Crucial 2013 Annual Report Download - page 21

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An adverse outcome relating to allegations of anticompetitive conduct could materially adversely affect our business,
results of operations or financial condition.
On May 5, 2004, Rambus, Inc. ("Rambus") filed a complaint in the Superior Court of the State of California (San
Francisco County) against us and other DRAM suppliers which alleged that the defendants harmed Rambus by engaging in
concerted and unlawful efforts affecting Rambus DRAM by eliminating competition and stifling innovation in the market for
computer memory technology and computer memory chips. Rambus' complaint alleged various causes of action under
California state law including, among other things, a conspiracy to restrict output and fix prices, a conspiracy to monopolize,
intentional interference with prospective economic advantage, and unfair competition. Rambus sought a judgment for damages
of approximately $3.9 billion, joint and several liability, trebling of damages awarded, punitive damages, a permanent
injunction enjoining the defendants from the conduct alleged in the complaint, interest, and attorneys' fees and costs. Trial
began on June 20, 2011, and the case went to the jury on September 21, 2011. On November 16, 2011, the jury found for us on
all claims. On April 2, 2012, Rambus filed a notice of appeal to the California 1st District Court of Appeal.
We are unable to predict the outcome of this matter. An adverse court determination of any lawsuit alleging violations of
antitrust laws could result in significant liability and could have a material adverse effect on our business, results of operations
or financial condition.
An adverse determination that our products or manufacturing processes infringe the intellectual property rights of
others could materially adversely affect our business, results of operations or financial condition.
On January 13, 2006, Rambus filed a lawsuit against us in the U.S. District Court for the Northern District of California.
Rambus alleges that certain of our DDR2, DDR3, RLDRAM, and RLDRAM II products infringe as many as fourteen Rambus
patents and seeks monetary damages, treble damages, and injunctive relief. The accused products account for a significant
portion of our net sales. On June 2, 2006, we filed an answer and counterclaim against Rambus alleging, among other things,
antitrust and fraud claims. On January 9, 2009, in another lawsuit involving us and Rambus and involving allegations by
Rambus of patent infringement against us in the U.S. District Court for the District of Delaware, Judge Robinson entered an
opinion in favor of us holding that Rambus had engaged in spoliation and that the twelve Rambus patents in the suit were
unenforceable against us. Rambus subsequently appealed the Delaware Court's decision to the U.S. Court of Appeals for the
Federal Circuit. On May 13, 2011, the Federal Circuit affirmed Judge Robinson's finding of spoliation, but vacated the
dismissal sanction and remanded the case to the Delaware District Court for analysis of the remedy based on the Federal
Circuit's decision. On January 2, 2013, Judge Robinson entered a new opinion in our favor holding that Rambus had engaged
in spoliation, that Rambus' spoliation was done in bad faith, that the spoliation prejudiced us, and that the appropriate sanction
was to declare the twelve Rambus patents in the suit unenforceable against us. On March 27, 2013, Rambus filed a notice of
appeal to the U.S. Court of Appeals for the Federal Circuit. The Northern District of California Court stayed the trial of the
patent phase of the Northern District of California case upon appeal of the spoliation issue to the Federal Circuit. In addition,
others have asserted, and may assert in the future, that our products or manufacturing processes infringe their intellectual
property rights. (See "Item 1. Legal Proceedings" for additional details on these lawsuits.)
We are unable to predict the outcome of assertions of infringement made against us. A court determination that our
products or manufacturing processes infringe the intellectual property rights of others could result in significant liability and/or
require us to make material changes to our products and/or manufacturing processes. Any of the foregoing results could have a
material adverse effect on our business, results of operations or financial condition.
We have a number of patent and intellectual property license agreements. Some of these license agreements require us to
make one time or periodic payments. We may need to obtain additional patent licenses or renew existing license agreements in
the future. We are unable to predict whether these license agreements can be obtained or renewed on acceptable terms.
Products that fail to meet specifications, are defective or that are otherwise incompatible with end uses could impose
significant costs on us.
Products that do not meet specifications or that contain, or are perceived by our customers to contain, defects or that are
otherwise incompatible with end uses could impose significant costs on us or otherwise materially adversely affect our
business, results of operations or financial condition. From time to time we experience problems with nonconforming,
defective or incompatible products after we have shipped such products. In recent periods we have further diversified and
expanded our product offerings which could potentially increase the chance that one or more of our products could fail to meet
specifications in a particular application. As a result of these problems we could be adversely affected in several ways,
including the following: