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Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
damages in an unstated amount, an accounting, preliminary and permanent injunctions, prejudgment interest,
enhanced damages for alleged willful infringement, and attorney fees and costs. The lawsuit was served on Seagate
on September 6, 2006. We served an answer to the complaint on November 27, 2006, denying all material allegations
and asserting affirmative defenses. Trial is scheduled for August 2008. We intend to vigorously defend the case.
StorMedia Texas LLC v. Comp USA, et al. On January 22, 2007, a lawsuit was filed against 11 defendants,
alleging infringement of U.S. Patent No. 6,805,891, a media patent that is allegedly owned by StorMedia Texas LLC.
The suit was filed in U.S. District Court for the Eastern District of Texas, Marshall Division. All major hard disc
drive companies are named, including Seagate Technology, Seagate Technology LLC, Hitachi, Fujitsu, Samsung,
Toshiba, and Western Digital, as well as retailers Comp USA, J&R Electronics, and Tiger Direct. We served an
answer to the complaint on April 13, 2007, denying all material allegations and asserting affirmative defense. No trial
date has been set. We intend to vigorously defend the case.
Environmental Matters
The Company’s operations inside and outside the United States are subject to laws and regulations relating to
protection of the environment, including those governing the discharge of pollutants into the air, soil and water, the
management and disposal of hazardous substances and wastes and clean-up of contaminated sites. Contaminants
have been detected at some of the Company’s current and former sites, principally in connection with historical
operations. In addition, the Company has been named as a potentially responsible party at several superfund sites.
Investigative activities have taken place at all sites of known contamination. One former site is under a Consent
Order by the U.S. Environmental Protection Agency. The extent of the contamination at this site has been
investigated and defined and remediation is underway. The Company is indemnified by a third party for a portion of
the costs it may incur in the clean-up of contamination at most sites. In the opinion of management, including
internal counsel, the probability is remote that the losses to the Company arising from these environmental matters
would be material to the Company’s financial position, cash flows or results of operations.
The Company may be subject to various state, federal and international laws and regulations governing the
environment, including those restricting the presence of certain substances in electronic products. For example, the
European Union (“EU”) has enacted the Restriction of the Use of Certain Hazardous Substances in Electrical and
Electronic Equipment (“RoHS”), which prohibits the use of certain substances, including lead, in certain products,
including hard drives, put on the market after July 1, 2006 as well as the Waste Electrical and Electronic Equipment
(“WEEE”) directive, which makes producers of electrical goods, including disc drives, financially responsible for
specified collection, recycling, treatment and disposal of past and future covered products. Similar legislation has
been or may be enacted in other jurisdictions, including in the United States, Canada, Mexico, China and Japan. The
Company will need to ensure that it complies with such laws and regulations as they are enacted, and that its
component suppliers also timely comply with such laws and regulations. If the Company fails to timely comply with
the legislation, its customers may refuse to purchase the Company’
s products, which would have a materially adverse
effect on the Company’s business, financial condition and results of operations.
Other Matters
We are involved in a number of other judicial and administrative proceedings incidental to our business, and we
may be involved in various legal proceedings arising in the normal course of our business in the future. Although
occasional adverse decisions or settlements may occur, we believe that the final disposition of such matters will not
have a material adverse effect on our financial position or results of operations.
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