WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 168.90

+4.9%

Dec 5 9:30 AM EST

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To: Art Bechhoefer who wrote (16005)	10/24/2000 11:35:24 PM
From: Ausdauer	Read Replies (2) of 60323

Art, I had a revelation tonite. The basis of the upcoming suit (as it relates to patent nullification) does not appear to be based on any contended technical aspects of the '987 patent, rather whether the patent is enforceable. Enforceability Lexar Media's case is predicated on PCMCIA and CFA regulations which they contend required disclosure of the '987 patent submission. SanDisk's reply is that a) the PCMCIA standard does not incorporate '987 and b) no CFA regulations were violated and no misrepresentations were made related to '987 during CFA meetings. As SanDisk has already quoted... "The CFA did not have any written regulations that could be interpreted as requiring SanDisk to disclose its pending patent application. Accordingly, to the extent Lexar's claim is based on the CFA's written regulations, its claim fails as a matter of law." To investigate the latter claim of misrepresentation it would appear that William Frank, Executive Director of the CFA, has been deposed (two court citations bear his last name and relate to CFA rules and regulations) and testified that no misrepresentations were made during the course of the CFA's functions. I extracted the following quote from the court document... Section II of Lexar's opposition identifies two alleged misrepresentations: "5/1/00 Frank Dep. at 170" and "5/1/00 Frank Dep. at 185." Lexar Opp. at 4. Neither of these deposition citations comes close to supporting Lexar's allegations of affirmative misrepresentations. Accordingly, no reasonable trier of fact could find that SanDisk made the affirmative misrepresentations alleged by Lexar. Lexar also contends that there was some kind of unwritten understanding between CFA members. And when SanDisk disclosed that the '987 patent was granted the CFA members responded negatively. Whether or not testimony has been submitted to indicate that all CFA members agreed to an unwritten rule regarding disclosure of proprietary interests is unclear. Lexar has only submitted Mr. Reimer's testimony to this effect which has met with several objections from SanDisk's legal team. The issue of patent misuse is concerning, although if SanDisk offered similar agreements to all potential licensees I don't see how this is anticompetitive. The fact that SanDisk required licensees to recognize the entire IP portfolio or restricted flash suppliers needs clarification. I am not certain this type of activity would render the patent unenforceable, however. Anyone with other interpretations of the findings is welcomed to comment and criticize. Aus

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