SanDisk 2013 Annual Report Download - page 220

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
However, legal discovery and litigation is highly unpredictable and future legal developments may cause
current estimates to change in future periods.
Patent Infringement Litigation With Round Rock Research LLC. On October 27, 2011, in response to
infringement allegations by Round Rock Research LLC (‘‘Round Rock’’), the Company filed a lawsuit
against Round Rock in the U.S. District Court for the Northern District of California. The lawsuit seeks a
declaratory judgment that twelve Round Rock patents are invalid and/or not infringed by flash memory
products sold by the Company. Round Rock has since withdrawn its allegations of infringement as to three
of the patents. SanDisk has filed motions for summary judgment of invalidity directed at two additional
Round Rock patents, and Round Rock has filed a motion for summary judgment as to certain affirmative
defenses asserted by SanDisk to the counterclaims in this action. These motions are currently pending.
Fact discovery has closed in the case. Expert discovery is underway and initial expert reports have been
exchanged. Trial is currently scheduled to begin on August 11, 2014.
On May 3, 2012, Round Rock filed an action in the U.S. District Court for the District of Delaware
alleging that the Company infringed eleven patents, and subsequently filed an amended complaint alleging
that SanDisk’s infringement was willful. The parties agreed to dismiss one patent from this Delaware
lawsuit that was also being litigated in the California case described above. Discovery is underway. Trial is
currently scheduled to begin on January 20, 2015.
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 ventures controlled by the Company from June 25, 2006 through the present. The
complaint alleges that the Company created and maintained a monopoly by fraudulently obtaining patents
and using them to restrain competition and by allegedly converting other patents for its competitive use.
On February 24, 2011, the District Court issued an Order granting in part and denying in part the
Company’s motion to dismiss which resulted in Dr. Harari being dismissed as a defendant. On
September 19, 2011, the Company filed a petition for permission to file an interlocutory appeal in the U.S.
Court of Appeals for the Federal Circuit (the ‘‘Federal Circuit’’) for the portion of the District Court’s
Order denying the Company’s motion to dismiss based on Ritz’s lack of standing to pursue Walker Process
antitrust claims. On October 27, 2011, the District Court administratively closed the case pending the
Federal Circuit’s ruling on the Company’s petition. On November 20, 2012, the Federal Circuit affirmed
the District Court’s order denying SanDisk’s motion to dismiss. On December 2, 2012, the Federal Circuit
issued its mandate returning the case to the District Court. Discovery is now open in the District Court. On
February 20, 2013, Ritz filed a motion requesting that Albert Giuliano, the Chapter 7 Trustee of the Ritz
bankruptcy estate, be substituted as the plaintiff in this case, which the District Court granted on July 5,
2013. On October 1, 2013, the District Court granted the Trustee’s motion for leave to file a third amended
complaint, which adds CPM Electronics Inc. and E.S.E. Electronics, Inc. as named plaintiffs. On
December 17, 2013, Ritz sought leave to file a fourth amended complaint, which would add a cause of
action for attempted monopolization and add another named plaintiff.
Samsung Federal Antitrust Action Against Panasonic and SD-3C. On July 15, 2010, Samsung
Electronics Co., Ltd. (‘‘Samsung’’) filed an action in the U.S. District Court for the Northern District of
California (the ‘‘District Court’’) alleging various claims against Panasonic Corporation and Panasonic
Corporation of North America (collectively, ‘‘Panasonic’’) and SD-3C, LLC (‘‘SD-3C’’) under federal
antitrust law pursuant to Sections 1 and 2 of the Sherman Act, and under California antitrust and unfair
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