Opinion ID: 731320
Heading Depth: 4
Heading Rank: 4

Heading: Defendants' Omissions about the R6000 Line

Text: 67 Plaintiffs also allege that defendants failed to disclose that MIPS was having serious technical problems with its R6000 line. The district court, however, did not find defendants' failure to disclose this information to be misleading because the defendants had already disclosed that MIPS was having problems with its supplier. Defendants identified sourcing and cost problems with the R6000 line in their SEC Form 10-K and 10Q filings. 68 But a jury may find that such disclosures were not sufficient. As we have explained: 69 There is a difference between knowing that any product-in-development may run into a few snags, and knowing that a particular product has already developed problems so significant as to require months of delay. 70 Convergent Technologies, 948 F.2d at 515, n. 2 (citing Apple Computer, 886 F.2d at 1113-14). 71 Here, plaintiffs have provided evidence suggesting the R6000 line was experiencing more than simply supply problems. The R6000 line was plagued with delays and performance problems so severe that MIPS was losing orders and constantly cutting sales forecasts. Defendants, however, continued to represent to analysts that there was pretty significant demand and that shipment levels would increase in the third quarter of 1991. Based on this evidence, we believe that a jury could reasonably find that defendants' statements about the R6000 line were false or misleading.