SanDisk 2011 Annual Report Download - page 176

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
claims, invalidity of certain of those claims, and in connection with certain of the Company’s damages claims.
On August 12, 2011, the District Court granted Kingston’s motion for summary judgment as to all of the
Company’s infringement claims. On October 13, 2011, the District Court granted the Company’s motion for
summary judgment on Kingston’s monopolization and attempted monopolization counterclaims, but denied the
Company’s motion for summary judgment on Kingston’s federal agreement-in-restraint-of-trade counterclaim
and state law unfair competition counterclaim. A bench trial on Kingston’s remaining counterclaims was held the
week of November 7, 2011. The District Court has not issued a decision.
Patent Infringement Litigation Initiated by SanDisk (United Kingdom). On April 4, 2011, following the
detention by Customs Authorities in the United Kingdom of several consignments of Universal Serial Bus
(“USB”) flash drive products imported by Kingston Digital Europe Limited (“Kingston”), SanDisk IL Ltd. and
the Company commenced patent infringement proceedings against Kingston in the Patents Court in the Chancery
Division of the High Court. The subject matter of the proceedings concerns Kingston USB flash drive products
suspected of infringing three Company patents, being European patents (UK) numbered 1,092,193, 1,548,604
and 1,746,413. The Company seeks injunctive relief, damages, costs and associated remedies in those
proceedings. A further related company, Kingston Technology Europe Limited, was initially named in the
proceedings but was removed after Kingston admitted to all importation of the relevant products. Kingston filed
its Defence (i.e., Defense) on May 19, 2011 denying infringement and seeking revocation of all three patents.
The Company joined issue with Kingston’s allegations in its Reply and Defence to Counterclaim served on
July 6, 2011. Trial is scheduled to commence the week of October 8, 2012.
Patent Litigation Initiated By SanDisk. On October 27, 2011, in response to infringement allegations by
Round Rock Research LLC, the Company filed a lawsuit against Round Rock in the U.S. District Court for the
Northern District of California (the “District Court”). The lawsuit seeks a declaratory judgment that eleven
Round Rock patents are invalid and/or not infringed by flash memory products sold by the Company. To date,
Round Rock has not filed an answer or counterclaim in the lawsuit. On November 22, 2011, Round Rock filed a
motion to dismiss the case for alleged lack of personal jurisdiction, which the District Court denied on
February 16, 2012.
Federal Civil Antitrust Class Actions. 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 U.S. District Court for
the Northern District of California (the “District Court”), 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 a purported class action captioned In re Flash Memory
Antitrust Litigation. Plaintiffs alleged the Company and a number of other manufacturers of flash memory and
flash memory products conspired to fix, raise, maintain and stabilize the price of NAND flash memory in
violation of state and federal laws and sought an injunction, damages, restitution, fees, costs and disgorgement of
profits. The direct purchaser lawsuit was dismissed with prejudice. On March 31, 2010, the District Court denied
the indirect purchaser plaintiffs’ class certification motion, and denied plaintiffs’ motion for leave to amend the
Consolidated Amended Complaint to substitute certain class representatives. On April 5, 2011, the District Court
denied the indirect purchaser plaintiffs’ motion for reconsideration of the class certification decision and on
April 19, 2011, indirect purchaser plaintiffs filed a Rule 23(f) petition to the U.S. Court of Appeals for the Ninth
Circuit (the “Ninth Circuit”) to request permission to appeal that decision. On June 28, 2011, the Ninth Circuit
denied that petition. On July 12, 2011, indirect purchaser plaintiffs petitioned the Ninth Circuit for a rehearing,
which the Ninth Circuit denied on August 24, 2011. Indirect purchaser plaintiffs petitioned the district court to
reopen the case, which request was granted on January 3, 2012.
Ritz Camera Federal Antitrust Class Action. On June 25, 2010, Ritz Camera & Image, LLC (“Ritz”) filed a
complaint in the U.S. District Court for the Northern District of California (the “District Court”), alleging that the
Company violated federal antitrust law by conspiring to monopolize and monopolizing the market for flash
memory products. The lawsuit captioned Ritz Camera & Image, LLC v. SanDisk Corporation, Inc. and Eliyahou
Harari, purports to be on behalf of direct purchasers of flash memory products sold by the Company and joint
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