Sandisk Corporation v. Lexar Media Inc

Filing 529

ORDER by Judge Charles R. Breyer granting 503 Motion to Reopen Case, granting in part and denying in part 503 Motion for Preliminary Injunction (crblc1, COURT STAFF) (Filed on 7/21/2006)

Sandisk Corporation v. Lexar Media Inc

Doc. 529

Case 3:98-cv-01115-CRB

Document 529

Filed 07/21/2006

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1 2 3 4 5 6 7 8 9 10 I N THE UNITED STATES DISTRICT COURT F O R THE NORTHERN DISTRICT OF CALIFORNIA

U n it e d United States District Court

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For the Northern District of California

S A N D IS K CORPORATION, P l a i n ti f f , v. LEXAR MEDIA INC, De fend ant. /

N o . C 98-01115 CRB ORDER

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N o w pending before the Court is SanDisk's motion to reopen the case and for a p r e l im i n a r y injunction. After considering the papers and evidence filed by the parties, and havin g had the benefit of spirited oral argument, SanDisk's motion is GRANTED in part. T h e parties are competitors in the market for flash storage card products. In N o v e m b e r 2000 the parties settled three pending cases: two pending before this Court and o n e in Delaware. The current motion arises out of paragraph 10 of the Settlement Agreement wh ich provides in relevant part: Lex ar and SanDisk agree that, for a period of seven years, in any dispute b e t w e e n the parties over any patent owned by either of them, the parties waive t h e i r right to injunctive relief of any type or description, including exclusion o r d e r s , in any forum, including the International Trade Commission. In the e v e n t of any change in control or ownership of the business or patents of a p a r t y by way of merger, acquisition, or otherwise, this waiver of injunctive relief, . . ., shall terminate unless the acquiring party or merged entity agrees to be bound by this provision with respect to all patents owned or controlled by it.

Dockets.Justia.com

Case 3:98-cv-01115-CRB

Document 529

Filed 07/21/2006

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S e t t le m e n t Agreement ¶ 10 (emphasis added). This waiver of injunctive relief is effective u n t i l November 2007. I n May 2006 Lexar filed a complaint before the International Trade Commission ("ITC ") against Toshiba. The Complaint seeks an exclusion order excluding from entry into the United States all "products containing" the accused flash memory chips. ITC Complaint a t p. 22. As Lexar is well aware, 70 percent of SanDisk's products are imported into the Un ited States containing one of Toshiba's accused memory chips. SanDisk thus seeks to r e o p e n the case and enforce the settlement by obtaining an order from the Court enjoining L e x a r from seeking an exclusion order that would bar SanDisk's products from being i m p o r t e d into the United States. Lexar concedes that paragraph 10 of the Settlement Ag reem ent was in effect when it filed its ITC complaint. T h e Court finds that Lexar violated paragraph 10 when it filed the ITC complaint. In t h e complaint Lexar is seeking an order that, among other things, would exclude 70 percent of SanDisk's products from importation into the United States on the ground that the memory chips the products use infringe Lexar's patent. SanDisk does not concede that their products infring e Lexar's patent; thus, there is a dispute between the parties. That Lexar chose not to mak e SanDisk a respondent/defendant in the ITC matter is immaterial. As the evidence presently before the Court establishes that the operative complaint in the ITC proceeding is seeking relief which Lexar waived, Lexar is ordered to withdraw its dem and for an exclusion order that would include SanDisk's products. The Court is not, however, enjoining Lexar or any other party from making a new d e m a n d for relief on exactly the same terms. As SanDisk conceded at oral argument, Lexar h a s submitted evidence which shows that subsequent to the filing of the ITC complaint the t e r m i n at i o n provisions of paragraph 10 have been literally satisfied. If SanDisk believes that i t has evidence sufficient to show that paragraph 10 is still operative, and Lexar files a new d em a nd for an exclusion order that applies to SanDisk's products, Lexar may file a new // // 2

United States District Court

11 12
For the Northern District of California

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Case 3:98-cv-01115-CRB

Document 529

Filed 07/21/2006

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mo tion for an injunction. IT IS SO ORDERED.

D a t e d : July 21, 2006

CHARLES R. BREYER U N I TE D STATES DISTRICT JUDGE

United States District Court

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For the Northern District of California

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