Micron hit with $445M Netlist damages award

SSD and memory module supplier Netlist has won a memory module patent infringement legal case against Micron with the jury awarding it $445 million in damages. Micron is appealing the verdict.

Update. Micron response added 29 May 2024.

The case, 2:22-cv-00294, was heard in the district court for the Marshall Division in the Eastern district of Texas. Two patents were involved, the ‘417, where the jury awarded Netlist $20 million, and the ‘912 patent with a $425 million damages award. The jury further found that Micron wilfully infringed the ‘912 and ‘417 patents. Such wilful infringement means the court may increase the damages by up to three times, to $1.34 billion.

We wrote in August 2022: “the ‘912 patent … refers to the use of rank multiplication in an LRDIMM (Long Range DIMM) memory module. Such DIMMs can have four ranks or blocks of memory, and the patent describes IP to present the LRDIMM logically as only having two ranks, thus getting over system memory controller limits on the maximum rank count.” The ’417 patent is entitled “Memory Module With Data Buffering” in a DIMM and applies to LRDIMMs as well.

Netlist has steadfastly defended its patents by variously suing Diablo Technology, Google, Micron, Samsung and SK hynix for patent infringement and breaking licensing or development deal conditions. 

It sued Google for infringing the ‘912 patent in 2009 and is also involved in a similar legal dispute with Samsung. The Google case was suspended (stayed) until the related Netlist-Samsung case involving five Netlist patents was decided. This was because Samsung supplied the alleged infringing modules to Google. 

A jury reached a verdict against Samsung in the Federal District Court for the Central District of California, finding that Samsung materially breached a Joint Development and License Agreement with Netlist, which was signed by both companies in November 2015.

Reuters reported that another jury awarded Netlist $303 million in damages against Samsung in April last year, again in the Marshall court, in case 2:21-cv-00463.

Netlist sued SK hynix for similar memory chip patent infringements and won $40 million in damages and a cross-licensing and supply arrangement deal in 2021. That dispute commenced in 2016 and took 5 years to come to a conclusion.

In 2017 Netlist sued Diablo for infringing its memory module patents but Diablo went bust later that year.

It seems likely that Micron may now negotiate a patent licensing deal with Netlist, as might Samsung.

Micron replied to an inquiry about this with a statement: “Micron respectfully disagrees with the jury’s verdict. The vast majority of damages awarded by the jury were based on Netlist’s ’912 patent, which was already declared invalid by the U.S. Patent Trial and Appeal Board of the United States Patent and Trademark Office over a month before this trial (IPR2022-00615, Paper 96). The jury’s verdict does not affect the prior ruling that Netlist’s patent is invalid. Additionally, Micron’s evidence presented during the trial demonstrates that Micron does not infringe either of the patents asserted by Netlist.

“Netlist’s ’417 patent, which reflects less than 5 percent of the damages, is also under review by the patent office after a determination that there is a reasonable likelihood it is also invalid (IPR2023-01141, Paper 7). Micron will appeal the jury’s verdict and will defend the U.S. Patent Office ruling that the ’912 patent is invalid.”

Netlist investors will be happy but hold their celebrations until the outcome of Micron’s appeal.