Apple 2006 Annual Report Download - page 35

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filed an answer to the amended complaint as to the allegations regarding the 17-inch display and a demurrer/motion to strike as to the
allegations regarding the 20-inch and 23-inch displays on the ground that plaintiffs failed to allege that they purchased those displays. At a
status conference on November 1, 2005, the Court ordered Plaintiffs to amend their complaint. Plaintiff filed an amended complaint on
December 12, 2005, and the Company answered on January 5, 2006 denying all allegations and asserting numerous affirmative defenses. The
Company has reached a settlement in this matter, which was given preliminary approval by the Court on September 18, 2006. The final
approval hearing is scheduled for February 15, 2007. Settlement of this matter will not have a material effect on the Company’s financial
position or results of operations.
Apple Computer, Inc. v. Burst.com, Inc.
The Company filed an action for declaratory judgment against Defendant Burst.com, Inc. on January 4, 2006 in the United States District Court
for the Northern District of California. The Company seeks declaratory judgment that U.S. Patent Nos. 4,963,995, 5,164,839, 5,057,932 and
5,995,705 (“Burst patents”) are invalid and not infringed by the Company. Burst filed an answer and counterclaim on April 17, 2006. Burst
alleges that the following Apple products and services infringe U.S. Patent Nos. 4,963,995, 5,057,932, 5,164,839, and 5,995,705; iTunes Store,
iPod devices, QuickTime products (including QuickTime player and QuickTime Streaming Server), iTunes software, other Apple software
products (Final Cut Studio, GarageBand, iMovie, iDVD, iWeb), the use of the .Mac services and Apple computers and servers running iTunes,
QuickTime, or the other named Apple software products. The Burst patents allegedly relate to methods and devices used for “burst”
transmission of audio or video files. The case is in discovery. A claim construction hearing is set for February 8, 2007. Trial is set for
February 26, 2008.
Apple Corps Ltd. v. Apple Computer, Inc.; Apple Computer, Inc. v. Apple Corps Ltd.
Plaintiff Apple Corps filed this action on July 4, 2003 in the High Court of Justice, Chancery Division, in London alleging that the Company
has breached a 1991 agreement that resolved earlier trademark litigation between the parties regarding use of certain Apple marks. Plaintiff
seeks an injunction, unspecified damages, and other relief. The Company filed a motion on October 13, 2003, challenging jurisdiction in the
U.K. The Court denied this motion on April 7, 2004. The Company filed an appeal of the Court’s decision but subsequently withdrew the
appeal. In November 2004, Plaintiff served the Company with an Amended Bill of Particulars and on December 23, 2004, the Company filed a
Defence. On November 24, 2005, Plaintiff filed a Re-Amended Bill of Particulars and the Company filed its Defence on December 16, 2005.
Trial took place from March 29, 2006 through April 5, 2006. Judgment was given in favor of the Company on May 8, 2006 and Apple Corps
was ordered to pay a portion of the Company’s fees, the amount to be agreed or determined in a subsequent proceeding. Apple Corps has filed
an appeal, which is scheduled to be heard in late February 2007.
On October 8, 2003, the Company filed a lawsuit against Apple Corps in the United States District Court for the Northern District of California
requesting a declaratory judgment that the Company has not breached the 1991 agreement. Apple Corps challenged jurisdiction in the
California case but the Court denied that challenge on March 25, 2004. Apple Corps subsequently prevailed on a motion to stay the California
case during the pendency of the U.K. action. The Company has dismissed the California lawsuit without prejudice.
Bader v. Anderson, et al.
Plaintiff filed this purported shareholder derivative action against the Company and each of its then current executive officers and members of
its Board of Directors on May 19, 2005 in Santa Clara County Superior Court asserting claims for breach of fiduciary duty, material
misstatements and omissions, and violations of California Businesses & Professions Code §17200 (unfair competition). Plaintiff alleges that
the Company’s March 14, 2005, proxy statement was false and misleading for failure to disclose certain information relating to the Apple
Computer, Inc. Performance Bonus Plan, which was approved by
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