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Judge Koh wants Apple to reveal the profitability of the Apple iPhone

Posted: , posted by Alan F.

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Judge Koh wants Apple to reveal the profitability of the Apple iPhone
Some things you never ask such as a woman's age, someone's political affiliation, and if they are a New York Yankee or Boston Red Sox fan. You also are not supposed to ask Apple about how profitable the Apple iPhone is. This is a secret that the Cupertino based firm has been holding onto since the first unit was sold back in 2007. But Judge Lucy Koh, who presided over the epic Apple-Samsung patent suit, wants Apple to open its books to see if the company can justify the large $1.05 billion verdict that it was awarded by the jury.

Judge Koh rules that Apple cannot seal its financial records pertaining to the iPhone

Judge Koh rules that Apple cannot seal its financial records pertaining to the iPhone

On Friday, the judge refused to grant Apple the right to seal its financial records. Judge Koh has made it clear that if Apple is going to use its financial performance to win huge verdicts, it cannot do so and then keep those numbers a secret. The judge wants Apple to reveal the profitability of the Apple iPhone. Around now, you might ask yourself that since Apple is a public company, shouldn't these figures be available to the public? The SEC does not require that companies like Apple with a multitude of products, break out the profitability of each one. It would be like McDonalds issuing a P/L for each variation of burger it sells.

The figures will not be made public immediately as Judge Koh has decided to keep the documents sealed until she gets a ruling on her order from the US Court of Appeals for the Federal Circuit, the higher court which handles all patent cases. A similar order that the judge made on August 9th to unseal certain documents has already been sent to the Appellate Court for their review.

What the judge is saying is that while Apple can keep the profit/loss figures for the Apple iPhone a secret for competitive reasons, it cannot do so while using the same financial performance as a tool to win billion dollar verdicts.

"In seeking the very large damages award it sought at trial, Apple stipulated to the introduction of JX1500, a partial summary of its damages calculations, which contains some product-specific unit sales and revenue information. As Apple appears to have realized in introducing that exhibit, it cannot both use its financial data to seek multi-billion dollar damages and insist on keeping it secret. As this Court explained in the August 9 Order, Apple has not established that public availability of its product-specific unit sales, revenue, profit, profit margin, and cost data would actually provide its competitors with an advantage, as would be required to find the information sealable under the ‘compelling reasons’ standard."-Judge Lucy Koh

source: ArsTechnica via BGR

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