Art,
I don't understand why SanDisk would knowingly allow manufacturers to assemble and sell CF cards that infringed SNDK IP without taking legal action like Lexar recently did against a few companies. I think there is too little information regarding the royalty rights and obligations for companies such as Simple, Kingston, PNY, ect... Are there not IP for the controller? for the packaging? A bigger fish is Sony and its memory stick., I remember Eli saying at the last shareholder meeting that SNDK did not want to fight with Sony; that it is better to have Sony pushing the demand for removable flash memory cards. That may have made strategic sense where demand grossly outstripped supply a year ago (although I don't agree with the position), but clearly the market dynamics are different now: the supply of CF cards exceeds demand. If SNDK believes it is entitled to royalties from these producers, then it should go after them. It is one thing to hold off on suing someone you are in negotiations with, but certainly the negotiations with these companies can not go on forever. I can only assume SNDK's crack legal team, that prevailed over Lexar, has notified all the known infringers with letters putting them on notice that they are infringing. I do not believe there is a statute of limitations to bring suit against an infringer (except for the expiration of the patent maybe?) once the infringer has been put on notice, but certainly SNDK can't just indefinitely sit on the sidelines watching infringement and then spring a big lawsuit. The defense of laches, I'd presume, would mitigate any potential damages.
The lack of information on licensing agreements, royalties, infringement is deafening. I look forward to the annual meeting because I will ask management what it is doing about protecting the company's IP.
Jason
Shareholder since '96 |
