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To: Ausdauer who wrote (5666)	5/7/1999 5:57:00 PM
From: Sam	Read Replies (1) \| Respond to of 60323

Aus, "Also, if there is a settlement there is no need for a trial. Therefore I find Mr. Reimer's remarks confusing." He's just saying that they have both agreed to try to reach a settlement before the trial begins. Nothing fancy there. It may be that they will think that SNDK's terms are too high for them, and that they would rather duke it out in court. We'll see. Good move today. Sam (31)

To: Ausdauer who wrote (5666)	5/8/1999 9:27:00 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Aus and Thread: This news doesn't hurt SNDK but merely shows who has the trump card. SNDK obviously has the stronger hand. The reason that Lexar may be in settlement negotiations is simple. If SNDK should win a trial verdict, and if the verdict shows that Lexar intentionally infringed, then there will be treble damages. Concerning the appropriate royalty payment, one precedent could be the Kodak-Polaroid lawsuit, in which the court awarded Polaroid damages based on 8 percent of the retail price of Kodak instant film. While the amount was substantial, it was really just a drop in the bucket for Kodak. The court, however, found no intent to infringe, in spite of Kodak having copied about 14 patents. So, in this case, it turns out that Polaroid could have settled for more than they received, after paying legal fees and other costs. Royalties are the way to go. They give a company cash flow and make it possible to put more into research and development. They may also allow the company to buy back shares, if the stock price is thought to be abnormally low. At this point, if I were to hazard a guess, I would say that it is unlikely the shares will fall back even to $30. Art