SanDisk 2008 Annual Report Download - page 39

answered Lonestar’s complaint, denying the allegations. Pursuant to a settlement agreement reached, the lawsuit
was dismissed on November 14, 2008. Lonestar’s claims were dismissed with prejudice with respect to the
particular products accused of infringement. SanDisk’s counterclaims were dismissed without prejudice.
On September 11, 2007, the Company and the Company’s CEO, Dr. Eli Harari, received grand jury
subpoenas issued from the United States District Court for the Northern District of California indicating a
Department of Justice investigation into possible antitrust violations in the NAND flash memory industry. The
Company also received a notice from the Canadian Competition Bureau (“Bureau”) that the Bureau has
commenced an industry-wide investigation with respect to alleged anti-competitive activity regarding the
conduct of companies engaged in the supply of NAND flash memory chips to Canada and requesting that the
Company preserve any records relevant to such investigation. The Company is cooperating in these
investigations.
On September 11, 2007, Premier International Associates LLC (“Premier”) filed suit against the Company
and 19 other named defendants, including Microsoft Corporation, Verizon Communications Inc. and AT&T Inc.,
in the United States District Court for the Eastern District of Texas (Marshall Division). The suit, Case
No. 2-07-CV-396, alleges infringement of Premier’s U.S. Patents 6,243,725 (the “’725”) and 6,763,345 (the
“’345”) by certain of the Company’s portable digital music players, and seeks an injunction and damages in an
unspecified amount. On December 10, 2007, an amended complaint was filed. On February 5, 2008, the
Company filed an answer to the amended complaint and counterclaims: (a) denying infringement; (b) seeking a
declaratory judgment that the ’725 and ’345 patents are invalid, unenforceable and not infringed by the
Company. On February 5, 2008, the Company, along with the other defendants in the action, filed a motion to
stay the litigation pending completion of reexaminations of the ’725 and ’345 patents by the U.S. Patent and
Trademark Office. This motion was granted and on June 4, 2008, the action is currently stayed.
On October 24, 2007, the Company filed a complaint under Section 337 of the Tariff Act of 1930 (as
amended) (Inv. No. 337-TA-619) titled, “In the matter of flash memory controllers, drives, memory cards, and
media players and products containing same” in the ITC (hereinafter, “the 619 Investigation”), naming the
following companies as respondents: Phison Electronics Corp. (“Phison”); Silicon Motion Technology Corp.,
Silicon Motion, Inc. (Taiwan), Silicon Motion, Inc. (California), and Silicon Motion International, Inc. (collectively,
“Silicon Motion”); USBest Technology, Inc. dba Afa Technologies, Inc. (“USBest”); Skymedi Corp. (“Skymedi”);
Chipsbrand Microelectronics (HK) Co., Ltd., Chipsbank Technology (Shenzhen) Co., Ltd., and Chipsbank
Microelectronics Co., Ltd., (collectively, “Chipsbank”); Zotek Electronic Co., Ltd., dba Zodata Technology Ltd.
(collectively, “Zotek”); Infotech Logistic LLC (“Infotech”); Power Quotient International Co., Ltd., and PQI Corp.
(collectively, “PQI”); Power Quotient International (HK) Co., Ltd.; Syscom Development Co. Ltd.; PNY
Technologies, Inc. (“PNY”); Kingston Technology Co., Inc., Kingston Technology Corp., Payton Technology
Corp., and MemoSun, Inc. (collectively, “Kingston”); Buffalo, Inc., Melco Holdings, Inc., and Buffalo Technology
(USA), Inc. (collectively, “Buffalo”); Verbatim Corp. (“Verbatim”); Transcend Information Inc. (Taiwan),
Transcend Information Inc. (California), and Transcend Information Maryland, Inc., (collectively, “Transcend”);
Imation Corp., Imation Enterprises Corp., and Memorex Products, Inc. (collectively, “Imation”); Add-On Computer
Peripherals, Inc. and Add-On Computer Peripherals, LLC (collectively, “Add-On Computer Peripherals”); Add-On
Technology Co.; A-Data Technology Co., Ltd., and A-Data Technology (USA) Co., Ltd., (collectively,
“A-DATA”); Apacer Technology Inc. and Apacer Memory America, Inc. (collectively, “Apacer”); Acer, Inc.
(“Acer”); Behavior Tech Computer Corp. and Behavior Tech Computer (USA) Corp. (collectively, “Behavior”);
Emprex Technologies Corp.(“Emprex”); Corsair Memory, Inc. (“Corsair”); Dane-Elec Memory S.A., and Dane-
Elec Corp. USA, (collectively, “Dane-Elec”); Deantusaiocht Dane-Elec TEO; EDGE Tech Corp. (“EDGE”);
Interactive Media Corp, (“Interactive”); Kaser Corp. (“Kaser”); LG Electronics, Inc., and LG Electronics U.S.A.,
Inc., (collectively, “LG”); TSR Silicon Resources Inc. (“TSR”); and Welldone Co. (“Welldone”). In the complaint,
the Company asserts that respondents’ accused flash memory controllers, drives, memory cards, and media players
infringe the following: U.S. Patent No. 5,719,808 (the “’808 patent”); U.S. Patent No. 6,763,424 (the “’424
patent”); U.S. Patent No. 6,426,893 (the “’893 patent”); U.S. Patent No. 6,947,332 (the “’332 patent”); and U.S.
Patent No. 7,137,011 (the “’011 patent”). The Company seeks an order excluding the accused products from entry
35