Apple 2008 Annual Report Download - page 33

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Table of Contents
Macadam v. Apple Computer, Inc.; Santos v. Apple Computer, Inc.
The Macadam action was filed in late 2002 in Santa Clara County Superior Court asserting various causes of action including breach of contract,
fraud, negligent and intentional interference with economic relationship, negligent misrepresentation, trade libel, unfair competition and false
advertising. The complaint requested unspecified damages and other relief. The Company filed an answer on December 3, 2004 denying all
allegations and asserting numerous defenses.
On October 1, 2003, Macadam was deauthorized as an Apple reseller. Macadam filed a motion for a temporary order to reinstate it as a reseller,
which the Court denied. The Court denied Macadam’s motion for a preliminary injunction on December 19, 2003. On December 6, 2004,
Macadam filed for Chapter 11 bankruptcy in the Northern District of California, which placed a stay on the litigation as to Macadam. The
Company filed a claim in the bankruptcy proceedings on February 16, 2005. The Macadam bankruptcy case was converted to Chapter 7
(liquidation) on April 29, 2005. The Company reached a settlement of Macadam’s claims against the Company with the Chapter 7 Bankruptcy
Trustee, and the Bankruptcy Court approved the settlement on July 17, 2006 over the objection of Tom Santos, Macadam’s principal. Santos
appealed the ruling approving the settlement, but the District Court denied the appeal. Santos appealed to the Ninth Circuit Court of Appeals.
Santos’ appeal was dismissed on October 3, 2008.
On December 19, 2005, Tom Santos filed a Fifth Amended Complaint on his own behalf (not on behalf of Macadam) alleging fraud, violations
of California Business & Professions Code §17200 (unfair competition), California Business & Professions Code §17500 (false advertising) and
the Consumer Legal Remedies Act. The Company filed a demurrer to Santos’ amended complaint and a special motion to strike the defamation
cause of action on January 20, 2006. The Court sustained the demurrer in part but denied the special motion to strike. Santos filed a Sixth
Amended Complaint on July 14, 2006. The Company filed a demurrer, which was sustained on September 9, 2006. Santos filed a Seventh
Amended Complaint in late September 2006. The Company filed a motion to strike, which was granted in part and denied in part on
December 15, 2006. Santos filed an Eighth Amended Complaint on January 29, 2007. The Company filed a demurrer, which was heard on
May 7, 2007. The court sustained the demurrer, and Santos filed a Ninth Amended Complaint on July 11, 2007. The Company filed a demurrer,
which was overruled. The Company also filed a cross complaint against Santos on January 20, 2006 alleging violations of California Business &
Professions Code §17200 and California Penal Code §502, fraud and deceit and breach of contract. The parties have reached a settlement.
Mediostream, Inc. v. Acer America Corp. et al.
Plaintiff filed this action against the Company, Acer America Corp., Dell, Inc. and Gateway, Inc. on August 28, 2007 in the United States
District Court for the Eastern District of Texas, Marshall Division, alleging infringement of U.S. Patent No. 7,009,655, entitled “Method and
System for Direct Recording of Video Information onto a Disk Medium.” An amended complaint was served on November 7, 2007. The
amended complaint seeks unspecified damages and other relief. On January 25, 2008, the Company filed an answer to the complaint denying all
material allegations and asserting numerous affirmative defenses and also filed a motion to transfer the case to the Northern District of
California. The Court has scheduled the Markman hearing for August 4, 2010 and trial for January 4, 2011.
OPTi Inc. v. Apple Inc.
Plaintiff filed this action against the Company on January 16, 2007 in the United States District Court for the Eastern District of Texas, Marshall
Division, alleging infringement of U.S. Patent Nos. 5,710,906, 5,813,036 and 6,405,291, all entitled “Predictive Snooping of Cache Memory for
Master-Initiated Accesses.” The complaint seeks unspecified damages and other relief. The Company filed an answer on April 17, 2007 denying
all material allegations and asserting numerous affirmative defenses. The Company also asserted counterclaims for declaratory judgment of non-
infringement and invalidity. The Markman hearing is set for November 26, 2008, and trial is scheduled for April 6, 2009.
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