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May 14, 2014

SD card price-fixing lawsuit revived in US

Big manufacturers could be back in the dock

By Vinod

A customer led lawsuit accusing Toshiba, SanDisk and Panasonic of rigging SD card prices has been revived by a federal appeals court in the US.

Judge Richard Paez declared an error in judgement was made by the original trial judge who had concluded that the claimants took too long to sue the technology bigwigs.

It is estimated that Panasonic, Toshiba and SanDisk control 70% market share for memory cards (also called secure digital memory cards or SD cards). These cards are commonly used in mobile phones, tablets and digital cameras. SD-3C LLC, a licensing entity, was also involved in this muddle.

According to the judge, the Clayton Act’s four-year statute of limitations did not hold validity here as the alleged price-fixing was in force whenever the accused sold new memory cards, and one could only assume as to whether any damage had occurred prior to the sales.

Writing for a three-judge 9th Circuit panel in San Francisco, Paez stated on Wednesday that the "plaintiffs should not be penalized for failing to foresee earlier that they would enter the market for SD cards and would therefore be harmed by the defendants’ conduct". No immediate comments were forthcoming from the lawyers of both sides.

The plaintiffs stated that the infringements allegedly committed by the techno trio developed as a result of a licensing agreement dating back to 2006, which enabled these companies to arrange for a "fair market price" for memory cards. They even compelled other manufacturers to pay ‘royalty’ for SD cards sold by them.

Filed in March 2011, the lawsuit was revived for the sake of all the SD card buyers in the past four years. The purpose was to put a stop to the alleged rigging of prices while seeking damages incurred during the fiasco.

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In May 2012, Jeffrey White, U.S. District Judge in San Francisco, had dismissed the federal and statute anti-trust claims of the plaintiffs. This decision was reversed on Wednesday by Paez who sent back the case to Judge White’s court for reopening.

In a similar case, April 4 saw the revival of a lawsuit against Panasonic and SD-3C by Samsung Electronics Co., which alleged that the two were trying to suppress their competitors in the SD card market. Samsung had been paying royalty to the two accused companies.

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