Samsung Electronics gets favorable ruling against Netlist in US

The US appeals court has reversed a California federal judge’s ruling against Samsung Electronics Co. in its legal fight over memory chip patents with Netlist Inc., raising expectations that the South Korean memory giant would earn favorable orders in similar legal battles.

The US Court of Appeals for the Ninth Circuit on Tuesday ruled that the California district court was incorrect in granting Netlist a summary judgment that it properly terminated a joint development and patent license agreement over memory module technologies with Samsung Electronics, according to the Korean company on Wednesday.

The lower court's original ruling could allow Netlist to collect additional royalties from the Korean tech giant, but the US appeals court has remanded to the district court to re-examine the case.

In 2021, Netlist filed a suit against Samsung Electronics, claiming that the Korean tech giant infringed its patent related to memory module technologies for cloud servers. The California district court ruled in favor of the Irvine, CA-based memory company.

The latest ruling by the appeals court is expected to allow Samsung Electronics to gain the upper hand in other similar patent infringement fights waged by Netlist.

The Korean company in April lost a semiconductor patent infringement lawsuit filed by Netlist and was ordered by the Eastern Federal District Court in Texas to pay $303 million in damages to the plaintiff.

Netlist, founded in 2000 by Hong Chun-ki, a former LG Semiconductor employee, holds a portfolio of patents regarding various semiconductor technologies and earns money via settlements in patent infringement disputes.

It has also accused SK Hynix Inc., as well as US tech giants Google and Micron Technology of violating its patents.

Samsung Electronics and Netlist have been in dispute since 2015 when the Korean memory titan agreed to pay $23 million to Netlist under their five-year joint development and license agreement for memory solutions production.

Upon the expiry of the license agreement, Netlist requested Samsung Electronics to renew the intellectual licensing term but their talks collapsed.

Since then, Netlist has waged legal battles against Samsung Electronics for alleged patent infringement in not only the US but also Germany, demanding royalties.

Following the news on the US appeals court’s ruling, Netlist shares tanked 29.9% on the Nasdaq market on Wednesday. Samsung Electronics shares rose 1.6% on Korea's main bourse Kospi on the same day.

Write to Jeong-Soo Hwang at hjs@hankyung.com

Sookyung Seo edited this article.