Apple Will Appeal Huge Damages in Lawsuit : Litigation: A jury awarded shareholders a potential $40 million after deciding the computer firm misled them about prospects for a disk drive.

Apple Computer Inc. said Friday that it will appeal a jury’s decision to award what could be millions of dollars in damages to shareholders who had contended that Vice Chairman A. C. (Mike) Markkula Jr. and former Vice President John Vennard misled them about prospects for a disk drive the company was developing in the early 1980s.

The Twiggy drive turned out to be a disastrous flop. The company pulled it off the market a few months after it was introduced in 1983.

The jury’s decision to hold Markkula and Vennard liable for potentially huge damages stunned Silicon Valley companies, where shareholder suits are common, as well as many in the legal community. Damages will be determined later, but a lawyer for the shareholders said they could reach $40 million.

The decision handed down Thursday in San Jose federal court was notable not only for the size of the potential award but also because it came after the suit had actually gone through the entire trial process. Companies usually settle such suits out of court, feeling that it is cheaper and less risky than a trial.

Thinking that it could win, Apple chose to contest the suit, which charged Markkula, Vennard, Apple founder Steve Jobs, Chairman John Sculley and the company itself with making misleading statements in a 1982 press release about the outlook for Twiggy.

Apple brought Twiggy to market in early 1983 but pulled it in September because of serious flaws. The debacle caused the company’s stock to drop about 25%.

Jobs, Sculley and the company itself were exonerated. Judge James Ware dismissed Sculley as a defendant because he had not joined the company when some of the events at issue occurred. Sculley replaced Jobs.

At the time of the Twiggy project, Markkula was president and chief executive and Vennard vice president and general manager of the peripheral systems division.

The jury held the two responsible for $2.90 of the $8-a-share drop in the stock price.

Apple said it will “contest the verdict of liability against the two former officers and believes that it will prevail on the merits of its case.”

M. Laurence Popofsky, an Apple attorney, said the verdict surprised him.

“Our own view is that the jury misconstrued the case as a consumer-fraud case and accepted the view that the product was not up to snuff,” he said. “We believe the verdict is contrary to the weight of the evidence and unsupportable as a matter of law.”

Patrick Coughlin, a lawyer who represented the shareholders, was surprised at the potential size of the award.