Netlist Bags Federal Circuit Win After Court Rejects Micron’s Patent Challenge

• Micron Technology had appealed two final decisions by the Patent Trial and Appeal Board, which concluded it had not demonstrated that certain patent claims were obvious and hence, not suitable to be patented.
• As per earlier rulings, Micron Technology will be liable to pay $445 million in the patent infringement verdicts.
• Micron had previously filed two separate patent challenges, alleging that Netlist’s memory technology was a variation of existing designs.

The U.S. Court of Appeals for the Federal Circuit on Friday rejected Micron Technology Inc.’s (MU) appeal challenging a Netlist Inc. (NLST) memory module patent.

Micron Technology had appealed two final decisions by the Patent Trial and Appeal Board, which concluded it had not demonstrated that certain patent claims were obvious and hence, not suitable to be patented.

The Federal Circuit upheld the validity of the patents in an opinion, saying Micron “failed to prove certain claims would have been unpatentable as obvious,” adding that the arguments from the computer memory manufacturer were “unpersuasive.”

As per earlier rulings, Micron Technology will be liable to pay $445 million in the patent infringement verdicts.

Shares of NLST soared, ending 20% higher on Friday, while MU shares rose more than 2.5% at market-close.

What Were The Claims?

Micron had previously filed two separate patent challenges, alleging that Netlist’s memory technology was a variation of existing designs. In one case, Micron said an earlier reference, an application known as Halbert, had already disclosed the same kind of data-speed relationship between parts of a memory system, arguing Netlist cannot be granted a patent for it.

However, the Board determined that Micron could not convincingly show that Halbert “teaches that its ranks communicate data at the same rate at which data is communicated between the memory module and the memory controller.”

In another case, Micron claimed that Netlist’s patent included the combination of two different features from an earlier design that a skilled artisan would have been motivated to combine. However, the Board rejected that claim on the grounds that Micron had failed to explain how an engineer would have made that combination.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around NLST shares jumped from ‘neutral’ to ‘bullish’ territory over the past 24 hours, while message volumes jumped from ‘normal’ to ‘high’ levels.

Meanwhile, retail sentiment around MU shares remained in the ‘bearish’ territory over the past 24 hours, amid ‘low’ message levels.

Shares of NLST have gained more than 65% in the past year, while shares of MU have surged more than 314% in the same time.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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