SUNNYVALE, CA, Nov. 15, 2000 - SanDisk Corporation (NASDAQ: SNDK) and Lexar Media, Inc. (NASDAQ: LEXR) announced today that they have reached a settlement agreement concerning the patent infringement actions and all other claims and counterclaims currently before the United States District Courts for the Northern District of California and the District of Delaware.
In March 1998, SanDisk sued Lexar in the Northern District of California alleging that Lexar's CompactFlash™ and PC Cards infringe SanDisk's U.S. Patent No. 5,602,987 ("'987 Patent"). In resolution of this action, Lexar has stipulated that SanDisk's '987 Patent is valid and infringed by Lexar's current CompactFlash™ and PC Cards. Lexar will make a lump sum payment of $8.0 million for royalties due on the '987 Patent, through March 31, 2001. Subject to Lexar's representations and warranties relating to Lexar's newly designed CompactFlash™ and PC Cards, SanDisk has stipulated that these designs do not infringe SanDisk's '987 Patent. Lexar shall enter into a 4% royalty-bearing license agreement for certain Lexar products that may use the '987 Patent beyond March 31, 2001.
In September 2000, Lexar sued SanDisk in the District of Delaware alleging that SanDisk's SmartMedia products infringe Lexar's United States Patent No. 5,479,638 ("'638 Patent"). In resolution of this action, SanDisk will pay Lexar a lump sum payment of $2.0 million for a fully-paid up license for use of the '638 Patent in SmartMedia products.
Under the settlement, Lexar has provided SanDisk with an option for a royalty bearing license to its patents for use in certain future SanDisk products.
SanDisk and Lexar have agreed to resolve any future disputes relating to the use by Lexar of the '987 Patent through binding arbitration. The parties also agreed that for a period of seven years, neither party shall seek injunctive relief against the other in any patent lawsuit. However, at all times, SanDisk retains the right to seek injunctive relief to enforce the payment of royalties pursuant to an arbitrator's ruling.
SanDisk and Lexar have agreed to dismiss with prejudice all pending claims and counterclaims involving claims of false advertising, unfair competition and patent misuse.
All other terms of the Agreement are confidential.