Netlist vs. Samsung: The Battle over Patent 912

On August 18, 2024, a significant court case is set to unfold between Netlist Inc. (NLST) and Samsung, focusing on the infringement of Patent 912. This patent has been a cornerstone for Netlist, and its enforcement has already led to a substantial $445 million award from a recent case against Micron. Considering that Samsung's production volume is up to three times that of Micron, expectations are high that the judgment in this case could exceed $1 billion.

However, the road to this point has been fraught with controversy. Recently, the Patent Trial and Appeal Board (PTAB) invalidated Claim 16 of Patent 912. This decision came after five previous reviews and numerous higher court validations spanning over 14 years were made, which had consistently upheld the patent. The latest PTAB's invalidation, which seems based on some new concocted grounds, has raised serious concerns about the integrity of their review process.

This Inter Partes Review (IPR) was requested by Samsung on behalf of Google, despite Google having previously requested a review for the same claim. The PTAB's decision to entertain this new review has been widely criticized. Observers argue that the PTAB should have declined the request, given Google's prior involvement. The situation has led to questions about why this review was permitted and whether the process has been compromised.

The entire scenario suggests a need for closer scrutiny. Some believe that the PTAB's actions are either a result of incompetence or something more questionable. There is a growing call for an overhall of the PTAB and we feel a special counsel should be appointed to investigate the PTAB's decision-making process, particularly concerning Netlist's patents. The perception is that the PTAB, which invalidates 84 percent of the patents brought before it, may not be operating with the fairness and expertise required for such a critical role.

Adding to the controversy was an IPR review involving several of Netlist's patents, including those related to High Bandwidth Memory (HBM). During this review, the judges frequently interrupted Netlist's attorney, Jason Sheasby, and displayed a lack of understanding of key technical terms such as DRAM. The resulting invalidation of all patents under review has only reinforced the belief that the PTAB's process is deeply flawed.

In April 2023, in the case involving Samsung, the PTAB has now invalidated all five patents. One would ask how is this possible? How can patent office approve all five patents only for the PTAB to invalidate all five patents? Something doesn't seem right. If you heard the evidence brought up at the district court trial, where Samsung's own witness said he knew of no other alternative to the Netlist's ip, why didn't they have their own patent on this ip before Netlist? Such outcomes have fueled suspicions that reforms need to be made at the PTAB and in our opinion an independent investigation of at least what is going on with Netlist's patents being invalidated, should be made to restore confidence in the patent review process.

As August 18, 2024 approaches, the spotlight will once again be on Netlist's patents. The upcoming case will be presided over by Judge Gilstrap, known for his fair and rigorous approach. The anticipation is high that this case will further highlight the extent of infringement being made against Netlist's ip and bring more clarity to the ongoing battle over Patent 912.

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