SanDisk’s booth at a consumer electronics show in Germany was left barren on Tuesday after German officials carried out a court injunction to seize its MP3 players.
The Italian patent-licensing company Società Italiana per lo Sviluppo dell’Elettronica (SISVEL) alleges that SanDisk has infringed upon MP3 playback patents SISVEL manages for patent owners France Telecom, TDF, U.S. Philips, Philips Electronics NV, Institut für Rundfunktechnik, and Bayerische Rundfunkwerbung.
Elettronica
France TelecomSanDisk refuses to pay licensing fees to SISVEL, claiming its MP3 technology does not infringe upon the patents.
But the German criminal court disagreed and on Monday officials came to the IFA electronics show in Berlin and seized SanDisk’s new MP3 players, including the recently released 8-gigabyte Sansa e280 that was to rival Apple’s iPod nano (see SanDisk Takes on iPod).
SanDisk, a leading flash memory data storage manufacturer, acknowledged it is facing legal challenges over its MP3 players in its 2005 annual report.
“If the company was held to infringe upon the intellectual property of others, the company may need to spend significant resources to develop non-infringing technology or obtain licenses from third parties, but the company may not be able to develop such technology or acquire such licenses on terms acceptable to it or at all,” said SanDisk’s 2005 annual report.
SanDisk’s press representatives in Italy declined to comment to RedHerring.com on the recent seizure of its MP3 players. SISVEL did not immediately comment on the lawsuits concerning SanDisk.
Shares of SanDisk fell $0.30 to $58.41 in recent trading.
Spate of Lawsuits
SanDisk has faced lawsuits in the Netherlands, the United States, the United Kingdom, and Germany in the past year over its MP3, bar code scanning, and flash memory card technologies, among others.
SISVEL first filed a lawsuit against SanDisk in The Hague, in the Netherlands, in July 2005, regarding the international sale of SanDisk’s MP3 players. There has not been a ruling in the Netherlands regarding this lawsuit.
SISVEL has also filed suits against Creative Technology and Thomson for patent infringement in the past year. Thomson was granted a patent license in November of 2005 from SISVEL, which dropped the litigation.
Creative Technology, which dropped the litigation.
Creative Technology also pays licensing fees to SISVEL now for use of MP3 technology as well as MPEG 2 compression technology. About 600 manufacturers and software developers license patents from SISVEL.
The case echoes Apple Computer’s recent woes with Creative Technology regarding its navigation system. Apple agreed to pay its rival $100 million to settle the five-patent lawsuit regarding Creative’s Zen music players (see iPod: Apple, Creative Settle).
iPod: Apple, Creative SettleContact the writer:Editorial@RedHerring.com
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