SanDisk 2014 Annual Report Download - page 199

SANDISK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
commitments that Micron made to the standards-setting organization, JEDEC Solid State Technology
Association. The antitrust case has been stayed until after the January 2015 trial in the patent case.
On December 3, 2014, Round Rock filed another action in the U.S. District Court for the District of
Delaware alleging that the Company infringed five patents, which patents are not at issue in the matters
described above. The Company has not yet filed its response.
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, former SanDisk Corporation Chief Executive Officer, 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. On July 5, 2013, the District Court granted Ritz’s motion to substitute in Albert Giuliano,
the Chapter 7 Trustee of the Ritz bankruptcy estate, as the plaintiff in this case. 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 September 19, 2014, the District Court
granted the plaintiffs’ motion for leave to file a fourth amended complaint, which adds a cause of action
for attempted monopolization and adds MFLASH as a named plaintiff. The plaintiffs have filed a motion
for class certification, which is fully briefed and has been taken under submission by the District Court. On
February 3, 2015, the Company filed a motion for summary judgment as to all of the plaintiffs’ asserted
claims. Trial is scheduled to begin on June 22, 2015.
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
competition laws relating to the licensing practices and operations of SD-3C. The complaint seeks an
injunction against collection of Secure Digital (‘‘SD’’) card royalties, treble damages, restitution, pre- and
post-judgment interest, costs, and attorneys’ fees, as well as a declaration that Panasonic and SD-3C
engaged in patent misuse and that the patents subject to such alleged misuse should be held
unenforceable. The Company is not named as a defendant in this case, but it established SD-3C along with
Panasonic and Toshiba, and the complaint includes various factual allegations concerning the Company. As
a member of SD-3C, the Company may be responsible for a portion of any monetary award. Other
requested relief, including an injunction or declaration of patent misuse, could result in a loss of revenue to
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Annual Report