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Technology Stocks : WDC/Sandisk Corporation
WDC 157.75+0.4%Nov 14 3:59 PM EST

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To: orkrious who wrote (16321)10/30/2000 10:27:39 PM
From: Ausdauer  Read Replies (3) of 60323
 
Jay, I am trying to create a timeline.

This is what I have pieced together so far...

circa 1993:

SanDisk files '987 patent with U.S. Patent Office
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October 1994:

SanDisk reveals CompactFlash as a new storage medium designed for digital cameras and other mobile devices.

from SanDisk's website...

"CompactFlash, which weighs a half ounce and is the size of a matchbook, is an ultra-small, removable data storage system. Introduced in October 1994, CompactFlash provides complete PCMCIA-ATA functionality and compatibility. CompactFlash has built-in, industry-standard compatibility because the 50-pin CompactFlash card can be easily slipped into a passive 68 pin Type II adapter card that fully meets PCMCIA electrical and mechanical interface specifications."
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October 1995:

The CompactFlash Association is formed by the following companies; Apple Computer Inc., Canon, Eastman Kodak, Hewlett-Packard, LG Semicon (formerly Goldstar), Matsushita (Panasonic), Motorola, NEC, Polaroid, SanDisk (formerly SunDisk), Seagate and Seiko Epson.

from the CompactFlash Association website...

"The CompactFlash Association (CFA) was established in October, 1995 as a non-profit, mutual-benefit corporation with the premise that CF technology will result in the introduction of a new class of advanced, small, lightweight, low-power mobile products that will significantly increase the productivity and enhance the lifestyle of millions of people. The concept behind CompactFlash technology is simple: to capture, retain and transport data, video, audio and images. CF provides the capability to easily transfer all types of digital information and software between a large variety of digital systems."

At that time SanDisk also tranferred their trademarks and the CompactFlash specs to the CompactFlash Association...

SanDisk will transfer the CompactFlash trademark and technical specifications to CFA, which will make it available under a royalty free license to other third party manufacturers who commit to develop, manufacture and supply CF products.
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June 1996: Cirrus Logic (whose IP is later purchased by the co-founders of Simple Technology) registers as a CompactFlash Association member.

compactflash.org
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September 1996:

Manouch, Mark and Mike Moshayedi purchase the intellectual properties of Cirrus Logic and rename the company Lexar Media. They finance the company during 1996 and 1997, and perhaps extending into 1998.

Message 13224256

from Simple Technology's SEC registration statement...

"In September 1996, we made a $3.0 million non-interest bearing loan to Manouch Moshayedi, Mike Moshayedi and Mark Moshayedi, each of whom is an executive officer and director of Simple Technology. The purpose of this loan was to facilitate the purchase by the Moshayedi brothers of a business unit of Cirrus Logic, Inc., now named Lexar Media, Inc. In addition, from November 1996 through May 1997, we made related non-interest bearing advances to the Moshayedis totaling $2.3 million as operating capital for Lexar. In May 1997, the Moshayedis repaid $2.3 million of non-interest bearing advances. In addition, in August 1997, the Moshayedis repaid the remaining $3.0 million loan to us in full. Currently, neither we nor the Moshayedis have any type of relationship, either business, financial or otherwise, with Lexar."

The Moshayedis sell 10% of the company to Toshiba in 1997 and then divest entirely in late 1998. The Moshayedi brothers continue their interest in the flash memory business by later taking Simple Technology public in 2000 using none of the Lexar Media IP and purchasing flash memory and controllers from Hitachi that is "strictly licensed" [to Hitachi] by SanDisk.

Message 13369885
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March 1997:

SanDisk announces award of the '987 patent some 4 years after its submission, 2 1/2 years after the announcement of the CompactFlash product, and 1 1/2 years after releasing the trademark and specifications of CompactFlash to the CompactFlash Association and its membership.
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March 1997:

Lexar Media announces its own CompactFlash card...

techweb.com
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October 3, 1997:

Lexar Media announces management changes including John Reimer as CEO...

"Lexar Media Corporation announced today a series of management additions that strongly position the company in the emerging CompactFlash memory card and digital film marketplace.

John Reimer, founder and former chairman of the Personal Computer Memory Card International Association (PCMCIA), has been appointed president and CEO of the Fremont, CA start-up. Most recently Reimer led Motorola's Mobile Computing Products Division and previously served as vice president of sales and marketing for SanDisk Corporation. He has held executive management positions at Texas Instruments and Fujitsu Microelectronics and holds and B.S. in electrical engineering from the University of Illinois."

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Again I think much of Lexar Media's case against SanDisk regarding "unenforceability" will depend on the testimony of CFA members and the governing body. It seems from Judge Breyer's recent memorandum and order that "The Frank Deposition" does not corroborate Mr. Reimer's contention that the rules and regulations of the CFA were violated. The above timeline suggests that the CF card and its specs were made available by SanDisk, who had a working product since October of 1994 or earlier, prior to any additional CF card manufacturers coming on board. The CFA website does not say that SanDisk tranferred any of its IP to the CF Association.

The "unenforceability" issue may come down to other CF Association members coming to SanDisk's defense or, at a minimum, refusing to back up Mr. Reimer's recollection of any "unwritten" arrangements.

Ausdauer
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