NVIDIA 2009 Annual Report Download - page 118

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Rambus Corporation
On July 10, 2008, Rambus Corporation, or Rambus, filed suit against NVIDIA Corporation, asserting patent infringement of 17
patents claimed to be owned by Rambus. Rambus seeks damages, enhanced damages and injunctive relief. The lawsuit was filed in
the Northern District of California in San Jose, California. On July 11, 2008, NVIDIA filed suit against Rambus in the Middle District
of North Carolina asserting numerous claims, including antitrust and other claims. NVIDIA seeks damages, enhanced damages and
injunctive relief. Rambus has since dropped two patents from its lawsuit in the Northern District of California. The two cases have
recently been consolidated into a single action in the Northern District of California. A case management conference in the case
pending in the Northern District of California is scheduled for March 30, 2009. On November 6, 2008, Rambus filed a complaint
alleging a violation of 19 U.S.C. Section 1337 based on a claim of patent infringement against NVIDIA and 14 other respondents with
the U.S. International Trade Commission, or ITC. The complaint seeks an exclusion order barring the importation of products that
allegedly infringe nine Rambus patents. The ITC has instituted the investigation. NVIDIA intends to pursue its offensive and
defensive cases vigorously.
Product Defect Litigation and Securities Cases
In September, October and November 2008, several putative consumer class action lawsuits were filed against us, asserting
various claims arising from a weak die/packaging material set in certain versions of our previous generation MCP and GPU products
used in notebook systems. Most of the lawsuits were filed in Federal Court in the Northern District of California, but three were filed
in state court in California, in Federal Court in New York, and in Federal Court in Texas. Those three actions have since been
removed or transferred to the United States District Court for the Northern District of California, San Jose Division, where all of the
actions now are currently pending. The various lawsuits are titled Nakash v. NVIDIA Corp., Feinstein v. NVIDIA Corp., Inicom
Networks, Inc. v. NVIDIA Corp. and Dell, Inc. and Hewlett Packard , Olivos v. NVIDIA Corp., Dell, Inc. and Hewlett Packard , Sielicki
v. NVIDIA Corp. and Dell, Inc., Cormier v. NVIDIA Corp., National Business Officers Association, Inc. v. NVIDIA Corp. , and West v.
NVIDIA Corp. The First Amended Complaint was filed on October 27, 2008, which no longer asserted claims against Dell, Inc. The
various complaints assert claims for, among other things, breach of warranty, violations of the Consumer Legal Remedies Act,
Business & Professions Code sections 17200 and 17500 and other consumer protection statutes under the laws of various jurisdictions,
unjust enrichment, and strict liability.
The District Court has entered orders deeming all of the above cases related under the relevant local rules. On December 11,
2008, NVIDIA filed a motion to consolidate all of the aforementioned consumer class action cases. The District Court held a case
management conference for the above cases on February 23, 2009. On February 26, 2009, the District Court consolidated the cases,
as well as two other cases pending against Hewlett-Packard, under the caption “The NVIDIA GPU Litigation” and ordered the
plaintiffs to file lead counsel motions by March 2, 2009. On March 2, 2009, several of the parties filed motions for appointment of
lead counsel and briefs addressing certain related issues. A hearing on appointment of lead counsel is scheduled for March 23,
2009. The District Court also ordered that a consolidated amended complaint be filed on or before May 6, 2009.
In September 2008, three putative securities class actions, or the Actions, were filed in the United States District Court for the
Northern District of California arising out of our announcements on July 2, 2008, that we would take a charge against cost of revenue
to cover anticipated costs and expenses arising from a weak die/packaging material set in certain versions of our previous generation
MCP and GPU products and that we were revising financial guidance for our second quarter of fiscal year 2009. The Actions purport
to be brought on behalf of purchasers of NVIDIA stock and assert claims for violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, as amended. On October 30, 2008, the Actions were consolidated under the caption In re NVIDIA Corporation
Securities Litigation, Civil Action No. 08-CV-04260-JW (HRL). Lead Plaintiffs and Lead Plaintiffs' Counsel were appointed on
December 23, 2008. On February 6, 2009, co-Lead Plaintiff filed a Writ of Mandamus with the Ninth Circuit Court of Appeals
challenging the designation of co-Lead Plaintiffs' Counsel. On February 19, 2009, co-Lead Plaintiff filed with the District Court, a
motion to stay the District Court proceedings pending resolution of the Writ of Mandamus by the Ninth Circuit. On February 24,
2009, Judge Ware granted the stay. The Writ is still pending in the Court of Appeals. We intend to take all appropriate action with
respect to the above cases.
Intel Corporation
On February 17, 2009, Intel Corporation filed suit against NVIDIA Corporation, seeking declaratory and injunctive relief
relating to a licensing agreement that the parties signed in 2004. The lawsuit was filed in Delaware Chancery Court. Intel seeks an
order from the Court declaring that the license does not extend to certain future NVIDIA chipset products, and enjoining NVIDIA
from stating that it has licensing rights for these products. The lawsuit seeks no damages from NVIDIA. If Intel successfully obtains
such a court order, we could be unable to sell our MCP products for use with Intel processors and our competitive position would be
harmed. NVIDIA’s response to the Intel complaint is currently due on March 23, 2009. NVIDIA disputes Intel’s positions and
intends to vigorously defend the case.
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Source: NVIDIA CORP, 10-K, March 13, 2009 Powered by Morningstar® Document Research℠