Apple 1999 Annual Report Download - page 63

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 8--COMMITMENTS AND CONTINGENCIES (CONTINUED)
personal computers. All but three of the cases against the Company were dismissed by the end of fiscal 1998. During fiscal 1999, the remaining
three cases were dismissed.
MONITOR-SIZE LITIGATION
In August 1995, the Company was named, along with 41 other entities, including computer manufacturers and computer monitor vendors, in a
putative nationwide class action filed in the California Superior Court for Orange County, styled Keith Long et al. v. Amazing Technologies
Corp. et al. The complaint alleges each of the defendants engaged in false or misleading advertising with respect to the size of computer
monitor screens. Also in August 1995, the Company was named as the sole defendant in a purported class action alleging similar claims filed in
the New Jersey Superior Court for Camden County, entitled Mahendri Shah
v. Apple Computer, Inc. Subsequently, in November 1995, the Company, along with 26 other entities, was named in a purported class action
alleging similar claims filed in the New Jersey Superior Court for Essex County, entitled Maizes & Maizes v. Apple Computer, Inc. et al.. The
complaints in all of these cases seek restitution in the form of refunds or product exchange, damages, punitive damages, and attorneys fees. In
December 1995, the California Judicial Council ordered all of the California actions, including Long, coordinated for purposes of pretrial
proceedings and trial before a single judge. These actions were subsequently coordinated under the name In re Computer Monitor Litigation. In
July 1996, the Court ordered all of the California cases dismissed without leave to amend as to plaintiffs residing in California. In March 1998,
the Court granted final approval of a settlement resolving all claims and all subsequent appeals have been dismissed.
EXPONENTIAL TECHNOLOGY INC. V. APPLE COMPUTER, INC.
Plaintiff, Exponential Technology, Inc. (Exponential), alleged the Company, which was an investor in Exponential, breached its fiduciary duty
to Exponential by misusing confidential information and that the Company fraudulently misrepresented the facts about allowing Exponential to
sell its processors to the Company's Mac OS licensees. The lawsuit was filed in California Superior Court for Santa Clara County. In
November 1997, the Company filed a demurrer to portions of the complaint, which the Court granted in part. In January 1998, the plaintiff
filed an Amended Complaint. In March 1998, the Company filed a cross-complaint for damages against Exponential alleging breach of
contract, negligent misrepresentation, and violations of the California Corporations Code. This matter was settled during the fourth quarter of
1999 for an amount not material to the Company's financial position or results of operations.
FTC INQUIRY--PRADO V. APPLE COMPUTER, INC. (AND RELATED ACTIONS)
In October 1997, Apple began charging all U.S. noneducation customers for live telephone technical support beyond 90 days after purchase of
Apple products. In late 1997, the Federal Trade Commission (FTC) commenced an investigation into customer complaints that Apple's change
in technical support practices was either unfair or contrary to earlier representations to certain customers. Four purported class action lawsuits
were filed against Apple related to this change. During the fourth quarter of 1999, the regional and national offices of the FTC approved a
settlement with the Company, and a settlement was approved by the Court in three of the class action suits. In November 1999, two appeals
were filed objecting to the settlement and therefore the settlement is stayed pending resolution of the appeals. Settlement of these matters was
not material to the Company's financial position or results of operations.
MICROWARE SYSTEMS CORPORATION V. APPLE COMPUTER, INC.
Plaintiff, Microware Systems Corporation (Microware), filed this action against the Company on September 1, 1999, in the United States
District Court for the Southern District of Iowa. Microware alleges that
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