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We are unable to predict the outcome of assertions of infringement made against us and therefore cannot estimate the range
of possible loss, except as noted in the discussion of the Advanced Data Access LLC, Smart Memory Solutions LLC and
Semiconductor Technologies, LLC matters above. 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 could have a material adverse effect on our business, results of
operations or financial condition.
Antitrust Matters
On May 5, 2004, 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.
At least sixty-eight purported class action price-fixing lawsuits have been filed against us and other DRAM suppliers in
various federal and state courts in the United States and in Puerto Rico on behalf of indirect purchasers alleging a conspiracy to
increase DRAM prices in violation of federal and state antitrust laws and state unfair competition law, and/or unjust enrichment
relating to the sale and pricing of DRAM products during the period from April 1999 through at least June 2002. The
complaints seek joint and several damages, trebled, in addition to restitution, costs and attorneys' fees. A number of these cases
were removed to federal court and transferred to the U.S. District Court for the Northern District of California for consolidated
pre-trial proceedings. In July, 2006, the Attorneys General for approximately forty U.S. states and territories filed suit in the
U.S. District Court for the Northern District of California. The complaints allege, among other things, violations of the
Sherman Act, Cartwright Act, and certain other states' consumer protection and antitrust laws and seek joint and several
damages, trebled, as well as injunctive and other relief. On October 3, 2008, the California Attorney General filed a similar
lawsuit in California Superior Court, purportedly on behalf of local California government entities, alleging, among other
things, violations of the Cartwright Act and state unfair competition law. On June 23, 2010, we executed a settlement
agreement resolving these purported class-action indirect purchaser cases and the pending cases of the Attorneys General
relating to alleged DRAM price-fixing in the United States. Subject to certain conditions, including final court approval of the
class settlements, we agreed to pay approximately $67 million in aggregate in three equal installments over a two-year period.
We had paid the full amount into an escrow account by the end of the first quarter of 2013 in accordance with the settlement
agreement.
Three putative class action lawsuits alleging price-fixing of DRAM products also have been filed against us in Quebec,
Ontario, and British Columbia, Canada, on behalf of direct and indirect purchasers, asserting violations of the Canadian
Competition Act and other common law claims (collectively the "Canadian Cases"). The claims were initiated between
December 2004 (British Columbia) and June 2006 (Quebec). The plaintiffs seek monetary damages, restitution, costs, and
attorneys' fees. The substantive allegations in these cases are similar to those asserted in the DRAM antitrust cases filed in the
United States. Plaintiffs' motion for class certification was denied in the British Columbia and Quebec cases in May and June
2008, respectively. Plaintiffs subsequently filed an appeal of each of those decisions. On November 12, 2009, the British
Columbia Court of Appeal reversed, and on November 16, 2011, the Quebec Court of Appeal also reversed the denial of class
certification and remanded the cases for further proceedings. On October 16, 2012, we entered into a settlement agreement
resolving these three putative class action cases subject to certain conditions including final court approval of the settlement.
The settlement amount did not have a material effect on our business, results of operations or financial condition.
On June 21, 2010, the Brazil Secretariat of Economic Law of the Ministry of Justice ("SDE") announced that it had
initiated an investigation relating to alleged anticompetitive activities within the DRAM industry. The SDE's Notice of
Investigation names various DRAM manufacturers and certain executives, including us, and focuses on the period from July
1998 to June 2002.
We are unable to predict the outcome of these matters and therefore cannot estimate the range of possible loss, except as
noted in the U.S. indirect purchaser cases and the Canadian Cases above. The final resolution of these alleged 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.