Apple Fights to Keep Details of Nokia Settlement From the Public
October 3, 2011 3:08 PM
comment(s) - last by
SEC is the only party who will likely be privy to the terms of closed-door deal
Apple, Inc. (
) has been quite active legally of late, carrying out a massive litigation war [
] with its top rivals who use Google Inc.'s (
) Android OS. But back in June, Apple was in court-endorsed settlement talks in a separate legal spat with Finland's Nokia Oyj. (
Formerly the world's top smartphone maker, Nokia was
bumped out of first place by Apple
. But in court it looked on the verge of victory, so Apple
opted to enter a cross-licensing agreement
could involve hundreds of millions of dollars in licensing payments to Nokia.
But here's the interesting thing: Nobody knew what the settlement was worth, as Apple did not disclose it in its legal mandated financial filings. Apple explains this away in that it felt the deal was in the "ordinary course of business" and not necessary to report to shareholders.
U.S. Securities and Exchange Commission
(SEC) wasn't happy with this response. It sent a frustrated
[PDF] to Apple in June asking for the company to share with it the missing information. It writes:
We note various news articles discussing the patent litigation settlement between Nokia and Apple. Supplementally tell us the amount and terms of such settlement agreement, any amounts accrued, the periods in which they were recognized, and the timeline of the negotiations with Nokia that led to the June settlement agreement. Also, tell us how you considered including a discussion regarding this matter in your MD&A [Management Discussion and Analysis] disclosures and financial statement footnotes, including disclosure of a reasonably possible range of loss in excess of amounts accrued. Further, tell us how considered disclosing this event in a Form 8-K or tell us how you determined that such disclosure was not necessary.
Apple complied filing
on July 12, but including a "request for confidential treatment for selected portions of this letter." In doing so Apple fought to keep details of the settlement out of the eyes of the public -- and its Android competitors.
Of course this isn't exactly uncommon in closed-door settlements in legal disputes between major corporations. Still the SEC, privy to the secret information, apparently felt Apple was holding back. It
[PDF] requesting more information, commenting:
Please describe in further detail the terms, arrangements, obligations and rights associated with the Settlement Agreement and Patent License Agreement entered into between the company and Nokia. Also, describe for us each element of these Agreements (i.e. settlement portion, past usage, future usage, etc.).
Apple fulfilled that request with
of non-public confidential information filed on August 1. On August 17 the SEC acknowledged receiving the document and
[PDF] that it was satisfactory. While not ruling out future inquiries against Apple, it now appears to be satisfied that it has sufficient details about the transaction.
As for the public, though, they are unlikely to ever find out what those details are, including how much per handset Apple is paying Nokia.
This article is over a month old, voting and posting comments is disabled
10/3/2011 3:42:30 PM
Apple doesnt want it public. Of course not. Then the public could see that they themselves (Apple) are guilty of the very behavior they are suing others for. Tony? MacDuechedude? How can this be? How can the inventor of all things good and mobile be paying Nokia?
10/3/2011 4:24:17 PM
I think the reason to keep it private is so that if there were another cross license settlement they had to reach with another vendor, there would be no public precedent of how much someone else is getting paid per iPhone sold. So for example if Nokia is geting 10 bucks per iPhone sold, and all of a sudden someone else enters into settlement talks with Apple, Apple could low ball the price to start, instead of these companies knowing exactly what other companies are getting.
"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs
Samsung to Seek Sales Ban on iPhone 5
September 19, 2011, 10:03 AM
Apple Looks to Kill Samsung's Android Tablets and Phones in Britain
September 14, 2011, 4:10 PM
Samsung Files "3G" Lawsuit Against Apple in France, Appeals German Tablet Ban
September 13, 2011, 12:04 PM
Apple's Lawyers Take Quest to Kill Android to Japan
September 8, 2011, 10:15 AM
Apple Succeeds in Killing Samsung's Australian Tablet Sales With Lawsuit
August 1, 2011, 11:57 AM
Report: Apple to Unveil "iWatch" at iPhone 6 Event on September 9
August 27, 2014, 2:00 PM
Reports: Snapchat is Now Worth $10B, Cofounders are Billionaires to Be
August 27, 2014, 9:30 AM
Tim Cook Says iPad Sales Have Merely Hit a Temporary “Speed Bump”
August 27, 2014, 9:16 AM
ZOTAC Announces Diminutive ZBOX PI320 pico
August 27, 2014, 9:00 AM
Verizon Wireless' VoLTE Service Tiptoes Closer to Launch
August 26, 2014, 3:21 PM
5.5” LG G3 Stylus to Make Its Debut at IFA 2014, Will Feature Budget Specs/Pricing
August 26, 2014, 9:00 AM
Most Popular Articles
New Photos Show “Assembled” iPhone 6, Protruding Camera Ring
August 20, 2014, 2:32 PM
Leaked Qualcomm Roadmap: 20 nm 64-bit Octacore Smartphone SoCs Cometh
August 20, 2014, 11:38 AM
Microsoft's Surface 2 Tablet Family Gets a $100 Price Cut
August 25, 2014, 1:16 AM
Report: Microsoft to Announce Windows 9 on September 30
August 21, 2014, 11:20 AM
From HULC to FORTIS: the Evolution of Lockheed Martin's Incredible Exosuit
August 22, 2014, 12:45 PM
Latest Blog Posts
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information