Most readers of this blog know that over recent years, Apple and Samsung have engaged in high-profile litigation over certain patents used in smartphones and tablets. A decision was just provided in a trial involving five patents from Apple, and two patents from Samsung.
In 2012, I wrote a blog post on the litigation surveys used in an earlier trial, which involved patents relating to earlier models of smartphones and tablets.
The ruling in the 2014 trial appears to be mixed. Apple was awarded almost $120 million in damages, and Samsung was awarded approximately $158,000 in damages. These amounts are not very large, particularly compared with the $2.2 billion that Apple had been seeking or the $6.2 million that Samsung had sought. As with the 2012 trial, litigation surveys were both provided and rebutted in this matter.
There are summaries of this trial in sources such as The New York Times and Fortune. This blog post discusses the litigation survey evidence presented in the 2014 trial. (A general caveat: I was not involved in this matter. I wrote this blog post from public sources, and am not providing an opinion regarding any side’s argument or witnesses.)
A Litigation Survey Using Conjoint Analysis
As in the 2012 trial, Professor Hauser used a method called conjoint analysis to measure the importance of certain features in Samsung products that rely on the patents at issue. Those features include universal search, automatic word correction, and slide to unlock. The survey conducted by Professor Hauser evaluated consumers’ willingness to pay for those features, and also measured the decrease in demand for Samsung products without those features.
Basically, conjoint is a method used to estimate the demand for certain elements in complex products, such as automobiles or electronics. In a conjoint study, respondents are shown different configurations of product profiles. By measuring consumer preference for the different configurations, conjoint can measure the value of specific features.
You can learn more about conjoint from a white paper I’ve written, which is available here. You can read more about Professor Hauser’s testimony, as well as the rebuttal testimony, at websites including theverge, Electronista, Bloomberg, and ZDNet.
Rebuttal of the Conjoint Survey
Professor Hauser was rebutted and/or cross-examined by three separate people, all of whom argued that Hauser survey misstated the value of the patents at issue. I’ve summarized their testimony below.
First, counsel for Samsung cross-examined Professor Hauser, arguing that key influences on consumer buying decisions were not included in the survey, such as the value of Samsung’s brand and marketing.
Second, Wharton Professor David Reibstein, a rebuttal witness, questioned Professor Hauser’s methods and conclusions. Professor Reibstein argued that the research was biased, and did not provide valid measures because it asked only about certain features, and did not ask about the most important features. Professor Reibstein compared this to asking consumers what cup holder they would like in a car, rather than asking about more important features such as their preferred manufacturer.
Professor Reibstein also conducted his own research with a smaller sample, which he maintains indicated that consumers do not understand the features involved in Professor Hauser’s conjoint survey.
Third, Tulin Erdem, professor of business and marketing at New York University, also rebutted Professor Hauser. She argued that Professor Hauser’s research only asked about certain features and not about other features. According to Professor Erdem, this would tend to elevate the value and importance of those features, by motivating consumers to think about features they normally would not consider in such detail.
What We Can Learn From This Litigation Survey
The ongoing battle between Apple and Samsung has been high profile, and this trial received a lot of press. Apple and Samsung are interesting, successful, and well-funded adversaries, and they compete in markets that are important and rapidly-changing. There is even evidence that Google helped fund some of Samsung’s legal fees in this matter. Because smartphones and tablets are markets that move so rapidly, these trials and these patents could have implications for innovations in these important products.
Despite the high stakes, the outcome in this round is less conclusive. Although Apple and Samsung spent a lot of time and a lot of money on this trial, they ended up with a mixed verdict – both sides were awarded something, but neither side was awarded what they had requested. Even the jury foreman, who has expertise with IBM in software and patents, states that he did not see the verdict as sending a message. This matter is likely not over, as both sides have promised to appeal.
However, the trial does provide a good example of how litigation surveys are often evaluated in court. Professor Hauser is one of the pre-eminent experts on conjoint. The opposition in this matter cross-examined Professor Hauser, and also brought in two additional experts to provide rebuttal testimony. Both sides spend a lot of effort and a lot of money either providing or rebutting the litigation survey.
It is not unusual for a survey offered in litigation to be questioned or rebutted by opposing counsel and multiple experts. When a survey is important to the litigation, and the litigation has high stakes to the parties involved, it is likely that the survey will attract extensive criticism from opposing parties. Conjoint is a particularly complex methodology, but this basic principle applies across a wide range of litigation surveys.