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Apple's SEC Filing Discusses Lawsuits

Apple's SEC Filing Discusses Lawsuits

by , 9:00 PM EST, December 29th, 2006

Apple Computer filed fiscal 2006 financial documents with the Securities and Exchange Commission on Friday that disclosed improperly handled backdated stock options. The documents also revealed several federal lawsuits, including one that purports that iPod+iTunes amounts to an illegal monopoly, according to Forbes.

The suit claims that Apple created an illegal monopoly by limiting songs and videos purchased at the iTunes Store to function only on iPod media players. The case was filed on July 21, and a motion to dismiss the complaint was denied on December 20. The plaintiff is seeking unspecified damages and other relief.

Interestingly, the same argument could be used to say that iTunes Store competitors are committing similar violations since they offer media downloads that are not compatible with Apple's iPod.

On October 24, PhatRat Technology filed a lawsuit against Apple claiming the company is infringing on patents with the Nike+iPod product. Apple and Nike jointly developed the athletic training aid that works with the iPod nano. Apple has not yet responded to the suit.

On November 7, a case was filed against that alleges the logic boards in iBook G4 portable computers fail at an abnormally high rate. The plaintiff in this case is seeking unspecified damages, and Apple has not yet responded to the suit.

Pending cases against a company are routinely disclosed in SEC financial reports, so revealing these lawsuits in and of itself does not indicate that Apple executives are concerned about their financial impact. They do show, however, that Apple lawyers will be spending a considerable amount of time in court rooms in 2007 - just like they did in 2006.

Apple stock is currently trading in the after-hours market at US$84.70, down 0.14 (0.17%).

If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.


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