Stanford University (undergrad and grad) and has an undergrad degree in symbolic systems that combines computer science, linguistic and other fields. Says he specialized in artificial intelligence. Has a masters in AI.
Forstall is being asked when he met with Steve Jobs. He says he had an interview at NeXT (Steve Jobs company) and that Jobs told him that he could expect the offer from NeXT and they expect that he would take it. This was in 1992. He went to Apple in 1997 when NeXT was acquired by Apple. Forstall said he was a software engineer.
Forstall is being asked about what he did at Apple between 1997-2204. He says he managed operating system software — software that would eventually become Mac OS X, the operating system that runs all Macintosh computers today. “I was one of the people who started the project and created a piece of it. Over time, I was responsible for more and more pieces.” Eventually, Forstall said he took over the whole OS.
Forstall said Apple bought NeXT to advance its OS strategy: “tTe goal is to run all of the machines. We wanted an operating system that could last for another 20 years.” The OS Apple had at the time “didn’t have those legs.” We came up with a strategy for a modern operating system.
12:00. Court is now breaking for an hour for lunch.
1:12: Court resumes. Forstall retakes the stand. He’s asked to talk about the development of the iPhone and iPad.
Says Forstall, “In 2003, we had built all these great Macs and laptops and we started asking ourselves what comes next. One thought we settled on was a tablet…We settled pretty quickly if we could investigate doing that with a touchscreen So we started investigating and building prototypes.”
“In 2004, I remember sitting with Steve and saying we all hated our cell phones. We were asking ourselves – could we use the technology we were using with touch and use that same technology for phone. Something that would fit in your pocket.”
“I’ll never forget — we took that tablet and built a small scrolling list. On the tablet, we were doing pinch and zoom…So we built a small list to scroll on contacts and then you could tap on it to call. We realized that a touchscreen that was the size that would fit in your pocket would be perfect for the phone. So in 2004, we switched over from developing a tablet to developing the iPhone.”
Apple’s lawyer asks Forstall what “pinch” and “scroll” means in context of a touchscreen. He explains.
What was your direct role in the iPhone? In 2004, when we decided to build the iPhone, Steve knew that there would need to be a lot of different groups. Forstall said he was responsible for building the software team. Steve gave him a constraint — couldn’t hire anyone from outside of Apple to work on the interface. But he said I could move anyone from the company into the iPhone team. That was quite a challenge. What I did was find people who were true superstars of the company — amazing engineers — bring them into my office and say, ‘You’re a superstar in your current role…I have an other offer, another option. We’re starting a new project. It’s so secret I can’t tell you what that project is. I can’t tell you who you will work for. ” He adds, What I can tell you is if you chose this new role, you’re going to work hard, give up nights, work weekends for years.
“We wanted to build a phone for ourselves. A phone that we really love. A computer in your pocket…We wanted to bring out something great without anyone else finding out what we’re doing so they wouldn’t leak it.”
Did you have confidence you could succeed? “Not at all,” says Forstall. He says because they took such great people from the company, and if they hadn’t succeeded.
Where was the iPhone created? In a building on Apple campus. Started by locking one floor down. Doors with badge readers. There were cameras. Codenames were colors — the original iPhone was called the “purple project.” I referred to this building as the “purple dorm.” People were there all the time. It smelled like pizza. Put a sign on the front door saying Fight Club because the first rule of Fight Club is you don’t talk about Fight Club. The first rule of the purple project is you dont’ talk about the purple project.”
Forstall says that a lot of the innovation came from the development of the iPhone’s touchscreen and how they tried to move past resistive touchscreen to get to capacitive touch. Apple found a lot of challenges because its software up until that time had been designed for keyboards and the mouse. “Every single part of the design had to be rethought for touch. We started with a brand new UI. That’s one. Second, we didn’t want to have a physical keyboard on here. If you look back to even 2005 when the engineering team started on this, smartphones all had physical keyboard. The most popular one at the time was the BlackBerry. People thought we were crazy.
Another challenge, he says, “we wanted to give people the entire Web, the entire Internet experience. And the Internet is designed for a much larger screen. When a web designer is building a site, they expect a screen like this (gesturing)…We had a small screen. So we wanted to solve the problem of giving people the entire, Internet experience on this device.”
While there were other people doing web on smartphones, he said the WAP technology was a dumbed-down, baby Internet experience.
Forstall is asked: How much investment went into creating the user interface? The investment that went into building a user interface that could fit into this device that you could use with your fingers was “immense.” Forstall says he “devoted years of my life to this” and it was “very, very difficult.”
1:30: Forstall is asked about a patent, on which he is a named inventor (Patent 163). At a general level, Forstall says it covers a lot of things. One example, when you’re browsing the web in a browser like Safari, there are many stories. There are columns of stories, horizontal stories. All these different pieces of content on the web page. What this patent tries to address is how to navigate among the stories through tapping and double tapping. Forstall is showing how it works on an iPhone. “It makes it real simple for use to move around, navigate around the web site by double tapping on what you see.”
Forstall was asked how he came up with it. He says he spent a lot of time on the early prototypes, browsing the web. He says pinching in and out of the stories to get it “just right” took a lot of time. He decided that why can’t the device just do that automatically — just double tap on the story and have it zoom up and center the story…The team went back and worked really hard.
The Apple lawyer is asking how this double tap feature is implemented. Forstall says its built right into the OS. Is it challenging to build in software? Forstall laughs and says yes. “Understanding that structure – and the structure the user cares about – is part of the challenge.”
What is the goal with double tapping? Forstall says it is to “substantially center” the content to the best viewing area on the screen. “Center it where it makes sense but don’t go beyond the edge of a document.”
Do you consider it a significant feature? “Absolutely. I remember what it was like before, during development and after. It allowed me to browse the web “much more fluently.” And we know from our users that browsing the web is one of the things they do on their iPhone. “It allows you to have a dramatically better experience.” Apple did an ad just about this feature. Court is now watching the Apple ad.One of the lines, “It’s just the Internet on your phone.”
1:40:Apple lawyer done questioning Forstall. Samsung lawyer Kevin Johnson is up to question him.
Question: In 2006, your team was concerned that the speed of the processor was going to be too slow compared to the speed of processors used in other phones, including Samsung’s phones. So looking at what your competitor was doing was ok? Forstall agrees.
Samsung says that Apple executives, during development of the iPhone, looked at other rival phones. Do you recall looking at other phones and he mentions a specific model. Forstall doesn’t remember that specific phone. Exhibits are being pulled up.
Samsung is talking about an email exchange involving Apple executives Tony Fadell (who was in charge of most hardware for development of the iPhone), Jon Rubinstein, Steve Jobs, Jonny Ive, Eddy Cue, Jeff Robbin, Greg Joswiak. Jobs makes a comment about a Bang & Olufsen phone and a comment about “this may be our answer.” “This is an example of Apple executives looking to Samsung phones for inspiration during the development of the iPhone?” Samsung asks. Forstall says he’s not sure if Jobs is referring to the phone or has come up with his own solution.
Samsung brings up another internal Apple email, containing a story about Samsung phone. Samsung lawyer says doesn’t it mean that Apple was starting benchmarks against rival phones, like Samsung. Forstall says not necessarily — that Apple was testing call performance — the number of phone calls dropped — against both other phones and other carriers networks. Forstall says the person who sent a note was doing a call drop performance doing a comparison of all phones, including Samsung. And that Apple also said it was buying each of the phones to do feature analysis of how the phones handle calls — and not interface and design, Forstall said.
Are you aware that Apple has done detailed competitive tear downs of rival phones? Forstall said yes.
Now looking at an Apple internal email between Tim Cook, Eddy Cue and Forstall talking about a news story mentioning a Samsung Galaxy tablet. Cue, who wrote the email in Feb. 2011, says there is going to be a market for a 7-inch tablet and thinks it’s a good idea (Huh, we all agree right? And maybe it will be called the iPad mini.)
Samsung lawyer is talking about how patents are granted and does Forstall now that the claims were narrowed in Patent 163 by Apple.
2:03: Samsung is asking about the New York Times web page and how it is an electronic documents and there are other documents embedded within that. Forstall says the way HTML is that there is a structure to the page. It’s not that you have another document embedded in another. Samsung lawyer now switches to discussion about whether Apple invented zooming in or zooming out on a touchscreen. There’s an objection from Apple.
Question: Did Apple invent touchscreens? Forstall says he doesn’t know the extent of Apple’s patents and therefore has to answer I don’t know.
Apple lawyer is returning to an email from Steve Jobs about a Samsung device in which Jobs says “the really screwed this up.” Forstall
Apple lawyer returns to the Samsung Galaxy teardown and asks Forstall to check date. The teardown was done three years after the iPhone
Forstall asked if OK’s to benchmark.”It’s fine to benchmark for performance reasons. It’s not ok to copy and rip something off.”
He’s asked if he told anyone at Apple to copy from Samsung’s designs. “I never directed anyone to go and copy something from Samsung. We wanted to build something great…There was no reason to look at anything they had done.”
Samsung lawyer comes back and tries to make a point that Jobs had said in an Apple email that there was something worthy of copying. Forstall doesn’t agree with that reading of the email — at all.
2:11: Forstall is now excused. Apple is calling its next witness, Justin Denison of Samsung Mobile USA. He’s the chief strategy officer at Samsung Telecommunications America (STA), which is headquartered in Texas.
Apple lawyer William Lee is going through the org chart of Samsung companies. In addition to STA, there’s Samsung Electronics America and there’s a parent company called Samsung Electronics Corporation, or SEC, which is in Seoul, Korea.
STA sells mobile phones and tablets in the U.S. that are manufactured by SEC, Apple asks. Denison says yes. If the parent gives you an instruction or direction about a customer, you are obligated to follow it, correct? Denison says there’s lots of conversations back and forth that could be construed as directions.
Denison acknowledges that he was the corporate representative for STA, SEA and SEC when he gave a deposition in 2011. Among the questions asked, Apple says Denison was asked to comment on the issue of Samsung copying elements of Apple products during the design phase. Denison said he was, though there was certain limitations about what he could address.
Denison says he reviewed many documents to prepare for his deposition. He had presentations, emails, design — some documents he found on his own and some documents that were given to him by Samsung’s lawyers. That includes translated documents from Korea. Denison says yes.
Apple’s Lee says Denison also talked to several Samsung product designers in Korea, who spoke Korean. Some also spoke English. In some cases, an interpreter, provided by Samsung lawyers, was used. Denison agrees to all that.
2:27: Lee is now going to turn to Denison’s deposition. It’s a video deposition and a snippet is being played. Denison is saying that when he talked to Samsung designers, each had told him that they had not considered, studied or drew or copied from Apple’s product designs. Lee is now saying there’s a difference between benchmarking and copying. Denison agrees.
Lee asks if Denison still stands by his testimony as it relates to the products under discussion in the court today. Denison said no, but now maybe he doesn’t know. Samsung’s request for an objection and sidebar is denied by the judge.
Lee is now showing an internal Samsung presentation called “Beat Apple Response” on March 25, 2011. Denison created the presentation, in response to a request from Samsung’s CEO Bill Choi. It starts with a line to develop a strategy to compete with Apple. There’s a line that the Boston Consulting Group came in to Samsung in Nov. 2010 and made a presentation called “Lessons From Apple,” by Neal Zuckerman & Kate McArthy of BCG. The presentation says, “Why you (Samsung) should care about Apple?”
Lee returns to Denison’s presentation, which has a “Recent Apple Analysis projects” page that talks about an iPhone counter strategy in March 2011. Denison says he didn’t author the document or present it.
Now on to another Samsung presentation, this time which Denison says he is the owner of. It’s dated 2012. It says, “Three Horse Race Becoming a Two-horse Race between Apple and Samsung.”
There’s now a discussion going on what Denison can and can’t comment on based on his role as a corporate spokesperson.
2:48: Apple shows a presentation called ”Relative Evaluation Report on S1, iPhone, March 2, 2010, Product Engineering Team, SW Verification Group” and says at the time of this report, the Samsung Galaxy 1 was under development.” Page 53 – Browsing – Web browser. It shows a comparison of the iPhone and S1. There’s a recommendation that Galaxy’s double-tap zoom needs to be improved.
Another page in the presentation is called “Visual Interaction Effect – Icon.” Again, there’s a comparison of the iPhone and Samsung phone. And yet another page, which refers to Graphical UI of the menu icons. Again, iPhone compared to a Samsung phone. All of the pages have “directions for improvement” for the Samsung phone.
Denison is asked if he stands behind his comments from Nov. 2011 that no Samsung designers compared or looked at the iPhone as they designed Samsung phones. Denison said he comments don’t apply to the phones under discussion in the trial now because that wasn’t the scope of products he was talking about in his deposition last year. The judge says he should have been designated to speak on the question of “copying” so she doesn’t agree with Samsung.
3:00: Lee concludes his examination of Denison. Court is taking a 15 minute break, then Samsung gets to talk to Denison.
3:24: Court resumes. Now Denison is being questioned by Samsung attorney. Denison says he was limited in that he was meant to only talk about comparison/copying issues as it related to four Samsung products: Infuse4G, the Galaxy, Droid Charge and Galaxy Tab. Denison said they had not made direct comparisons to Apple products for the industrial design of the four Samsung products.
Samsung asks Denison to be specific about what the industrial designers told him.
Samsung lawyer is now going through the same presentation that Apple went through earlier with the comparisons between the iPhone and Samsung Galaxy S and the recommendations for improving the Samsung phones. He’s asking Denison if any of the recommendations were made in the phones. Denison says he’s not aware that they were.
Denison is now being handed physical models of the iPhone and Samsung Infuse4G and asked to describe how they’re different. Apple objects. So Samsung lawyer is asking Denison to describe the Infuse4G. The phones are now being passed around among the jury.
Now Denison is asked to describe what his role was for the company in the court. He says he was supposed to be an expert on four products and to talk to the Samsung designers and engineers for those products for a few hours.
3:43: Did you ask the designers how they arrived at these designers? I did. Did you ask them if they had looked at the iPhone design — did you learn they had based their designs on the iPhone? Denison said he did get information and that the main designer of the Infuse said he wanted something futuristic, edgier and having sharper corners than other phones in the market.
Judge stops Samsung lawyer from asking more questions about what the Samsung designers said since they themselves will be testifying in court at some time.
Conversation now turns to Galaxy S phone. It’s been entered as an exhibit. Denison is holding now the Galaxy 4G. It’s admitted as well. Devices are being passed around to the jury.
For the Galaxy 4G, Denison said he also spoke to the designer of the phone.
Samsung lawyer asks Denison to comment on the design and why it’s rounded. Denison can answer based on his own personal knowledge, but he can’t say how Samsung came up with the design based on conversations with designers.
Denison said phones have rounded corners because they fit better in your hand, slides into your pocket. It also speaks to durability. If you drop a phone with a sharp edge on the ground, it may be more likely to break. Denison is now asked to comment on why phones have flat screens. One of the key issues of having a curved glass front is that it’s expensive to produce. There are also problems with touch sensitivity in curved glass fronted phones.
3:55: Denison is asked by Samsung to talk about why screen is centered on the front of the phone. He discusses the reason that phones have black masks on either side of the screen. Denison says people want to get rid of the black masks, but there are manufacturing reasons so that you have something holding the glass on to the device. Displays are expensive to replace he says.
Samsung attorney asks Denison why screens are rectangular. He says it’s apparent that most screens are rectangular (like TVs). He also says that most people want large screen to have “larger windows” on to the content. “It’s the general direction the industry is growing.”
Does Samsung want to beat Apple? Denison says, “Samsung wants to sell more products than Apple.” He says there’s no reason to apologize for that.
Does Samsung only want to beat Apple? Denison says they monitor all the competition in the market.
Does Samsung focus on one competitor than another? Denison says the company may focus on one competitor, depending on the market it’s look at it (carrier market, pre-paid versus postpaid).
Denison is the head of corporate strategy for STA. It includes building a single-year and multi-year plan and tracking our progress against those plans.
Explain what is Samsung’s strategy for becoming No. 1. Strateg is based on our “recipe for our sustainable advantage in the market.” He says that is the unique capabilities that Samsung has. Copying doesn’t allow you to create a sustainable advantage, Denison adds. He says Samsung wants to deliver multiple products at multiple price points.
Based on what Denison sees in terms of bringing products to market, he says they introduce one model a year. They’ve had exclusive relationships with carriers but is now adding new carriers.
How many new phones does Samsung deliver each year? In 2011, Denison says there were about 50 models. Part of it has to do with new technologies becoming available, the other part is providing unique feature sets to its carriers. STA spent $1 billion in marketing in the U.S.
Is Samsung proud of its name? Yes. Samsung name is on the front of many, but not all of its products. There’s one product that they didn’t have the name on the front because of a glass etching.
Samsung spent — SEC — about $35 billion over a few years on R&D. Denison says there are about 50,000 engineers and upwards of 1,200 designers at Samsung.
Samsung is the No. 2 patent awardee since at least 2008 in the U.S., Denison said.He says Samsung launched the first camera phone, and has had many innovations in the smart phone market. That includes new screen technology that allows for a much faster response time and allows for more contrast and brightness. Also means thinner displays.
4:13: Are you familiar with how STA promotes Samsung products in the U.S.? Denison says yes. “We try to show consumers in our advertising that we’ve brought them the latest and greatest technology.”
For the Galaxy S2, the tagline was “the next big thing.”
Do you have any information about the value of the Samsung brand? Denison says one of the ways we track our brand is using a survey from Interbrand that does annual ranking of brands. Samsung was ranked in the Top 20.
Samsung consumers can buy phones in carrier stores, national retailers like BestBuy, dealers, online retailers, he says.
Denison is now being shown images of competitor phones from 2008 to 2011, and he agrees that a lot of the phones can look alike.
Apple devices, he says, are usually on display separately from other phones. Denison says there are sometimes Apple stores within other stores, and that it’s unlikely to see an Apple phone next to a Samsung phone.
Denison is now being asked how consumers buy phone – is it an impulse decision. He says no, consumers take six weeks generally to decide which smartphone to buy. He’s asked if he’s heard of any examples where a consumer bought a Samsung phone thinking it was an iPhone. Denison says no.
Samsung lawyer has brought up a Samsung strategy document for 2011. Denison says that marketing assumptions for iPhone 5 are not accurate in the document, because Apple didn’t release an iPhone 5 in 2011, but it shows that Samsung was working on various phones at various price point.
4:30: Court stops questioning and says Denison will retake the stand on Monday, Aug. 6 at 9am California time.
The jury has left the courtroom and the judge is asking both sides to limit the number of objections on a daily basis because it’s ‘cruel and unusual’ punishment to everyone in the courtroom. Apple, Samsung and the judge are trying to figure out the slew of objections that are being filed in the middle of the night. Judge says she will allows 2 objections per witness and asks that they limit the length of what they’re filing. “There’s five million objections and no explanations,” Judge Koh says.
There’s an issue with the microphones for sidebars and Samsung and Apple have offered to have their own technicians fix it (There’s a lot of laughter in the courtroom over that).