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Apple Inc. sued companies it said areselling unauthorized electronic accessories such as chargers, speakers andcables for the iPod music player, iPhone and iPad tablet computer.
“Many are of inferior quality andreliability, raising significant concerns over compatibility with and damage toApple’s products,” Apple said in the complaint, citing a user comment that acharger from one of the companies drained his iPod rather than replenishing thebattery.
The suit is an example of the tight gripApple keeps on its products, including approval of accessories andapplications. Apple has a program called “Made for iPod” under whichmanufacturers get a license to sell accessories for devices. Apple collects aroyalty of 20 percent to 25 percent from each sale of a licensed accessory,according to Shaw Wu, an analyst with Kaufman Bros. LP in San Francisco.
“If you sell speakers for $100, Apple gets$20 to $25,” said Wu, who has a “buy” rating on Apple shares and doesn’t ownthem.
In the complaint, Cupertino,California-based Apple said the unauthorized products are infringing as many as10 patents and violating its trademarks.
“They are trying to control all aspects oftheir devices,” said Mark Kesslen, chairman of the intellectual property groupat Lowenstein Sandler PC, a law firm in NewYork. “They are using the various licensingagreements, partner agreements and brand management to make sure that it stayswithin their high standard.”
Implied Endorsement
Kesslen, who has represented clientsseeking licensing agreements with Apple, said it’s trying to preventunauthorized products from being marketed as endorsed by the company becausethese sales could harm its brand.
The complaint, filed July 22 in federal court in SanFrancisco, identifies six sellers based in Californiaand one in Washingtonand said Apple could name as many as 20 additional companies. Calls or e-mailsto five of the named companies weren’t immediately returned, and contactinformation for two companies couldn’t be obtained.
Apple’s policies drew attention from theU.S. Library of Congress this week, when it said in a periodic review ofcopyright laws that users could “jailbreak” their iPhones to downloadapplications not authorized by the company.
‘Fine Line’
“There is a very fine line” betweenmaintaining control over its gadgets and anticompetitive behavior, Kesslensaid. “You have to be very careful,” he said.
In November, Apple sued a California company that it said was sellingknockoff power adapters for the MacBook laptop computer. The accused companyagreed to a court order that it stop selling the products.
Apple sold 3.27 million iPads, 8.4 millioniPhones and 9.41 million iPods in the quarter ended June 26, the company saidin its third-quarter earnings report on July 20.
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