ADT 2006 Annual Report Download - page 92

Subpoenas and Document Requests From Governmental Entities
As previously disclosed in our periodic filings, we and others have received various subpoenas and
requests from the SEC, the United States Department of Labor, the General Service Administration
and others seeking the production of voluminous documents in connection with various investigations
into our governance, management, operations, accounting and related controls. We are cooperating
with these investigations and are complying with these requests.
Certain current and former employees in Fire and Security received subpoenas from the SEC’s
Division of Enforcement seeking testimony related to past accounting practices for the ADT dealer
connect fees. As previously reported in our periodic filings, these practices have been discontinued.
The United States Department of Labor served document subpoenas on Tyco and Fidelity
Management Trust Company for documents concerning the administration of the Tyco International
(US) Inc. Retirement Savings and Investment Plans. The current focus of the Department’s inquiry
concerns the losses allegedly experienced by the plans due to investments in our stock. The Department
of Labor has authority to bring suit on behalf of the plans and their participants against those acting as
fiduciaries to the plans for recovery of losses and additional penalties, although it has not informed us
of any intention to do so. The Company is continuing to cooperate with the Department’s investigation.
As previously disclosed, in November 2004, we received an order from the SEC to report facts and
circumstances involving our participation, if any, in the United Nations Oil for Food Program governing
sales of Iraqi oil. On January 10, 2005 and November 8, 2005, we responded to the Order and provided
information concerning transactions under the United Nations Oil for Food Program. On January 31,
2006, we received a Subpoena from the SEC to produce additional documents and information related
to the participation of three of our businesses in the Oil for Food Program. The SEC notified the
Company on June 7, 2006 that it was dismissing Tyco from the SEC’s investigation of the United
Nations Oil for Food Program.
On January 27, 2006, we received from the New Jersey Division of Criminal Justice Office of the
Attorney General a subpoena to produce documents concerning, among other things, former
employees, the use of certain chemicals, and the filing of reports under state and federal environmental
reporting laws at the same New Jersey facility sold by Tyco in 2000. The subpoena seeks information
for the period from January 1987 to December 2000. We have provided information in response to the
subpoena and will continue to cooperate fully with the investigators.
Intellectual Property and Antitrust Litigation
As previously disclosed in our periodic filings, we are a party to a number of patent infringement
and antitrust actions that may require us to pay damage awards. Tyco has assessed the status of these
matters and has recorded liabilities related to certain of these matters where appropriate.
Mallinckrodt, Inc. (‘‘Mallinckrodt’’) and Nellcor Puritan Bennett, Inc. (‘‘Nellcor’’), plaintiffs/counter-
defendants v. Masimo Corporation (‘‘Masimo’’) et al., defendants/counter-claimants, is a consolidated
patent infringement action filed on June 19, 2000 in the United States District Court for the Central
District of California. Nellcor is a subsidiary of Tyco. Nellcor alleges that Masimo infringed one Nellcor
patent related to pulse oximeters, which are medical devices used to measure blood oxygen levels in
patients, and Masimo alleges that Nellcor infringed four Masimo patents related to pulse oximeters.
Trial in the action commenced on February 18, 2004. On March 16, 2004, the jury returned a liability
finding that Nellcor willfully infringed the four Masimo patents and that Masimo did not infringe the
one Nellcor patent. On March 26, 2004, the jury awarded Masimo $135 million in damages for
Nellcor’s alleged infringement through December 31, 2003. After hearing post-trial motions, the district
court issued an order on July 14, 2004 which (i) denied Masimo’s request to impose an injunction on
the sale of pulse oximeters; (ii) reversed the jury finding of patent infringement for one of the four
30 2006 Financials