Steve, the issue of how good the patents are is still somewhat unresolved, which is why I posed it as a question. There is a history here, however, which is useful to recall. A couple of years ago, Samsung decided it would market its own flash memories in the U.S., on the assumption that whatever patents SNDK might claim were invalid. SNDK immediately filed a formal complaint with the Commerce Department, which after reviewing the claim denied Samsung the right to export its chips to the U.S. Samsung subsequently entered into a licensing agreement with SNDK. Since that time, there have been numerous licensing agreements, some of which, with Intel, for example, are in the form of cross licensing agreements. So Intel can make flash memories using SNDK technology, without paying royalties, and SNDK can do likewise. That's why I ask a question about how good the patents are.
The issue seems pretty well settled with all major flash memory producers EXCEPT for Lexar. In earlier discussions on this thread, the consensus seems to be that Lexar's more recent suit charging false advertising is more like a side action intended to distract, drain energy (and money) from SNDK, and possibly soften them up to make some sort of accommodation on the main patent suit. It probably won't work, but the ultimate resolution of that matter is still unknown. If it is resolved in favor of SNDK, then there will no longer be any doubt about who owns (and receives money for) the technology.
Additionally, there is the issue of standards, not just for the shape and size of the cards but for maintaining security. Here SNDK seems to be way out in front, with everybody in the field, except possibly Sony, wanting to cooperate on a standard that will preserve copyrighted music, movies, etc. The significance here is that SNDK is not resting on its earlier patent portfolio but is continuing to develop and patent new ideas. This is the feature that I most like about the company, and it parallels the path taken by QUALCOMM - very successfully.
In terms of new product areas, I particularly like the health information stored on a card, as it is not a cyclical, consumer driven demand, but grows very steadily over time. Here again, it is necessary to create a standard quickly, before someone else does, and I think SNDK has made a beautiful move in allying itself with Kaneb Services on a military contract to make these health information cards (which the military likes to call PIC, for personal information carrier) the standard for storing medical information. Seen in this perspective, SNDK has got to be one of the truly fine investments available today. Art |
