Apple (AAPL)

On May 15, 2006, Creative Labs, Inc., and Creative Technology Ltd. (collectively “Creative”) filed a complaint with the U.S. International Trade Commission (“ITC”) alleging that the Company infringed U.S. patent number 6,928,433 (“‘433 patent”) and seeking an order permanently barring iPods from importation into the United States. On May 15, 2006, Creative also brought suit against the Company in

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the United States District Court for the Northern District of California, also alleging that the iPod infringed the ‘433 patent. The District Court action was stayed pending resolution of the Creative ITC Action.

On May 15, 2006, the Company brought suit against Creative in the United States District Court for the Western District of Wisconsin (“Wisconsin Action”), alleging that Creative infringed U.S. patent number 5,479,602 (“‘602 patent”), U.S. patent number 5,586,237 (“‘237 patent”), U.S. patent number 5,898,434 (“‘434 patent”), and U.S. patent number 6,731,312 (“‘312 patent”). On May 17, 2006, the Company filed an amended complaint in the Wisconsin Action alleging that Creative also infringed U.S. patent number 5,341,293 (“‘293 patent”), U.S. patent number 6,047,342 (“‘342 patent”), and U.S. patent number 5,799,280 (“‘280 patent”).

On June 1, 2006, the Company brought suit against Creative in the United States District Court for the Eastern District of Texas, (“Texas Action”), alleging that Creative infringed U.S. patent number 6,157,363 (“‘363 patent”), U.S. patent number 5,640,566 (“‘566 patent”), and U.S. patent number 5,504,852 (“‘852 patent”). On June 27, 2006, the Company filed an amended complaint in the Texas Action alleging that Creative also infringed U.S. patent number 7,046,230 (“‘230 patent”) and U.S. patent number 6,282,646 (“‘646 patent”). At the suggestion of the District Court, the Company filed separate actions in the Eastern District of Texas regarding the Company’s allegations relating to the ‘230 patent and the ‘646 patent.

On June 1, 2006, the Company filed a complaint with the ITC alleging that Creative infringed the ‘230 patent, the ‘293 patent, and the ‘434 patent. On June 5, 2006, the Company filed an amended complaint with the ITC alleging that Creative also infringed the ‘646 patent.

The parties reached a settlement of all of the above matters and all cases were dismissed as of October 13, 2006. These matters are concluded. Settlement of these matters did not have a material effect on the Company’s financial position or results of operations.

On May 15, 2006, Creative Labs, Inc., and
Creative Technology Ltd. (collectively “Creative”) filed a complaint with the
U.S. International Trade Commission (“ITC”) alleging that the Company infringed
U.S. patent number 6,928,433 (“‘433 patent”) and seeking an order permanently
barring iPods from importation into the United States. On May 15, 2006,
Creative also brought suit against the Company in

37

the United States District Court for the Northern
District of California, also alleging that the iPod infringed the ‘433 patent. The
District Court action was stayed pending resolution of the Creative ITC Action.

On May 15, 2006, the Company brought suit against
Creative in the United States District Court for the Western District of
Wisconsin (“Wisconsin Action”), alleging that Creative infringed U.S. patent
number 5,479,602 (“‘602 patent”), U.S. patent number 5,586,237 (“‘237 patent”),
U.S. patent number 5,898,434 (“‘434 patent”), and U.S. patent number 6,731,312
(“‘312 patent”). On May 17, 2006, the Company filed an amended complaint
in the Wisconsin Action alleging that Creative also infringed U.S. patent
number 5,341,293 (“‘293 patent”), U.S. patent number 6,047,342 (“‘342 patent”),
and U.S. patent number 5,799,280 (“‘280 patent”).

On June 1, 2006, the Company brought suit against
Creative in the United States District Court for the Eastern District of Texas,
(“Texas Action”), alleging that Creative infringed U.S. patent number 6,157,363
(“‘363 patent”), U.S. patent number 5,640,566 (“‘566 patent”), and U.S. patent
number 5,504,852 (“‘852 patent”). On June 27, 2006, the Company filed an
amended complaint in the Texas Action alleging that Creative also infringed
U.S. patent number 7,046,230 (“‘230 patent”) and U.S. patent number 6,282,646 (“‘646
patent”). At the suggestion of the District Court, the Company filed separate
actions in the Eastern District of Texas regarding the Company’s allegations
relating to the ‘230 patent and the ‘646 patent.

On June 1, 2006, the Company filed a complaint
with the ITC alleging that Creative infringed the ‘230 patent, the ‘293 patent,
and the ‘434 patent. On June 5, 2006, the Company filed an amended
complaint with the ITC alleging that Creative also infringed the ‘646 patent.

The parties reached a
settlement of all of the above matters and all cases were dismissed as of October 13,
2006. These matters are concluded. Settlement of these matters did not have a
material effect on the Company’s financial position or results of operations.

On May 15, 2006, Creative Labs, Inc., and Creative Technology Ltd. (collectively “Creative”) filed a complaint with the U.S. International Trade Commission (“ITC”) alleging that the Company infringed U.S. patent number 6,928,433 (“‘433 patent”) and seeking an order permanently barring iPods from importation into the United States.  On May 15, 2006, Creative also brought suit against the Company in the United States District Court for the Northern District of California, also alleging that the iPod infringed the ‘433 patent.  The District Court action was stayed pending resolution of the Creative ITC Action.

On May 15, 2006, the Company brought suit against Creative in the United States District Court for the Western District of Wisconsin (“Wisconsin Action”), alleging that Creative infringed U.S. patent number 5,479,602 (“‘602 patent”), U.S. patent number 5,586,237 (“‘237 patent”), U.S. patent number 5,898,434 (“‘434 patent”), and U.S. patent number 6,731,312 (“‘312 patent”).  On May 17, 2006, the Company filed an amended complaint in the Wisconsin Action alleging that Creative also infringed U.S. patent number 5,341,293 (“‘293 patent”), U.S. patent number 6,047,342 (“‘342 patent”), and U.S. patent number 5,799,280 (“‘280 patent”).

On June 1, 2006, the Company brought suit against Creative in the United States District Court for the Eastern District of Texas, (“Texas Action”), alleging that Creative infringed U.S. patent number 6,157,363 (“‘363 patent”), U.S. patent number 5,640,566 (“‘566 patent”), and U.S. patent number 5,504,852 (“‘852 patent”).  On June 27, 2006, the Company filed an amended complaint in the Texas Action alleging that Creative also infringed U.S. patent number 7,046,230 (“‘230 patent”) and U.S. patent number 6,282,646 (“‘646 patent”).  At the suggestion of the District Court, the Company filed separate actions in the Eastern District of Texas regarding the Company’s allegations relating to the ‘230 patent and the ‘646 patent.

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On June 1, 2006, the Company filed a complaint with the ITC alleging that Creative infringed the ‘230 patent, the ‘293 patent, and the ‘434 patent.  On June 5, 2006, the Company filed an amended complaint with the ITC alleging that Creative also infringed the ‘646 patent.

The parties reached a settlement of all of the above matters and all cases were dismissed as of October 13, 2006.  These matters are concluded.  Settlement of these matters did not have a material effect on the Company’s financial position or results of operations.