Aus, re, cost of lawsuits. Patent suits are very expensive because they require expert testimony, delivered at costs running easily $500 per hour. That's not just for testimony at trial but during discovery. The discovery phase in a technical area such as this could easily consume more than $1 million. Add to that all the motions, cross motions, and other pre-trial activities, plus appeals from any final order, and, to paraphrase the late Sen. Everett Dirksen, "A million here, a million there, pretty soon it adds up to real money." Not to mention all the time and psychological energy. This is why, when a relatively small company sues a big one, the most likely outcome is a settlement that isn't perfect but at least goes in the right direction.
In terms of the bottom line, we'll have to see if there are specified damages or indications of how many flash memory cards were already sold by Micron. Also, we don't know if the infringement occurred by accident or was intentional. If there was intent that can be documented, that would mean treble damages. This probably won't be known until the discovery phase, which probably won't take place for perhaps six months, and even longer if Micron files a motion for summary dismissal.
So at this point, I wouldn't even add one dollar to the value of SNDK shares as a result of the lawsuit. What interests me more, however, is the added impetus given to reliable flash storage where security is now seen as a very serious problem. I'm also interested in whether the excess inventory still remains, or whether supply and demand are in better synch than so far this year. Hopefully, we'll get some answers tomorrow.
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