SanDisk 2004 Annual Report Download - page 18

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the validity of the patent. On June 2, 2004, we filed a notice of appeal of the summary judgment rulings to the United States Court of
Appeals for the Federal Circuit.
On or about June 9, 2003, we received written notice from Infineon Technologies AG, or Infineon, that it believes we have
infringed its U.S. Patent No. 5,726,601 (the ‘601 patent). On June 24, 2003, we filed a complaint against Infineon for a declaratory
judgment of patent non−infringement and invalidity regarding the ‘601 patent in the United States District Court for the Northern
District of California, captioned SanDisk Corporation v. Infineon Technologies AG, a German corporation, et.al, Civil Case No. C 03
02931 BZ. On October 6, 2003, Infineon filed an answer and counterclaim: (a) denying that we are entitled to the declaration sought
by the our complaint; (b) requesting that we be adjudged to have infringed, actively induced and/or contributed to the infringement of
the ‘601 patent and an additional patent, U.S. Patent No. 4,841,222 (the ‘222 patent). On August 12, 2004, Infineon filed an amended
counterclaim for patent infringement alleging that we infringe U.S. Patent Nos. 6,026,002 (the ‘002 patent); 5,041,894 (the ‘894
patent); and 6,226,219 (the ‘219 patent), and omitting the ‘601 and ‘222 patents. On August 18, 2004, we filed an amended complaint
against Infineon for a declaratory judgment of patent non−infringement and invalidity regarding the ‘002, ‘894, and ‘219 patents.
On July 3, 2003, a purported shareholder class action lawsuit was filed on behalf of United States holders of ordinary shares of
Tower as of the close of business on April 1, 2002 in the United States District Court for the Southern District of New York. The suit,
captioned Philippe de Vries, Julia Frances Dunbar De Vries Trust, et al., v. Tower Semiconductor Ltd., et al., Civil Case No. 03 CV
4999, was filed against Tower and a number of its shareholders and directors, including us and Dr. Harari, who is a Tower board
member, and asserts claims arising under Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended, and
Rule 14a−9 promulgated there under. The lawsuit alleges that Tower and certain of its directors made false and misleading statements
in a proxy solicitation to Tower shareholders regarding a proposed amendment to a contract between Tower and certain of its
shareholders, including us. The plaintiffs are seeking unspecified damages and attorneys’ and experts’ fees and expenses. On
August 19, 2004, the court granted our and the other defendants’ motion to dismiss the complaint in its entirety with prejudice. On
September 29, 2004, plaintiffs appealed the dismissal to the United States Court of Appeals for the Second Circuit.
On February 20, 2004, we and a number of other manufacturers of flash memory products were sued in the Superior Court of the
State of California for the City and County of San Francisco in a purported consumer class action captioned Willem Vroegh et al. v.
Dane Electric Corp. USA, et al., Civil Case No. GCG−04−428953, alleging false advertising, unfair business practices, breach of
contract, fraud, deceit, misrepresentation and violation of the California Consumers Legal Remedy Act. The lawsuit purports to be on
behalf of a class of purchasers of flash memory products and claims that the defendants overstated the size of the memory storage
capabilities of such products. The lawsuit seeks restitution, injunction and damages in an unspecified amount.
On October 15, 2004, we filed a complaint for patent infringement and declaratory judgment of non−infringement and patent
invalidity against STMicroelectronics N.V. and STMicroelectronics, Inc. in the United States District Court for the Northern District
of California, captioned SanDisk Corporation v. STMicroelectronics, Inc., et al., Civil Case No. C 04−04379JF. The complaint alleges
that STMicro’s products infringe one of our U.S. patents and seeks damages and an injunction. The complaint further seeks a
declaratory judgment that we do not infringe several of STMicro’s U.S. patents. By order dated January 4, 2005, the court stayed our
claim that STMicro infringes the our patent pending an outcome in the ITC action (discussed below). On January 20, 2005, the court
issued an order granting STMicro’s motion to dismiss the declaratory judgment causes of action. We intend to appeal this decision.
On February 4, 2005, STMicro filed two complaints for patent infringement against us in the United States District Court for the
Eastern District of Texas, captioned STMicroelectronics, Inc. v. SanDisk Corporation, Civil Case No. 4−05CV44 and
STMicroelectronics, Inc. v. SanDisk Corporation, Civil Case No. 4−05CV45, respectively. The complaints seek damages and
injunctions against unspecified SanDisk products.
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