throbber
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`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`SIMPLEAIR, INC. * Civil Docket No.
` * 2:13-CV-587
`VS. * Marshall, Texas
` *
` * March 18, 2014
` *
`GOOGLE * 1:00 P.M.
`
`TRANSCRIPT OF JURY TRIAL
`BEFORE THE HONORABLE JUDGE RODNEY GILSTRAP
`UNITED STATES DISTRICT JUDGE
`
`APPEARANCES:
`
`FOR THE PLAINTIFFS:
`
`MR. GREGORY DOVEL
`MR. JEFFREY EICHMANN
`Dovel & Luner
`201 Santa Monica Blvd.
`Suite 600
`Santa Monica, CA 90401
`
`MS. ELIZABETH DERIEUX
`Capshaw DeRieux
`114 East Commerce Avenue
`Gladewater, TX 75647
`
`FOR THE DEFENDANTS:
`
`MR. MITCHELL STOCKWELL
`MR. RUSSELL KORN
`Kilpatrick Townsend & Stockton
`1100 Peachtree Street, Suite 2800
`Atlanta, GA 30309
`
`APPEARANCES CONTINUED ON NEXT PAGE:
`
`COURT REPORTERS:
`
`
`
`
`MS. SHELLY HOLMES, CSR
`MS. SUSAN SIMMONS, CSR
`Official Court Reporters
`100 East Houston, Suite 125
`Marshall, TX 75670
`903/935-3868
`
`(Proceedings recorded by mechanical stenography, transcript
`produced on CAT system.)
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`2
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`APPEARANCES CONTINUED:
`
`FOR THE DEFENDANTS:
`
`MS. DANIELLE WILLIAMS
`Kilpatrick Townsend & Stockton
`1001 West Fourth Street
`Winston-Salem, NC 27101
`
`MS. JENNIFER PARKER AINSWORTH
`Wilson Robertson & Cornelius
`909 ESE Loop 323, Suite 400
`Tyler, TX 75701
`
`***************************************
`
` P R O C E E D I N G S
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`(Jury out.)
`
`COURT SECURITY OFFICER: All rise.
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`THE COURT: Be seated, please.
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`All right. Is there anything from the Plaintiff
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`or the Defendant before we bring the jury back in?
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`MR. EICHMANN: No, Your Honor.
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`MR. STOCKWELL: Your Honor, just for the record,
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`we had talked yesterday about Google filing an offer of
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`proof on the implementation by ECF instead of reciting it in
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`Court. We ECF'd that over the lunch hour, and I have copies
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`for Your Honor and the clerk, if Your Honor wishes.
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`THE COURT: If you'll hand those up.
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`MR. STOCKWELL: Thank you.
`
`THE COURT: All right. If there's not anything
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`further, we'll bring in the jury, Mr. McAteer.
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`COURT SECURITY OFFICER: Yes, sir.
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`All rise for the jury.
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`(Jury in.)
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`THE COURT: Be seated, please.
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`Welcome back from lunch, ladies and gentlemen.
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`Is the Defendant prepared to call their next witness?
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`MS. AINSWORTH: Yes, Your Honor. As the next
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`witness, Google calls Dr. Ravi Dhar.
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`THE COURT: All right.
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`MS. AINSWORTH: And he has been sworn, Your Honor.
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`THE COURT: All right. If you'll come have a
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`seat, Dr. Dhar.
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`THE WITNESS: Thank you, sir.
`
`(Noise.)
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`THE COURT: It was quiet the entire noon hour.
`
`All right. Ms. Ainsworth, proceed.
`
`MS. AINSWORTH: Thank you, Your Honor.
`
`RAVI DHAR, Ph.D., DEFENDANT'S WITNESS, PREVIOUSLY SWORN
`
`DIRECT EXAMINATION
`
`BY MS. AINSWORTH:
`
`Q.
`
`Good afternoon, Dr. Dhar.
`
`A.
`
`Good afternoon.
`
`Q.
`
`Could you introduce yourself to the jury, please?
`
`A.
`
`Sure. My name is Ravi Dhar, and I'm a professor of
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`marketing at Yale University.
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`Q.
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`Do you hold any other positions at Yale University?
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`A.
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`Yes. I have what's called a secondary appointment as
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`professor of psychology at Yale University as well, and I
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`direct a center, director of the center, Yale Center for
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`Customer Insights, it's called.
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`Q.
`
`Could you tell us what the Yale Center for Customer
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`Insights is?
`
`A.
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`Sure. It was started around seven or eight years ago
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`roughly, and the idea is that academics is very rigorous,
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`but it's often not seen as very relevant to the real world.
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`And we thought how do we do rigor and relevance to work
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`jointly with companies.
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`So the mission of the center is to advance the
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`frontiers of understanding consumer behavior, and that's
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`what the center does with a lot of different companies.
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`Q.
`
`Okay. Dr. Dhar, let me ask you a little about your
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`educational background, and I might ask you to slow down
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`just a tiny bit in your answers, please.
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`Could you tell us about your education?
`
`A.
`
`Sure. My undergraduate degree was in engineering back
`
`in India. I also did an MBA from India, and I came to this
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`country around when I was 25 to go to graduate school. So I
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`came to University of California at Berkeley where I
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`received an MS, which is a degree you get in -- in sort of
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`on the way to getting a Ph.D. So I have an MS and Ph.D.
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`from the University of California. So those are my three
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`degrees.
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`Q.
`
`Why did you end up coming to this country -- to the
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`States?
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`A.
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`Basically, you know, I was one of those few people who
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`wanted to do more research on understanding consumer
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`behavior. Many MBAs, really both in this country and in
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`India, go to what we call the real world. I wanted to
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`understand and do more research in the area. And U.S. is
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`the best place to do research in most -- in most fields.
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`Q.
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`What did you do after you completed your studies?
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`A.
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`So typically after Ph.D. many of us become professors.
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`I became an assistant professor at Yale University.
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`Q.
`
`How long have you been teaching at Yale?
`
`A.
`
`I just finished my 20 years. I joined in '92 after
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`finishing my Ph.D. So 21 years, I guess.
`
`Q.
`
`What courses do you teach or have you taught in the
`
`past?
`
`A.
`
`Sure. Over the 20 years, I've taught a lot of different
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`courses. I can give you some of the titles: Consumer
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`behavior, marketing management, marketing strategy. I also
`
`taught what I call advanced courses on marketing leadership,
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`the role of a chief marketing officer. I've taught courses
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`on marketing and financial services, and then I've also
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`taught what's called courses for Ph.D., which tend to be
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`more specialized courses.
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`And my expertise is in decision-making, so I teach two
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`Ph.D. courses on judgment and decision-making.
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`Q.
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`Do you have any areas of expertise within the field of
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`marketing?
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`A.
`
`Sure. So broadly, the area of expertise is really
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`what's called judgment decision-making, how do people
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`decide, how do people make choices. But I also study
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`branding, marketing management, marketing strategy, so I
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`have a range of sort of areas in which I've worked over the
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`last 20 years.
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`Q.
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`Have you ever done any consumer survey work?
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`A.
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`Yes, I have both for my academic and for my consulting
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`and litigation consulting that I do.
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`Q.
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`And have you done consulting work with companies on
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`consumer issues?
`
`A.
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`Yes. That's my specialty, so my research is in this
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`area and the work I do with companies is also broadly in the
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`area of how do we understand consumer behavior.
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`Q.
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`Do you have any experience with what's called conjoint
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`surveys?
`
`A.
`
`Yes, I do.
`
`Q.
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`And what experience is that?
`
`A.
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`So I have taught in my master's classes and in my Ph.D.
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`classes, and also in my litigation work and consulting work
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`I have, you know, supervised surveys done for conjoint, not
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`as much as Dr. Srinivasan has done, but I'm fully
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`experienced in the technique.
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`Q.
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`Have you published any papers in your career?
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`A.
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`Yes. I've published over 50 papers.
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`Q.
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`And have you received any academic honors or awards?
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`A.
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`Yes. Over the -- the 20 years, I have won some best
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`paper awards for my research. I've -- also last year, I won
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`what's called Lifetime Research Award in the area of
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`consumer psychology.
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`Q.
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`Are you being compensated for your time in the work that
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`you've done in this case?
`
`A.
`
`Yes, I am.
`
`Q.
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`And what is your rate?
`
`A.
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`My rate is 700 per hour.
`
`Q.
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`And did you provide the parties with your resume or CV
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`that sets out all your qualifications and your papers that
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`you've written and those things?
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`A.
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`It's part of my report. Yes.
`
`Q.
`
`Okay.
`
`MS. AINSWORTH: And for the record, that's at
`
`Defendant's Exhibit 357.
`
`Q.
`
`(By Ms. Ainsworth) Now, Dr. Dhar, shifting gears, can
`
`you tell us what were you asked to do in this case?
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`A.
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`Sure. As you heard yesterday, Dr. Srinivasan came up
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`with a number for the value of this feature. I think it's
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`around $12.23. And what I was asked to do is really look at
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`Dr. Srinivasan's report and give my opinion on whether it
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`was valid and reliable to what Android in the marketplace
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`could charge for this feature.
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`Q.
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`Can you describe in general terms what you did to form
`
`your opinion?
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`A.
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`Sure. So I did -- you know, I looked at
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`Dr. Srinivasan's report. I looked at his deposition
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`testimony -- testimony -- sorry. I sat yesterday in the --
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`in the courtroom and listened to his trial testimony as
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`well.
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`And he had a very complicated formula that you saw. So
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`I looked at the formula, applied that formula to some other
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`features off the formula that he had. And in addition, what
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`I did is I looked at websites of companies that sell
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`smartphones. I wanted to look how much do they talk about
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`notification according to the website.
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`I also went to what's called third-party websites or
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`third-party organizations. They don't have to be websites.
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`They could be consumer reports, and I wanted to see do those
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`places talk about notification; and in particular, do they
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`talk about battery life, infringing technology.
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`So I just wanted to see what consumers might see in the
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`9
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`process of making a smartphone purchase decision.
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`Q.
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`What did Dr. Srinivasan estimate to be the market's
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`willingness to pay for Google's messaging service?
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`A.
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`So he had a lot of different numbers, but, roughly, I
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`think one of the numbers he had was $12.23 as the value for
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`this feature. What that means is if the phone is sold with
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`this feature, it will charge or it can obtain $12.23 more
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`than a phone without that feature.
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`Q.
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`And did he have an opinion also on if that feature were
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`available at that price, what percentage of Android users
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`would purchase it?
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`A.
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`Yes, he did. I think it was around 42 percent, if I
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`remember correctly.
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`Q.
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`Now, do you have any opinion about these estimates by
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`Dr. Srinivasan?
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`A.
`
`I do.
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`Q.
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`And what is your opinion?
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`A.
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`So my opinion is that Dr. Srinivasan is a fine academic,
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`and he did an academic exercise. I don't think it's
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`relevant to the marketplace of how people buying the
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`smartphones. And I want to talk a little bit about that.
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`Q.
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`And did you prepare a slide that sets out a summary of
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`your opinions?
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`A.
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`I did.
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`MS. AINSWORTH: And if -- Mr. Barnes, if we could
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`put up Slide 2.
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`Q.
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`(By Ms. Ainsworth) Dr. Dhar, let me point you to the
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`slide that's on the screen. And could you tell the jury
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`briefly what your three major opinions are in this case?
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`A.
`
`Sure. So there are essentially three reasons why I
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`think this was an academic exercise. The first reason is
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`that Dr. Srinivasan's formula, what was called Formula 14
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`yesterday, fails to consider competition. What we know is
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`that competition drives down prices. And so if you had
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`competition in the marketplace, that number would be far
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`lower. That's the first reason.
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`The second reason is really related to -- I mentioned
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`earlier I went to the websites to look at do the companies
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`talk about notification. And I looked at the third-party
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`reviews. So what -- the second point is really about how do
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`people buy smartphones. And a smartphone has over a hundred
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`features.
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`And consumer psychology shows when a product has
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`hundreds of features or more than a hundred features, you
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`don't consider all the features when you buy a phone. Most
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`of us would look at several -- you know, subset of features.
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`Is it an Apple? Do I like the design? You know, all that
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`kind of stuff, WiFi.
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`And so my point is, when you look at it in the real
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`world there's a hundred features, you would not be likely to
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`consider notification when you buy a phone. And so what's
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`important here is the following: If you don't consider a
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`feature when you're buying the phone, then it has zero value
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`for the consumer at that time.
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`So my point here is the following: When you're buying
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`a phone with lots of features, you're unlikely to consider
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`notification, and as a result, notification and choice will
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`have very little value for people.
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`Q.
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`What was the third opinion?
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`A.
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`Oh, I just want to finish that opinion a little bit.
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`The second sort of issue is that not only do people have
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`to be aware of notification, they also have to be aware of
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`that this infringing technology is better for battery life.
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`If they don't know that, how do they know what the
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`difference is between one way of notification and another
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`way of notification if nobody tells them this is better for
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`battery life.
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`I never saw any communication advertising -- or
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`website -- which talks about that this technology is better
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`for battery life. Yes, it is better for battery life. I
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`think this -- I mean, maybe the lawyers have a dispute about
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`that, but I take it that it's better for battery life.
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`But if I as a shopper don't know that, it will never enter
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`into my value for the phone, because I don't know if one way
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`of notification is better than another way of notification.
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`Q.
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`And what's your third opinion, Dr. Dhar?
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`A.
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`So the third opinion is really, you know, if I think
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`notification is not considered when making a choice, why
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`does it appear that in Dr. Srinivasan's survey, consumers do
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`assign or respondents do assign some experience to
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`notification.
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`And the reason for that is Dr. Srinivasan's survey had
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`two flaws. One is a survey methodology. We'll talk about
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`that a little later. And second, some of the instructions
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`that he gave are officially increased the importance of
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`notification. And I think I'll explain that a little bit
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`more.
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`Q.
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`Okay. So going back to the first point that you talked
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`about a minute ago, was that the Plaintiff's formula for
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`market willingness to pay failed to consider competition,
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`you said.
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`Why do you say that?
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`A.
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`Well, I think Dr. Srinivasan himself testified yesterday
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`he does not take into account competition.
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`Q.
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`Okay. Can you explain what you mean by a competitive
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`response?
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`A.
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`Sure. In general, in the marketplace, every action has
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`a reaction. If one company does something, other companies
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`respond in other ways, and competition tends to bring down
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`the price that you can charge for things.
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`Q.
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`If he didn't take that into account, why is that a
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`problem with regard to his conclusions?
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`A.
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`Because as I said, competition tends to drive down
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`prices, so the number that you'll have will be inflated.
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`Q.
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`Can you give any example of how competition changes what
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`companies can charge for a feature or a product or a
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`service?
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`A.
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`Sure. It's all the time. I mean, I state when you go
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`to a cafe, several years ago, I would have to pay for using
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`the WiFi, or a hotel would charge me 10 or $15. Now, many
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`of the hotels I stay in, the WiFi has become free. In cafes
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`it has become free because all the cafes have WiFi.
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`If you look at newspapers, we know all over that
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`newspapers are having a very hard time charging for
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`newspapers online, but they can charge for newspapers
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`offline. But they have less competition, because you can be
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`a local newspaper in a town, but when you go online, you're
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`competing with all the newspapers. Competition is based on
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`prices.
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`THE COURT: I'm going to ask you to slow down
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`a little bit, please, Dr. Dhar.
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`THE WITNESS: Thank you, sir.
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`THE COURT: And, Counsel, approach the bench,
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`please.
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`MS. AINSWORTH: Yes, Your Honor.
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`14
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`(Bench conference.)
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`THE COURT: Dr. Williams -- I've not excused
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`anybody. Has he left or is he still here?
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`MR. STOCKWELL: I believe he was having lunch over
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`at our offices.
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`THE COURT: I just want you to understand that
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`witnesses are not excused until the -- the Court excuses
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`them.
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`MR. STOCKWELL: Yes, I will.
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`MS. AINSWORTH: Yes, Your Honor.
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`(Bench conference concluded.)
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`THE COURT: All right. Let's continue.
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`MS. AINSWORTH: Thank you, Your Honor.
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`Q.
`
`(By Ms. Ainsworth) So just to finish this point, Dr.
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`Dhar, according to Dr. Srinivasan, about 42 percent of
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`current Android users would pay $12.23 for Google's
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`messaging system, if they have the option to purchase that
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`feature.
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`What effect, if any, does competition have on that
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`conclusion?
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`A.
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`So as I said, competition tends to drive down prices.
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`So that number would be lower.
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`Q.
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`Now, going to the second reason that we talked about,
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`why do you say that people in the marketplace are unlikely
`
`to consider notifications when they buy a smartphone?
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`A.
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`So as I mentioned, a smartphone typically has more than
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`a hundred features. And I also looked at what companies of
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`smartphone -- what kind of features do they talk about,
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`whether it's companies' websites or third-party reviews. So
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`I looked at both.
`
`Q.
`
`What work have you done to come to this conclusion that
`
`smartphones have so many features? You mentioned roughly a
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`hundred features.
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`A.
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`So what I did is I did a systemic search of many
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`different companies' websites, leading smartphones. I also
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`did a review of third-party -- I -- there are many
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`third-party reviews. So what I did, I typed in Google like
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`different types of key words: Best smartphone reviews, and
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`I had a year like 2012, 2013, and so forth.
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`And I kind of looked at the 53 reviews, I think, at the
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`end, because it's just endless you can do. So I looked at
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`the most -- you know, the ones that came out on top, and I
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`looked at the top 10 leading reviews.
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`Q.
`
`Did you prepare a slide that showed what you found about
`
`the -- the number of features that are available in the
`
`marketplace?
`
`A.
`
`Yes, I did.
`
`Q.
`
`Now, I know that the type is a little small on here, but
`
`can you tell the jury what this slide shows?
`
`A.
`
`So first, I want to start off with I also looked at the
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`websites I mentioned of the companies that sell the
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`smartphones. And I found no mention of notification in
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`those.
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`Then I went to -- what the slide shows is the review
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`that I did basically be counted up, you know, how many times
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`a different feature was mentioned. And so this is just an
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`example of like if you look at the -- if you look, the
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`operating system was mentioned 746 times. The carrier was
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`mentioned 786 times. And if you look at notifications, it
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`was mentioned 7 times.
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`And this is any mention of notification, not about
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`infringing technology. Just the word notification was
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`mentioned 7 times.
`
`Q.
`
`And, Dr. Dhar, the fact that notifications were
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`mentioned 7 times that you saw in the literature --
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`A.
`
`Right.
`
`Q.
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`-- versus some of the other features such as operating
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`system, brand, carrier being mentioned in the hundreds of
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`times, what does that tell you about whether consumers are
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`considering notification when they buy a smartphone?
`
`A.
`
`Sure. So I don't have a direct measure of how important
`
`each of this feature is, so I'm using a proxy of how many
`
`times does the people talk about it; does that tell me
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`something's important or not.
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`And what this tells me is that, first of all, there are
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`many features. So as I said, consumer psychology says when
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`you buy something and the product has a hundred features,
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`you don't think about all of them. You just think about a
`
`few of them and buy.
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`And what this tells me is that it's highly unlikely
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`that most consumers will think about notification in
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`considering a smartphone purchase.
`
`Q.
`
`Now, when Dr. Srinivasan testified yesterday, he
`
`explained that in his survey, he had a system where the
`
`participant could adjust the numbers, and they could assign
`
`a zero value to some features, for instance, notification.
`
`Does -- the fact that you could potentially assign a
`
`zero, does that address your concern here?
`
`A.
`
`It doesn't because his survey methodology and
`
`instructions were biased.
`
`Q.
`
`Okay. We'll -- let's talk about the survey in a minute.
`
`But have you seen any evidence that consumers are aware of a
`
`connection between notifications and battery life?
`
`A.
`
`No. As I mentioned earlier, I haven't seen anything
`
`that a consumer is aware that the infringing technology is
`
`better for your battery life. I haven't seen anything
`
`there.
`
`Q.
`
`Okay. Now, let's talk about the survey structure, Dr.
`
`Srinivasan (sic), which was your third point. I believe you
`
`testified that Dr. Srinivasan's survey exaggerated the value
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`of notification in comparison to the other features that he
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`tested.
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`Why do you believe that?
`
`A.
`
`So there are two reasons for this. One reason relates
`
`to the survey methodology that he used, and the second
`
`reason relates to the leading instructions. I can explain
`
`on both, if you'd like.
`
`Q.
`
`Well, let's -- let's look at -- at the next slide, which
`
`I believe is a screenshot from the survey that Dr.
`
`Srinivasan gave to the participants, and this shows his
`
`instructions.
`
`What is it in his instructions that you believe
`
`exaggerates notification?
`
`A.
`
`Sure. Before I go to his instruction, I want to talk a
`
`little bit about the survey methodology, and then I'll come
`
`down to the instructions.
`
`THE COURT: Let me interrupt, Dr. Dhar. I know
`
`you have a story to tell, but you're here to answer the
`
`questions that are asked and not to launch into something
`
`else that you thought of that you want to talk about.
`
`So you're here to respond to counsels' questions,
`
`and they'll certainly have a full opportunity to ask you all
`
`the questions that they want to, but you're limited in your
`
`responses to the questions asked.
`
`THE WITNESS: Thank you.
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`THE COURT: Do you understand?
`
`THE WITNESS: I'm sorry.
`
`THE COURT: Okay. Let's continue, Counsel.
`
`Q.
`
`(By Ms. Ainsworth) So, Dr. Dhar, in the survey
`
`instructions, what is it that makes you believe that the
`
`instructions exaggerated the importance of notifications?
`
`A.
`
`Sure. If you look at the highlighted portion, that is
`
`part of the instructions in the survey. And I want to point
`
`your attention to the second sentence, which says: During
`
`the next few screens, you'll be asked to rate the importance
`
`to you of different attributes and the -- that previous
`
`research has identified as important in choosing a
`
`smartphone.
`
`So basically, the respondents in the survey were told
`
`that all the 16 attributes of features that are included but
`
`important in choosing a smartphone, and that's considered
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`leading because now I've already told you this is important.
`
`So in theory, while I allow you to or Dr. Srinivasan
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`allows you to assign a zero value, it's unlikely that you
`
`will do that after you've been told it's important. Some
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`will, but many will sort of get influenced by the
`
`instructions.
`
`Q.
`
`Okay. And if we could look at the next slide, which is
`
`also a screenshot that shows on the left the 16 features
`
`that Dr. Srinivasan tested.
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`What about these survey instructions where he describes
`
`a notification issue gives you a concern?
`
`A.
`
`Sure. So if you look at the 16 features, you will
`
`notice that only 5 of them, I think, have some explanation
`
`and have sort of more descriptions and details. And one of
`
`them happens to be the notification. It also happens to be
`
`the longest explanation in detail.
`
`And so what we know from research is when you do that,
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`it draws attention, makes people think it's more important.
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`It also gives me an understanding -- I may not have an
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`understanding of what notification is. And now it tells me,
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`oh, I can use it for different things. So all of that
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`enhances the importance of notification in the survey
`
`compared to in the real world.
`
`Q.
`
`Now, Dr. Dhar, moving on from the way that his survey
`
`was structured, did you do any work to determine the
`
`validity of Dr. Srinivasan's formula to determine market
`
`willingness to pay?
`
`A.
`
`So as I mentioned earlier, I took his formula and I
`
`applied it to the other features that Dr. Srinivasan had in
`
`his report or in his survey.
`
`Q.
`
`Okay. And let's look at the next slide.
`
`Does this show what happens if you -- when you took the
`
`Formula 14 and -- and applied it to another feature, which
`
`was WiFi, what happened then?
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`A.
`
`So basically, I took Dr. Srinivasan's formula and
`
`applied it to WiFi, and what the formula suggests is that
`
`the feature WiFi is worth around $300, just that feature
`
`alone.
`
`Q.
`
`Now, do you think that that is a valid result?
`
`A.
`
`It's not valid of what the feature's worth is in the
`
`marketplace, because the phone costs around 150, $200, many
`
`phones.
`
`Q.
`
`Now, you were here yesterday when Dr. Srinivasan
`
`testified, right?
`
`A.
`
`Yes.
`
`Q.
`
`And did you hear that -- that he objected to the way
`
`that you used his Formula 14 to apply it to other features?
`
`Do you have any response to that?
`
`A.
`
`So my understanding is that Dr. Srinivasan objects that
`
`I have used it and applied it to a feature that what he
`
`calls his large importance in the overall decision to
`
`purchase.
`
`And it should be used only for small changes, so I also
`
`applied it to smaller changes.
`
`Q.
`
`And do you have a slide that shows applying it to small
`
`changes?
`
`A.
`
`Correct.
`
`MS. AINSWORTH: And if we can show the next slide.
`
`Q.
`
`(By Ms. Ainsworth) What -- can you explain what
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`happened when you took the Formula 14 and applied it to
`
`a half-inch change in the screen size of a phone? What
`
`did you find?
`
`A.
`
`So the -- just to explain the numbers there, the
`
`different numbers, which says how much people are willing to
`
`pay for each change in the screen size. And so when I
`
`applied it to change in screen size from 2.4 inches to 3.2
`
`inches, I get $83.
`
`Q.
`
`Okay. And did you consider a change in size of a half
`
`inch on screen size to be a small change in the size a
`
`feature?
`
`A.
`
`Well, it's apparently not small enough for Dr.
`
`Srinivasan, because he kept -- first, he said two -- you
`
`know, this was okay; subsequently, he said this is not okay.
`
`Q.
`
`So in your calculations, were you able to take Formula
`
`14 and make it work and come up with a type of results that
`
`Dr. Srinivasan did, or did you come up with illogical
`
`results?
`
`A.
`
`I don't think -- I didn't see Dr. Srinivasan -- Dr.
`
`Srinivasan apply it to other features, so I -- when I
`
`applied it to it, I got this different prices.
`
`Q.
`
`So let's -- last, let's set aside trying to actually use
`
`Formula 14 and just think about what this means using common
`
`sense. If the market is willing to pay $12.23 for
`
`notifications, which that feature Dr. Srinivasan ranked next
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`to last of the 16 that he tested, what does that mean for
`
`all those other features, the -- the 15 above that -- or the
`
`14 above that?
`
`A.
`
`Sure. So Dr. Srinivasan's survey had 16 features, and
`
`the 15th ranked was around $12.23. So by definition, that
`
`means all the other features ranked higher than notification
`
`would have been valued at more than $12.23.
`
`Q.
`
`But how many various features did you find in the
`
`literature that there are in the average smartphone?
`
`A.
`
`Over a hundred features.
`
`Q.
`
`So if -- if one that was pretty far down the list, he
`
`says the market would be willing to pay $12.23, what does
`
`that mean for all these other features? What would that do
`
`for the cost of phone?
`
`A.
`
`Well, it would be much more than what the market price
`
`for the phone is.
`
`Q.
`
`So to summarize, Dr. Dhar, if we could go to your last
`
`slide again, go to your ultimate conclusions about Dr.
`
`Srinivasan's estimates of the market's willingness to pay.
`
`A.
`
`So my conclusion is -- the three reasons why the $12.23
`
`estimate I don't think is valid of what we find in the
`
`marketplace. One is, it doesn't take into account
`
`competition, and competition can drive prices down. It can
`
`drive them all the way to zero sometimes over marginal
`
`costs, what economists say.
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`The second is, are consumers aware or can take into
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`account notification when they buy a phone, because even if
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`the feature has some value, if that is not something I
`
`consider when I buy a phone, that means in the pricing of
`
`the phone it has zero value.
`
`And the third is sort of trying to understand why if it
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`has zero value, I'm trying to reconcile why it might have
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`shown some experience in Dr. Srinivasan's survey. And part
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`of the reason is related to the methodology and the
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`instructions that in my opinion advised.
`
`MS. AINSWORTH: And for the record, the exhibit
`
`which sets out Dr. Dhar's summary of his opinions is
`
`Exhibit 484.
`
`And with that, I'll pass the witness, Your Honor.
`
`THE COURT: Cross-examination by the Plaintiff?
`
`You may proceed, Mr. Eichmann.
`
`MR. EICHMANN: Thank you, Your Honor.
`
`CROSS-EXAMINATION
`
`BY MR. EICHMANN:
`
`Q.
`
`Good afternoon, sir.
`
`A.
`
`Good afternoon.
`
`Q.
`
`I'll ask you as well to try to keep it a little bit
`
`slower in your speech, because I'm not sure I can keep up
`
`with you as well.
`
`Now, the first point that you raised in your
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`presentation was this issue of competition, right?
`
`A.
`
`Correct.
`
`Q.
`
`You understand, sir, that Google has competition in the
`
`Android smartphone -- excuse me -- Google has competition in
`
`the smartphone marketplace, right?
`
`A.
`
`You mean in terms of different company? Apple operating
`
`system? Are you talking about Google operating system?
`
`Q.
`
`Google has other competitors in the smartphone industry,
`
`right?
`
`A.
`
`Yes. They're competitors in the smartphone industry.
`
`Q.
`
`Apple, BlackBerry, Microsoft, they all are competitors
`
`of Google when it comes to smartphone operating systems,
`
`correct?
`
`A.
`
`Correct.
`
`Q.
`
`And you understand, sir, that each of those companies,
`
`all the competition by Google has actually taken a license
`
`to SimpleAir's patent on notifications, right?
`
`A.
`
`I understood that yesterday. Yes.
`
`Q.
`
`That's not something that you knew when you were
`
`preparing your report, is it?
`
`A.
`
`I might have known that. Yeah, I think I knew that
`
`there was -- I had seen some previous report. Yes.
`
`Q.
`
`You didn't talk about how all these competitors licensed
`
`the notification technology when you prepared and submitted
`
`your report, right?
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`A.
`
`That was not relevant. My point is that competition
`
`drives down prices. So I'm not sure what the question is
`
`here.
`
`Q.
`
`Sir, on

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