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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Rex Dwyer who wrote (4821)	2/20/1999 9:33:00 PM
From: David W. Tucker	Read Replies (1) \| Respond to of 60323

My understanding is that most of the royalties are based on more fundamental patents concerning broad flash memory concepts (in regards to semiconductor structure and control circuit aspects). The patents covering disk emulation are part of the gravy. As I recall, the Samsung suit was not over one of these disk emulation patents but was concerned with broader pioneering "flash memory" patents. Their coverage is very broad in the area of flash memory, but they also have very good patents on specific uses and environments (such as disk emulation). d

To: Rex Dwyer who wrote (4821)	2/20/1999 9:52:00 PM
From: Rex Dwyer	Respond to of 60323

Heres the Lexar suit: sandisk.com The patent, "Flash EEPROM System" (U.S. patent 5,602,987) was issued Feb. 11, 1997. SanDisk officials said they have been in cross-licensing negotiations with Lexar but that the two companies were unable to come to an agreement. They also said that customers who buy Lexar products and customers who build electronic products with Lexar devices may also be infringing patent 5,602,987. Eli Harari, SanDisk CEO and president, said, "Lexar is using Sandisk's patented innovations in an attempt to unfairly appropriate some of SanDisk's business. Since our formation in 1988, we have invested hundreds of man years and over $40 million to develop the flash storage card market with the underlying technology. We have offered a patent cross-licensing agreement to Lexar under reasonable terms, but Lexar has rejected the agreement. SanDisk has no alternative but to vigorously protect our intellectual property rights through the legal system. "In the last two years, we have signed patent cross-licensing agreements with Intel, Sharp, Hitachi, Samsung and Toshiba. Our strategy has been and is to license our patents to enable an open, competitive market for flash cards." The patent teaches and claims important aspects of the emulation of a magnetic disk drive in removable flash memory cards, the so called flashdisk and CompactFlash. The removable flashdisk memory card claimed in the patent appears to the computer, digital camera or digital recorder to be completely identical to the industry standard magnetic disk drive although the flash memory is solid state, has no moving parts, is extremely compact and rugged and consumes negligible battery power. Therefore it is ideally suited to be a universal digital storage device. SanDisk, a pioneering technology company in the flash memory market, holds more than 70 related patents.

To: Rex Dwyer who wrote (4821)	2/21/1999 12:29:00 AM
From: Craig Freeman	Read Replies (1) \| Respond to of 60323

Rex, estimating the duration and amount of future royalties is impossible because SNDK won't say who's obliged to pay what or when. Craig reply to: "Why don't you give it a shot and tell me what you think?"

To: Rex Dwyer who wrote (4821)	2/21/1999 12:45:00 AM
From: Craig Freeman	Read Replies (1) \| Respond to of 60323

Rex, you are absolutely right about Sony's beta format. They owned the market with beta until VHS came along. VHS beat them, Sony turned around and now they own the same market with VHS. And in between, they killed the VHS camcorder with 8mm and took over the hand-held market as well. In short, Sony doesn't know how to lose. Take a good look at their website and you'll see "marketing machine" written all over it. Then go to SNDK's site and tell me what you see. What Sony is doing is setting standards on the way in which flash memory will be used by the end consumer. Even if the Memory Stick flops, Sony will just do what they did with beta and substitute CF, MMC, Smartmedia or whatever format ultimately wins. In so doing they will end up owning the drivers, application software, viewing frames and other items worth far more than SNDK's technical patents. I'm not afraid of Sony's stick. It's where they might put it that keeps me on my toes. Craig