NVIDIA 2007 Annual Report Download - page 33

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Opti Incorporated
On October 19, 2004, Opti Incorporated, or Opti, filed a complaint for patent infringement against NVIDIA in the United States
District Court for the Eastern District of Texas. In its complaint, Opti asserted that unspecified NVIDIA chipsets infringe five United
States patents held by Opti. Opti sought unspecified damages for our alleged conduct, attorneys' fees and triple damages for alleged
willful infringement by NVIDIA. In April 2006, the District Court issued a Markman ruling adopting Opti's proposed construction on
13 of the 15 terms at issue and Opti dropped from the lawsuit two of the five United States patents that Opti alleged NVIDIA
infringes, and elected to pursue the three remaining patents at trial.
In August 2006, Opti and NVIDIA settled this litigation. Under that settlement, NVIDIA was obligated to pay to Opti $11.0
million dollars for past and present licenses to the patents in suit and NVIDIA agreed to make additional quarterly payments to Opti
should NVIDIA use certain patented technology after January 31, 2007. The case has now been dismissed with prejudice. The
agreements with Opti call for us to pay $11.0 million in exchange for Opti's dismissal of its lawsuit against us and for certain patent
license rights. Of this $11.0 million, we recorded $8.0 million as a patent−related intangible asset and $3.0 million as a charge to cost
of revenue.
Department of Justice Subpoena and Investigation
On November 29, 2006, we received a subpoena from the San Francisco Office of the Antitrust Division of the United States
Department of Justice, or DOJ, in connection with the DOJ's investigation into potential antitrust violations related to graphics
processing units and cards. No specific allegations have been made against us. We plan to cooperate with the DOJ in its investigation.
As of March 14, 2007, 42 civil complaints have been filed against us. The majority are pending in the Northern District of California,
a number are pending in the Central District of California, and other cases are pending in several other Federal district courts.
Although the complaints differ, they generally purport to assert federal and state antitrust claims based on alleged price fixing, market
allocation, and other alleged anti−competitive agreements between us and Advanced Micro Devices, Inc., or AMD, as a result of its
acquisition of ATI Technologies, Inc., or ATI. Many of the cases also assert a variety of state law unfair competition or consumer
protection claims on the same allegations and some cases assert unjust enrichment or other common law claims. The complaints are
putative class actions alleging classes of direct and/or indirect purchasers of our graphic processing units and cards. The plaintiffs in a
few of the Northern District of California actions have filed a motion with the Judicial Panel on Multidistrict Litigation asking that all
pending and subsequent cases be consolidated in one court for all pre−trial discovery and motion practice. A hearing on this motion is
set for March 29, 2007. We believe the allegations in the complaints are without merit and intend to vigorously defend the cases.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of our security holders during the fourth quarter of fiscal 2007.
27
Source: NVIDIA CORP, 10−K, March 16, 2007