SAN FRANCISCO — SanDisk Corp. and Memorex Products Inc. have agreed to play nice. The two companies, which have been embroiled in a bitter 6-year-old federal patent dispute over flash memory technology, put aside their differences last month after deciding that the case did not warrant a trial.

Milpitas, Calif.-based SanDisk agreed to drop its claim that Memorex's CompactFlash cards — which Memorex had purchased from C-One Technology Corp., a Taiwanese manufacturer of components for mobile devices, and Pretec Electronics Corp., C-One's Fremont, Calif.-based subsidiary and a defendant in the case — infringed on its patent.

SanDisk is headed by Eli Harari, 60, who serves as the company's chief executive officer and chairman of the board of directors, and Sanjay Mehrotra, 47, who co-founded SanDisk and is currently its president and chief operating officer.

Judge Vaughn R. Walker signed off on the agreement Sept. 8 in the U.S. District Court-Northern District of California and vacated all orders, including claim-construction orders, related to the dispute prior to Aug. 28. (Claim construction is the art of translating patent claim jargon into plain English; claim construction disputes arise over both the definition of technical terms and semantic interpretation.)

Walker stipulated in the agreement that Memorex refrain from manufacturing or selling the flash-memory cards in the United States; he dismissed with prejudice SanDisk's claims that Memorex had infringed on its patent and he dismissed without prejudice Memorex's affirmative defenses against SanDisk.

"For the life of [SanDisk's] patent, Memorex is enjoined from using in the United States, making in the United States, having made in the United States, selling in the United States, offering for sale in the United States or importing into the United States for sale, the accused CF cards," Walker wrote in his order to dismiss the case. He also ordered the two companies to bear their own costs and attorneys' fees.

The agreement came a little more than a month after the court dismissed SanDisk's infringement claims against Ritek Corp., a Taiwanese consumer-electronics group specializing in optical-media products, flash memory, MP3 players, light-emitting diode displays and plastics; as well as Ritek's patent-noninfringement and invalidity claims. Pretek remains the lone defendant in the case.

SanDisk and Ritek also agreed to bear their own legal fees – a stipulation of the settlement agreement they reached in late June. Under the agreement, Ritek became the sole SanDisk-licensed manufacturer of flash cards, USB drives and storage systems.

SanDisk filed suit against Memorex in October 2001, accusing the Cerritos, Calif.-based company of violating its U.S. patent on the "Flash EEprom System," which SanDisk markets to consumers as CF cards. SanDisk included Ritek and Pretec in the lawsuit because Memorex had contracted with them to manufacture its flash-memory products. SanDisk also named Taiwanese firm Power Quotient International in the suit, but reached a settlement with it in 2002.

SanDisk and Memorex began working toward resolving their dispute in mid-August – a surprising development considering that in early July, SanDisk chided Memorex and Pretec for not providing information that it had repeatedly requested of them. During their negotiations, SanDisk and Memorex learned that with the exception of a very small amount of sales, Memorex had stopped selling the disputed flash memory cards in 2002. This was reflected in a joint statement the two companies filed with the court Aug. 31.

"The revenue base on which any damages recovery would be calculated in this case is relatively modest. SanDisk and Memorex recognize that the economies of the case do not justify the fees and expenses of trial,” the companies said in a statement.

Flash memory is a type of computer memory that can be electronically erased and reprogrammed; it is considered nonvolatile, in that it retains stored information even when not powered. Flash memory is primarily used in memory cards and USB flash drives (thumb drives, handy drives, memory sticks, flash sticks and jump drives), which are used for general storage and transfer of data between computers and other digital products.

Flash memory products are an extremely competitive market that operates on very tight profit margins. SanDisk asserts that it is the only company in the world to have the rights to manufacture, distribute and sell every major flash card format. The company generated more than $3.3 billion in revenue last year, and employs approximately 1,083 employees worldwide.