Free Status Report - District Court of Delaware - Delaware

Case 1:04-cv-00135-GMS

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE ) ) ) Plaintiff, ) ) v. ) SONY CORPORATION, SONY CORPORATION ) ) OF AMERICA, SONY ELECTRONICS, INC., ACER INC., ACER AMERICA CORPORATION, ) ) ASUSTEK COMPUTER INC., ASUS ) COMPUTER INTERNATIONAL INC., ) I/OMAGIC CORPORATION, IOMEGA ) CORPORATION, LG ELECTRONICS, INC., LG ) ELECTRONICS USA, INC., LG INNOTEK ) COMPANY, LTD., LG INNOTEK USA, INC., ) LITE-ON TECHNOLOGY CORPORATION, ) LITE-ON TECHNOLOGY INTERNATIONAL, ) INC., LITE-ON PERIPHERALS, INC., LITE-ON ) INFORMATION TECHNOLOGY ) CORPORATION, MEMOREX PRODUCTS (TAIWAN) LTD., MEMOREX PRODUCTS, INC., ) ) MICRO-STAR INTERNATIONAL COMPANY, ) LTD., MSI COMPUTER CORPORATION, ) MITSUMI ELECTRIC COMPANY, LTD., ) MITSUMI ELECTRONICS CORPORATION, TEAC CORPORATION, TEAC AMERICA, INC., ) ) AND VICTOR COMPANY OF JAPAN, ) LIMITED, ) ) Defendants. ) MAGNEQUENCH INTERNATIONAL, INC.,

C.A. No. 04-135 (GMS)

PLAINTIFF MAGNEQUENCH'S SUBMISSION REGARDING THE STATUS OF SETTLEMENT NEGOTIATIONS WITH THE VARIOUS DEFENDANTS Plaintiff Magnequench International Inc. ("Magnequench") makes this

submission regarding the status of settlement negotiations with the various Defendants in order to assist the Court in connection with the March 9 and 10, 2005 Settlement Conference.

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At the January 21, 2005 Status and Scheduling Conference, the Court set March 9 and, if necessary, March 10, 2005 for a Settlement Conference with the Court and business representatives of the parties with the authority to settle this action. Since the January 21, 2005 Status and Scheduling Conference, Magnequench's President and Chief Executive Officer, Mr. Archibald Cox, Jr., and Magnequench's Director of Business Development, Mr. Gregory Kroll, have continued to participate in face-to-face meetings, telephone conferences and/or exchanged correspondence with representatives and/or counsel for all the Defendants. These discussions have progressed to varying degrees. There are twelve (12) Defendants/Defendant Groups in this action, as set forth below: 1. "The Acer Group" - comprising Acer Incorporated and Acer America Corporation; 2. "The ASUS Group" - comprising Defendants ASUS Computer International Inc. and ASUSTek Computer Inc.; 3. 4. 5. "I/OMagic" - comprising Defendant I/OMagic Corporation; "IOMEGA" - comprising Defendant IOMEGA Corporation; "The LG Group" - comprising Defendants LG Electronics, Inc., LG Electronics USA, Inc., LG Innotek Company, Ltd., and LG Innotek USA, Inc.; 6. "The Lite-On Group" - comprising Defendants Lite-On Technology Corporation, Lite-On Technology International Inc., Lite-On Peripherals, Inc., and Lite-On Information Technology Corporation; 7. "JVC" - comprising Defendant Victor Company of Japan, Limited. -2-

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8.

"The Memorex Group" - comprising Defendants Memorex Products, Inc. and Memorex Products (Taiwan) Ltd.;

9.

"The Mitsumi Group" - comprising Defendants Mitsumi Electric Company, Ltd. and Mitsumi Electronics Corporation;

10.

"The MSI Group" - comprising Defendants Micro-Star International Company, Ltd. and MSI Computer Corporation;

11.

"The Sony Group" - comprising Defendants Sony Corporation, Sony Corporation of America and Sony Electronics Inc.; and

12.

"The TEAC Group" - comprising Defendants TEAC Corporation and TEAC America, Inc.

Magnequench has an executed Settlement Agreement with The Mitsumi Group. Magnequench believes it has reached agreements in principle to settle this action with: (1) The ASUS Group; (2) The Lite-On Group; (3) The MSI Group; (4) I/OMagic; (5) The Memorex Group; and (6) IOMEGA. Therefore, Magnequench and these Defendants/Defendant Groups will not need the Court's assistance at the March 9 and 10, 2005 Settlement Conference. With regard to the remaining Defendants/Defendant Groups, Magnequench believes that the parties need the Court's assistance in mediating settlement negotiations. These Defendants/Defendant Groups are: (1) The SONY Group; (2) The LG Group; (3) The Acer Group; (4) JVC; and (5) The TEAC Group. Attached as Exhibit A is a chart summarizing the status of settlement negotiations with each of the Defendant/Defendant Groups.

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In order to assist the Court during the Settlement Conference, Magnequench is submitting to the Court a confidential document containing a "blackline" comparison version of the most recent Settlement Agreements with each of the individual Defendant/Defendant Groups that have not yet settled. To the extent any of these draft Settlement Agreements are not blacklined, it means Magnequench has not received comments on Magnequench's latest draft Settlement Agreement from the individual Defendant/Defendant Group. The above-identified compilation containing the latest versions of the Settlement Agreements with the various Defendants will not be served on counsel for the Defendants because of the confidential nature of the individual Settlement Agreements (obviously each defendant already has the papers applicable to it). MORRIS, NICHOLS, ARSHT & TUNNELL

/s/Mary B. Graham Mary B. Graham (#2256) 1201 North Market Street P.O. Box 1347 Wilmington, DE 19899 [email protected] (302) 658-9200 Attorneys for Plaintiff Magnequench International, Inc OF COUNSEL: Brian M. Poissant Thomas G. Rowan Leo Merken JONES DAY 222 East 41st Street New York, New York 10017 (212) 326-3939 March 8, 2005

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Exhibit A Status of Settlement Negotiations Between Magnequench and the Various Defendants Defendant/Defendant Group (In Alphabetical Order) The Acer Group (Acer Incorporated and Acer America Corporation) The ASUS Group (ASUS Computer International Inc. and ASUSTek Computer Inc.) I/OMagic Corporation IOMEGA Corporation The LG Group (LG Electronics, Inc., LG Electronics USA, Inc., LG Innotek Company, Ltd., and LG Innotek USA, Inc.) The Lite-On Group (Lite-On Technology Corporation, Lite-On Technology International Inc., Lite-On Peripherals, Inc., and Lite-On Information Technology Corporation) JVC (Victor Company of Japan, Limited) The Memorex Group (Memorex Products, Inc. and Memorex Products (Taiwan) Ltd.) The Mitsumi Group (Mitsumi Electric Company, Ltd. and Mitsumi Electronics Corporation) The MSI Group (Micro-Star International Company, Ltd. and MSI Computer Corporation) The Sony Group (Sony Corporation, Sony Corporation of America and Sony Electronics Inc.) The TEAC Group (TEAC Corporation and TEAC America, Inc.) Status of Settlement Negotiations No agreement has been reached Agreement in principle has been reached Agreement in principle has been reached Agreement in principle has been reached No agreement has been reached

Agreement in principle has been reached

No agreement has been reached Agreement in principle has been reached Settlement Agreement executed

Agreement in principle has been reached No agreement has been reached

No agreement has been reached

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CERTIFICATE OF SERVICE I hereby certify that on the 8th day of March, 2005, I have caused to be electronically filed a true and correct copy of the foregoing PLAINTIFF MAGNEQUENCH'S SUBMISSION REGARDING THE STATUS OF SETTLEMENT NEGOTIATIONS WITH THE VARIOUS DEFENDANTS with the Clerk of the Court using CM/ECF which will send notification of such filing to the following: Frederick L. Cottrell, III Richards, Layton & Finger, P.A. One Rodney Square P.O. Box 551 Wilmington, DE 19899 William J. Wade Richards Layton & Finger, P.A. One Rodney Square P.O. Box 551 Wilmington, DE 19899 Josy W. Ingersoll Young Conaway Stargatt & Taylor, LLP The Brandywine Building 1000 West Street, 17th Floor Wilmington, DE 19899 Thomas H. Kovach The Bayard Firm 222 Delaware Avenue Suite 900 P.O. Box 25130 Wilmington, DE 19899 Timothy Devlin Fish & Richardson, P.C. 919 N. Market Street Suite 1100 P.O. Box 1114 Wilmington, DE 19899

Paul Crawford Connolly Bove Lodge & Hutz LLP The Nemours Building 1007 North Orange Street P.O. Box 2207 Wilmington, DE 19899

/s/Mary B. Graham Mary B. Graham (#2256)