SanDisk 2007 Annual Report Download - page 79

memory controllers, drives, memory cards, and media players from entry into the United States as well as a
permanent cease and desist order against the respondents. On December 6, 2007, the Commission instituted an
investigation based on the Company’s complaint. The target date for completing the investigation was originally set
for March 12, 2009. Since filing its complaint, the Company has reached settlement agreements with Add-On
Computer Peripherals, Inc., Add-On Computer Peripherals, LLC, EDGE, Infotech, Interactive, Kaser, PNY, TSR,
and Welldone. The parties’ moved to terminate the investigation as to these respondents in light of the settlement
agreements. Most of the respondents that have not settled with the Company have responded to the complaint.
Among other things, these respondents deny infringement or that the Company has a domestic industry in the
asserted patents. In responding to the complaint, these respondents have also raised several affirmative defenses
including, among others, invalidity, unenforceability, express license, implied license, patent exhaustion, waiver,
acquiescence, latches, estoppel and unclean hands. On January 23, 2008, the Administrative Law Judge issued an
initial determination extending the target date by three months to June 12, 2009, proposing a Markman hearing for
May 6-7, 2008 and tentatively scheduling the evidentiary hearing to begin on October 27, 2008.
On October 24, 2007, the Company filed a complaint for patent infringement in the United States District
Court for the Western District of Wisconsin against the following defendants: Phison, Silicon Motion, Synergistic
Sales, Inc. (“Synergistic”), USBest, Skymedi, Chipsbank, Infotech, Zotek, PQI, PNY, Kingston, Buffalo, Verbatim,
Transcend, Imation, Add-On, A-DATA, Apacer, Behavior, Corsair, Dane-Elec, EDGE, Interative, LG, TSR and
Welldone. In this action, Case No. 07-C-0607-C, the Company asserts that the defendants infringe the ’808 patent,
the ’424 patent, the ’893 patent, the ’332 patent and the ’011 patent. The Company seeks damages and injunctive
relief. In light of the above mentioned settlement agreements, the Company dismissed its claims against Add-On
Computer Peripherals, Inc., Add-On Computer Peripherals, LLC, EDGE, Infotech, Interactive, PNY, TSR, and
Welldone. The Company also voluntarily dismissed its claims against Acer and Synergistic without prejudice. On
November 21, 2007, defendant Kingston filed a motion to stay this action. Several defendants joined in Kingston’s
motion. On December 19, 2007, the Court issued an order staying the case in its entirety until the 619 Investigation
becomes final. On January 14, 2008, the Court issued an order clarifying that the entire case is stayed for all parties.
On October 24, 2007, the Company filed a complaint for patent infringement in the United States District Court
for the Western District of Wisconsin against the following defendants: Phison, Silicon Motion, Synergistic, USBest,
Skymedi, Zotek, Infortech, PQI, PNY, Kingston, Buffalo, Verbatim, Transcend, Imation, A-DATA, Apacer, Behavior,
and Dane-Elec. In this action, Case No. 07-C-0605-C, the Company asserts that the defendants infringe U.S. Patent
No. 6,149,316 (the “’316 patent”) and U.S. Patent No. 6,757,842 (the “’842 patent”). The Company seeks damages
and injunctive relief. In light of above mentioned settlement agreements, the Company dismissed its claims against
Infotech and PNY. The Company also voluntarily dismissed its claims against Acer and Synergistic without prejudice.
On November 21, 2007, defendant Kingston filed a motion to consolidate and stay this action. Several defendants
joined in Kingston’s motion. On December 17, 2007, the Company filed an opposition to Kingston’s motion. That
same day, several defendants filed another motion to stay this action. On January 7, 2008, the Company opposed the
defendants’ second motion to stay. On January 22, 2008, defendants Phison, Skymedi and Behavior filed motions to
dismiss the Company’s complaint for lack of personal jurisdiction. That same day, defendants Phison, Silicon Motion,
USBest, Skymedi, PQI, Kingston, Buffalo, Verbatim, Transcend, A-DATA, Apacer, and Dane-Elec answered the
Company’s complaint denying infringement and raising several affirmative defenses. These defenses included, among
others, lack of personal jurisdiction, improper venue, lack of standing, invalidity, unenforceability, express license,
implied license, patent exhaustion, waiver, latches, and estoppel. On January 24, 2008, Silicon Motion filed a motion
to dismiss the Company’s complaint for lack of personal jurisdiction. On January 25, 2008, Dane-Elec also filed a
motion to dismiss the Company’s complaint for lack of personal jurisdiction. On January 28, 2008, the Court issued an
order staying the case in its entirety with respect to all parties until the proceeding in the 619 Investigation become
final. In its order, the Court also consolidated this action (Case Nos. 07-C-0605-C) with the action discussed in the
preceding paragraph (07-C-0607-C).
Between August 31, 2007 and December 14, 2007, the Company (along with a number of other manufacturers
of flash memory products) was sued in the Northern District of California, in eight purported class action
complaints. On February 7, 2008 all of the civil complaints were consolidated into two complaints, one on behalf of
direct purchasers and one on behalf of indirect purchasers, in the Northern District of California in a purported class
action captioned In re Flash Memory Antitrust Litigation, Civil Case No. C07-0086. Plaintiffs allege the Company
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