Samsung gains upper hand vs Netlist in $303 million patent dispute

Samsung Electronics Co. has taken the upper hand in its ongoing legal battle against Netlist Inc. over memory chip module patent infringement allegations following the US Patent Trial and Appeal Board's (PTAB) ruling that all of the latter's related patent claims are unpatentable.  

According to foreign media and industry sources on Wednesday, the PTAB, an administrative legal body of the United States Patent and Trademark Office (USPTO), sided with Samsung Electronics in a lawsuit raised by the Korean tech giant to nullify Netlist’s two DRAM chip module patents in light of previous patents and published standards.

Together with the PTAB’s previous decisions in December last year to invalidate all claims of Netlist’s three other patents covering memory chip modules, Samsung Electronics could be cleared of a $303 million patent verdict handed down last April.

A year ago, the world’s No. 1 memory chip maker lost a chip patent violation lawsuit filed by the Irvine, CA-headquartered modular memory subsystem-developing company, which awarded the plaintiff $303 million in damages.

Samsung Electronics petitioned the PTAB to nullify the five patents tied to the verdict.

With the latest PTAB decision, there is no legal basis forcing the Korean company to compensate Netlist.

Netlist is however expected to take the PTAB’s latest decision to an appeal court, according to industry experts. 

NEARLY DECADE-OLD DISPUTE

The two companies’ legal wrangling over memory chip module patents dates back to 2015.

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. 

In 2015, Samsung Electronics 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 terms but their talks collapsed.

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

It argues the Korean chip giant infringed its patents in developing Samsung’s high-performance memory chips, including some of DDR4, DDR5 and high-bandwidth memory (HBM) components.  

But Samsung said its technology worked differently from those owned by Netlist.

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

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

Sookyung Seo edited this article.