Do Apple's contracts require a $50 million payment from partners who leak information?

Do Apple's contracts require a $50 million payment from partners who leak information?
An interesting bit of information came out of the surprise Chapter 11 bankruptcy filing of GT Advanced Technologies. Not only did the filing prove that being partners with Apple isn't going to automatically make your company $1 billion, it also revealed that if you leak any information relating to your partnership with Apple, you better be prepared to pay for such an oversight.

GT has filed a petition with a New Hampshire court, seeking to have Apple's Non-Disclosure Agreement declared "oppressive" and "burdensome" so that the NDA can be ruled null and void. In short, GT is arguing about the $50 million penalty that Apple charges its partners who reveal product information to a third party. 

Under the protection of the bankruptcy laws, GT can tell the court that it wants to be relieved of its obligations under the contract it signed with Apple. Not having to live up to the NDA makes it easier for GT to sell the sapphire crystal producing equipment to another company. And it will also allow GT to reveal exactly what Apple was going to do with the sapphire glass that was supposed to be the finished product made from the crystals. 

The finishers had a hard time getting the yield up over 25%, forcing Apple to turn to its own ion-hardened glass for the Apple iPhone 6 and Apple iPhone 6 Plus. The sapphire glass that did make the cut was employed by Apple for the Apple Watch. But the real question is if every contract or NDA involving Apple and another company has a similar $50 million penalty clause. If so, it is easy to see why there are so many secrets surrounding the company.

One thing that is not secret is GT's court filing, which you can read below.



source: Scribd, FT.com (subscription req'd) via Engadget

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16 Comments

1. Derekjeter

Posts: 1456; Member since: Oct 27, 2011

Is it a bad thing that Apple has that penalty? It's business.

2. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

It is business up to a point. The contract can not violate public policy, or it becomes unenforceable. That is what GT is claiming. The risk for Apple is that the clause providing $50m in liquidated damages is ruled unenforceable for all of their contracts with partners....

10. Finalflash

Posts: 4063; Member since: Jul 23, 2013

50 MILLION DOLLAS....who they think they leakin, Chelsea Clinton?

12. Its_MFJC

Posts: 1; Member since: Oct 14, 2014

This comment made my day! This comment was so funny to me after years on this site I finally registered so I can give you a thumb up! +1 for you in life Finalflash!!

3. phil2n

Posts: 519; Member since: Apr 30, 2012

Oh no.. another greedy move. Bad fruit very bad fruit.

4. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

One of the reasons so many third product products for Apple devices cost so much money. All that crazy legal stuff that Apple insists on doesn't come for free.

5. dimas

Posts: 3297; Member since: Jul 22, 2014

So if apple is imposing harsh penalties on their partners doing product leaks, then how the hell did the tech world have massive "leakage", "rumors" and everything of iPhone 6 and 6+ months before the release?

6. Chuck007

Posts: 1410; Member since: Mar 02, 2014

Wondering the same thing here. Apple product launches are no longer fun to watch because of this.

8. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

Apple leaks a lot of what you see through various backchannels. You think the control fanatics at Apple would leave all the hype generation to chance?

9. AlikMalix unregistered

Proof?.... or just Anti-Apple vomit...?

11. darkkjedii

Posts: 30836; Member since: Feb 05, 2011

The latter

13. Stuntman

Posts: 843; Member since: Aug 01, 2011

Apple does try to control the media. They punish media companies who don't play ball with Apple. Just recently, they cut off a German site from getting free trial units because they posted a video that showed the iPhone 6 Plus bends more easily compared to a Samsung phone. If you want to read more about how Apple tries to control the media, have a look at these articles from Apple fan sites: http://9to5mac.com/2014/08/29/seeing-through-the-illusion-understanding-apples-mastery-of-the-media/ http://www.macrumors.com/2014/08/29/inside-apples-pr-practices/

14. AlikMalix unregistered

Why do people do this? I asked for proof that the leaks are from Apple to build hype, and the answer I got was - Apple cuts its support for a journalist that destroys their products instead of a review - how is that the same?

15. dimas

Posts: 3297; Member since: Jul 22, 2014

"journalist that destroys their products instead of a review." And how do you want gadget reviews to be as neutral as possible dear applelogist? iPhone 6+ bends, that German site is just proving the facts. Unbox therapy is bending Note 4 and Samsung don't make a big deal of it. You are one certified stupid iFan.

16. AlikMalix unregistered

Unbox therapy, buys their own phones for their videos... That german site gets them from apple for a test drive (it could be different based on rules when you get something to test drive, maybe one of them was DONT FORCE BRAKING IT, but I dont know) and they did nothing but show that you can bend the phone with your hands (just like many other phones - where are those tests?). People that complained about the problem said it bent in their pockets not forcefully by their own hands.. Samsung didnt make a big deal out of bending Note4 because unless it's Apple it doesn't go viral: no one cares!!! I'm not an apologist for apple - stop making stupid assumptions - I like iOS and iDevices but you should read more of my posts regarding Apple's deficiencies.. AND FOR CRYING OUT LOUD - must you resort to name-calling? The best your post sounds likesomething that comes from a 12 year old... Grow up! You have a different opinion - relax.

7. Bozzor

Posts: 248; Member since: May 02, 2012

I have a client who was an Apple supplier for a component. Whilst i am not aware of such a clause, it doesn't surprise me, but what Apple also does is drive ultra hard bargains. They have the knack for turning a very high valued added, critically important high technology component into a commodity with now real differentiation worth paying for when it comes negotiating with potential suppliers: everyone realizes they get screwed on the margin but make up for it with volume, and they have enough excess capacity to meet other orders at much higher margins, because often Apple locks up so much of the supply no one has much of a choice.

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