Now Apple complains that its OWN lawyers are too expensive.

Dec 9, 2013

Last week it emerged that Apple is suing Michael Bromwich, the court-appointed compliance monitor who has the responsibility to ensure that Apple abides by the terms of the legal punishment imposed on it when the company was found guilty of breaking anti-trust legislation by fixing the price of ebooks.

The basis of Apple's complaint against Mr. Bromwich is that his fees are too high and that he is overcharging for his services. And they say Americans don't do irony.

Mr Bromwich is billing an hourly rate of US$1,100 plus a 15 per cent 'administrative fee' and any and all further costs incurred in appointing additional attorneys to assist him. The 'hired help' from the up-market law firm of Frank Field charge $1025 per hour.

When Mr Bromwich presented Apple with the bill for his (and his team's) first two weeks of work it came to US$138,432. Apple claims that the sum is "unprecedented in its experience."

In a letter to Apple's CEO, Tim Cook and the company's board of directors, Mr Bromwich makes it clear that Apple has no part to play in determining his remuneration. He writes, "The company [Apple] has spent far more time challenging the terms of our compensation and raising other objections related to administrative matters, even though the Court’s Order provided no role for Apple in setting the monitor’s compensation".

Bromwich continues, "You people seem to think I’m working for you. Apple has sought for the last month to manage our relationship as though we are its outside counsel or consultant. We are not. My fees are reasonable, and you have no idea what a reasonable fee looks like. Also, it doesn’t matter if you think my fees are reasonable, because you don’t get to negotiate them: You just pay them. The court will approve them".

It is amusing to watch Apple wriggle and pout and complain about being overcharged given that, for 2013, the company's net income from selling its own overpriced products will be in excess of $37 billion.

In an article published last week by TelecomTV we wondered how much Apple has spent on external lawyers as it pursues its endless patents war with Samsung of Korea. And now we know, thanks to a legal document filed last week in which Apple again complains about legal bills due to be paid to its own lawyers.

It transpires that Apple has splurged more than $60 million on external legal counsel as it prosecutes its war of attrition against Samsung. It also transpires that Apple believes itself to be so wronged and so in the right that it shouldn't be liable to pay the entirety of its legal bills.

In its filing Apple cites the the provisions of the 1946 Lanham Act to claim that "Samsung's willful, deliberate and calculated copying of Apple's iPhone makes this an 'exceptional case'" under the terms of the legislation relating to the payment of damages, costs, and lawyers fees in such "exceptional" cases.

The filing continues, "Given Samsung's blatant disregard of Apple's IP rights, Apple should not be forced to bear the full expense of prosecuting its claims."

Apple has pursued Samsung through two long drawn-out and very expensive trials which cost the company over $60 million "after discounts and reductions". Apple says that the discounts it has negotiated with its long-standing attorneys, Morrison & Foerster, (or "Mo-Fo" as the practice calls itself) are "substantial" but for some reason the actual hourly fee that has been charged by Mo-Fo have been redacted and appear in the court document as a blacked-out block.

However, we do know exactly what compliance monitor Michael Bromwich charges for 60 minutes of his time; $1,100. What's the betting that Mo-Fo charges more than that? An odds-on cert one would suspect given that Apple doesn't want anyone to see the figures.

What Apple does want is for Samsung to stump up $15,736,992, which is 33 per cent of the $47,201,976 that Mo-Fo charged Apple for its services up to the end of March this year. That was the last date to which the lawyers have been able to bill under the existing court mandated and issued "order of motions". Another such order will no doubt follow next year and Apple will be in receipt of yet more legal bills. Then it'll probably do the same thing again and try to get Samsung to pay part of Apple's legal bill.

And so the wheel of commerce continues to turn and redolent of the Jarndyce case in the Charles Dickens novel, Bleak House. At the end of that the litigants get nothing of the huge disputed fortune because the lawyers bills have accounted for every penny. Obviously Apple is ensuring this won't happen where it is concerned. Time to call in Tulkinghorn?

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