Apple 2010 Annual Report Download - page 25

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Table of Contents
The Company believes its existing facilities and equipment are in good operating condition and are suitable for the conduct of its business. The
Company has invested in internal capacity and strategic relationships with outside manufacturing vendors and continues to make investments in
capital equipment as needed to meet anticipated demand for its products.
As of September 25, 2010, the end of the annual period covered by this report, the Company was subject to the various legal proceedings and
claims discussed below, as well as certain other legal proceedings and claims that have not been fully resolved and that have arisen in the
ordinary course of business. In the opinion of management, the Company does not have a potential liability related to any current legal
proceeding or claim that would individually or in the aggregate materially adversely affect its financial condition or operating results. However,
the results of legal proceedings cannot be predicted with certainty. Should the Company fail to prevail in any of these legal matters or should
several of these legal matters be resolved against the Company in the same reporting period, the operating results of a particular reporting period
could be materially adversely affected. The Company settled certain matters during the fourth quarter of 2010 that did not individually or in the
aggregate have a material impact on the Company’s financial condition and results of operations.
Branning et al. v. Apple Computer, Inc.
Plaintiffs originally filed this purported class action against the Company on February 17, 2005 on behalf of putative classes of consumers and
resellers and is currently pending in the Santa Clara Superior Court. In general, the consumer plaintiffs allege that the Company “shorted”
the
coverage provided under its warranties and AppleCare Protection Plan extended service contracts and sold plaintiffs used products that were
represented to be new. In general, the reseller plaintiffs allege that the Company damaged their businesses by opening the Apple retail stores and
making misrepresentations in connection with doing so. The complaint seeks unspecified damages and other relief. Currently no plaintiff classes
are certified, although reseller plaintiffs’ motion to certify a class of Apple specialist resellers, is set for hearing on November 2, 2010.
In re Apple & ATTM Antitrust Litigation
This is a purported class action filed against the Company and AT&T Mobility in the United States District Court for the Northern District of
California. The Consolidated Complaint alleges that the Company and AT&T Mobility violated the federal antitrust laws by monopolizing
and/or attempting to monopolize the “aftermarket for voice and data services”
for the iPhone and that the Company monopolized and/or
attempted to monopolize the “aftermarket for software applications for iPhones.”
The Consolidated Complaint also alleges that Apple violated
numerous laws by intentionally “bricking” (
rendering inoperable) iPhones through the release of iPhone software update 1.1.1. On July 8, 2010,
the Court granted Apple’s motion for summary judgment on all of plaintiffs’
claims related to the alleged bricking of iPhones. In the same July
8, 2010 order the Court granted in part plaintiffs’ motion for class certification, certifying a class related to plaintiffs’ antitrust claims.
The case
is currently stayed until a status conference with the Judge is held on November 15, 2010.
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 alleging infringement of U.S. Patent No. 7,009,655. Plaintiff seeks unspecified damages and other
relief. This case is currently pending.
Mirror Worlds, LLC. v. Apple Inc.
Plaintiff filed this action against the Company on March 14, 2008, in the United States District Court for the Eastern District of Texas, alleging
that certain of the Company’
s products infringed U.S. Patent Nos. 6,006,227, 6,638,313 and 6,725,427. On October 1, 2010, a jury returned a
verdict finding the Company had infringed all
22
Item 3.
Legal Proceedings