Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_98-cv-01115/USCOURTS-cand-3_98-cv-01115-1/pdf.json

Parties Involved:
Lexar Media Inc
Counter-claimant
Sandisk Corporation
Counter-defendant

Document Text:

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States District C

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For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SANDISK CORPORATION,

Plaintiff,

 v.

 LEXAR MEDIA INC,

Defendant.

 /

No. C 98-01115 CRB

ORDER

Now pending before the Court is SanDisk’s motion to reopen the case and for a

preliminary injunction. After considering the papers and evidence filed by the parties, and

having had the benefit of spirited oral argument, SanDisk’s motion is GRANTED in part.

The parties are competitors in the market for flash storage card products. In

November 2000 the parties settled three pending cases: two pending before this Court and

one in Delaware. The current motion arises out of paragraph 10 of the Settlement Agreement

which provides in relevant part:

Lexar and SanDisk agree that, for a period of seven years, in any dispute

between the parties over any patent owned by either of them, the parties waive

their right to injunctive relief of any type or description, including exclusion

orders, in any forum, including the International Trade Commission. In the

event of any change in control or ownership of the business or patents of a

party by way of merger, acquisition, or otherwise, this waiver of injunctive

relief, . . ., shall terminate unless the acquiring party or merged entity agrees to

be bound by this provision with respect to all patents owned or controlled by it.

Case 3:98-cv-01115-CRB Document 529 Filed 07/21/06 Page 1 of 3
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Settlement Agreement ¶ 10 (emphasis added). This waiver of injunctive relief is effective

until November 2007.

In May 2006 Lexar filed a complaint before the International Trade Commission

(“ITC”) against Toshiba. The Complaint seeks an exclusion order excluding from entry into

the United States all “products containing” the accused flash memory chips. ITC Complaint

at p. 22. As Lexar is well aware, 70 percent of SanDisk’s products are imported into the

United States containing one of Toshiba’s accused memory chips. SanDisk thus seeks to

reopen the case and enforce the settlement by obtaining an order from the Court enjoining

Lexar from seeking an exclusion order that would bar SanDisk’s products from being

imported into the United States. Lexar concedes that paragraph 10 of the Settlement

Agreement was in effect when it filed its ITC complaint.

The Court finds that Lexar violated paragraph 10 when it filed the ITC complaint. In

the complaint Lexar is seeking an order that, among other things, would exclude 70 percent

of SanDisk’s products from importation into the United States on the ground that the memory

chips the products use infringe Lexar’s patent. SanDisk does not concede that their products

infringe Lexar’s patent; thus, there is a dispute between the parties. That Lexar chose not to

make SanDisk a respondent/defendant in the ITC matter is immaterial.

As the evidence presently before the Court establishes that the operative complaint in

the ITC proceeding is seeking relief which Lexar waived, Lexar is ordered to withdraw its

demand for an exclusion order that would include SanDisk’s products. 

The Court is not, however, enjoining Lexar or any other party from making a new

demand for relief on exactly the same terms. As SanDisk conceded at oral argument, Lexar

has submitted evidence which shows that subsequent to the filing of the ITC complaint the

termination provisions of paragraph 10 have been literally satisfied. If SanDisk believes that

it has evidence sufficient to show that paragraph 10 is still operative, and Lexar files a new

demand for an exclusion order that applies to SanDisk’s products, Lexar may file a new 

//

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motion for an injunction. 

IT IS SO ORDERED.

Dated: July 21, 2006

 

CHARLES R. BREYER

UNITED STATES DISTRICT JUDGE

Case 3:98-cv-01115-CRB Document 529 Filed 07/21/06 Page 3 of 3