Ina Fried

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MIT Professor Says Samsung Customers Might Pay Extra $100 for Apple-like Features

Apple on Friday called a marketing professor to testify that Samsung customers would pay a “substantial premium” for some of the features allegedly making use of Apple patents.

John Hauser, a marketing professor from MIT, did a pair of studies examining how much Samsung customers would pay for the features at issue in the patents in this case.

Hauser said that consumers were willing to pay up to $100 extra for the features covered by the three Apple utility patents Samsung is accused of infringing.

“There is substantial demand for the features at issue,” he testified. Apple briefly showed a slide that said Hauser found customers would spend up to an additional $100 on a smartphone or $90 for a tablet that incorporated all three features at issue.

Apple then ended the testimony after having Hauser on the witness stand for just a brief few moments.

Samsung objected, saying that Hauser didn’t explain how he did his research and arguing that it should be stricken from the record. Judge Koh overruled the objection, forcing Samsung’s lawyers to use their time to both explain and try to poke holes in the report.

Judge Lucy Koh has put both sides on a strict time clock, alloting each side just 25 hours in front of the jury to make their case. That time includes direct testimony, cross-examination and, in some cases, legal objections.

“It’s a good survey,” Hauser said. “I think the numbers make sense.”

On cross-examination, Samsung’s lawyers got Hauser to explain that customers were asked how much they might be willing to spend on a set of features, but not actually forced to spend money or weigh those costs versus other expenses they might have.

Hauser frequently found himself cut off as he tried to give lengthy answers.

“I’m trying to help you,” Hauser said after one of the times he was interrupted.

“Oh, I’m not sure about that,” Samsung’s lawyer said.

Asked another question, Hauser answered yes and tried to go on.

Samsung’s lawyer cut him off. “Yes is good,” the lawyer said. “I like yes.”

Hauser was taken to task for only showing what customers might be willing to pay for Apple’s patented features even though the same study could have also offered a price for other things such as cameras, storage and other features. That, Samsung’s legal team argues, would offer a “reality check” on the figure Hauser offered up.

Samsung’s lawyers also quoted from a book by the author of the software that Hauser used that said the types of “conjoint studies” he did often come up with amounts far different than would be found in the marketplace.

Using a similar methodology, Samsung reasons that consumers might indicate they are willing to pay hundreds of dollars for a phone with certain features. Realistically though, customers don’t expect to pay more than $200 for a phone when signing a new contract.

Hauser testified he was being paid $800 an hour by Apple for his work. Asked how much he has billed in the case so far, Hauser struggled for an answer.

“I’d have to ask my wife,” he said.

“You really can’t tell us?” Samsung’s lawyer said. Hauser estimated it he probably has done $30,000 to $40,000 worth of work so far.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik